-Restatement and Amendment of Previously Reported Financial Information (Tables)

3 Months Ended

Mar. 31, 2013

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments

The impact of the correction of these errors on the unaudited financial statements as of and for the comparative three months ended March 31, 2012 is presented in the “Summary of Correction of Investments Errors” table within the “Investments” section of this Note below.

Increase (decrease)	Summary of Correction of Investments Errors – Three months ended March 31, 2012 Income Statement Impacts [1]
($ in millions)	Investments
	AFS Valuation		Derivative Valuation			Structured Securities			Total Investment Errors [2]
REVENUES:
Premiums	$	—	$	—		$	—		$	—
Insurance and investment product fees	—		—			—			—
Net investment income	—		—			0.1			0.1
Net realized investment gains (losses):
Total OTTI losses	—		—			0.4			0.4
Portion of OTTI gains (losses) recognized in OCI	—		—			(0.7		)	(0.7		)
Net OTTI losses recognized in earnings	—		—			(0.3		)	(0.3		)
Net realized investment gains (losses), excluding OTTI	—		4.1			—			4.1
Net realized investment gains (losses)	—		4.1			(0.3		)	3.8
Total revenues	—		4.1			(0.2		)	3.9
BENEFITS AND EXPENSES:
Policy benefits	—		—			—			—
Policy acquisition cost amortization	—		(1.4		)	—			(1.4		)
Other operating expenses	—		—			—			—
Total benefits and expenses	—		(1.4		)	—			(1.4		)
Income (loss) from before income taxes	—		5.5			(0.2		)	5.3
Income tax expense (benefit)	—		—			—			—
Net income (loss)	$	—	$	5.5		$	(0.2	)	$	5.3
COMPREHENSIVE INCOME (LOSS):
Net income (loss)	$	—	$	5.5		$	(0.2	)	$	5.3
Other comprehensive income (loss) before income taxes:
Unrealized investment gains (losses), net of related offsets	—		—			0.3			0.3
Less: Income tax expense (benefit) related to:
Unrealized investment gains (losses), net of related offsets	—		—			—			—
Other comprehensive income (loss), net of income taxes	—		—			0.3			0.3
Comprehensive income (loss)	$	—	$	5.5		$	0.1		$	5.6

———————

[1] All amounts are shown before income taxes, unless otherwise noted.

[2] Amounts represent the total “Summary of Correction of Investment Errors” which is further aggregated into the “Summary of Correction of Errors” in the following pages.

Adjustments for the retrospective adoption reflect the impact of the adoption after consideration of correcting the errors associated with the Restatement as noted more fully in the tables reflecting the impact of the retrospective adoption on the unaudited financial statements presented within this Note below.

Increase (decrease)	Summary of Correction of Errors – Three months ended March 31, 2012 Income Statement Impacts [1]
($ in millions)
							Reinsurance Accounting
	Total Actuarial Finance [2]			Total Investments [3]			Third-party reinsurance			Related party reinsurance			Other Restatement Adjustments			Total Correction of Errors [4]
REVENUES
Premiums	$	—		$	—		$	—		$	—		$	—		$	—
Insurance and investment product fees	0.2			—			—			0.2			(0.1		)	0.3
Net investment income	—			0.1			—			—			0.2			0.3
Net realized investment gains (losses):
Total OTTI losses	—			0.4			—			—			—			0.4
Portion of OTTI gains (losses) recognized in OCI	—			(0.7		)	—			—			—			(0.7		)
Net OTTI losses recognized in earnings	—			(0.3		)	—			—			—			(0.3		)
Net realized investment gains (losses),   excluding OTTI losses	1.4			4.1			—			—			0.1			5.6
Net realized investment gains (losses)	1.4			3.8			—			—			0.1			5.3
Total revenues	1.6			3.9			—			0.2			0.2			5.9
BENEFITS AND EXPENSES
Policy benefits	7.6			—			(0.2		)	(9.5		)	0.2			(1.9		)
Policy acquisition cost amortization	4.4			(1.4		)	—			8.5			0.5			12.0
Other operating expenses	3.5			—			—			—			—			3.5
Total benefits and expenses	15.5			(1.4		)	(0.2		)	(1.0		)	0.7			13.6
Income (loss) before income taxes	(13.9		)	5.3			0.2			1.2			(0.5		)	(7.7		)
Income tax expense (benefit)	—			—			—			—			17.7			17.7
Net income (loss)	$	(13.9	)	$	5.3		$	0.2		$	1.2		$	(18.2	)	$	(25.4	)
COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$	(13.9	)	$	5.3		$	0.2		$	1.2		$	(18.2	)	$	(25.4	)
Other comprehensive income (loss)   before income taxes [5]:
Unrealized investment gains (losses), net of related offsets [5]	(2.8		)	0.3			—			(0.7		)	0.1			(3.1		)
Less: Income tax expense (benefit) related to:
Unrealized investment gains (losses), net of related offsets [5]	—			—			—			—			(0.4		)	(0.4		)
Other comprehensive income (loss), net of income taxes	(2.8		)	0.3			—			(0.7		)	0.5			(2.7		)
Comprehensive income (loss)	$	(16.7	)	$	5.6		$	0.2		$	0.5		$	(17.7	)	$	(28.1	)

