10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___ 

Commission File Number 001-31792

CNO Financial Group, Inc.

Delaware	75-3108137
State of Incorporation	IRS Employer Identification No.
11825 N. Pennsylvania Street
Carmel, Indiana  46032	(317) 817-6100
Address of principal executive offices	Telephone

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  Yes [ X ]  No [   ]

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes [ X ]  No [   ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.  Large accelerated filer [ X ]  Accelerated filer [   ] Non-accelerated filer [   ] Smaller reporting company [   ] Emerging growth company [   ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):  Yes [   ] No [ X ]

Shares of common stock outstanding as of October 23, 2018:  164,649,365

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		Page
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheet as of September 30, 2018 and December 31, 2017	3
	Consolidated Statement of Operations for the three and nine months ended September 30, 2018 and 2017	5
	Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2018 and 2017	6
	Consolidated Statement of Shareholders' Equity for the nine months ended September 30, 2018 and 2017	7
	Consolidated Statement of Cash Flows for the nine months ended September 30, 2018 and 2017	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations	59
	Cautionary Statement Regarding Forward-Looking Statements	59
	Overview	61
	Critical Accounting Policies	63
	Results of Operations	64
	Premium Collections	83
	Liquidity and Capital Resources	89
	Investments	96
	Investments in Variable Interest Entities	105
	New Accounting Standards	107
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	107
Item 4.	Controls and Procedures	107
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	108
Item 1A.	Risk Factors	108
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	108
Item 6.	Exhibits	109

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Dollars in millions)

(unaudited)

ASSETS

	September 30, 2018		December 31, 2017
Investments:
Fixed maturities, available for sale, at fair value (amortized cost: September 30, 2018 - $17,929.5; December 31, 2017 - $20,702.1)	$	18,512.4	$	22,910.9
Equity securities at fair value (cost: September 30, 2018 - $340.8; December 31, 2017 - $420.0)	335.5		440.6
Mortgage loans	1,680.6		1,650.6
Policy loans	117.4		116.0
Trading securities	239.0		284.6
Investments held by variable interest entities	1,550.5		1,526.9
Other invested assets	920.0		924.5
Total investments	23,355.4		27,854.1
Cash and cash equivalents - unrestricted	539.2		578.4
Cash and cash equivalents held by variable interest entities	56.4		178.9
Accrued investment income	224.7		245.9
Present value of future profits	351.6		359.6
Deferred acquisition costs	1,291.1		1,026.8
Reinsurance receivables	4,946.3		2,175.2
Income tax assets, net	577.8		366.9
Assets held in separate accounts	5.1		5.0
Other assets	299.6		319.5
Total assets	$	31,647.2	$	33,110.3

(continued on next page)

The accompanying notes are an integral part

of the consolidated financial statements.

3

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET, continued

(Dollars in millions)

(unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY

	September 30, 2018		December 31, 2017
Liabilities:
Liabilities for insurance products:
Policyholder account balances	$	11,449.7	$	11,220.7
Future policy benefits	11,140.5		11,521.3
Liability for policy and contract claims	513.4		530.3
Unearned and advanced premiums	249.2		261.7
Liabilities related to separate accounts	5.1		5.0
Other liabilities	689.5		751.8
Investment borrowings	1,646.1		1,646.7
Borrowings related to variable interest entities	1,417.6		1,410.7
Notes payable – direct corporate obligations	916.2		914.6
Total liabilities	28,027.3		28,262.8
Commitments and Contingencies
Shareholders' equity:
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding:  September 30, 2018 – 164,634,365; December 31, 2017 – 166,857,931)	1.6		1.7
Additional paid-in capital	3,030.0		3,073.3
Accumulated other comprehensive income	403.5		1,212.1
Retained earnings	184.8		560.4
Total shareholders' equity	3,619.9		4,847.5
Total liabilities and shareholders' equity	$	31,647.2	$	33,110.3

The accompanying notes are an integral part

of the consolidated financial statements.

4

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Dollars in millions, except per share data)

(unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues:
Insurance policy income	$	656.9		$	659.3		$	1,976.6		$	1,987.2
Net investment income:
General account assets	332.0			325.9			989.3			960.3
Policyholder and other special-purpose portfolios	85.8			52.7			134.3			171.8
Realized investment gains (losses):
Net realized gains on the transfer of assets related to reinsurance transaction	363.4			—			363.4			—
Other net realized investment gains, excluding impairment losses	33.3			34.5			29.1			74.8
Other-than-temporary impairments:
Total other-than-temporary impairment losses	(2.1		)	(4.7		)	(2.1		)	(17.3		)
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income	—			—			—			(.9		)
Net impairment losses recognized	(2.1		)	(4.7		)	(2.1		)	(18.2		)
Loss on dissolution of variable interest entities	—			(.6		)	—			(4.3		)
Total realized gains	394.6			29.2			390.4			52.3
Fee revenue and other income	11.9			12.2			44.7			35.5
Total revenues	1,481.2			1,079.3			3,535.3			3,207.1
Benefits and expenses:
Insurance policy benefits	646.9			638.1			1,851.7			1,941.6
Loss related to reinsurance transaction	1,067.6			—			1,067.6			—
Interest expense	38.8			30.1			110.1			92.3
Amortization	62.4			58.2			195.3			181.3
Loss on extinguishment of borrowings related to variable interest entities	—			5.5			3.8			5.5
Other operating costs and expenses	205.3			217.5			608.7			631.3
Total benefits and expenses	2,021.0			949.4			3,837.2			2,852.0
Income (loss) before income taxes	(539.8		)	129.9			(301.9		)	355.1
Income tax expense (benefit):
Tax expense (benefit) on period income (loss)	(114.8		)	44.1			(63.4		)	123.6
Valuation allowance for deferred tax assets and other tax items	104.8			(15.0		)	104.8			(15.0		)
Net income (loss)	$	(529.8	)	$	100.8		$	(343.3	)	$	246.5
Earnings per common share:
Basic:
Weighted average shares outstanding	164,551,000			168,684,000			165,903,000			170,890,000
Net income (loss)	$	(3.22	)	$	.60		$	(2.07	)	$	1.44
Diluted:
Weighted average shares outstanding	164,551,000			170,982,000			165,903,000			172,800,000
Net income (loss)	$	(3.22	)	$	.59		$	(2.07	)	$	1.43

The accompanying notes are an integral part

of the consolidated financial statements.

5

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Dollars in millions)

(unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Net income (loss)	$	(529.8	)	$	100.8		$	(343.3	)	$	246.5
Other comprehensive income, before tax:
Unrealized gains (losses) for the period	(149.1		)	120.9			(1,264.1		)	794.5
Adjustment to present value of future profits and deferred acquisition costs	18.7			(1.8		)	107.4			(25.3		)
Amount related to premium deficiencies assuming the net unrealized gains (losses) had been realized	106.5			(31.0		)	509.5			(243.0		)
Reclassification adjustments:
For net realized investment gains included in net income (loss)	(354.7		)	(27.7		)	(366.4		)	(44.0		)
For amortization of the present value of future profits and deferred acquisition costs related to net realized investment gains (losses) included in net income (loss)	(.5		)	.7			(.1		)	1.0
Other comprehensive income (loss) before tax	(379.1		)	61.1			(1,013.7		)	483.2
Income tax (expense) benefit related to items of accumulated other comprehensive income (loss)	82.4			(22.0		)	221.4			(172.0		)
Other comprehensive income (loss), net of tax	(296.7		)	39.1			(792.3		)	311.2
Comprehensive income (loss)	$	(826.5	)	$	139.9		$	(1,135.6	)	$	557.7

The accompanying notes are an integral part

of the consolidated financial statements.

6

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

(Dollars in millions)

(unaudited)

	Common stock and additional paid-in capital			Accumulated other  comprehensive income			Retained earnings			Total
Balance, December 31, 2016	$	3,213.8		$	622.4		$	650.7		$	4,486.9
Cumulative effect of accounting change	.9			—			(.6		)	.3
Net income	—			—			246.5			246.5
Change in unrealized appreciation (depreciation) of investments and other (net of applicable income tax expense of $170.9)	—			309.1			—			309.1
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense of $1.1)	—			2.1			—			2.1
Cost of common stock repurchased	(140.1		)	—			—			(140.1		)
Dividends on common stock	—			—			(44.7		)	(44.7		)
Stock options, restricted stock and performance units	21.6			—			—			21.6
Balance, September 30, 2017	$	3,096.2		$	933.6		$	851.9		$	4,881.7
Balance, December 31, 2017	$	3,075.0		$	1,212.1		$	560.4		$	4,847.5
Cumulative effect of accounting change	—			(16.3		)	16.3			—
Net loss	—			—			(343.3		)	(343.3		)
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax benefit of $221.2)	—			(791.5		)	—			(791.5		)
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax benefit of $.2)	—			(.8		)	—			(.8		)
Cost of common stock repurchased	(60.5		)	—			—			(60.5		)
Dividends on common stock	—			—			(48.6		)	(48.6		)
Stock options, restricted stock and performance units	17.1			—			—			17.1
Balance, September 30, 2018	$	3,031.6		$	403.5		$	184.8		$	3,619.9

The accompanying notes are an integral part

of the consolidated financial statements.

7

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in millions)

(unaudited)

	Nine months ended
	September 30,
	2018			2017
Cash flows from operating activities:
Insurance policy income	$	1,848.1		$	1,859.4
Net investment income	1,005.7			917.9
Fee revenue and other income	44.7			35.5
Insurance policy benefits	(1,515.6		)	(1,491.7		)
Payment to reinsurer pursuant to long-term care business reinsured	(365.0		)	—
Interest expense	(92.8		)	(81.0		)
Deferrable policy acquisition costs	(187.2		)	(183.4		)
Other operating costs	(591.9		)	(549.2		)
Income taxes	(31.0		)	(58.0		)
Net cash from operating activities	115.0			449.5
Cash flows from investing activities:
Sales of investments	2,747.2			1,723.5
Maturities and redemptions of investments	1,966.7			2,543.0
Purchases of investments	(5,037.6		)	(4,076.8		)
Net sales of trading securities	25.4			94.8
Other	(16.3		)	(20.4		)
Net cash provided (used) by investing activities	(314.6		)	264.1
Cash flows from financing activities:
Issuance of common stock	3.5			6.0
Payments to repurchase common stock	(67.5		)	(142.3		)
Common stock dividends paid	(48.4		)	(44.5		)
Amounts received for deposit products	1,129.7			1,067.2
Withdrawals from deposit products	(980.5		)	(920.8		)
Issuance of investment borrowings:
Federal Home Loan Bank	150.0			332.0
Related to variable interest entities	277.6			387.3
Payments on investment borrowings:
Federal Home Loan Bank	(150.6		)	(332.6		)
Related to variable interest entities	(275.9		)	(862.3		)
Net cash provided (used) by financing activities	37.9			(510.0		)
Net increase (decrease) in cash and cash equivalents	(161.7		)	203.6
Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period	757.3			668.2
Cash and cash equivalents - unrestricted and held by variable interest entities, end of period	$	595.6		$	871.8

The accompanying notes are an integral part

of the consolidated financial statements.

8

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

BUSINESS AND BASIS OF PRESENTATION

The following notes should be read together with the notes to the consolidated financial statements included in our 2017 Annual Report on Form 10-K.

CNO Financial Group, Inc., a Delaware corporation ("CNO"), is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products.  The terms "CNO Financial Group, Inc.", "CNO", the "Company", "we", "us", and "our" as used in these financial statements refer to CNO and its subsidiaries.  Such terms, when used to describe insurance business and products, refer to the insurance business and products of CNO's insurance subsidiaries.

We focus on serving middle-income pre-retiree and retired Americans, which we believe are attractive, underserved, high growth markets.  We sell our products through three distribution channels: career agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing.

Our unaudited consolidated financial statements reflect normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented.  As permitted by rules and regulations of the Securities and Exchange Commission (the "SEC") applicable to quarterly reports on Form 10-Q, we have condensed or omitted certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").  We have reclassified certain amounts from the prior periods to conform to the 2018 presentation.  These reclassifications have no effect on net income or shareholders' equity.  Results for interim periods are not necessarily indicative of the results that may be expected for a full year.

The balance sheet at December 31, 2017, presented herein, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods.  For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, fair value measurements of certain investments (including derivatives), other-than-temporary impairments of investments, assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals.  If our future experience differs from these estimates and assumptions, our financial statements would be materially affected.

The accompanying financial statements include the accounts of the Company and its subsidiaries. Our consolidated financial statements exclude transactions between us and our consolidated affiliates, or among our consolidated affiliates.

INVESTMENTS

We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as net investment income (classified as investment income from policyholder and other special-purpose portfolios)).

Ourtrading securities include: (i) investments purchased with the intent of selling in the near term to generate income; (ii) investments supporting certain insurance liabilities and certain reinsurance agreements; and (iii) certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option.  The change in fair value of the income generating investments and investments supporting insurance liabilities is recognized in income from policyholder and other special-purpose portfolios (a component of net investment income). The change in fair value of securities with embedded derivatives is recognized in realized investment gains (losses). Investment income related to investments supporting certain insurance liabilities is substantially offset by the change in insurance policy benefits related to certain products.

9

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments.  These amounts, included in shareholders' equity as of September 30, 2018 and December 31, 2017, were as follows (dollars in millions):

	September 30, 2018			December 31, 2017
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized	$	1.6		$	2.6
Net unrealized gains on all other investments	577.2			2,227.3
Adjustment to present value of future profits (a)	(4.5		)	(94.0		)
Adjustment to deferred acquisition costs	(56.1		)	(292.6		)
Adjustment to insurance liabilities	(5.0		)	(295.8		)
Deferred income tax liabilities	(109.7		)	(335.4		)
Accumulated other comprehensive income	$	403.5		$	1,212.1

________

(a) The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003, the date Conseco, Inc., an Indiana corporation, emerged from bankruptcy.

At September 30, 2018, adjustments to insurance liabilities and deferred tax assets included $5.0 million and $1.1 million, respectively, for premium deficiencies that would exist on certain blocks of business if unrealized gains on the assets backing such products had been realized and the proceeds from the sales of such assets were invested at then current yields.

At September 30, 2018, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions):

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value		Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities	$	11,266.5	$	468.8	$	(210.8	)	$	11,524.5	$	—
United States Treasury securities and obligations of United States government corporations and agencies	151.9		17.3		(.5		)	168.7		—
States and political subdivisions	1,749.7		141.9		(4.6		)	1,887.0		—
Debt securities issued by foreign governments	60.3		1.3		(1.4		)	60.2		—
Asset-backed securities	2,363.7		143.6		(8.2		)	2,499.1		—
Collateralized debt obligations	355.6		.4		(2.0		)	354.0		—
Commercial mortgage-backed securities	1,439.3		14.3		(20.3		)	1,433.3		—
Mortgage pass-through securities	1.5		.1		—			1.6		—
Collateralized mortgage obligations	541.0		48.1		(5.1		)	584.0		(.6		)
Total fixed maturities, available for sale	$	17,929.5	$	835.8	$	(252.9	)	$	18,512.4	$	(.6	)

10

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

At December 31, 2017, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions):

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value		Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities	$	13,286.3	$	1,699.1	$	(27.0	)	$	14,958.4	$	—
United States Treasury securities and obligations of United States government corporations and agencies	146.4		31.5		(.2		)	177.7		—
States and political subdivisions	1,821.9		234.8		(.4		)	2,056.3		—
Debt securities issued by foreign governments	79.5		3.8		(.2		)	83.1		—
Asset-backed securities	3,085.9		172.6		(4.1		)	3,254.4		—
Collateralized debt obligations	257.1		2.3		—			259.4		—
Commercial mortgage-backed securities	1,354.0		33.8		(10.3		)	1,377.5		—
Mortgage pass-through securities	1.8		.2		—			2.0		—
Collateralized mortgage obligations	669.2		73.2		(.3		)	742.1		(1.0		)
Total fixed maturities, available for sale	$	20,702.1	$	2,251.3	$	(42.5	)	$	22,910.9	$	(1.0	)
Equity securities	$	420.0	$	23.6	$	(3.0	)	$	440.6

The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at September 30, 2018, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.  Structured securities (such as asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	367.7	$	372.8
Due after one year through five years	1,496.2		1,536.2
Due after five years through ten years	1,625.1		1,632.8
Due after ten years	9,739.4		10,098.6
Subtotal	13,228.4		13,640.4
Structured securities	4,701.1		4,872.0
Total fixed maturities, available for sale	$	17,929.5	$	18,512.4

11

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2017, by contractual maturity.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	328.1	$	335.1
Due after one year through five years	1,947.3		2,052.3
Due after five years through ten years	1,508.7		1,601.3
Due after ten years	11,550.0		13,286.8
Subtotal	15,334.1		17,275.5
Structured securities	5,368.0		5,635.4
Total fixed maturities, available for sale	$	20,702.1	$	22,910.9

Net Realized Investment Gains (Losses)

The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Fixed maturity securities, available for sale:
Gross realized gains on sale	$	5.4		$	32.3		$	45.5		$	60.4
Gross realized losses on sale	(11.4		)	(8.5		)	(36.9		)	(16.4		)
Impairments:
Total other-than-temporary impairment losses	—			(3.2		)	—			(10.0		)
Other-than-temporary impairment losses recognized in accumulated other comprehensive income	—			—			—			(.9		)
Net impairment losses recognized	—			(3.2		)	—			(10.9		)
Net realized investment gains (losses) from fixed maturities	(6.0		)	20.6			8.6			33.1
Equity securities, including change in fair value (a)	(3.0		)	7.7			(13.3		)	9.6
Mortgage loans	—			—			—			1.0
Impairments of other investments	(2.1		)	(1.5		)	(2.1		)	(7.3		)
Loss on dissolution of variable interest entities	—			(.6		)	—			(4.3		)
Other (a) (b)	42.3			3.0			33.8			20.2
Net realized investment gains before net realized gains on the transfer of assets related to reinsurance transaction	31.2			29.2			27.0			52.3
Net realized gains on the transfer of assets related to reinsurance transaction	363.4			—			363.4			—
Net realized investment gains	$	394.6		$	29.2		$	390.4		$	52.3

_________________

(a) Changes in the estimated fair value of trading securities that we have elected the fair value option and equity securities (and are still held as of the end of the respective periods) were $(6.0) million and $13.0 million for the nine months ended September 30, 2018 and 2017, respectively.

(b) In April 2016, the Company announced that it had invested in a non-controlling minority interest in Tennenbaum Capital Partners, LLC ("TCP"), a Los Angeles-based investment management firm. In August 2018, Blackrock, Inc.

12

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

announced the completion of its acquisition of TCP. The sale of our interest in TCP resulted in a significant portion of the net realized gains in the third quarter of 2018.

During the first nine months of 2018, we recognized net realized investment gains of $390.4 million, which were comprised of: (i) $50.4 million of net gains from the sales of investments; (ii) $363.4 million of gains on the transfer of assets (substantially all of which were fixed maturities) related to reinsurance transaction; (iii) $13.3 million of losses related to equity securities, including the change in fair value; (iv) the decrease in fair value of certain fixed maturity investments with embedded derivatives of $3.0 million; (v) the decrease in fair value of embedded derivatives related to a modified coinsurance agreement of $5.0 million; and (vi) $2.1 million of writedowns of investments for other than temporary declines in fair value recognized through net income.

During the first nine months of 2017, we recognized net realized investment gains of $52.3 million, which were comprised of: (i) $60.1 million of net gains from the sales of investments; (ii) $4.3 million of losses on the dissolution of variable interest entities ("VIEs"); (iii) the increase in fair value of certain fixed maturity investments with embedded derivatives of $12.3 million; (iv) the increase in fair value of embedded derivatives related to a modified coinsurance agreement of $2.4 million; and (v) $18.2 million of writedowns of investments for other than temporary declines in fair value recognized through earnings.

During the first nine months of 2017, VIEs that were required to be consolidated were dissolved. A loss of $4.3 million was recognized representing the difference between the borrowings of such VIEs and the contractual distributions required following the liquidation of the underlying assets.

Our fixed maturity investments are generally purchased in the context of various long-term strategies, including funding insurance liabilities, so we do not generally seek to generate short-term realized gains through the purchase and sale of such securities.  In certain circumstances, including those in which securities are selling at prices which exceed our view of their underlying economic value, or when it is possible to reinvest the proceeds to better meet our long-term asset-liability objectives, we may sell certain securities.

During the first nine months of 2018, the $36.9 million of gross realized losses on sales of $1,040.4 million of fixed maturity securities, available for sale included: (i) $26.9 million related to various corporate securities; (ii) $4.0 million related to commercial mortgage-backed securities; and (iii) $6.0 million related to various other investments. Securities are generally sold at a loss following unforeseen issuer-specific events or conditions or shifts in perceived relative values.  These reasons include but are not limited to: (i) changes in the investment environment; (ii) expectation that the market value could deteriorate; (iii) our desire to reduce our exposure to an asset class, an issuer or an industry; (iv) prospective or actual changes in credit quality; or (v) changes in expected portfolio cash flows.

During the first nine months of 2018, we recognized $2.1 million of impairment losses recorded in earnings on a mortgage loan due to issuer specific events.

During the first nine months of 2017, we recognized $18.2 million of impairment losses recorded in earnings which included: (i) $5.7 million of writedowns on fixed maturities in the energy sector; (ii) $5.2 million of writedowns related to a real estate investment; and (iii) $7.3 million of writedowns on other investments.

We regularly evaluate all of our investments with unrealized losses for possible impairment.  Our assessment of whether unrealized losses are "other than temporary" requires significant judgment.  Factors considered include: (i) the extent to which fair value is less than the cost basis; (ii) the length of time that the fair value has been less than cost; (iii) whether the unrealized loss is event driven, credit-driven or a result of changes in market interest rates or risk premium; (iv) the near-term prospects for specific events, developments or circumstances likely to affect the value of the investment; (v) the investment's rating and whether the investment is investment-grade and/or has been downgraded since its purchase; (vi) whether the issuer is current on all payments in accordance with the contractual terms of the investment and is expected to meet all of its obligations under the terms of the investment; (vii) whether we intend to sell the investment or it is more likely than not that circumstances will require us to sell the investment before recovery occurs; (viii) the underlying current and prospective asset and enterprise values of the issuer and the extent to which the recoverability of the carrying value of our investment may be affected by changes in such values; (ix) projections of, and unfavorable changes in, cash flows on structured securities including mortgage-

13

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

backed and asset-backed securities; (x) our best estimate of the value of any collateral; and (xi) other objective and subjective factors.

Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio.  Significant losses could have a material adverse effect on our consolidated financial statements in future periods.

The manner in which impairment losses on fixed maturity securities, available for sale, are recognized in the financial statements is dependent on the facts and circumstances related to the specific security.  If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, the security is other-than-temporarily impaired and the full amount of the impairment is recognized as a loss through earnings.  If we do not expect to recover the amortized cost basis, we do not plan to sell the security, and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current period credit loss, the recognition of the other-than-temporary impairment is bifurcated.  We recognize the credit loss portion in net income and the noncredit loss portion in accumulated other comprehensive income.

We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security.  The present value is determined using the best estimate of future cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating-rate security.  The methodology and assumptions for establishing the best estimate of future cash flows vary depending on the type of security.

For most structured securities, cash flow estimates are based on bond-specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including overcollateralization, excess spread, subordination and guarantees.  For corporate bonds, cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond-specific facts and circumstances. The previous amortized cost basis less the impairment recognized in net income becomes the security's new cost basis.  We accrete the new cost basis to the estimated future cash flows over the expected remaining life of the security, except when the security is in default or considered nonperforming.

The remaining noncredit impairment, which is recorded in accumulated other comprehensive income, is the difference between the security's estimated fair value and our best estimate of future cash flows discounted at the effective interest rate prior to impairment.  The remaining noncredit impairment typically represents changes in the market interest rates, current market liquidity and risk premiums.  As of September 30, 2018, other-than-temporary impairments included in accumulated other comprehensive income totaled $.6 million (before taxes and related amortization).

14

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for the three and nine months ended September 30, 2018 and 2017 (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Credit losses on fixed maturity securities, available for sale, beginning of period	$	(.3	)	$	(4.9	)	$	(2.8	)	$	(5.5	)
Add: credit losses on other-than-temporary impairments not previously recognized	—			—			—			—
Less: credit losses on securities sold	.1			—			2.6			1.6
Less: credit losses on securities impaired due to intent to sell (a)	—			—			—			—
Add: credit losses on previously impaired securities	—			—			—			(1.0		)
Less: increases in cash flows expected on previously impaired securities	—			—			—			—
Credit losses on fixed maturity securities, available for sale, end of period	$	(.2	)	$	(4.9	)	$	(.2	)	$	(4.9	)

__________

(a) Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis.

Gross Unrealized Investment Losses

Our investment strategy is to maximize, over a sustained period and within acceptable parameters of quality and risk, investment income and total investment return through active strategic asset allocation and investment management. Accordingly, we may sell securities at a gain or a loss to enhance the projected total return of the portfolio as market opportunities change, to reflect changing perceptions of risk, or to better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities.

15

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at September 30, 2018 (dollars in millions):

	Less than 12 months					12 months or greater					Total
Description of securities	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
United States Treasury securities and obligations of United States government corporations and agencies	$	29.6	$	(.3	)	$	9.9	$	(.2	)	$	39.5	$	(.5	)
States and political subdivisions	174.2		(3.8		)	16.8		(.8		)	191.0		(4.6		)
Debt securities issued by foreign governments	24.4		(1.2		)	4.3		(.2		)	28.7		(1.4		)
Corporate securities	4,114.8		(178.8		)	315.9		(32.0		)	4,430.7		(210.8		)
Asset-backed securities	512.9		(4.1		)	165.3		(4.1		)	678.2		(8.2		)
Collateralized debt obligations	242.7		(2.0		)	—		—			242.7		(2.0		)
Commercial mortgage-backed securities	431.8		(6.4		)	209.3		(13.9		)	641.1		(20.3		)
Mortgage pass-through securities	.1		—			—		—			.1		—
Collateralized mortgage obligations	95.7		(4.3		)	16.8		(.8		)	112.5		(5.1		)
Total fixed maturities, available for sale	$	5,626.2	$	(200.9	)	$	738.3	$	(52.0	)	$	6,364.5	$	(252.9	)

The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2017 (dollars in millions):

	Less than 12 months					12 months or greater					Total
Description of securities	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
United States Treasury securities and obligations of United States government corporations and agencies	$	28.2	$	(.2	)	$	.7	$	—		$	28.9	$	(.2	)
States and political subdivisions	18.3		(.1		)	14.9		(.3		)	33.2		(.4		)
Debt securities issued by foreign governments	7.7		(.1		)	5.4		(.1		)	13.1		(.2		)
Corporate securities	470.5		(6.8		)	359.7		(20.2		)	830.2		(27.0		)
Asset-backed securities	601.4		(2.0		)	122.2		(2.1		)	723.6		(4.1		)
Collateralized debt obligations	3.0		—			—		—			3.0		—
Commercial mortgage-backed securities	276.8		(1.7		)	218.2		(8.6		)	495.0		(10.3		)
Collateralized mortgage obligations	20.5		(.2		)	11.5		(.1		)	32.0		(.3		)
Total fixed maturities, available for sale	$	1,426.4	$	(11.1	)	$	732.6	$	(31.4	)	$	2,159.0	$	(42.5	)
Equity securities	$	58.7	$	(1.7	)	$	21.2	$	(1.3	)	$	79.9	$	(3.0	)

Based on management's current assessment of investments with unrealized losses at September 30, 2018, the Company believes the issuers of the securities will continue to meet their obligations.  While we do not have the intent to sell securities

16

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses prior to their anticipated recovery, our intent on an individual security may change, based upon market or other unforeseen developments.  In such instances, if a loss is recognized from a sale subsequent to a balance sheet date due to these unexpected developments, the loss is recognized in the period in which we had the intent to sell the security before its anticipated recovery.

EARNINGS PER SHARE

A reconciliation of net income (loss) and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):

	Three months ended					Nine months ended
	September 30,					September 30,
	2018			2017		2018			2017
Net income (loss) for basic and diluted earnings per share	$	(529.8	)	$	100.8	$	(343.3	)	$	246.5
Shares:
Weighted average shares outstanding for basic earnings per share	164,551			168,684		165,903			170,890
Effect of dilutive securities on weighted average shares:
Stock options, restricted stock and performance units	—			2,298		—			1,910
Weighted average shares outstanding for diluted earnings per share	164,551			170,982		165,903			172,800

In the three and nine months ended September 30, 2018, equivalent common shares of 2,146,000 and 2,214,000, respectively, (related to stock options, restricted stock and performance units) were not included in the diluted weighted average shares outstanding, because their inclusion would have been antidilutive due to the net loss recognized by the Company in such periods.

Basic earnings per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.  Restricted shares (including our performance units) are not included in basic earnings per share until vested.  Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options were exercised and restricted stock was vested.  The dilution from options and restricted shares is calculated using the treasury stock method.  Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the average market price during the period, reducing the dilutive effect of the exercise of the options (or the vesting of the restricted stock and performance units).

17

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

BUSINESS SEGMENTS

The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; long-term care in run-off; and corporate operations, comprised of holding company activities and certain noninsurance company businesses.

On September 27, 2018, the Company completed a long-term care reinsurance transaction pursuant to which its wholly-owned subsidiary, Bankers Life and Casualty Company ("Bankers Life"), entered into an agreement with Wilton Reassurance Company ("Wilton Re") to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies (with statutory reserves of approximately $2.7 billion) through 100% indemnity coinsurance, as further described in the note to the consolidated financial statements entitled "Reinsurance". In anticipation of the reinsurance agreement, the Company reorganized its business segments to move the block to be ceded from the "Bankers Life segment" to the "Long-term care in run-off segment" in the third quarter of 2018. As a result of the reorganization of the Company's business segments, total assets of $2.8 billion were transferred from the "Banker Life segment" to the "Long-term care in run-off segment" as of September 30, 2018. All prior period segment disclosures have been revised to conform to management's current view of the Company's operating segments.

We measure segment performance by excluding net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan, loss related to reinsurance transaction, income taxes and other non-operating items consisting primarily of earnings attributable to VIEs ("pre-tax operating earnings") because we believe that this performance measure is a better indicator of the ongoing business and trends in our business.  Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of net realized investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business.

The net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan and other non-operating items consisting primarily of earnings attributable to VIEs depend on market conditions or represent unusual items that do not necessarily relate to the underlying business of our segments.  Net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) may affect future earnings levels since our underlying business is long-term in nature and changes in our investment portfolio may impact our ability to earn the assumed interest rates needed to maintain the profitability of our business.

18

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

Operating information by segment is as follows (dollars in millions):

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenues:
Bankers Life:
Insurance policy income:
Annuities	$	4.3	$	3.7	$	13.7	$	15.5
Health	255.8		259.4		769.0		780.5
Life	103.9		103.7		312.8		310.4
Net investment income (a)	256.9		222.7		661.2		658.9
Fee revenue and other income (a)	10.7		11.3		40.9		32.5
Total Bankers Life revenues	631.6		600.8		1,797.6		1,797.8
Washington National:
Insurance policy income:
Annuities	.4		.5		1.1		1.6
Health	163.7		160.4		491.5		480.3
Life	6.7		6.5		20.2		20.1
Net investment income (a)	69.9		68.0		199.4		201.9
Fee revenue and other income (a)	.2		.3		.7		.8
Total Washington National revenues	240.9		235.7		712.9		704.7
Colonial Penn:
Insurance policy income:
Health	.4		.5		1.3		1.6
Life	74.7		72.6		222.4		217.5
Net investment income (a)	11.1		11.0		33.4		33.1
Fee revenue and other income (a)	.5		.3		1.4		.9
Total Colonial Penn revenues	86.7		84.4		258.5		253.1
Long-term care in run-off:
Insurance policy income - health	47.0		52.0		144.6		159.7
Net investment income (a)	54.1		54.7		164.2		168.0
Total Long-term care in run-off revenues	101.1		106.7		308.8		327.7
Corporate operations:
Net investment income	8.0		7.0		13.2		24.8
Fee and other income	1.6		1.8		4.9		6.5
Total corporate revenues	9.6		8.8		18.1		31.3
Total revenues	$	1,069.9	$	1,036.4	$	3,095.9	$	3,114.6

(continued on next page)

19

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

(continued from previous page)

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Expenses:
Bankers Life:
Insurance policy benefits	$	390.5		$	362.1		$	1,080.5		$	1,086.7
Amortization	37.3			35.9			119.4			118.3
Interest expense on investment borrowings	7.9			5.3			21.5			14.3
Other operating costs and expenses	101.5			102.2			313.6			310.4
Total Bankers Life expenses	537.2			505.5			1,535.0			1,529.7
Washington National:
Insurance policy benefits	143.5			144.7			423.7			436.7
Amortization	14.0			14.3			42.9			43.9
Interest expense on investment borrowings	3.0			1.7			7.8			4.5
Other operating costs and expenses	50.1			47.5			148.5			145.0
Total Washington National expenses	210.6			208.2			622.9			630.1
Colonial Penn:
Insurance policy benefits	49.8			47.7			157.1			150.8
Amortization	4.2			3.9			12.9			11.9
Interest expense on investment borrowings	.3			.3			1.0			.7
Other operating costs and expenses	26.3			23.5			77.5			73.0
Total Colonial Penn expenses	80.6			75.4			248.5			236.4
Long-term care in run-off:
Insurance policy benefits	91.3			86.5			259.9			257.6
Amortization	2.1			2.8			7.0			8.0
Other operating costs and expenses	5.6			6.8			19.3			19.9
Total Long-term care in run-off expenses	99.0			96.1			286.2			285.5
Corporate operations:
Interest expense on corporate debt	12.1			11.7			35.9			34.8
Other operating costs and expenses	21.4			23.7			59.4			68.3
Total corporate expenses	33.5			35.4			95.3			103.1
Total expenses	960.9			920.6			2,787.9			2,784.8
Pre-tax operating earnings by segment:
Bankers Life	94.4			95.3			262.6			268.1
Washington National	30.3			27.5			90.0			74.6
Colonial Penn	6.1			9.0			10.0			16.7
Long-term care in run-off	2.1			10.6			22.6			42.2
Corporate operations	(23.9		)	(26.6		)	(77.2		)	(71.8		)
Pre-tax operating earnings	$	109.0		$	115.8		$	308.0		$	329.8

___________________

(a) It is not practicable to provide additional components of revenue by product or services.

