|
|
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|
|
|
|
|
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized | $ | (24.5 | ) | $ | (133.5 | ) | ||
Net unrealized gains (losses) on all other investments | 1,351.7 | (339.9 | ) | |||||
Adjustment to present value of future profits (a) | (31.5 | ) | 10.7 | |||||
Adjustment to deferred acquisition costs | (217.7 | ) | 59.8 | |||||
Unrecognized net loss related to deferred compensation plan | (7.9 | ) | (8.2 | ) | ||||
Deferred income tax asset (liability) | (382.0 | ) | 146.8 | |||||
Accumulated other comprehensive income (loss) | $ | 688.1 | $ | (264.3 | ) |
(a) | The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003 (the date our Predecessor emerged from bankruptcy). |
Other-than- | ||||||||||||||||||||
temporary | ||||||||||||||||||||
impairments | ||||||||||||||||||||
included in | ||||||||||||||||||||
Gross | Gross | accumulated other | ||||||||||||||||||
Amortized | unrealized | unrealized | Estimated | comprehensive | ||||||||||||||||
cost | gains | losses | fair value | income (loss) | ||||||||||||||||
Corporate securities | $ | 14,437.7 | $ | 1,329.5 | $ | (116.1 | ) | $ | 15,651.1 | $ | - | |||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 100.8 | 8.0 | - | 108.8 | - | |||||||||||||||
States and political subdivisions | 1,444.3 | 62.5 | (32.5 | ) | 1,474.3 | - | ||||||||||||||
Debt securities issued by foreign governments | .8 | .1 | - | .9 | - | |||||||||||||||
Asset-backed securities | 606.7 | 12.2 | (6.7 | ) | 612.2 | - | ||||||||||||||
Collateralized debt obligations | 222.8 | 1.8 | (2.2 | ) | 222.4 | - | ||||||||||||||
Commercial mortgage-backed securities | 1,306.2 | 84.9 | (20.8 | ) | 1,370.3 | - | ||||||||||||||
Mortgage pass-through securities | 32.1 | 1.6 | (.1 | ) | 33.6 | - | ||||||||||||||
Collateralized mortgage obligations | 1,513.1 | 63.2 | (42.4 | ) | 1,533.9 | (44.7 | ) | |||||||||||||
Total fixed maturities, available for sale | $ | 19,664.5 | $ | 1,563.8 | $ | (220.8 | ) | $ | 21,007.5 | $ | (44.7 | ) |
Estimated | ||||||||
Amortized | fair | |||||||
cost | value | |||||||
(Dollars in millions) | ||||||||
Due in one year or less | $ | 146.3 | $ | 147.5 | ||||
Due after one year through five years | 1,105.3 | 1,175.0 | ||||||
Due after five years through ten years | 4,441.6 | 4,855.0 | ||||||
Due after ten years | 10,290.4 | 11,057.6 | ||||||
Subtotal | 15,983.6 | 17,235.1 | ||||||
Structured securities | 3,680.9 | 3,772.4 | ||||||
Total | $ | 19,664.5 | $ | 21,007.5 |
At date of sale | ||||||||||||
Number | Amortized | Fair | ||||||||||
of issuers | cost | value | ||||||||||
Less than 6 months prior to sale | 6 | $ | 51.5 | $ | 38.9 | |||||||
Greater than 12 months prior to sale | 22 | 162.5 | 85.6 | |||||||||
28 | $ | 214.0 | $ | 124.5 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Credit losses on fixed maturity securities, available for sale, beginning of period | $ | (24.0 | ) | $ | (10.0 | ) | $ | (27.2 | ) | $ | (.6 | ) | ||||
Add: credit losses on other-than-temporary impairments not previously recognized | - | (9.8 | ) | (1.3 | ) | (18.2 | ) | |||||||||
Less: credit losses on securities sold | 14.5 | 1.8 | 28.0 | 1.8 | ||||||||||||
Less: credit losses on securities impaired due to intent to sell (a) | - | - | 1.1 | - | ||||||||||||
Add: credit losses on previously impaired securities | (1.7 | ) | (1.2 | ) | (11.8 | ) | (2.2 | ) | ||||||||
Less: increases in cash flows expected on previously impaired securities | - | - | - | - | ||||||||||||
Credit losses on fixed maturity securities, available for sale, end of period | $ | (11.2 | ) | $ | (19.2 | ) | $ | (11.2 | ) | $ | (19.2 | ) |
(a) | Represents securities for which the amount previously recognized in accumulated other comprehensive income (loss) was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis. |
Less than 12 months | 12 months or greater | Total | ||||||||||||||||||||||
Estimated fair | Unrealized | Estimated fair | Unrealized | Estimated fair | Unrealized | |||||||||||||||||||
Description of securities | value | losses | value | losses | value | losses | ||||||||||||||||||
Corporate securities | $ | 492.7 | $ | (10.0 | ) | $ | 1,252.2 | $ | (106.1 | ) | $ | 1,744.9 | $ | (116.1 | ) | |||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 10.0 | - | .3 | - | 10.3 | - | ||||||||||||||||||
States and political subdivisions | 82.2 | (.2 | ) | 258.0 | (32.3 | ) | 340.2 | (32.5 | ) | |||||||||||||||
Asset-backed securities | 170.2 | (1.5 | ) | 61.0 | (5.2 | ) | 231.2 | (6.7 | ) | |||||||||||||||
Collateralized debt obligations | 117.7 | (2.2 | ) | - | - | 117.7 | (2.2 | ) | ||||||||||||||||
Commercial mortgage-backed securities | 37.6 | (.2 | ) | 126.3 | (20.6 | ) | 163.9 | (20.8 | ) | |||||||||||||||
Mortgage pass-through securities | .3 | - | 3.6 | (.1 | ) | 3.9 | (.1 | ) | ||||||||||||||||
Collateralized mortgage obligations | 106.3 | (1.0 | ) | 321.5 | (41.4 | ) | 427.8 | (42.4 | ) | |||||||||||||||
