CNO FINANCIAL GROUP, INC., 10-Q filed on 8/1/2011
Quarterly Report
DOCUMENT AND ENTITY INFORMATION (USD $)
6 Months Ended
Jun. 30, 2011
Jul. 18, 2011
Jun. 30, 2010
Document Information [Line Items]
 
 
 
Entity Registrant Name
CNO Financial Group, Inc. 
 
 
Entity Central Index Key
0001224608 
 
 
Document Type
10-Q 
 
 
Document Period End Date
Jun. 30, 2011 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Document Fiscal Year Focus
2011 
 
 
Document Fiscal Period Focus
Q2 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Voluntary Filers
No 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Current Reporting Status
Yes 
 
 
Amendment Flag
FALSE 
 
 
Entity Public Float
 
 
$ 1,225,000,000 
Entity Common Stock, Shares Outstanding
 
249,431,710 
 
CONSOLIDATED BALANCE SHEET (USD $)
In Millions
Jun. 30, 2011
Dec. 31, 2010
Investments:
 
 
Fixed maturities, available for sale, at fair value (amortized cost: June 30, 2011 - $20,893.1; December 31, 2010 - $20,155.8)
$ 21,622.9 
$ 20,633.9 
Equity securities at fair value (cost: June 30, 2011 - $128.6; December 31, 2010 - $68.2)
129.6 
68.1 
Mortgage loans
1,752.8 
1,761.2 
Policy loans
279.5 
284.4 
Trading securities
83.5 
372.6 
Investments held by variable interest entities
414.0 
420.9 
Other invested assets
252.2 
240.9 
Total investments
24,534.5 
23,782.0 
Cash and cash equivalents - unrestricted
580.2 
571.9 
Cash and cash equivalents held by variable interest entities
25.3 
26.8 
Accrued investment income
314.3 
327.8 
Present value of future profits
936.5 
1,008.6 
Deferred acquisition costs
1,762.6 
1,764.2 
Reinsurance receivables
3,172.5 
3,256.3 
Income tax assets, net
703.5 
839.4 
Assets held in separate accounts
17.4 
17.5 
Other assets
349.8 
305.1 
Total assets
32,396.6 
31,899.6 
Liabilities for insurance products:
 
 
Interest-sensitive products
13,152.8 
13,194.7 
Traditional products
10,424.4 
10,307.6 
Claims payable and other policyholder funds
978.0 
968.7 
Liabilities related to separate accounts
17.4 
17.5 
Other liabilities
703.7 
496.3 
Investment borrowings
1,305.3 
1,204.1 
Borrowings related to variable interest entities
317.3 
386.9 
Notes payable - direct corporate obligations
934.5 
998.5 
Total liabilities
27,833.4 
27,574.3 
Commitments and contingencies
 
 
Shareholders' equity:
 
 
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: June 30, 2011 – 249,415,210; December 31, 2010 – 251,084,174)
2.5 
2.5 
Additional paid-in capital
4,414.3 
4,424.2 
Accumulated other comprehensive income
372.7 
238.3 
Accumulated deficit
(226.3)
(339.7)
Total shareholders' equity
4,563.2 
4,325.3 
Total liabilities and shareholders' equity
$ 32,396.6 
$ 31,899.6 
PARENTHETICAL DATA TO THE CONSOLIDATED BALANCE SHEET (USD $)
In Millions, except Share data
Jun. 30, 2011
Dec. 31, 2010
Investments:
 
 
Fixed maturities, available for sale, amortized cost
$ 20,893.1 
$ 20,155.8 
Equity securities amortized cost
$ 128.6 
$ 68.2 
Shareholders' equity:
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
8,000,000,000 
8,000,000,000 
Common stock, shares issued
249,415,210 
251,084,174 
Common stock, shares outstanding
249,415,210 
251,084,174 
CONSOLIDATED STATEMENT OF OPERATIONS (USD $)
In Millions, except Share data
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Revenues:
 
 
 
 
Insurance policy income
$ 679.6 
$ 667.9 
$ 1,346.8 
$ 1,332.5 
Net investment income (loss):
 
 
 
 
General account assets
342.2 
321.1 
678.3 
636.3 
Policyholder and reinsurer accounts and other special- purpose portfolios
3.1 
(22.7)
40.5 
1.3 
Realized investment gains (losses):
 
 
 
 
Net realized investment gains, excluding impairment losses
13.0 
11.2 
31.4 
26.6 
Other-than-temporary impairment losses:
 
 
 
 
Total other-than-temporary impairment losses
(10.1)
(29.3)
(23.4)
(47.0)
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income
0 
1.40 
0 
(1.20)
Net impairment losses recognized
(10.1)
(27.9)
(23.4)
(48.2)
Total realized gains (losses)
2.9 
(16.7)
8.0 
(21.6)
Fee revenue and other income
4.2 
3.6 
7.6 
7.1 
Total revenues
1,032.0 
953.2 
2,081.2 
1,955.6 
Benefits and expenses:
 
 
 
 
Insurance policy benefits
684.4 
651.0 
1,367.6 
1,350.0 
Interest expense
28.9 
28.7 
58.1 
56.2 
Amortization
101.5 
96.6 
238.2 
199.2 
Loss on extinguishment of debt
0.6 
0.9 
2.0 
2.7 
Other operating costs and expenses
124.4 
124.2 
239.5 
242.6 
Total benefits and expenses
939.8 
901.4 
1,905.4 
1,850.7 
Income before income taxes
92.2 
51.8 
175.8 
104.9 
Tax expense on period income
32.7 
18.7 
62.4 
37.9 
Net income
$ 59.5 
$ 33.1 
$ 113.4 
$ 67.0 
Basic:
 
 
 
 
Weighted average shares outstanding
250,933,000 
250,994,000 
251,027,000 
250,891,000 
Net income
$ 0.24 
$ 0.13 
$ 0.45 
$ 0.27 
Diluted:
 
 
 
 
Weighted average shares outstanding
308,048,000 
302,648,000 
307,773,000 
297,364,000 
Net income
$ 0.21 
$ 0.12 
$ 0.39 
$ 0.25 
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (USD $)
In Millions
Total
Common stock and additional paid-in capital
Accumulated other comprehensive income (loss)
Retained earnings (accumulated deficit)
Balance at Dec. 31, 2009
$ 3,532.4 
$ 4,411.3 
$ (264.3)
$ (614.6)
Comprehensive income (loss), net of tax:
 
 
 
 
Net income
67.0 
0 
0 
67.0 
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense of $303.7)
553.2 
0 
553.2 
0 
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense of $20.2)
36.1 
0 
36.1 
0 
Total comprehensive income (loss)
656.3 
 
 
 
Cumulative effect of accounting change
(15.9)
0 
(6.2)
(9.7)
Beneficial conversion feature related to the issuance of convertible debentures
4.0 
4.0 
0 
0 
Stock option and restricted stock plans
6.0 
6.0 
0 
0 
Balance at Jun. 30, 2010
4,182.8 
4,421.3 
318.8 
(557.3)
Balance at Dec. 31, 2010
4,325.3 
4,426.7 
238.3 
(339.7)
Comprehensive income (loss), net of tax:
 
 
 
 
Net income
113.4 
0 
0 
113.4 
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense of $303.7)
131.6 
0 
131.6 
0 
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense of $20.2)
2.8 
0 
2.8 
0 
Total comprehensive income (loss)
247.8 
 
 
 
Cost of shares acquired
(16.2)
(16.2)
0 
0 
Stock option and restricted stock plans
6.3 
6.3 
0 
0 
Balance at Jun. 30, 2011
$ 4,563.2 
$ 4,416.8 
$ 372.7 
$ (226.3)
PARENTHETICAL DATA TO THE CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (USD $)
In Millions
6 Months Ended
Jun. 30,
2011
2010
Comprehensive income (loss), net of tax:
 
 
Change in unrealized appreciation (depreciation) of investments, applicable income tax expense
$ 74.4 
$ 303.7 
Change in noncredit component of impairment losses on fixed maturities, available for sale, applicable income tax expense
$ 1.6 
$ 20.2 
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
In Millions
6 Months Ended
Jun. 30,
2011
2010
Cash flows from operating activities:
 
 
Insurance policy income
$ 1,194.3 
$ 1,177.3 
Net investment income
687.1 
667.4 
Fee revenue and other income
7.6 
7.1 
Insurance policy benefits
(1,022.6)
(997.3)
Interest expense
(42.2)
(54.1)
Policy acquisition costs
(215.1)
(210.3)
Other operating costs
(245.8)
(240.2)
Taxes
(2.50)
(3.90)
Net cash provided by operating activities
360.8 
346.0 
Cash flows from investing activities:
 
 
Sales of investments
2,931.9 
4,572.6 
Maturities and redemptions of investments
538.1 
392.2 
Purchases of investments
(4,050.8)
(5,406.2)
Net sales (purchases) of trading securities
304.4 
(41.5)
Change in cash and cash equivalents held by variable interest entities
1.5 
(6.3)
Other
(15.1)
(9.2)
Net cash used by investing activities
(290.0)
(498.4)
Cash flows from financing activities:
 
 
Issuance of notes payable, net
0 
110.8 
Payments on notes payable
(66.2)
(116.5)
Issuance of common stock
0.3 
0 
Payments to repurchase common stock
(16.2)
0 
Amounts received for deposit products
837.7 
882.6 
Withdrawals from deposit products
(854.9)
(862.0)
Investment borrowings and borrowings related to variable interest entities
36.8 
(62.2)
Net cash used by financing activities
(62.5)
(47.3)
Net decrease in cash and cash equivalents
8.3 
(199.7)
Cash and cash equivalents, beginning of period
571.9 
523.4 
Cash and cash equivalents, end of period
$ 580.2 
$ 323.7 
BUSINESS AND BASIS OF PRESENTATION
BUSINESS AND BASIS OF PRESENTATION
BUSINESS AND BASIS OF PRESENTATION


The following notes should be read together with the notes to the consolidated financial statements included in our 2010 Annual Report on Form 10-K.


CNO Financial Group, Inc., a Delaware corporation (“CNO”), is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products.  CNO became the successor to Conseco, Inc., an Indiana corporation (our “Predecessor”), in connection with our bankruptcy reorganization which became effective on September 10, 2003.  The terms “CNO Financial Group, Inc.”, the “Company”, “we”, “us”, and “our” as used in these financial statements refer to CNO and its subsidiaries or, when the context requires otherwise, our Predecessor and its subsidiaries.  We focus on serving the senior and middle-income markets, which we believe are attractive, underserved, high growth markets.  We sell our products through three distribution channels: career agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing.


Our unaudited consolidated financial statements reflect normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented.  As permitted by rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to quarterly reports on Form 10-Q, we have condensed or omitted certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  We have reclassified certain amounts from the prior periods to conform to the 2011 presentation.  These reclassifications have no effect on net income or shareholders’ equity.  Results for interim periods are not necessarily indicative of the results that may be expected for a full year.


The balance sheet at December 31, 2010, presented herein, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.


When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods.  For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, certain investments (including derivatives), assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals.  If our future experience differs from these estimates and assumptions, our financial statements would be materially affected.


Our consolidated financial statements exclude the results of transactions between us and our consolidated affiliates, or among our consolidated affiliates.
INVESTMENTS
INVESTMENTS
INVESTMENTS


We classify our fixed maturity securities into one of three categories: (i) “available for sale” (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders’ equity); (ii) “trading” (which we carry at estimated fair value with changes in such value recognized as net investment income (classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios)); or (iii) “held to maturity” (which we carry at amortized cost).  We had no fixed maturity securities classified as held to maturity during the periods presented in these financial statements.


The trading account includes investments backing the market strategies of our multibucket annuity products and certain reinsurance agreements.  The change in fair value of these securities, which is recognized currently in income from policyholder and reinsurer accounts and other special-purpose portfolios (a component of investment income), is substantially offset by the change in insurance policy benefits for these products.  Prior to June 30, 2011, certain of our trading securities were held to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products.  See the note entitled “Accounting for Derivatives” for further discussion regarding these embedded derivatives.  Our trading securities totaled $83.5 million and $372.6 million at June 30, 2011 and December 31, 2010, respectively.


Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments.  These amounts, included in shareholders’ equity as of June 30, 2011 and December 31, 2010, were as follows (dollars in millions):


 
June 30,

2011
 
December 31,

2010
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized
$
.6


 
$
(4.4
)
Net unrealized gains (losses) on all other investments
732.0


 
476.5


Adjustment to present value of future profits (a)
(23.4
)
 
(17.6
)
Adjustment to deferred acquisition costs
(120.9
)
 
(76.2
)
Unrecognized net loss related to deferred compensation plan
(7.3
)
 
(7.7
)
Deferred income tax liability
(208.3
)
 
(132.3
)
Accumulated other comprehensive income
$
372.7


 
$
238.3


_________
(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).


At June 30, 2011, the amortized cost, gross unrealized gains and losses, other-than-temporary impairments in accumulated other comprehensive income and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions):


 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Estimated
fair value
 
Other-than-
temporary
impairments
included in
accumulated other
comprehensive
income
Corporate securities
$
14,263.3


 
$
769.2


 
$
(117.4
)
 
$
14,915.1


 
$
—


United States Treasury securities and obligations of United States government corporations and agencies
283.4


 
5.0


 
(9.8
)
 
278.6


 
—


States and political subdivisions
1,849.2


 
40.4


 
(46.1
)
 
1,843.5


 
—


Debt securities issued by foreign governments
.8


 
.1


 
—


 
.9


 
—


Asset-backed securities
739.6


 
19.0


 
(9.7
)
 
748.9


 
—


Collateralized debt obligations
189.6


 
4.8


 
(.9
)
 
193.5


 
—


Commercial mortgage-backed securities
1,410.6


 
80.0


 
(10.8
)
 
1,479.8


 
—


Mortgage pass-through securities
26.0


 
2.0


 
—


 
28.0


 
—


Collateralized mortgage obligations
2,130.6


 
38.3


 
(34.3
)
 
2,134.6


 
(10.3
)
Total fixed maturities, available for sale
$
20,893.1


 
$
958.8


 
$
(229.0
)
 
$
21,622.9


 
$
(10.3
)




The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at June 30, 2011, by contractual maturity.  Actual maturities will differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties.  In addition, structured securities (such as asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations, collectively referred to as “structured securities”) frequently include provisions for periodic principal payments and permit periodic unscheduled payments.


 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
107.7


 
$
109.0


Due after one year through five years
1,164.7


 
1,238.3


Due after five years through ten years
4,245.4


 
4,547.2


Due after ten years
10,878.9


 
11,143.6


Subtotal
16,396.7


 
17,038.1


Structured securities
4,496.4


 
4,584.8


Total fixed maturities, available for sale
$
20,893.1


 
$
21,622.9






Net Realized Investment Gains (Losses)


During the first six months of 2011, we recognized net realized investment gains of $8.0 million, which were comprised of $31.4 million of net gains from the sales of investments (primarily fixed maturities) with proceeds of $2.9 billion and $23.4 million of writedowns of investments for other than temporary declines in fair value recognized through net income.


During the first six months of 2010, we recognized net realized investment losses of $21.6 million, which were comprised of $26.6 million of net gains from the sales of investments (primarily fixed maturities) with proceeds of $4.6 billion and $48.2 million of writedowns of investments for other than temporary declines in fair value recognized through net income ($47.0 million, prior to the $(1.2) million of impairment losses recognized through accumulated other comprehensive income (loss)).


At June 30, 2011, fixed maturity securities and mortgage loans in default or considered nonperforming had both an aggregate amortized cost and a carrying value of $6.2 million.


Our fixed maturity investments are generally purchased in the context of a long-term strategy to fund insurance liabilities, so we do not generally seek to generate short-term realized gains through the purchase and sale of such securities.  In certain circumstances, including those in which securities are selling at prices which exceed our view of their underlying economic value, or when it is possible to reinvest the proceeds to better meet our long-term asset-liability objectives, we may sell certain securities.


During the six months ended June 30, 2011, we sold $.7 billion of fixed maturity investments which resulted in gross investment losses (before income taxes) of $39.0 million.  We sell securities at a loss for a number of reasons including, but not limited to:  (i) changes in the investment environment; (ii) expectation that the market value could deteriorate further; (iii) desire to reduce our exposure to an asset class, an issuer or an industry; (iv) changes in credit quality; or (v) changes in expected liability cash flows.


There was one investment sold at a loss during the first six months of 2011 that had been continuously in an unrealized loss position exceeding 20 percent of the amortized cost basis for more than 12 months prior to the sale of the investment. This investment had an amortized cost and estimated fair value of $4.0 million and $2.7 million, respectively.


We regularly evaluate our investments for possible impairment.  Our assessment of whether unrealized losses are “other than temporary” requires significant judgment.  Factors considered include:  (i) the extent to which fair value is less than the cost basis; (ii) the length of time that the fair value has been less than cost; (iii) whether the unrealized loss is event driven, credit-driven or a result of changes in market interest rates or risk premium; (iv) the near-term prospects for specific events, developments or circumstances likely to affect the value of the investment; (v) the investment’s rating and whether the investment is investment-grade and/or has been downgraded since its purchase; (vi) whether the issuer is current on all payments in accordance with the contractual terms of the investment and is expected to meet all of its obligations under the terms of the investment; (vii) whether we intend to sell the investment or it is more likely than not that circumstances will require us to sell the investment before recovery occurs; (viii) the underlying current and prospective asset and enterprise values of the issuer and the extent to which the recoverability of the carrying value of our investment may be affected by changes in such values; (ix) projections of, and unfavorable changes in, cash flows on structured securities including mortgage-backed and asset-backed securities; (x) the value of any collateral; and (xi) other objective and subjective factors.


Future events may occur, or additional information may become available, which may necessitate future realized losses of securities in our portfolio.  Significant losses in the estimated fair values of our investments could have a material adverse effect on our consolidated financial statements in future periods.


Impairment losses on equity securities are recognized in net income.  The manner in which impairment losses on fixed maturity securities, available for sale, are recognized in the financial statements is dependent on the facts and circumstances related to the specific security.  If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, the security is other-than-temporarily impaired and the full amount of the impairment is recognized as a loss through earnings.  If we do not expect to recover the amortized cost basis, we do not plan to sell the security, and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current period credit loss, the recognition of the other-than-temporary impairment is bifurcated.  We recognize the credit loss portion in net income and the noncredit loss portion in accumulated other comprehensive income (loss).


We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security.  The present value is determined using the best estimate of future cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security.  The methodology and assumptions for establishing the best estimate of future cash flows vary depending on the type of security.


For most structured securities, cash flow estimates are based on bond specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including excess spread, subordination and guarantees.  For corporate bonds, cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond specific facts and circumstances including timing, secured interest and loss severity.  The previous amortized cost basis less the impairment recognized in net income becomes the security’s new cost basis.  We accrete the new cost basis to the estimated future cash flows over the expected remaining life of the security.


The remaining non-credit impairment, which is recorded in accumulated other comprehensive income (loss), is the difference between the security’s estimated fair value and our best estimate of future cash flows discounted at the effective interest rate prior to impairment.  The remaining non-credit impairment typically represents changes in the market interest rates, current market liquidity and risk premiums.  As of June 30, 2011, other-than-temporary impairments included in accumulated other comprehensive income of $10.3 million (before taxes and related amortization) related to structured securities.


The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for the six months ended June 30, 2011 and 2010 (dollars in millions):
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Credit losses on fixed maturity securities, available for sale, beginning of period
$
(1.8
)
 
$
(29.4
)
 
$
(6.1
)
 
$
(27.2
)
Add:  credit losses on other-than-temporary impairments not previously recognized
—


 
(1.3
)
 
—


 
(1.3
)
Less:  credit losses on securities sold
.2


 
10.1


 
4.5


 
13.5


Less:  credit losses on securities impaired due to intent to sell (a)
—


 
1.1


 
—


 
1.1


Add:  credit losses on previously impaired securities
—


 
(4.5
)
 
—


 
(10.1
)
Less:  increases in cash flows expected on previously impaired securities
—


 
—


 
—


 
—


Credit losses on fixed maturity securities, available for sale, end of period
$
(1.6
)
 
$
(24.0
)
 
$
(1.6
)
 
$
(24.0
)
__________
(a)
Represents securities for which the amount previously recognized in accumulated other comprehensive income 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.


Gross Unrealized Investment Losses


Our investment strategy is to maximize, over a sustained period and within acceptable parameters of quality and risk, investment income and total investment return through active investment management.  Accordingly, we may sell securities at a gain or a loss to enhance the projected income or total return of the portfolio as market opportunities change, to reflect changing perceptions of risk, or to better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities.


The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at June 30, 2011 (dollars in millions):


 
Less than 12 months
 
12 months or greater
 
Total
Description of securities
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
United States Treasury securities and obligations of United States government corporations and agencies
$
198.7


 
$
(9.8
)
 
$
.3


 
$
—


 
$
199.0


 
$
(9.8
)
States and political subdivisions
487.3


 
(12.1
)
 
216.0


 
(34.0
)
 
703.3


 
(46.1
)
Corporate securities
2,718.1


 
(70.2
)
 
519.0


 
(47.2
)
 
3,237.1


 
(117.4
)
Asset-backed securities
305.1


 
(8.6
)
 
9.7


 
(1.1
)
 
314.8


 
(9.7
)
Collateralized debt obligations
19.9


 
(.9
)
 
—


 
—


 
19.9


 
(.9
)
Commercial mortgage-backed securities
184.3


 
(7.6
)
 
47.6


 
(3.2
)
 
231.9


 
(10.8
)
Mortgage pass-through securities
.1


 
—


 
3.3


 
—


 
3.4


 
—


Collateralized mortgage obligations
840.5


 
(33.4
)
 
29.1


 
(.9
)
 
869.6


 
(34.3
)
Total fixed maturities, available for sale
$
4,754.0


 
$
(142.6
)
 
$
825.0


 
$
(86.4
)
 
$
5,579.0


 
$
(229.0
)




The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2010 (dollars in millions):
 
 
Less than 12 months
 
12 months or greater
 
Total
Description of securities
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
United States Treasury securities and obligations of United States government corporations and agencies
 
$
196.9


 
$
(11.8
)
 
$
.2


 
$
—


 
$
197.1


 
$
(11.8
)
States and political subdivisions
 
1,201.9


 
(54.8
)
 
229.6


 
(45.9
)
 
1,431.5


 
(100.7
)
Corporate securities
 
2,633.0


 
(80.6
)
 
864.6


 
(88.4
)
 
3,497.6


 
(169.0
)
Asset-backed securities
 
272.2


 
(2.4
)
 
54.0


 
(3.9
)
 
326.2


 
(6.3
)
Collateralized debt obligations
 
117.0


 
(0.9
)
 
5.8


 
(.2
)
 
122.8


 
(1.1
)
Commercial mortgage-backed securities
 
15.5


 
—


 
111.8


 
(12.5
)
 
127.3


 
(12.5
)
Mortgage pass-through securities
 
.3


 
—


 
3.4


 
—


 
3.7


 
—


Collateralized mortgage obligations
 
661.0


 
(29.1
)
 
112.9


 
(6.4
)
 
773.9


 
(35.5
)
Total fixed maturities, available for sale
 
$
5,097.8


 
$
(179.6
)
 
$
1,382.3


 
$
(157.3
)
 
$
6,480.1


 
$
(336.9
)




Based on management’s current assessment of investments with unrealized losses at June 30, 2011, the Company believes the issuers of the securities will continue to meet their obligations (or with respect to equity-type securities, the investment value will recover to its cost basis).  While we do not have the intent to sell securities with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses prior to their anticipated recovery, our intent on an individual security may change, based upon market or other unforeseen developments.  In such instances, if a loss is recognized from a sale subsequent to a balance sheet date due to these unexpected developments, the loss is recognized in the period in which we had the intent to sell the security before its anticipated recovery.
EARNINGS PER SHARE
EARNINGS PER SHARE
EARNINGS PER SHARE


A reconciliation of net income and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):


 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Net income for basic earnings per share
$
59.5


 
$
33.1


 
$
113.4


 
$
67.0


Add:  interest expense on 7.0% Convertible Senior Debentures due 2016 (the “7.0% Debentures”), net of income taxes
3.7


 
3.4


 
7.4


 
6.0


Net income for diluted earnings per share
$
63.2


 
$
36.5


 
$
120.8


 
$
73.0


Shares:
 


 
 


 
 


 
 


Weighted average shares outstanding for basic earnings per share
250,933


 
250,994


 
251,027


 
250,891


Effect of dilutive securities on weighted average shares:
 


 
 


 
 


 
 


7% Debentures
53,367


 
49,793


 
53,367


 
44,663


Stock option and restricted stock plans
3,036


 
1,861


 
2,892


 
1,810


Warrants
712


 
—


 
487


 
—


Dilutive potential common shares
57,115


 
51,654


 
56,746


 
46,473


Weighted average shares outstanding for diluted earnings per share
308,048


 
302,648


 
307,773


 
297,364






Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding for the period.  Restricted shares (including our performance shares) are not included in basic earnings per share until vested.  Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options and
warrants were exercised and restricted stock was vested.  The dilution from options, warrants and restricted shares is calculated using the treasury stock method.  Under this method, we assume the proceeds from the exercise of the options and warrants (or the unrecognized compensation expense with respect to restricted stock) will be used to purchase shares of our common stock at the average market price during the period, reducing the dilutive effect of the exercise of the options (or the vesting of the restricted stock). Initially, the 7.0% Debentures will be convertible into 182.1494 shares of our common stock for each $1,000 principal amount of 7.0% Debentures, which is equivalent to an initial conversion price of approximately $5.49 per share. The conversion rate is subject to adjustment following the occurrence of certain events in accordance with the terms of the 7.0% Debenture.