20

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income (loss) is as follows (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Total segment revenues	$	1,069.9		$	1,036.4		$	3,095.9		$	3,114.6
Net realized investment gains (losses)	31.2			29.2			27.0			52.3
Net realized gains on the transfer of assets related to reinsurance transaction	363.4			—			363.4			—
Revenues related to VIEs	16.7			13.7			49.0			40.2
Consolidated revenues	1,481.2			1,079.3			3,535.3			3,207.1
Total segment expenses	960.9			920.6			2,787.9			2,784.8
Insurance policy benefits - fair value changes in embedded derivative liabilities	(28.2		)	(2.9		)	(69.5		)	9.8
Amortization related to fair value changes in embedded derivative liabilities	5.3			.6			13.2			(1.8		)
Amortization related to net realized investment gains	(.5		)	.7			(.1		)	1.0
Expenses related to VIEs	15.9			17.0			49.1			44.8
Fair value changes related to agent deferred compensation plan	—			13.4			(11.0		)	13.4
Loss related to reinsurance transaction	1,067.6			—			1,067.6			—
Consolidated expenses	2,021.0			949.4			3,837.2			2,852.0
Income (loss) before tax	(539.8		)	129.9			(301.9		)	355.1
Income tax expense (benefit):
Tax expense (benefit) on period income (loss)	(114.8		)	44.1			(63.4		)	123.6
Valuation allowance for deferred tax assets and other tax items	104.8			(15.0		)	104.8			(15.0		)
Net income (loss)	$	(529.8	)	$	100.8		$	(343.3	)	$	246.5

ACCOUNTING FOR DERIVATIVES

Our freestanding and embedded derivatives, which are not designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions):

	Fair value
	September 30, 2018			December 31, 2017
Assets:
Other invested assets:
Fixed index call options	$	143.5		$	170.2
Reinsurance receivables	(6.4		)	(1.4		)
Total assets	$	137.1		$	168.8
Liabilities:
Future policy benefits:
Fixed index products	$	1,370.0		$	1,334.8
Total liabilities	$	1,370.0		$	1,334.8

21

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

Our fixed index annuity products provide a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the Standard & Poor's 500 Index, over a specified period.  Typically, on each policy anniversary date, a new index period begins.  We are generally able to change the participation rate at the beginning of each index period during a policy year, subject to contractual minimums.  The Company accounts for the options attributed to the policyholder for the estimated life of the contract as embedded derivatives. These accounting requirements often create volatility in the earnings from these products. We typically buy call options (including call spreads) referenced to the applicable indices in an effort to offset or hedge potential increases to policyholder benefits resulting from increases in the particular index to which the policy's return is linked.  The notional amount of these options was $3.0 billion at both September 30, 2018 and December 31, 2017.

We are required to establish an embedded derivative related to a modified coinsurance agreement pursuant to which we assume the risks of a block of health insurance business. The embedded derivative represents the mark-to-market adjustment for approximately $125 million in underlying investments held by the ceding reinsurer.

We purchase certain fixed maturity securities that contain embedded derivatives that are required to be held at fair value on the consolidated balance sheet. We have elected the fair value option to carry the entire security at fair value with changes in fair value recognized in net income.

The following table provides the pre-tax gains (losses) recognized in net income for derivative instruments, which are not designated as hedges for the periods indicated (dollars in millions):

	Three months ended					Nine months ended
	September 30,					September 30,
	2018			2017		2018			2017
Net investment income (loss) from policyholder and other special-purpose portfolios:
Fixed index call options	$	59.0		$	30.6	$	66.8		$	95.4
Net realized gains (losses):
Embedded derivative related to modified coinsurance agreement	(.8		)	.3		(5.0		)	2.4
Insurance policy benefits:
Embedded derivative related to fixed index annuities	34.6			12.4		87.6			17.2
Total	$	92.8		$	43.3	$	149.4		$	115.0

Derivative Counterparty Risk

If the counterparties to the call options fail to meet their obligations, we may recognize a loss.  We limit our exposure to such a loss by diversifying among several counterparties believed to be strong and creditworthy.  At September 30, 2018, all of our counterparties were rated "A-" or higher by S&P Global Ratings ("S&P").

The Company and its subsidiaries are parties to master netting arrangements with its counterparties related to entering into various derivative contracts. Exchange-traded derivatives require margin accounts which we offset.

22

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table summarizes information related to derivatives with master netting arrangements or collateral as of September 30, 2018 and December 31, 2017 (dollars in millions):

								Gross amounts not offset in the balance sheet
		Gross amounts recognized		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Financial instruments		Cash collateral received		Net amount
September 30, 2018:
	Fixed index call options	$	143.5	$	—	$	143.5	$	—	$	—	$	143.5
December 31, 2017:
	Fixed index call options	170.2		—		170.2		—		—		170.2

REINSURANCE

On September 27, 2018, the Company completed a long-term care reinsurance transaction pursuant to which its wholly-owned subsidiary, Bankers Life, entered into an agreement with Wilton Re to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies (with statutory reserves of approximately $2.7 billion) through 100% indemnity coinsurance. Bankers Life paid a ceding commission of $825 million to reinsure the block, funded through excess capital in the insurance subsidiaries and at the holding company. Bankers Life transferred to Wilton Re assets equal to the statutory liabilities supporting the block plus the ceding commission (subject to a customary post-closing adjustment). In anticipation of the reinsurance agreement, the Company reorganized its business segments to move the block to be ceded from the "Bankers Life segment" to the "Long-term care in run-off segment" in the third quarter of 2018. Accordingly, the Company will evaluate and test for loss recognition separately for the ceded block included in the "Long-term care in run-off segment". CNO recognized a charge related to the transaction of $661.1 million, net of taxes and gains recognized on the assets transferred to Wilton Re. The charge is primarily attributable to loss recognition on the block due to the ceding commission. Including cash flows related to reinsurance in loss recognition testing is consistent with the Company's past practices and policies.

In addition to the reinsurance agreement, Bankers Life and another CNO subsidiary entered into certain other agreements with Wilton Re, including a trust agreement, an administrative services agreement and a transition services agreement.

Wilton Re established a trust account for the benefit of Bankers Life to secure its obligations under the coinsurance agreement. The trust account is required to hold qualified assets with book values equal to the statutory liabilities of the block plus an additional amount, initially $500 million, which declines over time.

The cost of reinsurance ceded totaled $25.4 million and $27.1 million in the third quarters of 2018 and 2017, respectively, and $76.0 million and $79.9 million in the first nine months of 2018 and 2017, respectively.  We deduct this cost from insurance policy income.  Reinsurance recoveries netted against insurance policy benefits totaled $19.4 million and $22.6 million in the third quarters of 2018 and 2017, respectively, and $63.6 million and $69.1 million in the first nine months of 2018 and 2017, respectively.

From time to time, we assume insurance from other companies.  Any costs associated with the assumption of insurance are amortized consistent with the method used to amortize deferred acquisition costs.  Reinsurance premiums assumed totaled $7.0 million and $7.4 million in the third quarters of 2018 and 2017, respectively, and $21.2 million and $23.1 million in the first nine months of 2018 and 2017, respectively. Insurance policy benefits related to reinsurance assumed totaled $8.6 million and $10.5 million in the third quarters of 2018 and 2017, respectively, and $26.6 million and $34.0 million in the first nine months of 2018 and 2017, respectively.

23

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

INCOME TAXES

The Company's interim tax expense is based upon the estimated annual effective tax rate for the respective period. Under authoritative guidance, certain items are required to be excluded from the estimated annual effective tax rate calculation. Such items include changes in judgment about the realizability of deferred tax assets resulting from changes in projections of income expected to be available in future years, and items deemed to be unusual, infrequent, or that can not be reliably estimated. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item. The components of income tax expense are as follows (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Current tax expense (benefit)	$	(16.9	)	$	25.9		$	3.8		$	68.5
Deferred tax expense	50.0			18.2			80.7			55.1
Valuation allowance applicable to current year income	—			(2.2		)	—			(2.2		)
Income tax expense calculated based on estimated annual effective tax rate	33.1			41.9			84.5			121.4
Tax benefit on long-term care reinsurance transaction	(147.9		)	—			(147.9		)	—
Income tax expense on discrete items:
Change in valuation allowance	104.8			(12.8		)	104.8			(12.8		)
Total income tax expense (benefit)	$	(10.0	)	$	29.1		$	41.4		$	108.6

On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Reform Act") was signed into law and enacted a broad range of changes to the Internal Revenue Code (the "Code") including individual and corporate reforms and numerous changes to U.S. international tax provisions. The Tax Reform Act reduced the corporate tax rate to 21 percent from 35 percent effective January 1, 2018, and made significant changes to the taxation of life insurance companies. Among other things, the Tax Reform Act modified the computation of life insurance reserves, increased the capitalization rate and extended the amortization period for policy acquisition costs, imposed limitations on the deductibility of performance-based compensation to "covered employees" and interest expense, and allowed for the expensing of certain capital expenditures. For net operating losses ("NOLs") arising after December 31, 2017, the Tax Reform Act limits the ability to utilize NOL carryforwards to 80% of taxable income. In addition, NOLs arising after 2017 can be carried forward indefinitely, but carryback is prohibited. As a result of the reduction in the federal corporate income tax rate, we reduced the value of our net deferred tax assets by $172.5 million (net of the reduction in the valuation allowance for deferred tax assets) which was recorded as additional income tax expense in the fourth quarter of 2017.

The $172.5 million adjustment to our net deferred tax assets was a provisional amount as defined in the SEC's Staff Accounting Bulletin No. 118 ("SAB 118"), issued in December 2017 to address complexities in completing the calculations resulting from the Tax Reform Act. Although we were able to make a reasonable estimate of the impact of the Tax Reform Act based on the information available, we have not analyzed the calculations in sufficient detail to complete the accounting process, including the analysis of the calculations of life insurance tax reserves and future taxable income used to estimate the deferred tax valuation allowance. SAB 118 provides guidance on accounting for the effects of the Tax Reform Act when our accounting process is incomplete but we are able to determine a reasonable estimate. A final determination is required to be made within a measurement period not to extend beyond one year from the enactment date of the Tax Reform Act. We continue to analyze our estimate of the impact of the Tax Reform Act and expect the process to be completed in the fourth quarter of 2018.

24

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, reflected in the consolidated statement of operations is as follows:

	Nine months ended
	September 30,
	2018		2017
U.S. statutory corporate rate	21.0	%	35.0	%
Valuation allowance	(34.7	)	(.6	)
Non-taxable income and nondeductible benefits, net	.4		(1.5	)
State taxes	(.4	)	1.3
Estimated annual effective tax rate	(13.7	)%	34.2	%

The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):

	September 30, 2018			December 31, 2017
Deferred tax assets:
Net federal operating loss carryforwards	$	685.0		$	489.6
Net state operating loss carryforwards	19.5			9.3
Investments	—			4.3
Insurance liabilities	301.0			415.8
Other	43.8			48.9
Gross deferred tax assets	1,049.3			967.9
Deferred tax liabilities:
Investments	(9.6		)	—
Present value of future profits and deferred acquisition costs	(174.2		)	(165.4		)
Accumulated other comprehensive income	(111.7		)	(337.2		)
Gross deferred tax liabilities	(295.5		)	(502.6		)
Net deferred tax assets before valuation allowance	753.8			465.3
Valuation allowance	(193.9		)	(89.1		)
Net deferred tax assets	559.9			376.2
Current income taxes prepaid (accrued)	17.9			(9.3		)
Income tax assets, net	$	577.8		$	366.9

Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities and NOLs. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted.

A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred income tax assets

25

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

on an ongoing basis. The realization of our deferred tax assets depends upon generating sufficient future taxable income of the appropriate type during the periods in which our temporary differences become deductible and before our NOLs expire.

Based on our assessment, it appears more likely than not that $559.9 million of our net deferred tax assets of $753.8 million will be realized through future taxable earnings. Accordingly, we have established a deferred tax valuation allowance of $193.9 million at September 30, 2018 ($182.2 million of which relates to our net federal operating loss carryforwards and $11.7 million relates to state operating loss carryforwards). As a result of the completion of the long-term care reinsurance transaction in the third quarter of 2018, we increased the valuation allowance for deferred tax assets by $104.8 million. The increase in life company NOLs generated by the tax loss on the reinsurance transaction is expected to impact our ability to utilize non-life NOLs in the future. Accordingly, we increased the valuation allowance for deferred taxes by $104.8 million. We will continue to assess the need for a valuation allowance in the future. If future results are less than projected, an increase to the valuation allowance may be required to reduce the deferred tax asset, which could have a material impact on our results of operations in the period in which it is recorded.

We use a deferred tax valuation model to assess the need for a valuation allowance. Our model is adjusted to reflect changes in our projections of future taxable income including changes resulting from the Tax Reform Act, investment strategies, the impact of the sale or reinsurance of business and the recapture of business previously ceded. Our estimates of future taxable income are based on evidence we consider to be objective and verifiable.

Our projection of future taxable income for purposes of determining the valuation allowance is based on our adjusted average annual taxable income which is assumed to increase by 3 percent for the next five years, and level taxable income is assumed thereafter. In the projections used for our analysis, our adjusted average taxable income of approximately $345 million consisted of $85 million of non-life taxable income and $260 million of life taxable income.

Recovery of our deferred tax asset is dependent on achieving the level of future taxable income projected in our deferred tax valuation model and failure to do so could result in an increase in the valuation allowance in a future period.  Any future increase in the valuation allowance may result in additional income tax expense and reduce shareholders' equity, and such an increase could have a significant impact upon our earnings in the future.

The Code limits the extent to which losses realized by a non-life entity (or entities) may offset income from a life insurance company (or companies) to the lesser of: (i) 35 percent of the income of the life insurance company; or (ii) 35 percent of the total loss of the non-life entities (including NOLs of the non-life entities).  This limitation is the primary reason a valuation allowance for NOLs is required. There is no similar limitation on the extent to which losses realized by a life insurance entity (or entities) may offset income from a non-life entity (or entities).

Section 382 of the Code imposes limitations on a corporation's ability to use its NOLs when the company undergoes a 50 percent ownership change over a three-year period.  Future transactions and the timing of such transactions could cause an ownership change for Section 382 income tax purposes.  Such transactions may include, but are not limited to, additional repurchases under our securities repurchase program, issuances of common stock and acquisitions or sales of shares of CNO stock by certain holders of our shares, including persons who have held, currently hold or may accumulate in the future five percent or more of our outstanding common stock for their own account.  Many of these transactions are beyond our control.  If an additional ownership change were to occur for purposes of Section 382, we would be required to calculate an annual restriction on the use of our NOLs to offset future taxable income.  The annual restriction would be calculated based upon the value of CNO's equity at the time of such ownership change, multiplied by a federal long-term tax exempt rate (2.32 percent at September 30, 2018), and the annual restriction could limit our ability to use a substantial portion of our NOLs to offset future taxable income.  We regularly monitor ownership change (as calculated for purposes of Section 382) and, as of September 30, 2018, we were below the 50 percent ownership change level that would trigger further impairment of our ability to utilize our NOLs.

26

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

Pursuant to the Tax Reform Act, NOLs generated subsequent to 2017 do not have an expiration date. We have $3.3 billion of federal NOLs as of September 30, 2018, as summarized below (dollars in millions):

	Net operating loss
Year of expiration	carryforwards
2023	$	1,744.8
2025	85.2
2026	149.9
2027	10.8
2028	80.3
2029	213.2
2030	.3
2031	.2
2032	44.4
2033	.6
2034	.9
2035	.8
Total federal non-life NOLs	2,331.4
Post 2017 life NOLs with no expiration	930.7
Total federal NOLs	$	3,262.1

The loss on the reinsurance transaction that was completed in September 2018 resulted in a life NOL of $930.7 million. The life NOL is expected to be used to offset 80 percent of our future life insurance company taxable income due to limitations prescribed in the Tax Reform Act. Our life NOL has no expiration date and we expect it to be fully utilized over the next three to four years, depending on the level of life taxable income during such period. Our non-life NOLs can be used to offset 35 percent of remaining life insurance company taxable income after application of the life NOLs, until all non-life NOLs are utilized or expire.

At September 30, 2018, we also had deferred tax assets related to NOLs for state income taxes of $19.5 million.  The related state NOLs are available to offset future state taxable income in certain states through 2033.

The Company’s various state income tax returns are generally open for tax years beginning in 2015, based on individual state statutes of limitation. Generally, for tax years which generate NOLs, capital losses or tax credit carryforwards, the statute remains open until the expiration of the statute of limitations for the tax year in which such carryforwards are utilized.

27

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS

The following notes payable were direct corporate obligations of the Company as of September 30, 2018 and December 31, 2017 (dollars in millions):

	September 30, 2018			December 31, 2017
4.500% Senior Notes due May 2020	$	325.0		$	325.0
5.250% Senior Notes due May 2025	500.0			500.0
Revolving Credit Agreement (as defined below)	100.0			100.0
Unamortized debt issue costs	(8.8		)	(10.4		)
Direct corporate obligations	$	916.2		$	914.6

Revolving Credit Agreement

On May 19, 2015, the Company entered into a $150.0 millionfour-year unsecured revolving credit agreement with KeyBank National Association, as administrative agent (the "Agent"), and the lenders from time to time party thereto. On May 19, 2015, the Company made an initial drawing of $100.0 million under the Revolving Credit Agreement, resulting in $50.0 million available for additional borrowings. On October 13, 2017, the Company entered into an amendment and restatement agreement (the "Amendment Agreement") with respect to its revolving credit agreement (as amended by the Amendment Agreement, the "Revolving Credit Agreement"). The Amendment Agreement, among other things, increased the total commitments available under the revolving credit facility from $150.0 million to $250.0 million, increased the aggregate amount of additional incremental loans the Company may incur from $50.0 million to $100.0 million and extended the maturity date of the revolving credit facility from May 19, 2019 to the earlier of October 13, 2022 and the date that is six months prior to the maturity date of the 2020 Notes, which is November 30, 2019.

The interest rates with respect to loans under the Revolving Credit Agreement are based on, at the Company's option, a floating base rate (defined as a per annum rate equal to the highest of: (i) the federal funds rate plus 0.50%; (ii) the "prime rate" of the Agent; and (iii) the eurodollar rate for a one-month interest period plus an applicable margin based on the Company's unsecured debt rating), or a eurodollar rate plus an applicable margin based on the Company's unsecured debt rating. The margins under the Revolving Credit Agreement range from 1.375 percent to 2.125 percent, in the case of loans at the eurodollar rate, and 0.375 percent to 1.125 percent, in the case of loans at the base rate. At September 30, 2018, the interest rate on the amounts outstanding under the Revolving Credit Agreement was 4.12 percent. In addition, the daily average undrawn portion of the Revolving Credit Agreement accrues a commitment fee payable quarterly in arrears. The applicable margin for, and the commitment fee applicable to, the Revolving Credit Agreement, will be adjusted from time to time pursuant to a ratings-based pricing grid.

The Revolving Credit Agreement requires the Company to maintain (each as calculated in accordance with the Revolving Credit Agreement): (i) a debt to total capitalization ratio of not more than 35.0 percent (such ratio was 22.6 percent at September 30, 2018); (ii) an aggregate ratio of total adjusted capital to company action level risk-based capital for the Company's insurance subsidiaries of not less than 250 percent (such ratio was approximately 450 percent at September 30, 2018); and (iii) a minimum consolidated net worth of not less than the sum of (x) $2,674 million plus (y) 50.0 percent of the net equity proceeds received by the Company from the issuance and sale of equity interests in the Company (the Company's consolidated net worth was $3,619.9 million at September 30, 2018 compared to the minimum requirement of $2,687.2 million).

28

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

Scheduled Repayment of our Direct Corporate Obligations

The scheduled repayment of our direct corporate obligations was as follows at September 30, 2018 (dollars in millions):

Year ending September 30,
2019	$	—
2020	425.0
2021	—
2022	—
2023	—
Thereafter	500.0
	$	925.0

INVESTMENT BORROWINGS

Three of the Company's insurance subsidiaries (Washington National Insurance Company ("Washington National"), Bankers Life and Colonial Penn Life Insurance Company ("Colonial Penn")) are members of the Federal Home Loan Bank ("FHLB").  As members of the FHLB, our insurance subsidiaries have the ability to borrow on a collateralized basis from the FHLB. We are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings.  New guidance effective January 1, 2018, requiring equity investments to be measured at fair value (as described in the note entitled "Recently Issued Accounting Standards - Adopted Accounting Standards") do not apply to FHLB common stock and prohibit such investments from being classified as equity securities subject to the new guidance. Accordingly, we have classified our investment in the FHLB common stock as other invested assets. In order to conform to the current presentation, the prior period investment in the FHLB common stock has been reclassified to other invested assets. At September 30, 2018, the carrying value of the FHLB common stock was $71.1 million.  As of September 30, 2018, collateralized borrowings from the FHLB totaled $1.6 billion and the proceeds were used to purchase fixed maturity securities.  The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet.  The borrowings are collateralized by investments with an estimated fair value of $2.0 billion at September 30, 2018, which are maintained in a custodial account for the benefit of the FHLB.  Substantially all of such investments are classified as fixed maturities, available for sale, in our consolidated balance sheet.  

29

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions):

Amount		Maturity	Interest rate at
borrowed		date	September 30, 2018
$	50.0	February 2019	Variable rate – 2.405%
21.8		July 2019	Variable rate – 2.672%
15.0		October 2019	Variable rate – 2.850%
50.0		May 2020	Variable rate – 2.678%
21.8		June 2020	Fixed rate – 1.960%
25.0		September 2020	Variable rate – 2.991%
100.0		September 2020	Variable rate – 2.876%
50.0		September 2020	Variable rate – 2.902%
75.0		September 2020	Variable rate – 2.506%
100.0		October 2020	Variable rate – 2.453%
50.0		December 2020	Variable rate – 2.814%
100.0		July 2021	Variable rate – 2.889%
100.0		July 2021	Variable rate – 2.859%
28.2		August 2021	Fixed rate – 2.550%
57.7		August 2021	Variable rate - 2.871%
125.0		August 2021	Variable rate – 2.696%
50.0		September 2021	Variable rate – 2.851%
22.0		May 2022	Variable rate – 2.665%
100.0		May 2022	Variable rate – 2.505%
10.0		June 2022	Variable rate – 2.941%
50.0		July 2022	Variable rate – 2.703%
50.0		July 2022	Variable rate – 2.722%
50.0		July 2022	Variable rate – 2.719%
50.0		August 2022	Variable rate – 2.733%
50.0		December 2022	Variable rate – 2.621%
50.0		December 2022	Variable rate – 2.621%
24.1		March 2023	Fixed rate – 2.160%
50.0		July 2023	Variable rate – 2.548%
100.0		July 2023	Variable rate – 2.548%
20.5		June 2025	Fixed rate – 2.940%
$	1,646.1

The variable rate borrowings are pre-payable on each interest reset date without penalty.  The fixed rate borrowings are pre-payable subject to payment of a yield maintenance fee based on prevailing market interest rates.  At September 30, 2018, the aggregate yield maintenance fee to prepay all fixed rate borrowings was $1.0 million.

Interest expense of $30.3 million and $19.5 million in the first nine months of 2018 and 2017, respectively, was recognized related to total borrowings from the FHLB.

30

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

CHANGES IN COMMON STOCK

Changes in the number of shares of common stock outstanding were as follows (shares in thousands):

Balance, December 31, 2017	166,858
Treasury stock purchased and retired	(2,998	)
Stock options exercised	327		(a)
Restricted and performance stock vested	447		(b)
Balance, September 30, 2018	164,634

____________________

(a) Such amount was reduced by 69 thousand shares which were tendered to the Company for the payment of the exercise price and required federal and state tax withholdings.

(b) Such amount was reduced by 239 thousand shares which were tendered to the Company for the payment of required federal and state tax withholdings owed on the vesting of restricted and performance stock.

In the first nine months of 2018, we repurchased 3.0 million shares of common stock for $60.5 million under our securities repurchase program. The Company had remaining repurchase authority of $325.1 million as of September 30, 2018.

In the first nine months of 2018, dividends declared on common stock totaled $48.6 million ($0.29 per common share). In May 2018, the Company increased its quarterly common stock dividend to $0.10 per share from $0.09 per share.

SALES INDUCEMENTS

Certain of our annuity products offer sales inducements to contract holders in the form of enhanced crediting rates or bonus payments in the initial period of the contract.  Certain of our life insurance products offer persistency bonuses credited to the contract holder's balance after the policy has been outstanding for a specified period of time.  These enhanced rates and persistency bonuses are considered sales inducements in accordance with GAAP.  Such amounts are deferred and amortized in the same manner as deferred acquisition costs.  Sales inducements deferred totaled $4.8 million and $1.5 million during the nine months ended September 30, 2018 and 2017, respectively.  Amounts amortized totaled $7.6 million and $6.6 million during the nine months ended September 30, 2018 and 2017, respectively.  The unamortized balance of deferred sales inducements was $39.7 million and $42.5 million at September 30, 2018 and December 31, 2017, respectively.

OUT-OF-PERIOD ADJUSTMENTS

In the first nine months of 2018, we recorded the net effect of out-of-period adjustments related to the calculation of certain insurance liabilities which increased insurance policy benefits by $2.5 million (of which, $1.4 million related to long-term care reserves in the Bankers Life segment and $1.1 million related to a closed block of payout annuities in the Colonial Penn segment), decreased tax expense by $.5 million and decreased our net income (loss) by $2.0 million (or 1 cent per diluted share). We evaluated these adjustments taking into account both qualitative and quantitative factors and considered the impact of these adjustments in relation to each period, as well as the periods in which they originated. The impact of recognizing these adjustments in prior years was not significant to any individual period. Management believes these adjustments are immaterial to the consolidated financial statements and all previously issued financial statements.

RECENTLY ISSUED ACCOUNTING STANDARDS

Pending Accounting Standards

In February 2016, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance related to accounting for leases, requiring lessees to report most leases on their balance sheets, regardless of whether the lease is classified as a finance lease or an operating lease. For lessees, the initial lease liability is equal to the present value of future lease payments, and a corresponding asset, adjusted for certain items, is also recorded. Expense recognition for lessees will remain similar to current accounting requirements for capital and operating leases. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. In transition, lessees and lessors are required to recognize and measure

31

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance will be effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Based on lease contracts in effect at September 30, 2018, the Company's analysis currently indicates that the primary impact of implementation of the new leasing guidance will be the recognition of a "right to use" asset and a "lease liability" of approximately $55 million. The cumulative effect adjustment to retained earnings as of January 1, 2019 is not expected to be material.

In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. The guidance will be effective for the Company for fiscal years beginning in 2020, including interim periods within the fiscal year. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company has not yet determined the expected impact of adoption of this guidance on its consolidated financial position, results of operations or cash flows.

In January 2017, the FASB issued authoritative guidance that removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reported unit's fair value. Upon adoption, the guidance is to be applied prospectively. The guidance will be effective for the Company on January 1, 2020, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

In March 2017, the FASB issued authoritative guidance related to the premium amortization on purchased callable debt securities. The guidance shortens the amortization period for certain callable debt securities held at a premium. Specifically, the new guidance requires the premium to be amortized to the earliest call date. The guidance does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows based on the investments held by the Company at September 30, 2018, that are applicable to this guidance.

In August 2017, the FASB issued authoritative guidance related to derivatives and hedging. The new guidance expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instruments and the hedged item in the financial statements. The new guidance also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance will be effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Based on the Company's current use of derivatives and hedging activities, the adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

In August 2018, the FASB issued authoritative guidance that makes targeted improvements to the accounting for long-duration contracts. The new guidance: (i) improves the timeliness of recognizing changes in the liability for future benefits and modifies the rate used to discount future cash flows; (ii) simplifies and improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts; (iii) simplifies the amortization of deferred acquisition costs; and (iv) requires enhanced disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account balances, market risk benefits and deferred acquisition costs. Additionally, qualitative and quantitative information about expected cash flows, estimates and assumptions will be required. The new measurement guidance for traditional and limited-payment contract liabilities and the new guidance for the amortization of deferred acquisition costs are required to be adopted on a modified retrospective transition approach, with an option to elect a full retrospective transition if certain criteria are met. The transition approach for deferred acquisition costs is required to be consistent with the transition applied to the liability for future policyholder benefits. Under the modified retrospective approach, for contracts in-force at the transition date, an entity would continue to use the existing locked-in investment yield interest rate assumption to calculate the net premium ratio, rather than the upper-medium grade fixed-income corporate instrument yield. However, for balance sheet remeasurement purposes, the current upper-medium grade fixed-income corporate instrument yield would be used at transition through accumulated other comprehensive income and subsequently

32

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

through other comprehensive income. For market risk benefits, retrospective application is required, with the ability to use hindsight to measure fair value components to the extent assumptions in a prior period are unobservable or otherwise unavailable. The guidance will be effective for the Company on January 1, 2021, with early adoption permitted. The Company has not yet determined the expected impact of adoption of this guidance on its consolidated financial position, results of operations or cash flows.

In August 2018, the FASB issued authoritative guidance related to changes to the disclosure requirements for fair value measurement. The new guidance removes, modifies and adds certain disclosure requirements. The guidance will be effective for the Company on January 1, 2020. The adoption of such guidance will impact certain fair value disclosures, but will not impact our consolidated financial position, results of operations or cash flows.

Adopted Accounting Standards

In May 2014, the FASB issued authoritative guidance for recognizing revenue from contracts with customers. Certain contracts with customers are specifically excluded from this guidance, including insurance contracts. The core principle of the new guidance is that an entity should recognize revenue when it transfers promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance was effective for the Company on January 1, 2018. The adoption of this new guidance impacts the timing of certain revenues and expenses between quarters of a calendar year for various distribution and marketing agreements with other insurance companies pursuant to which Bankers Life's career agents distribute third party products including prescription drug and Medicare Advantage plans. The annual fee income earned during a calendar year will not change, but the amount recognized during each quarterly period will vary based on the sales of such products in each period. Furthermore, we are recognizing distribution expenses in the same period that the associated fee revenue is earned. Periods prior to the January 1, 2018 adoption date were not restated to reflect the new guidance. The impact of adoption was as follows (dollars in millions):

	Three months ended September 30, 2018
			Impact of			Amounts prior
	As reported		adoption			to adoption
Fee revenue	$	6.4	$	(2.4	)	$	8.8
Distribution expense (included in other operating costs and expenses)	.6		(2.9		)	3.5
Impact on pre-tax income	$	5.8	$	.5		$	5.3

	Nine months ended September 30, 2018
			Impact of			Amounts prior
	As reported		adoption			to adoption
Fee revenue	$	28.8	$	3.1		$	25.7
Distribution expense (included in other operating costs and expenses)	13.0		3.6			9.4
Impact on pre-tax income	$	15.8	$	(.5	)	$	16.3

In January 2016, the FASB issued authoritative guidance related to the recognition and measurement of financial assets and financial liabilities which made targeted improvements to GAAP as follows:

(i) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

33

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

(ii) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value.

(iii) Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.

(iv) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.

(v) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.

(vi) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements.

(vii) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

The guidance was effective for the Company on January 1, 2018. Accordingly, the Company recorded a cumulative effect adjustment to the balance sheet as of January 1, 2018, related to certain equity investments that are measured at fair value. The impact of adoption was as follows (dollars in millions):

	January 1, 2018
	Amounts prior to effect of adoption of authoritative guidance		Effect of adoption of authoritative guidance			As adjusted
Accumulated other comprehensive income	$	1,212.1	$	(16.3	)	$	1,195.8
Retained earnings	560.4		16.3			576.7
Total shareholders' equity	4,847.5		—			4,847.5

In August 2016, the FASB issued authoritative guidance related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance addresses eight specific cash flow issues including debt prepayment or debt extinguishment costs, proceeds from the settlement of corporate-owned life insurance policies ("COLI"), distributions received from equity method investees, and others. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance resulted in reclassifications to certain cash receipts and payments within our consolidated statement of cash flows, but had no impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

In November 2016, the FASB issued authoritative guidance to address the diversity in practice that currently exists regarding the classification and presentation of changes in restricted cash on the statement of cash flows. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Entities are also required to disclose information about the nature of their restricted cash and restricted cash equivalents. Additionally, if cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item in the statement of financial position, entities will be required to present a reconciliation, either on the face of the statement of cash flows or disclosed in the notes, of the totals in the statement of cash flows to the related line item captions in the statement of financial position. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance impacted the presentation of our consolidated statement of cash flows and related cash flow disclosures, but did not have an impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

34

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The impact of adopting the cash flow guidance described above was as follows (dollars in millions):

	Nine months ended
	September 30, 2017
	Amounts prior to effect of adoption of authoritative guidance			Restricted cash			COLI death benefits			Distributions received from equity method investments			As adjusted
Cash flows from operating activities:
Net investment income	$	898.9		$	—		$	—		$	19.0		$	917.9
Other operating costs	(546.0		)	—			(3.2		)	—			(549.2		)
Net cash flow from operating activities	433.7			—			(3.2		)	19.0			449.5
Cash flows from investing activities:
Sales of investments	1,742.5			—			—			(19.0		)	1,723.5
Change in cash and cash equivalents held by variable interest entities	83.4			(83.4		)	—			—			—
Other	(23.6		)	—			3.2			—			(20.4		)
Net cash provided (used) by investing activities	363.3			(83.4		)	3.2			(19.0		)	264.1
Net increase (decrease) in cash and cash equivalents	287.0			(83.4		)	—			—			203.6
Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period	478.9			189.3			—			—			668.2
Cash and cash equivalents - unrestricted and held by variable interest entities, end of period	765.9			105.9			—			—			871.8

In May 2017, the FASB issued authoritative guidance related to which changes to the terms or conditions of a share-based award require an entity to apply modification accounting. The guidance was effective for the Company for fiscal years beginning after December 15, 2017. Early adoption was permitted, including adoption in an interim period. The guidance is to be applied prospectively to an award modified on or after the adoption date. The adoption of this guidance did not have a material impact to the Company's consolidated financial position, results of operations or cash flows.