Total fixed maturities, available for sale | $ | 1,017.0 | $ | (15.1 | ) | $ | 2,022.9 | $ | (205.7 | ) | $ | 3,039.9 | $ | (220.8 | ) |
|
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income for basic earnings per share | $ | 49.4 | $ | 15.4 | $ | 116.4 | $ | 67.5 | ||||||||
Add: interest expense on 7.0% Convertible Senior Debentures due 2016 (the “7.0% Debentures”), net of income taxes | 3.7 | - | 9.7 | - | ||||||||||||
Net income for diluted earnings per share | $ | 53.1 | $ | 15.4 | $ | 126.1 | $ | 67.5 | ||||||||
Shares: | ||||||||||||||||
Weighted average shares outstanding for basic earnings per share | 251,045 | 184,886 | 250,942 | 184,820 | ||||||||||||
Effect of dilutive securities on weighted average shares: | ||||||||||||||||
7% Debentures | 53,364 | - | 47,563 | - | ||||||||||||
Stock option and restricted stock plans | 1,631 | 960 | 1,751 | 457 | ||||||||||||
Dilutive potential common shares | 54,995 | 960 | 49,314 | 457 | ||||||||||||
Weighted average shares outstanding for diluted earnings per share | 306,040 | 185,846 | 300,256 | 185,277 |
|
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues: | ||||||||||||||||
Bankers Life: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Annuities | $ | 11.7 | $ | 13.1 | $ | 30.7 | $ | 33.9 | ||||||||
Health | 343.9 | 423.6 | 1,032.2 | 1,298.8 | ||||||||||||
Life | 49.5 | 56.4 | 139.1 | 149.5 | ||||||||||||
Net investment income (a) | 208.5 | 199.6 | 554.9 | 505.4 | ||||||||||||
Fee revenue and other income (a) | 3.6 | 2.4 | 8.6 | 5.4 | ||||||||||||
Total Bankers Life revenues | 617.2 | 695.1 | 1,765.5 | 1,993.0 | ||||||||||||
Washington National: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Health | 139.6 | 140.1 | 418.6 | 421.8 | ||||||||||||
Life | 4.0 | 8.2 | 12.7 | 25.1 | ||||||||||||
Other | 1.3 | 1.4 | 3.7 | 4.1 | ||||||||||||
Net investment income (a) | 46.4 | 48.0 | 137.7 | 144.4 | ||||||||||||
Fee revenue and other income (a) | .3 | .5 | .8 | 1.6 | ||||||||||||
Total Washington National revenues | 191.6 | 198.2 | 573.5 | 597.0 | ||||||||||||
Colonial Penn: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Health | 1.8 | 2.1 | 5.2 | 6.2 | ||||||||||||
Life | 47.0 | 46.3 | 141.1 | 142.0 | ||||||||||||
Net investment income (a) | 9.9 | 9.5 | 29.3 | 29.1 | ||||||||||||
Fee revenue and other income (a) | .2 | .2 | .5 | .6 | ||||||||||||
Total Colonial Penn revenues | 58.9 | 58.1 | 176.1 | 177.9 | ||||||||||||
Other CNO Business: | ||||||||||||||||
Insurance policy income: | ||||||||||||||||
Annuities | 3.8 | 3.1 | 8.7 | 26.1 | ||||||||||||
Health | 7.5 | 7.9 | 22.7 | 24.3 | ||||||||||||
Life | 63.9 | 69.1 | 190.4 | 212.1 | ||||||||||||
Other | .5 | .7 | 1.9 | 2.2 | ||||||||||||
Net investment income (a) | 96.5 | 102.2 | 269.5 | 281.2 | ||||||||||||
Total Other CNO Business revenues | 172.2 | 183.0 | 493.2 | 545.9 | ||||||||||||
Corporate operations: | ||||||||||||||||
Net investment income | 8.5 | 3.5 | 16.0 | 10.8 | ||||||||||||
Fee and other income | .5 | 1.0 | 1.8 | 2.6 | ||||||||||||
Total corporate revenues | 9.0 | 4.5 | 17.8 | 13.4 | ||||||||||||
Total revenues | 1,048.9 | 1,138.9 | 3,026.1 | 3,327.2 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Expenses: | ||||||||||||||||
Bankers Life: | ||||||||||||||||
Insurance policy benefits | $ | 402.1 | $ | 488.0 | $ | 1,201.3 | $ | 1,442.3 | ||||||||
Amortization | 76.4 | 74.5 | 214.0 | 213.2 | ||||||||||||
Other operating costs and expenses | 43.2 | 47.2 | 137.5 | 144.1 | ||||||||||||
Total Bankers Life expenses | 521.7 | 609.7 | 1,552.8 | 1,799.6 | ||||||||||||
Washington National: | ||||||||||||||||
Insurance policy benefits | 112.4 | 115.6 | 341.6 | 350.9 | ||||||||||||
Amortization | 14.4 | 12.9 | 42.3 | 42.1 | ||||||||||||
Other operating costs and expenses | 37.6 | 40.6 | 113.7 | 116.1 | ||||||||||||
Total Washington National expenses | 164.4 | 169.1 | 497.6 | 509.1 | ||||||||||||
Colonial Penn: | ||||||||||||||||
Insurance policy benefits | 36.4 | 35.0 | 108.5 | 107.6 | ||||||||||||
Amortization | 7.0 | 8.4 | 24.5 | 24.8 | ||||||||||||
Other operating costs and expenses | 7.7 | 7.3 | 22.4 | 22.0 | ||||||||||||
Total Colonial Penn expenses | 51.1 | 50.7 | 155.4 | 154.4 | ||||||||||||
Other CNO Business: | ||||||||||||||||
Insurance policy benefits | 149.1 | 144.1 | 398.6 | 416.5 | ||||||||||||
Amortization | 20.7 | 18.9 | 36.5 | 60.3 | ||||||||||||
Interest expense on investment borrowings | 5.1 | 5.1 | 15.1 | 15.5 | ||||||||||||
Other operating costs and expenses | 21.7 | 22.4 | 60.5 | 67.5 | ||||||||||||
Total Other CNO Business expenses | 196.6 | 190.5 | 510.7 | 559.8 | ||||||||||||
Corporate operations: | ||||||||||||||||
Interest expense on corporate debt | 20.0 | 24.0 | 59.3 | 61.6 | ||||||||||||
Interest expense on borrowings of variable interest entities | 3.3 | 2.8 | 10.2 | 10.7 | ||||||||||||
Loss on extinguishment or modification of debt | - | - | 2.7 | 9.5 | ||||||||||||
Other operating costs and expenses | 18.0 | 9.1 | 36.7 | 27.6 | ||||||||||||