BUSINESS SEGMENTS
BUSINESS SEGMENTS
BUSINESS SEGMENTS


Beginning July 1, 2010, management changed the manner in which it disaggregates the Company’s operations for making operating decisions and assessing performance.  As a result, the Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; Other CNO Business, comprised primarily of products we no longer sell actively; and corporate operations, comprised of holding company activities and certain noninsurance company businesses.  All prior period segment disclosures have been revised to conform to management’s current view of the Company’s operating segments.


We measure segment performance by excluding realized investment gains (losses) because we believe that this performance measure is a better indicator of the ongoing business and trends in our business.  Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of realized investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business.


Realized investment gains (losses) depend on market conditions and do not necessarily relate to the underlying business of our segments.  Realized investment gains (losses) may affect future earnings levels since our underlying business is long-term in nature and changes in our investment portfolio may impact our ability to earn the assumed interest rates needed to maintain the profitability of our business.
Operating information by segment was as follows (dollars in millions):
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Revenues:
 
 
 
 
 
 
 
Bankers Life:
 
 
 
 
 
 
 
Insurance policy income:
 
 
 
 
 
 
 
Annuities
$
8.7


 
$
10.7


 
$
17.1


 
$
19.0


Health
343.3


 
342.4


 
683.1


 
688.3


Life
57.6


 
47.6


 
109.4


 
89.6


Net investment income (a)
196.9


 
160.5


 
406.5


 
346.4


Fee revenue and other income (a)
3.3


 
2.7


 
5.6


 
5.0


Total Bankers Life revenues
609.8


 
563.9


 
1,221.7


 
1,148.3


Washington National:
 


 
 


 
 


 
 


Insurance policy income:
 


 
 


 
 


 
 


Health
141.7


 
139.4


 
281.9


 
279.0


Life
3.8


 
4.1


 
7.9


 
8.7


Other
1.1


 
1.2


 
2.2


 
2.4


Net investment income (a)
46.7


 
45.9


 
93.0


 
91.3


Fee revenue and other income (a)
.2


 
.2


 
.5


 
.5


Total Washington National revenues
193.5


 
190.8


 
385.5


 
381.9


Colonial Penn:
 


 
 


 
 


 
 


Insurance policy income:
 


 
 


 
 


 
 


Health
1.5


 
1.6


 
3.1


 
3.4


Life
49.4


 
47.7


 
98.1


 
94.1


Net investment income (a)
10.5


 
9.7


 
20.8


 
19.4


Fee revenue and other income (a)
.2


 
.1


 
.4


 
.3


Total Colonial Penn revenues
61.6


 
59.1


 
122.4


 
117.2


Other CNO Business:
 


 
 


 
 


 
 


Insurance policy income:
 


 
 


 
 


 
 


Annuities
2.9


 
2.4


 
5.2


 
4.9


Health
7.1


 
7.5


 
14.4


 
15.2


Life
61.9


 
62.6


 
123.2


 
126.5


Other
.6


 
.7


 
1.2


 
1.4


Net investment income (a)
86.7


 
80.4


 
181.4


 
173.0


Total Other CNO Business revenues
159.2


 
153.6


 
325.4


 
321.0


Corporate operations:
 


 
 


 
 


 
 


Net investment income
4.5


 
1.9


 
17.1


 
7.5


Fee and other income
.5


 
.6


 
1.1


 
1.3


Total corporate revenues
5.0


 
2.5


 
18.2


 
8.8


Total revenues
1,029.1


 
969.9


 
2,073.2


 
1,977.2




(continued on next page)


(continued from previous page)


 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Expenses:
 
 
 
 
 
 
 
Bankers Life:
 
 
 
 
 
 
 
Insurance policy benefits
$
408.9


 
$
382.7


 
$
813.7


 
$
799.2


Amortization
69.7


 
70.6


 
171.6


 
137.6


Interest expense on investment borrowings
1.1


 
—


 
2.3


 
—


Other operating costs and expenses
45.4


 
46.6


 
85.5


 
94.3


Total Bankers Life expenses
525.1


 
499.9


 
1,073.1


 
1,031.1


Washington National:
 


 
 


 
 


 
 


Insurance policy benefits
118.3


 
116.7


 
230.5


 
229.2


Amortization
14.0


 
13.1


 
30.1


 
27.9


Other operating costs and expenses
38.5


 
39.9


 
77.0


 
76.1


Total Washington National expenses
170.8


 
169.7


 
337.6


 
333.2


Colonial Penn:
 


 
 


 
 


 
 


Insurance policy benefits
38.0


 
35.4


 
76.7


 
72.1


Amortization
8.6


 
8.8


 
17.6


 
17.5


Other operating costs and expenses
7.4


 
7.3


 
15.1


 
14.7


Total Colonial Penn expenses
54.0


 
51.5


 
109.4


 
104.3


Other CNO Business:
 


 
 


 
 


 
 


Insurance policy benefits
119.2


 
116.2


 
246.7


 
249.5


Amortization
9.9


 
3.6


 
19.0


 
15.8


Interest expense on investment borrowings
5.0


 
5.0


 
9.9


 
10.0


Other operating costs and expenses
20.3


 
20.0


 
37.9


 
38.8


Total Other CNO Business expenses
154.4


 
144.8


 
313.5


 
314.1


Corporate operations:
 


 
 


 
 


 
 


Interest expense on corporate debt
19.3


 
19.8


 
39.9


 
39.3


Interest expense on borrowings of variable interest entities
3.5


 
3.9


 
6.0


 
6.9


Loss on extinguishment of debt
.6


 
.9


 
2.0


 
2.7


Other operating costs and expenses
12.8


 
10.4


 
24.0


 
18.7


Total corporate expenses
36.2


 
35.0


 
71.9


 
67.6


Total expenses
940.5


 
900.9


 
1,905.5


 
1,850.3


Income (loss) before net realized investment losses (net of related amortization) and income taxes:
 


 
 
 
 


 
 


Bankers Life
84.7


 
64.0


 
148.6


 
117.2


Washington National
22.7


 
21.1


 
47.9


 
48.7


Colonial Penn
7.6


 
7.6


 
13.0


 
12.9


Other CNO Business
4.8


 
8.8


 
11.9


 
6.9


Corporate operations
(31.2
)
 
(32.5
)
 
(53.7
)
 
(58.8
)
Income before net realized investment losses (net of related amortization) and income taxes
$
88.6


 
$
69.0


 
$
167.7


 
$
126.9


___________________
(a)
It is not practicable to provide additional components of revenue by product or services.


A reconciliation of segment revenues and expenses to consolidated revenues and expenses is as follows (dollars in millions):


 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Total segment revenues                                                                                            
$
1,029.1


 
$
969.9


 
$
2,073.2


 
$
1,977.2


Net realized investment gains (losses)                                                                                            
2.9


 
(16.7
)
 
8.0


 
(21.6
)
Consolidated revenues                                                                                       
$
1,032.0


 
$
953.2


 
$
2,081.2


 
$
1,955.6


Total segment expenses                                                                                            
$
940.5


 
$
900.9


 
$
1,905.5


 
$
1,850.3


Amortization related to net realized investment gains (losses)
(.7
)
 
.5


 
(.1
)
 
.4


Consolidated expenses                                                                                       
$
939.8


 
$
901.4


 
$
1,905.4


 
$
1,850.7


ACCOUNTING FOR DERIVATIVES
ACCOUNTING FOR DERIVATIVES
ACCOUNTING FOR DERIVATIVES


Our fixed index annuity products provide a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the “participation rate”) of the amount of increase in the value of a particular index, such as the Standard & Poor’s 500 Index, over a specified period.  Typically, on each policy anniversary date, a new index period begins.  We are generally able to change the participation rate at the beginning of each index period during a policy year, subject to contractual minimums.  We typically buy call options (including call spreads) referenced to the applicable indices in an effort to hedge potential increases to policyholder benefits resulting from increases in the particular index to which the policy’s return is linked.  We reflect changes in the estimated fair value of these options in net investment income (classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios).  Net investment gains related to fixed index products were $19.0 million and $(26.0) million in the six months ended June 30, 2011 and 2010, respectively.  These amounts were substantially offset by a corresponding change to insurance policy benefits.  The estimated fair value of these options was $100.9 million and $89.4 million at June 30, 2011 and December 31, 2010, respectively.  We classify these instruments as other invested assets.


The Company accounts for the options attributed to the policyholder for the estimated life of the annuity contract as embedded derivatives.  The expected future cost of options on fixed index annuity products is used to determine the value of embedded derivatives.  The Company purchases options to hedge liabilities for the next policy year on each policy anniversary date and must estimate the fair value of the forward embedded options related to the policies.  These accounting requirements often create volatility in the earnings from these products.  We record the changes in the fair values of the embedded derivatives in current earnings as a component of insurance policy benefits.  The fair value of these derivatives, which are classified as “liabilities for interest-sensitive products”, was $612.7 million at June 30, 2011 and $553.6 million at December 31, 2010.  Prior to June 30, 2011, we maintained a specific block of investments in our trading securities account (which we carried at estimated fair value with changes in such value recognized as investment income from policyholder and reinsurer accounts and other special-purpose portfolios) to offset the income statement volatility caused by the effect of interest rate fluctuations on the value of embedded derivatives related to our fixed index annuity products.  During the second quarter of 2011, we sold this trading portfolio, which will result in increased volatility in future earnings since the volatility caused by the accounting requirements to record embedded options at fair value will no longer be offset.


If the counterparties for the call options we hold fail to meet their obligations, we may have to recognize a loss.  We limit our exposure to such a loss by diversifying among several counterparties believed to be strong and creditworthy.  At June 30, 2011, substantially all of our counterparties were rated “BBB+” or higher by Standard & Poor’s Corporation (“S&P”).


Certain of our reinsurance payable balances contain embedded derivatives.  Such derivatives had an estimated fair value of $.7 million and $(.4) million at June 30, 2011 and December 31, 2010, respectively.  We record the change in the fair value of these derivatives as a component of investment income (classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios).  We maintain the investments related to these agreements in our trading securities account, which we carry at estimated fair value with changes in such value recognized as investment income (also classified as investment income from policyholder and reinsurer accounts and other special-purpose portfolios).  The change in value of these trading securities offsets the change in value of the embedded derivatives.


REINSURANCE
REINSURANCE
REINSURANCE


The cost of reinsurance ceded totaled $57.6 million and $67.1 million in the second quarters of 2011 and 2010, respectively, and $118.0 million and $131.7 million in the first six months of 2011 and 2010, respectively.  We deduct this cost from insurance policy income.  Reinsurance recoveries netted against insurance policy benefits totaled $52.3 million and $113.6 million in the second quarters of 2011 and 2010, respectively, and $114.8 million and $233.5 million in the first six months of 2011 and 2010, respectively.


From time-to-time, we assume insurance from other companies.  Any costs associated with the assumption of insurance are amortized consistent with the method used to amortize deferred acquisition costs.  Reinsurance premiums assumed totaled $26.1 million and $26.6 million in the second quarters of 2011 and 2010, respectively, and $46.5 million and $50.8 million in the first six months of 2011 and 2010, respectively.  Reinsurance premiums included amounts assumed pursuant to marketing and quota-share agreements with Coventry Health Care (“Coventry”) of $20.4 million and $19.4 million in the second quarters of 2011 and 2010, respectively, and $34.8 million and $37.3 million in the first six months of 2011 and 2010, respectively. Coventry decided to cease selling Private-Fee-For-Service (“PFFS”) plans effective January 1, 2010.  In July 2009, Bankers Life and Casualty Company (“Bankers Life”) entered into an agreement with Humana, Inc. (“Humana”) under which it offers Humana’s Medicare Advantage/PFFS plans to its policyholders and consumers nationwide through its career agency force and receives marketing fees based on sales.  Effective January 1, 2010, the Company no longer assumes the underwriting risk related to PFFS business.


See the note entitled “Accounting for Derivatives” for a discussion of the derivative embedded in the payable related to certain modified coinsurance agreements.


INCOME TAXES
INCOME TAXES
INCOME TAXES


The components of income tax expense were as follows (dollars in millions):


 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Current tax expense
$
1.8


 
$
1.5


 
$
4.9


 
$
2.5


Deferred tax provision
30.9


 
17.2


 
57.5


 
35.4


Total income tax expense
$
32.7


 
$
18.7


 
$
62.4


 
$
37.9






A reconciliation of the U.S. statutory corporate tax rate to the effective rate reflected in the consolidated statement of operations is as follows:
 


Six months ended


June 30,
 
2011
 
2010
U.S. statutory corporate rate
35.0
 %
 
35.0
 %
Other nondeductible benefits
(.4
)
 
.4


State taxes
.7


 
.9


Provision for tax issues, tax credits and other
.2


 
(.2
)
Effective tax rate
35.5
 %
 
36.1
 %




The components of the Company’s income tax assets and liabilities were as follows (dollars in millions):
 
June 30,

2011
 
December 31,

2010
Deferred tax assets:
 
 
 
Net federal operating loss carryforwards attributable to:
 
 
 
Life insurance subsidiaries
$
635.2


 
$
681.7


Non-life companies
874.7


 
870.6


Net state operating loss carryforwards
17.7


 
17.8


Tax credits
28.6


 
23.4


Capital loss carryforwards
346.0


 
339.7


Deductible temporary differences:
 


 
 


Investments
—


 
5.3


Insurance liabilities
732.2


 
738.9


Other
45.9


 
62.8


Gross deferred tax assets
2,680.3


 
2,740.2


Deferred tax liabilities:
 


 
 


Investments
(5.8
)
 
—


Present value of future profits and deferred acquisition costs
(668.0
)
 
(676.3
)
Unrealized appreciation on investments
(208.3
)
 
(132.3
)
Gross deferred tax liabilities
(882.1
)
 
(808.6
)
Net deferred tax assets before valuation allowance
1,798.2


 
1,931.6


Valuation allowance
(1,081.4
)
 
(1,081.4
)
Net deferred tax assets
716.8


 
850.2


Current income taxes accrued
(13.3
)
 
(10.8
)
Income tax assets, net
$
703.5


 
$
839.4






Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and net operating loss carryforwards (“NOLs”).  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted.


A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized.  We evaluate the need to establish a valuation allowance for our deferred income tax assets on an ongoing basis.  In evaluating our deferred income tax assets, we consider whether the deferred income tax assets will be realized, based on the more-likely-than-not realization threshold criterion.  The ultimate realization of our deferred income tax assets depends upon generating sufficient future taxable income during the periods in which our temporary differences become deductible and before our capital loss carryforwards and NOLs expire.  This assessment requires significant judgment.  In assessing the need for a valuation allowance, appropriate consideration is given to all positive and negative evidence related to the realization of the deferred tax assets.  This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, excess appreciated asset value over the tax basis of net assets, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning alternatives.


Concluding that a valuation allowance is not required is difficult when there has been significant negative evidence, such as cumulative losses in recent years.  We utilize a three year rolling calculation of actual income before income taxes as our primary measure of cumulative losses in recent years.  Our analysis of whether there needs to be any changes to the deferred tax valuation allowance recognizes that as of June 30, 2011, we have incurred a cumulative loss over the evaluation period, resulting from the substantial loss during 2008 primarily related to the transfer of Senior Health Insurance Company of Pennsylvania (“Senior Health”) to an independent trust.  As a result of the cumulative losses recognized in recent years, our evaluation of the need to increase the valuation allowance for deferred tax assets was primarily based on our historical taxable earnings.  However, because a substantial portion of the cumulative losses for the three-year period ended June 30, 2011, relates to transactions to dispose of blocks of businesses, we have adjusted the three-year cumulative results for the income and losses from the blocks of business disposed of in the past and the business of Senior Health transferred in 2008.  We consider this to be non-recurring and have reflected our best estimates of when temporary differences will reverse over the carryforward periods. We do not expect to be in a three year cumulative loss position at September 30, 2011, which would have an impact on the manner we evaluate our valuation allowance.


At June 30, 2011, our valuation allowance for our net deferred tax assets was $1.1 billion, as we have determined that it is more likely than not that a portion of our deferred tax assets will not be realized.  This determination was made by evaluating each component of the deferred tax asset and assessing the effects of limitations and/or interpretations on the value of such component to be fully recognized in the future.  We have also evaluated the likelihood that we will have sufficient taxable income to offset the available deferred tax assets based on evidence which we consider to be objective and verifiable.  Based upon our analysis completed at June 30, 2011, we believe that we will, more likely than not, recover $.7 billion of our deferred tax assets through reductions of our tax liabilities in future periods.  There was no change to our valuation allowance for deferred tax assets during the six months ended June 30, 2011.


Recovery of our deferred tax assets is dependent on achieving the projections of future taxable income embedded in our analysis and failure to do so would result in an increase in the valuation allowance in a future period.  Any future increase in the valuation allowance may result in additional income tax expense and reduce shareholders’ equity, and such an increase could have a significant impact upon our earnings in the future.  In addition, the use of the Company’s NOLs is dependent, in part, on whether the Internal Revenue Service (the “IRS”) does not take an adverse position in the future regarding the tax position we have taken in our tax returns with respect to the allocation of cancellation of indebtedness income resulting from the bankruptcy of our Predecessor.


The Internal Revenue Code (the “Code”) limits the extent to which losses realized by a non-life entity (or entities) may offset income from a life insurance company (or companies) to the lesser of:  (i) 35 percent of the income of the life insurance company; or (ii) 35 percent of the total loss of the non-life entities (including NOLs of the non-life entities).  There is no similar limitation on the extent to which losses realized by a life insurance entity (or entities) may offset income from a non-life entity (or entities).


Section 382 imposes limitations on a corporation’s ability to use its NOLs when the company undergoes an ownership change.  Future transactions and the timing of such transactions could cause an ownership change for Section 382 income tax purposes.  Such transactions may include, but are not limited to, additional repurchases or issuances of common stock (including upon conversion of our outstanding 7.0% Debentures), or acquisitions or sales of shares of CNO stock by certain holders of our shares, including persons who have held, currently hold or may accumulate in the future five percent or more of our outstanding common stock for their own account.  Many of these transactions are beyond our control.  If an additional ownership change were to occur for purposes of Section 382, we would be required to calculate an annual restriction on the use of our NOLs to offset future taxable income.  The annual restriction would be calculated based upon the value of CNO’s equity at the time of such ownership change, multiplied by a federal long-term tax exempt rate (4.30 percent at June 30, 2011), and the annual restriction could effectively eliminate our ability to use a substantial portion of our NOLs to offset future taxable income.  We regularly monitor ownership change (as calculated for purposes of Section 382) and, as of June 30, 2011, we were below the 50 percent ownership change level that would trigger further impairment of our ability to utilize our NOLs.


As of June 30, 2011, we had $4.3 billion of federal NOLs and $1.0 billion of capital loss carryforwards, which expire as follows (dollars in millions):
Year of expiration
 
Net operating loss carryforwards (a)
 
Capital loss
 
Total loss
 
 
Life
 
Non-life
 
carryforwards
 
carryforwards
2011
 
$
—


 
 
 
$
0.1


 
 
 
$
—


 
$
0.1


2013
 
—


 
 
 
—


 
 
 
939.8


 
939.8


2014
 
—


 
 
 
—


 
 
 
28.7


 
28.7


2016
 
—


 
 
 
—


 
 
 
20.2


 
20.2


2018
 
1,581.1


 
(a)
 
—


 
 
 
—


 
1,581.1


2021
 
29.6


 
 
 
—


 
 
 
—


 
29.6


2022
 
204.1


 
 
 
—


 
 
 
—


 
204.1


2023
 
—


 
 
 
1,999.3


 
(a)
 
—


 
1,999.3


2024
 
—


 
 
 
3.2


 
 
 
—


 
3.2


2025
 
—


 
 
 
118.8


 
 
 
—


 
118.8


2027
 
—


 
 
 
216.8


 
 
 
—


 
216.8


2028
 
—


 
 
 
0.3


 
 
 
—


 
0.3


2029
 
—


 
 
 
149.0


 
 
 
—


 
149.0


2031
 
—


 
 
 
11.7


 
 
 
—


 
11.7


Total
 
$
1,814.8


 
 
 
$
2,499.2


 
 
 
$
988.7


 
$
5,302.7


 
_________________________
(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.


We had deferred tax assets related to NOLs for state income taxes of $17.7 million and $17.8 million at June 30, 2011 and December 31, 2010, respectively.  The related state NOLs are available to offset future state taxable income in certain states through 2018.


Tax years 2007 through 2010 are open to examination by the IRS.  The Company’s various state income tax returns are generally open for tax years 2007 through 2010 based on the individual state statutes of limitation.


NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS


The following notes payable were direct corporate obligations of the Company as of June 30, 2011 and December 31, 2010 (dollars in millions):


 
June 30,

2011
 
December 31,

2010
7.0% Debentures
$
293.0


 
$
293.0


Senior Secured Credit Agreement due September 30, 2016 (the “Senior Secured Credit Agreement”)
308.8


 
375.0


9.0% Senior Secured Notes due January 2018 (the “9.0% Senior Secured Notes”)
275.0


 
275.0


Senior Health Note due November 12, 2013 (the “Senior Health Note”)
75.0


 
75.0


Unamortized discount on 7.0% Debentures
(13.9
)
 
(14.8
)
Unamortized discount on Senior Secured Credit Agreement
(3.4
)
 
(4.7
)
Direct corporate obligations
$
934.5


 
$
998.5






In May 2011, we amended our Senior Secured Credit Agreement. Pursuant to the amended terms, the applicable interest rate on the Senior Secured Credit Agreement was decreased. The new interest rate is, at our option (in most instances): (i) a Eurodollar rate of LIBOR plus 5.00 percent subject to a LIBOR "floor" of 1.25 percent (previously LIBOR plus 6.00 percent with a LIBOR floor of 1.50 percent); or (ii) a Base Rate plus 4.00 percent subject to a Base Rate "floor" of 2.25 percent (previously a Base Rate plus 5.00 percent with a Base Rate floor of 2.50 percent). The interest rate on the Senior Secured Credit Agreement was 6.25 percent at June 30, 2011. Other changes to the Senior Secured Credit Agreement included:


(i)     a reduction in the mandatory prepayments resulting from certain restricted payments (including share repurchases). Pursuant to the amended terms, the amount of the mandatory prepayment is: (a) 100 percent of the amount of certain restricted payments made if the debt to total capitalization ratio, as defined in the agreement, is greater than 17.5 percent (such ratio was 18.7 percent at June 30, 2011); (b) 50 percent of the amount if such ratio is equal to or less than 17.5 percent but greater than 12.5 percent; or (c) if the ratio is equal to or less than 12.5 percent at the time of the restricted payment, then there is no prepayment requirement. Previously, we were required to make mandatory prepayments equal to 100 percent of the amount of certain restricted payments regardless of the level of the debt to total capitalization ratio;


(ii)     revisions to the covenants related to investment activity to allow the Company to make certain investments which were previously only permitted to be made by our insurance subsidiaries; and


(iii)    an increase in the cap on non-investment grade investments to 12 percent from 10 percent.


In June 2011, as required under the terms of the Senior Secured Credit Agreement, we made a mandatory prepayment of $16.2 million due to our repurchase of $16.2 million of our common stock in the second quarter of 2011. As a result of the repayment, we recognized a loss on the extinguishment of debt totaling $.6 million representing the write-off of unamortized discount and issuance costs associated with the Senior Secured Credit Agreement.


In March 2011, we made a voluntary prepayment of $50.0 million on our outstanding principal balance under the Senior Secured Credit Agreement using available cash.  As a result of the repayment, we recognized a loss on the extinguishment of debt totaling $1.4 million representing the write-off of unamortized discount and issuance costs associated with the Senior Secured Credit Agreement.


The scheduled repayment of our direct corporate obligations was as follows at June 30, 2011 (dollars in millions):
Year ending June 30,
 
2012
$
25.0


2013
72.5


2014
90.0


2015
80.0


2016
102.5


Thereafter
581.8


 
$
951.8


INVESTMENT BORROWINGS
INVESTMENT BORROWINGS
INVESTMENT BORROWINGS


Three of the Company’s insurance subsidiaries (Conseco Life Insurance Company (“Conseco Life”), Washington National Insurance Company and Bankers Life) are members of the Federal Home Loan Bank (“FHLB”).  As members of the FHLB, Conseco Life, Washington National Insurance Company and Bankers Life have the ability to borrow on a collateralized basis from the FHLB.  Conseco Life, Washington National Insurance Company and Bankers Life are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings.  At June 30, 2011, the carrying value of the FHLB common stock was $63.8 million.  As of June 30, 2011, collateralized borrowings from the FHLB totaled $1.3 billion and the proceeds were used to purchase fixed maturity securities.  The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet.  The borrowings are collateralized by investments with an estimated fair value of $1.6 billion at June 30, 2011, which are maintained in a custodial account for the benefit of the FHLB.  Such investments are classified as fixed maturities, available for sale, in our consolidated balance sheet.  Interest expense of $12.2 million and $9.8 million in the first six months of 2011 and 2010, respectively, was recognized related to the borrowings.