35

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

LITIGATION AND OTHER LEGAL PROCEEDINGS

Legal Proceedings

The Company and its subsidiaries are involved in various legal actions in the normal course of business, in which claims for compensatory and punitive damages are asserted, some for substantial amounts.  We recognize an estimated loss from these loss contingencies when we believe it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Some of the pending matters have been filed as purported class actions and some actions have been filed in certain jurisdictions that permit punitive damage awards that are disproportionate to the actual damages incurred.  The amounts sought in certain of these actions are often large or indeterminate and the ultimate outcome of certain actions is difficult to predict.  In the event of an adverse outcome in one or more of these matters, there is a possibility that the ultimate liability may be in excess of the liabilities we have established and could have a material adverse effect on our business, financial condition, results of operations and cash flows.  In addition, the resolution of pending or future litigation may involve modifications to the terms of outstanding insurance policies or could impact the timing and amount of rate increases, which could adversely affect the future profitability of the related insurance policies.  Based upon information presently available, and in light of legal, factual and other defenses available to the Company and its subsidiaries, the Company does not believe that it is probable that the ultimate liability from either pending or threatened legal actions, after consideration of existing loss provisions, will have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows. However, given the inherent difficulty in predicting the outcome of legal proceedings, there exists the possibility that such legal actions could have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows.

In addition to the inherent difficulty of predicting litigation outcomes, particularly those that will be decided by a jury, some matters purport to seek substantial or an unspecified amount of damages for unsubstantiated conduct spanning several years based on complex legal theories and damages models. The alleged damages typically are indeterminate or not factually supported in the complaint, and, in any event, the Company's experience indicates that monetary demands for damages often bear little relation to the ultimate loss. In some cases, plaintiffs are seeking to certify classes in the litigation and class certification either has been denied or is pending and we have filed oppositions to class certification or sought to decertify a prior class certification. In addition, for many of these cases: (i) there is uncertainty as to the outcome of pending appeals or motions; (ii) there are significant factual issues to be resolved; and/or (iii) there are novel legal issues presented. Accordingly, the Company cannot reasonably estimate the possible loss or range of loss in excess of amounts accrued, if any, or predict the timing of the eventual resolution of these matters.  The Company reviews these matters on an ongoing basis.  When assessing reasonably possible and probable outcomes, the Company bases its assessment on the expected ultimate outcome following all appeals.

On September 29, 2016, Washington National and Bankers Conseco Life Insurance Company ("BCLIC") commenced an arbitration proceeding seeking compensatory, consequential and punitive damages against Beechwood Re Ltd. ("BRe") based upon BRe’s incurable material breaches of the long-term care reinsurance agreements, conversion, fraud, and breaches of fiduciary duties and the obligation to deal honestly and in good faith. BRe filed a counterclaim against Washington National and BCLIC in the arbitration alleging damages relating to the reinsurance agreements and their termination. In addition, on September 29, 2016, a complaint was filed by BCLIC and Washington National in the United States District Court for the Southern District of New York, Bankers Conseco Life Insurance Company and Washington National Insurance Company v. Moshe M. Feuer, Scott Taylor and David Levy, Case No. 16-cv-7646, alleging, among other claims, fraud/fraudulent concealment, and violation of the Racketeer Influenced and Corrupt Organizations Act. These allegations relate to the long-term care reinsurance agreements between BRe and Washington National and BCLIC, respectively, and emanate from the undisclosed relationships between and among the defendants (who were the principal owners and officers of BRe) and Platinum Partners, LP and its affiliates. On April 27, 2017, an amended complaint was filed adding Beechwood Capital Group, LLC as a defendant. On March 13, 2018, the District Court granted the motion that had been filed by Feuer, Taylor and Levy to compel arbitration of Washington National's and BCLIC's claims and the litigation is now stayed pending the outcome of the arbitration. Washington National and BCLIC intend to vigorously pursue their claims for damages and other remedies in the arbitration and the litigation described above.

By public notice dated July 26, 2017, the Cayman Islands Monetary Authority advised that, effective July 25, 2017, two individuals (the "Controllers") had been appointed pursuant to Section 24(2)(h) of the Cayman Islands Insurance Law to assume control of the affairs of BRe.  According to the public notice, effective with their appointment, the Controllers assumed immediate control of the affairs of BRe and have all the powers necessary to administer the affairs of BRe including power to terminate its insurance business.  The Controllers are responsible for assessing the financial position of BRe and submitting a

36

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

report to the Cayman Islands Monetary Authority.  On August 10, 2018, the Cayman Islands Monetary Authority filed a public petition in the Grand Court of the Cayman Islands to officially wind up Beechwood, concluding that Beechwood was now of doubtful solvency. We are in the process of assessing the potential impact of this action on the proceedings described in the foregoing paragraph.

Regulatory Examinations and Fines

Insurance companies face significant risks related to regulatory investigations and actions.  Regulatory investigations generally result from matters related to sales or underwriting practices, payment of contingent or other sales commissions, claim payments and procedures, product design, product disclosure, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, charging excessive or impermissible fees on products, procedures related to canceling policies, changing the way cost of insurance charges are calculated for certain life insurance products or recommending unsuitable products to customers.  We are, in the ordinary course of our business, subject to various examinations, inquiries and information requests from state, federal and other authorities.  The ultimate outcome of these regulatory actions (including the costs of complying with information requests and policy reviews) cannot be predicted with certainty.  In the event of an unfavorable outcome in one or more of these matters, the ultimate liability may be in excess of liabilities we have established and we could suffer significant reputational harm as a result of these matters, which could also have a material adverse effect on our business, financial condition, results of operations or cash flows.

In August 2011, we were notified of an examination to be done on behalf of a number of states for the purpose of determining compliance with unclaimed property laws by the Company and its subsidiaries.  Such examination has included inquiries related to the use of data available on the U.S. Social Security Administration's Death Master File to identify instances where benefits under life insurance policies, annuities and retained asset accounts are payable. We are continuing to provide information to the examiners in response to their requests. A total of 40 states and the District of Columbia are currently participating in this examination.

37

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

CONSOLIDATED STATEMENT OF CASH FLOWS

The following reconciles net income (loss) to net cash from operating activities (dollars in millions):

	Nine months ended
	September 30,
	2018			2017
Cash flows from operating activities:
Net income (loss)	$	(343.3	)	$	246.5
Adjustments to reconcile net income (loss) to net cash from operating activities:
Amortization and depreciation	216.1			200.8
Income taxes	10.5			50.6
Insurance liabilities	209.1			321.5
Accrual and amortization of investment income	(117.9		)	(214.2		)
Deferral of policy acquisition costs	(187.2		)	(183.4		)
Net realized investment gains	(27.0		)	(52.3		)
Net realized gains on the transfer of assets related to reinsurance transaction	(363.4		)	—
Loss related to reinsurance transaction	1,067.6			—
Payment to reinsurer pursuant to long-term care business reinsured	(365.0		)	—
Loss on extinguishment of borrowings related to variable interest entities	3.8			5.5
Other	11.7			74.5
Net cash from operating activities	$	115.0		$	449.5

The following summarizes the impact of the reinsurance transaction completed on September 27, 2018 (dollars in millions):

Investments transferred	$	(3,582.1	)	(a)
Cash paid to reinsurer	(365.0		)
Accrued interest on investments transferred	(51.6		)
Present value of future profits and deferred acquisition costs written-off	(61.6		)
Reinsurance receivables	2,818.0
Transaction expenses and other	(14.6		)
Release of future loss reserve	189.3
Subtotal	(1,067.6		)
Realized gains on investments transferred	363.4
Pre-tax loss related to reinsurance transaction	$	(704.2	)

______________

(a) Such non-cash amounts are not included in the consolidated statement of cash flows.

38

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

Other non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions):

	Nine months ended
	September 30,
	2018		2017
Stock options, restricted stock and performance units	$	19.6	$	17.8

INVESTMENTS IN VARIABLE INTEREST ENTITIES

We have concluded that we are the primary beneficiary with respect to certain VIEs, which are consolidated in our financial statements.  In consolidating the VIEs, we consistently use the financial information most recently distributed to investors in the VIE.

All of the VIEs are collateralized loan trusts that were established to issue securities to finance the purchase of corporate loans and other permitted investments.  The assets held by the trusts are legally isolated and not available to the Company.  The liabilities of the VIEs are expected to be satisfied from the cash flows generated by the underlying loans held by the trusts, not from the assets of the Company.  The Company has no financial obligation to the VIEs beyond its investment in each VIE.

Certain of our subsidiaries are noteholders of the VIEs.  Another subsidiary of the Company is the investment manager for the VIEs.  As such, it has the power to direct the most significant activities of the VIEs which materially impacts the economic performance of the VIEs.

The following tables provide supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions):

	September 30, 2018
	VIEs		Eliminations			Net effect on consolidated balance sheet
Assets:
Investments held by variable interest entities	$	1,550.5	$	—		$	1,550.5
Notes receivable of VIEs held by subsidiaries	—		(142.8		)	(142.8		)
Cash and cash equivalents held by variable interest entities	56.4		—			56.4
Accrued investment income	2.6		—			2.6
Income tax assets, net	2.3		—			2.3
Other assets	4.5		(3.9		)	.6
Total assets	$	1,616.3	$	(146.7	)	$	1,469.6
Liabilities:
Other liabilities	$	66.9	$	(6.2	)	$	60.7
Borrowings related to variable interest entities	1,417.6		—			1,417.6
Notes payable of VIEs held by subsidiaries	155.2		(155.2		)	—
Total liabilities	$	1,639.7	$	(161.4	)	$	1,478.3

39

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

	December 31, 2017
	VIEs		Eliminations			Net effect on consolidated balance sheet
Assets:
Investments held by variable interest entities	$	1,526.9	$	—		$	1,526.9
Notes receivable of VIEs held by subsidiaries	—		(155.5		)	(155.5		)
Cash and cash equivalents held by variable interest entities	178.9		—			178.9
Accrued investment income	2.6		(.1		)	2.5
Income tax assets, net	.7		—			.7
Other assets	10.0		(1.5		)	8.5
Total assets	$	1,719.1	$	(157.1	)	$	1,562.0
Liabilities:
Other liabilities	$	158.3	$	(4.4	)	$	153.9
Borrowings related to variable interest entities	1,410.7		—			1,410.7
Notes payable of VIEs held by subsidiaries	167.6		(167.6		)	—
Total liabilities	$	1,736.6	$	(172.0	)	$	1,564.6

The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade.  At September 30, 2018, such loans had an amortized cost of $1,553.1 million; gross unrealized gains of $6.8 million; gross unrealized losses of $9.4 million; and an estimated fair value of $1,550.5 million.

The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at September 30, 2018, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	5.0	$	5.0
Due after one year through five years	523.8		521.9
Due after five years through ten years	1,024.3		1,023.6
Total	$	1,553.1	$	1,550.5

During the first nine months of 2018, the VIEs recognized net realized investment losses of $3.2 million from the sales of fixed maturities. During the first nine months of 2017, the VIEs recognized net realized investment losses of $2.5 million, which were comprised of: (i) $2.2 million of net gains from the sales of fixed maturities; (ii) $4.3 million of losses on the dissolution of VIEs; and (iii) $.4 million of writedowns of investments for other than temporary declines in fair value recognized through net income.

At September 30, 2018, there were no investments held by the VIEs that were in default.

During the first nine months of 2018, $41.9 million of investments held by VIEs were sold which resulted in gross investment losses (before income taxes) of $3.4 million. During the first nine months of 2017, $86.0 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $2.0 million.

At September 30, 2018, the VIEs held: (i) investments with a fair value of $474.6 million and gross unrealized losses of $5.4 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of

40

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

$101.1 million and gross unrealized losses of $4.0 million that had been in an unrealized loss position for twelve months or greater.

At December 31, 2017, the VIEs held: (i) investments with a fair value of $445.4 million and gross unrealized losses of $4.9 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $28.4 million and gross unrealized losses of $1.7 million that had been in an unrealized loss position for twelve months or greater.

The investments held by the VIEs are evaluated for other-than-temporary declines in fair value in a manner that is consistent with the Company's fixed maturities, available for sale.

In addition, the Company, in the normal course of business, makes passive investments in structured securities issued by VIEs for which the Company is not the investment manager.  These structured securities include asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, residential mortgage-backed securities and collateralized mortgage obligations.  Our maximum exposure to loss on these securities is limited to our cost basis in the investment.  We have determined that we are not the primary beneficiary of these structured securities due to the relative size of our investment in comparison to the total principal amount of the individual structured securities and the level of credit subordination which reduces our obligation to absorb gains or losses.

At September 30, 2018, we held investments in various limited partnerships and hedge funds, in which we are not the primary beneficiary, totaling $459.1 million (classified as other invested assets).  At September 30, 2018, we had unfunded commitments to these partnerships and hedge funds totaling $231.5 million.  Our maximum exposure to loss on these investments is limited to the amount of our investment.

41

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price.  We carry certain assets and liabilities at fair value on a recurring basis, including fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, separate account assets and embedded derivatives.  We carry our company-owned life insurance policy, which is invested in a series of mutual funds, at its cash surrender value which approximates fair value. In addition, we disclose fair value for certain financial instruments, including mortgage loans, policy loans, cash and cash equivalents, insurance liabilities for interest-sensitive products, investment borrowings, notes payable and borrowings related to VIEs.

The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs.  Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information.  Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value.  Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value.

Valuation Hierarchy

There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable.

• Level 1 – includes assets and liabilities valued using inputs that are unadjusted quoted prices in active markets for identical assets or liabilities.  Our Level 1 assets primarily include cash and cash equivalents and exchange-traded securities.

• Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data.  Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies.  These models consider various inputs such as credit rating, maturity, corporate credit spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by transactions executed in the marketplace. Financial assets in this category primarily include:  certain publicly registered and privately placed corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; certain equity securities; most investments held by our consolidated VIEs; certain mutual fund investments; most short-term investments; and non-exchange-traded derivatives such as call options. Financial liabilities in this category include investment borrowings, notes payable and borrowings related to VIEs.

• Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions.  Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on broker/dealer quotes, pricing services or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information.  Financial assets in this category include certain corporate securities (primarily certain below-investment grade privately placed securities), certain structured securities, mortgage loans, and other less liquid securities.  Financial liabilities in this category include our insurance liabilities for interest-sensitive products, which includes embedded derivatives (including embedded derivatives related to our fixed index annuity products and to a modified coinsurance arrangement) since their values include significant unobservable inputs including actuarial assumptions.

At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value.  This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions.  Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment and is subject to change from period to period based on the observability of the valuation inputs. Any transfers between levels

42

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

are reported as having occurred at the beginning of the period. There were no transfers between Level 1 and Level 2 in both the first nine months of 2018 and 2017.

The vast majority of our fixed maturity and equity securities, including those held in trading portfolios and those held by consolidated VIEs, short-term and separate account assets use Level 2 inputs for the determination of fair value.  These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value.  Our Level 2 assets are valued as follows:

•Fixed maturities available for sale, equity securities and trading securities

Corporate securities are generally priced using market and income approaches. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads.

U.S. Treasuries and obligations of U.S. Government corporations and agencies are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity.

States and political subdivisions are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads.

Asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations are generally priced using market and income approaches. Inputs generally consist of quoted prices in inactive markets, spreads on actively traded securities, expected prepayments, expected default rates, expected recovery rates, and issue specific information including, but not limited to, collateral type, seniority and vintage.

Equity securities (primarily comprised of non-redeemable preferred stock) are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads.

• Investments held by VIEs

Corporate securities are generally priced using market and income approaches using pricing vendors. Inputs generally consist of issuer rating, benchmark yields, maturity, and credit spreads.

• Other invested assets - derivatives

The fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, are determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotes; time value and volatility factors underlying options; market interest rates; and non-performance risk.

Third-party pricing services normally derive security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information.  If there are no recently reported trades, the third-party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are discounted at an estimated risk-adjusted market rate.  The number of prices obtained for a given security is dependent on the Company's analysis of such prices as further described below.

As the Company is responsible for the determination of fair value, we have control processes designed to ensure that the fair values received from third-party pricing sources are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. Additionally, when inputs are provided by third-party pricing sources, we have controls in place to review those inputs for reasonableness. As part of these controls, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value.  The Company's analysis includes: (i) a review of the methodology used by third-party pricing services;

43

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

(ii) where available, a comparison of multiple pricing services' valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably dated; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties.  As a result of such procedures, the Company may conclude a particular price received from a third party is not reflective of current market conditions.  In those instances, we may request additional pricing quotes or apply internally developed valuations.  However, the number of such instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received.

The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company's judgment of the inputs or methodologies used by the independent pricing services to value different asset classes.  Such inputs typically include:  benchmark yields, reported trades, broker dealer quotes, issuer spreads, benchmark securities, bids, offers and other relevant data.  The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments.

For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes.  These broker quotes are non-binding andrepresent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs.  Approximately 29 percent of our Level 3 fixed maturity securities were valued using unadjusted broker quotes or broker-provided valuation inputs.  The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs.  For these securities, we use internally developed valuations.  Key assumptions used to determine fair value for these securities may include risk premiums, projected performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market.  For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are discounted at an estimated market rate.  The pricing matrix incorporates term interest rates as well as a spread level based on the issuer's credit rating, other factors relating to the issuer, and the security's maturity.  In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity.

For certain embedded derivatives, we use actuarial assumptions in the determination of fair value which we consider to be Level 3 inputs.

44

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at September 30, 2018 is as follows (dollars in millions):

	Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs  (Level 3)		Total
Assets:
Fixed maturities, available for sale:
Corporate securities	$	—	$	11,371.7	$	152.8	$	11,524.5
United States Treasury securities and obligations of United States government corporations and agencies	—		168.7		—		168.7
States and political subdivisions	—		1,887.0		—		1,887.0
Debt securities issued by foreign governments	—		59.2		1.0		60.2
Asset-backed securities	—		2,487.0		12.1		2,499.1
Collateralized debt obligations	—		354.0		—		354.0
Commercial mortgage-backed securities	—		1,433.3		—		1,433.3
Mortgage pass-through securities	—		1.6		—		1.6
Collateralized mortgage obligations	—		584.0		—		584.0
Total fixed maturities, available for sale	—		18,346.5		165.9		18,512.4
Equity securities - corporate securities	216.3		109.7		9.5		335.5
Trading securities:
Asset-backed securities	—		89.7		—		89.7
Commercial mortgage-backed securities	—		93.2		—		93.2
Collateralized mortgage obligations	—		56.1		—		56.1
Total trading securities	—		239.0		—		239.0
Investments held by variable interest entities - corporate securities	—		1,550.5		—		1,550.5
Other invested assets - derivatives	—		143.5		—		143.5
Assets held in separate accounts	—		5.1		—		5.1
Total assets carried at fair value by category	$	216.3	$	20,394.3	$	175.4	$	20,786.0
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	$	—	$	—	$	1,370.0	$	1,370.0

45

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2017 is as follows (dollars in millions):

	Quoted prices in active markets  for identical assets or liabilities (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)		Total
Assets:
Fixed maturities, available for sale:
Corporate securities	$	—	$	14,728.0	$	230.4	$	14,958.4
United States Treasury securities and obligations of United States government corporations and agencies	—		177.7		—		177.7
States and political subdivisions	—		2,056.3		—		2,056.3
Debt securities issued by foreign governments	—		79.2		3.9		83.1
Asset-backed securities	—		3,230.2		24.2		3,254.4
Collateralized debt obligations	—		259.4		—		259.4
Commercial mortgage-backed securities	—		1,377.5		—		1,377.5
Mortgage pass-through securities	—		2.0		—		2.0
Collateralized mortgage obligations	—		742.1		—		742.1
Total fixed maturities, available for sale	—		22,652.4		258.5		22,910.9
Equity securities - corporate securities	287.8		131.6		21.2		440.6
Trading securities:
Corporate securities	—		21.6		—		21.6
United States Treasury securities and obligations of United States government corporations and agencies	—		.5		—		.5
Asset-backed securities	—		95.8		—		95.8
Collateralized debt obligations	—		2.7		—		2.7
Commercial mortgage-backed securities	—		92.5		—		92.5
Collateralized mortgage obligations	—		68.7		—		68.7
Equity securities	2.8		—		—		2.8
Total trading securities	2.8		281.8		—		284.6
Investments held by variable interest entities - corporate securities	—		1,522.0		4.9		1,526.9
Other invested assets - derivatives	—		170.2		—		170.2
Assets held in separate accounts	—		5.0		—		5.0
Total assets carried at fair value by category	$	290.6	$	24,763.0	$	284.6	$	25,338.2
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	$	—	$	—	$	1,334.8	$	1,334.8

46

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions):

	September 30, 2018
	Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)		Total estimated fair value		Total carrying amount
Assets:
Mortgage loans	$	—	$	—	$	1,671.5	$	1,671.5	$	1,680.6
Policy loans	—		—		117.4		117.4		117.4
Other invested assets:
Company-owned life insurance	—		186.2		—		186.2		186.2
Cash and cash equivalents:
Unrestricted	539.2		—		—		539.2		539.2
Held by variable interest entities	56.4		—		—		56.4		56.4
Liabilities:
Policyholder account balances	—		—		11,449.7		11,449.7		11,449.7
Investment borrowings	—		1,647.1		—		1,647.1		1,646.1
Borrowings related to variable interest entities	—		1,426.7		—		1,426.7		1,417.6
Notes payable – direct corporate obligations	—		938.9		—		938.9		916.2

	December 31, 2017
	Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)		Total estimated fair value		Total carrying amount
Assets:
Mortgage loans	$	—	$	—	$	1,677.3	$	1,677.3	$	1,650.6
Policy loans	—		—		116.0		116.0		116.0
Other invested assets:
Company-owned life insurance	—		182.3		—		182.3		182.3
Cash and cash equivalents:
Unrestricted	578.4		—		—		578.4		578.4
Held by variable interest entities	178.9		—		—		178.9		178.9
Liabilities:
Policyholder account balances	—		—		11,220.7		11,220.7		11,220.7
Investment borrowings	—		1,648.8		—		1,648.8		1,646.7
Borrowings related to variable interest entities	—		1,432.9		—		1,432.9		1,410.7
Notes payable – direct corporate obligations	—		962.3		—		962.3		914.6

47

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended September 30, 2018 (dollars in millions):

	September 30, 2018
	Beginning balance as of June 30, 2018			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income			Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2018			Amount of total gains (losses) for the three months ended September 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	181.9		$	(23.9	)	$	(.8	)	$	.1		$	—	$	(4.5	)	$	152.8		$	—
Debt securities issued by foreign governments	3.9			(2.9		)	(.1		)	.1			—		—			1.0			—
Asset-backed securities	18.4			(.2		)	—			(.1		)	—		(6.0		)	12.1			—
Total fixed maturities, available for sale	204.2			(27.0		)	(.9		)	.1			—		(10.5		)	165.9			—
Equity securities - corporate securities	9.5			—			—			—			—		—			9.5			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,333.3		)	(71.3		)	34.6			—			—		—			(1,370.0		)	34.6

48

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

_________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended September 30, 2018 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	20.4		$	(44.3	)	$	—		$	—	$	(23.9	)
Debt securities issued by foreign governments	3.0			(5.9		)	—			—		(2.9		)
Asset-backed securities	—			(.2		)	—			—		(.2		)
Total fixed maturities, available for sale	23.4			(50.4		)	—			—		(27.0		)
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(41.8		)	.8			(50.3		)	20.0		(71.3		)

49

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the nine months ended September 30, 2018 (dollars in millions):

	September 30, 2018
	Beginning balance as of December 31, 2017			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income			Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2018			Amount of total gains (losses) for the nine months ended September 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	230.4		$	(23.2	)	$	.7		$	(3.1	)	$	—	$	(52.0	)	$	152.8		$	—
Debt securities issued by foreign governments	3.9			(2.9		)	(.1		)	.1			—		—			1.0			—
Asset-backed securities	24.2			(11.4		)	—			(.7		)	—		—			12.1			—
Total fixed maturities, available for sale	258.5			(37.5		)	.6			(3.7		)	—		(52.0		)	165.9			—
Equity securities - corporate securities	21.2			(10.9		)	(.8		)	—			—		—			9.5			—
Investments held by variable interest entities - corporate securities	4.9			—			—			—			—		(4.9		)	—			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,334.8		)	(122.8		)	87.6			—			—		—			(1,370.0		)	87.6

50

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

_________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the nine months ended September 30, 2018 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	31.5		$	(54.7	)	$	—		$	—	$	(23.2	)
Debt securities issued by foreign governments	3.0			(5.9		)	—			—		(2.9		)
Asset-backed securities	—			(11.4		)	—			—		(11.4		)
Total fixed maturities, available for sale	34.5			(72.0		)	—			—		(37.5		)
Equity securities - corporate securities	—			(10.9		)	—			—		(10.9		)
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(125.1		)	7.7			(64.4		)	59.0		(122.8		)

51

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended September 30, 2017 (dollars in millions):

	September 30, 2017
	Beginning balance as of June 30, 2017			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income		Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2017			Amount of total gains (losses) for the three months ended September 30, 2017 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	263.3		$	(44.8	)	$	1.7	$	1.3		$	34.2	$	—		$	255.7		$	(3.2	)
Debt securities issued by foreign governments	3.9			—			—		.1			—		—			4.0			—
Asset-backed securities	59.6			(1.3		)	—		.7			7.1		(6.2		)	59.9			—
Collateralized debt obligations	2.5			(2.5		)	—		—			—		—			—			—
Collateralized mortgage obligations	.2			—			—		(.2		)	—		—			—			—
Total fixed maturities, available for sale	329.5			(48.6		)	1.7		1.9			41.3		(6.2		)	319.6			(3.2		)
Equity securities - corporate securities	24.6			(8.3		)	6.4		(1.1		)	—		—			21.6			(.5		)
Investments held by variable interest entities - corporate securities	—			—			—		—			5.0		—			5.0			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,205.4		)	(56.3		)	12.4		—			—		—			(1,249.3		)	12.4

52

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

____________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended September 30, 2017 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	15.3		$	(60.1	)	$	—		$	—	$	(44.8	)
Asset-backed securities	9.9			(11.2		)	—			—		(1.3		)
Collateralized debt obligations	—			(2.5		)	—			—		(2.5		)
Total fixed maturities, available for sale	25.2			(73.8		)	—			—		(48.6		)
Equity securities - corporate securities	—			(8.3		)	—			—		(8.3		)
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(41.0		)	1.8			(31.4		)	14.3		(56.3		)

53

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the nine months ended September 30, 2017 (dollars in millions):

	September 30, 2017
	Beginning balance as of December 31, 2016			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income		Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2017			Amount of total gains (losses) for the nine months ended September 30, 2017 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	258.5		$	(44.1	)	$	9.5	$	.6		$	31.2	$	—		$	255.7		$	(6.5	)
Debt securities issued by foreign governments	3.9			—			—		.1			—		—			4.0			—
Asset-backed securities	60.4			3.8			—		2.3			4.2		(10.8		)	59.9			—
Collateralized debt obligations	5.4			(2.5		)	—		—			—		(2.9		)	—			—
Commercial mortgage-backed securities	32.0			—			—		—			—		(32.0		)	—			—
Total fixed maturities, available for sale	360.2			(42.8		)	9.5		3.0			35.4		(45.7		)	319.6			(6.5		)
Equity securities - corporate securities	25.2			(8.5		)	6.3		(1.4		)	—		—			21.6			(.5		)
Investments held by variable interest entities - corporate securities	—			5.0			—		—			—		—			5.0			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,092.3		)	(174.2		)	17.2		—			—		—			(1,249.3		)	17.2

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Notes to Consolidated Financial Statements

(unaudited)

___________________

____________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the nine months ended September 30, 2017 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	64.3		$	(108.4	)	$	—		$	—	$	(44.1	)
Asset-backed securities	21.9			(18.1		)	—			—		3.8
Collateralized debt obligations	—			(2.5		)	—			—		(2.5		)
Total fixed maturities, available for sale	86.2			(129.0		)	—			—		(42.8		)
Equity securities - corporate securities	—			(8.5		)	—			—		(8.5		)
Investments held by variable interest entities - corporate securities	5.0			—			—			—		5.0
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(130.1		)	5.3			(95.7		)	46.3		(174.2		)

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CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(unaudited)

___________________

At September 30, 2018, 55 percent of our Level 3 fixed maturities, available for sale, were investment grade and 92 percent of our Level 3 fixed maturities, available for sale, consisted of corporate securities.

Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3.

Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and other special-purpose portfolios, net realized investment gains (losses) or insurance policy benefits within the consolidated statement of operations or accumulated other comprehensive income within shareholders' equity based on the appropriate accounting treatment for the instrument.

The amount presented for gains (losses) included in our net loss for assets and liabilities still held as of the reporting date primarily represents impairments for fixed maturities, available for sale, changes in fair value of trading securities and certain derivatives and changes in fair value of embedded derivative instruments included in liabilities for insurance products that exist as of the reporting date.

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Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at September 30, 2018 (dollars in millions):

	Fair value at September 30, 2018		Valuation techniques	Unobservable inputs	Range (weighted average)
Assets:
Corporate securities (a)	$	98.0	Discounted cash flow analysis	Discount margins	1.35% - 8.91% (3.94%)
Corporate securities (b)	5.3		Recovery method	Percent of recovery expected	0% - 62.20% (57.70%)
Asset-backed securities (c)	12.1		Discounted cash flow analysis	Discount margins	1.87%
Equity securities (d)	1.2		Market comparables	EBITDA multiples	1.1X
Equity securities (e)	8.3		Recovery method	Percent of recovery expected	59.27% - 100.00% (59.52%)
Other assets categorized as Level 3 (f)	50.5		Unadjusted third-party price source	Not applicable	Not applicable
Total	175.4
Liabilities:
Future policy benefits (g)	1,370.0		Discounted projected embedded derivatives	Projected portfolio yields	5.15% - 5.61% (5.60%)
				Discount rates	1.50% - 2.98% (2.70%)
				Surrender rates	1.20% - 46.40% (12.30%)

________________________________

(a) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(b) Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(c) Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(d) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"). Generally, increases (decreases) in the EBITDA multiples would result in higher (lower) fair value measurements.

(e) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(f) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.

(g) Future policy benefits - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative.

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Notes to Consolidated Financial Statements

(unaudited)

___________________

The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2017 (dollars in millions):

	Fair value at December 31, 2017		Valuation techniques	Unobservable inputs	Range (weighted average)
Assets:
Corporate securities (a)	$	149.2	Discounted cash flow analysis	Discount margins	1.45% - 71.29% (6.96%)
Corporate securities (b)	2.8		Recovery method	Percent of recovery expected	0% - 21.73% (18.42%)
Asset-backed securities (c)	24.2		Discounted cash flow analysis	Discount margins	1.80% - 3.71% (2.67%)
Equity securities (d)	1.1		Market comparables	EBITDA multiples	1.1X
Equity securities (e)	20.1		Recovery method	Percent of recovery expected	59.1%
Other assets categorized as Level 3 (f)	87.2		Unadjusted third-party price source	Not applicable	Not applicable
Total	284.6
Liabilities:
Future policy benefits (g)	1,334.8		Discounted projected embedded derivatives	Projected portfolio yields	5.15% - 5.61% (5.60%)
				Discount rates	0.92% - 2.51% (2.00%)
				Surrender rates	1.20% - 46.40% (12.30%)

________________________________

(a) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(b) Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(c) Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(d) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is EBITDA multiples. Generally, increases (decreases) in EBITDA multiples would result in higher (lower) fair value measurements.

(e) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(f) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.