Total corporate expenses | 41.3 | 35.9 | 108.9 | 109.4 | ||||||||||||
Total expenses | 975.1 | 1,055.9 | 2,825.4 | 3,132.3 | ||||||||||||
Income (loss) before net realized investment losses (net of related amortization) and income taxes: | ||||||||||||||||
Bankers Life | 95.5 | 85.4 | 212.7 | 193.4 | ||||||||||||
Washington National | 27.2 | 29.1 | 75.9 | 87.9 | ||||||||||||
Colonial Penn | 7.8 | 7.4 | 20.7 | 23.5 | ||||||||||||
Other CNO Business | (24.4 | ) | (7.5 | ) | (17.5 | ) | (13.9 | ) | ||||||||
Corporate operations | (32.3 | ) | (31.4 | ) | (91.1 | ) | (96.0 | ) | ||||||||
Income before net realized investment losses (net of related amortization) and income taxes | $ | 73.8 | $ | 83.0 | $ | 200.7 | $ | 194.9 |
(a) | It is not practicable to provide additional components of revenue by product or services. |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Total segment revenues | $ | 1,048.9 | $ | 1,138.9 | $ | 3,026.1 | $ | 3,327.2 | ||||||||
Net realized investment gains (losses) | 3.6 | (20.3 | ) | (18.0 | ) | (43.5 | ) | |||||||||
Consolidated revenues | $ | 1,052.5 | $ | 1,118.6 | $ | 3,008.1 | $ | 3,283.7 | ||||||||
Total segment expenses | $ | 975.1 | $ | 1,055.9 | $ | 2,825.4 | $ | 3,132.3 | ||||||||
Amortization related to net realized investment gains (losses) | .1 | (1.4 | ) | .5 | (4.5 | ) | ||||||||||
Consolidated expenses | $ | 975.2 | $ | 1,054.5 | $ | 2,825.9 | $ | 3,127.8 |
|
|
|
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Current tax expense | $ | 3.0 | $ | - | $ | 5.5 | $ | 3.5 | ||||||||
Deferred tax provision | 24.9 | 22.0 | 60.3 | 51.2 | ||||||||||||
Income tax expense on period income | 27.9 | 22.0 | 65.8 | 54.7 | ||||||||||||
Valuation allowance | - | 26.7 | - | 33.7 | ||||||||||||
Total income tax expense | $ | 27.9 | $ | 48.7 | $ | 65.8 | $ | 88.4 |
Nine months ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
U.S. statutory corporate rate | 35.0 | % | 35.0 | % | ||||
Valuation allowance | - | 21.6 | ||||||
Other nondeductible expenses (benefit) | (.2 | ) | (1.7 | ) | ||||
State taxes | .9 | .9 | ||||||
Provision for tax issues, tax credits and other | .4 | .9 | ||||||
Effective tax rate | 36.1 | % | 56.7 | % |
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Deferred tax assets: | ||||||||
Net federal operating loss carryforwards attributable to: | ||||||||
Life insurance subsidiaries | $ | 701.4 | $ | 745.3 | ||||
Non-life companies | 872.4 | 883.9 | ||||||
Net state operating loss carryforwards | 18.1 | 19.1 | ||||||
Tax credits | 22.2 | 18.5 | ||||||
Capital loss carryforwards | 379.9 | 393.8 | ||||||
Deductible temporary differences: | ||||||||
Insurance liabilities | 750.1 | 782.1 | ||||||
Unrealized depreciation of investments | - | 146.8 | ||||||
Other | 60.2 | 44.0 | ||||||
Gross deferred tax assets | 2,804.3 | 3,033.5 | ||||||
Deferred tax liabilities: | ||||||||
Investments | (20.7 | ) | (38.1 | ) | ||||
Present value of future profits and deferred acquisition costs | (686.1 | ) | (694.0 | ) | ||||
Unrealized appreciation on investments | (382.0 | ) | - | |||||
Gross deferred tax liabilities | (1,088.8 | ) | (732.1 | ) | ||||
Net deferred tax assets before valuation allowance | 1,715.5 | 2,301.4 | ||||||
Valuation allowance | (1,176.4 | ) | (1,176.4 | ) | ||||
Net deferred tax assets | 539.1 | 1,125.0 | ||||||
Current income taxes accrued | (2.4 | ) | (1.0 | ) | ||||
Income tax assets, net | $ | 536.7 | $ | 1,124.0 |
Year of expiration | Net operating loss carryforwards (a) | Capital loss | Total loss | |||||||||||||||
Life | Non-life | carryforwards | carryforwards | |||||||||||||||
2010 | $ | - | $ | .1 | $ | - | $ | .1 | ||||||||||
2011 | - | .1 | - | .1 | ||||||||||||||
2012 | - | - | 22.7 | 22.7 | ||||||||||||||
2013 | - | - | 1,034.2 | 1,034.2 | ||||||||||||||
2014 | - | - | 28.6 | 28.6 | ||||||||||||||
2018 | 1,770.4 | (a) | - | - | 1,770.4 | |||||||||||||
2021 | 29.6 | - | - | 29.6 | ||||||||||||||
2022 | 204.1 | - | - | 204.1 | ||||||||||||||
2023 | - | 2,003.5 | (a) | - | 2,003.5 | |||||||||||||
2024 | - | 3.2 | - | 3.2 | ||||||||||||||
2025 | - | 118.8 | - | 118.8 | ||||||||||||||
2026 | - | .8 | - | .8 | ||||||||||||||
2027 | - | 216.3 | - | 216.3 | ||||||||||||||
2028 | - | 1.2 | - | 1.2 | ||||||||||||||
2029 | - | 148.7 | - | 148.7 | ||||||||||||||
Total | $ | 2,004.1 | $ | 2,492.7 | $ | 1,085.5 | $ | 5,582.3 |
(a) | The allocation of the NOLs summarized above assumes the IRS does not take an adverse position in the future regarding the tax position we plan to take in our tax returns with respect to the allocation of cancellation of indebtedness income. If the IRS disagrees with the tax position we plan to take with respect to the allocation of cancellation of indebtedness income, and their position prevails, approximately $631 million of the NOLs expiring in 2018 would be characterized as non-life NOLs. |
|
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
3.5% Convertible Debentures due September 30, 2035 (the “3.5% Debentures”) | $ | - | $ | 116.5 | ||||