The following summarizes the terms of the borrowings (dollars in millions):


Amount
 
Maturity
 
Interest rate at
borrowed
 
date
 
June 30, 2011
 
 
 
 
 
$
100.0


 
October 2013
 
Variable rate – 0.516%
67.0


 
February 2014
 
Fixed rate – 1.830%
100.0


 
September 2015
 
Variable rate – 0.573%
150.0


 
October 2015
 
Variable rate – 0.537%
146.0


 
November 2015
 
Fixed rate – 5.300%
100.0


 
November 2015
 
Fixed rate – 4.890%
100.0


 
December 2015
 
Fixed rate – 4.710%
100.0


 
June 2016
 
Variable rate – 0.626%
75.0


 
June 2016
 
Variable rate – 0.458%
50.0


 
November 2016
 
Variable rate – 0.522%
50.0


 
November 2016
 
Variable rate – 0.656%
100.0


 
June 2017
 
Variable rate – 0.690%
100.0


 
October 2017
 
Variable rate – 0.708%
37.0


 
November 2017
 
Fixed rate – 3.750%
$
1,275.0


 
 
 
 




The variable rate borrowings are pre-payable on each interest reset date without penalty.  The fixed rate borrowings are pre-payable subject to payment of a yield maintenance fee based on current market interest rates.  At June 30, 2011, the aggregate fee to prepay all fixed rate borrowings was $57.6 million.


In June 2011, as part of our investment strategy, we entered into repurchase agreements to increase our investment return. We account for these transactions as collateralized borrowings, where the amount borrowed is equal to the sales price of the underlying securities. Repurchase agreements involve a sale of securities and an agreement to repurchase the same securities at a later date at an agreed-upon price. Such borrowings totaled $26.9 million at June 30, 2011. These borrowings were collateralized by investment securities with fair values approximately equal to the loan value. The primary risks associated with short-term collateralized borrowings are: (i) a substantial decline in the market value of the margined security will occur; and (ii) that a counterparty will be unable to perform under the terms of the contract or be unwilling to extend such financing in future periods especially if the liquidity or value of the margined security has declined. Exposure is limited to the excess of the net replacement cost of the related securities.


At June 30, 2011, investment borrowings consisted of:  (i) collateralized borrowings from the FHLB of $1.3 billion; (ii) repurchase agreements of $26.9 million; and (iii) other borrowings of $3.4 million.


At December 31, 2010, investment borrowings consisted of:  (i) collateralized borrowings from the FHLB of $1.2 billion; and (ii) other borrowings of $4.1 million.
CHANGES IN COMMON STOCK
CHANGES IN COMMON STOCK
CHANGES IN COMMON STOCK


Changes in the number of shares of common stock outstanding were as follows (shares in thousands):


Balance, December 31, 2010
251,084


 
 
Treasury stock purchased and retired
(2,207
)
 
 
Stock options exercised
152


 
 
Restricted stock vested
386


 
(a)
Balance, June 30, 2011
249,415


 
 
________
(a)
Such amount was reduced by 149 thousand shares which were tendered to the Company for the payment of federal and state taxes owed on the vesting of restricted stock.


In May 2011, the Company announced a common share repurchase program of up to $100.0 million. In the second quarter of 2011, we repurchased 2.2 million shares of common stock for $16.2 million pursuant to the program. In addition, the Company formally terminated the share repurchase program which had been initially adopted in 2006.


SALES INDUCEMENTS
SALES INDUCEMENTS
SALES INDUCEMENTS


Certain of our annuity products offer sales inducements to contract holders in the form of enhanced crediting rates or bonus payments in the initial period of the contract.  Certain of our life insurance products offer persistency bonuses credited to the contract holders balance after the policy has been outstanding for a specified period of time.  These enhanced rates and
persistency bonuses are considered sales inducements in accordance with GAAP.  Such amounts are deferred and amortized in the same manner as deferred acquisition costs.  Sales inducements deferred totaled $7.5 million and $14.2 million during the six months ended June 30, 2011 and 2010, respectively.  Amounts amortized totaled $15.2 million and $12.4 million during the six months ended June 30, 2011 and 2010, respectively.  The unamortized balance of deferred sales inducements at June 30, 2011 and December 31, 2010 was $158.7 million and $166.4 million, respectively.  The balance of insurance liabilities for persistency bonus benefits was $66.3 million and $85.3 million at June 30, 2011 and December 31, 2010, respectively.
RECENTLY ISSUED ACCOUNTING STANDARDS
RECENTLY ISSUED ACCOUNTING STANDARDS
RECENTLY ISSUED ACCOUNTING STANDARDS


Pending Accounting Standards


In June 2011, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to increase the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in shareholders' equity. Such guidance requires that all non-owner changes in shareholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income and the total of comprehensive income. The guidance is to be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. The adoption of this guidance will result in a change in the presentation of our financial statements but will not have any impact on our financial condition, operating results or cash flows.


In May 2011, the FASB issued authoritative guidance which clarifies or updates requirements for measuring fair value and for disclosing information about fair value measurements. The guidance clarifies: (i) the application of the highest and best use and valuation premise concepts; (ii) measuring the fair value of an instrument classified in a reporting entity's shareholders' equity; and (iii) disclosure of quantitative information about the unobservable inputs used in a fair value measurement that is categorized within Level 3 of the fair value hierarchy. The guidance changes certain requirements for measuring fair value or disclosing information about fair value measurements including: (i) measuring the fair value of financial instruments that are managed within a portfolio; (ii) application of premiums and discounts in a fair value measurement; and (iii) additional disclosures about fair value measurements. Such additional disclosures include a description of the valuation process used for measuring Level 3 instruments and the sensitivity of the Level 3 fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs, if any. The guidance is effective prospectively for interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The adoption of this guidance is not expected to have a material impact on our financial condition, operating results or cash flows.


In October 2010, the FASB issued authoritative guidance that modifies the definition of the types of costs incurred by insurance entities that can be capitalized in the acquisition of new and renewal contracts.  The guidance specifies that an insurance entity shall only capitalize incremental direct costs related to the successful acquisition of new or renewal insurance contracts.  The guidance also states that advertising costs should be included in deferred acquisition costs only if the capitalization criteria in the direct-response advertising guidance are met.  The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011.  Retrospective application to all prior periods presented upon the date of adoption is permitted, but not required.  We are in the process of evaluating the impact the guidance will have on our consolidated financial statements and expect to adopt the new standard on a retrospective basis. The guidance will reduce the balance of deferred acquisition costs, its amortization and the amount of costs that we capitalize. We expect that we will be able to defer most commission payments, which comprise approximately 55 percent of our deferrable expenses, plus other costs directly related to the production of new business. The proposed change will have no impact on the balance of the present value of future profits. Therefore, in contrast to the reduction in amortization of deferred acquisition costs, there will be no change in the amortization of the present value of future profits.


Adopted Accounting Standards


In January 2010, the FASB issued authoritative guidance which requires additional disclosures related to purchases, sales, issuances and settlements in the rollforward of Level 3 fair value measurements.  This guidance is effective for reporting periods beginning after December 15, 2010.  The adoption of this guidance did not have a material impact on our consolidated financial statements.
CONSOLIDATED STATEMENT CASH FLOWS
Cash Flow, Supplemental Disclosures [Text Block]
CONSOLIDATED STATEMENT OF CASH FLOWS


The following disclosures supplement our consolidated statement of cash flows.


The following reconciles net income to net cash provided by operating activities (dollars in millions):


 
Six months ended
 
June 30,
 
2011
 
2010
Cash flows from operating activities:
 
 
 
Net income
$
113.4


 
$
67.0


Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 


Amortization and depreciation
251.3


 
214.0


Income taxes
59.9


 
34.0


Insurance liabilities
192.5


 
197.5


Accrual and amortization of investment income
(31.7
)
 
29.8


Deferral of policy acquisition costs
(215.1
)
 
(210.3
)
Net realized investment (gains) losses
(8.0
)
 
21.6


Loss on extinguishment of debt
2.0


 
2.7


Other
(3.5
)
 
(10.3
)
Net cash provided by operating activities
$
360.8


 
$
346.0






Non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions):


 
Six months ended
 
June 30,
 
2011
 
2010
Stock option and restricted stock plans
$
6.0


 
$
6.0


Change in securities lending collateral
—


 
103.7


Change in securities lending payable
—


 
(103.7
)
INVESTMENTS IN VARIABLE INTEREST ENTITIES
Investments in Variable Interest Entities
INVESTMENTS IN VARIABLE INTEREST ENTITIES


Effective January 1, 2010, the Company adopted authoritative guidance that requires an entity to perform a qualitative analysis to determine whether a primary beneficiary interest is held in a variable interest entity (a “VIE”).  The guidance also requires ongoing reassessments to determine whether a primary beneficiary interest is held.  Based on our assessment, we concluded that we were the primary beneficiary with respect to the VIEs which are consolidated in our financial statements.  The following is a description of our significant investments in VIEs:


All of the VIEs are collateralized loan trusts that were established to issue securities and use the proceeds to principally invest in corporate loans and other permitted investments (including a new VIE which was consolidated in the second quarter of 2011, as further discussed below).  The assets held by the trusts are legally isolated and not available to the Company.  The liabilities of the VIEs are expected to be satisfied from the cash flows generated by the underlying loans, not from the assets of the Company.  Repayment of the remaining principal balance of the borrowings of the VIEs is based on available cash flows from the assets.  The Company has no further commitments to the VIEs.


In the second quarter of 2011, one of the VIEs was liquidated and its obligations were repaid pursuant to the priority of payments as defined in the indenture of the VIE. Such liquidation did not have a material effect on our consolidated financial statements. In addition, in the second quarter of 2011, certain of our insurance subsidiaries invested in the formation of a new VIE which has been consolidated in our financial statements.


Certain of our insurance subsidiaries own preferred stock or are noteholders of the VIEs.  Another subsidiary of the Company is the investment manager for the VIEs.  As such, it has the power to direct the most significant activities of the VIEs which materially impacts the economic performance of the VIEs.


The following table provides supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions):
 
June 30, 2011
 
VIEs
 
Eliminations
 
Net effect on
consolidated
balance sheet
Assets:
 
 
 
 
 
Investments held by variable interest entities
$
414.0


 
$
—


 
$
414.0


Notes receivable of VIEs held by insurance subsidiaries
—


 
(62.2
)
 
(62.2
)
Cash and cash equivalents held by variable interest entities
25.3


 
—


 
25.3


Accrued investment income
.9


 
—


 
.9


Income tax assets, net
4.4


 
(1.2
)
 
3.2


Other assets
4.9


 
—


 
4.9


Total assets
$
449.5


 
$
(63.4
)
 
$
386.1


Liabilities:
 


 
 


 
 


Other liabilities
$
75.0


 
$
—


 
$
75.0


Borrowings related to variable interest entities
317.3


 
—


 
317.3


Notes payable of VIEs held by insurance subsidiaries
65.7


 
(65.7
)
 
—


Total liabilities
$
458.0


 
$
(65.7
)
 
$
392.3




 
December 31, 2010
 
VIEs
 
Eliminations
 
Net effect on
consolidated
balance sheet
Assets:
 
 
 
 
 
Investments held by variable interest entities
$
420.9


 
$
—


 
$
420.9


Notes receivable of VIEs held by insurance subsidiaries
—


 
(96.8
)
 
(96.8
)
Cash and cash equivalents held by variable interest entities
26.8


 
—


 
26.8


Accrued investment income
1.4


 
(4.8
)
 
(3.4
)
Income tax assets, net
20.9


 
(6.5
)
 
14.4


Other assets
15.9


 
—


 
15.9


Total assets
$
485.9


 
$
(108.1
)
 
$
377.8


Liabilities:
 


 
 


 
 


Other liabilities
$
22.0


 
$
(4.6
)
 
$
17.4


Borrowings related to variable interest entities
386.9


 
—


 
386.9


Notes payable of VIEs held by insurance subsidiaries
115.6


 
(115.6
)
 
—


Total liabilities
$
524.5


 
$
(120.2
)
 
$
404.3






The investment portfolios held by the VIEs are primarily comprised of corporate fixed maturity securities which are almost entirely rated as below-investment grade securities.  At June 30, 2011, such securities had an amortized cost of $413.5 million; gross unrealized gains of $2.7 million; gross unrealized losses of $2.2 million; and an estimated fair value of $414.0 million.


The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at June 30, 2011, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.


 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
7.7


 
$
7.7


Due after one year through five years
242.6


 
242.4


Due after five years through ten years
163.2


 
163.9


Total
$
413.5


 
$
414.0






During the first six months of 2011, we recognized net realized investment gains on the VIE investments of $.4 million, which were comprised of $3.6 million of net gains from the sales of fixed maturities, and $3.2 million of writedowns of investments for other than temporary declines in fair value recognized through net income.  During the first six months of 2010, we recognized net realized investment losses on the VIE investments of $2.7 million, which were comprised of $.3 million of net gains from the sales of fixed maturities, and $3.0 million of writedowns of investments for other than temporary declines in fair value recognized through net income.


At June 30, 2011, there were no investments held by the VIEs that were in default.


During the first six months of 2011, $90.1 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $1.9 million.


At June 30, 2011, the VIEs held:  (i) investments with a fair value of $175.1 million and gross unrealized losses of $1.3 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $35.9 million and gross unrealized losses of $.9 million that had been in an unrealized loss position for greater than twelve months.


The investments held by the VIEs are evaluated for other-than-temporary declines in fair value in a manner that is consistent with the Company’s fixed maturities, available for sale.


In addition, the Company, in the normal course of business, makes passive investments in structured securities issued by VIEs for which the Company is not the investment manager.  These structured securities include asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, residential mortgage-backed securities and collateralized mortgage obligations.  Our maximum exposure to loss on these securities is limited to our cost basis in the investment.  We have determined that we are not the primary beneficiary of these structured securities due to the relative size of our investment in comparison to the total principal amount of the individual structured securities and the level of credit subordination which reduces our obligation to absorb gains or losses.


At June 30, 2011, we hold investments in various limited partnerships, in which we are not the primary beneficiary, totaling $19.2 million (classified as other invested assets).  At June 30, 2011, we had unfunded commitments to these partnerships of $17.2 million.  Our maximum exposure to loss on these investments is limited to the amount of our investment.
FAIR VALUE MEASUREMENTS
Fair Value Disclosures [Text Block]
FAIR VALUE MEASUREMENTS


Definition of Fair Value


Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price.  We hold fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, separate account assets and embedded derivatives, which are carried at fair value.


The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs.  Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information.  Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value.  Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value.


Valuation Hierarchy


There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable.


•
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 privately placed 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 certain below investment grade privately placed securities), 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.


At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value.  This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions.  Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment.


The vast majority of our fixed maturity securities and separate account assets use Level 2 inputs for the determination of fair value.  These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value.  Substantially all of our Level 2 fixed maturity securities and separate account assets were valued from independent pricing services.  Third party pricing services normally derive the security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information.  If there are no recently reported trades, the third party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are developed and discounted at an estimated risk-adjusted market rate.  The number of prices obtained is dependent on the Company’s analysis of such prices as further described below.


For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes.  These broker quotes are non-binding and represent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs.  Approximately 47 percent and 2 percent of our Level 3 fixed maturity securities were valued using broker quotes or independent pricing services, respectively.  The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs.  For these securities, we use internally developed valuations.  Key assumptions used to determine fair value for these securities may include risk-free rates, risk premiums, performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market.  For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are developed and discounted at an estimated market rate.  The pricing matrix utilizes a spread level to determine the market price for a security.  The credit spread generally incorporates the issuer’s credit rating and other factors relating to the issuer’s industry and the security’s maturity.  In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity.


Privately placed securities are classified as Level 3 when their valuation is based on internal valuation models which rely on significant inputs that are not observable in the market.  Our model applies spreads above the risk-free rate which are determined based on comparison to securities with similar ratings, maturities and industries that are rated by independent third party rating agencies.  Our process also considers the ratings assigned by the National Association of Insurance Commissioners (the “NAIC”) to the Level 3 securities on an annual basis.  Each quarter, a review is performed to determine the reasonableness of the initial valuations from the model.  If an initial valuation appears unreasonable based on our knowledge of a security and current market conditions, we make appropriate adjustments to our valuation inputs.  For the quarter ended June 30, 2011, the Company compared the results of the private placement pricing model to actual trades, as well as to third party broker quotes and determined that the valuations from our pricing model were consistent with market observable data for most investment grade privately placed securities. As a result, the Company reclassified certain investment grade privately placed securities from Level 3 to Level 2. Below investment grade privately placed securities, which are valued using significant inputs that are not observable in the market, remain classified as Level 3. The remaining securities classified as Level 3 are primarily valued based on internally developed models using estimated future cash flows.  We recognized other-than-temporary impairments on securities classified as Level 3 investments of $11.5 million during the first six months of 2011. Privately placed securities comprise approximately 20 percent of our fixed maturities, available for sale, classified as Level 3.  


As the Company is responsible for the determination of fair value, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value.  The Company’s analysis includes:  (i) a review of the methodology used by third party pricing services; (ii) a comparison of pricing services’ valuation to other pricing services’ valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably stale; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties.  As a result of such procedures, the Company may conclude the prices received from third parties are not reflective of current market conditions.  In those instances, we may request additional pricing quotes or apply internally developed valuations.  However, the number of instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received.


The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company’s judgment of the inputs or methodologies used by the independent pricing services to value different asset classes.  Such inputs include:  benchmark yields, reported trades, broker dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data.  The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments.


The classification of fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, is determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotations; time value and volatility factors underlying options; market interest rates; and non-performance risk.  For certain embedded derivatives, we may use actuarial assumptions in the determination of fair value.


The categorization of fair value measurements, by input level, for our fixed maturity securities, equity securities, trading securities, certain other invested assets, assets held in separate accounts and embedded derivative instruments included in liabilities for insurance products at June 30, 2011 is as follows (dollars in millions):


 
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
$
—


 
$
14,499.9


 
 
 
$
415.2


 
 
 
$
14,915.1


United States Treasury securities and obligations of United States government corporations and agencies
2.0


 
274.9


 
 
 
1.7


 
 
 
278.6


States and political subdivisions
—


 
1,834.3


 
 
 
9.2


 
 
 
1,843.5


Debt securities issued by foreign governments
—


 
.9


 
 
 
—


 
 
 
.9


Asset-backed securities
—


 
622.5


 
 
 
126.4


 
 
 
748.9


Collateralized debt obligations
—


 
—


 
 
 
193.5


 
 
 
193.5


Commercial mortgage-backed securities
—


 
1,479.8


 
 
 
—


 
 
 
1,479.8


Mortgage pass-through securities
24.8


 
—


 
 
 
3.2


 
 
 
28.0


Collateralized mortgage obligations
—


 
1,930.5


 
 
 
204.1


 
 
 
2,134.6


Total fixed maturities, available for sale
26.8


 
20,642.8


 
 
 
953.3


 
 
 
21,622.9


Equity securities
12.9


 
66.8


 
 
 
49.9


 
 
 
129.6


Trading securities:
 


 
 


 
 
 
 


 
 
 
 


Corporate securities
3.4


 
48.6


 
 
 
4.6


 
 
 
56.6


United States Treasury securities and obligations of United States government corporations and agencies
—


 
4.7


 
 
 
—


 
 
 
4.7


States and political subdivisions
—


 
16.5


 
 
 
—


 
 
 
16.5


Asset-backed securities
—


 
—


 
 
 
—


 
 
 
—


Commercial mortgage-backed securities
—


 
4.5


 
 
 
—


 
 
 
4.5


Mortgage pass-through securities
.3


 
—


 
 
 
—


 
 
 
.3


Collateralized mortgage obligations
—


 
.9


 
 
 
—


 
 
 
.9


Total trading securities
3.7


 
75.2


 
 
 
4.6


 
 
 
83.5


Investments held by variable interest entities
—


 
414.0


 
 
 
—


 
 
 
414.0


Other invested assets
—


 
206.4


 
(a)
 
—


 
 
 
206.4


Assets held in separate accounts
—


 
17.4


 
 
 
—


 
 
 
17.4


Liabilities:
 


 
 


 
 
 
 


 
 
 
 


Liabilities for insurance products:
 


 
 


 
 
 
 


 
 
 
 


Interest-sensitive products
—


 
—


 
 
 
613.4


 
(b)
 
613.4


_____________
(a)
Includes company-owned life insurance and derivatives.
(b)
Includes $612.7 million of embedded derivatives associated with our fixed index annuity products and $.7 million of embedded derivatives associated with a modified coinsurance agreement.


The categorization of fair value measurements, by input level, for our fixed maturity securities, equity securities, trading securities, certain other invested assets, assets held in separate accounts and embedded derivative instruments included in liabilities for insurance products at December 31, 2010 is as follows (dollars in millions):


 
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
$
—


 
$
12,240.1


 
 
 
$
1,977.5


 
 
 
$
14,217.6


United States Treasury securities and obligations of United States government corporations and agencies
10.0


 
282.2


 
 
 
2.0


 
 
 
294.2


States and political subdivisions
—


 
1,772.1


 
 
 
11.4


 
 
 
1,783.5


Debt securities issued by foreign governments
—


 
.9


 
 
 
—


 
 
 
.9


Asset-backed securities
—


 
652.7


 
 
 
121.0


 
 
 
773.7


Collateralized debt obligations
—


 
—


 
 
 
256.5


 
 
 
256.5


Commercial mortgage-backed securities
—


 
1,363.7


 
 
 
—


 
 
 
1,363.7


Mortgage pass-through securities
27.8


 
—


 
 
 
3.5


 
 
 
31.3


Collateralized mortgage obligations
—


 
1,715.4


 
 
 
197.1


 
 
 
1,912.5


Total fixed maturities, available for sale
37.8


 
18,027.1


 
 
 
2,569.0


 
 
 
20,633.9


Equity securities
—


 
37.5


 
 
 
30.6


 
 
 
68.1


Trading securities:
 


 
 


 
 
 
 


 
 
 
 


Corporate securities
3.2


 
47.5


 
 
 
4.3


 
 
 
55.0


United States Treasury securities and obligations of United States government corporations and agencies
—


 
293.8


 
 
 
—


 
 
 
293.8


States and political subdivisions
—


 
16.1


 
 
 
—


 
 
 
16.1


Asset-backed securities
—


 
.6


 
 
 
—


 
 
 
.6


Commercial mortgage-backed securities
—


 
5.2


 
 
 
—


 
 
 
5.2


Mortgage pass-through securities
.3


 
—


 
 
 
—


 
 
 
.3


Collateralized mortgage obligations
—


 
1.2


 
 
 
.4


 
 
 
1.6


Total trading securities
3.5


 
364.4


 
 
 
4.7


 
 
 
372.6


Investments held by variable interest entities
—


 
414.2


 
 
 
6.7


 
 
 
420.9


Other invested assets
—


 
192.0


 
(a)
 
—


 
 
 
192.0


Assets held in separate accounts
—


 
17.5


 
 
 
—


 
 
 
17.5


Liabilities:
 


 
 


 
 
 
 


 
 
 
 


Liabilities for insurance products:
 


 
 


 
 
 
 


 
 
 
 


Interest-sensitive products
—


 
—


 
 
 
553.2


 
(b)
 
553.2


_____________
(a)
Includes company-owned life insurance and derivatives.
(b)
Includes $553.6 million of embedded derivatives associated with our fixed index annuity products and $(.4) million of embedded derivatives associated with a modified coinsurance agreement.