———————

[1] All amounts are shown before income taxes, unless otherwise noted.

[2] Represents “Summary of Correction of Actuarial Finance Errors” from the previous pages of this Note.

[3] Represents “Summary of Correction of Investments Errors” from the previous pages of this Note.

[4] Amounts represent total correction of errors which is also presented in the “Statement of Income and Comprehensive Income” reflected in the tables on the following pages.

[5] In addition to adjustments described within this footnote the correction of errors column contains reclassifications related to changes in presentation of components of other comprehensive income.

	Statement of Income and Comprehensive Income
($ in millions)	Three months ended March 31, 2012
	As previously reported			Correction of errors			As restated and amended
REVENUES:
Premiums	$	0.7		$	—		$	0.7
Insurance and investment product fees	96.5			0.3			96.8
Net investment income	30.3			0.3			30.6
Net realized investment gains (losses):
Total OTTI losses	(1.1		)	0.4			(0.7		)
Portion of OTTI gains (losses) recognized in OCI	0.4			(0.7		)	(0.3		)
Net OTTI losses recognized in earnings	(0.7		)	(0.3		)	(1.0		)
Net realized investment gains (losses), excluding OTTI losses	(7.1		)	5.6			(1.5		)
Net realized investment gains (losses)	(7.8		)	5.3			(2.5		)
Total revenues	119.7			5.9			125.6
BENEFITS AND EXPENSES:
Policy benefits	63.7			(1.9		)	61.8
Policy acquisition cost amortization	28.7			12.0			40.7
Other operating expenses	23.3			3.5			26.8
Total benefits and expenses	115.7			13.6			129.3
Income (loss) before income taxes	4.0			(7.7		)	(3.7		)
Income tax expense (benefit)	1.1			17.7			18.8
Net income (loss)	$	2.9		$	(25.4	)	$	(22.5	)
COMPREHENSIVE INCOME (LOSS):
Net income (loss)	$	2.9		$	(25.4	)	$	(22.5	)
Other comprehensive income (loss) before income taxes:
Unrealized investment gains (losses), net of related offsets	11.7			(3.1		)	8.6
Less: Income tax expense (benefit) related to:
Unrealized investment gains (losses), net of related offsets	4.1			(0.4		)	3.7
Other comprehensive income (loss), net of income taxes	7.6			(2.7		)	4.9
Comprehensive income (loss)	$	10.5		$	(28.1	)	$	(17.6	)