7.0% Debentures | 293.0 | 176.5 | ||||||
Secured credit agreement | 652.1 | 652.1 | ||||||
Senior Note due November 12, 2013 (the “Senior Note”) | 100.0 | 100.0 | ||||||
Unamortized discount on 3.5% Debentures | - | (3.3 | ) | |||||
Unamortized discount on 7.0% Debentures | (15.3 | ) | (4.4 | ) | ||||
Direct corporate obligations | $ | 1,029.8 | $ | 1,037.4 |
Remainder of 2010 | $ | 25.0 | ||
2011 | 60.0 | |||
2012 | 65.0 | |||
2013 | 602.1 | |||
2016 | 293.0 | |||
$ | 1,045.1 |
|
Amount | Maturity | Interest rate | |||
borrowed | date | at September 30, 2010 | |||
$ | 54.0 | May 2012 | Variable rate – 0.339% | ||
37.0 | July 2012 | Fixed rate – 5.540% | |||
13.0 | July 2012 | Variable rate – 0.588% | |||
100.0 | September 2015 | Variable rate – 0.606% | |||
100.0 | September 2015 | Variable rate – 0.557% | |||
146.0 | November 2015 | Fixed rate – 5.300% | |||
100.0 | November 2015 | Fixed rate – 4.890% | |||
100.0 | December 2015 | Fixed rate – 4.710% |
|
Balance at December 31, 2009 | 250,786 | ||||
Shares issued under employee benefit compensation plans | 260 | (a) | |||
Balance at September 30, 2010 | 251,046 |
(a) | Such amount was reduced by 72 thousand shares which were tendered for the payment of federal and state taxes owed on the issuance of restricted stock. |
|
|
January 1, 2010 | ||||||||||||
Amounts prior to effect of adoption of authoritative | Effect of adoption of authoritative | As | ||||||||||
guidance | guidance | adjusted | ||||||||||
Total investments | $ | 21,530.2 | $ | 247.6 | $ | 21,777.8 | ||||||
Cash and cash equivalents held by variable interest entities | 3.4 | 3.8 | 7.2 | |||||||||
Accrued investment income | 309.0 | .9 | 309.9 | |||||||||
Income tax assets, net | 1,124.0 | 8.6 | 1,132.6 | |||||||||
Other assets | 310.7 | 14.2 | 324.9 | |||||||||
Total assets | 30,343.8 | 275.1 | 30,618.9 | |||||||||
Other liabilities | 610.4 | 8.8 | 619.2 | |||||||||
Borrowings related to variable interest entities | 229.1 | 282.2 | 511.3 | |||||||||
Total liabilities | 26,811.4 | 291.0 | 27,102.4 | |||||||||
Accumulated other comprehensive income (loss) | (264.3 | ) | (6.2 | ) | (270.5 | ) | ||||||
Accumulated deficit | (614.6 | ) | (9.7 | ) | (624.3 | ) | ||||||
Total shareholders’ equity | 3,532.4 | (15.9 | ) | 3,516.5 | ||||||||
Total liabilities and shareholders’ equity | 30,343.8 | 275.1 | 30,618.9 |
|
|
Nine months ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 116.4 | $ | 67.5 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Amortization and depreciation | 339.1 | 364.1 | ||||||
Income taxes | 61.6 | 82.1 | ||||||
Insurance liabilities | 305.8 | 264.3 | ||||||
Accrual and amortization of investment income | (26.9 | ) | (110.2 | ) | ||||
Deferral of policy acquisition costs | (315.8 | ) | (309.5 | ) | ||||
Net realized investment losses | 18.0 | 43.5 | ||||||
Loss on extinguishment or modification of debt | 2.7 | 9.5 | ||||||
Other | 23.7 | 7.9 | ||||||
Net cash provided by operating activities | $ | 524.6 | $ | 419.2 |
Nine months ended | ||||||||
September 30, | ||||||||
2010 | 2009 | |||||||
Stock option and restricted stock plans | $ | 8.8 | $ | 6.6 | ||||
Change in securities lending collateral | 103.7 | 196.1 | ||||||
Change in securities lending payable | (103.7 | ) | (196.1 | ) |
|
September 30, 2010 | ||||||||||||
Fall Creek | Net effect on | |||||||||||
and | consolidated | |||||||||||
Eagle Creek | Eliminations | balance sheet | ||||||||||
Assets: | ||||||||||||
Investments held by variable interest entities | $ | 454.8 | $ | - | $ | 454.8 | ||||||
Notes receivable of VIEs held by insurance subsidiaries | - | (96.8 | ) | (96.8 | ) | |||||||
Cash and cash equivalents held by variable interest entities | 18.3 | - | 18.3 | |||||||||
Accrued investment income | 1.5 | (4.3 | ) | (2.8 | ) | |||||||
Income tax assets, net | 24.6 | (6.5 | ) | 18.1 | ||||||||
Other assets | 13.8 | - | 13.8 | |||||||||
Total assets | $ | 513.0 | $ | (107.6 | ) | $ | 405.4 | |||||
Liabilities: | ||||||||||||
Other liabilities | $ | 18.2 | $ | (4.2 | ) | $ | 14.0 | |||||
Borrowings related to variable interest entities | 425.0 | - | 425.0 | |||||||||
Notes payable of VIEs held by insurance subsidiaries | 115.6 | (115.6 | ) | - | ||||||||
Total liabilities | $ | 558.8 | $ | (119.8 | ) | $ | 439.0 |
December 31, 2009 | ||||||||||||
Net effect on | ||||||||||||
consolidated | ||||||||||||
Fall Creek | Eliminations | balance sheet | ||||||||||
Assets: | ||||||||||||
Fixed maturities, available for sale | $ | 268.0 | $ | - | $ | 268.0 | ||||||
Notes receivable of VIE held by insurance subsidiaries | - | (81.9 | ) | (81.9 | ) | |||||||
Cash and cash equivalents – restricted | 3.4 | - | 3.4 | |||||||||
Accrued investment income | 1.2 | (3.0 | ) | (1.8 | ) | |||||||
Income tax assets, net | 19.3 | (5.3 | ) | 14.0 | ||||||||
Other assets | 8.0 | - | 8.0 | |||||||||
Total assets | $ | 299.9 | $ | (90.2 | ) | $ | 209.7 | |||||
Liabilities: | ||||||||||||
