Shareholders' Equity

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

At December 31, 2014 and 2013, ProAssurance had 100 million shares of authorized common stock and 50 million shares of authorized preferred stock. The Board has the authority to determine provisions for the issuance of preferred shares, including the number of shares to be issued, the designations, powers, preferences and rights, and the qualifications, limitations or restrictions of such shares. To date, the Board has not approved the issuance of preferred stock.

The following is a summary of changes in common shares issued and outstanding during the years ended December 31, 2014, 2013 and 2012:

(In thousands of shares)	2014		2013		2012
Issued and outstanding shares - January 1	61,197		61,624		61,107
Repurchase of shares	(4,909	)	(681	)	—
Shares issued due to exercise of options and vesting of share-based compensation awards	154		169		436
Other shares issued for compensation and shares reissued to stock purchase plan*	92		85		81
Issued and outstanding shares - December 31	56,534		61,197		61,624

* Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue).

As of December 31, 2014, approximately 2.7 million of ProAssurance's authorized common shares were reserved by the Board for award or issuance under the incentive compensation plans described in Note 12 and an additional 0.8 million of authorized common shares were reserved for the issuance of currently outstanding restricted share and performance share unit awards and for the exercise of outstanding stock options.

ProAssurance declared cash dividends during 2014, 2013 and 2012 as follows:

	Cash Dividends Declared, per Share
	2014		2013		2012
First Quarter	$	0.300	$	0.250	$	0.125
Second Quarter	$	0.300	$	0.250	$	0.125
Third Quarter	$	0.300	$	0.250	$	0.125
Fourth Quarter*	$	2.960	$	0.300	$	2.750

* Includes special dividends of $2.65 per share in 2014 and $2.50 per share in 2012.

Dividends declared during 2014, 2013 and 2012 totaled $220.5 million, $64.8 million and $192.5 million, respectively. These dividends were paid in the month following the quarter in which they were declared, except for fourth quarter 2012 dividends for which payment was accelerated into December 2012.

ProAssurance's ability to pay dividends to its shareholders is limited by its holding company structure, to the extent of the net assets held by its insurance subsidiaries, as discussed in Note 17. Otherwise, there are no other regulatory restrictions on ProAssurance's retained earnings or net income that materially impact its ability to pay dividends. Based on Shareholders' Equity at December 31, 2014, total equity of $239 million was free of debt covenant restrictions regarding the payment of dividends. However, any decision to pay future cash dividends is subject to the Board’s final determination after a comprehensive review of financial performance, future expectations and other factors deemed relevant by the Board.

As of December 31, 2014 Board authorizations for the repurchase of common shares or the retirement of outstanding debt of $181.5 million remained available for use. The timing and quantity of purchases depends upon market conditions and changes in ProAssurance's capital requirements and is subject to limitations that may be imposed on such purchases by applicable securities laws and regulations, and the rules of the New York Stock Exchange.

Other Comprehensive Income (Loss) (OCI)

For the years ended December 31, 2014, 2013 and 2012, OCI was primarily comprised of unrealized gains and losses arising during the period related to available-for-sale securities, less reclassification adjustments as shown in the table below, net of tax. At December 31, 2014 and 2013, accumulated other comprehensive income was comprised primarily of unrealized gains and losses from available-for-sale securities, including non-credit impairment losses of $0.8 million and 0.5 million, respectively, net of tax. All tax effects were computed using a 35% rate. OCI and accumulated other comprehensive income also included immaterial amounts of foreign currency translation adjustments.

Amounts reclassified from accumulated other comprehensive income to net income and the amounts of deferred tax expense (benefit) included in OCI were as follows:

(In thousands)	2014			2013			2012
Reclassifications from accumulated other comprehensive income to net income, available-for-sale securities:
Realized investment gains (losses)	$	3,317		$	11,375		$	17,350
Non-credit impairment losses reclassified to earnings, due to sale of securities or reclassification as a credit loss	—			(347		)	(2,417		)
Total amounts reclassified, before tax effect	3,317			11,028			14,933
Tax effect (at 35%)	(1,161		)	(3,860		)	(5,227		)
Net reclassification adjustments	$	2,156		$	7,168		$	9,706
Deferred tax expense (benefit) included in OCI	$	(785	)	$	(46,157	)	$	8,262