DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2018

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

On September 18, 2017, we signed a definitive agreement to sell our subsidiary, United Life Insurance Company, to Kuvare for $280,000 in cash, less a $21 adjustment as set forth in the definitive agreement, for a net amount of $279,979. The sale closed on March 30, 2018 and we reported an after-tax gain on the sale of discontinued operations of $27,307. The life insurance business (previously reported as a separate segment) was considered held for sale and reported as discontinued operations and its financial position, results of operations and cash flows were reported separately for all periods presented, as applicable, unless otherwise noted.

UFG has agreed to provide services to Kuvare through a transition services agreement ("TSA"). The TSA ensures a seamless transfer of the business between UFG and Kuvare. The TSA includes, among other considerations, accounting management, human resources, legal and information technology services, from the closing date for up to 24 months. Since the close date, the Company has received $414 as part of the TSA agreement.

The assets and liabilities associated with discontinued operations prior to the closing of the sale have been presented separately in our Consolidated Balance Sheets. The major assets and liability categories were as follows as of the dates indicated:

Discontinued Operations
Balance Sheets
	December 31,
(In Thousands, Except Share Data)	2018		2017
Assets
Investments
Fixed maturities
Held-to-maturity, at amortized cost (fair value $0 in 2018 and $34 in 2017)	$	—	$	34
Available-for-sale, at fair value (amortized cost $0 in 2018 and $1,412,291 in 2017)	—		1,430,025
Equity Securities available-for-sale, at fair value (cost $0 in 2018 and $5,099 in 2017)	—		23,653
Mortgage loans	—		3,435
Policy loans	—		5,815
Other long-term investments	—		16,437
	—		1,479,399
Cash and cash equivalents	—		15,851
Deferred policy acquisition costs	—		71,151
Other assets	—		19,733
Total assets held for sale	$	—	$	1,586,134
Liabilities
Future policy benefits and losses	$	—	$	1,320,401
Deferred income taxes	—		18,716
Accrued expenses and other liabilities	—		8,018
Total liabilities held for sale	$	—	$	1,347,135

Summary operating results of discontinued operations were as follows for the periods indicated:

Discontinued Operations
Statements of Income
	For the Years Ended December 31,
(In Thousands, Except Share Data)	2018			2017		2016
Revenues
Net premiums earned	$	13,003		$	61,368	$	87,270
Investment income, net of investment expenses	12,663			49,720		51,538
Total net realized investment gains (losses)	(1,057		)	4,008		1,156
Other income	146			617		621
Total revenues	$	24,755		$	115,713	$	140,585
Benefits, Losses and Expenses
Losses and loss settlement expenses	$	10,823		$	40,451	$	31,365
Increase in liability for future policy benefits	5,023			27,632		59,969
Amortization of deferred policy acquisition costs	1,895			5,181		8,121
Other underwriting expenses	3,864			13,281		19,881
Interest on policyholders’ accounts	4,499			18,525		20,079
Total benefits, losses and expenses	$	26,104		$	105,070	$	139,415
Income (loss) from discontinued operations before income taxes	$	(1,349	)	$	10,643	$	1,170
Federal income tax expense	563			4,490		384
Net income (loss) from discontinued operations	$	(1,912	)	$	6,153	$	786
Earnings per common share from discontinued operations:
Basic	$	(0.08	)	$	0.24	$	0.03
Diluted	(0.07		)	0.24		0.03

The Company's Consolidated Statement of Cash Flows presents operating, investing and financing cash flows of the discontinued operations separately. The Company's cash management and financial management of both continued and discontinued operations is consolidated as a centralized corporate function in our Finance Department.