Shareholders' Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

At December 31, 2015 and 2014, 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, 2015, 2014 and 2013:

(In thousands of shares)	2015		2014		2013
Issued and outstanding shares - January 1	56,534		61,197		61,624
Repurchase of shares	(3,680	)	(4,909	)	(681	)
Shares issued due to exercise of options and vesting of share-based compensation awards	150		154		169
Other shares issued for compensation and shares reissued to stock purchase plan*	97		92		85
Issued and outstanding shares - December 31	53,101		56,534		61,197
* Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue).

As of December 31, 2015, approximately 2.4 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 0.7 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 2015, 2014 and 2013 as follows:

	Cash Dividends Declared, per Share
	2015		2014		2013
First Quarter	$	0.31	$	0.30	$	0.25
Second Quarter	0.31		0.30		0.25
Third Quarter	0.31		0.30		0.25
Fourth Quarter*	1.31		2.96		0.30

* Includes special dividends of $1.00 per share in 2015 and $2.65 per share in 2014.

Dividends declared during 2015, 2014 and 2013 totaled $119.9 million, $220.5 million and $64.8 million, respectively. These dividends were paid in the month following the quarter in which they were declared.

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, 2015, total equity of $592 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, 2015, Board authorizations for the repurchase of common shares or the retirement of outstanding debt of $111.7 million remained available for use, which included a $100 million increase to the authorization approved by the Board in 2015. 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 NYSE.

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

For the years ended December 31, 2015, 2014 and 2013, OCI was primarily comprised of unrealized gains and losses, including non-credit impairment losses in 2015 and 2013, arising during the period related to available-for-sale securities, less reclassification adjustments as shown in the table that follows, net of tax. For the year endedDecember 31, 2015, OCI also included losses related to unrecognized changes in defined benefit plan liabilities of $1.0 million, net of tax, from the reestimation of two defined benefit plans assumed in the Eastern acquisition. Both plans are frozen as to the earning of additional benefits, but the unrecognized plan benefit liability is reestimated annually.

At December 31, 2015 and 2014, AOCI was primarily comprised of unrealized gains and losses from available-for-sale securities, including non-credit impairment losses of $2.0 million and $0.5 million, respectively, net of tax. At December 31, 2015, AOCI also included losses of $1.0 million related to unrecognized changes in defined benefit plan liabilities, net of tax. Tax effects were computed using a 35% rate, with the exception of immaterial amounts of foreign currency translation adjustments included in OCI and AOCI, as there is no deferred tax effect for such adjustments.

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

(In thousands)	2015			2014			2013
Reclassifications from AOCI to net income, available-for-sale securities:
Realized investment gains (losses)	$	(4,475	)	$	3,317		$	11,722
Non-credit impairment losses reclassified to earnings, due to sale of securities or reclassification as a credit loss	(2,279		)	—			(347		)
Tax effect (at 35%)	2,364			(1,161		)	(3,981		)
Net reclassification adjustments	$	(4,390	)	$	2,156		$	7,394
Deferred tax expense (benefit) included in OCI	$	(18,370	)	$	(785	)	$	(46,157	)