The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended June 30, 2011 (dollars in millions):




 
June 30, 2011
 
 
 
Beginning balance as of March 31, 2011
 
Purchases, sales, issuances and settlements, net (c)
 
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 (a)
 
Transfers out of Level 3 (a) (b)
 
Ending balance as of June 30, 2011
 
Amount of total gains (losses) for the three months ended June 30, 2011 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
$
1,926.0


 
$
(59.1
)
 
$
(10.0
)
 
$
7.2


 
$
43.5


 
$
(1,492.4
)
 
$
415.2


 
$
(5.1
)
United States Treasury securities and obligations of United States government corporations and agencies
1.7


 
—


 
—


 
—


 
—


 
—


 
1.7


 
—


States and political subdivisions
8.9


 
—


 
—


 
.3


 
—


 
—


 
9.2


 
—


Asset-backed securities
143.3


 
(1.6
)
 
—


 
.7


 
4.4


 
(20.4
)
 
126.4


 
—


Collateralized debt obligations
186.2


 
7.2


 
—


 
.1


 
—


 
—


 
193.5


 
—


Mortgage pass-through securities
3.3


 
(.1
)
 
—


 
—


 
—


 
—


 
3.2


 
—


Collateralized mortgage obligations
247.5


 
45.8


 
(.9
)
 
(.1
)
 
25.1


 
(113.3
)
 
204.1


 
—


Total fixed maturities, available for sale
2,516.9


 
(7.8
)
 
(10.9
)
 
8.2


 
73.0


 
(1,626.1
)
 
953.3


 
(5.1
)
Equity securities
45.4


 
3.0


 
1.0


 
.5


 
—


 
—


 
49.9


 
—


Trading securities:
 


 
 


 
 


 
 


 
 


 
 


 
 
 
 


Corporate securities
4.6


 
—


 
—


 
—


 
—


 
—


 
4.6


 
—


Collateralized mortgage obligations
.5


 
—


 
—


 
—


 
—


 
(.5
)
 
—


 
—


Total trading securities
5.1


 
—


 
—


 
—


 
—


 
(.5
)
 
4.6


 
—


Investments held by variable interest entities:
 


 
 


 
 


 
 


 
 


 
 


 
 
 
 


Corporate securities
—


 
—


 
—


 
—


 
—


 
—


 
—


 
—


Liabilities:
 


 
 


 
 


 
 


 
 


 
 


 
 
 
 


Liabilities for insurance products:
 


 
 


 
 


 
 


 
 


 
 


 
 
 
 


Interest-sensitive products
(587.5
)
 
(15.2
)
 
(10.7
)
 
—


 
—


 
—


 
(613.4
)
 
(10.7
)


____________
(a)
Transfers in/out of Level 3 are reported as having occurred at the beginning of the period.
(b)
Transfers out of Level 3 are primarily related to our re-evaluation of the observability of pricing inputs related to investment grade privately placed securities.
(c)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity, equity and trading securities, purchases and settlements of derivative instruments, and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended June 30, 2011 (dollars in millions):


 
 
 
 
 
 
 
 
 
Purchases, sales, issuances and settlements, net
 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
—


 
$
(59.1
)
 
$
—


 
$
—


 
$
(59.1
)
States and political subdivisions
—


 
—


 
—


 
—


 
—


Asset-backed securities
—


 
(1.6
)
 
—


 
—


 
(1.6
)
Collateralized debt obligations
19.0


 
(11.8
)
 
—


 
—


 
7.2


Mortgage pass-through securities
—


 
(.1
)
 
—


 
—


 
(.1
)
Collateralized mortgage obligations
61.4


 
(15.6
)
 
—


 
—


 
45.8


Total fixed maturities, available for sale
80.4


 
(88.2
)
 
—


 
—


 
(7.8
)
Equity securities
3.9


 
(.9
)
 
—


 
—


 
3.0


Investments held by variable interest entities:
 
 
 
 
 
 
 
 
 
Corporate securities
—


 
—


 
—


 
—


 
—


Liabilities:
 
 
 
 
 
 
 
 
 
Liabilities for insurance products:
 
 
 
 
 
 
 
 
 
Interest-sensitive products
(27.4
)
 
7.5


 
(6.8
)
 
11.5


 
(15.2
)




The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the six months ended June 30, 2011 (dollars in millions):


 
June 30, 2011
 
 
 
Beginning balance as of December 31, 2010
 
Purchases, sales, issuances and settlements, net (c)
 
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 (a)
 
Transfers out of Level 3 (a) (b)
 
Ending balance as of June 30, 2011
 
Amount of total gains (losses) for the six months ended June 30, 2011 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
$
1,977.5


 
$
(161.3
)
 
$
(21.0
)
 
$
10.3


 
$
60.2


 
$
(1,450.5
)
 
$
415.2


 
$
(11.5
)
United States Treasury securities and obligations of United States government corporations and agencies
2.0


 
(.1
)
 
—


 
(.2
)
 
—


 
—


 
1.7


 
—


States and political subdivisions
11.4


 
(.1
)
 
—


 
.4


 
—


 
(2.5
)
 
9.2


 
—


Asset-backed securities
121.0


 
(2.3
)
 
—


 
.5


 
7.2


 
—


 
126.4


 
—


Collateralized debt obligations
256.5


 
(69.5
)
 
2.2


 
4.3


 
—


 
—


 
193.5


 
—


Mortgage pass-through securities
3.5


 
(.3
)
 
—


 
—


 
—


 
—


 
3.2


 
—


Collateralized mortgage obligations
197.1


 
54.4


 
(.9
)
 
.7


 
38.7


 
(85.9
)
 
204.1


 
—


Total fixed maturities, available for sale
2,569.0


 
(179.2
)
 
(19.7
)
 
16.0


 
106.1


 
(1,538.9
)
 
953.3


 
(11.5
)
Equity securities
30.6


 
40.5


 
.2


 
1.1


 
—


 
(22.5
)
 
49.9


 
—


Trading securities:
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
4.3


 
—


 
.3


 
—


 
—


 
—


 
4.6


 
.3


Collateralized mortgage obligations
.4


 
—


 
—


 
—


 
—


 
(.4
)
 
—


 
—


Total trading securities
4.7


 
—


 
.3


 
—


 
—


 
(.4
)
 
4.6


 
.3


Investments held by variable interest entities:
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
6.7


 
(7.9
)
 
1.5


 
(.3
)
 
—


 
—


 
—


 
—


Liabilities:
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Liabilities for insurance products:
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Interest-sensitive products
(553.2
)
 
(51.3
)
 
(8.9
)
 
—


 
—


 
—


 
(613.4
)
 
(8.9
)


____________
(a)
Transfers in/out of Level 3 are reported as having occurred at the beginning of the period.
(b)
Transfers out of Level 3 are primarily related to our re-evaluation of the observability of pricing inputs related to investment grade privately placed securities.
(c)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity, equity and trading securities, purchases and settlements of derivative instruments, and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the six months ended June 30, 2011 (dollars in millions):






 
 
 
 
 
 
 
 
 
Purchases, sales, issuances and settlements, net
 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
—


 
$
(161.3
)
 
$
—


 
$
—


 
$
(161.3
)
United States Treasury securities and obligations of United States governement corporations and agencies
—


 
(.1
)
 
—


 
—


 
(.1
)
States and political subdivisions
—


 
(.1
)
 
—


 
—


 
(.1
)
Asset-backed securities
—


 
(2.3
)
 
—


 
—


 
(2.3
)
Collateralized debt obligations
20.7


 
(90.2
)
 
—


 
—


 
(69.5
)
Mortgage pass-through securities
—


 
(.3
)
 
—


 
—


 
(.3
)
Collateralized mortgage obligations
73.9


 
(19.5
)
 
—


 
—


 
54.4


Total fixed maturities, available for sale
94.6


 
(273.8
)
 
—


 
—


 
(179.2
)
Equity securities
41.4


 
(.9
)
 
—


 
—


 
40.5


Investments held by variable interest entities:
 
 
 
 
 
 
 
 
 
Corporate securities
—


 
(7.9
)
 
—


 
—


 
(7.9
)
Liabilities:
 
 
 
 
 
 
 
 
 
Liabilities for insurance products:
 
 
 
 
 
 
 
 
 
Interest-sensitive products
(52.4
)
 
10.1


 
(25.8
)
 
16.8


 
(51.3
)




The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended June 30, 2010 (dollars in millions):


 
 
June 30, 2010
 
 
 
 
Beginning balance as of March 31, 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 other comprehensive income (loss)
 
Transfers into Level 3 (a)
 
Transfers out of Level 3 (a)
 
Ending balance as of June 30, 2010
 
Amount of total gains (losses) for the three months ended June 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
 
$
2,150.8


 
$
63.9


 
$
.8


 
$
95.3


 
$
33.4


 
$
(15.6
)
 
$
2,328.6


 
$
—


United States Treasury securities and obligations of United States government corporations and agencies
 
2.2


 
(.1
)
 
—


 
—


 
—


 
—


 
2.1


 
—


States and political subdivisions
 
8.9


 
—


 
—


 
1.1


 
—


 
—


 
10.0


 
—


Asset-backed securities
 
104.1


 
19.3


 
—


 
7.7


 
—


 
—


 
131.1


 
—


Collateralized debt obligations
 
128.9


 
11.2


 
(.8
)
 
(2.5
)
 
—


 
—


 
136.8


 
—


Commercial mortgage-backed securities
 
—


 
—


 
—


 
—


 
10.5


 
—


 
10.5


 
—


Mortgage pass-through securities
 
3.9


 
(.1
)
 
—


 
.1


 
—


 
—


 
3.9


 
—


Collateralized mortgage obligations
 
9.9


 
23.8


 
—


 
—


 
—


 
(9.6
)
 
24.1


 
—


Total fixed maturities, available for sale
 
2,408.7


 
118.0


 
—


 
101.7


 
43.9


 
(25.2
)
 
2,647.1


 
—


Equity securities
 
31.0


 
—


 
—


 
—


 
—


 
—


 
31.0


 
—


Trading securities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
4.0


 
—


 
—


 
(.4
)
 
.5


 
—


 
4.1


 
(.4
)
Investments held by variable interest entities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
7.1


 
—


 
—


 
.1


 
—


 
—


 
7.2


 
—


Securities lending collateral:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Asset-backed securities
 
21.4


 
(15.6
)
 
(.2
)
 
.3


 
—


 
(1.0
)
 
4.9


 
(.2
)
Liabilities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Liabilities for insurance products:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Interest-sensitive products
 
(497.2
)
 
29.4


 
(32.7
)
 
—


 
—


 
—


 
(500.5
)
 
(32.7
)


____________
(a) Transfers in/out of Level 3 are reported as having occurred at the beginning of the period.


 
 
June 30, 2010
 
 
 
 
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 other comprehensive income (loss)
 
Transfers into Level 3 (b)
 
Transfers out of Level 3 (b)
 
Ending balance as of June 30, 2010
 
Amount of total gains (losses) for the six months ended June 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
 
$
2,147.8


 
$
(5.9
)
 
$
58.8


 
$
.8


 
$
111.1


 
$
47.0


 
$
(31.0
)
 
$
2,328.6


 
$
—


United States Treasury securities and obligations of United States government corporations and agencies
 
2.2


 
—


 
(.1
)
 
—


 
—


 
—


 
—


 
2.1


 
—


States and political subdivisions
 
10.7


 
—


 
—


 
—


 
1.1


 
—


 
(1.8
)
 
10.0


 
—


Asset-backed securities
 
115.1


 
—


 
6.3


 
(11.3
)
 
21.0


 
—


 
—


 
131.1


 
—


Collateralized debt obligations
 
92.8


 
(5.7
)
 
50.1


 
(.2
)
 
(.2
)
 
—


 
—


 
136.8


 
—


Commercial mortgage-backed securities
 
13.7


 
—


 
(.7
)
 
—


 
2.0


 
1.3


 
(5.8
)
 
10.5


 
—


Mortgage pass-through securities
 
4.2


 
—


 
(.3
)
 
—


 
—


 
—


 
—


 
3.9


 
—


Collateralized mortgage obligations
 
11.4


 
—


 
23.8


 
—


 
—


 
—


 
(11.1
)
 
24.1


 
—


Total fixed maturities, available for sale
 
2,397.9


 
(11.6
)
 
137.9


 
(10.7
)
 
135.0


 
48.3


 
(49.7
)
 
2,647.1


 
—


Equity securities
 
30.9


 
—


 
.1


 
—


 
—


 
—


 
—


 
31.0


 
—


Trading securities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
3.7


 
—


 
—


 
—


 
—


 
.4


 
—


 
4.1


 
—


Investments held by variable interest entities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
—


 
6.9


 
—


 
—


 
.3


 
—


 
—


 
7.2


 
—


Securities lending collateral:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
13.7


 
—


 
(13.7
)
 
—


 
—


 
—


 
—


 
—


 
—


Asset-backed securities
 
22.9


 
—


 
(15.5
)
 
(.2
)
 
(.3
)
 
—


 
(2.0
)
 
4.9


 
(.2
)
Total securities lending collateral
 
36.6


 
—


 
(29.2
)
 
(.2
)
 
(.3
)
 
—


 
(2.0
)
 
4.9


 
(.2
)
Other invested assets
 
2.4


 
(2.4
)
 
—


 
—


 
—


 
—


 
—


 
—


 
—


Liabilities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Liabilities for insurance products:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Interest-sensitive products
 
(496.0
)
 
—


 
35.0


 
(39.5
)
 
—


 
—


 
—


 
(500.5
)
 
(39.5
)


__________
(a)
Amounts represent adjustments to investments related to a VIE that was required to be consolidated effective January 1, 2010, as well as the reclassification of investments of a VIE which was consolidated at December 31, 2009.
(b)
Transfers in/out of Level 3 are reported as having occurred at the beginning of the period.


At June 30, 2011, 69 percent of our Level 3 fixed maturities, available for sale, were investment grade and 49 percent of our Level 3 fixed maturities, available for sale, consisted of corporate securities.


Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3.


Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and reinsurer accounts and other special-purpose portfolios, net realized investment gains (losses) or insurance policy benefits within the consolidated statement of operations or accumulated other comprehensive income within shareholders’ equity based on the appropriate accounting treatment for the instrument.


We review the fair value hierarchy classifications each reporting period.  Transfers in and/or (out) of Level 3 in the first six months of 2011 and 2010 include transfers due to changes in the observability of the valuation attributes resulting in a reclassification of certain financial assets or liabilities. In addition, for the quarter ended June 30, 2011, we re-evaluated the observability of pricing inputs related to investment grade privately placed securities. As a result, we reclassified certain investment grade privately placed securities from Level 3 to Level 2.  Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur.  There were no transfers between Level 1 and Level 2 in the first six months of 2011 or 2010.


The amount presented for gains (losses) included in our net loss for assets and liabilities still held as of the reporting date primarily represents impairments for fixed maturities, available for sale, changes in fair value of trading securities and certain derivatives and changes in fair value of embedded derivative instruments included in liabilities for insurance products that exist as of the reporting date.


We use the following methods and assumptions to determine the estimated fair values of other financial instruments:


Cash and cash equivalents.  The carrying amount for these instruments approximates their estimated fair value.


Mortgage loans and policy loans.  We discount future expected cash flows for loans included in our investment portfolio based on interest rates currently being offered for similar loans to borrowers with similar credit ratings.  We aggregate loans with similar characteristics in our calculations.  The fair value of policy loans approximates their carrying value.


Other invested assets.  We use quoted market prices, where available.  When quotes are not available, we estimate the fair value based on discounted future expected cash flows or independent transactions which establish a value for our investment.  Investments in limited partnerships are accounted for under the equity method which approximates estimated fair value.


Insurance liabilities for interest-sensitive products.  We discount future expected cash flows based on interest rates currently being offered for similar contracts with similar maturities.


Investment borrowings, notes payable and borrowings related to variable interest entities.  For publicly traded debt, we use current fair values.  For other notes, we use discounted cash flow analyses based on our current incremental borrowing rates for similar types of borrowing arrangements.


The estimated fair values of our financial instruments at June 30, 2011 and December 31, 2010, were as follows (dollars in millions):


 
June 30, 2011
 
December 31, 2010
 
Carrying
amount
 
Estimated fair
value
 
Carrying
amount
 
Estimated fair
value
Financial assets:
 
 
 
 
 
 
 
Fixed maturities, available for sale
$
21,622.9


 
$
21,622.9


 
$
20,633.9


 
$
20,633.9


Equity securities
129.6


 
129.6


 
68.1


 
68.1


Mortgage loans
1,752.8


 
1,799.4


 
1,761.2


 
1,762.6


Policy loans
279.5


 
279.5


 
284.4


 
284.4


Trading securities
83.5


 
83.5


 
372.6


 
372.6


Investments held by securitization entities
414.0


 
414.0


 
420.9


 
420.9


Other invested assets
252.2


 
252.2


 
240.9


 
240.9


Cash and cash equivalents
605.5


 
605.5


 
598.7


 
598.7


Financial liabilities:
 


 
 


 
 


 
 


Insurance liabilities for interest-sensitive products (a)
$
13,152.8


 
$
13,152.8


 
$
13,194.7


 
$
13,194.7


Investment borrowings
1,305.3


 
1,336.1


 
1,204.1


 
1,265.3


Borrowings related to variable interest entities
317.3


 
286.9


 
386.9


 
345.1


Notes payable – direct corporate obligations
934.5


 
1,118.0


 
998.5


 
1,166.4


____________________
(a)
The estimated fair value of insurance liabilities for interest-sensitive products was approximately equal to its carrying value at June 30, 2011 and December 31, 2010.  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.


SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS


On July 5, 2011, C. James Prieur, Chief Executive Officer and a Director informed the Board of Directors (the "Board") of the Company that he will be retiring as Chief Executive Officer and as a Director effective September 30, 2011.


On July 5, 2011, Edward J. Bonach, currently the Company's Executive Vice President and Chief Financial Officer, was appointed Chief Executive Officer of the Company, effective October 1, 2011. Mr. Bonach was also appointed as a Director of the Company, effective October 1, 2011. Mr. Bonach will remain CFO until his successor has been appointed.


On July 5, 2011, the Board also elected Scott R. Perry to the new position of Chief Operating Officer of the Company, effective immediately. Mr. Perry is currently President of Bankers Life and will continue to hold that position.




INVESTMENTS (TABLES)
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] 
Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments.  These amounts, included in shareholders’ equity as of June 30, 2011 and December 31, 2010, were as follows (dollars in millions):


 
June 30,

2011
 
December 31,

2010
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized
$
.6


 
$
(4.4
)
Net unrealized gains (losses) on all other investments
732.0


 
476.5


Adjustment to present value of future profits (a)
(23.4
)
 
(17.6
)
Adjustment to deferred acquisition costs
(120.9
)
 
(76.2
)
Unrecognized net loss related to deferred compensation plan
(7.3
)
 
(7.7
)
Deferred income tax liability
(208.3
)
 
(132.3
)
Accumulated other comprehensive income
$
372.7


 
$
238.3


_________
(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).
Schedule of Available-for-sale Securities Reconciliation [Table Text Block] 


At June 30, 2011, the amortized cost, gross unrealized gains and losses, other-than-temporary impairments in accumulated other comprehensive income and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions):


 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Estimated
fair value
 
Other-than-
temporary
impairments
included in
accumulated other
comprehensive
income
Corporate securities
$
14,263.3


 
$
769.2


 
$
(117.4
)
 
$
14,915.1


 
$
—


United States Treasury securities and obligations of United States government corporations and agencies
283.4


 
5.0


 
(9.8
)
 
278.6


 
—


States and political subdivisions
1,849.2


 
40.4


 
(46.1
)
 
1,843.5


 
—


Debt securities issued by foreign governments
.8


 
.1


 
—


 
.9


 
—


Asset-backed securities
739.6


 
19.0


 
(9.7
)
 
748.9


 
—


Collateralized debt obligations
189.6


 
4.8


 
(.9
)
 
193.5


 
—


Commercial mortgage-backed securities
1,410.6


 
80.0


 
(10.8
)
 
1,479.8


 
—


Mortgage pass-through securities
26.0


 
2.0


 
—


 
28.0


 
—


Collateralized mortgage obligations
2,130.6


 
38.3


 
(34.3
)
 
2,134.6


 
(10.3
)
Total fixed maturities, available for sale
$
20,893.1


 
$
958.8


 
$
(229.0
)
 
$
21,622.9


 
$
(10.3
)
Investments Classified by Contractual Maturity Date [Table Text Block] 
The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at June 30, 2011, by contractual maturity.  Actual maturities will differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties.  In addition, structured securities (such as asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations, collectively referred to as “structured securities”) frequently include provisions for periodic principal payments and permit periodic unscheduled payments.


 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
107.7


 
$
109.0


Due after one year through five years
1,164.7


 
1,238.3


Due after five years through ten years
4,245.4


 
4,547.2


Due after ten years
10,878.9


 
11,143.6


Subtotal
16,396.7


 
17,038.1


Structured securities
4,496.4


 
4,584.8


Total fixed maturities, available for sale
$
20,893.1


 
$
21,622.9


Other than Temporary Impairment, Credit Losses Recognized in Earnings [Table Text Block] 
The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for the six months ended June 30, 2011 and 2010 (dollars in millions):
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Credit losses on fixed maturity securities, available for sale, beginning of period
$
(1.8
)
 
$
(29.4
)
 
$
(6.1
)
 
$
(27.2
)
Add:  credit losses on other-than-temporary impairments not previously recognized
—


 
(1.3
)
 
—


 
(1.3
)
Less:  credit losses on securities sold
.2


 
10.1


 
4.5


 
13.5


Less:  credit losses on securities impaired due to intent to sell (a)
—


 
1.1


 
—


 
1.1


Add:  credit losses on previously impaired securities
—


 
(4.5
)
 
—


 
(10.1
)
Less:  increases in cash flows expected on previously impaired securities
—


 
—


 
—


 
—


Credit losses on fixed maturity securities, available for sale, end of period
$
(1.6
)
 
$
(24.0
)
 
$
(1.6
)
 
$
(24.0
)
__________
(a)
Represents securities for which the amount previously recognized in accumulated other comprehensive income 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.
Schedule of Unrealized Loss on Investments [Table Text Block] 
The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at June 30, 2011 (dollars in millions):


 
Less than 12 months
 
12 months or greater
 
Total
Description of securities
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
United States Treasury securities and obligations of United States government corporations and agencies
$
198.7


 
$
(9.8
)
 
$
.3


 
$
—


 
$
199.0


 
$
(9.8
)
States and political subdivisions
487.3


 
(12.1
)
 
216.0


 
(34.0
)
 
703.3


 
(46.1
)
Corporate securities
2,718.1


 
(70.2
)
 
519.0


 
(47.2
)
 
3,237.1


 
(117.4
)
Asset-backed securities
305.1


 
(8.6
)
 
9.7


 
(1.1
)
 
314.8


 
(9.7
)
Collateralized debt obligations
19.9


 
(.9
)
 
—


 
—


 
19.9


 
(.9
)
Commercial mortgage-backed securities
184.3


 
(7.6
)
 
47.6


 
(3.2
)
 
231.9


 
(10.8
)
Mortgage pass-through securities
.1


 
—


 
3.3


 
—


 
3.4


 
—


Collateralized mortgage obligations
840.5


 
(33.4
)
 
29.1


 
(.9
)
 
869.6


 
(34.3
)
Total fixed maturities, available for sale
$
4,754.0


 
$
(142.6
)
 
$
825.0


 
$
(86.4
)
 
$
5,579.0


 
$
(229.0
)
The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2010 (dollars in millions):
 
 
Less than 12 months
 
12 months or greater
 
Total
Description of securities
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
United States Treasury securities and obligations of United States government corporations and agencies
 
$
196.9


 
$
(11.8
)
 
$
.2


 
$
—


 
$
197.1


 
$
(11.8
)
States and political subdivisions
 
1,201.9


 
(54.8
)
 
229.6


 
(45.9
)
 
1,431.5


 
(100.7
)
Corporate securities
 
2,633.0


 
(80.6
)
 
864.6


 
(88.4
)
 
3,497.6


 
(169.0
)
Asset-backed securities
 
272.2


 
(2.4
)
 
54.0


 
(3.9
)
 
326.2


 
(6.3
)
Collateralized debt obligations
 
117.0


 
(0.9
)
 
5.8


 
(.2
)
 
122.8


 
(1.1
)
Commercial mortgage-backed securities
 
15.5


 
—


 
111.8


 
(12.5
)
 
127.3


 
(12.5
)
Mortgage pass-through securities
 
.3


 
—


 
3.4


 
—


 
3.7


 
—


Collateralized mortgage obligations
 
661.0


 
(29.1
)
 
112.9


 
(6.4
)
 
773.9


 
(35.5
)
Total fixed maturities, available for sale
 
$
5,097.8


 
$
(179.6
)
 
$
1,382.3


 
$
(157.3
)
 
$
6,480.1


 
$
(336.9
)
EARNINGS PER SHARE (TABLES)
Schedule of Earnings Per Share Reconciliation
A reconciliation of net income and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):


 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Net income for basic earnings per share
$
59.5


 
$
33.1


 
$
113.4


 
$
67.0


Add:  interest expense on 7.0% Convertible Senior Debentures due 2016 (the “7.0% Debentures”), net of income taxes
3.7


 
3.4


 
7.4


 
6.0


Net income for diluted earnings per share
$
63.2


 
$
36.5


 
$
120.8


 
$
73.0


Shares:
 


 
 


 
 


 
 


Weighted average shares outstanding for basic earnings per share
250,933


 
250,994


 
251,027


 
250,891


Effect of dilutive securities on weighted average shares:
 


 
 


 
 


 
 


7% Debentures
53,367


 
49,793


 
53,367


 
44,663


Stock option and restricted stock plans
3,036


 
1,861


 
2,892


 
1,810


Warrants
712


 
—


 
487


 
—


Dilutive potential common shares
57,115


 
51,654


 
56,746


 
46,473


Weighted average shares outstanding for diluted earnings per share
308,048


 
302,648


 
307,773


 
297,364


BUSINESS SEGMENTS (TABLES)
Schedule of Segment Reporting Information, by Segment [Table Text Block] 
Operating information by segment was as follows (dollars in millions):
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Revenues:
 
 
 
 
 
 
 
Bankers Life:
 
 
 
 
 
 
 
Insurance policy income:
 
 
 
 
 
 
 
