Fair Value of Financial Instruments (Tables)

9 Months Ended

Jun. 30, 2015

Schedule of Assets and Liabilities not Measured at Fair Value [Table Text Block]

The carrying amount, estimated fair value and the level of the fair value hierarchy of the Company’s financial instrument assets and liabilities which are not measured at fair value on the unaudited Condensed Consolidated Balance Sheets are summarized as follows:



	June 30, 2015
	Level 1		Level 2		Level 3		Fair Value		Carrying Amount
Assets (a)
Cash and cash equivalents	$	1,293.2	$	—	$	—	$	1,293.2	$	1,293.2
Asset-based loans	—		—		490.0		490.0		490.0
Other invested assets	—		—		427.9		427.9		427.9
Total financial assets	$	1,293.2	$	—	$	917.9	$	2,211.1	$	2,211.1

Liabilities (a)
Total debt (b)	$	—	$	6,941.9	$	65.4	$	7,007.3	$	6,832.7
Investment contracts, included in contractholder funds	—		—		14,016.1		14,016.1		15,530.1
Total financial liabilities	$	—	$	6,941.9	$	14,081.5	$	21,023.4	$	22,362.8



	September 30, 2014
	Level 1		Level 2		Level 3		Fair Value		Carrying Amount
Assets (a)
Cash and cash equivalents	$	1,319.2	$	—	$	—	$	1,319.2	$	1,319.2
Asset-based loans	—		—		811.6		811.6		811.6
Other invested assets	—		—		151.7		151.7		151.7
Total financial assets	$	1,319.2	$	—	$	963.3	$	2,282.5	$	2,282.5

Liabilities (a)
Total debt (b)	$	—	$	5,308.5	$	—	$	5,308.5	$	5,157.8
Investment contracts, included in contractholder funds	—		—		13,108.8		13,108.8		14,555.4
Total financial liabilities	$	—	$	5,308.5	$	13,108.8	$	18,417.3	$	19,713.2


(a)	The carrying amounts of trade receivables, accounts payable, accrued investment income and portions of other insurance liabilities approximate fair value due to their short duration and, accordingly, they are not presented in the tables above.


(b)	The fair values of debt set forth above are generally based on quoted or observed market prices.

Assets and Liabilities Carrying at Fair Value on Recurring Basis

The Company’s consolidated assets and liabilities measured at fair value are summarized according to the hierarchy previously described as follows:



	June 30, 2015								September 30, 2014
	Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3		Fair Value
Assets
Contingent purchase price reduction receivable	$	—	$	—	$	—	$	—	$	—	$	—	$	41.5	$	41.5
Derivatives:
Interest rate contracts	—		—		—		—		—		0.6		—		0.6
Commodity contracts	—		10.3		—		10.3		—		3.2		—		3.2
Foreign exchange contracts	—		6.2		—		6.2		—		12.8		—		12.8
Call options and futures contracts	—		220.4		—		220.4		—		296.3		—		296.3
Fixed maturity securities, available-for-sale:
Asset-backed securities	—		1,854.4		33.1		1,887.5		—		1,755.9		37.0		1,792.9
Commercial mortgage-backed securities	—		681.5		140.1		821.6		—		553.8		83.1		636.9
Corporates	—		8,634.2		916.9		9,551.1		—		8,945.8		850.0		9,795.8
Hybrids	—		1,241.1		—		1,241.1		—		1,316.1		—		1,316.1
Municipals	—		1,413.1		37.5		1,450.6		—		1,222.6		37.2		1,259.8
Residential mortgage-backed securities	—		2,175.4		—		2,175.4		—		2,114.0		—		2,114.0
U.S. Government	413.4		182.9		—		596.3		115.6		180.4		—		296.0
Equity securities:
Available-for-sale	26.7		546.9		6.0		579.6		59.2		598.4		6.0		663.6
Trading	41.9		—		—		41.9		104.5		—		—		104.5
Other invested assets	—		—		14.5		14.5		—		2.1		11.2		13.3
Funds withheld receivable (a)	45.8		595.9		—		641.7		—		154.4		—		154.4
Total financial assets	$	527.8	$	17,562.3	$	1,148.1	$	19,238.2	$	279.3	$	17,156.4	$	1,066.0	$	18,501.7
Liabilities
Derivatives:
FIA embedded derivatives, included in contractholder funds	$	—	$	—	$	2,173.7	$	2,173.7	$	—	$	—	$	1,908.1	$	1,908.1
Front Street future policyholder benefit liability	—		—		594.6		594.6		—		—		151.3		151.3
Foreign exchange contracts	—		1.0		—		1.0		—		0.1		—		0.1
Futures contracts	—		—		—		—		—		0.5		—		0.5
Commodity contracts	—		1.6		—		1.6		—		0.4		—		0.4
Interest rate contracts	—		2.2		—		2.2		—		1.8		—		1.8
Total financial liabilities	$	—	$	4.8	$	2,768.3	$	2,773.1	$	—	$	2.8	$	2,059.4	$	2,062.2