Other liabilities | $ | 7.7 | $ | (3.2 | ) | $ | 4.5 | |||||
Investment borrowings | 229.1 | - | 229.1 | |||||||||
Notes payable of VIE held by insurance subsidiaries | 99.2 | (99.2 | ) | - | ||||||||
Total liabilities | $ | 336.0 | $ | (102.4 | ) | $ | 233.6 |
Estimated | ||||||||
Amortized | fair | |||||||
cost | value | |||||||
(Dollars in millions) | ||||||||
Due in one year or less | $ | 19.8 | $ | 19.4 | ||||
Due after one year through five years | 371.2 | 355.5 | ||||||
Due after five years through ten years | 80.7 | 79.9 | ||||||
Total | $ | 471.7 | $ | 454.8 |
At date of sale | ||||||||||||
Number | Amortized | Fair | ||||||||||
of issuers | cost | value | ||||||||||
Less than six months prior to sale | 1 | $ | - | $ | - | |||||||
Greater than or equal to 6 and less than 12 months prior to sale | 2 | .3 | .1 | |||||||||
Greater than 12 months prior to sale | 5 | 3.0 | 1.5 | |||||||||
8 | $ | 3.3 | $ | 1.6 |
|
· | Level 1 – includes assets and liabilities valued using inputs that are quoted prices in active markets for identical assets or liabilities. Our Level 1 assets include exchange traded securities. |
· | Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data. Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies. These models are primarily industry-standard models that consider various inputs such as interest rate, credit spread, reported trades, broker/dealer quotes, issuer spreads and other inputs that are observable or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace. Financial instruments in this category primarily include: certain public and private corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; and non-exchange-traded derivatives such as call options to hedge liabilities related to our fixed index annuity products. |
· | Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions. Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on non-binding broker prices or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information. Financial instruments in this category include certain corporate securities (primarily private placements), certain mortgage and asset-backed securities, and other less liquid securities. Additionally, the Company’s liabilities for embedded derivatives (including embedded derivatives related to our fixed index annuity products and to a modified coinsurance arrangement) are classified in Level 3 since their values include significant unobservable inputs including actuarial assumptions. |
Quoted prices in active markets for identical assets or liabilities (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |||||||||||||||
Assets: | ||||||||||||||||||
Fixed maturities, available for sale: | ||||||||||||||||||
Corporate securities | $ | - | $ | 13,167.8 | $ | 2,483.3 | $ | 15,651.1 | ||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | - | 106.6 | 2.2 | 108.8 | ||||||||||||||
States and political subdivisions | - | 1,464.6 | 9.7 | 1,474.3 | ||||||||||||||
Debt securities issued by foreign governments | - | .9 | - | .9 | ||||||||||||||
Asset-backed securities | - | 606.4 | 5.8 | 612.2 | ||||||||||||||
Collateralized debt obligations | - | 12.4 | 210.0 | 222.4 | ||||||||||||||
Commercial mortgage-backed securities | - | 1,363.7 | 6.6 | 1,370.3 | ||||||||||||||
Mortgage pass-through securities | 29.9 | - | 3.7 | 33.6 | ||||||||||||||
Collateralized mortgage obligations | - | 1,454.4 | 79.5 | 1,533.9 | ||||||||||||||
Total fixed maturities, available for sale | 29.9 | 18,176.8 | 2,800.8 | 21,007.5 | ||||||||||||||
Equity securities | - | 10.0 | 31.1 | 41.1 | ||||||||||||||
Trading securities: | ||||||||||||||||||
Corporate securities | 5.7 | 53.1 | 4.1 | 62.9 | ||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | - | 305.6 | - | 305.6 | ||||||||||||||
States and political subdivisions | - | 12.9 | - | 12.9 | ||||||||||||||
Asset-backed securities | - | .6 | - | .6 | ||||||||||||||
Commercial mortgage-backed securities | - | 5.4 | - | 5.4 | ||||||||||||||
Mortgage pass-through securities | .4 | - | - | .4 | ||||||||||||||
Collateralized mortgage obligations | - | 1.9 | - | 1.9 | ||||||||||||||
Total trading securities | 6.1 | 379.5 | 4.1 | 389.7 | ||||||||||||||
Investments held by variable interest entities | - | 448.6 | 6.2 | 454.8 | ||||||||||||||
Other invested assets | - | 133.9 | (a) | - | 133.9 | |||||||||||||
Assets held in separate accounts | - | 16.7 | - | 16.7 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Liabilities for insurance products: | ||||||||||||||||||
Interest-sensitive products | - | - | 521.2 | (b) | 521.2 |
(a) | Includes company-owned life insurance and derivatives. |
(b) | Includes $519.6 million of embedded derivatives associated with our fixed index annuity products and $1.6 million of embedded derivatives associated with a modified coinsurance agreement. |
Quoted prices in active markets for identical assets or liabilities (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Total | |||||||||||||||