Annuities
$
8.7


 
$
10.7


 
$
17.1


 
$
19.0


Health
343.3


 
342.4


 
683.1


 
688.3


Life
57.6


 
47.6


 
109.4


 
89.6


Net investment income (a)
196.9


 
160.5


 
406.5


 
346.4


Fee revenue and other income (a)
3.3


 
2.7


 
5.6


 
5.0


Total Bankers Life revenues
609.8


 
563.9


 
1,221.7


 
1,148.3


Washington National:
 


 
 


 
 


 
 


Insurance policy income:
 


 
 


 
 


 
 


Health
141.7


 
139.4


 
281.9


 
279.0


Life
3.8


 
4.1


 
7.9


 
8.7


Other
1.1


 
1.2


 
2.2


 
2.4


Net investment income (a)
46.7


 
45.9


 
93.0


 
91.3


Fee revenue and other income (a)
.2


 
.2


 
.5


 
.5


Total Washington National revenues
193.5


 
190.8


 
385.5


 
381.9


Colonial Penn:
 


 
 


 
 


 
 


Insurance policy income:
 


 
 


 
 


 
 


Health
1.5


 
1.6


 
3.1


 
3.4


Life
49.4


 
47.7


 
98.1


 
94.1


Net investment income (a)
10.5


 
9.7


 
20.8


 
19.4


Fee revenue and other income (a)
.2


 
.1


 
.4


 
.3


Total Colonial Penn revenues
61.6


 
59.1


 
122.4


 
117.2


Other CNO Business:
 


 
 


 
 


 
 


Insurance policy income:
 


 
 


 
 


 
 


Annuities
2.9


 
2.4


 
5.2


 
4.9


Health
7.1


 
7.5


 
14.4


 
15.2


Life
61.9


 
62.6


 
123.2


 
126.5


Other
.6


 
.7


 
1.2


 
1.4


Net investment income (a)
86.7


 
80.4


 
181.4


 
173.0


Total Other CNO Business revenues
159.2


 
153.6


 
325.4


 
321.0


Corporate operations:
 


 
 


 
 


 
 


Net investment income
4.5


 
1.9


 
17.1


 
7.5


Fee and other income
.5


 
.6


 
1.1


 
1.3


Total corporate revenues
5.0


 
2.5


 
18.2


 
8.8


Total revenues
1,029.1


 
969.9


 
2,073.2


 
1,977.2




(continued on next page)


(continued from previous page)


 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Expenses:
 
 
 
 
 
 
 
Bankers Life:
 
 
 
 
 
 
 
Insurance policy benefits
$
408.9


 
$
382.7


 
$
813.7


 
$
799.2


Amortization
69.7


 
70.6


 
171.6


 
137.6


Interest expense on investment borrowings
1.1


 
—


 
2.3


 
—


Other operating costs and expenses
45.4


 
46.6


 
85.5


 
94.3


Total Bankers Life expenses
525.1


 
499.9


 
1,073.1


 
1,031.1


Washington National:
 


 
 


 
 


 
 


Insurance policy benefits
118.3


 
116.7


 
230.5


 
229.2


Amortization
14.0


 
13.1


 
30.1


 
27.9


Other operating costs and expenses
38.5


 
39.9


 
77.0


 
76.1


Total Washington National expenses
170.8


 
169.7


 
337.6


 
333.2


Colonial Penn:
 


 
 


 
 


 
 


Insurance policy benefits
38.0


 
35.4


 
76.7


 
72.1


Amortization
8.6


 
8.8


 
17.6


 
17.5


Other operating costs and expenses
7.4


 
7.3


 
15.1


 
14.7


Total Colonial Penn expenses
54.0


 
51.5


 
109.4


 
104.3


Other CNO Business:
 


 
 


 
 


 
 


Insurance policy benefits
119.2


 
116.2


 
246.7


 
249.5


Amortization
9.9


 
3.6


 
19.0


 
15.8


Interest expense on investment borrowings
5.0


 
5.0


 
9.9


 
10.0


Other operating costs and expenses
20.3


 
20.0


 
37.9


 
38.8


Total Other CNO Business expenses
154.4


 
144.8


 
313.5


 
314.1


Corporate operations:
 


 
 


 
 


 
 


Interest expense on corporate debt
19.3


 
19.8


 
39.9


 
39.3


Interest expense on borrowings of variable interest entities
3.5


 
3.9


 
6.0


 
6.9


Loss on extinguishment of debt
.6


 
.9


 
2.0


 
2.7


Other operating costs and expenses
12.8


 
10.4


 
24.0


 
18.7


Total corporate expenses
36.2


 
35.0


 
71.9


 
67.6


Total expenses
940.5


 
900.9


 
1,905.5


 
1,850.3


Income (loss) before net realized investment losses (net of related amortization) and income taxes:
 


 
 
 
 


 
 


Bankers Life
84.7


 
64.0


 
148.6


 
117.2


Washington National
22.7


 
21.1


 
47.9


 
48.7


Colonial Penn
7.6


 
7.6


 
13.0


 
12.9


Other CNO Business
4.8


 
8.8


 
11.9


 
6.9


Corporate operations
(31.2
)
 
(32.5
)
 
(53.7
)
 
(58.8
)
Income before net realized investment losses (net of related amortization) and income taxes
$
88.6


 
$
69.0


 
$
167.7


 
$
126.9


___________________
(a)
It is not practicable to provide additional components of revenue by product or services.


Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] 
A reconciliation of segment revenues and expenses to consolidated revenues and expenses is as follows (dollars in millions):


 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Total segment revenues                                                                                            
$
1,029.1


 
$
969.9


 
$
2,073.2


 
$
1,977.2


Net realized investment gains (losses)                                                                                            
2.9


 
(16.7
)
 
8.0


 
(21.6
)
Consolidated revenues                                                                                       
$
1,032.0


 
$
953.2


 
$
2,081.2


 
$
1,955.6


Total segment expenses                                                                                            
$
940.5


 
$
900.9


 
$
1,905.5


 
$
1,850.3


Amortization related to net realized investment gains (losses)
(.7
)
 
.5


 
(.1
)
 
.4


Consolidated expenses                                                                                       
$
939.8


 
$
901.4


 
$
1,905.4


 
$
1,850.7


INCOME TAXES (TABLES)
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] 
The components of income tax expense were as follows (dollars in millions):


 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2010
 
2011
 
2010
Current tax expense
$
1.8


 
$
1.5


 
$
4.9


 
$
2.5


Deferred tax provision
30.9


 
17.2


 
57.5


 
35.4


Total income tax expense
$
32.7


 
$
18.7


 
$
62.4


 
$
37.9


Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] 
A reconciliation of the U.S. statutory corporate tax rate to the effective rate reflected in the consolidated statement of operations is as follows:
 


Six months ended


June 30,
 
2011
 
2010
U.S. statutory corporate rate
35.0
 %
 
35.0
 %
Other nondeductible benefits
(.4
)
 
.4


State taxes
.7


 
.9


Provision for tax issues, tax credits and other
.2


 
(.2
)
Effective tax rate
35.5
 %
 
36.1
 %
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] 
The components of the Company’s income tax assets and liabilities were as follows (dollars in millions):
 
June 30,

2011
 
December 31,

2010
Deferred tax assets:
 
 
 
Net federal operating loss carryforwards attributable to:
 
 
 
Life insurance subsidiaries
$
635.2


 
$
681.7


Non-life companies
874.7


 
870.6


Net state operating loss carryforwards
17.7


 
17.8


Tax credits
28.6


 
23.4


Capital loss carryforwards
346.0


 
339.7


Deductible temporary differences:
 


 
 


Investments
—


 
5.3


Insurance liabilities
732.2


 
738.9


Other
45.9


 
62.8


Gross deferred tax assets
2,680.3


 
2,740.2


Deferred tax liabilities:
 


 
 


Investments
(5.8
)
 
—


Present value of future profits and deferred acquisition costs
(668.0
)
 
(676.3
)
Unrealized appreciation on investments
(208.3
)
 
(132.3
)
Gross deferred tax liabilities
(882.1
)
 
(808.6
)
Net deferred tax assets before valuation allowance
1,798.2


 
1,931.6


Valuation allowance
(1,081.4
)
 
(1,081.4
)
Net deferred tax assets
716.8


 
850.2


Current income taxes accrued
(13.3
)
 
(10.8
)
Income tax assets, net
$
703.5


 
$
839.4


Summary of Operating Loss Carryforwards [Table Text Block] 
As of June 30, 2011, we had $4.3 billion of federal NOLs and $1.0 billion of capital loss carryforwards, which expire as follows (dollars in millions):
Year of expiration
 
Net operating loss carryforwards (a)
 
Capital loss
 
Total loss
 
 
Life
 
Non-life
 
carryforwards
 
carryforwards
2011
 
$
—


 
 
 
$
0.1


 
 
 
$
—


 
$
0.1


2013
 
—


 
 
 
—


 
 
 
939.8


 
939.8


2014
 
—


 
 
 
—


 
 
 
28.7


 
28.7


2016
 
—


 
 
 
—


 
 
 
20.2


 
20.2


2018
 
1,581.1


 
(a)
 
—


 
 
 
—


 
1,581.1


2021
 
29.6


 
 
 
—


 
 
 
—


 
29.6


2022
 
204.1


 
 
 
—


 
 
 
—


 
204.1


2023
 
—


 
 
 
1,999.3


 
(a)
 
—


 
1,999.3


2024
 
—


 
 
 
3.2


 
 
 
—


 
3.2


2025
 
—


 
 
 
118.8


 
 
 
—


 
118.8


2027
 
—


 
 
 
216.8


 
 
 
—


 
216.8


2028
 
—


 
 
 
0.3


 
 
 
—


 
0.3


2029
 
—


 
 
 
149.0


 
 
 
—


 
149.0


2031
 
—


 
 
 
11.7


 
 
 
—


 
11.7


Total
 
$
1,814.8


 
 
 
$
2,499.2


 
 
 
$
988.7


 
$
5,302.7


 
_________________________
(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.
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (TABLES)
Schedule of Long-term Debt Instruments [Table Text Block] 
The following notes payable were direct corporate obligations of the Company as of June 30, 2011 and December 31, 2010 (dollars in millions):


 
June 30,

2011
 
December 31,

2010
7.0% Debentures
$
293.0


 
$
293.0


Senior Secured Credit Agreement due September 30, 2016 (the “Senior Secured Credit Agreement”)
308.8


 
375.0


9.0% Senior Secured Notes due January 2018 (the “9.0% Senior Secured Notes”)
275.0


 
275.0


Senior Health Note due November 12, 2013 (the “Senior Health Note”)
75.0


 
75.0


Unamortized discount on 7.0% Debentures
(13.9
)
 
(14.8
)
Unamortized discount on Senior Secured Credit Agreement
(3.4
)
 
(4.7
)
Direct corporate obligations
$
934.5


 
$
998.5


Schedule of Maturities of Long-term Debt [Table Text Block] 
The scheduled repayment of our direct corporate obligations was as follows at June 30, 2011 (dollars in millions):
Year ending June 30,
 
2012
$
25.0


2013
72.5


2014
90.0


2015
80.0


2016
102.5


Thereafter
581.8


 
$
951.8






INVESTMENT BORROWINGS (TABLES)
Schedule of Terms of Federal Home Loan Bank Borrowing [Table Text Block]
The following summarizes the terms of the borrowings (dollars in millions):


Amount
 
Maturity
 
Interest rate at
borrowed
 
date
 
June 30, 2011
 
 
 
 
 
$
100.0


 
October 2013
 
Variable rate – 0.516%
67.0


 
February 2014
 
Fixed rate – 1.830%
100.0


 
September 2015
 
Variable rate – 0.573%
150.0


 
October 2015
 
Variable rate – 0.537%
146.0


 
November 2015
 
Fixed rate – 5.300%
100.0


 
November 2015
 
Fixed rate – 4.890%
100.0


 
December 2015
 
Fixed rate – 4.710%
100.0


 
June 2016
 
Variable rate – 0.626%
75.0


 
June 2016
 
Variable rate – 0.458%
50.0


 
November 2016
 
Variable rate – 0.522%
50.0


 
November 2016
 
Variable rate – 0.656%
100.0


 
June 2017
 
Variable rate – 0.690%
100.0


 
October 2017
 
Variable rate – 0.708%
37.0


 
November 2017
 
Fixed rate – 3.750%
$
1,275.0


 
 
 
 
CHANGES IN COMMON STOCK (TABLES)
Schedule of Stock by Class
Changes in the number of shares of common stock outstanding were as follows (shares in thousands):


Balance, December 31, 2010
251,084


 
 
Treasury stock purchased and retired
(2,207
)
 
 
Stock options exercised
152


 
 
Restricted stock vested
386


 
(a)
Balance, June 30, 2011
249,415


 
 
________
(a)
Such amount was reduced by 149 thousand shares which were tendered to the Company for the payment of federal and state taxes owed on the vesting of restricted stock.
CONSOLIDATED STATEMENT CASH FLOWS (TABLES)
Reconciliation Of Net Income To Net Cash Provided By Operating Activities [Table Text Block] 
The following reconciles net income to net cash provided by operating activities (dollars in millions):


 
Six months ended
 
June 30,
 
2011
 
2010
Cash flows from operating activities:
 
 
 
Net income
$
113.4


 
$
67.0


Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 


Amortization and depreciation
251.3


 
214.0


Income taxes
59.9


 
34.0


Insurance liabilities
192.5


 
197.5


Accrual and amortization of investment income
(31.7
)
 
29.8


Deferral of policy acquisition costs
(215.1
)
 
(210.3
)
Net realized investment (gains) losses
(8.0
)
 
21.6


Loss on extinguishment of debt
2.0


 
2.7


Other
(3.5
)
 
(10.3
)
Net cash provided by operating activities
$
360.8


 
$
346.0


Schedule of Other Significant Noncash Transactions [Table Text Block] 
Non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions):


 
Six months ended
 
June 30,
 
2011
 
2010
Stock option and restricted stock plans
$
6.0


 
$
6.0


Change in securities lending collateral
—


 
103.7


Change in securities lending payable
—


 
(103.7
)
INVESTMENTS IN VARIABLE INTEREST ENTITIES (TABLES)
Schedule of Impact On Balance Sheet of Consolidating Variable Interest Entities [Table Text Block] 
The following table provides supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions):
 
June 30, 2011
 
VIEs
 
Eliminations
 
Net effect on
consolidated
balance sheet
Assets:
 
 
 
 
 
Investments held by variable interest entities
$
414.0


 
$
—


 
$
414.0


Notes receivable of VIEs held by insurance subsidiaries
—


 
(62.2
)
 
(62.2
)
Cash and cash equivalents held by variable interest entities
25.3


 
—


 
25.3


Accrued investment income
.9


 
—


 
.9


Income tax assets, net
4.4


 
(1.2
)
 
3.2


Other assets
4.9


 
—


 
4.9


Total assets
$
449.5


 
$
(63.4
)
 
$
386.1


Liabilities:
 


 
 


 
 


Other liabilities
$
75.0


 
$
—


 
$
75.0


Borrowings related to variable interest entities
317.3


 
—


 
317.3


Notes payable of VIEs held by insurance subsidiaries
65.7


 
(65.7
)
 
—


Total liabilities
$
458.0


 
$
(65.7
)
 
$
392.3




 
December 31, 2010
 
VIEs
 
Eliminations
 
Net effect on
consolidated
balance sheet
Assets:
 
 
 
 
 
Investments held by variable interest entities
$
420.9


 
$
—


 
$
420.9


Notes receivable of VIEs held by insurance subsidiaries
—


 
(96.8
)
 
(96.8
)
Cash and cash equivalents held by variable interest entities
26.8


 
—


 
26.8


Accrued investment income
1.4


 
(4.8
)
 
(3.4
)
Income tax assets, net
20.9


 
(6.5
)
 
14.4


Other assets
15.9


 
—


 
15.9


Total assets
$
485.9


 
$
(108.1
)
 
$
377.8


Liabilities:
 


 
 


 
 


Other liabilities
$
22.0


 
$
(4.6
)
 
$
17.4


Borrowings related to variable interest entities
386.9


 
—


 
386.9


Notes payable of VIEs held by insurance subsidiaries
115.6


 
(115.6
)
 
—


Total liabilities
$
524.5


 
$
(120.2
)
 
$
404.3


Variable Interest Entities, Fair Value by Contractual Maturity [Table Text Block] 
The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at June 30, 2011, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.


 
Amortized
cost
 
Estimated
fair
value
 
(Dollars in millions)
Due in one year or less
$
7.7


 
$
7.7


Due after one year through five years
242.6


 
242.4


Due after five years through ten years
163.2


 
163.9


Total
$
413.5


 
$
414.0


FAIR VALUE MEASUREMENTS (TABLES)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] 
The categorization of fair value measurements, by input level, for our fixed maturity securities, equity securities, trading securities, certain other invested assets, assets held in separate accounts and embedded derivative instruments included in liabilities for insurance products at June 30, 2011 is as follows (dollars in millions):


 
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
$
—


 
$
14,499.9


 
 
 
$
415.2


 
 
 
$
14,915.1


United States Treasury securities and obligations of United States government corporations and agencies
2.0


 
274.9


 
 
 
1.7


 
 
 
278.6


States and political subdivisions
—


 
1,834.3


 
 
 
9.2


 
 
 
1,843.5


Debt securities issued by foreign governments
—


 
.9


 
 
 
—


 
 
 
.9


Asset-backed securities
—


 
622.5


 
 
 
126.4


 
 
 
748.9


Collateralized debt obligations
—


 
—


 
 
 
193.5


 
 
 
193.5


Commercial mortgage-backed securities
—


 
1,479.8


 
 
 
—


 
 
 
1,479.8


Mortgage pass-through securities
24.8


 
—


 
 
 
3.2


 
 
 
28.0


Collateralized mortgage obligations
—


 
1,930.5


 
 
 
204.1


 
 
 
2,134.6


Total fixed maturities, available for sale
26.8


 
20,642.8


 
 
 
953.3


 
 
 
21,622.9


Equity securities
12.9


 
66.8


 
 
 
49.9


 
 
 
129.6


Trading securities:
 


 
 


 
 
 
 


 
 
 
 


Corporate securities
3.4


 
48.6


 
 
 
4.6


 
 
 
56.6


United States Treasury securities and obligations of United States government corporations and agencies
—


 
4.7


 
 
 
—


 
 
 
4.7


States and political subdivisions
—


 
16.5


 
 
 
—


 
 
 
16.5


Asset-backed securities
—


 
—


 
 
 
—


 
 
 
—


Commercial mortgage-backed securities
—


 
4.5


 
 
 
—


 
 
 
4.5


Mortgage pass-through securities
.3


 
—


 
 
 
—


 
 
 
.3


Collateralized mortgage obligations
—


 
.9


 
 
 
—


 
 
 
.9


Total trading securities
3.7


 
75.2


 
 
 
4.6


 
 
 
83.5


Investments held by variable interest entities
—


 
414.0


 
 
 
—


 
 
 
414.0


Other invested assets
—


 
206.4


 
(a)
 
—


 
 
 
206.4


Assets held in separate accounts
—


 
17.4


 
 
 
—


 
 
 
17.4


Liabilities:
 


 
 


 
 
 
 


 
 
 
 


Liabilities for insurance products:
 


 
 


 
 
 
 


 
 
 
 


Interest-sensitive products
—


 
—


 
 
 
613.4


 
(b)
 
613.4


_____________
(a)
Includes company-owned life insurance and derivatives.
(b)
Includes $612.7 million of embedded derivatives associated with our fixed index annuity products and $.7 million of embedded derivatives associated with a modified coinsurance agreement.
The categorization of fair value measurements, by input level, for our fixed maturity securities, equity securities, trading securities, certain other invested assets, assets held in separate accounts and embedded derivative instruments included in liabilities for insurance products at December 31, 2010 is as follows (dollars in millions):


 
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
$
—


 
$
12,240.1


 
 
 
$
1,977.5


 
 
 
$
14,217.6


United States Treasury securities and obligations of United States government corporations and agencies
10.0


 
282.2


 
 
 
2.0


 
 
 
294.2


States and political subdivisions
—


 
1,772.1


 
 
 
11.4


 
 
 
1,783.5


Debt securities issued by foreign governments
—


 
.9


 
 
 
—


 
 
 
.9


Asset-backed securities
—


 
652.7


 
 
 
121.0


 
 
 
773.7


Collateralized debt obligations
—


 
—


 
 
 
256.5


 
 
 
256.5


Commercial mortgage-backed securities
—


 
1,363.7


 
 
 
—


 
 
 
1,363.7


Mortgage pass-through securities
27.8


 
—


 
 
 
3.5


 
 
 
31.3


Collateralized mortgage obligations
—


 
1,715.4


 
 
 
197.1


 
 
 
1,912.5


Total fixed maturities, available for sale
37.8


 
18,027.1


 
 
 
2,569.0


 
 
 
20,633.9


Equity securities
—


 
37.5


 
 
 
30.6


 
 
 
68.1


Trading securities:
 


 
 


 
 
 
 


 
 
 
 


Corporate securities
3.2


 
47.5


 
 
 
4.3


 
 
 
55.0


United States Treasury securities and obligations of United States government corporations and agencies
—


 
293.8


 
 
 
—


 
 
 
293.8


States and political subdivisions
—


 
16.1


 
 
 
—


 
 
 
16.1


Asset-backed securities
—


 
.6


 
 
 
—


 
 
 
.6


Commercial mortgage-backed securities
—


 
5.2


 
 
 
—


 
 
 
5.2


Mortgage pass-through securities
.3


 
—


 
 
 
—


 
 
 
.3


Collateralized mortgage obligations
—


 
1.2


 
 
 
.4


 
 
 
1.6


Total trading securities
3.5


 
364.4


 
 
 
4.7


 
 
 
372.6


Investments held by variable interest entities
—


 
414.2


 
 
 
6.7


 
 
 
420.9


Other invested assets
—


 
192.0


 
(a)
 
—


 
 
 
192.0


Assets held in separate accounts
—


 
17.5


 
 
 
—


 
 
 
17.5


Liabilities:
 


 
 


 
 
 
 


 
 
 
 


Liabilities for insurance products:
 


 
 


 
 
 
 


 
 
 
 


Interest-sensitive products
—


 
—


 
 
 
553.2


 
(b)
 
553.2


_____________
(a)
Includes company-owned life insurance and derivatives.
(b)
Includes $553.6 million of embedded derivatives associated with our fixed index annuity products and $(.4) million of embedded derivatives associated with a modified coinsurance agreement.
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] 


The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the six months ended June 30, 2011 (dollars in millions):


 
June 30, 2011
 
 
 
Beginning balance as of December 31, 2010
 
Purchases, sales, issuances and settlements, net (c)
 
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 (a)
 
Transfers out of Level 3 (a) (b)
 
Ending balance as of June 30, 2011
 
Amount of total gains (losses) for the six months ended June 30, 2011 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
$
1,977.5


 
$
(161.3
)
 
$
(21.0
)
 
$
10.3


 
$
60.2


 
$
(1,450.5
)
 
$
415.2


 
$
(11.5
)
United States Treasury securities and obligations of United States government corporations and agencies
2.0


 
(.1
)
 
—


 
(.2
)
 
—


 
—


 
1.7


 
—


States and political subdivisions
11.4


 
(.1
)
 
—


 
.4


 
—


 
(2.5
)
 
9.2


 
—


Asset-backed securities
121.0


 
(2.3
)
 
—


 
.5


 
7.2


 
—


 
126.4


 
—


Collateralized debt obligations
256.5


 
(69.5
)
 
2.2


 
4.3


 
—


 
—


 
193.5


 
—


Mortgage pass-through securities
3.5


 
(.3
)
 
—


 
—


 
—


 
—


 
3.2


 
—


Collateralized mortgage obligations
197.1


 
54.4


 
(.9
)
 
.7


 
38.7


 
(85.9
)
 
204.1


 
—


Total fixed maturities, available for sale
2,569.0


 
(179.2
)
 
(19.7
)
 
16.0


 
106.1


 
(1,538.9
)
 
953.3


 
(11.5
)
Equity securities
30.6


 
40.5


 
.2


 
1.1


 
—


 
(22.5
)
 
49.9


 
—


Trading securities:
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
4.3


 
—


 
.3


 
—


 
—


 
—


 
4.6


 
.3


Collateralized mortgage obligations
.4


 
—


 
—


 
—


 
—


 
(.4
)
 
—


 
—


Total trading securities
4.7


 
—


 
.3


 
—


 
—


 
(.4
)
 
4.6


 
.3


Investments held by variable interest entities:
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
6.7


 
(7.9
)
 
1.5


 
(.3
)
 
—


 
—


 
—


 
—


Liabilities:
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Liabilities for insurance products:
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Interest-sensitive products
(553.2
)
 
(51.3
)
 
(8.9
)
 
—


 
—


 
—


 
(613.4
)
 
(8.9
)


____________
(a)
Transfers in/out of Level 3 are reported as having occurred at the beginning of the period.
(b)
Transfers out of Level 3 are primarily related to our re-evaluation of the observability of pricing inputs related to investment grade privately placed securities.
(c)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity, equity and trading securities, purchases and settlements of derivative instruments, and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the six months ended June 30, 2011 (dollars in millions):






 
 