Schedule of Unobservable Inputs Used for Level Three Fair Value Measurements of Financial Instruments on Recurring Basis

Quantitative information regarding significant unobservable inputs used for recurring Level 3 fair value measurements of financial instruments carried at fair value as of June 30, 2015 and September 30, 2014 were as follows:



	Fair Value at						Range (Weighted average)
Assets	June 30, 2015		September 30, 2014		Valuation Technique	Unobservable Input(s)	June 30, 2015	September 30, 2014
Contingent purchase price reduction receivable	$	—	$	41.5	Discounted cash flow	Probability of collection	—	88% - 96% (92%)
						Expected term	—	4.5 months
						Discount rate	—	1%
						Credit insurance risk premium	—	12%
Asset-backed securities	33.1		37.0		Broker-quoted	Offered quotes	100% - 107% (101%)	100% - 109% (101%)
Commercial mortgage-backed securities	140.1		83.1		Broker-quoted	Offered quotes	100% - 122% (113%)	105% - 121% (118%)
Corporates	883.8		848.0		Broker-quoted	Offered quotes	60% - 120% (102%)	62% - 120% (100%)
Corporates	33.1		2.0		Matrix Pricing	Quoted prices	104% - 144% (105%)	142%
Municipal	37.5		37.2		Broker-quoted	Offered quotes	108%	107%
Equity	6.0		6.0		Broker-quoted	Quoted prices	100%	100%
Other invested assets	11.7		11.2		Black Scholes model	Market value of AnchorPath Fund	100%	100%
Other invested assets	2.8		—		Discounted cash flow	Probability of collection	50%	—
						Discount rate	10%	—
Total	$	1,148.1	$	1,066.0
Liabilities
FIA embedded derivatives, included in contractholder funds	$	2,173.7	$	1,908.1	Discounted cash flow	Market value of option	0% - 41% (2%)	0% - 50% (3%)
						SWAP rates	2%	2% - 3% (2%)
						Mortality multiplier	80%	80%
						Surrender rates	0.50% - 75% (7%)	0.50% - 75% (7%)
						Non-performance risk spread	0.25%	0.25%
Front Street future policyholder benefit liability	594.6		151.3		Discounted cash flow	Non-performance risk spread	0.50% - 1.50%	0.50% - 1.50%
						Risk margin to reflect uncertainty	1%	0.50%
Total	$	2,768.3	$	2,059.4

Changes in Fair Value of Financial Instruments

The following tables summarize changes to the Company’s financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the three and nine months ended June 30, 2015 and 2014. This summary excludes any impact of amortization of value of business acquired ("VOBA") and deferred acquisition costs ("DAC"). The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.



	Three months ended June 30, 2015
	Balance at Beginning of Period		Total Gains (Losses)														Net transfer In (Out) of Level 3 (a)			Balance at End of Period
	Balance at Beginning of Period		Included in Earnings			Included in AOCI			Purchases		Sales			Settlements			Net transfer In (Out) of Level 3 (a)			Balance at End of Period
Assets
Contingent purchase price reduction receivable	$	47.0	$	3.0		$	—		$	—	$	—		$	(50.0	)	$	—		$	—
Fixed maturity securities available-for-sale:
Asset-backed securities	34.3		—			(0.1		)	—		—			(0.1		)	(1.0		)	33.1
Commercial mortgage-backed securities	142.5		—			(1.9		)	—		—			(0.5		)	—			140.1
Corporates	941.1		—			(20.0		)	—		(1.6		)	(2.6		)	—			916.9
Municipals	39.8		—			(2.1		)	—		—			(0.2		)	—			37.5
Equity securities - available-for-sale	6.0		—			—			—		—			—			—			6.0
Other invested assets	12.2		(16.8		)	—			—		—			—			19.1			14.5
Total assets at fair value	$	1,222.9	$	(13.8	)	$	(24.1	)	$	—	$	(1.6	)	$	(53.4	)	$	18.1		$	1,148.1