(g) Future policy benefits - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

In this section, we review the consolidated financial condition of CNO at September 30, 2018, and its consolidated results of operations for the three and nine months ended September 30, 2018 and 2017, and, where appropriate, factors that may affect future financial performance. Please read this discussion in conjunction with the accompanying consolidated financial statements and notes.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Our statements, trend analyses and other information contained in this report and elsewhere (such as in filings by CNO with the SEC, press releases, presentations by CNO or its management or oral statements) relative to markets for CNO's products and trends in CNO's operations or financial results, as well as other statements, contain forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995.  Forward-looking statements typically are identified by the use of terms such as "anticipate," "believe," "plan," "estimate," "expect," "project," "intend," "may," "will," "would," "contemplate," "possible," "attempt," "seek," "should," "could," "goal," "target," "on track," "comfortable with," "optimistic," "guidance," "outlook" and similar words, although some forward-looking statements are expressed differently.  You should consider statements that contain these words carefully because they describe our expectations, plans, strategies and goals and our beliefs concerning future business conditions, our results of operations, financial position, and our business outlook or they state other "forward-looking" information based on currently available information.  The "Risk Factors" section of our 2017 Annual Report on Form 10-K provides examples of risks, uncertainties and events that could cause our actual results to differ materially from the expectations expressed in our forward-looking statements.  Assumptions and other important factors that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, among other things:

• changes in or sustained low interest rates causing reductions in investment income, the margins of our fixed annuity and life insurance businesses, and sales of, and demand for, our products;

• expectations of lower future investment earnings may cause us to accelerate amortization, write down the balance of insurance acquisition costs or establish additional liabilities for insurance products;

• general economic, market and political conditions and uncertainties, including the performance and fluctuations of the financial markets which may affect the value of our investments as well as our ability to raise capital or refinance existing indebtedness and the cost of doing so;

• the ultimate outcome of lawsuits filed against us and other legal and regulatory proceedings to which we are subject;

• our ability to make anticipated changes to certain non-guaranteed elements of our life insurance products;

• our ability to obtain adequate and timely rate increases on our health products, including our long-term care business;

• the receipt of any required regulatory approvals for dividend and surplus debenture interest payments from our insurance subsidiaries;

• mortality, morbidity, the increased cost and usage of health care services, persistency, the adequacy of our previous reserve estimates, changes in the health care market and other factors which may affect the profitability of our insurance products;

• changes in our assumptions related to deferred acquisition costs or the present value of future profits;

• the recoverability of our deferred tax assets and the effect of potential ownership changes and tax rate changes on their value;

• changes to our estimates of the impact of comprehensive federal tax legislation related to the Tax Reform Act;

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• our assumption that the positions we take on our tax return filings will not be successfully challenged by the Internal Revenue Service;

• changes in accounting principles and the interpretation thereof;

• our ability to continue to satisfy the financial ratio and balance requirements and other covenants of our debt agreements;

• our ability to achieve anticipated expense reductions and levels of operational efficiencies including improvements in claims adjudication and continued automation and rationalization of operating systems;

• performance and valuation of our investments, including the impact of realized losses (including other-than-temporary impairment charges);

• our ability to identify products and markets in which we can compete effectively against competitors with greater market share, higher ratings, greater financial resources and stronger brand recognition;

• our ability to generate sufficient liquidity to meet our debt service obligations and other cash needs;

• changes in capital deployment opportunities;

• our ability to maintain effective controls over financial reporting;

• our ability to continue to recruit and retain productive agents and distribution partners;

• customer response to new products, distribution channels and marketing initiatives;

• our ability to achieve additional upgrades of the financial strength ratings of CNO and our insurance company subsidiaries as well as the impact of our ratings on our business, our ability to access capital, and the cost of capital;

• regulatory changes or actions, including: those relating to regulation of the financial affairs of our insurance companies, such as the calculation of risk-based capital and minimum capital requirements, and payment of dividends and surplus debenture interest to us; regulation of the sale, underwriting and pricing of products; and health care regulation affecting health insurance products;

• changes in the Federal income tax laws and regulations which may affect or eliminate the relative tax advantages of some of our products or affect the value of our deferred tax assets;

• availability and effectiveness of reinsurance arrangements, as well as the impact of any defaults or failure of reinsurers to perform;

• the performance of third party service providers and potential difficulties arising from outsourcing arrangements;

• the growth rate of sales, collected premiums, annuity deposits and assets;

• interruption in telecommunication, information technology or other operational systems or failure to maintain the security, confidentiality or privacy of sensitive data on such systems;

• events of terrorism, cyber attacks, natural disasters or other catastrophic events, including losses from a disease pandemic;

• ineffectiveness of risk management policies and procedures in identifying, monitoring and managing risks; and

• the risk factors or uncertainties listed from time to time in our filings with the SEC.

Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected.

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All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement.  Our forward-looking statements speak only as of the date made.  We assume no obligation to update or to publicly announce the results of any revisions to any of the forward-looking statements to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements.

The reporting of risk-based capital ("RBC") measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities.

OVERVIEW

We are a holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products.  We focus on serving the senior and middle-income markets, which we believe are attractive, underserved, high growth markets.  We sell our products through three distribution channels: career agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing.

On September 27, 2018, the Company completed a long-term care reinsurance transaction pursuant to which its wholly-owned subsidiary, Bankers Life, entered into an agreement with Wilton Re to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies (with statutory reserves of approximately $2.7 billion) through 100% indemnity coinsurance, as further described in the note to the consolidated financial statements entitled "Reinsurance". In anticipation of the reinsurance agreement, the Company reorganized its business segments to move the block to be ceded from the "Bankers Life segment" to the "Long-term care in run-off segment" in the third quarter of 2018. All prior period segment disclosures have been revised to conform to management's current view of the Company's operating segments.

The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; long-term care in run off; and corporate operations, comprised of holding company activities and certain noninsurance company businesses.

The Company’s insurance segments are described below:

• Bankers Life,which markets and distributes Medicare supplement insurance, interest-sensitive life insurance, traditional life insurance, fixed annuities and long-term care insurance products to the middle-income senior market through a dedicated field force of career agents, financial and investment advisors, and sales managers supported by a network of community-based sales offices.  The Bankers Life segment includes primarily the business of Bankers Life.  Bankers Life also has various distribution and marketing agreements with other insurance companies to use Bankers Life's career agents to distribute Medicare Advantage and prescription drug plan products in exchange for a fee.

• Washington National, which markets and distributes supplemental health (including specified disease, accident and hospital indemnity insurance products) and life insurance to middle-income consumers at home and at the worksite.  These products are marketed through Performance Matters Associates, Inc. ("PMA") and through independent marketing organizations and insurance agencies including worksite marketing.  The products being marketed are underwritten by Washington National. This segment's business also includes certain closed blocks of annuities and Medicare supplement policies which are no longer being actively marketed by this segment and were primarily issued or acquired by Washington National.

• Colonial Penn, which markets primarily graded benefit and simplified issue life insurance directly to customers in the senior middle-income market through television advertising, direct mail, the internet and telemarketing.  The Colonial Penn segment includes primarily the business of Colonial Penn.

• Long-term care in run-off consists of: (i) the long-term care business that was recaptured due to the termination of certain reinsurance agreements effective September 30, 2016 (such business is not actively marketed and was issued or acquired by Washington National and BCLIC); and (ii) certain legacy (prior to 2003) comprehensive and nursing

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home long-term care policies ceded to Wilton Re (such business is not actively marketed and was issued by Bankers Life).

The following summarizes our earnings for the three and nine months ending September 30, 2018 and 2017 (dollars in millions, except per share data):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Adjusted EBIT (a non-GAAP measure) (a):
Bankers Life	$	94.4		$	95.3		$	262.6		$	268.1
Washington National	30.3			27.5			90.0			74.6
Colonial Penn	6.1			9.0			10.0			16.7
Long-term care in run-off	2.1			10.6			22.6			42.2
Adjusted EBIT from business segments	132.9			142.4			385.2			401.6
Corporate operations, excluding corporate interest expense	(11.8		)	(14.9		)	(41.3		)	(37.0		)
Adjusted EBIT	121.1			127.5			343.9			364.6
Corporate interest expense	(12.1		)	(11.7		)	(35.9		)	(34.8		)
Operating earnings before taxes	109.0			115.8			308.0			329.8
Tax expense on operating income	21.5			39.1			64.7			114.7
Net operating income (a)	87.5			76.7			243.3			215.1
Net realized investment gains (net of related amortization)	31.7			28.5			27.1			51.3
Fair value changes in embedded derivative liabilities (net of related amortization)	22.9			2.3			56.3			(8.0		)
Fair value changes related to agent deferred compensation plan	—			(13.4		)	11.0			(13.4		)
Loss related to reinsurance transaction	(704.2		)	—			(704.2		)	—
Other	.8			(3.3		)	(.1		)	(4.6		)
Non-operating income (loss) before taxes	(648.8		)	14.1			(609.9		)	25.3
Income tax expense (benefit):
On non-operating income (loss)	(136.3		)	5.0			(128.1		)	8.9
Valuation allowance for deferred tax assets and other tax items	104.8			(15.0		)	104.8			(15.0		)
Net non-operating income (loss)	(617.3		)	24.1			(586.6		)	31.4
Net income (loss)	$	(529.8	)	$	100.8		$	(343.3	)	$	246.5
Per diluted share:
Net operating income	$	.53		$	.45		$	1.47		$	1.25
Net realized investment gains (net of related amortization and taxes)	.15			.11			.13			.19
Fair value changes in embedded derivative liabilities (net of related amortization and taxes)	.11			.01			.27			(.03		)
Fair value changes related to agent deferred compensation plan (net of taxes)	—			(.05		)	.05			(.05		)
Loss related to reinsurance transaction (net of taxes)	(4.01		)	—			(3.99		)	—
Valuation allowance for deferred tax assets and other tax items	—			.09			—			.09
Other	—			(.02		)	—			(.02		)
Net income (loss)	$	(3.22	)	$	.59		$	(2.07	)	$	1.43

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____________

(a) Management believes that an analysis of net operating income provides a clearer comparison of the operating results of the Company from period to period because it excludes: (i) net realized investment gains or losses, net of related amortization; (ii) fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities, net of related amortization; (iii) fair value changes related to the agent deferred compensation plan; (iv) loss related to reinsurance transaction; and (v) other non-operating items consisting primarily of earnings attributable to variable interest entities. Net realized investment gains or losses include: (i) gains or losses on the sales of investments; (ii) other-than-temporary impairments recognized through net income; (iii) changes in fair value of certain fixed maturity investments with embedded derivatives; and (iv) changes in the fair value of equity securities.  Adjusted EBIT is presented as net operating income excluding corporate interest expense and income tax expense. The table above reconciles the non-GAAP measures to the corresponding GAAP measure.

In addition, management uses these non-GAAP financial measures in its budgeting process, financial analysis of segment performance and in assessing the allocation of resources. We believe these non-GAAP financial measures enhance an investor’s understanding of our financial performance and allows them to make more informed judgments about the Company as a whole. These measures also highlight operating trends that might not otherwise be apparent. However, Adjusted EBIT and net operating income are not measurements of financial performance under GAAP and should not be considered as alternatives to cash flow from operating activities, as measures of liquidity, or as alternatives to net income as measures of our operating performance or any other measures of performance derived in accordance with GAAP. In addition, Adjusted EBIT and net operating income should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Adjusted EBIT and net operating income have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP. Our definitions and calculation of Adjusted EBIT and net operating income are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation.

CRITICAL ACCOUNTING POLICIES

Refer to "Critical Accounting Policies" in our 2017 Annual Report on Form 10-K for information on our other accounting policies that we consider critical in preparing our consolidated financial statements.

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RESULTS OF OPERATIONS

The following tables and narratives summarize the operating results of our segments (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Pre-tax operating earnings (a non-GAAP measure) (a):
Bankers Life	$	94.4		$	95.3		$	262.6		$	268.1
Washington National	30.3			27.5			90.0			74.6
Colonial Penn	6.1			9.0			10.0			16.7
Long-term care in run-off	2.1			10.6			22.6			42.2
Corporate operations	(23.9		)	(26.6		)	(77.2		)	(71.8		)
	109.0			115.8			308.0			329.8
Net realized investment gains (losses), net of related amortization:
Bankers Life	35.7			12.6			38.1			26.4
Washington National	(2.0		)	6.5			(3.4		)	12.6
Colonial Penn	.2			1.0			(.2		)	.8
Long-term care in run-off	(2.1		)	9.0			(.4		)	11.5
Corporate operations	(.1		)	(.6		)	(7.0		)	—
	31.7			28.5			27.1			51.3
Fair value changes in embedded derivative liabilities, net of related amortization:
Bankers Life	22.8			2.3			55.8			(8.0		)
Washington National	.1			—			.5			—
	22.9			2.3			56.3			(8.0		)
Earnings attributable to VIEs:
Corporate operations	.8			(3.3		)	(.1		)	(4.6		)
Fair value changes related to agent deferred compensation plan:
Corporate operations	—			(13.4		)	11.0			(13.4		)
Loss related to reinsurance transaction:
Corporate operations	(704.2		)	—			(704.2		)	—
Income (loss) before income taxes:
Bankers Life	152.9			110.2			356.5			286.5
Washington National	28.4			34.0			87.1			87.2
Colonial Penn	6.3			10.0			9.8			17.5
Long-term care in run-off	—			19.6			22.2			53.7
Corporate operations	(727.4		)	(43.9		)	(777.5		)	(89.8		)
Income (loss) before income taxes	$	(539.8	)	$	129.9		$	(301.9	)	$	355.1

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(a) These non-GAAP measures as presented in the above table and in the following segment financial data and discussions of segment results exclude net realized investment gains (losses), fair value changes in embedded derivative liabilities, net of related amortization, fair value changes related to the agent deferred compensation plan, loss related to reinsurance transaction and earnings attributable to VIEs and before income taxes.  These are considered non-GAAP financial measures.  A non-GAAP measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

These non-GAAP financial measures of "pre-tax operating earnings" differ from "income (loss) before income taxes" as presented in our consolidated statement of operations prepared in accordance with GAAP due to the exclusion of realized investment gains (losses), fair value changes in embedded derivative liabilities, net of related amortization, fair value changes related to the agent deferred compensation plan, loss related to reinsurance transaction and earnings attributable to VIEs.  We measure segment performance excluding these items because we believe that this performance measure is a better indicator of the ongoing businesses and trends in our business. Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of realized investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business. Realized investment gains (losses), fair value changes in embedded derivative liabilities, fair value changes related to the agent deferred compensation plan and earnings attributable to VIEs depend on market conditions and do not necessarily relate to decisions regarding the underlying business of our segments.  However, "pre-tax operating earnings" does not replace "income (loss) before income taxes" as a measure of overall profitability.

We may experience realized investment gains (losses), which may affect future earnings levels since our underlying business is long-term in nature and we need to earn the assumed interest rates on the investments backing our liabilities for insurance products to maintain the profitability of our business.  In addition, management uses this non-GAAP financial measure in its budgeting process, financial analysis of segment performance and in assessing the allocation of resources. We believe these non-GAAP financial measures enhance an investor's understanding of our financial performance and allows them to make more informed judgments about the Company as a whole.  These measures also highlight operating trends that might not otherwise be apparent.  The table above reconciles the non-GAAP measure to the corresponding GAAP measure.

General: CNO is the top tier holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products. We distribute these products through our Bankers Life segment, which utilizes a career agency force, through our Washington National segment, which utilizes independent producers and through our Colonial Penn segment, which utilizes direct response marketing. We also have a Long-term care in run-off segment that consists of: (i) the long-term care business that was recaptured due to the termination of certain reinsurance agreements effective September 30, 2016 (such business is not actively marketed and was issued or acquired by Washington National and BCLIC); and (ii) certain legacy (prior to 2003) comprehensive and nursing home long-term care policies ceded to Wilton Re in September 2018 (such business is not actively marketed and was issued by Bankers Life).

.

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Bankers Life (dollars in millions)

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Premium collections:
Annuities	$	270.5	$	236.5	$	808.9	$	758.3
Medicare supplement and other supplemental health	249.7		246.7		758.0		763.3
Life	115.5		113.7		349.2		345.4
Total collections	$	635.7	$	596.9	$	1,916.1	$	1,867.0
Average liabilities for insurance products:
Fixed index annuities	$	5,869.1	$	5,222.5	$	5,709.1	$	5,048.2
Fixed interest annuities	2,548.5		2,860.5		2,630.8		2,935.9
SPIAs and supplemental contracts:
Mortality based	145.9		159.2		148.9		162.1
Deposit based	144.3		148.1		144.7		149.8
Health:
Long-term care	1,920.0		1,818.0		1,893.9		1,792.6
Medicare supplement	307.1		329.8		314.4		336.7
Other health	60.2		56.5		59.5		55.3
Life:
Interest sensitive	837.8		785.6		822.7		771.7
Non-interest sensitive	1,168.1		1,099.1		1,151.3		1,080.8
Total average liabilities for insurance products, net of reinsurance ceded	$	13,001.0	$	12,479.3	$	12,875.3	$	12,333.1
Broker dealer and registered investment advisor client assets:
Net new client assets (a)
Brokerage	$	26.3	$	4.7	$	41.6	$	19.8
Advisory	44.2		32.3		143.8		76.9
Total	$	70.5	$	37.0	$	185.4	$	96.7
Client assets at end of period (b)
Brokerage	$	860.4	$	798.2
Advisory	317.6		127.5
Total	$	1,178.0	$	925.7

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	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues:
Insurance policy income	$	364.0		$	366.8		$	1,095.5		$	1,106.4
Net investment income:
General account invested assets	200.9			194.2			597.9			569.4
Fixed index products	56.0			28.5			63.3			89.5
Fee revenue and other income	10.7			11.3			40.9			32.5
Total revenues	631.6			600.8			1,797.6			1,797.8
Expenses:
Insurance policy benefits	290.9			289.6			887.4			868.9
Amounts added to policyholder account balances:
Cost of interest credited to policyholders	24.4			26.3			73.9			79.3
Cost of options to fund index credits, net of forfeitures	19.4			16.0			56.8			47.1
Market value changes credited to policyholders	55.8			30.2			62.4			91.4
Amortization related to operations	37.3			35.9			119.4			118.3
Interest expense on investment borrowings	7.9			5.3			21.5			14.3
Other operating costs and expenses	101.5			102.2			313.6			310.4
Total benefits and expenses	537.2			505.5			1,535.0			1,529.7
Income before net realized investment gains (losses), net of related amortization, and fair value changes in embedded derivative liabilities, net of related amortization, and income taxes	94.4			95.3			262.6			268.1
Net realized investment gains	35.3			13.3			38.1			27.4
Amortization related to net realized investment gains	.4			(.7		)	—			(1.0		)
Net realized investment gains, net of related amortization	35.7			12.6			38.1			26.4
Insurance policy benefits - fair value changes in embedded derivative liabilities	27.6			2.8			67.7			(9.8		)
Amortization related to fair value changes in embedded derivative liabilities	(4.8		)	(.5		)	(11.9		)	1.8
Fair value changes in embedded derivative liabilities, net of related amortization	22.8			2.3			55.8			(8.0		)
Income before income taxes	$	152.9		$	110.2		$	356.5		$	286.5

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	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Health benefit ratios:
All health lines:
Insurance policy benefits	$	223.3		$	216.2		$	656.1		$	642.0
Benefit ratio (c)	87.3		%	83.3		%	85.3		%	82.3		%
Medicare supplement:
Insurance policy benefits	$	145.2		$	140.0		$	427.0		$	414.1
Benefit ratio (c)	75.6		%	72.0		%	74.0		%	70.8		%
Long-term care:
Insurance policy benefits	$	78.1		$	76.2		$	229.1		$	227.9
Benefit ratio (c)	122.5		%	117.3		%	119.4		%	116.5		%
Interest-adjusted benefit ratio (d)	79.0		%	76.1		%	76.4		%	75.6		%

______________

(a) Net new client assets includes total inflows of cash and securities into brokerage and managed advisory accounts less outflows. Inflows include interest and dividends and exclude changes due to market fluctuations.

(b) Client assets include cash and securities in brokerage and managed advisory accounts.

(c) We calculate benefit ratios by dividing the related product's insurance policy benefits by insurance policy income.

(d) We calculate the interest-adjusted benefit ratio (a non-GAAP measure) for Bankers Life's long-term care products by dividing such product's insurance policy benefits less the imputed interest income on the accumulated assets backing the insurance liabilities by policy income. These are considered non-GAAP financial measures. A non-GAAP measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

These non-GAAP financial measures of "interest-adjusted benefit ratios" differ from "benefit ratios" due to the deduction of imputed interest income on the accumulated assets backing the insurance liabilities from the product's insurance policy benefits used to determine the ratio. Interest income is an important factor in measuring the performance of health products that are expected to be inforce for a longer duration of time, are not subject to unilateral changes in provisions (such as non-cancelable or guaranteed renewable contracts) and require the performance of various functions and services (including insurance protection) for an extended period of time. The net cash flows from long-term care products generally cause an accumulation of amounts in the early years of a policy (accounted for as reserve increases) that will be paid out as benefits in later policy years (accounted for as reserve decreases). Accordingly, as the policies age, the benefit ratio will typically increase, but the increase in benefits will be partially offset by the imputed interest income earned on the accumulated assets. The interest-adjusted benefit ratio reflects the effects of such interest income offset (which is equal to the tabular interest on the related insurance liabilities). Since interest income is an important factor in measuring the performance of this product, management believes a benefit ratio that includes the effect of interest income is useful in analyzing product performance. We utilize the interest-adjusted benefit ratio in measuring segment performance because we believe that this performance measure is a better indicator of the ongoing businesses and trends in the business. However, the "interest-adjusted benefit ratio" does not replace the "benefit ratio" as a measure of current period benefits to current period insurance policy income. Accordingly, management reviews both "benefit ratios" and "interest-adjusted benefit ratios" when analyzing the financial results attributable to these products. The imputed investment income earned on the accumulated assets backing Bankers Life's long-term care reserves was $27.8 million and $26.8 million in the three months ended September 30, 2018 and 2017, respectively, and was $82.5 million and $80.0 million in the nine months ended September 30, 2018 and 2017, respectively.

Bankers Life is the marketing brand of various affiliated companies of CNO Financial Group including, Bankers Life and Casualty Company, Bankers Life Securities, Inc., and Bankers Life Advisory Services, Inc. Non-affiliated insurance products are offered through Bankers Life General Agency, Inc. (dba BL General Insurance Agency, Inc., AK, AL, CA, NV, PA). Agents who are financial advisors are registered with Bankers Life Securities, Inc.

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Securities and variable annuity products and services are offered by Bankers Life Securities, Inc. Member FINRA/SIPC, (dba BL Securities, Inc., AL, GA, IA, IL, MI, NV, PA). Advisory products and services are offered by Bankers Life Advisory Services, Inc. SEC Registered Investment Adviser (dba BL Advisory Services, Inc., AL, GA, IA, MT, NV, PA). Home Office: 111 East Wacker Drive, Suite 1900, Chicago, IL 60601.

Total premium collections were $635.7 million in the third quarter of 2018, up 6.5 percent from 2017, and were $1,916.1 million in the first nine months of 2018, up 2.6 percent from 2017. See "Premium Collections" for further analysis of Bankers Life's premium collections.

Average liabilities for insurance products, net of reinsurance ceded were $13.0 billion in the third quarter of 2018, up 4.2 percent from 2017, and $12.9 billion in the first nine months of 2018, up 4.4 percent from 2017. The increase in average liabilities for insurance products is primarily due to new sales and the amounts added to policyholder account balances on interest-sensitive products.

Broker dealer and registered investment advisor client assets totaled $1,178.0 million at September 30, 2018, with net inflows of $70.5 million in the third quarter of 2018 and $185.4 million in the first nine months of 2018.

Insurance policy income is comprised of premiums earned on policies which provide mortality or morbidity coverage and fees and other charges assessed on other policies.

Net investment income on general account invested assets (which excludes income on policyholder portfolios) was $200.9 million in the third quarter of 2018, up 3.5 percent from 2017, and $597.9 million in the first nine months of 2018, up 5.0 percent from 2017. The 2018 periods reflect higher investment income from alternative investments compared to the 2017 periods. Such increases reflect higher returns from credit, private equity, and equity related strategies and a larger average alternative investment portfolio in the 2018 periods.

Net investment income related to fixed index products represents the change in the estimated fair value of options which are purchased in an effort to offset or hedge certain potential benefits accruing to the policyholders of our fixed index products. Our fixed index products are designed so that investment income spread is expected to be more than adequate to cover the cost of the options and other costs related to these policies.  Net investment income related to fixed index products was $56.0 million and $28.5 million in the third quarters of 2018 and 2017, respectively, and $63.3 million and $89.5 million in the first nine months of 2018 and 2017, respectively. Such amounts were substantially offset by the corresponding charge (credit) to amounts added to policyholder account balances - market value changes credited to policyholders.Such income and related charges fluctuate based on the value of options embedded in the segment's fixed index annuity policyholder account balances subject to this benefit and to the performance of the index to which the returns on such products are linked.

Fee revenue and other income was $10.7 million and $11.3 million in the third quarters of 2018 and 2017, respectively, and $40.9 million and $32.5 million in the first nine months of 2018 and 2017, respectively. The increase in the first nine months of 2018, and the decrease in the third quarter of 2018, compared to the same periods in 2017 is primarily due to the adoption of the new revenue recognition guidance which was effective January 1, 2018. The new guidance accelerated the recognition of fee revenue related to various distribution and marketing agreements pursuant to which Bankers Life's career agents distribute third party products including prescription drug and Medicare Advantage plans. The annual fee income earned during a calendar year will not change, but the amount recognized during each quarterly period will vary based on the sales of such products. Fee revenue earned under such agreements was $28.8 million in the first nine months of 2018 (of which, $3.1 million was recognized pursuant to the new guidance) compared to $22.3 million in the first nine months of 2017.

Insurance policy benefits fluctuated as a result of the factors summarized below for benefit ratios.  Benefit ratios are calculated by dividing the related insurance product’s insurance policy benefits by insurance policy income.

The Medicare supplement business consists of both individual and group policies.  Government regulations generally require us to attain and maintain a ratio of total benefits incurred to total premiums earned (excluding changes in policy benefit reserves), after three years from the original issuance of the policy and over the lifetime of the policy, of not less than 65 percent on individual products and not less than 75 percent on group products, as determined in accordance with statutory accounting principles.  Since the insurance product liabilities we establish for Medicare supplement business are subject to significant estimates, the ultimate claim liability we incur for a particular period is likely to be different than our initial estimate.

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Our benefit ratios were 75.6 percent and 72.0 percent in the third quarters of 2018 and 2017, respectively, and 74.0 percent and 70.8 percent in the first nine months of 2018 and 2017, respectively. The benefit ratio in the third quarter of 2018 reflected unfavorable claim experience. The benefit ratio in the first nine months of 2018 also reflected lower margins due to the implementation of the Medicare crossover claims process. In addition, the 2017 periods reflected favorable claim experience. The Medicare crossover process is a claims payment platform that provides for straight through processing of provider claims. As expected, this new process increased the reporting of smaller claims, resulting in a higher benefit ratio in the first nine months of 2018. Implementation of this process is expected to increase efficiency, improve payment accuracy and increase customer satisfaction over time. Although the benefit ratio in the third quarter of 2018 exceeded our expectations, we continue to expect the Medicare supplement benefit ratio to be in the range of 71 percent to 74 percent during the fourth quarter of 2018.

The net cash flows from our long-term care products generally cause an accumulation of amounts in the early years of a policy (accounted for as reserve increases) which will be paid out as benefits in later policy years (accounted for as reserve decreases). Accordingly, as the policies age, the benefit ratio typically increases, but the increase in reserves is partially offset by investment income earned on the accumulated assets.  The benefit ratio on our long-term care business in the Bankers Life segment was 122.5 percent and 117.3 percent in the third quarters of 2018 and 2017, respectively, and 119.4 percent and 116.5 percent in the first nine months of 2018 and 2017, respectively.  The interest-adjusted benefit ratio on this business was 79.0 percent and 76.1 percent in the third quarters of 2018 and 2017, respectively, and 76.4 percent and 75.6 percent in the first nine months of 2018 and 2017, respectively.  The interest-adjusted benefit ratio in the first nine months of 2017 was favorably impacted by $3.4 million of one-time reserve releases which were comprised of: (i) $1.9 million recognized in the second quarter of 2017 related to lower persistency (including the results of procedures performed to identify policies that had terminated prior to June 30, 2017 due to death); (ii) $.9 million related to an out-of-period adjustment recognized in the second quarter of 2017 that reduced reserves; and (iii) $.6 million related to the impact of policyholder decisions to surrender or reduce coverage following rate increases (such amount was not significant in the third quarter of 2017 and had no impact on the interest-adjusted benefit ratio). The interest-adjusted benefit ratio in the first nine months of 2017, excluding these favorable reserve releases, was 77.4 percent. We expect the interest-adjusted benefit ratio for this segment's long-term care block to be in the range of 74 percent to 79 percent during the fourth quarter of 2018.

Amounts added to policyholder account balances - cost of interest credited to policyholders were $24.4 million and $26.3 million in the third quarters of 2018 and 2017, respectively, and $73.9 million and $79.3 million in the first nine months of 2018 and 2017, respectively. The weighted average crediting rate for these products was 2.8 percent in both the third quarters of 2018 and 2017 and both the first nine months of 2018 and 2017. The average liabilities of the fixed interest annuity block were $2.6 billion and $2.9 billion in the first nine months of 2018 and 2017, respectively. The decrease in the liabilities related to these annuities reflects the lower sales of these products in the current low interest rate environment and consumer preference for fixed index products.

Amounts added to policyholder account balances for fixed index products represent a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the S&P 500 Index, over a specified period. Such amounts include our cost to fund the annual index credits, net of policies that are canceled prior to their anniversary date (classified as cost of options to fund index credits, net of forfeitures). Market value changes in the underlying indices during a specified period of time are classified as market value changes credited to policyholders. Such market value changes are generally offset by the net investment income related to fixed index products discussed above.

Amortization related to operations includes amortization of deferred acquisition costs and the present value of future profits. Deferred acquisition costs and the present value of future profits are collectively referred to as "insurance acquisition costs". Insurance acquisition costs are generally amortized either: (i) in relation to the estimated gross profits for interest-sensitive life and annuity products; or (ii) in relation to actual and expected premium revenue for other products.  In addition, for interest-sensitive life and annuity products, we are required to adjust the total amortization recorded to date through the statement of operations if actual experience or other evidence suggests that earlier estimates of future gross profits should be revised. Accordingly, amortization for interest-sensitive life and annuity products is dependent on the profits realized during the period and on our expectation of future profits.  For other products, we amortize insurance acquisition costs in relation to actual and expected premium revenue, and amortization is only adjusted if expected premium revenue changes or if we determine the balance of these costs is not recoverable from future profits.  Bankers Life’s amortization expense was $37.3 million and $35.9 million in the third quarters of 2018 and 2017, respectively, and was $119.4 million and $118.3 million in the first nine months of 2018 and 2017, respectively.

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Interest expense on investment borrowings represents interest expense on collateralized borrowings as further described in the note to the consolidated financial statements entitled "Investment Borrowings". The increase in interest expense in the 2018 periods is primarily due to higher interest rates on the variable rate investment borrowings.

Other operating costs and expenses in our Bankers Life segment were $101.5 million in the third quarter of 2018, down .7 percent from 2017, and $313.6 million in the first nine months of 2018, up 1.0 percent from 2017. In order to be consistent with the additional fee revenue recognized in the first nine months of 2018 pursuant to the new guidance described above under fee revenue and other income, we recognized additional distribution expense of $3.6 million (included in other operating expenses) related to the sales of such third party products. Such distribution expenses in the 2017 periods were amortized using a method that was different than the method of recognizing revenues. The annual distribution expense incurred during the calendar year will not change as a result of the adoption of the new guidance, but the amount recognized each quarterly period will correspond directly with the fee revenue recognized. Other operating costs and expenses in the first nine months of 2017 include $3.5 million for estimated future state guaranty association assessments, net of premium tax offsets, related to the liquidation of Penn Treaty Network America Insurance Company ("Penn Treaty"). Other operating costs and expenses include the following (dollars in millions):

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Commission expense and agent manager benefits	$	18.8	$	17.0	$	54.2	$	52.5
Other operating expenses	82.7		85.2		259.4		257.9
Total	$	101.5	$	102.2	$	313.6	$	310.4

Net realized investment gains (losses) fluctuate from period to period. During the first nine months of 2018, we recognized net realized investment gains of $38.1 million, which were comprised of: (i) $47.7 million of net gains from the sales of investments; (ii) a $5.6 million unfavorable change in the fair value of equity securities; and (iii) the decrease in fair value of certain fixed maturity investments with embedded derivatives of $4.0 million. During the first nine months of 2017, we recognized net realized investment gains of $27.4 million, which were comprised of: (i) $18.5 million of net gains from the sales of investments; and (ii) the increase in fair value of certain fixed maturity investments with embedded derivatives of $8.9 million.

Amortization related to net realized investment gains (losses) is the increase or decrease in the amortization of insurance acquisition costs which results from realized investment gains or losses. When we sell securities which back our interest-sensitive life and annuity products at a gain (loss) and reinvest the proceeds at a different yield, we increase (reduce) the amortization of insurance acquisition costs in order to reflect the change in estimated gross profits due to the gains (losses) realized and the resulting effect on estimated future yields. Sales of fixed maturity investments resulted in an increase (decrease) in the amortization of insurance acquisition costs of $(.4) million and $.7 million in the third quarters of 2018 and 2017, respectively, and nil and $1.0 million in the first nine months of 2018 and 2017, respectively.

Insurance policy benefits - fair value changes in embedded derivative liabilities represents fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities.

Amortization related to fair value changes in embedded derivative liabilities is the increase or decrease in the amortization of insurance acquisition costs which results from changes in interest rates used to discount embedded derivative liabilities related to our fixed index annuities.