	Statement of Cash Flows
($ in millions)	For the period ended March 31, 2012
	As previously reported			Correction of errors			As restated and amended
OPERATING ACTIVITIES:
Net income (loss)	$	2.9		$	(25.4	)	$	(22.5	)
Net realized investment (gains) losses	7.8			(5.3		)	2.5
Policy acquisition costs deferred	(28.9		)	4.9			(24.0		)
Policy acquisition cost amortization	28.7			12.0			40.7
Interest credited	—			16.0			16.0
Equity in earnings of limited partnerships and other investments	(0.1		)	(0.2		)	(0.3		)
Change in:
Accrued investment income	(5.4		)	(0.8		)	(6.2		)
Deferred income taxes, net	(11.0		)	9.6			(1.4		)
Receivables [1]	13.6			(0.2		)	13.4
Policy liabilities and accruals	25.7			(81.7		)	(56.0		)
Due to/from affiliate	—			9.0			9.0
Other operating activities, net [1]	17.9			(4.9		)	13.0
Cash provided by (used for) operating activities	51.2			(67.0		)	(15.8		)
INVESTING ACTIVITIES:
Purchases of:
Available-for-sale debt securities [1]	(280.4		)	9.4			(271.0		)
Derivative instruments	(19.0		)	—			(19.0		)
Fair value investments	—			—			—
Other investments	(0.6		)	0.6			—
Sales, repayments and maturities of:
Available-for-sale debt securities [1]	107.0			(10.4		)	96.6
Derivative instruments	1.8			—			1.8
Fair value investments	—			1.1			1.1
Other investments	0.2			(0.2		)	—
Contributions to limited partnerships	—			(0.6		)	(0.6		)
Distributions from limited partnerships	—			0.2			0.2
Policy loans, net	1.8			0.6			2.4
Cash provided by (used for) investing activities	(189.2		)	0.7			(188.5		)
FINANCING ACTIVITIES:
Policyholder deposit fund deposits	214.8			74.4			289.2
Policyholder deposit fund withdrawals	(53.5		)	(86.3		)	(139.8		)
Net transfers to/from separate accounts	—			77.6			77.6
Cash provided by (used for) financing activities	161.3			65.7			227.0
Change in cash and cash equivalents	23.3			(0.6		)	22.7
Cash and cash equivalents, beginning of year	67.5			(18.0		)	49.5
Cash and cash equivalents, end of year	$	90.8		$	(18.6	)	$	72.2
Supplemental Disclosure of Cash Flow Information
Income taxes paid (refunded)	$	—		$	(0.9	)	$	(0.9	)
Non-Cash Transactions During the Year
Investment exchanges	$	—		$	7.7		$	7.7

———————

[1] Certain financial statement lines were separately presented beginning in March 31, 2013 which resulted in the reclassification of all prior year information within the balance sheets and the statements of income and comprehensive income. However, presentation of ‘as restated and amended’ amounts herein has been retained to conform to amounts previously presented in the 2012 Form 10-K.

	Statement of Changes in Stockholder’s Equity
($ in millions)	For the period ended March 31, 2012
	As previously reported			Correction of errors [1]			Adjusted prior to the retrospective adoption			Retrospective adoption [2]			As restated and amended
COMMON STOCK:
Balance, beginning of period	$	2.5		$	—		$	2.5		$	—		$	2.5
Balance, end of period	$	2.5		$	—		$	2.5		$	—		$	2.5
ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period	$	802.2		$	—		$	802.2		$	—		$	802.2
Balance, end of period	$	802.2		$	—		$	802.2		$	—		$	802.2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Balance, beginning of period	$	6.2		$	0.2		$	6.4		$	(3.8	)	$	2.6
Other comprehensive income (loss)	7.6			(2.7		)	4.9			—			4.9
Balance, end of period	$	13.8		$	(2.5	)	$	11.3		$	(3.8	)	$	7.5
RETAINED EARNINGS (ACCUMULATED DEFICIT):
Balance, beginning of period	$	(165.1	)	$	(185.9	)	$	(351.0	)	$	(32.3	)	$	(383.3	)
Net income (loss)	2.9			(25.4		)	(22.5		)	—			(22.5		)
Balance, end of period	$	(162.2	)	$	(211.3	)	$	(373.5	)	$	(32.3	)	$	(405.8	)
TOTAL STOCKHOLDER’S EQUITY:
Balance, beginning of period	$	645.8		$	(185.7	)	$	460.1		$	(36.1	)	$	424.0
Change in stockholder’s equity	10.5			(28.1		)	(17.6		)	—			(17.6		)
Balance, end of period	$	656.3		$	(213.8	)	$	442.5		$	(36.1	)	$	406.4

———————

[1] Adjustments related to the correction of errors reflect amounts prior to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance. See footnote 2 below for additional information regarding these amounts and the retrospective adoption.