 
 
 
 
 
 
 
Purchases, sales, issuances and settlements, net
 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
—


 
$
(161.3
)
 
$
—


 
$
—


 
$
(161.3
)
United States Treasury securities and obligations of United States governement corporations and agencies
—


 
(.1
)
 
—


 
—


 
(.1
)
States and political subdivisions
—


 
(.1
)
 
—


 
—


 
(.1
)
Asset-backed securities
—


 
(2.3
)
 
—


 
—


 
(2.3
)
Collateralized debt obligations
20.7


 
(90.2
)
 
—


 
—


 
(69.5
)
Mortgage pass-through securities
—


 
(.3
)
 
—


 
—


 
(.3
)
Collateralized mortgage obligations
73.9


 
(19.5
)
 
—


 
—


 
54.4


Total fixed maturities, available for sale
94.6


 
(273.8
)
 
—


 
—


 
(179.2
)
Equity securities
41.4


 
(.9
)
 
—


 
—


 
40.5


Investments held by variable interest entities:
 
 
 
 
 
 
 
 
 
Corporate securities
—


 
(7.9
)
 
—


 
—


 
(7.9
)
Liabilities:
 
 
 
 
 
 
 
 
 
Liabilities for insurance products:
 
 
 
 
 
 
 
 
 
Interest-sensitive products
(52.4
)
 
10.1


 
(25.8
)
 
16.8


 
(51.3
)




 
 
June 30, 2010
 
 
 
 
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 other comprehensive income (loss)
 
Transfers into Level 3 (b)
 
Transfers out of Level 3 (b)
 
Ending balance as of June 30, 2010
 
Amount of total gains (losses) for the six months ended June 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
 
$
2,147.8


 
$
(5.9
)
 
$
58.8


 
$
.8


 
$
111.1


 
$
47.0


 
$
(31.0
)
 
$
2,328.6


 
$
—


United States Treasury securities and obligations of United States government corporations and agencies
 
2.2


 
—


 
(.1
)
 
—


 
—


 
—


 
—


 
2.1


 
—


States and political subdivisions
 
10.7


 
—


 
—


 
—


 
1.1


 
—


 
(1.8
)
 
10.0


 
—


Asset-backed securities
 
115.1


 
—


 
6.3


 
(11.3
)
 
21.0


 
—


 
—


 
131.1


 
—


Collateralized debt obligations
 
92.8


 
(5.7
)
 
50.1


 
(.2
)
 
(.2
)
 
—


 
—


 
136.8


 
—


Commercial mortgage-backed securities
 
13.7


 
—


 
(.7
)
 
—


 
2.0


 
1.3


 
(5.8
)
 
10.5


 
—


Mortgage pass-through securities
 
4.2


 
—


 
(.3
)
 
—


 
—


 
—


 
—


 
3.9


 
—


Collateralized mortgage obligations
 
11.4


 
—


 
23.8


 
—


 
—


 
—


 
(11.1
)
 
24.1


 
—


Total fixed maturities, available for sale
 
2,397.9


 
(11.6
)
 
137.9


 
(10.7
)
 
135.0


 
48.3


 
(49.7
)
 
2,647.1


 
—


Equity securities
 
30.9


 
—


 
.1


 
—


 
—


 
—


 
—


 
31.0


 
—


Trading securities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
3.7


 
—


 
—


 
—


 
—


 
.4


 
—


 
4.1


 
—


Investments held by variable interest entities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
—


 
6.9


 
—


 
—


 
.3


 
—


 
—


 
7.2


 
—


Securities lending collateral:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
13.7


 
—


 
(13.7
)
 
—


 
—


 
—


 
—


 
—


 
—


Asset-backed securities
 
22.9


 
—


 
(15.5
)
 
(.2
)
 
(.3
)
 
—


 
(2.0
)
 
4.9


 
(.2
)
Total securities lending collateral
 
36.6


 
—


 
(29.2
)
 
(.2
)
 
(.3
)
 
—


 
(2.0
)
 
4.9


 
(.2
)
Other invested assets
 
2.4


 
(2.4
)
 
—


 
—


 
—


 
—


 
—


 
—


 
—


Liabilities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Liabilities for insurance products:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Interest-sensitive products
 
(496.0
)
 
—


 
35.0


 
(39.5
)
 
—


 
—


 
—


 
(500.5
)
 
(39.5
)


__________
(a)
Amounts represent adjustments to investments related to a VIE that was required to be consolidated effective January 1, 2010, as well as the reclassification of investments of a VIE which was consolidated at December 31, 2009.
(b)
Transfers in/out of Level 3 are reported as having occurred at the beginning of the period.


The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended June 30, 2010 (dollars in millions):


 
 
June 30, 2010
 
 
 
 
Beginning balance as of March 31, 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 other comprehensive income (loss)
 
Transfers into Level 3 (a)
 
Transfers out of Level 3 (a)
 
Ending balance as of June 30, 2010
 
Amount of total gains (losses) for the three months ended June 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
 
$
2,150.8


 
$
63.9


 
$
.8


 
$
95.3


 
$
33.4


 
$
(15.6
)
 
$
2,328.6


 
$
—


United States Treasury securities and obligations of United States government corporations and agencies
 
2.2


 
(.1
)
 
—


 
—


 
—


 
—


 
2.1


 
—


States and political subdivisions
 
8.9


 
—


 
—


 
1.1


 
—


 
—


 
10.0


 
—


Asset-backed securities
 
104.1


 
19.3


 
—


 
7.7


 
—


 
—


 
131.1


 
—


Collateralized debt obligations
 
128.9


 
11.2


 
(.8
)
 
(2.5
)
 
—


 
—


 
136.8


 
—


Commercial mortgage-backed securities
 
—


 
—


 
—


 
—


 
10.5


 
—


 
10.5


 
—


Mortgage pass-through securities
 
3.9


 
(.1
)
 
—


 
.1


 
—


 
—


 
3.9


 
—


Collateralized mortgage obligations
 
9.9


 
23.8


 
—


 
—


 
—


 
(9.6
)
 
24.1


 
—


Total fixed maturities, available for sale
 
2,408.7


 
118.0


 
—


 
101.7


 
43.9


 
(25.2
)
 
2,647.1


 
—


Equity securities
 
31.0


 
—


 
—


 
—


 
—


 
—


 
31.0


 
—


Trading securities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
4.0


 
—


 
—


 
(.4
)
 
.5


 
—


 
4.1


 
(.4
)
Investments held by variable interest entities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Corporate securities
 
7.1


 
—


 
—


 
.1


 
—


 
—


 
7.2


 
—


Securities lending collateral:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Asset-backed securities
 
21.4


 
(15.6
)
 
(.2
)
 
.3


 
—


 
(1.0
)
 
4.9


 
(.2
)
Liabilities:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Liabilities for insurance products:
 
 


 
 


 
 


 
 


 
 


 
 


 
 


 
 


Interest-sensitive products
 
(497.2
)
 
29.4


 
(32.7
)
 
—


 
—


 
—


 
(500.5
)
 
(32.7
)


____________
(a) Transfers in/out of Level 3 are reported as having occurred at the beginning of the period.


The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended June 30, 2011 (dollars in millions):




 
June 30, 2011
 
 
 
Beginning balance as of March 31, 2011
 
Purchases, sales, issuances and settlements, net (c)
 
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 (a)
 
Transfers out of Level 3 (a) (b)
 
Ending balance as of June 30, 2011
 
Amount of total gains (losses) for the three months ended June 30, 2011 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
$
1,926.0


 
$
(59.1
)
 
$
(10.0
)
 
$
7.2


 
$
43.5


 
$
(1,492.4
)
 
$
415.2


 
$
(5.1
)
United States Treasury securities and obligations of United States government corporations and agencies
1.7


 
—


 
—


 
—


 
—


 
—


 
1.7


 
—


States and political subdivisions
8.9


 
—


 
—


 
.3


 
—


 
—


 
9.2


 
—


Asset-backed securities
143.3


 
(1.6
)
 
—


 
.7


 
4.4


 
(20.4
)
 
126.4


 
—


Collateralized debt obligations
186.2


 
7.2


 
—


 
.1


 
—


 
—


 
193.5


 
—


Mortgage pass-through securities
3.3


 
(.1
)
 
—


 
—


 
—


 
—


 
3.2


 
—


Collateralized mortgage obligations
247.5


 
45.8


 
(.9
)
 
(.1
)
 
25.1


 
(113.3
)
 
204.1


 
—


Total fixed maturities, available for sale
2,516.9


 
(7.8
)
 
(10.9
)
 
8.2


 
73.0


 
(1,626.1
)
 
953.3


 
(5.1
)
Equity securities
45.4


 
3.0


 
1.0


 
.5


 
—


 
—


 
49.9


 
—


Trading securities:
 


 
 


 
 


 
 


 
 


 
 


 
 
 
 


Corporate securities
4.6


 
—


 
—


 
—


 
—


 
—


 
4.6


 
—


Collateralized mortgage obligations
.5


 
—


 
—


 
—


 
—


 
(.5
)
 
—


 
—


Total trading securities
5.1


 
—


 
—


 
—


 
—


 
(.5
)
 
4.6


 
—


Investments held by variable interest entities:
 


 
 


 
 


 
 


 
 


 
 


 
 
 
 


Corporate securities
—


 
—


 
—


 
—


 
—


 
—


 
—


 
—


Liabilities:
 


 
 


 
 


 
 


 
 


 
 


 
 
 
 


Liabilities for insurance products:
 


 
 


 
 


 
 


 
 


 
 


 
 
 
 


Interest-sensitive products
(587.5
)
 
(15.2
)
 
(10.7
)
 
—


 
—


 
—


 
(613.4
)
 
(10.7
)


____________
(a)
Transfers in/out of Level 3 are reported as having occurred at the beginning of the period.
(b)
Transfers out of Level 3 are primarily related to our re-evaluation of the observability of pricing inputs related to investment grade privately placed securities.
(c)
Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity, equity and trading securities, purchases and settlements of derivative instruments, and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended June 30, 2011 (dollars in millions):


 
 
 
 
 
 
 
 
 
Purchases, sales, issuances and settlements, net
 
Purchases
 
Sales
 
Issuances
 
Settlements
 
Assets:
 
 
 
 
 
 
 
 
 
Fixed maturities, available for sale:
 
 
 
 
 
 
 
 
 
Corporate securities
$
—


 
$
(59.1
)
 
$
—


 
$
—


 
$
(59.1
)
States and political subdivisions
—


 
—


 
—


 
—


 
—


Asset-backed securities
—


 
(1.6
)
 
—


 
—


 
(1.6
)
Collateralized debt obligations
19.0


 
(11.8
)
 
—


 
—


 
7.2


Mortgage pass-through securities
—


 
(.1
)
 
—


 
—


 
(.1
)
Collateralized mortgage obligations
61.4


 
(15.6
)
 
—


 
—


 
45.8


Total fixed maturities, available for sale
80.4


 
(88.2
)
 
—


 
—


 
(7.8
)
Equity securities
3.9


 
(.9
)
 
—


 
—


 
3.0


Investments held by variable interest entities:
 
 
 
 
 
 
 
 
 
Corporate securities
—


 
—


 
—


 
—


 
—


Liabilities:
 
 
 
 
 
 
 
 
 
Liabilities for insurance products:
 
 
 
 
 
 
 
 
 
Interest-sensitive products
(27.4
)
 
7.5


 
(6.8
)
 
11.5


 
(15.2
)
Fair Value, by Balance Sheet Grouping [Table Text Block] 


The estimated fair values of our financial instruments at June 30, 2011 and December 31, 2010, were as follows (dollars in millions):


 
June 30, 2011
 
December 31, 2010
 
Carrying
amount
 
Estimated fair
value
 
Carrying
amount
 
Estimated fair
value
Financial assets:
 
 
 
 
 
 
 
Fixed maturities, available for sale
$
21,622.9


 
$
21,622.9


 
$
20,633.9


 
$
20,633.9


Equity securities
129.6


 
129.6


 
68.1


 
68.1


Mortgage loans
1,752.8


 
1,799.4


 
1,761.2


 
1,762.6


Policy loans
279.5


 
279.5


 
284.4


 
284.4


Trading securities
83.5


 
83.5


 
372.6


 
372.6


Investments held by securitization entities
414.0


 
414.0


 
420.9


 
420.9


Other invested assets
252.2


 
252.2


 
240.9


 
240.9


Cash and cash equivalents
605.5


 
605.5


 
598.7


 
598.7


Financial liabilities:
 


 
 


 
 


 
 


Insurance liabilities for interest-sensitive products (a)
$
13,152.8


 
$
13,152.8


 
$
13,194.7


 
$
13,194.7


Investment borrowings
1,305.3


 
1,336.1


 
1,204.1


 
1,265.3


Borrowings related to variable interest entities
317.3


 
286.9


 
386.9


 
345.1


Notes payable – direct corporate obligations
934.5


 
1,118.0


 
998.5


 
1,166.4


____________________
(a)
The estimated fair value of insurance liabilities for interest-sensitive products was approximately equal to its carrying value at June 30, 2011 and December 31, 2010.  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.
INVESTMENTS - AVAILABLE FOR SALE SECURITIES (DETAILS) (USD $)
In Millions
6 Months Ended
Jun. 30, 2011
Dec. 31, 2010
Schedule of Available-for-sale Securities [Line Items]
 
 
Trading securities
$ 83.5 
$ 372.6 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized
0.6 
(4.4)
Net unrealized gains (losses) on all other investments
732.0 
476.5 
Adjustment to present value of future profits (a)
(23.4)1
(17.6)1
Adjustment to deferred acquisition costs
(120.9)
(76.2)
Unrecognized net loss related to deferred compensation plan
(7.3)
(7.7)
Deferred income tax liability
(208.3)
(132.3)
Accumulated other comprehensive income
372.7 
238.3 
Available-for-sale Debt Securities Amortized Cost Basis
20,893.1 
 
Available-for-sale Securities, Gross Unrealized Gains
958.8 
 
Available-for-sale Securities, Gross Unrealized Losses
(229.0)
 
Available-for-sale Securities, Fair Value Disclosure
21,622.9 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
(10.3)
 
Available-for-sale Securities, Debt Maturities [Abstract]
 
 
Available-for-sale Securities, Debt Maturities, within One Year, Amortized Cost Basis
107.7 
 
Available-for-sale Securities, Debt Maturities, within One Year, Fair Value
109.0 
 
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Amortized Cost Basis
1,164.7 
 
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Fair Value
1,238.3 
 
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Amortized Cost Basis
4,245.4 
 
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Fair Value
4,547.2 
 
Available-for-sale Securities, Debt Maturities, after Ten Years, Amortized Cost Basis
10,878.9 
 
Available-for-sale Securities, Debt Maturities, after Ten Years, Fair Value
11,143.6 
 
Available For Sale Securities, Debt Maturities, Amortized Cost, Subtotal
16,396.7 
 
Available For Sale Securities, Debt Maturities, Fair Value, Subtotal
17,038.1 
 
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis
4,496.4 
 
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value
4,584.8 
 
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis
20,893.1 
20,155.8 
Available For Sale Securities, Nonperforming, Aggregate Amortized Cost
6.2 
 
Available For Sale Securities, Nonperforming, Carrying Value
6.2 
 
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
4,754.0 
5,097.8 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
(142.60)
(179.60)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
825.0 
1,382.3 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses
(86.40)
(157.30)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
5,579.0 
6,480.1 
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses
(229.00)
(336.90)
Corporate Debt Securities [Member]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Available-for-sale Debt Securities Amortized Cost Basis
14,263.3 
 
Available-for-sale Securities, Gross Unrealized Gains
769.2 
 
Available-for-sale Securities, Gross Unrealized Losses
(117.4)
 
Available-for-sale Securities, Fair Value Disclosure
14,915.1 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
2,718.1 
2,633.0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
(70.20)
(80.60)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
519.0 
864.6 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses
(47.20)
(88.40)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
3,237.1 
3,497.6 
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses
(117.40)
(169.00)
US Treasury and Government [Member]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Available-for-sale Debt Securities Amortized Cost Basis
283.4 
 
Available-for-sale Securities, Gross Unrealized Gains
5.0 
 
Available-for-sale Securities, Gross Unrealized Losses
(9.8)
 
Available-for-sale Securities, Fair Value Disclosure
278.6 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
198.7 
196.9 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
(9.80)
(11.80)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
0.3 
0.2 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses
0 
0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
199.0 
197.1 
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses
(9.80)
(11.80)
US States and Political Subdivisions Debt Securities [Member]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Available-for-sale Debt Securities Amortized Cost Basis
1,849.2 
 
Available-for-sale Securities, Gross Unrealized Gains
40.4 
 
Available-for-sale Securities, Gross Unrealized Losses
(46.1)
 
Available-for-sale Securities, Fair Value Disclosure
1,843.5 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
487.3 
1,201.9 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
(12.10)
(54.80)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
216.0 
229.6 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses
(34.00)
(45.90)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
703.3 
1,431.5 
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses
(46.10)
(100.70)
Foreign Government Debt Securities [Member]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Available-for-sale Debt Securities Amortized Cost Basis
0.8 
 
Available-for-sale Securities, Gross Unrealized Gains
0.1 
 
Available-for-sale Securities, Gross Unrealized Losses
0 
 
Available-for-sale Securities, Fair Value Disclosure
0.9 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
0 
 
Asset-backed Securities [Member]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Available-for-sale Debt Securities Amortized Cost Basis
739.6 
 
Available-for-sale Securities, Gross Unrealized Gains
19.0 
 
Available-for-sale Securities, Gross Unrealized Losses
(9.7)
 
Available-for-sale Securities, Fair Value Disclosure
748.9 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
305.1 
272.2 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
(8.60)
(2.40)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
9.7 
54.0 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses
(1.10)
(3.90)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
314.8 
326.2 
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses
(9.70)
(6.30)
Collateralized Mortgage Backed Securities [Member]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Available-for-sale Debt Securities Amortized Cost Basis
2,130.6 
 
Available-for-sale Securities, Gross Unrealized Gains
38.3 
 
Available-for-sale Securities, Gross Unrealized Losses
(34.3)
 
Available-for-sale Securities, Fair Value Disclosure
2,134.6 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
(10.3)
 
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
840.5 
661.0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
(33.40)
(29.10)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
29.1 
112.9 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses
(0.90)
(6.40)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
869.6 
773.9 
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses
(34.30)
(35.50)
Commercial Mortgage Backed Securities [Member]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Available-for-sale Debt Securities Amortized Cost Basis
1,410.6 
 
Available-for-sale Securities, Gross Unrealized Gains
80.0 
 
Available-for-sale Securities, Gross Unrealized Losses
(10.8)
 
Available-for-sale Securities, Fair Value Disclosure
1,479.8 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
184.3 
15.5 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
(7.60)
0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
47.6 
111.8 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses
(3.20)
(12.50)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
231.9 
127.3 
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses
(10.80)
(12.50)
Collateralized Debt Obligations [Member]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Available-for-sale Debt Securities Amortized Cost Basis
189.6 
 
Available-for-sale Securities, Gross Unrealized Gains
4.8 
 
Available-for-sale Securities, Gross Unrealized Losses
(0.9)
 
Available-for-sale Securities, Fair Value Disclosure
193.5 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
19.9 
117.0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
(0.90)
(0.90)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
0 
5.8 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses
0 
(0.20)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
19.9 
122.8 
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses
(0.90)
(1.10)
Mortgage Pass Through Securities [Member]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Available-for-sale Debt Securities Amortized Cost Basis
26.0 
 
Available-for-sale Securities, Gross Unrealized Gains
2.0 
 
Available-for-sale Securities, Gross Unrealized Losses
0 
 
Available-for-sale Securities, Fair Value Disclosure
28.0 
 
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
0.1 
0.3 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses
0 
0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
3.3 
3.4 
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses
0 
0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
3.4 
3.7 
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses
$ 0 
$ 0 
INVESTMENTS - SCHEDULE OF OTHER THAN TEMPORARY IMPAIRMENT (DETAILS) (USD $)
In Millions
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Other than Temporary Impairment, Available-for-sale, Debt Securities, Before Tax
$ 10.3 
 
$ 10.3 
 
Available-for-sale Securities [Member]
 
 
 
 
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
 
 
 
 
Credit losses on fixed maturity securities, available for sale, beginning of period
(1.8)
(29.4)
(6.1)
(27.2)
Add: credit losses on other-than-temporary impairments not previously recognized
0 
(1.3)
0 
(1.3)
Less: credit losses on other-than-temporary impairments not previously recognized
0.2 
10.1 
4.5 
13.5 
Less: credit losses on securities impaired due to intent to sell
0 1
1.1 1
0 1
1.1 1
Add: credit losses on previously impaired securities
0 
(4.5)
0 
(10.1)
Less: increases in cash flows expected on previously impaired securities
0 
0 
0 
0 
Credit losses on fixed maturity securities, available for sale, end of period
$ (1.6)
$ (24.0)
$ (1.6)
$ (24.0)
INVESTMENTS - REALIZED GAINS (LOSSES) (DETAILS) (USD $)
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Gain (Loss) on Investments [Abstract]
 
 
 
 
Net realized investment gains (losses)
$ 2,900,000 
$ (16,700,000)
$ 8,000,000 
$ (21,600,000)
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net
 
 
(23,400,000)
(48,200,000)
Total other-than-temporary impairment losses
10,100,000 
29,300,000 
23,400,000 
47,000,000 
Net realized investment gains, excluding impairment losses
13,000,000 
11,200,000 
31,400,000 
26,600,000 
Available For Sale Securities, Nonperforming, Aggregate Amortized Cost
6,200,000 
 
6,200,000 
 
Available For Sale Securities, Nonperforming, Carrying Value
6,200,000 
 
6,200,000 
 
Available For Sale Securities, Value Of Securities Sold
 
 
700,000,000 
 
Available For Sale Securities, Gross Investment Losses From Sale, Before Tax
 
 
39,000,000 
 
Available for Sale Securities, Continuous Unrealized Loss Position Exceeding Amortized Cost, Percent
 
 
20.00% 
 
Available For Sale Securities, Investment Sold at Loss, Amortized Cost
 
 
4,000,000 
 
Available For Sale Securities, Investment Sold at Loss, Estimated Fair Value
 
 
2,700,000 
 
Available For Sale Securities, Number of Securities Sold from Previous Unrealized Loss Position
 
 
1 
 
Sales of investments
 
 
$ 2,931,900,000 
$ 4,572,600,000 
EARNINGS PER SHARE (DETAILS) (USD $)
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract]
 
 
 
 
Net income for basic earnings per share
$ 59,500,000 
$ 33,100,000 
$ 113,400,000 
$ 67,000,000 
Add: interest expense on 7.0% Convertible Senior Debentures due 2016 (the “7.0% Debentures”), net of income taxes
3,700,000 
3,400,000 
7,400,000 
6,000,000 
Net income for diluted earnings per share
63,200,000 
36,500,000 
120,800,000 
73,000,000 
Shares:
 
 
 
 
Weighted average shares outstanding for basic earnings per share
250,933,000 
250,994,000 
251,027,000 
250,891,000 
Effect of dilutive securities on weighted average shares:
 
 
 
 
7% Debentures
53,367,000 
49,793,000 
53,367,000 
44,663,000 
Stock option and restricted stock plans
3,036,000 
1,861,000 
2,892,000 
1,810,000 
Warrants
712,000 
0 
487,000 
0 
Dilutive potential common shares
57,115,000 
51,654,000 
56,746,000 
46,473,000 
Weighted average shares outstanding for diluted earnings per share
308,048,000 
302,648,000 
307,773,000 
297,364,000 
Conversion Rate for Convertible Senior Debentures
182.1494 
 
182.1494 
 
Par Value of Each Convertible Senior Debenture
$ 1,000 
 
$ 1,000 
 
Conversion Price for Convertible Senior Debentures
$ 5.49 
 
$ 5.49 
 
BUSINESS SEGMENTS (DETAILS) (USD $)
In Millions
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Revenues:
 
 
 
 
Fee revenue and other income
$ 4.2 
$ 3.6 
$ 7.6 
$ 7.1 
Revenues
1,029.1 
969.9 
2,073.2 
1,977.2 
Benefits and expenses:
 
 
 
 
Insurance policy benefits
684.4 
651.0 
1,367.6 
1,350.0 
Loss on extinguishment of debt
0.6 
0.9 
2.0 
2.7 
Other operating costs and expenses
124.4 
124.2 
239.5 
242.6 
Total expenses
940.5 
900.9 
1,905.5 
1,850.3 
Income before net realized investment losses (net of related amortization) and income taxes
88.6 
69.0 
167.7 
126.9 
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
 
 
 
 
Total segment revenues
1,029.1 
969.9 
2,073.2 
1,977.2 
Net realized investment gains (losses)
2.9 
(16.7)
8.0 
(21.6)
Consolidated revenues
1,032.0 
953.2 
2,081.2 
1,955.6 
Total segment expenses
940.5 
900.9 
1,905.5 
1,850.3 
Amortization related to net realized investment gains (losses)
(0.70)
0.50 
(0.10)
0.40 
Consolidated expenses
939.8 
901.4 
1,905.4 
1,850.7 
Bankers Life [Member]
 