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Washington National (dollars in millions)

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Premium collections:
Supplemental health and other health	$	148.6		$	145.2		$	456.8		$	443.2
Medicare supplement	10.9			11.7			34.9			38.7
Life	7.7			7.1			23.7			22.3
Annuity	.3			.2			1.1			.6
Total collections	$	167.5		$	164.2		$	516.5		$	504.8
Average liabilities for insurance products:
Fixed index annuities	$	279.7		$	309.9		$	287.2		$	317.9
Fixed interest annuities	88.9			96.6			91.4			98.9
SPIAs and supplemental contracts:
Mortality based	216.6			231.8			221.5			232.5
Deposit based	271.3			267.8			270.5			269.7
Separate Accounts	5.0			4.8			4.9			4.7
Health:
Supplemental health	2,885.5			2,749.9			2,850.0			2,715.3
Medicare supplement	20.1			23.9			21.0			25.4
Other health	11.5			13.4			12.0			13.7
Life:
Interest sensitive	149.7			148.9			149.5			149.0
Non-interest sensitive	163.3			174.1			168.2			174.2
Total average liabilities for insurance products, net of reinsurance ceded	$	4,091.6		$	4,021.1		$	4,076.2		$	4,001.3
Revenues:
Insurance policy income	$	170.8		$	167.4		$	512.8		$	502.0
Net investment income:
General account invested assets	66.9			65.5			195.7			193.7
Fixed index products	3.0			2.0			3.5			5.8
Trading account income related to policyholder accounts	—			.5			.2			2.4
Fee revenue and other income	.2			.3			.7			.8
Total revenues	240.9			235.7			712.9			704.7
Expenses:
Insurance policy benefits	136.4			138.0			407.2			415.7
Amounts added to policyholder account balances:
Cost of interest credited to policyholders	3.3			3.2			9.6			9.7
Cost of options to fund index credits, net of forfeitures	1.1			1.2			3.3			3.2
Market value changes credited to policyholders	2.7			2.3			3.6			8.1
Amortization related to operations	14.0			14.3			42.9			43.9
Interest expense on investment borrowings	3.0			1.7			7.8			4.5
Other operating costs and expenses	50.1			47.5			148.5			145.0
Total benefits and expenses	210.6			208.2			622.9			630.1
Income before net realized investment gains (losses) and fair value changes in embedded derivative liabilities, net of related amortization, and income taxes	30.3			27.5			90.0			74.6
Net realized investment gains (losses)	(2.1		)	6.5			(3.5		)	12.6
Amortization related to net realized investment gains (losses)	.1			—			.1			—
Net realized investment gains (losses), net of related amortization	(2.0		)	6.5			(3.4		)	12.6
Insurance policy benefits - fair value changes in embedded derivative liabilities	.6			.1			1.8			—
Amortization related to fair value changes in embedded derivative liabilities	(.5		)	(.1		)	(1.3		)	—
Fair value changes in embedded derivative liabilities, net of related amortization	.1			—			.5			—
Income before income taxes	$	28.4		$	34.0		$	87.1		$	87.2

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	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Health benefit ratios:
Supplemental health and other:
Insurance policy benefits	$	123.6		$	122.4		$	364.7		$	369.2
Benefit ratio (a)	81.3		%	83.2		%	80.1		%	84.1		%
Interest-adjusted benefit ratio (b)	56.9		%	59.0		%	56.0		%	60.0		%
Medicare supplement:
Insurance policy benefits	$	7.4		$	9.1		$	24.7		$	28.3
Benefit ratio (a)	64.3		%	68.1		%	68.3		%	68.4		%

_________________

(a) We calculate benefit ratios by dividing the related product’s insurance policy benefits by insurance policy income.

(b) We calculate the interest-adjusted benefit ratio (a non-GAAP measure) for Washington National's supplemental health products by dividing such product’s insurance policy benefits less the imputed interest income on the accumulated assets backing the insurance liabilities by policy income.  These are considered non-GAAP financial measures.  A non-GAAP measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

These non-GAAP financial measures of "interest-adjusted benefit ratios" differ from "benefit ratios" due to the deduction of imputed interest income on the accumulated assets backing the insurance liabilities from the product’s insurance policy benefits used to determine the ratio.  Interest income is an important factor in measuring the performance of health products that are expected to be inforce for a longer duration of time, are not subject to unilateral changes in provisions (such as non-cancelable or guaranteed renewable contracts) and require the performance of various functions and services (including insurance protection) for an extended period of time.  The net cash flows from supplemental health products generally cause an accumulation of amounts in the early years of a policy (accounted for as reserve increases) that will be paid out as benefits in later policy years (accounted for as reserve decreases).  Accordingly, as the policies age, the benefit ratio will typically increase, but the increase in benefits will be partially offset by the imputed interest income earned on the accumulated assets.  The interest-adjusted benefit ratio reflects the effects of such interest income offset (which is equal to the tabular interest on the related insurance liabilities). Since interest income is an important factor in measuring the performance of these products, management believes a benefit ratio that includes the effect of interest income is useful in analyzing product performance.  We utilize the interest-adjusted benefit ratio in measuring segment performance because we believe that this performance measure is a better indicator of the ongoing businesses and trends in the business.  However, the "interest-adjusted benefit ratio" does not replace the "benefit ratio" as a measure of current period benefits to current period insurance policy income. Accordingly, management reviews both "benefit ratios" and "interest-adjusted benefit ratios" when analyzing the financial results attributable to these products.  The imputed investment income earned on the accumulated assets backing the supplemental health reserves was $37.0 million and $35.6 million in the three months ended September 30, 2018 and 2017, respectively, and was $109.8 million and $105.7 million in the nine months ended September 30, 2018 and 2017, respectively.

Total premium collections were $167.5 million in the third quarter of 2018, up 2.0 percent from 2017, and were $516.5 million in the first nine months of 2018, up 2.3 percent from 2017, driven by sales and persistency of the segment's supplemental health block; partially offset by lower Medicare supplement collected premiums due to the run-off of this block of business. This segment no longer markets Medicare supplement products and no longer actively pursues sales of annuity products. See "Premium Collections" for further analysis of fluctuations in premiums collected by product.

Average liabilities for insurance products, net of reinsurance ceded were $4.1 billion in the third quarter of 2018, up 1.8 percent from 2017, and were $4.1 billion in the first nine months of 2018, up 1.9 percent from 2017, reflecting an increase in the supplemental health block; partially offset by the run-off of the annuity blocks.

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Insurance policy income is comprised of premiums earned on traditional insurance policies which provide mortality or morbidity coverage and fees and other charges assessed on other policies. Such income has increased in recent periods as supplemental health premiums have increased consistent with sales; partially offset by the decrease in Medicare supplement premiums.

Net investment income on general account invested assets (which excludes income on policyholder portfolios) was $66.9 million in the third quarter of 2018, up 2.1 percent from 2017, and was $195.7 million in the first nine months of 2018, up 1.0 percent from 2017. Prepayment income (including call premiums) was $1.6 million and $2.6 million in the third quarters of 2018 and 2017, respectively, and $2.6 million and $4.7 million in the first nine months of 2018 and 2017, respectively.

Net investment income related to fixed index products represents the change in the estimated fair value of options which are purchased in an effort to offset or hedge certain potential benefits accruing to the policyholders of our fixed index products. Our fixed index products are designed so that investment income spread is expected to be more than adequate to cover the cost of the options and other costs related to these policies. Net investment income related to fixed index products was $3.0 million and $2.0 million in the third quarters of 2018 and 2017, respectively, and $3.5 million and $5.8 million in the first nine months of 2018 and 2017, respectively. Such amounts were substantially offset by the corresponding charge to amounts added to policyholder account balances - market value changes credited to policyholders.  Such income and related charges fluctuate based on the value of options embedded in the segment's fixed index annuity policyholder account balances subject to this benefit and to the performance of the index to which the returns on such products are linked.

Insurance policy benefits fluctuated as a result of the factors summarized below. Benefit ratios are calculated by dividing the related insurance product's insurance policy benefits by insurance policy income.

Washington National's supplemental health products (including specified disease, accident and hospital indemnity products) generally provide fixed or limited benefits. For example, payments under cancer insurance policies are generally made directly to, or at the direction of, the policyholder following diagnosis of, or treatment for, a covered type of cancer. Approximately three-fourths of our supplemental health policies inforce (based on policy count) are sold with return of premium or cash value riders. The return of premium rider generally provides that after a policy has been inforce for a specified number of years or upon the policyholder reaching a specified age, we will pay to the policyholder, or a beneficiary under the policy, the aggregate amount of all premiums paid under the policy, without interest, less the aggregate amount of all claims incurred under the policy. The cash value rider is similar to the return of premium rider, but also provides for payment of a graded portion of the return of premium benefit if the policy terminates before the return of premium benefit is earned. Accordingly, the net cash flows from these products generally result in the accumulation of amounts in the early years of a policy (reflected in our earnings as reserve increases) which will be paid out as benefits in later policy years (reflected in our earnings as reserve decreases which offset the recording of benefit payments). As the policies age, the benefit ratio will typically increase, but the increase in benefits will be partially offset by investment income earned on the accumulated assets. The benefit ratio will fluctuate depending on the claim experience during the year.

Insurance margins (insurance policy income less insurance policy benefits) on supplemental health products were $28.6 million and $24.8 million in the third quarters of 2018 and 2017, respectively, and were $90.6 million and $69.9 million in the first nine months of 2018 and 2017, respectively. The increase in margins on this block of business reflects higher insurance policy income due to higher sales and favorable claims and favorable development of prior-period claim reserves in the 2018 periods. The interest-adjusted benefit ratio on this supplemental health business was 56.9 percent and 59.0 percent in the third quarters of 2018 and 2017, respectively, and was 56.0 percent and 60.0 percent in the first nine months of 2018 and 2017, respectively. We continue to expect the supplemental health interest-adjusted benefit ratio to be in the range of 56 percent to 59 percent during the fourth quarter of 2018.

Washington National's Medicare supplement business primarily consists of individual policies. The insurance product liabilities we establish for our Medicare supplement business are subject to significant estimates and the ultimate claim liability we incur for a particular period is likely to be different than our initial estimate.  Governmental regulations generally require us to attain and maintain a ratio of total benefits incurred to total premiums earned (excluding changes in policy benefit reserves), after three years from the original issuance of the policy and over the lifetime of the policy, of not less than 65 percent on these products, as determined in accordance with statutory accounting principles. Insurance margins (insurance policy income less insurance policy benefits) on these products were $4.1 million and $4.2 million in the third quarters of 2018 and 2017,

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respectively, and $11.5 million and $13.0 million in the first nine months of 2018 and 2017, respectively. Such decrease reflects the run-off of this block of business.

Amounts added to policyholder account balances - cost of interest credited to policyholders were $3.3 million and $3.2 million in the third quarters of 2018 and 2017, respectively, and $9.6 million and $9.7 million in the first nine months of 2018 and 2017, respectively.

Amounts added to policyholder account balances for fixed index products represent a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the S&P 500 Index, over a specified period. Such amounts include our cost to fund the annual index credits, net of policies that are canceled prior to their anniversary date (classified as cost of options to fund index credits, net of forfeitures). Market value changes in the underlying indices during a specified period of time are classified as market value changes credited to policyholders. Such market value changes are generally offset by the net investment income related to fixed index products discussed above.

Amortization related to operations includes amortization of insurance acquisition costs. Insurance acquisition costs are generally amortized in relation to actual and expected premium revenue, and amortization is only adjusted if expected premium revenue changes or if we determine the balance of these costs is not recoverable from future profits. Such amounts were generally consistent with the related premium revenue. A revision to our current assumptions could result in increases or decreases to amortization expense in future periods. Washington National's amortization expense was $14.0 million and $14.3 million in the third quarters of 2018 and 2017, respectively, and $42.9 million and $43.9 million in the first nine months of 2018 and 2017, respectively.

Interest expense on investment borrowings represents interest expense on collateralized borrowings as further described in the note to the consolidated financial statements entitled "Investment Borrowings". The increase in interest expense in the 2018 periods is due to higher interest rates on the variable rate investment borrowings.

Other operating costs and expenses were $50.1 million and $47.5 million in the third quarters of 2018 and 2017, respectively, and $148.5 million and $145.0 million in the first nine months of 2018 and 2017, respectively. Such expenses in the first nine months of 2017 include $1.3 million for estimated future state guaranty association assessments, net of premium tax offsets, related to the liquidation of Penn Treaty. Other operating costs and expenses also include commission expense of $18.3 million and $17.8 million in the third quarters of 2018 and 2017, respectively, and $54.8 million and $51.9 million in the first nine months of 2018 and 2017, respectively.

Net realized investment gains (losses) fluctuate from period to period. During the first nine months of 2018, we recognized net realized investment losses of $3.5 million, which were comprised of: (i) $3.1 million of net gains from the sales of investments; (ii) a $3.1 million unfavorable change in the fair value of equity securities; (iii) an increase in fair value of certain fixed maturity investments with embedded derivatives of $1.5 million; and (iv) the decrease in fair value of embedded derivatives related to a modified coinsurance agreement of $5.0 million. During the first nine months of 2017, we recognized net realized investment gains of $12.6 million, which were comprised of: (i) $7.7 million of net gains from the sales of investments; (ii) the increase in fair value of certain fixed maturity investments with embedded derivatives of $3.0 million; (iii) the increase in fair value of embedded derivatives related to a modified coinsurance agreement of $2.4 million; and (iv) $.5 million of writedowns of investments for other than temporary declines in fair value recognized through earnings.

Amortization related to net realized investment gains (losses) is the increase or decrease in the amortization of insurance acquisition costs which results from realized investment gains or losses. When we sell securities which back our interest-sensitive life and annuity products at a gain (loss) and reinvest the proceeds at a different yield (or when we have the intent to sell the impaired investments before an anticipated recovery in value occurs), we increase (reduce) the amortization of insurance acquisition costs in order to reflect the change in estimated gross profits due to the gains (losses) realized and the resulting effect on estimated future yields.

Insurance policy benefits - fair value changes in embedded derivative liabilities represents fair value changes due to fluctuations in the interest rates used to discount embedded derivative liabilities related to our fixed index annuities.

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Amortization related to fair value changes in embedded derivative liabilities is the increase or decrease in the amortization of insurance acquisition costs which results from changes in interest rates used to discount embedded derivative liabilities related to our fixed index annuities.

Colonial Penn (dollars in millions)

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018			2017
Premium collections:
Life	$	73.6	$	72.2	$	221.8		$	218.1
Supplemental health	.4		.4		1.3			1.5
Total collections	$	74.0	$	72.6	$	223.1		$	219.6
Average liabilities for insurance products:
SPIAs - mortality based	$	68.8	$	73.6	$	70.2		$	73.0
Health:
Medicare supplement	4.9		5.6		5.1			5.8
Other health	3.6		4.1		3.8			4.1
Life:
Interest sensitive	14.7		15.4		15.0			15.6
Non-interest sensitive	741.7		720.1		736.8			714.3
Total average liabilities for insurance products, net of reinsurance ceded	$	833.7	$	818.8	$	830.9		$	812.8
Revenues:
Insurance policy income	$	75.1	$	73.1	$	223.7		$	219.1
Net investment income on general account invested assets	11.1		11.0		33.4			33.1
Fee revenue and other income	.5		.3		1.4			.9
Total revenues	86.7		84.4		258.5			253.1
Expenses:
Insurance policy benefits	49.6		47.5		156.6			150.3
Amounts added to annuity and interest-sensitive life product account balances	.2		.2		.5			.5
Amortization related to operations	4.2		3.9		12.9			11.9
Interest expense on investment borrowings	.3		.3		1.0			.7
Other operating costs and expenses	26.3		23.5		77.5			73.0
Total benefits and expenses	80.6		75.4		248.5			236.4
Loss before net realized investment losses and income taxes	6.1		9.0		10.0			16.7
Net realized investment losses	.2		1.0		(.2		)	.8
Loss before income taxes	$	6.3	$	10.0	$	9.8		$	17.5

This segment's results are significantly impacted by the accounting standard related to deferred acquisition costs. We are not able to defer most of Colonial Penn's direct response advertising costs although such costs generate predictable sales and future in-force profits. We plan to continue to invest in this segment's business, including the development of new products and markets. The amount of our investment in new business during a particular period will have a significant impact on this segment's results. We currently expect this segment to report earnings (before net realized investment gains (losses) and income taxes) in 2018 in the range of $12 million to $18 million.

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Total premium collections were $74.0 million in the third quarter of 2018, up 1.9 percent from 2017, and were $223.1 million in the first nine months of 2018, up 1.6 percent from 2017. The increase was driven by recent sales activity and steady persistency. See "Premium Collections" for further analysis of Colonial Penn's premium collections.

Average liabilities for insurance products, net of reinsurance ceded have increased as a result of growth in the core graded benefit and simplified issue life insurance block in this segment.

Insurance policy income is comprised of premiums earned on policies which provide mortality or morbidity coverage and fees and other charges assessed on other policies. The increase in such income reflects the growth in the block of graded benefit and simplified issue life insurance business.

Net investment income on general account invested assets in the 2018 periods was comparable to the corresponding periods in 2017.

Insurance policy benefits in the first nine months of 2018, as compared to the first nine months of 2017, reflect: (i) a $1.1 million out-of-period adjustment which increased reserves on a closed block of payout annuities in the first quarter of 2018; and (ii) favorable changes to liabilities for insurance products in the third quarter of 2017 including a $2.5 million out-of-period adjustment and a $.5 million refinement to the calculation.

Amortization related to operations includes amortization of insurance acquisition costs. Insurance acquisition costs in the Colonial Penn segment are amortized in relation to actual and expected premium revenue, and amortization is only adjusted if expected premium revenue changes or if we determine the balance of these costs is not recoverable from future profits. Such amounts were generally consistent with the related premium revenue and gross profits for such periods and the assumptions we made when we established the present value of future profits. A revision to our current assumptions could result in increases or decreases to amortization expense in future periods.

Other operating costs and expenses in our Colonial Penn segment fluctuate primarily due to changes in the marketing expenses incurred to generate new business. Marketing expenses were higher in the 2018 periods as compared to the corresponding periods in 2017. The demand and cost of television advertising appropriate for Colonial Penn's campaigns has fluctuated widely in certain periods. We are disciplined with our marketing expenditures and will increase or decrease our advertising spend depending on prices.

Net realized investment gains (losses) fluctuate from period to period. During the first nine months of 2018, we recognized net realized investment losses of $.2 million, resulting from the decrease in fair value of certain fixed maturity investments with embedded derivatives. During the first nine months of 2017, we recognized net realized investment gains of $.8 million, which were comprised of: (i) $.9 million of net gains from the sales of investments; (ii) the increase in fair value of certain fixed maturity investments with embedded derivatives of $.4 million; and (iii) $.5 million of writedowns of investments for other than temporary declines in fair value which were recorded in earnings.

Management believes that an analysis of Adjusted EBIT for Colonial Penn, separated between in-force and new business, provides increased clarity for this segment as the vast majority of the costs to generate new business in this segment are not deferrable and Adjusted EBIT will fluctuate based on management's decisions on how much marketing costs to incur in each period. Adjusted EBIT from new business includes pre-tax revenues and expenses associated with new sales of our insurance products during the first year after the sale is completed. Adjusted EBIT from in-force business includes all pre-tax revenues and expenses associated with sales of insurance products that were completed more than one year before the end of the reporting period. The allocation of certain revenues and expenses between new and in-force business is based on estimates, which we believe are reasonable.

Recognizing the accounting standard that requires us to expense certain direct response advertising costs (rather than deferring such costs as deferred acquisition costs), the amount of our investment in new business in the Colonial Penn segment during a particular period will have a significant impact on the segment results. The following summarizes our earnings, separated between in-force and new business for Colonial Penn (dollars in millions):

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	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Adjusted EBIT from In-Force Business
Revenues:
Insurance policy income	$	63.3		$	61.0		$	188.7		$	180.8
Net investment income and other	11.6			11.3			34.8			34.0
Total revenues	74.9			72.3			223.5			214.8
Benefits and expenses:
Insurance policy benefits	42.6			40.3			135.8			127.5
Amortization	4.0			3.7			12.4			11.3
Other expenses	9.5			8.5			27.3			24.7
Total benefits and expenses	56.1			52.5			175.5			163.5
Adjusted EBIT from In-Force Business	$	18.8		$	19.8		$	48.0		$	51.3
Adjusted EBIT from New Business
Revenues:
Insurance policy income	$	11.8		$	12.1		$	35.0		$	38.3
Net investment income and other	—			—			—			—
Total revenues	11.8			12.1			35.0			38.3
Benefits and expenses:
Insurance policy benefits	7.2			7.4			21.3			23.3
Amortization	.2			.2			.5			.6
Other expenses	17.1			15.3			51.2			49.0
Total benefits and expenses	24.5			22.9			73.0			72.9
Adjusted EBIT from New Business	$	(12.7	)	$	(10.8	)	$	(38.0	)	$	(34.6	)
Adjusted EBIT from In-Force and New Business
Revenues:
Insurance policy income	$	75.1		$	73.1		$	223.7		$	219.1
Net investment income and other	11.6			11.3			34.8			34.0
Total revenues	86.7			84.4			258.5			253.1
Benefits and expenses:
Insurance policy benefits	49.8			47.7			157.1			150.8
Amortization	4.2			3.9			12.9			11.9
Other expenses	26.6			23.8			78.5			73.7
Total benefits and expenses	80.6			75.4			248.5			236.4
Adjusted EBIT from In-Force and New Business	$	6.1		$	9.0		$	10.0		$	16.7

The Adjusted EBIT from in-force business in the Colonial Penn segment decreased in the first nine months of 2018, as compared to the same period in 2017, reflecting: (i) a $1.1 million out-of-period adjustment which increased reserves on a closed block of payout annuities in the first quarter of 2018; and (ii) the aforementioned $3.0 million favorable impact related to liabilities for insurance products in the third quarter of 2017. The Adjusted EBIT from new business in the Colonial Penn segment in the 2018 periods primarily reflects higher marketing costs. The vast majority of the costs to generate new business in this segment are not deferrable and Adjusted EBIT will fluctuate based on management's decisions on how much marketing costs to incur in each period.

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Long-term care in run-off (dollars in millions)

The long-term care in run-off segment consists of: (i) the long-term care business that was recaptured due to the termination of certain reinsurance agreements effective September 30, 2016 (such business is not actively marketed and was issued or acquired by Washington National and BCLIC); and (ii) certain legacy (prior to 2003) comprehensive and nursing home long-term care policies ceded to Wilton Re in September 2018 (such business is not actively marketed and was issued by Bankers Life). Beginning in the fourth quarter of 2018, the earnings of this segment will only reflect the long-term care business that was recaptured in September 2016 as the legacy long-term care business was ceded to Wilton Re under a 100% indemnity coinsurance agreement in September 2018. Accordingly, we expect this segment to report normalized earnings before net realized investment gains (losses) of approximately breakeven over the long-term. However, this segment's quarterly results can be volatile.

	Three months ended					Nine months ended
	September 30,					September 30,
	2018			2017		2018			2017
Premium collections:
Long-term care (all renewal)	$	44.9		$	48.7	$	142.1		$	156.0
Average liabilities for insurance products:
Average liabilities for long-term care products	$	3,548.2		$	3,800.0	$	3,632.6		$	3,729.0
Revenues:
Insurance policy income	$	47.0		$	52.0	$	144.6		$	159.7
Net investment income on general account invested assets	54.1			54.7		164.2			168.0
Total revenues	101.1			106.7		308.8			327.7
Expenses:
Insurance policy benefits	91.3			86.5		259.9			257.6
Amortization	2.1			2.8		7.0			8.0
Other operating costs and expenses	5.6			6.8		19.3			19.9
Total benefits and expenses	99.0			96.1		286.2			285.5
Income (loss) before net realized investment gains (losses) and income taxes	2.1			10.6		22.6			42.2
Net realized investment gains (losses)	(2.1		)	9.0		(.4		)	11.5
Income before income taxes	$	—		$	19.6	$	22.2		$	53.7

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Health benefit ratios:
Long-term care:
Insurance policy benefits	$	91.3		$	86.5		$	259.9		$	257.6
Benefit ratio (a)	194.1		%	166.6		%	179.7		%	161.3		%
Interest-adjusted benefit ratio (b)	90.4		%	71.1		%	78.2		%	67.7		%

_______________

(a) We calculate benefit ratios by dividing the related product's insurance policy benefits by insurance policy income.

(b) We calculate the interest-adjusted benefit ratio (a non-GAAP measure) for long-term care products in this segment by dividing such product's insurance policy benefits less the imputed interest income on the accumulated assets backing the insurance liabilities by policy income. These are considered non-GAAP financial measures. A non-GAAP measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that

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are normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

These non-GAAP financial measures of "interest-adjusted benefit ratios" differ from "benefit ratios" due to the deduction of imputed interest income on the accumulated assets backing the insurance liabilities from the product's insurance policy benefits used to determine the ratio. Interest income is an important factor in measuring the performance of health products that are expected to be inforce for a longer duration of time, are not subject to unilateral changes in provisions (such as non-cancelable or guaranteed renewable contracts) and require the performance of various functions and services (including insurance protection) for an extended period of time. The net cash flows from long-term care products generally cause an accumulation of amounts in the early years of a policy (accounted for as reserve increases) that will be paid out as benefits in later policy years (accounted for as reserve decreases). Accordingly, as the policies age, the benefit ratio will typically increase, but the increase in benefits will be partially offset by the imputed interest income earned on the accumulated assets. The interest-adjusted benefit ratio reflects the effects of such interest income offset (which is equal to the tabular interest on the related insurance liabilities). Since interest income is an important factor in measuring the performance of these products, management believes a benefit ratio that includes the effect of interest income is useful in analyzing product performance. We utilize the interest-adjusted benefit ratio in measuring segment performance because we believe that this performance measure is a better indicator of the ongoing businesses and trends in the business. However, the "interest-adjusted benefit ratio" does not replace the "benefit ratio" as a measure of current period benefits to current period insurance policy income. Accordingly, management reviews both "benefit ratios" and "interest-adjusted benefit ratios" when analyzing the financial results attributable to these products. The imputed investment income earned on the accumulated assets backing the long-term care reserves was $48.7 million and $49.6 million in the three months ended September 30, 2018 and 2017, respectively, and was $146.8 million and $149.5 million in the nine months ended September 30, 2018 and 2017, respectively.

Average liabilities for long-term care products were increased by $186 million and $96 million in the three and nine months ended September 30, 2017, respectively, to reflect the premium deficiencies that would exist if unrealized gains on the assets backing such products had been realized and the proceeds from the sales of such assets were invested at then current yields. Such increase is reflected as a reduction of accumulated other comprehensive income.

Insurance policy benefits were $91.3 million and $86.5 million in the third quarters of 2018 and 2017, respectively, and were $259.9 million and $257.6 million in the first nine months of 2018 and 2017, respectively. The interest-adjusted benefit ratio for this long-term care block was 90.4 percent and 71.1 percent in the third quarters of 2018 and 2017, respectively, and was 78.2 percent and 67.7 percent in the first nine months of 2018 and 2017, respectively. This block had favorable claim experience in the third quarter of 2017. The interest-adjusted benefit ratio in the first nine months of 2017 was favorably impacted by $7.9 million of one-time reserve releases which were comprised of: (i) $4.6 million related to lower persistency (including the results of procedures performed to identify policies that had terminated prior to June 30, 2017 due to death); (ii) $.8 million related to an out-of-period adjustment that reduced reserves; and (iii) $2.5 million related to the impact of policyholder decisions to surrender or reduce coverage following rate increases (such amount was not significant in the third quarter of 2017 and had no impact on the interest-adjusted benefit ratio). The interest-adjusted benefit ratio in the first nine months of 2017, excluding these favorable reserve releases, was 72.6 percent.

Net realized investment gains (losses) fluctuate from period to period. During the first nine months of 2018, we recognized net realized investment losses of $.4 million, which were comprised of: (i) $2.5 million of net gains from the sales of investments; (ii) a $.5 million unfavorable change in the fair value of equity securities; (iii) the decrease in fair value of certain fixed maturity investments with embedded derivatives of $.3 million; and (iv) $2.1 million of writedowns of investments for other than temporary declines in fair value recognized through earnings. During the first nine months of 2017, we recognized net realized investment gains of $11.5 million, which were comprised of: (i) $28.3 million of net gains from the sales of investments; and (ii) $16.8 million of writedowns of investments for other than temporary declines in fair value recognized through earnings.

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Corporate Operations (dollars in millions)

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Corporate operations:
Interest expense on corporate debt	$	(12.1	)	$	(11.7	)	$	(35.9	)	$	(34.8	)
Net investment income (loss):
General investment portfolio	2.0			1.4			5.5			3.7
Other special-purpose portfolios:
COLI	2.4			2.3			(1.6		)	11.6
Investments held in a rabbi trust	1.3			.9			1.9			2.4
Other trading account activities	2.3			2.4			7.4			7.1
Fee revenue and other income	1.6			1.8			4.9			6.5
Other operating costs and expenses	(21.4		)	(23.7		)	(59.4		)	(68.3		)
Loss before net realized investment gains (losses), earnings attributable to VIEs and income taxes	(23.9		)	(26.6		)	(77.2		)	(71.8		)
Net realized investment gains (losses)	(.1		)	(.6		)	(7.0		)	—
Earnings attributable to VIEs	.8			(3.3		)	(.1		)	(4.6		)
Fair value changes related to agent deferred compensation plan	—			(13.4		)	11.0			(13.4		)
Loss related to reinsurance transaction	(704.2		)	—			(704.2		)	—
Loss before income taxes	$	(727.4	)	$	(43.9	)	$	(777.5	)	$	(89.8	)

Interest expense on corporate debt was $12.1 million and $11.7 million in the third quarters of 2018 and 2017, respectively, and was $35.9 million and $34.8 million in the first nine months of 2018 and 2017, respectively. Our average corporate debt outstanding was $925.0 million in both the first nine months of 2018 and 2017. The average interest rate on our debt was 4.8 percent and 4.7 percent in the first nine months of 2018 and 2017, respectively.

Net investment income on general investment portfolio fluctuates based on the amount and type of invested assets in the corporate operations segment.

Net investment income on other special-purpose portfolios includes the income (loss) from: (i) investments related to deferred compensation plans held in a rabbi trust (which is offset by amounts included in other operating costs and expenses as the investment results are allocated to participants' account balances); (ii) trading account activities; and (iii) income (loss) from COLI equal to the difference between the return on these investments (representing the change in value of the underlying investments) and our overall portfolio yield.  COLI is utilized as an investment vehicle to fund Bankers Life's agent deferred compensation plan.  For segment reporting, the Bankers Life segment is allocated a return on these investments equivalent to the yield on the Company’s overall portfolio, with any difference in the actual COLI return allocated to the Corporate operations segment. In the first quarter of 2017, we recognized a death benefit, net of cash surrender value, of $2.0 million related to the COLI, which was recognized as net investment income from COLI.

Fee revenue and other income includes the fees our wholly-owned investment advisor earns for managing portfolios of commercial bank loans for investment trusts. These trusts are consolidated as VIEs in our consolidated financial statements, but the fees are reflected as revenues and the fee expense is reflected in the earnings attributable to VIEs.

Other operating costs and expenses include general corporate expenses, net of amounts charged to subsidiaries for services provided by the corporate operations. These amounts fluctuate as a result of expenses such as legal and consulting costs which often vary from period to period and were lower in the 2018 periods as compared to the 2017 periods.

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Net realized investment gains (losses) fluctuate from period to period. During the first nine months of 2018, net realized investment losses in this segment were $7.0 million and were comprised of: (i) a $4.1 million unfavorable change in the fair value of equity securities (none of which was recognized by the VIEs); and (ii) $2.9 million of net losses from the sales of investments (including $3.2 million of net losses recognized by the VIEs and $.3 million of net gains on other investment sales). During the first nine months of 2017, net realized investment gains in this segment were nil and were comprised of: (i) $4.7 million of net gains from the sales of investments (including $2.2 million of net gains recognized by the VIEs and $2.5 million of net gains on other investment sales); (ii) $4.3 million of losses on the dissolution of VIEs; and (iii) $.4 million of writedowns of investments held by VIEs due to other-than-temporary declines in value recognized through earnings.

Earnings attributable to VIEs include the earnings in certain VIEs that we are required to consolidate, net of affiliated amounts. Such earnings are not indicative of, and are unrelated to, the Company's underlying fundamentals.

Fair value changes related to agent deferred compensation plan relates to changes in the underlying actuarial assumptions used to value liabilities for our agent deferred compensation plan.

Loss related to reinsurance transaction resulted from ceding our legacy (prior to 2003) comprehensive and nursing home long-term care policies to Wilton Re in September 2018 through 100% indemnity coinsurance. We recognized a pre-tax loss related to the reinsurance transaction of $704.2 million (net of realized gains on the transfer of assets related to the transaction of $363.4 million).

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PREMIUM COLLECTIONS

In accordance with GAAP, insurance policy income in our consolidated statement of operations consists of premiums earned for traditional insurance policies that have life contingencies or morbidity features.  For annuity and interest-sensitive life contracts, premiums collected are not reported as revenues, but as deposits to insurance liabilities.  We recognize revenues for these products over time in the form of investment income and surrender or other charges.

Our insurance segments sell products through three primary distribution channels - career agents (our Bankers Life segment), direct marketing (our Colonial Penn segment) and independent producers (our Washington National segment).  Our career agency force in the Bankers Life segment sells primarily Medicare supplement and long-term care insurance policies, life insurance and annuities.  These agents visit the customer's home, which permits one-on-one contact with potential policyholders and promotes strong personal relationships with existing policyholders.  Our direct marketing distribution channel in the Colonial Penn segment is engaged primarily in the sale of graded benefit life and simplified issue life insurance policies which are sold directly to the policyholder.  Our Washington National segment sells primarily supplemental health and life insurance.  These products are marketed through PMA, a wholly-owned subsidiary that specializes in marketing and distributing health products, and through independent marketing organizations and insurance agencies, including worksite marketing.