[2] Adjustments related to the retrospective adoption of amended guidance to ASC 944, Financial Services – Insurance, have been updated from those originally disclosed in the 2012 first quarter Form 10-Q filing to reflect the correction of errors identified related to the adoption of the amended guidance as well as indirect impact of the correction of errors associated with the Restatement.

The impact of the correction of these errors on the unaudited financial statements as of and for the comparative three months ended March 31, 2012 is presented in the “Summary of Correction of Actuarial Finance Errors” table within the “Actuarial Finance” section of this Note below.

Increase (decrease)	Summary of Correction of Actuarial Finance Errors – Three months ended March 31, 2012 Income Statement Impacts [1]
($ in millions)	Actuarial Finance
	Accounting for UL Type Products			Shadow Accounting			Loss Recognition		FIA			Other Actuarial			Total Actuarial Finance Errors [2]
REVENUES:
Premiums	$	—		$	—		$	—	$	—		$	—		$	—
Insurance and investment product fees	0.3			—			—		—			(0.1		)	0.2
Net investment income	—			—			—		—			—			—
Net realized investment gains (losses):
Total OTTI losses	—			—			—		—			—			—
Portion of OTTI gains (losses) recognized in OCI	—			—			—		—			—			—
Net OTTI losses recognized in earnings	—			—			—		—			—			—
Net realized investment gains (losses),     excluding OTTI losses	—			—			—		0.1			1.3			1.4
Net realized investment gains (losses)	—			—			—		0.1			1.3			1.4
Total revenues	0.3			—			—		0.1			1.2			1.6
BENEFITS AND EXPENSES:
Policy benefits	13.1			—			—		(0.2		)	(5.3		)	7.6
Policy acquisition cost amortization	3.5			—			—		5.6			(4.7		)	4.4
Other operating expenses	—			—			—		—			3.5			3.5
Total benefits and expenses	16.6			—			—		5.4			(6.5		)	15.5
Income (loss) from before income taxes	(16.3		)	—			—		(5.3		)	7.7			(13.9		)
Income tax expense (benefit)	—			—			—		—			—			—
Net income (loss)	$	(16.3	)	$	—		$	—	$	(5.3	)	$	7.7		$	(13.9	)
COMPREHENSIVE INCOME (LOSS):
Net income (loss)	$	(16.3	)	$	—		$	—	$	(5.3	)	$	7.7		$	(13.9	)
Other comprehensive income (loss)   before income taxes:
Unrealized investment gains (losses), net of related offsets	—			(2.8		)	—		—			—			(2.8		)
Less: Income tax expense (benefit) related to:
Unrealized investment gains (losses), net of related offsets	—			—			—		—			—			—
Other comprehensive income (loss), net of income taxes	—			(2.8		)	—		—			—			(2.8		)
Comprehensive income (loss)	$	(16.3	)	$	(2.8	)	$	—	$	(5.3	)	$	7.7		$	(16.7	)

———————

[1] All amounts are shown before income taxes, unless otherwise noted.

[2] Amounts represent the total “Summary of Correction of Actuarial Finance Errors” which is further aggregated into the “Summary of Correction of Errors” in the following pages.

The impact of the correction of these errors is summarized below and included in detail within the restated and amended statement of cash flows within this Note.

Increase (decrease)	For the period ended
($ in millions)	March 31,
	2012
Statement of Cash Flows
Cash provided by (used for) operating activities	$	(67.0	)
Cash provided by (used for) investing activities	0.7
Cash provided by (used for) financing activities	65.7