 
 
 
Revenues:
 
 
 
 
Annuities
8.7 
10.7 
17.1 
19.0 
Health
343.3 
342.4 
683.1 
688.3 
Life
57.6 
47.6 
109.4 
89.6 
Net investment income
196.9 1
160.5 1
406.5 1
346.4 1
Fee revenue and other income
3.3 1
2.7 1
5.6 1
5.0 1
Revenues
609.8 
563.9 
1,221.7 
1,148.3 
Benefits and expenses:
 
 
 
 
Insurance policy benefits
408.9 
382.7 
813.7 
799.2 
Amortization
69.7 
70.6 
171.6 
137.6 
Interest expense on investment borrowings
1.1 
0 
2.3 
0 
Other operating costs and expenses
45.4 
46.6 
85.5 
94.3 
Total expenses
525.1 
499.9 
1,073.1 
1,031.1 
Income before net realized investment losses (net of related amortization) and income taxes
84.7 
64.0 
148.6 
117.2 
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
 
 
 
 
Total segment revenues
609.8 
563.9 
1,221.7 
1,148.3 
Total segment expenses
525.1 
499.9 
1,073.1 
1,031.1 
Washington National [Member]
 
 
 
 
Revenues:
 
 
 
 
Health
141.7 
139.4 
281.9 
279.0 
Life
3.8 
4.1 
7.9 
8.7 
Other
1.1 
1.2 
2.2 
2.4 
Net investment income
46.7 1
45.9 1
93.0 1
91.3 1
Fee revenue and other income
0.2 1
0.2 1
0.5 1
0.5 1
Revenues
193.5 
190.8 
385.5 
381.9 
Benefits and expenses:
 
 
 
 
Insurance policy benefits
118.3 
116.7 
230.5 
229.2 
Amortization
14.0 
13.1 
30.1 
27.9 
Other operating costs and expenses
38.5 
39.9 
77.0 
76.1 
Total expenses
170.8 
169.7 
337.6 
333.2 
Income before net realized investment losses (net of related amortization) and income taxes
22.7 
21.1 
47.9 
48.7 
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
 
 
 
 
Total segment revenues
193.5 
190.8 
385.5 
381.9 
Total segment expenses
170.8 
169.7 
337.6 
333.2 
Colonial Penn [Member]
 
 
 
 
Revenues:
 
 
 
 
Health
1.5 
1.6 
3.1 
3.4 
Life
49.4 
47.7 
98.1 
94.1 
Net investment income
10.5 1
9.7 1
20.8 1
19.4 1
Fee revenue and other income
0.2 1
0.1 1
0.4 1
0.3 1
Revenues
61.6 
59.1 
122.4 
117.2 
Benefits and expenses:
 
 
 
 
Insurance policy benefits
38.0 
35.4 
76.7 
72.1 
Amortization
8.6 
8.8 
17.6 
17.5 
Other operating costs and expenses
7.4 
7.3 
15.1 
14.7 
Total expenses
54.0 
51.5 
109.4 
104.3 
Income before net realized investment losses (net of related amortization) and income taxes
7.6 
7.6 
13.0 
12.9 
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
 
 
 
 
Total segment revenues
61.6 
59.1 
122.4 
117.2 
Total segment expenses
54.0 
51.5 
109.4 
104.3 
Other CNO Business [Member]
 
 
 
 
Revenues:
 
 
 
 
Annuities
2.9 
2.4 
5.2 
4.9 
Health
7.1 
7.5 
14.4 
15.2 
Life
61.9 
62.6 
123.2 
126.5 
Other
0.6 
0.7 
1.2 
1.4 
Net investment income
86.7 1
80.4 1
181.4 1
173.0 1
Revenues
159.2 
153.6 
325.4 
321.0 
Benefits and expenses:
 
 
 
 
Insurance policy benefits
119.2 
116.2 
246.7 
249.5 
Amortization
9.9 
3.6 
19.0 
15.8 
Interest expense on investment borrowings
5.0 
5.0 
9.9 
10.0 
Other operating costs and expenses
20.3 
20.0 
37.9 
38.8 
Total expenses
154.4 
144.8 
313.5 
314.1 
Income before net realized investment losses (net of related amortization) and income taxes
4.8 
8.8 
11.9 
6.9 
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
 
 
 
 
Total segment revenues
159.2 
153.6 
325.4 
321.0 
Total segment expenses
154.4 
144.8 
313.5 
314.1 
Corporate Operations [Member]
 
 
 
 
Revenues:
 
 
 
 
Net investment income
4.5 
1.9 
17.1 
7.5 
Fee revenue and other income
0.5 
0.6 
1.1 
1.3 
Revenues
5.0 
2.5 
18.2 
8.8 
Benefits and expenses:
 
 
 
 
Interest expense on corporate debt
19.3 
19.8 
39.9 
39.3 
Interest expense on borrowings of variable interest entities
3.5 
3.9 
6.0 
6.9 
Loss on extinguishment of debt
0.6 
0.9 
2.0 
2.7 
Other operating costs and expenses
12.8 
10.4 
24.0 
18.7 
Total expenses
36.2 
35.0 
71.9 
67.6 
Income before net realized investment losses (net of related amortization) and income taxes
(31.2)
(32.5)
(53.7)
(58.8)
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
 
 
 
 
Total segment revenues
5.0 
2.5 
18.2 
8.8 
Total segment expenses
$ 36.2 
$ 35.0 
$ 71.9 
$ 67.6 
ACCOUNTING FOR DERIVATIVES (DETAILS) (USD $)
In Millions
6 Months Ended
Jun. 30,
Jun. 30, 2011
Equity Swap [Member]
Dec. 31, 2010
Equity Swap [Member]
2011
Equity Swap [Member]
Investment Income [Member]
2010
Equity Swap [Member]
Investment Income [Member]
Jun. 30, 2011
Embedded Derivative Financial Instruments [Member]
Dec. 31, 2010
Embedded Derivative Financial Instruments [Member]
Jun. 30, 2011
Embedded Derivative Associated With Modified Coinsurance Agreement [Member]
Dec. 31, 2010
Embedded Derivative Associated With Modified Coinsurance Agreement [Member]
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Income, Net
 
 
$ 19.0 
$ (26.0)
 
 
 
 
Other Derivatives Not Designated as Hedging Instruments Assets at Fair Value
100.9 
89.4 
 
 
 
 
 
 
Other Derivatives Not Designated as Hedging Instruments Liabilities at Fair Value
 
 
 
 
$ 612.7 
$ 553.6 
$ 0.7 
$ (0.4)
REINSURANCE (DETAILS) (USD $)
In Millions
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
 
 
 
 
Ceded Premiums Written
$ 57.6 
$ 67.1 
$ 118.0 
$ 131.7 
Reinsurance Effect on Claims and Benefits Incurred, Amount Ceded
52.3 
113.6 
114.8 
233.5 
Assumed Premiums Written
26.1 
26.6 
46.5 
50.8 
Coventry Health Care Marketing and Quota Share Agreements [Member]
 
 
 
 
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
 
 
 
 
Assumed Premiums Written
$ 20.4 
$ 19.4 
$ 34.8 
$ 37.3 
INCOME TAXES (DETAILS) (USD $)
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Dec. 31, 2010
Income Tax Expense (Benefit) [Abstract]
 
 
 
 
 
Current tax expense
$ 1,800,000 
$ 1,500,000 
$ 4,900,000 
$ 2,500,000 
 
Deferred tax provision
30,900,000 
17,200,000 
57,500,000 
35,400,000 
 
Total income tax expense
32,700,000 
18,700,000 
62,400,000 
37,900,000 
 
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]
 
 
 
 
 
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate
 
 
35.00% 
35.00% 
 
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Other
 
 
(0.40%)
0.40% 
 
Effective Income Tax Rate Reconciliation, State and Local Income Taxes
 
 
0.70% 
0.90% 
 
Provision for tax issues, tax credits and other
 
 
0.20% 
(0.20%)
 
Effective Income Tax Rate, Continuing Operations
 
 
35.50% 
36.10% 
 
Components of Deferred Tax Assets [Abstract]
 
 
 
 
 
Deferred Tax Assets, Operating Loss Carryforwards, Life Insurance Subsidaries
635,200,000 
 
635,200,000 
 
681,700,000 
Deferred Tax Assets, Operating Loss Carryforwards, Non Life Insurance Companies
874,700,000 
 
874,700,000 
 
870,600,000 
Deferred tax assets, operating loss carryforwards, state and local
17,700,000 
 
17,700,000 
 
17,800,000 
Tax credits
28,600,000 
 
28,600,000 
 
23,400,000 
Deferred Tax Assets, Capital Loss Carryforwards
346,000,000 
 
346,000,000 
 
339,700,000 
Investments
0 
 
0 
 
5,300,000 
Insurance liabilities
732,200,000 
 
732,200,000 
 
738,900,000 
Other
45,900,000 
 
45,900,000 
 
62,800,000 
Deferred Tax Assets, Gross
2,680,300,000 
 
2,680,300,000 
 
2,740,200,000 
Components of Deferred Tax Liabilities [Abstract]
 
 
 
 
 
Investments
(5,800,000)
 
(5,800,000)
 
0 
Present value of future profits and deferred acquisition costs
(668,000,000)
 
(668,000,000)
 
(676,300,000)
Unrealized appreciation on investments
(208,300,000)
 
(208,300,000)
 
(132,300,000)
Deferred Tax Liabilities
882,100,000 
 
882,100,000 
 
808,600,000 
Deferred Tax Assets Before Valuation Allowance
1,798,200,000 
 
1,798,200,000 
 
1,931,600,000 
Deferred Tax Assets, Valuation Allowance
1,081,400,000 
 
1,081,400,000 
 
1,081,400,000 
Deferred Tax Assets, Net
716,800,000 
 
716,800,000 
 
850,200,000 
Accrued Income Taxes, Current
13,300,000 
 
13,300,000 
 
10,800,000 
Income tax assets, net
703,500,000 
 
703,500,000 
 
839,400,000 
Loss Limitation Based On Income Of Life Insurance Company
35.00% 
 
35.00% 
 
 
Loss Limitation Based On Loss Of Non Life Entities
35.00% 
 
35.00% 
 
 
Federal Long Term Tax Exempt Rate
4.30% 
 
4.30% 
 
 
Ownership Change Threshold Restricting Nol Useage
50.00% 
 
50.00% 
 
 
Valuation Allowance, Deferred Tax Asset, Change in Amount
 
 
$ 0 
 
 
INCOME TAXES - OPERATING LOSS CARRYFORWARDS (DETAILS) (USD $)
In Millions
6 Months Ended
Jun. 30,
Jun. 30, 2011
Dec. 31, 2010
Jun. 30, 2011
Internal Revenue Service (IRS) [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2011 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2013 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2014 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2016 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2018 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2021 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2022 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2023 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2024 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2025 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2027 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2028 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2029 [Member]
Jun. 30, 2011
Non Life Insurance Companies [Member]
Carryforward Expiration 2031 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2011 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2013 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2014 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2016 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2018 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2021 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2022 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2023 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2024 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2025 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2027 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2028 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2029 [Member]
Jun. 30, 2011
Life Insurance Companies [Member]
Carryforward Expiration 2031 [Member]
2011
Carryforward Expiration 2011 [Member]
2011
Carryforward Expiration 2013 [Member]
2011
Carryforward Expiration 2014 [Member]
2011
Carryforward Expiration 2016 [Member]
2011
Carryforward Expiration 2018 [Member]
2011
Carryforward Expiration 2021 [Member]
2011
Carryforward Expiration 2022 [Member]
2011
Carryforward Expiration 2023 [Member]
2011
Carryforward Expiration 2024 [Member]
2011
Carryforward Expiration 2025 [Member]
2011
Carryforward Expiration 2027 [Member]
2011
Carryforward Expiration 2028 [Member]
2011
Carryforward Expiration 2029 [Member]
2011
Carryforward Expiration 2031 [Member]
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating loss carryforwards, expiration dates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2011 
 
 
 
2018 
2021 
2022 
2023 
2024 
2025 
2027 
2028 
2029 
2031 
Operating loss carryforwards
 
 
$ 4,300.0 
$ 2,499.2 
$ 0.1 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 1,999.3 1
$ 3.2 
$ 118.8 
$ 216.8 
$ 0.3 
$ 149.0 
$ 11.7 
$ 1,814.8 
$ 0 
$ 0 
$ 0 
$ 0 
$ 1,581.1 1
$ 29.6 
$ 204.1 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Tax Carryforward, Gross Amount
988.7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
939.8 
28.7 
20.2 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
Total loss carryforwards
5,302.7 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.1 
939.8 
28.7 
20.2 
1,581.1 
29.6 
204.1 
1,999.3 
3.2 
118.8 
216.8 
0.3 
149.0 
11.7 
Other Tax Carryforward, Expiration Dates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2013 
2014 
2016 
 
 
 
 
 
 
 
 
 
 
Net operating loss carryforward to be reclassified as non life net operating loss carryforwards
631 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred tax assets, operating loss carryforwards, state and local
$ 17.7 
$ 17.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (DETAILS) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Dec. 31, 2010
Jun. 30, 2011
Convertible Subordinated Debt [Member]
Dec. 31, 2010
Convertible Subordinated Debt [Member]
1 Months Ended
Mar. 31, 2011
Senior Secured Credit Agreement
6 Months Ended
Jun. 30, 2011
Senior Secured Credit Agreement
Dec. 31, 2010
Senior Secured Credit Agreement
Jun. 30, 2011
Senior Secured Notes 9 Percent [Member]
Dec. 31, 2010
Senior Secured Notes 9 Percent [Member]
Jun. 30, 2011
Other Notes Payable [Member]
Dec. 31, 2010
Other Notes Payable [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Basis Spread on Variable Rate
 
 
 
 
 
 
 
 
5.00% 
 
 
 
 
 
Debt Instrument, Basis Spread On Variable Rate, LIBOR Floor
 
 
 
 
 
 
 
 
1.25% 
 
 
 
 
 
Debt Instrument, Basis Spread on Variable Rate Prior To Ammendment
 
 
 
 
 
 
 
 
6.00% 
 
 
 
 
 
Debt Instrument, Basis Spread On Variable Rate, LIBOR Floor Prior To Ammendment
 
 
 
 
 
 
 
 
1.50% 
 
 
 
 
 
Debt Instrument, Basis Spread on Base Rate
 
 
 
 
 
 
 
 
4.00% 
 
 
 
 
 
Debt Instruent, Basis Spread on Variable Rate, Base Rate Floor
 
 
 
 
 
 
 
 
2.25% 
 
 
 
 
 
Debt Instrument, Basis Spread on Variable Floor, Base Rate Prior To Ammendment
 
 
 
 
 
 
 
 
5.00% 
 
 
 
 
 
Debt Instrument, Basis Spread on Base Rate Floor Prior to Ammendment
 
 
 
 
 
 
 
 
2.50% 
 
 
 
 
 
Debt Instrument, Interest Rate at Period End
 
 
 
 
 
 
 
 
6.25% 
 
 
 
 
 
Debt to Capitalization Ratio, Threshold Requiring Equal Debt Repayment
 
 
 
 
 
 
 
 
17.50% 
 
 
 
 
 
Debt to Capitalization Ratio, Threshold Requiring Half Debt Repayment [Roll Forward]
 
 
 
 
 
 
 
 
12.50% 
 
 
 
 
 
Debt to Capitalization Ratio, Maximum Threshold for Repayment Requirement
 
 
 
 
 
 
 
 
12.50% 
 
 
 
 
 
Ceiling on Non Investment Grade Investments at Period End
 
 
 
 
 
 
 
 
12.00% 
 
 
 
 
 
Ceiling on Non Investment Grade Investments at Period End Prior to Ammendment
 
 
 
 
 
 
 
 
10.00% 
 
 
 
 
 
Mandatory Debt Repayment
 
 
 
 
 
 
 
 
$ 16.2 
 
 
 
 
 
Stock Repurchased and Retired During Period, Value
 
 
(16.2)
 
 
 
 
 
 
 
 
 
 
 
Debt to Capitalization Ratio at Period End
 
 
 
 
 
 
 
 
18.70% 
 
 
 
 
 
Debt Instruments [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct corporate obligations
934.5 
 
934.5 
 
998.5 
293.0 
293.0 
 
308.8 
375.0 
275.0 
275.0 
75.0 
75.0 
Unamortized Discount
 
 
 
 
 
13.9 
14.8 
 
3.4 
4.7 
 
 
 
 
Early Repayment of Senior Debt
 
 
 
 
 
 
 
50.0 
 
 
 
 
 
 
Loss on extinguishment of debt
(0.6)
(0.9)
(2.0)
(2.7)
 
 
 
 
1.4 
 
 
 
 
 
Voluntary Debt Repayment
 
 
 
 
 
 
 
 
50.0 
 
 
 
 
 
Long-term Debt, by Maturity [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months
25.0 
 
25.0 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Maturities, Repayments of Principal in Year Two
72.5 
 
72.5 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Maturities, Repayments of Principal in Year Three
90.0 
 
90.0 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Maturities, Repayments of Principal in Year Four
80.0 
 
80.0 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Maturities, Repayments of Principal in Year Five
102.5 
 
102.5 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt, Maturities, Repayments of Principal after Year Five
581.8 
 
581.8 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt
$ 951.8 
 
$ 951.8 
 
 
 
 
 
 
 
 
 
 
 
INVESTMENT BORROWINGS (DETAILS) (USD $)
6 Months Ended
Jun. 30,
2011
2010
Dec. 31, 2010
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
$ 951,800,000 
 
 
Borrowings Due October 2013 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
100,000,000 
 
 
Debt Instrument, Maturity Date
Oct. 31, 2013 
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.516% 
 
 
Borrowings Due February 2014 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
67,000,000 
 
 
Debt Instrument, Maturity Date
Feb. 28, 2014 
 
 
Debt Instrument, Interest Rate, Stated Percentage
1.83% 
 
 
Borrowings Due September 2015 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
100,000,000 
 
 
Debt Instrument, Maturity Date
Sep. 30, 2015 
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.573% 
 
 
Borrowings Due October 2015 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
150,000,000 
 
 
Debt Instrument, Maturity Date
Oct. 31, 2015 
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.537% 
 
 
Borrowings Due November 2015 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
146,000,000 
 
 
Debt Instrument, Maturity Date
Nov. 30, 2015 
 
 
Debt Instrument, Interest Rate, Stated Percentage
5.30% 
 
 
Borrowings Due November 2015 Rate Two [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
100,000,000 
 
 
Debt Instrument, Maturity Date
Nov. 30, 2015 
 
 
Debt Instrument, Interest Rate, Stated Percentage
4.89% 
 
 
Borrowings Due December 2015 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
100,000,000 
 
 
Debt Instrument, Maturity Date
Dec. 31, 2015 
 
 
Debt Instrument, Interest Rate, Stated Percentage
4.71% 
 
 
Borrowings Due June 2016 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
100,000,000 
 
 
Debt Instrument, Maturity Date
Jun. 30, 2016 
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.626% 
 
 
Borrowings Due June 2016 Rate Two [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
75,000,000 
 
 
Debt Instrument, Maturity Date
Jun. 30, 2016 
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.458% 
 
 
Borrowings Due November 2016 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
50,000,000 
 
 
Debt Instrument, Maturity Date
Nov. 30, 2016 
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.522% 
 
 
Borrowings Due November 2016 Rate Two [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
50,000,000 
 
 
Debt Instrument, Maturity Date
Nov. 30, 2016 
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.656% 
 
 
Borrowings Due June 2017 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
100,000,000 
 
 
Debt Instrument, Maturity Date
Jun. 30, 2017 
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.69% 
 
 
Borrowings Due October 2017 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
100,000,000 
 
 
Debt Instrument, Maturity Date
Oct. 31, 2017 
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.708% 
 
 
Borrowings Due November 2017 [Member] |
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Investment Borrowings
37,000,000 
 
 
Debt Instrument, Maturity Date
Nov. 30, 2017 
 
 
Debt Instrument, Interest Rate, Stated Percentage
3.75% 
 
 
Federal Home Loan Bank Advances [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Aggregate Fee to Prepay All Fixed Rate FHLB Borrowings
57,600,000 
 
 
Federal Home Loan Bank Stock
63,800,000 
 
 
Investment Borrowings
1,275,000,000 
 
1,200,000,000 
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged
1,600,000,000 
 
 
Interest Expense on FHLB Borrowings
12,200,000 
9,800,000 
 
Other Borrowings [Member]
 
 
 
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
 
 
 
Assets Sold under Agreements to Repurchase, Repurchase Liability
26,900,000 
 
 
Investment Borrowings
$ 3,400,000 
 
$ 4,100,000 
CHANGES IN COMMON STOCK (DETAILS) (USD $)
In Millions, except Share data
6 Months Ended
Jun. 30, 2011
Class of Stock [Line Items]
 
Stock Repurchased and Retired During Period, Shares
(2,207,000)
Stock Repurchase Program, Authorized Amount
$ 100.0 
Stock Repurchased and Retired During Period, Value
(16.2)
Common Stock Disclosures [Abstract]
 
Balance, December 31, 2010
251,084,174 
Balance, June 30, 2011
249,415,210 
Shares Paid for Tax Withholding for Share Based Compensation
149,000 
Common Stock Including Additional Paid in Capital [Member]
 
Class of Stock [Line Items]
 
Stock Repurchased and Retired During Period, Value
$ (16.2)
Stock Options [Member]
 
Common Stock Disclosures [Abstract]
 
Shares issued under employee benefit compensation plans
152,000 
Restricted Stock [Member]
 
Common Stock Disclosures [Abstract]
 
Shares issued under employee benefit compensation plans
386,000 1
SALES INDUCEMENTS (DETAILS) (USD $)
In Millions
6 Months Ended
Jun. 30,
2011
2010
Dec. 31, 2010
Deferred Sales Inducements [Abstract]
 
 
 
Deferred Sales Inducements, Additions
$ 7.5 
$ 14.2 
 
Deferred Sales Inducements, Amortization Expense
15.2 
12.4 
 
Deferred Sales Inducements, Net
158.7 
 
166.4 
Persistency Bonus Benefits Included in Insurance Liabilities
$ 66.3 
 
$ 85.3 
RECENTLY ISSUED ACCOUNTING STANDARDS (DETAILS)
Jun. 30, 2011
Accounting Changes and Error Corrections [Abstract]
 
Commission Expenses Included in Deferred Acquisition Costs
55.00% 
CONSOLIDATED STATEMENT CASH FLOWS (DETAILS) (USD $)
In Millions
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Cash flows from operating activities:
 
 
 
 
Net income
$ 59.5 
$ 33.1 
$ 113.4 
$ 67.0 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Amortization and depreciation
 
 
251.3 
214.0 
Income taxes
 
 
59.9 
34.0 
Insurance liabilities
 
 
192.5 
197.5 
Accrual and amortization of investment income
 
 
(31.7)
29.8 
Deferral of policy acquisition costs
 
 
(215.1)
(210.3)
Net realized investment (gains) losses
(2.9)
16.7 
(8.0)
21.6 
Loss on extinguishment of debt
0.6 
0.9 
2.0 
2.7 
Other
 
 
(3.5)
(10.3)
Net cash provided by operating activities
 
 
360.8 
346.0 
Other Noncash Investing and Financing Items [Abstract]
 
 
 
 
Stock option and restricted stock plans
 
 
6.0 
6.0 
Change in securities lending collateral
 
 
0 
103.7 
Change in securities lending payable
 
 
$ 0 
$ (103.7)
INVESTMENTS IN VARIABLE INTEREST ENTITIES (DETAILS) (USD $)
In Millions
6 Months Ended
Jun. 30,
2011
2010
Dec. 31, 2010
Variable Interest Entity [Line Items]
 
 
 
Investments held by variable interest entities
$ 414.0 
 
$ 420.9 
Cash and cash equivalents held by variable interest entities
25.3 
 
26.8 
Borrowings related to variable interest entities
317.3 
 
386.9 
Variable interest entity amortized cost securities held
413.5 
 
 
Variable interest entity, gross unrealized gains fixed maturity securities
2.7 
 
 
Variable interest entity gross unrealized losses fixed maturity securities
2.2 
 
 
Variable interest entities net realized gain (loss) on investments
0.4 
(2.7)
 
Variable interest entities net gains from sale of fixed maturity investments
3.6 
0.3 
 
Total other-than-temporary impairment losses on investments held by variable interest entities
3.2 
(3.0)
 
Variable Interest Entities, Investments Sold
90.1 
 
 
Gain (loss) on Sale of Investments Held By Variable Interest Entity
1.9 
 
 
Investments held in limited partnerships
19.2 
 
 
Unfunded committments to limited partnerships
17.2 
 
 
Less Than Twelve Months [Member]
 
 
 
Variable Interest Entity [Line Items]
 
 
 
Fair value investments held by variable interest entity that had been in an unrealized loss position
175.1 
 
 
Gross unrealized losses on investments held by variable interest entity
1.3 
 
 
Greater Than Twelve Months [Member]
 
 
 
Variable Interest Entity [Line Items]
 
 
 
Fair value investments held by variable interest entity that had been in an unrealized loss position
35.9 
 