Agents, insurance brokers and marketing companies who market our products and prospective purchasers of our products use the financial strength ratings of our insurance subsidiaries as an important factor in determining whether to market or purchase.  Ratings have the most impact on our sales of supplemental health and life products to consumers at the worksite.  The current financial strength ratings of our primary insurance subsidiaries from Moody's Investor Services, Inc. ("Moody's"), Fitch Ratings ("Fitch"), A.M. Best Company ("A.M. Best") and S&P are "A3", "BBB+", "A-" and "BBB+", respectively.  For a description of these ratings and additional information on our ratings, see "Financial Strength Ratings of our Insurance Subsidiaries".

We set premium rates on our health insurance policies based on facts and circumstances known at the time we issue the policies using assumptions about numerous variables, including the actuarial probability of a policyholder incurring a claim, the probable size of the claim, and the interest rate earned on our investment of premiums.  We also consider historical claims information, industry statistics, the rates of our competitors and other factors.  If our actual claims experience is less favorable than we anticipated and we are unable to raise our premium rates, our financial results may be adversely affected.  We generally cannot raise our health insurance premiums in any state until we obtain the approval of the state insurance regulator.  We review the adequacy of our premium rates regularly and file for rate increases on our products when we believe such rates are too low.  It is likely that we will not be able to obtain approval for all requested premium rate increases.  If such requests are denied in one or more states, our net income may decrease.  If such requests are approved, increased premium rates may reduce the volume of our new sales and may cause existing policyholders to lapse their policies.  If the healthier policyholders allow their policies to lapse, this would reduce our premium income and profitability in the future.

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Total premium collections were $922.1 million in the third quarter of 2018, up 4.5 percent from 2017, and were $2,797.8 million in the first nine months of 2018, up 1.8 percent from 2017. First-year collected premiums were $349.1 million in the third quarter of 2018, up 9.4 percent from 2017, and were $1,049.2 million in the first nine months of 2018, up 3.2 percent from 2017. Total premiums collected are summarized as follows (dollars in millions):

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
First-year:
Bankers Life	$	318.9	$	288.2	$	956.7	$	919.2
Washington National	18.5		18.9		57.6		59.1
Colonial Penn	11.7		12.1		34.9		38.5
Total first-year	349.1		319.2		1,049.2		1,016.8
Renewal:
Bankers Life	316.8		308.7		959.4		947.8
Washington National	149.0		145.3		458.9		445.7
Colonial Penn	62.3		60.5		188.2		181.1
Long-term care in run-off	44.9		48.7		142.1		156.0
Total renewal	573.0		563.2		1,748.6		1,730.6
Total premiums collected	$	922.1	$	882.4	$	2,797.8	$	2,747.4

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Total premium collections by segment were as follows:

Bankers Life (dollars in millions)

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Premiums collected by product:
Annuities:
Fixed index (first-year)	$	260.2	$	222.6	$	769.5	$	705.1
Other fixed interest (first-year)	9.0		12.9		35.6		48.6
Other fixed interest (renewal)	1.3		1.0		3.8		4.6
Subtotal - other fixed interest annuities	10.3		13.9		39.4		53.2
Total annuities	270.5		236.5		808.9		758.3
Health:
Medicare supplement (first-year)	15.2		16.8		46.1		51.9
Medicare supplement (renewal)	164.2		160.4		498.4		496.7
Subtotal - Medicare supplement	179.4		177.2		544.5		548.6
Long-term care (first-year)	3.9		3.8		11.3		12.1
Long-term care (renewal)	59.1		58.7		180.2		181.2
Subtotal - long-term care	63.0		62.5		191.5		193.3
Supplemental health (first-year)	1.0		1.1		3.2		3.8
Supplemental health (renewal)	4.8		4.4		14.3		13.0
Subtotal – supplemental health	5.8		5.5		17.5		16.8
Other health (first-year)	.2		.2		.6		.6
Other health (renewal)	1.3		1.3		3.9		4.0
Subtotal - other health	1.5		1.5		4.5		4.6
Total health	249.7		246.7		758.0		763.3
Life insurance:
Traditional (first-year)	17.2		19.8		54.7		62.1
Traditional (renewal)	55.7		53.9		167.3		162.3
Subtotal - traditional	72.9		73.7		222.0		224.4
Interest-sensitive (first-year)	12.2		11.0		35.7		35.0
Interest-sensitive (renewal)	30.4		29.0		91.5		86.0
Subtotal - interest-sensitive	42.6		40.0		127.2		121.0
Total life insurance	115.5		113.7		349.2		345.4
Collections on insurance products:
Total first-year premium collections on insurance products	318.9		288.2		956.7		919.2
Total renewal premium collections on insurance products	316.8		308.7		959.4		947.8
Total collections on insurance products	$	635.7	$	596.9	$	1,916.1	$	1,867.0

Annuities in this segment include fixed index and other fixed interest annuities sold to the senior market. Annuity collections in this segment increased 14 percent, to $270.5 million, in the third quarter of 2018, and 6.7 percent, to $808.9 million, in the first nine months of 2018, as compared to the same periods in 2017. Premium collections from our fixed index products were favorably impacted in the 2018 periods by the general stock market performance which made these products

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attractive to certain customers. Premium collections from our other fixed interest products decreased in the 2018 periods due to lower sales of these products in the current low interest rate environment and consumer preference for fixed index products.

Health products include Medicare supplement, long-term care and other insurance products. Our profits on health policies depend on the overall level of sales, the length of time the business remains inforce, investment yields, claims experience and expense management.

Collected premiums on Medicare supplement policies in the Bankers Life segment increased 1.2 percent, to $179.4 million, in the third quarter of 2018, and decreased .7 percent, to $544.5 million, in the first nine months of 2018, as compared to the same periods in 2017.

Premiums collected on Bankers Life's long-term care policies increased .8 percent, to $63.0 million, in the third quarter of 2018, and decreased .9 percent, to $191.5 million, in the first nine months of 2018, as compared to the same periods in 2017.

Life products in this segment include traditional and interest-sensitive life products. Life premiums collected in this segment in the 2018 periods were slightly higher than the comparable periods in 2017, reflecting stable persistency; partially offset by lower first-year premiums.

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Washington National (dollars in millions)

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Premiums collected by product:
Health:
Medicare supplement (renewal)	$	10.9	$	11.7	$	34.9	$	38.7
Supplemental health (first-year)	17.1		17.8		53.1		55.2
Supplemental health (renewal)	131.1		127.0		402.4		386.7
Subtotal – supplemental health	148.2		144.8		455.5		441.9
Other health (first-year)	—		.1		.2		.2
Other health (renewal)	.4		.3		1.1		1.1
Subtotal - other health	.4		.4		1.3		1.3
Total health	159.5		156.9		491.7		481.9
Life insurance:
Traditional (first-year)	.1		.1		.4		.5
Traditional (renewal)	2.3		2.5		7.2		7.7
Subtotal - traditional	2.4		2.6		7.6		8.2
Interest-sensitive (first-year)	1.3		.9		3.9		3.2
Interest-sensitive (renewal)	4.0		3.6		12.2		10.9
Subtotal - interest-sensitive	5.3		4.5		16.1		14.1
Total life insurance	7.7		7.1		23.7		22.3
Annuities:
Fixed index (renewal)	.2		.1		.9		.4
Other fixed interest (renewal)	.1		.1		.2		.2
Total annuities	.3		.2		1.1		.6
Collections on insurance products:
Total first-year premium collections on insurance products	18.5		18.9		57.6		59.1
Total renewal premium collections on insurance products	149.0		145.3		458.9		445.7
Total collections on insurance products	$	167.5	$	164.2	$	516.5	$	504.8

Health products in the Washington National segment include Medicare supplement, supplemental health and other insurance products. Our profits on health policies depend on the overall level of sales, the length of time the business remains inforce, investment yields, claim experience and expense management.

Collected premiums on Medicare supplement policies in the Washington National segment decreased in the 2018 periods due to the run-off of this block of business.

Premiums collected on supplemental health products (including specified disease, accident and hospital indemnity insurance products) increased 2.3 percent, to $148.2 million, in the third quarter of 2018, and 3.1 percent, to $455.5 million, in the first nine months of 2018, as compared to the same periods in 2017. Such increase is due to new sales in recent periods and persistency.

Life premiums collected in the Washington National segment increased 8.5 percent, to $7.7 million, in the third quarter of 2018, and 6.3 percent, to $23.7 million, in the first nine months of 2018, as compared to the same periods in 2017.

Annuities in this segment include fixed index and other fixed interest annuities. We are no longer actively pursuing sales of annuity products in this segment.

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Colonial Penn (dollars in millions)

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Premiums collected by product:
Life insurance:
Traditional (first-year)	$	11.7	$	12.1	$	34.9	$	38.5
Traditional (renewal)	61.8		60.0		186.7		179.4
Subtotal - traditional	73.5		72.1		221.6		217.9
Interest-sensitive (all renewal)	.1		.1		.2		.2
Total life insurance	73.6		72.2		221.8		218.1
Health (all renewal):
Medicare supplement	.4		.4		1.2		1.4
Other health	—		—		.1		.1
Total health	.4		.4		1.3		1.5
Collections on insurance products:
Total first-year premium collections on insurance products	11.7		12.1		34.9		38.5
Total renewal premium collections on insurance products	62.3		60.5		188.2		181.1
Total collections on insurance products	$	74.0	$	72.6	$	223.1	$	219.6

Life products in this segment are sold primarily to the senior market. Life premiums collected in this segment increased 1.9 percent, to $73.6 million, in the third quarter of 2018, and 1.7 percent, to $221.8 million, in the first nine months of 2018, as compared to the same periods in 2017. Premiums collected reflect both recent sales activity and steady persistency.

Health products include Medicare supplement and other insurance products. Our profits on health policies depend on the overall level of sales, the length of time the business remains in-force, investment yields, claims experience and expense management. We do not currently market these products through this segment.

Long-term care in run-off (dollars in millions)

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Premiums collected by product:
Health:
Long-term care (renewal)	$	44.9	$	48.7	$	142.1	$	156.0

The Long-term care in run-off segment only includes the premiums collected from: (i) the long-term care business that was recaptured due to the termination of certain reinsurance agreements effective September 30, 2016 (such business is not actively marketed and was issued or acquired by Washington National and BCLIC); and (ii) certain legacy (prior to 2003) comprehensive and nursing home long-term care policies ceded to Wilton Re (such business is not actively marketed and was issued by Bankers Life) in September 2018. Such collected premiums decreased in the 2018 periods due to the run-off of these blocks of business.

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LIQUIDITY AND CAPITAL RESOURCES

Our capital structure as of September 30, 2018 and December 31, 2017 was as follows (dollars in millions):

	September 30, 2018		December 31, 2017
Total capital:
Corporate notes payable	$	916.2	$	914.6
Shareholders’ equity:
Common stock	1.6		1.7
Additional paid-in capital	3,030.0		3,073.3
Accumulated other comprehensive income	403.5		1,212.1
Retained earnings	184.8		560.4
Total shareholders’ equity	3,619.9		4,847.5
Total capital	$	4,536.1	$	5,762.1

The following table summarizes certain financial ratios as of and for the nine months ended September 30, 2018 and as of and for the year ended December 31, 2017:

	September 30, 2018			December 31, 2017
Book value per common share	$	21.99		$	29.05
Book value per common share, excluding accumulated other comprehensive income (a)	19.54			21.79
Ratio of earnings to fixed charges	(b)			2.94X
Debt to total capital ratios:
Corporate debt to total capital	20.2		%	15.9		%
Corporate debt to total capital, excluding accumulated other comprehensive income (a)	22.2		%	20.1		%

_____________________

(a) This non-GAAP measure differs from the corresponding GAAP measure presented immediately above, because accumulated other comprehensive income has been excluded from the value of capital used to determine this measure.  Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in accumulated other comprehensive income.  Such volatility is often caused by changes in the estimated fair value of our investment portfolio resulting from changes in general market interest rates rather than the business decisions made by management.  However, this measure does not replace the corresponding GAAP measure.

(b) For such ratio, earnings were $301.9 million less than fixed charges.

Liquidity for Insurance Operations

Our insurance companies generally receive adequate cash flows from premium collections and investment income to meet their obligations.  Life insurance, long-term care insurance and annuity liabilities are generally long-term in nature.  Life and annuity policyholders may, however, withdraw funds or surrender their policies, subject to any applicable penalty provisions; there are generally no withdrawal or surrender benefits for long-term care insurance.  We actively manage the relationship between the duration of our invested assets and the estimated duration of benefit payments arising from contract liabilities.

Three of the Company's insurance subsidiaries (Washington National, Bankers Life and Colonial Penn) are members of the FHLB.  As members of the FHLB, our insurance subsidiaries have the ability to borrow on a collateralized basis from the FHLB.  We are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings.  At September 30, 2018, the carrying value of the FHLB

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common stock was $71.1 million.  As of September 30, 2018, collateralized borrowings from the FHLB totaled $1.6 billion and the proceeds were used to purchase fixed maturity securities.  The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet.  The borrowings are collateralized by investments with an estimated fair value of $2.0 billion at September 30, 2018, which are maintained in custodial accounts for the benefit of the FHLB.  

The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions):

Amount		Maturity	Interest rate at
borrowed		date	September 30, 2018
$	50.0	February 2019	Variable rate – 2.405%
21.8		July 2019	Variable rate – 2.672%
15.0		October 2019	Variable rate – 2.850%
50.0		May 2020	Variable rate – 2.678%
21.8		June 2020	Fixed rate – 1.960%
25.0		September 2020	Variable rate – 2.991%
100.0		September 2020	Variable rate – 2.876%
50.0		September 2020	Variable rate – 2.902%
75.0		September 2020	Variable rate – 2.506%
100.0		October 2020	Variable rate – 2.453%
50.0		December 2020	Variable rate – 2.814%
100.0		July 2021	Variable rate – 2.889%
100.0		July 2021	Variable rate – 2.859%
28.2		August 2021	Fixed rate – 2.550%
57.7		August 2021	Variable rate - 2.871%
125.0		August 2021	Variable rate – 2.696%
50.0		September 2021	Variable rate – 2.851%
22.0		May 2022	Variable rate – 2.665%
100.0		May 2022	Variable rate – 2.505%
10.0		June 2022	Variable rate – 2.941%
50.0		July 2022	Variable rate – 2.703%
50.0		July 2022	Variable rate – 2.722%
50.0		July 2022	Variable rate – 2.719%
50.0		August 2022	Variable rate – 2.733%
50.0		December 2022	Variable rate – 2.621%
50.0		December 2022	Variable rate – 2.621%
24.1		March 2023	Fixed rate – 2.160%
50.0		July 2023	Variable rate – 2.548%
100.0		July 2023	Variable rate – 2.548%
20.5		June 2025	Fixed rate – 2.940%
$	1,646.1

State laws generally give state insurance regulatory agencies broad authority to protect policyholders in their jurisdictions. Regulators have used this authority in the past to restrict the ability of our insurance subsidiaries to pay any dividends or other amounts without prior approval. We cannot be assured that the regulators will not seek to assert greater supervision and control over our insurance subsidiaries' businesses and financial affairs.

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Our consolidated statutory RBC ratio was approximately 450 percent at September 30, 2018, reflecting: (i) estimated consolidated statutory operating earnings of $178 million (excluding approximately $545 million loss related to a reinsurance transaction); (ii) a $265.0 million capital contribution; and (iii) the payment of insurance company dividends to the holding company of $99.5 million during the first nine months of 2018. Our objective is to maintain an RBC ratio in the range of 425 percent to 450 percent. Statutory earnings will often fluctuate on a quarterly basis due to the application of statutory accounting principles. In June 2018, the National Association of Insurance Commissioners (the "NAIC") adopted changes to the RBC formulas to reflect the change in the corporate tax rate to 21 percent as a result of the Tax Reform Act. The changes to the RBC formulas are extensive and include, among other things, revising the tax factors and certain pre-tax factors for various investment classes. We estimate that the impact of these RBC formula changes will increase required capital by approximately $40 million (equivalent to a 37 percentage point decrease to the RBC ratio). In addition, the NAIC adopted changes to the RBC factors for collateral held for FHLB advances. Previously, there was a charge on the total amount of collateral held for the FHLB advances. Under the new guidance, we will recognize a charge only on the amount of collateral that exceeds 5 percent of admitted assets. We estimate the impact of the changes to RBC factors for collateral held for FHLB advances will increase the RBC ratio by approximately 10 percentage points. All of these RBC changes are effective for the December 31, 2018 RBC ratio calculation.

Our insurance subsidiaries transfer exposure to certain risk to others through reinsurance arrangements. When we obtain reinsurance, we are still liable for those transferred risks in the event the reinsurer defaults on its obligations. The failure, insolvency, inability or unwillingness of one or more of the Company's reinsurers to perform in accordance with the terms of its reinsurance agreement could negatively impact our earnings or financial position and our consolidated statutory RBC ratio.

Financial Strength Ratings of our Insurance Subsidiaries

Financial strength ratings provided by Moody's, Fitch, A.M. Best and S&P are the rating agency's opinions of the ability of our insurance subsidiaries to pay policyholder claims and obligations when due.

On October 4, 2018, Moody's upgraded the financial strength ratings of our primary insurance subsidiaries to "A3" from "Baa1" and the outlook for these ratings is stable. Moody's actions resulted from the Company's announcement that Bankers Life had closed on its agreement to cede certain long-term care policies as further described in the note to the consolidated financial statements entitled "Reinsurance". Moody’s financial strength ratings range from "Aaa" to "C".  These ratings may be supplemented with numbers "1", "2", or "3" to show relative standing within a category.  In Moody's view, an insurer rated "A" offers good financial security, however, certain elements may be present which suggests a susceptibility to impairment sometime in the future. Moody's has twenty-one possible ratings.  There are six ratings above the "A3" rating of our primary insurance subsidiaries and fourteen ratings that are below that rating.

On August 2, 2018, Fitch affirmed its "BBB+" financial strength ratings of our primary insurance subsidiaries and revised the outlook for these ratings to positive from stable. The positive outlook for these ratings reflected Fitch's view that such ratings could be upgraded over the next 12 to 18 months based on the Company's announcement that Bankers Life had entered into an agreement to cede certain long-term care policies as further described in the note to the consolidated financial statements entitled "Reinsurance". A "BBB" rating, in Fitch's opinion, indicates that there is currently a low expectation of ceased or interrupted payments. The capacity to meet policyholder and contract obligations on a timely basis is considered adequate, but adverse changes in circumstances and economic conditions are more likely to impact this capacity. Fitch ratings for the industry range from "AAA Exceptionally Strong" to "C Distressed" and some companies are not rated. Pluses and minuses show the relative standing within a category. Fitch has nineteen possible ratings. There are seven ratings above the "BBB+" rating of our primary insurance subsidiaries and eleven ratings that are below that rating.

On August 2, 2018, A.M. Best announced that there would be no change in the "A-" financial strength ratings of our primary insurance subsidiaries as a result of the Company's announcement that Bankers Life had entered into an agreement to cede certain long-term care policies as further described in the note to the consolidated financial statements entitled "Reinsurance". The outlook for these ratings remain stable. The "A-" rating is assigned to companies that have an excellent ability, in A.M. Best's opinion, to meet their ongoing obligations to policyholders.  A.M. Best ratings for the industry currently range from "A++ (Superior)" to "F (In Liquidation)" and some companies are not rated.  An "A++" rating indicates a superior ability to meet ongoing obligations to policyholders.  A.M. Best has sixteen possible ratings.  There are three ratings above the "A-" rating of our primary insurance subsidiaries and twelve ratings that are below that rating.

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On August 2, 2018, S&P affirmed the financial strength ratings of "BBB+" of our primary insurance subsidiaries and revised the outlook for these ratings to positive from stable. S&P's actions resulted from the Company's announcement that Bankers Life had entered into an agreement to cede certain long-term care policies as further described in the note to the consolidated financial statements entitled "Reinsurance". S&P financial strength ratings range from "AAA" to "R" and some companies are not rated.  An insurer rated "BBB" or higher is regarded as having financial security characteristics that outweigh any vulnerabilities, and is highly likely to have the ability to meet financial commitments. An insurer rated "BBB", in S&P's opinion, has good financial security characteristics, but is more likely to be affected by adverse business conditions than are higher-rated insurers.  Pluses and minuses show the relative standing within a category.  S&P has twenty-one possible ratings.  There are seven ratings above the "BBB+" rating of our primary insurance subsidiaries and thirteen ratings that are below that rating.

Rating agencies have increased the frequency and scope of their credit reviews and requested additional information from the companies that they rate, including us.  They may also adjust upward the capital and other requirements employed in the rating agency models for maintenance of certain ratings levels.  We cannot predict what actions rating agencies may take, or what actions we may take in response.  Accordingly, downgrades and outlook revisions related to us or the life insurance industry may occur in the future at any time and without notice by any rating agency.  These could increase policy surrenders and withdrawals, adversely affect relationships with our distribution channels, reduce new sales, reduce our ability to borrow and increase our future borrowing costs.

Liquidity of the Holding Companies

Availability and Sources and Uses of Holding Company Liquidity; Limitations on Ability of Insurance Subsidiaries to Make Dividend and Surplus Debenture Interest Payments to the Holding Companies; Limitations on Holding Company Activities

At September 30, 2018, CNO, CDOC, Inc. ("CDOC", our wholly owned subsidiary and the immediate parent of Washington National and Conseco Life Insurance Company of Texas ("CLTX")) and our other non-insurance subsidiaries held: (i) unrestricted cash and cash equivalents of $145.6 million; and (ii) fixed income investments of $20.3 million.  On September 27, 2018, the Company completed a long-term care reinsurance transaction pursuant to which its wholly-owned subsidiary, Bankers Life, entered into an agreement with Wilton Re to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies through 100% indemnity coinsurance, as further described in the note to the consolidated financial statements entitled "Reinsurance". Bankers Life paid a ceding commission of $825 million to reinsure the block, funded through excess capital in the insurance subsidiaries and at the holding company. We funded a portion of the ceding commission paid in the transaction through a capital contribution from the holding company of $265.0 million.  The capital contribution was funded from cash, cash equivalents and liquid investments held at the holding company.  We expect to maintain holding company liquidity of at least $150 million at all times, which represents approximately two years of interest and other holding company expenses.

CNO and CDOC are holding companies with no business operations of their own; they depend on their operating subsidiaries for cash to make principal and interest payments on debt, and to pay administrative expenses and income taxes.  CNO and CDOC receive cash from insurance subsidiaries, consisting of dividends and distributions, interest payments on surplus debentures and tax-sharing payments, as well as cash from non-insurance subsidiaries consisting of dividends, distributions, loans and advances.  The principal non-insurance subsidiaries that provide cash to CNO and CDOC are 40|86 Advisors, Inc. ("40|86 Advisors"), which receives fees from the insurance subsidiaries for investment services, and CNO Services, LLC which receives fees from the insurance subsidiaries for providing administrative services.  The agreements between our insurance subsidiaries and CNO Services, LLC and 40|86 Advisors, respectively, were previously approved by the domestic insurance regulator for each insurance company, and any payments thereunder do not require further regulatory approval.

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The following summarizes the current ownership structure of CNO’s primary subsidiaries:

The ability of our insurance subsidiaries to pay dividends is subject to state insurance department regulations and is based on the financial statements of our insurance subsidiaries prepared in accordance with statutory accounting practices prescribed or permitted by regulatory authorities, which differ from GAAP.  These regulations generally permit dividends to be paid from statutory earned surplus of the insurance company without regulatory approval for any 12-month period in amounts equal to the greater of (or in some states, the lesser of): (i) statutory net gain from operations or net income for the prior year; or (ii) 10 percent of statutory capital and surplus as of the end of the preceding year.  However, as each of the immediate insurance subsidiaries of CDOC has significant negative earned surplus, any dividend payments from the insurance subsidiaries require the prior approval of the director or commissioner of the applicable state insurance department.  In the first nine months of 2018, our insurance subsidiaries paid dividends to CDOC totaling $99.5 million.  We expect to receive regulatory approval for future dividends from our subsidiaries, but there can be no assurance that such payments will be approved or that the financial condition of our insurance subsidiaries will not change, making future approvals less likely.

CDOC holds surplus debentures from CLTX with an aggregate principal amount of $749.6 million.  Interest payments on those surplus debentures do not require additional approval provided the RBC ratio of CLTX exceeds 100 percent (but do require prior written notice to the Texas state insurance department).  The estimated RBC ratio of CLTX was 392 percent at September 30, 2018.  CDOC also holds a surplus debenture from Colonial Penn with a principal balance of $160.0 million. Interest payments on that surplus debenture require prior approval by the Pennsylvania state insurance department. Dividends and other payments from our non-insurance subsidiaries, including 40|86 Advisors and CNO Services, LLC, to CNO or CDOC do not require approval by any regulatory authority or other third party.  However, insurance regulators may prohibit payments by our insurance subsidiaries to parent companies if they determine that such payments could be adverse to our policyholders or contractholders.

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The insurance subsidiaries of CDOC receive funds to pay dividends primarily from: (i) the earnings of their direct businesses; (ii) tax sharing payments received from subsidiaries (if applicable); and (iii) with respect to CLTX, dividends received from subsidiaries.  At September 30, 2018, the subsidiaries of CLTX had earned surplus (deficit) as summarized below (dollars in millions):

Subsidiaries of CLTX	Earned surplus (deficit)			Additional information
Bankers Life	$	254.4		(a)
Colonial Penn	(320.6		)	(b)

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(a) Bankers Life paid dividends of $30.0 million to CLTX in the first nine months of 2018. Bankers Life may pay dividends without regulatory approval or prior notice for any 12-month period if such dividends are less than the greater of: (i) statutory net income for the prior year; or (ii) 10 percent of statutory capital and surplus as of the end of the preceding year. Dividends in excess of these levels require 30 days prior notice. If a company has negative unassigned surplus, any dividend payments require prior approval. Bankers Life recognized a statutory loss upon the closing of the reinsurance transaction as further described in the note to the consolidated financial statements entitled "Reinsurance". Accordingly, it is expected that any dividends paid in 2019 in excess of 10 percent of Bankers Life’s statutory capital and surplus will require 30 days prior notice.

(b) The deficit is primarily due to transactions which occurred several years ago, including a tax planning transaction and the fee paid to recapture a block of business previously ceded to an unaffiliated insurer.

A significant deterioration in the financial condition, earnings or cash flow of the material subsidiaries of CNO or CDOC for any reason could hinder such subsidiaries' ability to pay cash dividends or other disbursements to CNO and/or CDOC, which, in turn, could limit CNO's ability to meet debt service requirements and satisfy other financial obligations.  In addition, we may choose to retain capital in our insurance subsidiaries or to contribute additional capital to our insurance subsidiaries to maintain or strengthen their surplus or fund a long-term care reinsurance transaction, and these decisions could limit the amount available at our top tier insurance subsidiaries to pay dividends to the holding companies.

In the first nine months of 2018, we repurchased 3.0 million shares of common stock for $60.5 million under our securities repurchase program. The Company had remaining repurchase authority of $325.1 million as of September 30, 2018. Based on our expectations of future statutory net income, our free cash flow generation is expected to be approximately $350 million per year subsequent to the closing of the reinsurance agreement. The Company is committed to deploying 100 percent of its free cash flow into investments to accelerate profitable growth (including opportunities to invest in our business and acquisition transactions), common stock dividends and share repurchases. The amount and timing of the securities repurchases (if any) will be based on business and market conditions and other factors including, but not limited to, available capital, the current price of our common stock, opportunities to invest in our business or acquisition transactions.

In the first nine months of 2018, dividends declared on common stock totaled $48.6 million ($0.29 per common share). In May 2018, the Company increased its quarterly common stock dividend to $0.10 per share from $0.09 per share.

On October 4, 2018, Moody's upgraded our senior unsecured debt rating to "Baa3" from "Ba1" and the outlook for these ratings is stable. Moody's actions resulted from the Company's announcement that Bankers Life had closed on its agreement to cede certain long-term care policies as further described in the note to the consolidated financial statements entitled "Reinsurance". In Moody's view, obligations rated "Baa" are subject to moderate credit risk and may possess certain speculative characteristics. A rating is supplemented with numerical modifiers "1", "2" or "3" to show the relative standing within a category. Moody's has a total of 21 possible ratings ranging from "Aaa" to "C". There are nine ratings above CNO's "Baa3" rating and eleven ratings that are below its rating.

On August 2, 2018, Fitch affirmed its "BB+" rating on our senior unsecured debt and revised the outlook for these ratings to positive from stable. The positive outlook for these ratings reflected Fitch's view that such ratings could be upgraded over the next 12 to 18 months based on the Company's announcement that Bankers Life had entered into an agreement to cede certain long-term care policies as further described in the note to the consolidated financial statements entitled "Reinsurance". In Fitch's view, an obligation rated "BB" indicates an elevated vulnerability to default risk, particularly in the event of adverse

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changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments. Pluses and minuses show the relative standing within a category. Fitch has a total of 21 possible ratings ranging from "AAA" to "D". There are ten ratings above CNO's "BB+" rating and ten ratings that are below its rating.

On August 2, 2018, A.M. Best announced that there would be no change in the Company's "bbb-" issuer credit and senior unsecured debt ratings as a result of the Company's announcement that Bankers Life had entered into an agreement to cede certain long-term care policies as further described in the note to the consolidated financial statements entitled "Reinsurance". The outlook for these ratings remain stable. In A.M. Best's view, a company rated "bbb-" has an adequate ability to meet the terms of its obligations; however, the issuer is more susceptible to changes in economic or other conditions. Pluses and minuses show the relative standing within a category. A.M. Best has a total of 22 possible ratings ranging from "aaa (Exceptional)" to "d (In default)". There are nine ratings above CNO's "bbb-" rating and twelve ratings that are below its rating.

On August 2, 2018, S&P affirmed our issuer credit and unsecured debt ratings of "BB+" and revised the outlook for these ratings to positive from stable. S&P's actions were based on the Company's announcement that Bankers Life had entered into an agreement to cede certain long-term care policies as further described in the note to the consolidated financial statements entitled "Reinsurance". In S&P's view, an obligation rated "BB" is less vulnerable to nonpayment than other speculative issues; however, it faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. Pluses and minuses show the relative standing within a category. S&P has a total of 22 possible ratings ranging from "AAA (Extremely Strong)" to "D (Payment Default)". There are ten ratings above CNO's "BB+" rating and eleven ratings that are below its rating.

We believe that the existing cash available to the holding company, the cash flows to be generated from operations and other transactions will be sufficient to allow us to meet our debt service obligations, pay corporate expenses and satisfy other financial obligations.  However, our cash flow is affected by a variety of factors, many of which are outside of our control, including insurance regulatory issues, competition, financial markets and other general business conditions.  We cannot provide assurance that we will possess sufficient income and liquidity to meet all of our debt service requirements and other holding company obligations.

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INVESTMENTS

At September 30, 2018, the amortized cost, gross unrealized gains and losses and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions):

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Investment grade (a):
Corporate securities	$	10,391.4	$	460.0	$	(192.0	)	$	10,659.4
United States Treasury securities and obligations of United States government corporations and agencies	151.9		17.3		(.5		)	168.7
States and political subdivisions	1,749.7		141.9		(4.6		)	1,887.0
Debt securities issued by foreign governments	60.3		1.3		(1.4		)	60.2
Asset-backed securities	1,297.5		17.9		(7.4		)	1,308.0
Collateralized debt obligations	342.9		.4		(1.7		)	341.6
Commercial mortgage-backed securities	1,376.6		14.2		(19.4		)	1,371.4
Mortgage pass-through securities	1.5		.1		—			1.6
Collateralized mortgage obligations	292.3		10.0		(5.0		)	297.3
Total investment grade fixed maturities, available for sale	15,664.1		663.1		(232.0		)	16,095.2
Below-investment grade (a) (b):
Corporate securities	875.1		8.8		(18.8		)	865.1
States and political subdivisions	1,066.2		125.7		(.8		)	1,191.1
Collateralized debt obligations	12.7		—		(.3		)	12.4
Commercial mortgage-backed securities	62.7		.1		(.9		)	61.9
Collateralized mortgage obligations	248.7		38.1		(.1		)	286.7
Total below-investment grade fixed maturities, available for sale	2,265.4		172.7		(20.9		)	2,417.2
Total fixed maturities, available for sale	$	17,929.5	$	835.8	$	(252.9	)	$	18,512.4

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(a) Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations ("NRSROs") (Moody's, S&P or Fitch), or if not rated by such firms, the rating assigned by the NAIC.  NAIC designations of "1" or "2" include fixed maturities generally rated investment grade (rated "Baa3" or higher by Moody's or rated "BBB-" or higher by S&P and Fitch).  NAIC designations of "3" through "6" are referred to as below-investment grade (which generally are rated "Ba1" or lower by Moody's or rated "BB+" or lower by S&P and Fitch).  References to investment grade or below-investment grade throughout our consolidated financial statements are determined as described above.

(b) Certain structured securities rated below-investment grade by NRSROs may be assigned a NAIC 1 or NAIC 2 designation based on the cost basis of the security relative to estimated recoverable amounts as determined by the NAIC. Refer to the table below for a summary of our fixed maturity securities, available for sale, by NAIC designations.