Assets: | ||||||||||||||||||
Fixed maturities, available for sale: | ||||||||||||||||||
Corporate securities | $ | - | $ | 12,044.3 | $ | 2,247.1 | $ | 14,291.4 | ||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 19.4 | 248.0 | 2.2 | 269.6 | ||||||||||||||
States and political subdivisions | - | 842.9 | 10.7 | 853.6 | ||||||||||||||
Debt securities issued by foreign governments | - | 5.1 | - | 5.1 | ||||||||||||||
Asset-backed securities | - | 176.3 | 15.8 | 192.1 | ||||||||||||||
Collateralized debt obligations | - | - | 92.8 | 92.8 | ||||||||||||||
Commercial mortgage-backed securities | - | 752.3 | 13.7 | 766.0 | ||||||||||||||
Mortgage pass-through securities | 37.1 | 1.3 | 4.2 | 42.6 | ||||||||||||||
Collateralized mortgage obligations | - | 2,003.8 | 11.4 | 2,015.2 | ||||||||||||||
Total fixed maturities, available for sale | 56.5 | 16,074.0 | 2,397.9 | 18,528.4 | ||||||||||||||
Equity securities | .1 | - | 30.9 | 31.0 | ||||||||||||||
Trading securities: | ||||||||||||||||||
Corporate securities | 3.8 | 49.4 | 3.7 | 56.9 | ||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | - | 220.3 | - | 220.3 | ||||||||||||||
States and political subdivisions | - | 4.4 | - | 4.4 | ||||||||||||||
Asset-backed securities | - | .6 | - | .6 | ||||||||||||||
Commercial mortgage-backed securities | - | 4.9 | - | 4.9 | ||||||||||||||
Mortgage pass-through securities | .5 | - | - | .5 | ||||||||||||||
Collateralized mortgage obligations | - | 5.7 | - | 5.7 | ||||||||||||||
Total trading securities | 4.3 | 285.3 | 3.7 | 293.3 | ||||||||||||||
Securities lending collateral: | ||||||||||||||||||
Corporate securities | - | 81.0 | 13.7 | 94.7 | ||||||||||||||
Asset-backed securities | - | 16.2 | 22.9 | 39.1 | ||||||||||||||
Total securities lending collateral | - | 97.2 | 36.6 | 133.8 | ||||||||||||||
Other invested assets | - | 192.6 | (a) | 2.4 | (b) | 195.0 | ||||||||||||
Assets held in separate accounts | - | 17.3 | - | 17.3 | ||||||||||||||
Liabilities: | ||||||||||||||||||
Liabilities for insurance products: | ||||||||||||||||||
Interest-sensitive products | - | - | 496.0 | (c) | 496.0 |
____________ |
(a) | Includes company-owned life insurance and derivatives. |
(b) | Includes equity-like holdings in special-purpose entities. |
(c) | Includes $494.4 million of embedded derivatives associated with our fixed index annuity products and $1.6 million of embedded derivatives associated with a modified coinsurance agreement. |
September 30, 2010 | ||||||||||||||||||||||||||||||||
Beginning balance as of June 30, 2010 | Purchases, sales, issuances and settlements, net | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers into Level 3 | Transfers out of Level 3 (b) | Ending balance as of September 30, 2010 | Amount of total gains (losses) for the three months ended September 30, 2010 included in our net income relating to assets and liabilities still held as of the reporting date | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | ||||||||||||||||||||||||||||||||
Corporate securities | $ | 2,453.6 | $ | 16.5 | $ | (1.7 | ) | $ | 51.0 | $ | - | $ | (36.1 | ) | $ | 2,483.3 | $ | - | ||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 2.1 | - | - | .1 | - | - | 2.2 | - | ||||||||||||||||||||||||
States and political subdivisions | 10.0 | - | - | (.3 | ) | - | - | 9.7 | - | |||||||||||||||||||||||
Asset-backed securities | 6.1 | (.4 | ) | - | .1 | - | - | 5.8 | - | |||||||||||||||||||||||
Collateralized debt obligations | 136.8 | 69.7 | .1 | 3.4 | - | - | 210.0 | - | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 10.5 | (2.2 | ) | - | (.3 | ) | - | (1.4 | ) | 6.6 | - | |||||||||||||||||||||
Mortgage pass-through securities | 3.9 | (.2 | ) | - | - | - | - | 3.7 | - | |||||||||||||||||||||||
Collateralized mortgage obligations | 24.1 | 53.3 | - | 2.1 | - | - | 79.5 | - | ||||||||||||||||||||||||
Total fixed maturities, available for sale | 2,647.1 | 136.7 | (1.6 | ) | 56.1 | - | (37.5 | ) | 2,800.8 | - | ||||||||||||||||||||||
Equity securities | 31.0 | - | - | .1 | - | - | 31.1 | - | ||||||||||||||||||||||||
Trading securities: | ||||||||||||||||||||||||||||||||
Corporate securities | 4.1 | (.5 | ) | .5 | - | - | - | 4.1 | .5 | |||||||||||||||||||||||
Investments held by variable interest entities: | ||||||||||||||||||||||||||||||||
Corporate securities | 7.2 | (1.0 | ) | - | - | - | - | 6.2 | - | |||||||||||||||||||||||
Securities lending collateral: | ||||||||||||||||||||||||||||||||
Asset-backed securities | 4.9 | (4.9 | ) | - | - | - | - | - | - | |||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Liabilities for insurance products: | ||||||||||||||||||||||||||||||||
Interest-sensitive products | (500.5 | ) | (1.9 | ) | (18.8 | ) | - | - | - | (521.2 | ) | (18.8 | ) |