	Balance at Beginning of Period		Total (Gains) Losses														Net transfer In (Out) of Level 3 (a)			Balance at End of Period
	Balance at Beginning of Period		Included in Earnings			Included in AOCI			Purchases		Sales			Settlements			Net transfer In (Out) of Level 3 (a)			Balance at End of Period
Liabilities
FIA embedded derivatives, included in contractholder funds	$	2,217.4	$	(43.7	)	$	—		$	—	$	—		$	—		$	—		$	2,173.7
Front Street future policyholder benefit liability	584.5		(31.7		)	—			77.6		—			(35.8		)	—			594.6
Total liabilities at fair value	$	2,801.9	$	(75.4	)	$	—		$	77.6	$	—		$	(35.8	)	$	—		$	2,768.3

(a) During the three months ended June 30, 2015, the net transfers out of Level 3 were exclusively to Level 2 and the net transfer to Level 3 was related to a loan receivable previously eliminated upon consolidation.



	Nine months ended June 30, 2015
	Balance at Beginning of Period		Total Gains (Losses)														Net transfer In (Out) of Level 3 (a)			Balance at End of Period
	Balance at Beginning of Period		Included in Earnings			Included in AOCI			Purchases		Sales			Settlements			Net transfer In (Out) of Level 3 (a)			Balance at End of Period
Assets
Contingent purchase price reduction receivable	$	41.5	$	8.5		$	—		$	—	$	—		$	(50.0	)	$	—		$	—
Fixed maturity securities available-for-sale:
Asset-backed securities	37.0		0.1			(0.1		)	6.7		—			(0.2		)	(10.4		)	33.1
Commercial mortgage-backed securities	83.1		—			0.4			57.7		—			(1.1		)	—			140.1
Corporates	850.0		2.3			3.3			122.4		(1.6		)	(35.4		)	(24.1		)	916.9
Municipals	37.2		—			0.7			—		—			(0.4		)	—			37.5
Equity securities - available-for-sale	6.0		—			—			—		—			—			—			6.0
Other invested assets	11.2		(15.8		)	—			—		—			—			19.1			14.5
Total assets at fair value	$	1,066.0	$	(4.9	)	$	4.3		$	186.8	$	(1.6	)	$	(87.1	)	$	(15.4	)	$	1,148.1

	Balance at Beginning of Period		Total (Gains) Losses														Net transfer In (Out) of Level 3 (a)			Balance at End of Period
	Balance at Beginning of Period		Included in Earnings			Included in AOCI			Purchases		Sales			Settlements			Net transfer In (Out) of Level 3 (a)			Balance at End of Period
Liabilities
FIA embedded derivatives, included in contractholder funds	$	1,908.1	$	265.6		$	—		$	—	$	—		$	—		$	—		$	2,173.7
Front Street future policyholder benefit liability	151.3		(25.3		)	—			514.6		—			(46.0		)	—			594.6
Total liabilities at fair value	$	2,059.4	$	240.3		$	—		$	514.6	$	—		$	(46.0	)	$	—		$	2,768.3

(a) During the nine months ended June 30, 2015, the net transfers out of Level 3 were exclusively to Level 2 and the net transfer to Level 3 was related to a loan receivable previously eliminated upon consolidation.