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The NAIC evaluates the fixed maturity investments of insurers for regulatory and capital assessment purposes and assigns securities to one of six credit quality categories called NAIC designations, which are used by insurers when preparing their annual statements based on statutory accounting principles. The NAIC designations are generally similar to the credit quality designations of the NRSROs for marketable fixed maturity securities, except for certain structured securities. However, certain structured securities rated below investment grade by the NRSROs can be assigned NAIC 1 or NAIC 2 designations depending on the cost basis of the holding relative to estimated recoverable amounts as determined by the NAIC. The following summarizes the NAIC designations and NRSRO equivalent ratings:

NAIC Designation	NRSRO Equivalent Rating
1	AAA/AA/A
2	BBB
3	BB
4	B
5	CCC and lower
6	In or near default

A summary of our fixed maturity securities, available for sale, by NAIC designations (or for fixed maturity securities held by non-regulated entities, based on NRSRO ratings) as of September 30, 2018 is as follows (dollars in millions):

NAIC designation	Amortized cost		Estimated fair value		Percentage of total estimated fair value
1	$	8,368.6	$	8,862.5	47.9	%
2	8,551.1		8,656.3		46.7
Total NAIC 1 and 2 (investment grade)	16,919.7		17,518.8		94.6
3	725.4		716.6		3.9
4	258.6		251.9		1.4
5	19.7		19.1		.1
6	6.1		6.0		—
Total NAIC 3, 4, 5 and 6 (below-investment grade)	1,009.8		993.6		5.4
	$	17,929.5	$	18,512.4	100.0	%

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Concentration of Fixed Maturity Securities, Available for Sale

The following table summarizes the carrying values and gross unrealized losses of our fixed maturity securities, available for sale, by category as of September 30, 2018 (dollars in millions):

	Carrying value		Percent of fixed maturities		Gross unrealized losses		Percent of gross unrealized losses
Asset-backed securities	$	2,499.1	13.5	%	$	8.2	3.2	%
States and political subdivisions	1,887.0		10.2		4.6		1.8
Commercial mortgage-backed securities	1,433.3		7.7		20.3		8.1
Utilities	1,170.3		6.3		8.8		3.5
Insurance	1,160.1		6.3		11.9		4.7
Banks	1,152.4		6.2		18.6		7.4
Healthcare/pharmaceuticals	1,092.6		5.9		21.7		8.6
Energy	916.7		5.0		19.6		7.7
Food/beverage	825.2		4.5		17.1		6.7
Collateralized mortgage obligations	584.0		3.2		5.1		2.0
Real estate/REITs	535.7		2.9		6.0		2.4
Cable/media	456.2		2.5		14.5		5.7
Brokerage	455.6		2.5		13.9		5.5
Transportation	452.2		2.4		4.5		1.8
Capital goods	435.3		2.4		6.0		2.4
Technology	392.8		2.1		10.4		4.1
Chemicals	371.0		2.0		8.4		3.3
Telecom	357.1		1.9		3.1		1.2
Collateralized debt obligations	354.0		1.9		2.0		.8
Aerospace/defense	241.7		1.3		1.4		.6
Autos	182.0		1.0		8.7		3.4
Other	1,558.1		8.3		38.1		15.1
Total fixed maturities, available for sale	$	18,512.4	100.0	%	$	252.9	100.0	%

Below-Investment Grade Securities

At September 30, 2018, the amortized cost of the Company's below-investment grade fixed maturity securities was $2,265.4 million, or 13 percent of the Company's fixed maturity portfolio. The estimated fair value of the below-investment grade portfolio was $2,417.2 million, or 107 percent of the amortized cost.

Below-investment grade corporate debt securities typically have different characteristics than investment grade corporate debt securities.  Based on historical performance, probability of default by the borrower is significantly greater for below-investment grade corporate debt securities and in many cases severity of loss is relatively greater as such securities are generally unsecured and often subordinated to other indebtedness of the issuer.  Also, issuers of below-investment grade corporate debt securities frequently have higher levels of debt relative to investment-grade issuers, hence, all other things being equal, are generally more sensitive to adverse economic conditions.  The Company attempts to reduce the overall risk related to its investment in below-investment grade securities, as in all investments, through careful credit analysis, strict investment policy guidelines, and diversification by issuer and/or guarantor and by industry.

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Net Realized Investment Gains (Losses)

The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Fixed maturity securities, available for sale:
Gross realized gains on sale	$	5.4		$	32.3		$	45.5		$	60.4
Gross realized losses on sale	(11.4		)	(8.5		)	(36.9		)	(16.4		)
Impairments:
Total other-than-temporary impairment losses	—			(3.2		)	—			(10.0		)
Other-than-temporary impairment losses recognized in accumulated other comprehensive income	—			—			—			(.9		)
Net impairment losses recognized	—			(3.2		)	—			(10.9		)
Net realized investment gains (losses) from fixed maturities	(6.0		)	20.6			8.6			33.1
Equity securities, including change in fair value (a)	(3.0		)	7.7			(13.3		)	9.6
Mortgage loans	—			—			—			1.0
Impairments of other investments	(2.1		)	(1.5		)	(2.1		)	(7.3		)
Loss on dissolution of variable interest entities	—			(.6		)	—			(4.3		)
Other (a) (b)	42.3			3.0			33.8			20.2
Net realized investment gains before net realized gains on the transfer of assets related to reinsurance transaction	31.2			29.2			27.0			52.3
Net realized gains on the transfer of assets related to reinsurance transaction	363.4			—			363.4			—
Net realized investment gains	$	394.6		$	29.2		$	390.4		$	52.3

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(a) Changes in the estimated fair value of trading securities that we have elected the fair value option and equity securities (and are still held as of the end of the respective periods) were $(6.0) million and $13.0 million for the nine months ended September 30, 2018 and 2017, respectively.

(b) In April 2016, the Company announced that it had invested in a non-controlling minority interest in TCP. In August 2018, Blackrock, Inc. announced the completion of its acquisition of TCP. The sale of our interest in TCP resulted in a significant portion of the net realized gains in the third quarter of 2018.

During the first nine months of 2018, we recognized net realized investment gains of $390.4 million, which were comprised of: (i) $50.4 million of net gains from the sales of investments; (ii) $363.4 million of gains on the transfer of assets (substantially all of which were fixed maturities) related to reinsurance transaction; (iii) $13.3 million of losses related to equity securities, including the change in fair value; (iv) the decrease in fair value of certain fixed maturity investments with embedded derivatives of $3.0 million; (v) the decrease in fair value of embedded derivatives related to a modified coinsurance agreement of $5.0 million; and (vi) $2.1 million of writedowns of investments for other than temporary declines in fair value recognized through net income.

During the first nine months of 2017, we recognized net realized investment gains of $52.3 million, which were comprised of: (i) $60.1 million of net gains from the sales of investments; (ii) $4.3 million of losses on the dissolution of VIEs; (iii) the increase in fair value of certain fixed maturity investments with embedded derivatives of $12.3 million; (iv) the increase in fair value of embedded derivatives related to a modified coinsurance agreement of $2.4 million; and (v) $18.2 million of writedowns of investments for other than temporary declines in fair value recognized through earnings.

At September 30, 2018, there was one fixed maturity investment in default with an amortized cost and carrying value of $.5 million and $.4 million, respectively.

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During the first nine months of 2018, the $36.9 million of gross realized losses on sales of $1,040.4 million of fixed maturity securities, available for sale included: (i) $26.9 million related to various corporate securities; (ii) $4.0 million related to commercial mortgage-backed securities; and (iii) $6.0 million related to various other investments. Securities are generally sold at a loss following unforeseen issuer-specific events or conditions or shifts in perceived relative values.  These reasons include but are not limited to: (i) changes in the investment environment; (ii) expectation that the market value could deteriorate; (iii) our desire to reduce our exposure to an asset class, an issuer or an industry; (iv) prospective or actual changes in credit quality; or (v) changes in expected portfolio cash flows.

During the first nine months of 2017, the $16.4 million of gross realized losses on sales of $290.8 million of fixed maturity securities, available for sale, included: (i) $9.7 million related to various corporate securities; (ii) $3.1 million related to commercial mortgage-backed securities; and (iii) $3.6 million related to various other investments.

Our fixed maturity investments are generally purchased in the context of various long-term strategies, including funding insurance liabilities, so we do not generally seek to generate short-term realized gains through the purchase and sale of such securities.  In certain circumstances, including those in which securities are selling at prices which exceed our view of their underlying economic value, or when it is possible to reinvest the proceeds to better meet our long-term asset-liability objectives, we may sell certain securities.

During the first nine months of 2018, we recognized $2.1 million of impairment losses recorded in earnings on a mortgage loan due to issuer specific events.

The following summarizes the investments sold at a loss during the first nine months of 2018 which had been continuously in an unrealized loss position exceeding 20 percent of the amortized cost basis prior to the sale for the period indicated (dollars in millions):

		At date of sale
	Number of issuers	Amortized cost		Fair value
Less than 6 months prior to sale	1	$	13.1	$	9.6

We regularly evaluate all of our investments with unrealized losses for possible impairment.  Our assessment of whether unrealized losses are "other than temporary" requires significant judgment.  Factors considered include: (i) the extent to which fair value is less than the cost basis; (ii) the length of time that the fair value has been less than cost; (iii) whether the unrealized loss is event driven, credit-driven or a result of changes in market interest rates or risk premium; (iv) the near-term prospects for specific events, developments or circumstances likely to affect the value of the investment; (v) the investment's rating and whether the investment is investment-grade and/or has been downgraded since its purchase; (vi) whether the issuer is current on all payments in accordance with the contractual terms of the investment and is expected to meet all of its obligations under the terms of the investment; (vii) whether we intend to sell the investment or it is more likely than not that circumstances will require us to sell the investment before recovery occurs; (viii) the underlying current and prospective asset and enterprise values of the issuer and the extent to which the recoverability of the carrying value of our investment may be affected by changes in such values; (ix) projections of, and unfavorable changes in, cash flows on structured securities including mortgage-backed and asset-backed securities; (x) our best estimate of the value of any collateral; and (xi) other objective and subjective factors.

Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio.  Significant losses could have a material adverse effect on our consolidated financial statements in future periods.

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The following table sets forth the amortized cost and estimated fair value of those fixed maturities, available for sale, with unrealized losses at September 30, 2018, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.  Structured securities frequently include provisions for periodic principal payments and permit periodic unscheduled payments.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	29.2	$	29.0
Due after one year through five years	194.1		190.0
Due after five years through ten years	929.1		907.4
Due after ten years	3,754.8		3,563.5
Subtotal	4,907.2		4,689.9
Structured securities	1,710.2		1,674.6
Total	$	6,617.4	$	6,364.5

The following summarizes the investments in our portfolio rated below-investment grade which have been continuously in an unrealized loss position exceeding 20 percent of the cost basis for the period indicated as of September 30, 2018 (dollars in millions):

	Number of issuers	Cost basis		Unrealized loss			Estimated fair value
Less than 6 months	1	$	.3	$	(.1	)	$	.2
Greater than or equal to 6 months and less than 12 months	2	11.8		(2.5		)	9.3
		$	12.1	$	(2.6	)	$	9.5

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The following table summarizes the gross unrealized losses of our fixed maturity securities, available for sale, by category and ratings category as of September 30, 2018 (dollars in millions):

	Investment grade				Below-investment grade
	AAA/AA/A		BBB		BB		B+ and below		Total gross unrealized losses
Healthcare/pharmaceuticals	$	2.2	$	18.3	$	.3	$	.9	$	21.7
Commercial mortgage-backed securities	17.6		1.8		.9		—		20.3
Energy	1.8		13.2		2.2		2.4		19.6
Banks	2.4		16.2		—		—		18.6
Food/beverage	.7		15.2		.7		.5		17.1
Building materials	—		14.7		.9		.1		15.7
Cable/media	.4		12.0		1.2		.9		14.5
Brokerage	1.9		11.8		—		.2		13.9
Insurance	2.7		9.2		—		—		11.9
Technology	—		9.5		.8		.1		10.4
Utilities	4.0		4.6		.1		.1		8.8
Autos	2.1		5.4		.8		.4		8.7
Chemicals	.1		7.6		.7		—		8.4
Asset-backed securities	3.7		3.7		.5		.3		8.2
Capital goods	.3		5.4		.1		.2		6.0
Real estate/REITs	.2		5.6		.1		.1		6.0
Collateralized mortgage obligations	5.0		—		—		.1		5.1
States and political subdivisions	2.6		2.0		—		—		4.6
Transportation	.9		3.6		—		—		4.5
Consumer products	—		3.5		—		.4		3.9
Retail	—		3.0		—		.9		3.9
Telecom	—		3.0		.1		—		3.1
Collateralized debt obligations	.7		1.0		.3		—		2.0
Other	6.6		5.8		2.0		1.6		16.0
Total fixed maturities, available for sale	$	55.9	$	176.1	$	11.7	$	9.2	$	252.9

Our investment strategy is to maximize, over a sustained period and within acceptable parameters of quality and risk, investment income and total investment return through active strategic asset allocation and investment management. Accordingly, we may sell securities at a gain or a loss to enhance the projected total return of the portfolio as market opportunities change, to reflect changing perceptions of risk, or to better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities.

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CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

___________________

The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at September 30, 2018 (dollars in millions):

	Less than 12 months					12 months or greater					Total
Description of securities	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
United States Treasury securities and obligations of United States government corporations and agencies	$	29.6	$	(.3	)	$	9.9	$	(.2	)	$	39.5	$	(.5	)
States and political subdivisions	174.2		(3.8		)	16.8		(.8		)	191.0		(4.6		)
Debt securities issued by foreign governments	24.4		(1.2		)	4.3		(.2		)	28.7		(1.4		)
Corporate securities	4,114.8		(178.8		)	315.9		(32.0		)	4,430.7		(210.8		)
Asset-backed securities	512.9		(4.1		)	165.3		(4.1		)	678.2		(8.2		)
Collateralized debt obligations	242.7		(2.0		)	—		—			242.7		(2.0		)
Commercial mortgage-backed securities	431.8		(6.4		)	209.3		(13.9		)	641.1		(20.3		)
Mortgage pass-through securities	.1		—			—		—			.1		—
Collateralized mortgage obligations	95.7		(4.3		)	16.8		(.8		)	112.5		(5.1		)
Total fixed maturities, available for sale	$	5,626.2	$	(200.9	)	$	738.3	$	(52.0	)	$	6,364.5	$	(252.9	)

Based on management's current assessment of investments with unrealized losses at September 30, 2018, the Company believes the issuers of the securities will continue to meet their obligations.  While we do not have the intent to sell securities with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses prior to their anticipated recovery, our intent on an individual security may change, based upon market or other unforeseen developments.  In such instances, if a loss is recognized from a sale subsequent to a balance sheet date due to these unexpected developments, the loss is recognized in the period in which we had the intent to sell the security before its anticipated recovery.

Structured Securities

At September 30, 2018, fixed maturity investments included structured securities with an estimated fair value of $4.9 billion (or 26 percent of all fixed maturity securities).  The yield characteristics of structured securities generally differ in some respects from those of traditional corporate fixed-income securities or government securities.  For example, interest and principal payments on structured securities may occur more frequently, often monthly.  In many instances, we are subject to variability in the amount and timing of principal and interest payments.  For example, in many cases, partial prepayments may occur at the option of the issuer and prepayment rates are influenced by a number of factors that cannot be predicted with certainty, including:  the relative sensitivity of prepayments on the underlying assets backing the security to changes in interest rates and asset values; the availability of alternative financing; a variety of economic, geographic and other factors; the timing, pace and proceeds of liquidations of defaulted collateral; and various security-specific structural considerations (for example, the repayment priority of a given security in a securitization structure).  In addition, the total amount of payments for non-agency structured securities may be affected by changes to cumulative default rates or loss severities of the related collateral.

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CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

___________________

The following table sets forth the par value, amortized cost and estimated fair value of structured securities, summarized by interest rates on the underlying collateral, at September 30, 2018 (dollars in millions):

	Par value		Amortized cost		Estimated fair value
Below 4 percent	$	1,639.0	$	1,497.7	$	1,550.0
4 percent – 5 percent	1,800.6		1,694.2		1,747.2
5 percent – 6 percent	1,124.7		1,042.2		1,095.2
6 percent – 7 percent	169.2		157.2		164.9
7 percent – 8 percent	72.6		73.2		78.6
8 percent and above	236.5		236.6		236.1
Total structured securities	$	5,042.6	$	4,701.1	$	4,872.0

The amortized cost and estimated fair value of structured securities at September 30, 2018, summarized by type of security, were as follows (dollars in millions):

			Estimated fair value
Type	Amortized cost		Amount		Percent of fixed maturities
Pass-throughs, sequential and equivalent securities	$	465.6	$	499.9	2.7	%
Planned amortization classes, target amortization classes and accretion-directed bonds	67.3		76.0		.4
Commercial mortgage-backed securities	1,439.3		1,433.3		7.7
Asset-backed securities	2,363.7		2,499.1		13.5
Collateralized debt obligations	355.6		354.0		1.9
Other	9.6		9.7		.1
Total structured securities	$	4,701.1	$	4,872.0	26.3	%

Pass-throughs, sequentials and equivalent securities have unique prepayment variability characteristics.  Pass-through securities typically return principal to the holders based on cash payments from the underlying mortgage obligations. Sequential securities return principal to tranche holders in a detailed hierarchy.  Planned amortization classes, targeted amortization classes and accretion-directed bonds adhere to fixed schedules of principal payments as long as the underlying mortgage loans experience prepayments within certain estimated ranges.  In most circumstances, changes in prepayment rates are first absorbed by support or companion classes insulating the timing of receipt of cash flows from the consequences of both faster prepayments (average life shortening) and slower prepayments (average life extension).

Commercial mortgage-backed securities are secured by commercial real estate mortgages, generally income producing properties that are managed for profit.  Property types include multi-family dwellings including apartments, retail centers, hotels, restaurants, hospitals, nursing homes, warehouses, and office buildings.  While most commercial mortgage-backed securities have call protection features whereby underlying borrowers may not prepay their mortgages for stated periods of time without incurring prepayment penalties, recoveries on defaulted collateral may result in involuntary prepayments.

104

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

___________________

Mortgage Loans

The following table provides the carrying value and estimated fair value of our outstanding commercial mortgage loans and the underlying collateral as of September 30, 2018 (dollars in millions):

			Estimated fair value
Loan-to-value ratio (a)	Carrying value		Mortgage loans		Collateral
Less than 60%	$	983.0	$	983.5	$	2,569.9
60% to 70%	316.7		310.6		500.1
Greater than 70% to 80%	182.3		181.0		248.3
Greater than 80% to 90%	18.2		17.1		22.0
Greater than 90%	38.1		37.0		40.3
Total	$	1,538.3	$	1,529.2	$	3,380.6

________________

(a) Loan-to-value ratios are calculated as the ratio of: (i) the carrying value of the commercial mortgage loans; to (ii) the estimated fair value of the underlying collateral.

At September 30, 2018, we held residential mortgage loan investments with both a carrying value and fair value of $142.3 million.

INVESTMENTS IN VARIABLE INTEREST ENTITIES

The following table provides supplemental information about the revenues and expenses of the VIEs which have been consolidated in accordance with authoritative guidance, after giving effect to the elimination of our investment in the VIEs and investment management fees earned by a subsidiary of the Company (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues:
Net investment income – policyholder and other special-purpose portfolios	$	20.8		$	16.1		$	59.6		$	53.0
Fee revenue and other income	1.8			1.2			5.8			4.0
Total revenues	22.6			17.3			65.4			57.0
Expenses:
Interest expense	15.5			11.1			43.9			38.0
Other operating expenses	.4			.4			1.4			1.3
Total expenses	15.9			11.5			45.3			39.3
Income before net realized investment losses and income taxes	6.7			5.8			20.1			17.7
Net realized investment losses	(.3		)	(.7		)	(3.2		)	(2.5		)
Loss on extinguishment of borrowings	—			(5.5		)	(3.8		)	(5.5		)
Income (loss) before income taxes	$	6.4		$	(.4	)	$	13.1		$	9.7

During the first nine months of 2018, the VIEs recognized net realized investment losses of $3.2 million from the sales of fixed maturities. During the first nine months of 2017, the VIEs recognized net realized investment losses of $2.5 million

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CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

___________________

which were comprised of: (i) $2.2 million of net gains from the sales of fixed maturities; (ii) $4.3 million of losses on the dissolution of VIEs; and (iii) $.4 million of writedowns of investments for other than temporary declines in fair value recognized through earnings.

Supplemental Information on Investments Held by VIEs

The following table summarizes the carrying values of the investments held by the VIEs by category as of September 30, 2018 (dollars in millions):

	Carrying value		Percent of fixed maturities		Gross unrealized losses		Percent of gross unrealized losses
Healthcare/pharmaceuticals	$	200.0	12.9	%	$	.6	6.6	%
Technology	171.0		11.0		.3		3.5
Cable/media	138.2		8.9		.9		9.0
Food/beverage	114.9		7.4		2.3		24.1
Aerospace/defense	88.9		5.7		.2		2.3
Capital goods	88.8		5.7		.4		3.7
Consumer products	88.2		5.7		.8		8.3
Brokerage	71.8		4.6		.1		1.5
Paper	67.1		4.3		.8		8.8
Building materials	56.9		3.7		.2		2.2
Chemicals	46.6		3.0		.3		3.0
Utilities	43.8		2.8		.1		.6
Gaming	42.9		2.8		—		.3
Retail	40.8		2.6		1.0		10.3
Autos	38.5		2.5		—		.3
Insurance	29.0		1.9		—		.3
Transportation	26.6		1.7		—		.2
Business services	22.1		1.4		.1		1.2
Entertainment/hotels	21.0		1.4		.1		.9
Banks	16.3		1.1		—		.1
Other	137.1		8.9		1.2		12.8
Total	$	1,550.5	100.0	%	$	9.4	100.0	%

The following table sets forth the amortized cost and estimated fair value of those investments held by the VIEs with unrealized losses at September 30, 2018, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due after one year through five years	$	191.6	$	186.5
Due after five years through ten years	393.5		389.2
Total	$	585.1	$	575.7

106

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

___________________

The following summarizes the investments sold at a loss during the first nine months of 2018 which had been continuously in an unrealized loss position exceeding 20 percent of the amortized cost basis prior to the sale for the period indicated (dollars in millions):

		At date of sale
	Number of issuers	Amortized cost		Fair value
Less than 6 months prior to sale	2	$	6.3	$	4.4

There were no investments in our portfolio rated below-investment grade which had been continuously in an unrealized loss position exceeding 20 percent of the cost basis.

NEW ACCOUNTING STANDARDS

See "Recently Issued Accounting Standards" in the notes to consolidated financial statements for a discussion of recently issued accounting standards.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Our market risks, and the ways we manage them, are summarized in "Management's Discussion and Analysis of Financial Condition and Results of Operations", included in our Annual Report on Form 10-K for the year ended December 31, 2017.  There have been no material changes in the first nine months of 2018 to such risks or our management of such risks.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.  CNO's management, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of CNO's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended).  Based on its evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2018, CNO's disclosure controls and procedures were effective to ensure that information required to be disclosed by CNO in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.  Disclosure controls and procedures are also designed to reasonably assure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes to Internal Control Over Financial Reporting.  There were no changes in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the three months ended September 30, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

___________________

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

Information required for Part II, Item 1 is incorporated by reference to the discussion under the heading "Litigation and Other Legal Proceedings" in the footnotes to our consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

ITEM 1A.  RISK FACTORS.

CNO and its businesses are subject to a number of risks including general business and financial risk factors.  Any or all of such factors could have a material adverse effect on the business, financial condition or results of operations of CNO.  Refer to "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2017, for further discussion of such risk factors.  There have been no material changes from such previously disclosed risk factors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Issuer Purchases of Equity Securities

Period (in 2018)	Total number of shares (or units)	Average price paid per share (or unit)		Total number of shares (or units) purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (a)
					(dollars in millions)
July 1 through July 31	1,423	$	20.16	—	$	325.1
August 1 through August 31	136	22.17		—	325.1
September 1 through September 30	1,634	21.07		—	325.1
Total	3,193	20.71		—	325.1

_________________

(a) In May 2011, the Company announced a securities repurchase program of up to $100.0 million. In February 2012, June 2012, December 2012, December 2013, November 2014, November 2015 and May 2017, the Company's Board of Directors approved, in aggregate, an additional $1,900.0 million to repurchase the Company's outstanding securities.

108

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

___________________

ITEM 6. EXHIBITS.

12.1	Computation of Ratio of Earnings to Fixed Charges.
31.1	Certification Pursuant to the Securities Exchange Act Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification Pursuant to the Securities Exchange Act Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

109

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CNO FINANCIAL GROUP, INC.

Dated:  November 5, 2018

By:	/s/ John R. Kline
	John R. Kline
	Senior Vice President and Chief Accounting Officer
	(authorized officer and principal accounting officer)

110

EX-12.1

Exhibit 12.1

CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES

Computation of Ratio of Earnings to Fixed Charges

(Dollars in millions)

	Nine months
	ended			Year ended
	September 30,			December 31,
	2018			2017
Pretax income (loss) from operations:
Net income (loss)	$	(343.3	)	$	175.6
Add income tax expense	41.4			304.9
Pretax income (loss) from operations	(301.9		)	480.5
Add fixed charges:
Interest expense on corporate debt	35.9			46.5
Interest expense on investment borrowings and borrowings related to variable interest entities	74.2			77.2
Interest added to policyholder account balances	73.1			105.2
Portion of rental (a)	15.0			18.7
Fixed charges	198.2			247.6
Adjusted earnings (loss)	$	(103.7	)	$	728.1
Ratio of earnings to fixed charges	(b)			2.94X

____________________

(a) Interest portion of rental is estimated to be 33 percent.

(b) For such ratio, earnings were $301.9 million less than fixed charges.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Gary C. Bhojwani, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CNO Financial Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 5, 2018

/s/ Gary C. Bhojwani

Gary C. Bhojwani

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Erik M. Helding, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CNO Financial Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 5, 2018

/s/ Erik M. Helding

Erik M. Helding

Executive Vice President

and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CNO Financial Group, Inc. (the "Company") on Form 10-Q for the period ending September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gary C. Bhojwani, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my actual knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Gary C. Bhojwani

Gary C. Bhojwani

Chief Executive Officer

November 5, 2018

A signed original of this written statement required by Section 906 has been provided to CNO Financial Group, Inc. and will be retained by CNO Financial Group, Inc. and furnished to the Securities and Exchange Commission upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CNO Financial Group, Inc. (the "Company") on Form 10-Q for the period ending September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Erik M. Helding, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my actual knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Erik M. Helding

Erik M. Helding

Executive Vice President

and Chief Financial Officer

November 5, 2018

A signed original of this written statement required by Section 906 has been provided to CNO Financial Group, Inc. and will be retained by CNO Financial Group, Inc. and furnished to the Securities and Exchange Commission upon request.

XML

DOCUMENT AND ENTITY INFORMATION - shares	9 Months Ended
	Sep. 30, 2018	Oct. 23, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	CNO Financial Group, Inc.
Entity Central Index Key	0001224608
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Filer Category	Large Accelerated Filer
Amendment Flag	false
Entity Common Stock, Shares Outstanding		164,649,365

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CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Investments:
Fixed maturities, available for sale, at fair value (amortized cost: September 30, 2018 - $17,929.5; December 31, 2017 - $20,702.1)	$ 18,512.4	$ 22,910.9
Equity securities at fair value (cost: September 30, 2018 - $340.8; December 31, 2017 - $420.0)	335.5	440.6
Mortgage loans	1,680.6	1,650.6
Policy loans	117.4	116.0
Trading securities	239.0	284.6
Investments held by variable interest entities	1,550.5	1,526.9
Other invested assets	920.0	924.5
Total investments	23,355.4	27,854.1
Cash and cash equivalents - unrestricted	539.2	578.4
Cash and cash equivalents held by variable interest entities	56.4	178.9
Accrued investment income	224.7	245.9
Present value of future profits	351.6	359.6
Deferred acquisition costs	1,291.1	1,026.8
Reinsurance receivables	4,946.3	2,175.2
Income tax assets, net	577.8	366.9
Assets held in separate accounts	5.1	5.0
Other assets	299.6	319.5
Total assets	31,647.2	33,110.3
Liabilities for insurance products:
Policyholder account balances	11,449.7	11,220.7
Future policy benefits	11,140.5	11,521.3
Liability for policy and contract claims	513.4	530.3
Unearned and advanced premiums	249.2	261.7
Liabilities related to separate accounts	5.1	5.0
Other liabilities	689.5	751.8
Investment borrowings	1,646.1	1,646.7
Borrowings related to variable interest entities	1,417.6	1,410.7
Notes payable – direct corporate obligations	916.2	914.6
Total liabilities	28,027.3	28,262.8
Commitments and Contingencies
Shareholders' equity:
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: September 30, 2018 – 164,634,365; December 31, 2017 – 166,857,931)	1.6	1.7
Additional paid-in capital	3,030.0	3,073.3
Accumulated other comprehensive income	403.5	1,212.1
Retained earnings	184.8	560.4
Total shareholders' equity	3,619.9	4,847.5
Total liabilities and shareholders' equity	$ 31,647.2	$ 33,110.3

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CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Investments:
Fixed maturities, available for sale, amortized cost	$ 17,929.5	$ 20,702.1
Equity securities cost	$ 340.8	$ 420.0
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	8,000,000,000	8,000,000,000
Common stock, shares issued (in shares)	164,634,365	166,857,931
Common stock, shares outstanding (in shares)	164,634,365	166,857,931

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CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Insurance policy income	$ 656.9	$ 659.3	$ 1,976.6	$ 1,987.2
Net investment income:
General account assets	332.0	325.9	989.3	960.3
Policyholder and other special-purpose portfolios	85.8	52.7	134.3	171.8
Realized investment gains (losses):
Net realized gains on the transfer of assets related to reinsurance transaction	363.4	0.0	363.4	0.0
Other net realized investment gains, excluding impairment losses	33.3	34.5	29.1	74.8
Total other-than-temporary impairment losses	(2.1)	(4.7)	(2.1)	(17.3)
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income	0.0	0.0	0.0	(0.9)
Net impairment losses recognized	(2.1)	(4.7)	(2.1)	(18.2)
Loss on dissolution of variable interest entities	0.0	(0.6)	0.0	(4.3)
Total realized gains	394.6	29.2	390.4	52.3
Fee revenue and other income	11.9	12.2	44.7	35.5
Total revenues	1,481.2	1,079.3	3,535.3	3,207.1
Benefits and expenses:
Insurance policy benefits	646.9	638.1	1,851.7	1,941.6
Loss related to reinsurance transaction	1,067.6	0.0	1,067.6	0.0
Interest expense	38.8	30.1	110.1	92.3
Amortization	62.4	58.2	195.3	181.3
Loss on extinguishment of borrowings related to variable interest entities	0.0	5.5	3.8	5.5
Other operating costs and expenses	205.3	217.5	608.7	631.3
Total benefits and expenses	2,021.0	949.4	3,837.2	2,852.0
Income (loss) before income taxes	(539.8)	129.9	(301.9)	355.1
Tax expense (benefit) on period income (loss)	(114.8)	44.1	(63.4)	123.6
Valuation allowance for deferred tax assets and other tax items	104.8	(15.0)	104.8	(15.0)
Net income (loss)	$ (529.8)	$ 100.8	$ (343.3)	$ 246.5
Basic:
Weighted average shares outstanding (in shares)	164,551	168,684	165,903	170,890
Net income (loss) (in dollars per share)	$ (3.22)	$ 0.60	$ (2.07)	$ 1.44
Diluted:
Weighted average shares outstanding (in shares)	164,551	170,982	165,903	172,800
Net income (loss) (in dollars per share)	$ (3.22)	$ 0.59	$ (2.07)	$ 1.43

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (529.8)	$ 100.8	$ (343.3)	$ 246.5
Other comprehensive income, before tax:
Unrealized gains (losses) for the period	(149.1)	120.9	(1,264.1)	794.5
Adjustment to present value of future profits and deferred acquisition costs	18.7	(1.8)	107.4	(25.3)
Amount related to premium deficiencies assuming the net unrealized gains (losses) had been realized	106.5	(31.0)	509.5	(243.0)
Reclassification adjustments:
For net realized investment gains included in net income (loss)	(354.7)	(27.7)	(366.4)	(44.0)
For amortization of the present value of future profits and deferred acquisition costs related to net realized investment gains (losses) included in net income (loss)	(0.5)	0.7	(0.1)	1.0
Other comprehensive income (loss) before tax	(379.1)	61.1	(1,013.7)	483.2
Income tax (expense) benefit related to items of accumulated other comprehensive income (loss)	82.4	(22.0)	221.4	(172.0)
Other comprehensive income (loss), net of tax	(296.7)	39.1	(792.3)	311.2
Comprehensive income (loss)	$ (826.5)	$ 139.9	$ (1,135.6)	$ 557.7

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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions	Total	Common stock and additional paid-in capital	Accumulated other comprehensive income	Retained earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting change	$ 0.3	$ 0.9		$ (0.6)
Balance, beginning of period at Dec. 31, 2016	4,486.9	3,213.8	$ 622.4	650.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	246.5			246.5
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit))	309.1		309.1
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit))	2.1		2.1
Cost of common stock repurchased	(140.1)	(140.1)
Dividends on common stock	(44.7)			(44.7)
Stock options, restricted stock and performance units	21.6	21.6
Balance, end of period at Sep. 30, 2017	4,881.7	3,096.2	933.6	851.9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting change	0.0	0.0	(16.3)	16.3
Balance, beginning of period at Dec. 31, 2017	4,847.5	3,075.0	1,212.1	560.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(343.3)			(343.3)
Change in unrealized appreciation (depreciation) of investments (net of applicable income tax expense (benefit))	(791.5)		(791.5)
Change in noncredit component of impairment losses on fixed maturities, available for sale (net of applicable income tax expense (benefit))	(0.8)		(0.8)
Cost of common stock repurchased	(60.5)	(60.5)
Dividends on common stock	(48.6)			(48.6)
Stock options, restricted stock and performance units	17.1	17.1
Balance, end of period at Sep. 30, 2018	$ 3,619.9	$ 3,031.6	$ 403.5	$ 184.8

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CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Statement of Stockholders' Equity [Abstract]
Change in unrealized appreciation (depreciation) of investments, applicable income tax expense (benefit)	$ (221.2)	$ 170.9
Change in noncredit component of impairment losses on fixed maturities, available for sale, applicable income tax expense (benefit)	$ (0.2)	$ 1.1

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CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Insurance policy income	$ 1,848.1	$ 1,859.4
Net investment income	1,005.7	917.9
Fee revenue and other income	44.7	35.5
Insurance policy benefits	(1,515.6)	(1,491.7)
Payment to reinsurer pursuant to long-term care business reinsured	(365.0)	0.0
Interest expense	(92.8)	(81.0)
Deferrable policy acquisition costs	(187.2)	(183.4)
Other operating costs	(591.9)	(549.2)
Income taxes	(31.0)	(58.0)
Net cash flow from operating activities	115.0	449.5
Cash flows from investing activities:
Sales of investments	2,747.2	1,723.5
Maturities and redemptions of investments	1,966.7	2,543.0
Purchases of investments	(5,037.6)	(4,076.8)
Net sales of trading securities	25.4	94.8
Other	(16.3)	(20.4)
Net cash provided (used) by investing activities	(314.6)	264.1
Cash flows from financing activities:
Issuance of common stock	3.5	6.0
Payments to repurchase common stock	(67.5)	(142.3)
Common stock dividends paid	(48.4)	(44.5)
Amounts received for deposit products	1,129.7	1,067.2
Withdrawals from deposit products	(980.5)	(920.8)
Issuance of investment borrowings:
Federal Home Loan Bank	150.0	332.0
Related to variable interest entities	277.6	387.3
Payments on investment borrowings:
Federal Home Loan Bank	(150.6)	(332.6)
Related to variable interest entities	(275.9)	(862.3)
Net cash provided (used) by financing activities	37.9	(510.0)
Net increase (decrease) in cash and cash equivalents	(161.7)	203.6
Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period	757.3	668.2
Cash and cash equivalents - unrestricted and held by variable interest entities, end of period	$ 595.6	$ 871.8

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BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BUSINESS AND BASIS OF PRESENTATION

BUSINESS AND BASIS OF PRESENTATION

The following notes should be read together with the notes to the consolidated financial statements included in our 2017 Annual Report on Form 10-K.