September 30, 2010 | Amount of total gains (losses) for the nine months ended September 30, 2010 included in our net income relating to assets and liabilities still held as of the reporting date | |||||||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2009 | Cumulative effect of accounting change (a) | Purchases, sales, issuances and settlements, net | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers Into Level 3 | Transfers out of Level 3 (b) | Ending balance as of September 30, 2010 | |||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | ||||||||||||||||||||||||||||||||||||||
Corporate securities | $ | 2,247.1 | $ | (5.9 | ) | $ | 84.2 | $ | (2.2 | ) | $ | 172.5 | $ | 19.6 | $ | (32.0 | ) | $ | 2,483.3 | $ | - | |||||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 2.2 | - | (.1 | ) | - | .1 | - | - | 2.2 | - | ||||||||||||||||||||||||||||
States and political subdivisions | 10.7 | - | - | - | .7 | - | (1.7 | ) | 9.7 | - | ||||||||||||||||||||||||||||
Asset-backed securities | 15.8 | - | (11.9 | ) | (11.3 | ) | 13.2 | - | - | 5.8 | - | |||||||||||||||||||||||||||
Collateralized debt obligations | 92.8 | (5.7 | ) | 119.8 | (.1 | ) | 3.2 | - | - | 210.0 | - | |||||||||||||||||||||||||||
Commercial mortgage-backed securities | 13.7 | - | (2.8 | ) | - | 1.6 | - | (5.9 | ) | 6.6 | - | |||||||||||||||||||||||||||
Mortgage pass-through securities | 4.2 | - | (.5 | ) | - | - | - | - | 3.7 | - | ||||||||||||||||||||||||||||
Collateralized mortgage obligations | 11.4 | - | 77.1 | - | 2.1 | - | (11.1 | ) | 79.5 | - | ||||||||||||||||||||||||||||
Total fixed maturities, available for sale | 2,397.9 | (11.6 | ) | 265.8 | (13.6 | ) | 193.4 | 19.6 | (50.7 | ) | 2,800.8 | - | ||||||||||||||||||||||||||
Equity securities | 30.9 | - | .1 | - | .1 | - | - | 31.1 | - | |||||||||||||||||||||||||||||
Trading securities: | ||||||||||||||||||||||||||||||||||||||
Corporate securities | 3.7 | - | - | .4 | - | - | - | 4.1 | .4 | |||||||||||||||||||||||||||||
Investments held by variable interest entities: | ||||||||||||||||||||||||||||||||||||||
Corporate securities | - | 6.9 | (1.0 | ) | - | .3 | - | - | 6.2 | - | ||||||||||||||||||||||||||||
Securities lending collateral: | ||||||||||||||||||||||||||||||||||||||
Corporate securities | 13.7 | - | (13.7 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Asset-backed securities | 22.9 | - | (20.9 | ) | - | - | - | (2.0 | ) | - | - | |||||||||||||||||||||||||||
Total securities lending collateral | 36.6 | - | (34.6 | ) | - | - | - | (2.0 | ) | - | - | |||||||||||||||||||||||||||
Other invested assets | 2.4 | (2.4 | ) | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||
Liabilities for insurance products: | ||||||||||||||||||||||||||||||||||||||
Interest-sensitive products | (496.0 | ) | - | 33.1 | (58.3 | ) | - | - | - | (521.2 | ) | (58.3 | ) |
(a) | Amounts represent adjustments to investments related to a variable interest entity that was required to be consolidated effective January 1, 2010, as well as the reclassification of investments of a variable interest entity which was consolidated at December 31, 2009. |
(b) | Transfers out of Level 3 are reported as having occurred at the beginning of the period. |
September 30, 2009 | ||||||||||||||||||||||||||||||||
Beginning balance as of June 30, 2009 | Purchases, sales, issuances and settlements, net | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers into Level 3 | Transfers out of Level 3 | Ending balance as of September 30, 2009 | Amount of total gains (losses) for the three months ended September 30, 2009 included in our net income relating to assets and liabilities still held as of the reporting date | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | ||||||||||||||||||||||||||||||||
Corporate securities | $ | 1,852.5 | $ | 117.8 | $ | (1.5 | ) | $ | 244.0 | $ | 22.3 | $ | - | $ | 2,235.1 | $ | - | |||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 2.3 | - | - | - | - | - | 2.3 | - | ||||||||||||||||||||||||
States and political subdivisions | 8.9 | (.1 | ) | - | .1 | - | - | 8.9 | - | |||||||||||||||||||||||
Asset-backed securities | 23.2 | (.6 | ) | - | 1.9 | - | - | 24.5 | - | |||||||||||||||||||||||
Collateralized debt obligations | 104.9 | (.7 | ) | - | 13.6 | - | - | 117.8 | - | |||||||||||||||||||||||
Commercial mortgage-backed securities | - | (.8 | ) | - | .2 | 8.8 | - | 8.2 | - | |||||||||||||||||||||||
Mortgage pass-through securities | 4.4 | (.1 | ) | - | - | - | - | 4.3 | - | |||||||||||||||||||||||
Collateralized mortgage obligations | .3 | - | - | - | - | - | .3 | - | ||||||||||||||||||||||||
Total fixed maturities, available for sale | 1,996.5 | 115.5 | (1.5 | ) | 259.8 | 31.1 | - | 2,401.4 | - | |||||||||||||||||||||||
Equity securities | 30.4 | - | - | .3 | - | - | 30.7 | - | ||||||||||||||||||||||||
Trading securities: | ||||||||||||||||||||||||||||||||
Corporate securities | 2.7 | - | - | .9 | .5 | - | 4.1 | .9 | ||||||||||||||||||||||||
Securities lending collateral: | ||||||||||||||||||||||||||||||||
Corporate securities | 23.5 | (10.0 | ) | - | .1 | - | - | 13.6 | - | |||||||||||||||||||||||
Asset-backed securities | 18.5 | - | (.7 | ) | (1.4 | ) | 8.5 | - | 24.9 | (.7 | ) | |||||||||||||||||||||