	Three months ended June 30, 2014
	Balance at Beginning of Period		Total Gains (Losses)													Net transfer In (Out) of Level 3 (a)			Balance at End of Period
	Balance at Beginning of Period		Included in Earnings			Included in AOCI		Purchases		Sales			Settlements			Net transfer In (Out) of Level 3 (a)			Balance at End of Period
Assets
Contingent purchase price reduction receivable	$	41.5	$	—		$	—	$	—	$	—		$	—		$	—		$	41.5
Fixed maturity securities available-for-sale:
Asset-backed securities	10.7		—			—		—		—			—			(4.8		)	5.9
Commercial mortgage-backed securities	—		—			0.1		83.8		—			—			—			83.9
Corporates	657.0		—			14.4		88.9		(1.0		)	—			(14.1		)	745.2
Municipals	35.6		—			0.9		—		—			—			—			36.5
Equity securities- trading	10.8		1.2			—		1.5		—			(13.5		)	—			—
Equity securities- available for sale	—		—			0.5		5.5		—			—			—			6.0
Other invested assets	—		0.3			—		11.3		—			—			—			11.6
Total assets at fair value	$	755.6	$	1.5		$	15.9	$	191.0	$	(1.0	)	$	(13.5	)	$	(18.9	)	$	930.6

	Balance at Beginning of Period		Total (Gains) Losses													Net transfer In (Out) of Level 3 (a)			Balance at End of Period
	Balance at Beginning of Period		Included in Earnings			Included in AOCI		Purchases		Sales			Settlements			Net transfer In (Out) of Level 3 (a)			Balance at End of Period
Liabilities
FIA embedded derivatives, included in contractholder funds	$	1,718.7	$	145.8		$	—	$	—	$	—		$	—		$	—		$	1,864.5
Front Street future policyholder benefit liability	151.0		5.1			—		—		—			(1.2		)	—			154.9
Equity conversion feature of preferred stock	364.8		(38.0		)	—		—		—			(326.8		)	—			—
Total liabilities at fair value	$	2,234.5	$	112.9		$	—	$	—	$	—		$	(328.0	)	$	—		$	2,019.4

(a) The net transfers out of Level 3 for the three months ended June 30, 2014 were exclusively to Level 2.



	Nine months ended June 30, 2014
	Balance at Beginning of Period		Total Gains (Losses)													Net transfer In (Out) of Level 3 (a)			Balance at End of Period
	Balance at Beginning of Period		Included in Earnings		Included in AOCI			Purchases		Sales			Settlements			Net transfer In (Out) of Level 3 (a)			Balance at End of Period
Assets
Contingent purchase price reduction receivable	$	41.0	$	0.5	$	—		$	—	$	—		$	—		$	—		$	41.5
Fixed maturity securities available-for-sale:
Asset-backed securities	5.0		—		(0.3		)	5.0		—			—			(3.8		)	5.9
Commercial mortgage-backed securities	5.7		—		0.4			83.8		—			—			(6.0		)	83.9
Corporates	461.1		—		18.4			283.2		(1.0		)	(2.4		)	(14.1		)	745.2
Municipals	—		—		1.5			35.0		—			—			—			36.5
Equity securities- trading	10.7		1.3		—			1.5		—			(13.5		)	—			—
Equity securities- available-for-sale	—		—		0.5			5.5		—			—			—			6.0
Other invested assets	—		0.3		—			11.3		—			—			—			11.6
Total assets at fair value	$	523.5	$	2.1	$	20.5		$	425.3	$	(1.0	)	$	(15.9	)	$	(23.9	)	$	930.6

	Balance at Beginning of Period		Total (Gains) Losses													Net transfer In (Out) of Level 3 (a)			Balance at End of Period
	Balance at Beginning of Period		Included in Earnings		Included in AOCI			Purchases		Sales			Settlements			Net transfer In (Out) of Level 3 (a)			Balance at End of Period
Liabilities
FIA embedded derivatives, included in contractholder funds	$	1,544.4	$	320.1	$	—		$	—	$	—		$	—		$	—		$	1,864.5
Front Street future policyholder benefit liability	—		8.1		—			150.6		—			(3.8		)	—			154.9
Equity conversion feature of preferred stock	330.8		12.7		—			—		—			(343.5		)	—			—
Total liabilities at fair value	$	1,875.2	$	340.9	$	—		$	150.6	$	—		$	(347.3	)	$	—		$	2,019.4

(a) The net transfers out of Level 3 for the nine months ended June 30, 2014 were exclusively to Level 2. There was a $6.0 transfer to asset-backed securities from commercial mortgage-backed securities, the remaining transfers were from Level 3 to Level 2.