 
Gross unrealized losses on investments held by variable interest entity
0.9 
 
 
VIEs [Member]
 
 
 
Variable Interest Entity [Line Items]
 
 
 
Investments held by variable interest entities
414.0 
 
420.9 
Notes receivable of VIEs held by insurance subsidiaries
0 
 
0 
Cash and cash equivalents held by variable interest entities
25.3 
 
26.8 
Accrued investment income
0.9 
 
1.4 
Income tax assets, net
4.4 
 
20.9 
Other assets
4.9 
 
15.9 
Total assets
449.5 
 
485.9 
Other liabilities
75.0 
 
22.0 
Borrowings related to variable interest entities
317.3 
 
386.9 
Notes payable of VIEs held by insurance subsidiaries
65.7 
 
115.6 
Total liabilities
458.0 
 
524.5 
Eliminations [Member]
 
 
 
Variable Interest Entity [Line Items]
 
 
 
Investments held by variable interest entities
0 
 
0 
Notes receivable of VIEs held by insurance subsidiaries
(62.2)
 
(96.8)
Cash and cash equivalents held by variable interest entities
0 
 
0 
Accrued investment income
0 
 
(4.8)
Income tax assets, net
(1.2)
 
(6.5)
Other assets
0 
 
0 
Total assets
(63.4)
 
(108.1)
Other liabilities
0 
 
(4.6)
Borrowings related to variable interest entities
0 
 
0 
Notes payable of VIEs held by insurance subsidiaries
(65.7)
 
(115.6)
Total liabilities
(65.7)
 
(120.2)
Net Effect On Consolidated Balance Sheet [Member]
 
 
 
Variable Interest Entity [Line Items]
 
 
 
Investments held by variable interest entities
414.0 
 
420.9 
Notes receivable of VIEs held by insurance subsidiaries
(62.2)
 
(96.8)
Cash and cash equivalents held by variable interest entities
25.3 
 
26.8 
Accrued investment income
0.9 
 
(3.4)
Income tax assets, net
3.2 
 
14.4 
Other assets
4.9 
 
15.9 
Total assets
386.1 
 
377.8 
Other liabilities
75.0 
 
17.4 
Borrowings related to variable interest entities
317.3 
 
386.9 
Notes payable of VIEs held by insurance subsidiaries
0 
 
0 
Total liabilities
$ 392.3 
 
$ 404.3 
INVESTMENTS IN VARIABLE INTEREST ENTITIES - SCHEDULE OF VIEs (DETAILS) (USD $)
In Millions
Jun. 30, 2011
Investment Holdings [Line Items]
 
Variable interest entity amortized cost securities held
$ 413.5 
Variable interest entity, fixed maturity securities fair value
414.0 
Amortized Cost [Member]
 
Investment Holdings [Line Items]
 
Variable interest entity investments due In one year Or less
7.7 
Variable interest entity investments due after one year through five years
242.6 
Variable interest entity investments due after five years through ten years
163.2 
Variable interest entity amortized cost securities held
413.5 
Estimated Fair Value [Member]
 
Investment Holdings [Line Items]
 
Variable interest entity investments due In one year Or less
7.7 
Variable interest entity investments due after one year through five years
242.4 
Variable interest entity investments due after five years through ten years
163.9 
Variable interest entity, fixed maturity securities fair value
$ 414.0 
FAIR VALUE MEASUREMENTS - NARRATIVE (DETAILS) (USD $)
6 Months Ended
Jun. 30,
2011
2010
Fair Value Disclosures [Abstract]
 
 
Available for sale fixed maturities classified as level 3, investment grade, percent
69.00% 
 
Fair value of level 3 fixed maturity securities valued using broker quotes, percentage
47.00% 
 
Fair value of level 3 fixed maturity securities valued using independent pricing services, percentage
2.00% 
 
Other than temporary impairment attributable to level 3 investments
$ 11,500,000 
 
Fixed maturities, available for sale, classified as level 3, percentage privately placed
20.00% 
 
Available for sale fixed maturities classified as level 3, corporate securities, percent
49.00% 
 
Fair value, level 1 to level 2 transfers, amount
0 
0 
Fair value, level 2 to level 1 transfers, amount
$ 0 
$ 0 
FAIR VALUE MEASUREMENTS (DETAILS) (USD $)
In Millions
Jun. 30, 2011
Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
$ 21,622.9 
$ 20,633.9 
Equity securities
129.6 
68.1 
Trading securities
83.5 
372.6 
Investments held by variable interest entities
414.0 
420.9 
Other invested assets
252.2 
240.9 
Assets held in separate accounts
17.4 
17.5 
Interest-sensitive products
13,152.8 
13,194.7 
Corporate Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
14,915.1 
14,217.6 
Corporate Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Corporate Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
14,499.9 
12,240.1 
Corporate Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
415.2 
1,977.5 
Corporate Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
56.6 
55.0 
Corporate Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
3.4 
3.2 
Corporate Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
48.6 
47.5 
Corporate Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
4.6 
4.3 
US Treasury and Government [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
278.6 
294.2 
US Treasury and Government [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
2.0 
10.0 
US Treasury and Government [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
274.9 
282.2 
US Treasury and Government [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
1.7 
2.0 
US Treasury and Government [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
4.7 
293.8 
US Treasury and Government [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
US Treasury and Government [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
4.7 
293.8 
US Treasury and Government [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
1,843.5 
1,783.5 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
1,834.3 
1,772.1 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
9.2 
11.4 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
16.5 
16.1 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
16.5 
16.1 
US States and Political Subdivisions Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
Asset-backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
748.9 
773.7 
Asset-backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Asset-backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
622.5 
652.7 
Asset-backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
126.4 
121.0 
Asset-backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0.6 
Asset-backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
Asset-backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0.6 
Asset-backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
Commercial Mortgage Backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
1,479.8 
1,363.7 
Commercial Mortgage Backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Commercial Mortgage Backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
1,479.8 
1,363.7 
Commercial Mortgage Backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Commercial Mortgage Backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
4.5 
5.2 
Commercial Mortgage Backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
Commercial Mortgage Backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
4.5 
5.2 
Commercial Mortgage Backed Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
Mortgage Pass Through Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
28.0 
31.3 
Mortgage Pass Through Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
24.8 
27.8 
Mortgage Pass Through Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Mortgage Pass Through Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
3.2 
3.5 
Mortgage Pass Through Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0.3 
0.3 
Mortgage Pass Through Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0.3 
0.3 
Mortgage Pass Through Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
Mortgage Pass Through Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
Collateralized Mortgage Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0.9 
1.6 
Collateralized Mortgage Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0 
Collateralized Mortgage Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0.9 
1.2 
Collateralized Mortgage Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
0 
0.4 
Collateralized Mortgage Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
2,134.6 
1,912.5 
Collateralized Mortgage Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Collateralized Mortgage Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
1,930.5 
1,715.4 
Collateralized Mortgage Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
204.1 
197.1 
Total Fixed Maturities, Available For Sale [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
21,622.9 
20,633.9 
Total Fixed Maturities, Available For Sale [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
26.8 
37.8 
Total Fixed Maturities, Available For Sale [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
20,642.8 
18,027.1 
Total Fixed Maturities, Available For Sale [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
953.3 
2,569.0 
Foreign Government Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0.9 
0.9 
Foreign Government Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Foreign Government Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0.9 
0.9 
Foreign Government Debt Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Collateralized Debt Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
193.5 
256.5 
Collateralized Debt Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Collateralized Debt Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
0 
0 
Collateralized Debt Obligations [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fixed maturities, available for sale
193.5 
256.5 
Equity Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Equity securities
129.6 
68.1 
Equity Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Equity securities
12.9 
0 
Equity Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Equity securities
66.8 
37.5 
Equity Securities [Member] |
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Equity securities
49.9 
30.6 
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
83.5 
372.6 
Investments held by variable interest entities
414.0 
420.9 
Other invested assets
206.4 
192.0 
Assets held in separate accounts
17.4 
17.5 
Interest-sensitive products
613.4 
553.2 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
3.7 
3.5 
Investments held by variable interest entities
0 
0 
Other invested assets
0 
0 
Assets held in separate accounts
0 
0 
Interest-sensitive products
0 
0 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
75.2 
364.4 
Investments held by variable interest entities
414.0 
414.2 
Other invested assets
206.4 1
192.0 1
Assets held in separate accounts
17.4 
17.5 
Interest-sensitive products
0 
0 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities
4.6 
4.7 
Investments held by variable interest entities
0 
6.7 
Other invested assets
0 
0 
Assets held in separate accounts
0 
0 
Interest-sensitive products
$ 613.4 2
$ 553.2 3
FAIR VALUE MEASUREMENTS - UNOBSERVABLE INPUT RECONCILIATION (DETAILS) (USD $)
In Millions
3 Months Ended
Jun. 30,		 6 Months Ended
Jun. 30,
2011
2010
2011
2010
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
$ 5.1 
 
$ 4.7 
 
Purchases, sales, issuances and settlements, net
0 1
 
0 2
 
Total realized and unrealized gains (losses) included in net income
0 
 
0.3 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0 
 
0 
 
Transfers into level 3
0 3
 
0 3
 
Transfers out of level 3
(0.50)3 4
 
(0.40)3 4
 
Fair value, measurement with unobservable inputs reconciliation, ending balance
4.6 
 
4.6 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
 
0.30 
 
Corporate Debt Securities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
4.6 
4.0 
4.3 
3.7 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
0 1
0 
0 2
0 
Total realized and unrealized gains (losses) included in net income
0 
0 
0.3 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0 
(0.4)
0 
 
Transfers into level 3
0 3
0.5 3
0 3
0.4 3
Transfers out of level 3
0 3 4
0 3
0 3 4
0 3
Fair value, measurement with unobservable inputs reconciliation, ending balance
4.6 
4.1 
4.6 
4.1 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
(0.40)
0.30 
0 
Corporate Debt Securities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
1,926.0 
2,150.8 
1,977.5 
2,147.8 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
(5.9)5
Purchases, sales, issuances and settlements, net
(59.10)1
63.90 
(161.30)2
58.80 
Total realized and unrealized gains (losses) included in net income
(10.0)
0.8 
(21.0)
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
7.2 
95.3 
10.3 
 
Transfers into level 3
43.5 3
33.4 3
60.2 3
47.0 3
Transfers out of level 3
(1,492.40)3 4
(15.60)3
(1,450.50)3 4
(31.00)3
Fair value, measurement with unobservable inputs reconciliation, ending balance
415.2 
2,328.6 
415.2 
2,328.6 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0.8 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
111.1 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
(5.10)
0 
(11.50)
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
0 
 
0 
 
Sales
(59.1)
 
(161.3)
 
Issuances
0 
 
0 
 
Settlements
0 
 
0 
 
Collateralized Mortgage Obligations [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
0.5 
 
0.4 
 
Purchases, sales, issuances and settlements, net
0 1
 
0 2
 
Total realized and unrealized gains (losses) included in net income
0 
 
0 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0 
 
0 
 
Transfers into level 3
0 3
 
0 3
 
Transfers out of level 3
(0.50)3 4
 
(0.40)3 4
 
Fair value, measurement with unobservable inputs reconciliation, ending balance
0 
 
0 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
 
0 
 
Collateralized Mortgage Obligations [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
247.5 
9.9 
197.1 
11.4 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
45.80 1
23.80 
54.40 2
23.80 
Total realized and unrealized gains (losses) included in net income
(0.9)
0 
(0.9)
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
(0.1)
0 
0.7 
 
Transfers into level 3
25.1 3
0 3
38.7 3
0 3
Transfers out of level 3
(113.30)3 4
(9.60)3
(85.90)3 4
(11.10)3
Fair value, measurement with unobservable inputs reconciliation, ending balance
204.1 
24.1 
204.1 
24.1 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
0 
0 
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
61.4 
 
73.9 
 
Sales
(15.6)
 
(19.5)
 
Issuances
0 
 
0 
 
Settlements
0 
 
0 
 
Interest Sensitive Products [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
 
 
(553.2)
 
Fair value, measurement with unobservable inputs reconciliation, ending balance
(613.4)
 
(613.4)
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliations, liability value, beginning balance
(587.5)
(497.2)
 
(496.0)
Purchases, sales, issuances and settlements, net
(15.2)1
29.4 
(51.3)2
35.0 
Total realized and unrealized gains (losses) included in net income
(10.7)
(32.7)
(8.9)
(39.5)
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0 
0 
0 
0 
Transfers into level 3
0 3
0 3
0 3
0 3
Transfers out of level 3
0 3 4
0 3
0 3 4
0 3
Fair value, measurement with unobservable inputs reconciliations, liability value, ending balance
(613.4)
(500.5)
(613.4)
(500.5)
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
(10.70)
(32.70)
(8.90)
(39.50)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
(27.4)
 
(52.4)
 
Sales
7.5 
 
10.1 
 
Issuances
(6.8)
 
(25.8)
 
Settlements
11.5 
 
16.8 
 
Cumulative effect of accounting change
 
 
 
0 5
Total Fixed Maturities, Available For Sale [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
2,516.9 
2,408.7 
2,569.0 
2,397.9 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
(11.6)5
Purchases, sales, issuances and settlements, net
(7.80)1
118.00 
(179.20)2
137.90 
Total realized and unrealized gains (losses) included in net income
(10.9)
0 
(19.7)
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
8.2 
101.7 
16.0 
 
Transfers into level 3
73.0 3
43.9 3
106.1 3
48.3 3
Transfers out of level 3
(1,626.10)3 4
(25.20)3
(1,538.90)3 4
(49.70)3
Fair value, measurement with unobservable inputs reconciliation, ending balance
953.3 
2,647.1 
953.3 
2,647.1 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
(10.7)
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
135.0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
(5.10)
0 
(11.50)
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
80.4 
 
94.6 
 
Sales
(88.2)
 
(273.8)
 
Issuances
0 
 
0 
 
Settlements
0 
 
0 
 
US Treasury and Government [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
1.7 
2.2 
2.0 
2.2 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
0 1
(0.10)
(0.10)2
(0.10)
Total realized and unrealized gains (losses) included in net income
0 
0 
0 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0 
0 
(0.2)
 
Transfers into level 3
0 3
0 3
0 3
0 3
Transfers out of level 3
0 3 4
0 3
0 3 4
0 3
Fair value, measurement with unobservable inputs reconciliation, ending balance
1.7 
2.1 
1.7 
2.1 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
0 
0 
0 
US States and Political Subdivisions Debt Securities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
8.9 
8.9 
11.4 
10.7 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
0 1
0 
(0.10)2
0 
Total realized and unrealized gains (losses) included in net income
0 
0 
0 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0.3 
1.1 
0.4 
 
Transfers into level 3
0 3
0 3
0 3
0 3
Transfers out of level 3
0 3 4
0 3
(2.50)3 4
(1.80)3
Fair value, measurement with unobservable inputs reconciliation, ending balance
9.2 
10.0 
9.2 
10.0 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
1.1 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
0 
0 
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
0 
 
0 
 
Sales
0 
 
(0.1)
 
Issuances
0 
 
0 
 
Settlements
0 
 
0 
 
Asset-backed Securities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
143.3 
104.1 
121.0 
115.1 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
(1.60)1
19.30 
(2.30)2
6.30 
Total realized and unrealized gains (losses) included in net income
0 
0 
0 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0.7 
7.7 
0.5 
 
Transfers into level 3
4.4 3
0 3
7.2 3
0 3
Transfers out of level 3
(20.40)3 4
0 3
0 3 4
0 3
Fair value, measurement with unobservable inputs reconciliation, ending balance
126.4 
131.1 
126.4 
131.1 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
(11.3)
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
21.0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
0 
0 
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
0 
 
0 
 
Sales
(1.6)
 
(2.3)
 
Issuances
0 
 
0 
 
Settlements
0 
 
0 
 
Collateralized Debt Obligations [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
186.2 
128.9 
256.5 
92.8 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
(5.7)5
Purchases, sales, issuances and settlements, net
7.20 1
11.20 
(69.50)2
50.10 
Total realized and unrealized gains (losses) included in net income
0 
(0.8)
2.2 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0.1 
(2.5)
4.3 
 
Transfers into level 3
0 3
0 3
0 3
0 3
Transfers out of level 3
0 3 4
0 3
0 3 4
0 3
Fair value, measurement with unobservable inputs reconciliation, ending balance
193.5 
136.8 
193.5 
136.8 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
(0.2)
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
(0.2)
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
0 
0 
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
19.0 
 
20.7 
 
Sales
(11.8)
 
(90.2)
 
Issuances
0 
 
0 
 
Settlements
0 
 
0 
 
Mortgage Pass Through Securities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
3.3 
3.9 
3.5 
4.2 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
(0.10)1
(0.10)
(0.30)2
(0.30)
Total realized and unrealized gains (losses) included in net income
0 
0 
0 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0 
0.1 
0 
 
Transfers into level 3
0 3
0 3
0 3
0 3
Transfers out of level 3
0 3 4
0 3
0 3 4
0 3
Fair value, measurement with unobservable inputs reconciliation, ending balance
3.2 
3.9 
3.2 
3.9 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
0 
0 
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
0 
 
0 
 
Sales
(0.1)
 
(0.3)
 
Issuances
0 
 
0 
 
Settlements
0 
 
0 
 
Equity Securities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
45.4 
31.0 
30.6 
30.9 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
3.00 1
0 
40.50 2
0.10 
Total realized and unrealized gains (losses) included in net income
1.0 
0 
0.2 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0.5 
0 
1.1 
 
Transfers into level 3
0 3
0 3
0 3
0 3
Transfers out of level 3
0 3 4
0 3
(22.50)3 4
0 3
Fair value, measurement with unobservable inputs reconciliation, ending balance
49.9 
31.0 
49.9 
31.0 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
0 
0 
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
3.9 
 
41.4 
 
Sales
(0.9)
 
(0.9)
 
Issuances
0 
 
0 
 
Settlements
0 
 
0 
 
Corporate Securities Held By Variable Interest Entities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
0 
7.1 
6.7 
0 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
6.9 5
Purchases, sales, issuances and settlements, net
0 1
0 
(7.90)2
0 
Total realized and unrealized gains (losses) included in net income
0 
0 
1.5 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
0 
0.1 
(0.3)
 
Transfers into level 3
0 3
0 3
0 3
0 3
Transfers out of level 3
0 3 4
0 3
0 3 4
0 3
Fair value, measurement with unobservable inputs reconciliation, ending balance
0 
7.2 
0 
7.2 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
0.3 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
0 
0 
0 
0 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, Sales, Issuances, Settlements [Abstract]
 
 
 
 
Purchases
0 
 
0 
 
Sales
0 
 
(7.9)
 
Issuances
0 
 
0 
 
Settlements
0 
 
0 
 
Commercial Mortgage Backed Securities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
 
0 
 
13.7 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
 
0 
 
(0.70)
Total realized and unrealized gains (losses) included in net income
 
0 
 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
0 
 
 
Transfers into level 3
 
10.5 3
 
1.3 3
Transfers out of level 3
 
0 3
 
(5.80)3
Fair value, measurement with unobservable inputs reconciliation, ending balance
 
10.5 
 
10.5 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
2.0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
 
0 
 
0 
Securities Lending Collateral, Asset Backed Securities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
 
21.4 
 
22.9 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
 
(15.60)
 
(15.50)
Total realized and unrealized gains (losses) included in net income
 
(0.2)
 
 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
0.3 
 
 
Transfers into level 3
 
0 3
 
0 3
Transfers out of level 3
 
(1.00)3
 
(2.00)3
Fair value, measurement with unobservable inputs reconciliation, ending balance
 
4.9 
 
4.9 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
(0.2)
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
(0.3)
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
 
(0.20)
 
(0.20)
Securities Lending Collateral, Corporate Debt Securities [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
 
 
 
13.7 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
 
 
 
(13.70)
Transfers into level 3
 
 
 
0 3
Transfers out of level 3
 
 
 
0 3
Fair value, measurement with unobservable inputs reconciliation, ending balance
 
0 
 
0 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
 
 
 
0 
Total Securities Lending Collateral [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
 
 
 
36.6 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
0 5
Purchases, sales, issuances and settlements, net
 
 
 
(29.20)
Transfers into level 3
 
 
 
0 3
Transfers out of level 3
 
 
 
(2.00)3
Fair value, measurement with unobservable inputs reconciliation, ending balance
 
4.9 
 
4.9 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
(0.2)
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
(0.3)
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
 
 
 
(0.20)
Other Invested Assets [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Fair value, measurement with unobservable inputs reconciliation, beginning balance
 
 
 
2.4 
Fair value, measurement with unobservable inputs reconciliation, assets, cumulative effect of accounting change
 
 
 
(2.4)5
Purchases, sales, issuances and settlements, net
 
 
 
0 
Transfers into level 3
 
 
 
0 3
Transfers out of level 3
 
 
 
0 3
Fair value, measurement with unobservable inputs reconciliation, ending balance
 
0 
 
0 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Total realized and unrealized gains (losses) included in net income
 
 
 
0 
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)
 
 
 
0 
Amount of Total Gains Losses Included in Net Income Related to Assets Liabilities Still Held at the Reporting Date
 
 
 
$ 0 
[1] Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity, equity and trading securities, purchases and settlements of derivative instruments, and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended June 30, 2011 (dollars in millions):         Purchases, sales, issuances and settlements, net Purchases Sales Issuances Settlements Assets:         Fixed maturities, available for sale:         Corporate securities$— $(59.1) $— $— $(59.1)States and political subdivisions— — — — —Asset-backed securities— (1.6) — — (1.6)Collateralized debt obligations19.0 (11.8) — — 7.2Mortgage pass-through securities— (.1) — — (.1)Collateralized mortgage obligations61.4 (15.6) — — 45.8Total fixed maturities, available for sale80.4 (88.2) — — (7.8)Equity securities3.9 (.9) — — 3.0Investments held by variable interest entities:         Corporate securities— — — — —Liabilities:         Liabilities for insurance products:         Interest-sensitive products(27.4) 7.5 (6.8) 11.5 (15.2)
[2] Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity, equity and trading securities, purchases and settlements of derivative instruments, and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the six months ended June 30, 2011 (dollars in millions):         Purchases, sales, issuances and settlements, net Purchases Sales Issuances Settlements Assets:         Fixed maturities, available for sale:         Corporate securities$— $(161.3) $— $— $(161.3)United States Treasury securities and obligations of United States governement corporations and agencies— (.1) — — (.1)States and political subdivisions— (.1) — — (.1)Asset-backed securities— (2.3) — — (2.3)Collateralized debt obligations20.7 (90.2) — — (69.5)Mortgage pass-through securities— (.3) — — (.3)Collateralized mortgage obligations73.9 (19.5) — — 54.4Total fixed maturities, available for sale94.6 (273.8) — — (179.2)Equity securities41.4 (.9) — — 40.5Investments held by variable interest entities:         Corporate securities— (7.9) — — (7.9)Liabilities:         Liabilities for insurance products:         Interest-sensitive products(52.4) 10.1 (25.8) 16.8 (51.3)
FAIR VALUE MEASUREMENTS - FINANCIAL ASSETS AND LIABILITIES (DETAILS) (USD $)
In Millions
Jun. 30, 2011
Dec. 31, 2010
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
 
 
Fixed maturities, available for sale
$ 21,622.9 
$ 20,633.9 
Equity securities
129.6 
68.1 
Mortgage loans
1,752.8 
1,761.2 
Policy loans
279.5 
284.4 
Trading securities
83.5 
372.6 
Investments held by variable interest entities
414.0 
420.9 
Other invested assets
252.2 
240.9 
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
 
 
Interest-sensitive products
13,152.8 
13,194.7 
Investment borrowings
1,305.3 
1,204.1 
Borrowings related to variable interest entities
317.3 
386.9 
Notes payable - direct corporate obligations
934.5 
998.5 
Carrying (Reported) Amount, Fair Value Disclosure [Member]
 
 
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
 
 
Fixed maturities, available for sale
21,622.9 
20,633.9 
Equity securities
129.6 
68.1 
Mortgage loans
1,752.8 
1,761.2 
Policy loans
279.5 
284.4 
Trading securities
83.5 
372.6 
Investments held by variable interest entities
414.0 
420.9 
Other invested assets
252.2 
240.9 
Cash and Cash Equivalents, Fair Value Disclosure
605.5 
598.7 
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
 
 
Interest-sensitive products
13,152.8 1
13,194.7 1
Investment borrowings
1,305.3 
1,204.1 
Borrowings related to variable interest entities
317.3 
386.9 
Notes payable - direct corporate obligations
934.5 
998.5 
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
 
 
Fixed maturities, available for sale
21,622.9 
20,633.9 
Equity securities
129.6 
68.1 
Mortgage loans
1,799.4 
1,762.6 
Policy loans
279.5 
284.4 
Trading securities
83.5 
372.6 
Investments held by variable interest entities
414.0 
420.9 
Other invested assets
252.2 
240.9 
Cash and Cash Equivalents, Fair Value Disclosure
605.5 
598.7 
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
 
 
Interest-sensitive products
13,152.8 1
13,194.7 1
Investment borrowings
1,336.1 
1,265.3 
Borrowings related to variable interest entities
286.9 
345.1 
Notes payable - direct corporate obligations
$ 1,118.0 
$ 1,166.4