Total securities lending collateral | 42.0 | (10.0 | ) | (.7 | ) | (1.3 | ) | 8.5 | - | 38.5 | (.7 | ) | ||||||||||||||||||||
Other invested assets | .9 | - | - | .2 | - | - | 1.1 | - | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Liabilities for insurance products: | ||||||||||||||||||||||||||||||||
Interest-sensitive products | (406.6 | ) | (30.2 | ) | (13.8 | ) | - | - | - | (450.6 | ) | (13.8 | ) |
September 30, 2009 | |||||||||||||||||||||||||||||||||
Beginning balance as of December 31, 2008 | Purchases, sales, issuances and settlements, net | Total realized and unrealized gains (losses) included in net income | Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss) | Transfers into Level 3 | Transfers out of Level 3 | Ending balance as of September 30, 2009 | Amount of total gains (losses) for the nine months ended September 30, 2009 included in our net income relating to assets and liabilities still held as of the reporting date | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||
Fixed maturities, available for sale: | |||||||||||||||||||||||||||||||||
Corporate securities | $ | 1,715.6 | $ | 204.1 | $ | (5.5 | ) | $ | 299.4 | $ | 27.5 | $ | (6.0 | ) | $ | 2,235.1 | $ | - | |||||||||||||||
United States Treasury securities and obligations of United States government corporations and agencies | 2.6 | (.1 | ) | - | (.2 | ) | - | - | 2.3 | - | |||||||||||||||||||||||
States and political subdivisions | 10.5 | (.4 | ) | - | (1.2 | ) | - | - | 8.9 | - | |||||||||||||||||||||||
Asset-backed securities | 27.5 | (2.2 | ) | - | 1.9 | - | (2.7 | ) | 24.5 | - | |||||||||||||||||||||||
Collateralized debt obligations | 96.7 | (2.9 | ) | (2.7 | ) | 26.7 | - | - | 117.8 | (2.7 | ) | ||||||||||||||||||||||
Commercial mortgage-backed securities | 9.6 | (6.5 | ) | (.6 | ) | 5.7 | - | - | 8.2 | - | |||||||||||||||||||||||
Mortgage pass-through securities | 4.9 | (.6 | ) | - | - | - | - | 4.3 | - | ||||||||||||||||||||||||
Collateralized mortgage obligations | 8.7 | (.1 | ) | - | - | - | (8.3 | ) | .3 | - | |||||||||||||||||||||||
Total fixed maturities, available for sale | 1,876.1 | 191.3 | (8.8 | ) | 332.3 | 27.5 | (17.0 | ) | 2,401.4 | (2.7 | ) | ||||||||||||||||||||||
Equity securities | 32.4 | (.3 | ) | - | (1.4 | ) | - | - | 30.7 | - | |||||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||
Corporate securities | 2.7 | - | - | .9 | .5 | - | 4.1 | .9 | |||||||||||||||||||||||||
Securities lending collateral: | |||||||||||||||||||||||||||||||||
Corporate securities | 34.9 | (17.0 | ) | - | .1 | - | (4.4 | ) | 13.6 | - | |||||||||||||||||||||||
Equity securities | .1 | (.1 | ) | (.3 | ) | .3 | - | - | - | (.3 | ) | ||||||||||||||||||||||
Asset-backed securities | 13.1 | - | (.6 | ) | (8.0 | ) | 20.4 | - | 24.9 | (.6 | ) | ||||||||||||||||||||||
Total securities lending collateral | 48.1 | (17.1 | ) | (.9 | ) | (7.6 | ) | 20.4 | (4.4 | ) | 38.5 | (.9 | ) | ||||||||||||||||||||
Other invested assets | 2.3 | - | (3.4 | ) | 2.2 | - | - | 1.1 | (3.4 | ) | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||
Liabilities for insurance products: | |||||||||||||||||||||||||||||||||
Interest-sensitive products | (437.2 | ) | (11.1 | ) | (2.3 | ) | - | - | - | (450.6 | ) | (2.3 | ) |
September 30, 2010 | December 31, 2009 | |||||||||||||||
Carrying | Estimated fair | Carrying | Estimated fair | |||||||||||||
amount | value | amount | value | |||||||||||||
Financial assets: | ||||||||||||||||
Fixed maturities, available for sale | $ | 21,007.5 | $ | 21,007.5 | $ | 18,528.4 | $ | 18,528.4 | ||||||||
Equity securities | 41.1 | 41.1 | 31.0 | 31.0 | ||||||||||||
Mortgage loans | 1,825.6 | 1,848.5 | 1,965.5 | 1,756.8 | ||||||||||||
Policy loans | 290.9 | 290.9 | 295.2 | 295.2 | ||||||||||||
Trading securities | 389.7 | 389.7 | 293.3 | 293.3 | ||||||||||||
Investments held by securitization entities | 454.8 | 454.8 | - | - | ||||||||||||
Securities lending collateral | - | - | 180.0 | 180.0 | ||||||||||||
Other invested assets | 189.5 | 189.5 | 236.8 | 236.8 | ||||||||||||
Cash and cash equivalents | 567.1 | 567.1 | 526.8 | 526.8 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Insurance liabilities for interest-sensitive products (a) | $ | 13,217.6 | $ | 13,217.6 | $ | 13,219.2 | $ | 13,219.2 | ||||||||
Investment borrowings | 653.9 | 724.9 | 683.9 | 677.6 | ||||||||||||
Borrowings related to securitization entities | 425.0 | 378.3 | - | - | ||||||||||||
Notes payable – direct corporate obligations | 1,029.8 | 1,106.0 | 1,037.4 | 1,041.7 |
(a) | The estimated fair value of insurance liabilities for interest-sensitive products was approximately equal to its carrying value at September 30, 2010 and December 31, 2009. This was because interest rates credited on the vast majority of account balances approximate current rates paid on similar products and because these rates are not generally guaranteed beyond one year. |
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