CNO Financial Group, Inc., a Delaware corporation ("CNO"), is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer health insurance, annuity, individual life insurance and other insurance products.  The terms "CNO Financial Group, Inc.", "CNO", the "Company", "we", "us", and "our" as used in these financial statements refer to CNO and its subsidiaries.  Such terms, when used to describe insurance business and products, refer to the insurance business and products of CNO's insurance subsidiaries.

We focus on serving middle-income pre-retiree and retired Americans, which we believe are attractive, underserved, high growth markets.  We sell our products through three distribution channels: career agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing.

Our unaudited consolidated financial statements reflect normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented.  As permitted by rules and regulations of the Securities and Exchange Commission (the "SEC") applicable to quarterly reports on Form 10-Q, we have condensed or omitted certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").  We have reclassified certain amounts from the prior periods to conform to the 2018 presentation.  These reclassifications have no effect on net income or shareholders' equity.  Results for interim periods are not necessarily indicative of the results that may be expected for a full year.

The balance sheet at December 31, 2017, presented herein, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

When we prepare financial statements in conformity with GAAP, we are required to make estimates and assumptions that significantly affect reported amounts of various assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting periods.  For example, we use significant estimates and assumptions to calculate values for deferred acquisition costs, the present value of future profits, fair value measurements of certain investments (including derivatives), other-than-temporary impairments of investments, assets and liabilities related to income taxes, liabilities for insurance products, liabilities related to litigation and guaranty fund assessment accruals.  If our future experience differs from these estimates and assumptions, our financial statements would be materially affected.

The accompanying financial statements include the accounts of the Company and its subsidiaries. Our consolidated financial statements exclude transactions between us and our consolidated affiliates, or among our consolidated affiliates.

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INVESTMENTS

9 Months Ended

Sep. 30, 2018

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

INVESTMENTS

We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as net investment income (classified as investment income from policyholder and other special-purpose portfolios)).

Ourtrading securities include: (i) investments purchased with the intent of selling in the near term to generate income; (ii) investments supporting certain insurance liabilities and certain reinsurance agreements; and (iii) certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option.  The change in fair value of the income generating investments and investments supporting insurance liabilities is recognized in income from policyholder and other special-purpose portfolios (a component of net investment income). The change in fair value of securities with embedded derivatives is recognized in realized investment gains (losses). Investment income related to investments supporting certain insurance liabilities is substantially offset by the change in insurance policy benefits related to certain products.

Accumulated other comprehensive income is primarily comprised of the net effect of unrealized appreciation (depreciation) on our investments.  These amounts, included in shareholders' equity as of September 30, 2018 and December 31, 2017, were as follows (dollars in millions):

	September 30, 2018			December 31, 2017
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized	$	1.6		$	2.6
Net unrealized gains on all other investments	577.2			2,227.3
Adjustment to present value of future profits (a)	(4.5		)	(94.0		)
Adjustment to deferred acquisition costs	(56.1		)	(292.6		)
Adjustment to insurance liabilities	(5.0		)	(295.8		)
Deferred income tax liabilities	(109.7		)	(335.4		)
Accumulated other comprehensive income	$	403.5		$	1,212.1

________

(a) The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003, the date Conseco, Inc., an Indiana corporation, emerged from bankruptcy.

At September 30, 2018, adjustments to insurance liabilities and deferred tax assets included $5.0 million and $1.1 million, respectively, for premium deficiencies that would exist on certain blocks of business if unrealized gains on the assets backing such products had been realized and the proceeds from the sales of such assets were invested at then current yields.

At September 30, 2018, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions):

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value		Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities	$	11,266.5	$	468.8	$	(210.8	)	$	11,524.5	$	—
United States Treasury securities and obligations of United States government corporations and agencies	151.9		17.3		(.5		)	168.7		—
States and political subdivisions	1,749.7		141.9		(4.6		)	1,887.0		—
Debt securities issued by foreign governments	60.3		1.3		(1.4		)	60.2		—
Asset-backed securities	2,363.7		143.6		(8.2		)	2,499.1		—
Collateralized debt obligations	355.6		.4		(2.0		)	354.0		—
Commercial mortgage-backed securities	1,439.3		14.3		(20.3		)	1,433.3		—
Mortgage pass-through securities	1.5		.1		—			1.6		—
Collateralized mortgage obligations	541.0		48.1		(5.1		)	584.0		(.6		)
Total fixed maturities, available for sale	$	17,929.5	$	835.8	$	(252.9	)	$	18,512.4	$	(.6	)

At December 31, 2017, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions):

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value		Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities	$	13,286.3	$	1,699.1	$	(27.0	)	$	14,958.4	$	—
United States Treasury securities and obligations of United States government corporations and agencies	146.4		31.5		(.2		)	177.7		—
States and political subdivisions	1,821.9		234.8		(.4		)	2,056.3		—
Debt securities issued by foreign governments	79.5		3.8		(.2		)	83.1		—
Asset-backed securities	3,085.9		172.6		(4.1		)	3,254.4		—
Collateralized debt obligations	257.1		2.3		—			259.4		—
Commercial mortgage-backed securities	1,354.0		33.8		(10.3		)	1,377.5		—
Mortgage pass-through securities	1.8		.2		—			2.0		—
Collateralized mortgage obligations	669.2		73.2		(.3		)	742.1		(1.0		)
Total fixed maturities, available for sale	$	20,702.1	$	2,251.3	$	(42.5	)	$	22,910.9	$	(1.0	)
Equity securities	$	420.0	$	23.6	$	(3.0	)	$	440.6

The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at September 30, 2018, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.  Structured securities (such as asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	367.7	$	372.8
Due after one year through five years	1,496.2		1,536.2
Due after five years through ten years	1,625.1		1,632.8
Due after ten years	9,739.4		10,098.6
Subtotal	13,228.4		13,640.4
Structured securities	4,701.1		4,872.0
Total fixed maturities, available for sale	$	17,929.5	$	18,512.4

The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2017, by contractual maturity.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	328.1	$	335.1
Due after one year through five years	1,947.3		2,052.3
Due after five years through ten years	1,508.7		1,601.3
Due after ten years	11,550.0		13,286.8
Subtotal	15,334.1		17,275.5
Structured securities	5,368.0		5,635.4
Total fixed maturities, available for sale	$	20,702.1	$	22,910.9

Net Realized Investment Gains (Losses)

The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Fixed maturity securities, available for sale:
Gross realized gains on sale	$	5.4		$	32.3		$	45.5		$	60.4
Gross realized losses on sale	(11.4		)	(8.5		)	(36.9		)	(16.4		)
Impairments:
Total other-than-temporary impairment losses	—			(3.2		)	—			(10.0		)
Other-than-temporary impairment losses recognized in accumulated other comprehensive income	—			—			—			(.9		)
Net impairment losses recognized	—			(3.2		)	—			(10.9		)
Net realized investment gains (losses) from fixed maturities	(6.0		)	20.6			8.6			33.1
Equity securities, including change in fair value (a)	(3.0		)	7.7			(13.3		)	9.6
Mortgage loans	—			—			—			1.0
Impairments of other investments	(2.1		)	(1.5		)	(2.1		)	(7.3		)
Loss on dissolution of variable interest entities	—			(.6		)	—			(4.3		)
Other (a) (b)	42.3			3.0			33.8			20.2
Net realized investment gains before net realized gains on the transfer of assets related to reinsurance transaction	31.2			29.2			27.0			52.3
Net realized gains on the transfer of assets related to reinsurance transaction	363.4			—			363.4			—
Net realized investment gains	$	394.6		$	29.2		$	390.4		$	52.3

_________________

(a) Changes in the estimated fair value of trading securities that we have elected the fair value option and equity securities (and are still held as of the end of the respective periods) were $(6.0) million and $13.0 million for the nine months ended September 30, 2018 and 2017, respectively.

(b) In April 2016, the Company announced that it had invested in a non-controlling minority interest in Tennenbaum Capital Partners, LLC ("TCP"), a Los Angeles-based investment management firm. In August 2018, Blackrock, Inc. announced the completion of its acquisition of TCP. The sale of our interest in TCP resulted in a significant portion of the net realized gains in the third quarter of 2018.

During the first nine months of 2018, we recognized net realized investment gains of $390.4 million, which were comprised of: (i) $50.4 million of net gains from the sales of investments; (ii) $363.4 million of gains on the transfer of assets (substantially all of which were fixed maturities) related to reinsurance transaction; (iii) $13.3 million of losses related to equity securities, including the change in fair value; (iv) the decrease in fair value of certain fixed maturity investments with embedded derivatives of $3.0 million; (v) the decrease in fair value of embedded derivatives related to a modified coinsurance agreement of $5.0 million; and (vi) $2.1 million of writedowns of investments for other than temporary declines in fair value recognized through net income.

During the first nine months of 2017, we recognized net realized investment gains of $52.3 million, which were comprised of: (i) $60.1 million of net gains from the sales of investments; (ii) $4.3 million of losses on the dissolution of variable interest entities ("VIEs"); (iii) the increase in fair value of certain fixed maturity investments with embedded derivatives of $12.3 million; (iv) the increase in fair value of embedded derivatives related to a modified coinsurance agreement of $2.4 million; and (v) $18.2 million of writedowns of investments for other than temporary declines in fair value recognized through earnings.

During the first nine months of 2017, VIEs that were required to be consolidated were dissolved. A loss of $4.3 million was recognized representing the difference between the borrowings of such VIEs and the contractual distributions required following the liquidation of the underlying assets.

Our fixed maturity investments are generally purchased in the context of various long-term strategies, including funding insurance liabilities, so we do not generally seek to generate short-term realized gains through the purchase and sale of such securities.  In certain circumstances, including those in which securities are selling at prices which exceed our view of their underlying economic value, or when it is possible to reinvest the proceeds to better meet our long-term asset-liability objectives, we may sell certain securities.

During the first nine months of 2018, the $36.9 million of gross realized losses on sales of $1,040.4 million of fixed maturity securities, available for sale included: (i) $26.9 million related to various corporate securities; (ii) $4.0 million related to commercial mortgage-backed securities; and (iii) $6.0 million related to various other investments. Securities are generally sold at a loss following unforeseen issuer-specific events or conditions or shifts in perceived relative values.  These reasons include but are not limited to: (i) changes in the investment environment; (ii) expectation that the market value could deteriorate; (iii) our desire to reduce our exposure to an asset class, an issuer or an industry; (iv) prospective or actual changes in credit quality; or (v) changes in expected portfolio cash flows.

During the first nine months of 2018, we recognized $2.1 million of impairment losses recorded in earnings on a mortgage loan due to issuer specific events.

During the first nine months of 2017, we recognized $18.2 million of impairment losses recorded in earnings which included: (i) $5.7 million of writedowns on fixed maturities in the energy sector; (ii) $5.2 million of writedowns related to a real estate investment; and (iii) $7.3 million of writedowns on other investments.

We regularly evaluate all of our investments with unrealized losses for possible impairment.  Our assessment of whether unrealized losses are "other than temporary" requires significant judgment.  Factors considered include: (i) the extent to which fair value is less than the cost basis; (ii) the length of time that the fair value has been less than cost; (iii) whether the unrealized loss is event driven, credit-driven or a result of changes in market interest rates or risk premium; (iv) the near-term prospects for specific events, developments or circumstances likely to affect the value of the investment; (v) the investment's rating and whether the investment is investment-grade and/or has been downgraded since its purchase; (vi) whether the issuer is current on all payments in accordance with the contractual terms of the investment and is expected to meet all of its obligations under the terms of the investment; (vii) whether we intend to sell the investment or it is more likely than not that circumstances will require us to sell the investment before recovery occurs; (viii) the underlying current and prospective asset and enterprise values of the issuer and the extent to which the recoverability of the carrying value of our investment may be affected by changes in such values; (ix) projections of, and unfavorable changes in, cash flows on structured securities including mortgage-backed and asset-backed securities; (x) our best estimate of the value of any collateral; and (xi) other objective and subjective factors.

Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio.  Significant losses could have a material adverse effect on our consolidated financial statements in future periods.

The manner in which impairment losses on fixed maturity securities, available for sale, are recognized in the financial statements is dependent on the facts and circumstances related to the specific security.  If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, the security is other-than-temporarily impaired and the full amount of the impairment is recognized as a loss through earnings.  If we do not expect to recover the amortized cost basis, we do not plan to sell the security, and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current period credit loss, the recognition of the other-than-temporary impairment is bifurcated.  We recognize the credit loss portion in net income and the noncredit loss portion in accumulated other comprehensive income.

We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security.  The present value is determined using the best estimate of future cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating-rate security.  The methodology and assumptions for establishing the best estimate of future cash flows vary depending on the type of security.

For most structured securities, cash flow estimates are based on bond-specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including overcollateralization, excess spread, subordination and guarantees.  For corporate bonds, cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond-specific facts and circumstances. The previous amortized cost basis less the impairment recognized in net income becomes the security's new cost basis.  We accrete the new cost basis to the estimated future cash flows over the expected remaining life of the security, except when the security is in default or considered nonperforming.

The remaining noncredit impairment, which is recorded in accumulated other comprehensive income, is the difference between the security's estimated fair value and our best estimate of future cash flows discounted at the effective interest rate prior to impairment.  The remaining noncredit impairment typically represents changes in the market interest rates, current market liquidity and risk premiums.  As of September 30, 2018, other-than-temporary impairments included in accumulated other comprehensive income totaled $.6 million (before taxes and related amortization).

The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for the three and nine months ended September 30, 2018 and 2017 (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Credit losses on fixed maturity securities, available for sale, beginning of period	$	(.3	)	$	(4.9	)	$	(2.8	)	$	(5.5	)
Add: credit losses on other-than-temporary impairments not previously recognized	—			—			—			—
Less: credit losses on securities sold	.1			—			2.6			1.6
Less: credit losses on securities impaired due to intent to sell (a)	—			—			—			—
Add: credit losses on previously impaired securities	—			—			—			(1.0		)
Less: increases in cash flows expected on previously impaired securities	—			—			—			—
Credit losses on fixed maturity securities, available for sale, end of period	$	(.2	)	$	(4.9	)	$	(.2	)	$	(4.9	)

__________

(a) Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis.

Gross Unrealized Investment Losses

Our investment strategy is to maximize, over a sustained period and within acceptable parameters of quality and risk, investment income and total investment return through active strategic asset allocation and investment management. Accordingly, we may sell securities at a gain or a loss to enhance the projected total return of the portfolio as market opportunities change, to reflect changing perceptions of risk, or to better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities.

The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at September 30, 2018 (dollars in millions):

	Less than 12 months					12 months or greater					Total
Description of securities	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
United States Treasury securities and obligations of United States government corporations and agencies	$	29.6	$	(.3	)	$	9.9	$	(.2	)	$	39.5	$	(.5	)
States and political subdivisions	174.2		(3.8		)	16.8		(.8		)	191.0		(4.6		)
Debt securities issued by foreign governments	24.4		(1.2		)	4.3		(.2		)	28.7		(1.4		)
Corporate securities	4,114.8		(178.8		)	315.9		(32.0		)	4,430.7		(210.8		)
Asset-backed securities	512.9		(4.1		)	165.3		(4.1		)	678.2		(8.2		)
Collateralized debt obligations	242.7		(2.0		)	—		—			242.7		(2.0		)
Commercial mortgage-backed securities	431.8		(6.4		)	209.3		(13.9		)	641.1		(20.3		)
Mortgage pass-through securities	.1		—			—		—			.1		—
Collateralized mortgage obligations	95.7		(4.3		)	16.8		(.8		)	112.5		(5.1		)
Total fixed maturities, available for sale	$	5,626.2	$	(200.9	)	$	738.3	$	(52.0	)	$	6,364.5	$	(252.9	)

The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2017 (dollars in millions):

	Less than 12 months					12 months or greater					Total
Description of securities	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
United States Treasury securities and obligations of United States government corporations and agencies	$	28.2	$	(.2	)	$	.7	$	—		$	28.9	$	(.2	)
States and political subdivisions	18.3		(.1		)	14.9		(.3		)	33.2		(.4		)
Debt securities issued by foreign governments	7.7		(.1		)	5.4		(.1		)	13.1		(.2		)
Corporate securities	470.5		(6.8		)	359.7		(20.2		)	830.2		(27.0		)
Asset-backed securities	601.4		(2.0		)	122.2		(2.1		)	723.6		(4.1		)
Collateralized debt obligations	3.0		—			—		—			3.0		—
Commercial mortgage-backed securities	276.8		(1.7		)	218.2		(8.6		)	495.0		(10.3		)
Collateralized mortgage obligations	20.5		(.2		)	11.5		(.1		)	32.0		(.3		)
Total fixed maturities, available for sale	$	1,426.4	$	(11.1	)	$	732.6	$	(31.4	)	$	2,159.0	$	(42.5	)
Equity securities	$	58.7	$	(1.7	)	$	21.2	$	(1.3	)	$	79.9	$	(3.0	)

Based on management's current assessment of investments with unrealized losses at September 30, 2018, the Company believes the issuers of the securities will continue to meet their obligations.  While we do not have the intent to sell securities with unrealized losses and it is not more likely than not that we will be required to sell securities with unrealized losses prior to their anticipated recovery, our intent on an individual security may change, based upon market or other unforeseen developments.  In such instances, if a loss is recognized from a sale subsequent to a balance sheet date due to these unexpected developments, the loss is recognized in the period in which we had the intent to sell the security before its anticipated recovery.

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

A reconciliation of net income (loss) and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):

	Three months ended					Nine months ended
	September 30,					September 30,
	2018			2017		2018			2017
Net income (loss) for basic and diluted earnings per share	$	(529.8	)	$	100.8	$	(343.3	)	$	246.5
Shares:
Weighted average shares outstanding for basic earnings per share	164,551			168,684		165,903			170,890
Effect of dilutive securities on weighted average shares:
Stock options, restricted stock and performance units	—			2,298		—			1,910
Weighted average shares outstanding for diluted earnings per share	164,551			170,982		165,903			172,800

In the three and nine months ended September 30, 2018, equivalent common shares of 2,146,000 and 2,214,000, respectively, (related to stock options, restricted stock and performance units) were not included in the diluted weighted average shares outstanding, because their inclusion would have been antidilutive due to the net loss recognized by the Company in such periods.

Basic earnings per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.  Restricted shares (including our performance units) are not included in basic earnings per share until vested.  Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options were exercised and restricted stock was vested.  The dilution from options and restricted shares is calculated using the treasury stock method.  Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the average market price during the period, reducing the dilutive effect of the exercise of the options (or the vesting of the restricted stock and performance units).

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BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

BUSINESS SEGMENTS

BUSINESS SEGMENTS

The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; long-term care in run-off; and corporate operations, comprised of holding company activities and certain noninsurance company businesses.

On September 27, 2018, the Company completed a long-term care reinsurance transaction pursuant to which its wholly-owned subsidiary, Bankers Life and Casualty Company ("Bankers Life"), entered into an agreement with Wilton Reassurance Company ("Wilton Re") to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies (with statutory reserves of approximately $2.7 billion) through 100% indemnity coinsurance, as further described in the note to the consolidated financial statements entitled "Reinsurance". In anticipation of the reinsurance agreement, the Company reorganized its business segments to move the block to be ceded from the "Bankers Life segment" to the "Long-term care in run-off segment" in the third quarter of 2018. As a result of the reorganization of the Company's business segments, total assets of $2.8 billion were transferred from the "Banker Life segment" to the "Long-term care in run-off segment" as of September 30, 2018. All prior period segment disclosures have been revised to conform to management's current view of the Company's operating segments.

We measure segment performance by excluding net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan, loss related to reinsurance transaction, income taxes and other non-operating items consisting primarily of earnings attributable to VIEs ("pre-tax operating earnings") because we believe that this performance measure is a better indicator of the ongoing business and trends in our business.  Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of net realized investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business.

The net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan and other non-operating items consisting primarily of earnings attributable to VIEs depend on market conditions or represent unusual items that do not necessarily relate to the underlying business of our segments.  Net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) may affect future earnings levels since our underlying business is long-term in nature and changes in our investment portfolio may impact our ability to earn the assumed interest rates needed to maintain the profitability of our business.

Operating information by segment is as follows (dollars in millions):

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenues:
Bankers Life:
Insurance policy income:
Annuities	$	4.3	$	3.7	$	13.7	$	15.5
Health	255.8		259.4		769.0		780.5
Life	103.9		103.7		312.8		310.4
Net investment income (a)	256.9		222.7		661.2		658.9
Fee revenue and other income (a)	10.7		11.3		40.9		32.5
Total Bankers Life revenues	631.6		600.8		1,797.6		1,797.8
Washington National:
Insurance policy income:
Annuities	.4		.5		1.1		1.6
Health	163.7		160.4		491.5		480.3
Life	6.7		6.5		20.2		20.1
Net investment income (a)	69.9		68.0		199.4		201.9
Fee revenue and other income (a)	.2		.3		.7		.8
Total Washington National revenues	240.9		235.7		712.9		704.7
Colonial Penn:
Insurance policy income:
Health	.4		.5		1.3		1.6
Life	74.7		72.6		222.4		217.5
Net investment income (a)	11.1		11.0		33.4		33.1
Fee revenue and other income (a)	.5		.3		1.4		.9
Total Colonial Penn revenues	86.7		84.4		258.5		253.1
Long-term care in run-off:
Insurance policy income - health	47.0		52.0		144.6		159.7
Net investment income (a)	54.1		54.7		164.2		168.0
Total Long-term care in run-off revenues	101.1		106.7		308.8		327.7
Corporate operations:
Net investment income	8.0		7.0		13.2		24.8
Fee and other income	1.6		1.8		4.9		6.5
Total corporate revenues	9.6		8.8		18.1		31.3
Total revenues	$	1,069.9	$	1,036.4	$	3,095.9	$	3,114.6

(continued on next page)

(continued from previous page)

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Expenses:
Bankers Life:
Insurance policy benefits	$	390.5		$	362.1		$	1,080.5		$	1,086.7
Amortization	37.3			35.9			119.4			118.3
Interest expense on investment borrowings	7.9			5.3			21.5			14.3
Other operating costs and expenses	101.5			102.2			313.6			310.4
Total Bankers Life expenses	537.2			505.5			1,535.0			1,529.7
Washington National:
Insurance policy benefits	143.5			144.7			423.7			436.7
Amortization	14.0			14.3			42.9			43.9
Interest expense on investment borrowings	3.0			1.7			7.8			4.5
Other operating costs and expenses	50.1			47.5			148.5			145.0
Total Washington National expenses	210.6			208.2			622.9			630.1
Colonial Penn:
Insurance policy benefits	49.8			47.7			157.1			150.8
Amortization	4.2			3.9			12.9			11.9
Interest expense on investment borrowings	.3			.3			1.0			.7
Other operating costs and expenses	26.3			23.5			77.5			73.0
Total Colonial Penn expenses	80.6			75.4			248.5			236.4
Long-term care in run-off:
Insurance policy benefits	91.3			86.5			259.9			257.6
Amortization	2.1			2.8			7.0			8.0
Other operating costs and expenses	5.6			6.8			19.3			19.9
Total Long-term care in run-off expenses	99.0			96.1			286.2			285.5
Corporate operations:
Interest expense on corporate debt	12.1			11.7			35.9			34.8
Other operating costs and expenses	21.4			23.7			59.4			68.3
Total corporate expenses	33.5			35.4			95.3			103.1
Total expenses	960.9			920.6			2,787.9			2,784.8
Pre-tax operating earnings by segment:
Bankers Life	94.4			95.3			262.6			268.1
Washington National	30.3			27.5			90.0			74.6
Colonial Penn	6.1			9.0			10.0			16.7
Long-term care in run-off	2.1			10.6			22.6			42.2
Corporate operations	(23.9		)	(26.6		)	(77.2		)	(71.8		)
Pre-tax operating earnings	$	109.0		$	115.8		$	308.0		$	329.8

___________________

(a) It is not practicable to provide additional components of revenue by product or services.

A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income (loss) is as follows (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Total segment revenues	$	1,069.9		$	1,036.4		$	3,095.9		$	3,114.6
Net realized investment gains (losses)	31.2			29.2			27.0			52.3
Net realized gains on the transfer of assets related to reinsurance transaction	363.4			—			363.4			—
Revenues related to VIEs	16.7			13.7			49.0			40.2
Consolidated revenues	1,481.2			1,079.3			3,535.3			3,207.1
Total segment expenses	960.9			920.6			2,787.9			2,784.8
Insurance policy benefits - fair value changes in embedded derivative liabilities	(28.2		)	(2.9		)	(69.5		)	9.8
Amortization related to fair value changes in embedded derivative liabilities	5.3			.6			13.2			(1.8		)
Amortization related to net realized investment gains	(.5		)	.7			(.1		)	1.0
Expenses related to VIEs	15.9			17.0			49.1			44.8
Fair value changes related to agent deferred compensation plan	—			13.4			(11.0		)	13.4
Loss related to reinsurance transaction	1,067.6			—			1,067.6			—
Consolidated expenses	2,021.0			949.4			3,837.2			2,852.0
Income (loss) before tax	(539.8		)	129.9			(301.9		)	355.1
Income tax expense (benefit):
Tax expense (benefit) on period income (loss)	(114.8		)	44.1			(63.4		)	123.6
Valuation allowance for deferred tax assets and other tax items	104.8			(15.0		)	104.8			(15.0		)
Net income (loss)	$	(529.8	)	$	100.8		$	(343.3	)	$	246.5

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ACCOUNTING FOR DERIVATIVES

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

ACCOUNTING FOR DERIVATIVES

ACCOUNTING FOR DERIVATIVES

Our freestanding and embedded derivatives, which are not designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions):

	Fair value
	September 30, 2018			December 31, 2017
Assets:
Other invested assets:
Fixed index call options	$	143.5		$	170.2
Reinsurance receivables	(6.4		)	(1.4		)
Total assets	$	137.1		$	168.8
Liabilities:
Future policy benefits:
Fixed index products	$	1,370.0		$	1,334.8
Total liabilities	$	1,370.0		$	1,334.8

Our fixed index annuity products provide a guaranteed minimum rate of return and a higher potential return that is based on a percentage (the "participation rate") of the amount of increase in the value of a particular index, such as the Standard & Poor's 500 Index, over a specified period.  Typically, on each policy anniversary date, a new index period begins.  We are generally able to change the participation rate at the beginning of each index period during a policy year, subject to contractual minimums.  The Company accounts for the options attributed to the policyholder for the estimated life of the contract as embedded derivatives. These accounting requirements often create volatility in the earnings from these products. We typically buy call options (including call spreads) referenced to the applicable indices in an effort to offset or hedge potential increases to policyholder benefits resulting from increases in the particular index to which the policy's return is linked.  The notional amount of these options was $3.0 billion at both September 30, 2018 and December 31, 2017.

We are required to establish an embedded derivative related to a modified coinsurance agreement pursuant to which we assume the risks of a block of health insurance business. The embedded derivative represents the mark-to-market adjustment for approximately $125 million in underlying investments held by the ceding reinsurer.

We purchase certain fixed maturity securities that contain embedded derivatives that are required to be held at fair value on the consolidated balance sheet. We have elected the fair value option to carry the entire security at fair value with changes in fair value recognized in net income.

The following table provides the pre-tax gains (losses) recognized in net income for derivative instruments, which are not designated as hedges for the periods indicated (dollars in millions):

	Three months ended					Nine months ended
	September 30,					September 30,
	2018			2017		2018			2017
Net investment income (loss) from policyholder and other special-purpose portfolios:
Fixed index call options	$	59.0		$	30.6	$	66.8		$	95.4
Net realized gains (losses):
Embedded derivative related to modified coinsurance agreement	(.8		)	.3		(5.0		)	2.4
Insurance policy benefits:
Embedded derivative related to fixed index annuities	34.6			12.4		87.6			17.2
Total	$	92.8		$	43.3	$	149.4		$	115.0

Derivative Counterparty Risk

If the counterparties to the call options fail to meet their obligations, we may recognize a loss.  We limit our exposure to such a loss by diversifying among several counterparties believed to be strong and creditworthy.  At September 30, 2018, all of our counterparties were rated "A-" or higher by S&P Global Ratings ("S&P").

The Company and its subsidiaries are parties to master netting arrangements with its counterparties related to entering into various derivative contracts. Exchange-traded derivatives require margin accounts which we offset.

The following table summarizes information related to derivatives with master netting arrangements or collateral as of September 30, 2018 and December 31, 2017 (dollars in millions):

								Gross amounts not offset in the balance sheet
		Gross amounts recognized		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Financial instruments		Cash collateral received		Net amount
September 30, 2018:
	Fixed index call options	$	143.5	$	—	$	143.5	$	—	$	—	$	143.5
December 31, 2017:
	Fixed index call options	170.2		—		170.2		—		—		170.2

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REINSURANCE

9 Months Ended

Sep. 30, 2018

Reinsurance Disclosures [Abstract]

REINSURANCE

REINSURANCE

On September 27, 2018, the Company completed a long-term care reinsurance transaction pursuant to which its wholly-owned subsidiary, Bankers Life, entered into an agreement with Wilton Re to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies (with statutory reserves of approximately $2.7 billion) through 100% indemnity coinsurance. Bankers Life paid a ceding commission of $825 million to reinsure the block, funded through excess capital in the insurance subsidiaries and at the holding company. Bankers Life transferred to Wilton Re assets equal to the statutory liabilities supporting the block plus the ceding commission (subject to a customary post-closing adjustment). In anticipation of the reinsurance agreement, the Company reorganized its business segments to move the block to be ceded from the "Bankers Life segment" to the "Long-term care in run-off segment" in the third quarter of 2018. Accordingly, the Company will evaluate and test for loss recognition separately for the ceded block included in the "Long-term care in run-off segment". CNO recognized a charge related to the transaction of $661.1 million, net of taxes and gains recognized on the assets transferred to Wilton Re. The charge is primarily attributable to loss recognition on the block due to the ceding commission. Including cash flows related to reinsurance in loss recognition testing is consistent with the Company's past practices and policies.

In addition to the reinsurance agreement, Bankers Life and another CNO subsidiary entered into certain other agreements with Wilton Re, including a trust agreement, an administrative services agreement and a transition services agreement.

Wilton Re established a trust account for the benefit of Bankers Life to secure its obligations under the coinsurance agreement. The trust account is required to hold qualified assets with book values equal to the statutory liabilities of the block plus an additional amount, initially $500 million, which declines over time.

The cost of reinsurance ceded totaled $25.4 million and $27.1 million in the third quarters of 2018 and 2017, respectively, and $76.0 million and $79.9 million in the first nine months of 2018 and 2017, respectively.  We deduct this cost from insurance policy income.  Reinsurance recoveries netted against insurance policy benefits totaled $19.4 million and $22.6 million in the third quarters of 2018 and 2017, respectively, and $63.6 million and $69.1 million in the first nine months of 2018 and 2017, respectively.

From time to time, we assume insurance from other companies.  Any costs associated with the assumption of insurance are amortized consistent with the method used to amortize deferred acquisition costs.  Reinsurance premiums assumed totaled $7.0 million and $7.4 million in the third quarters of 2018 and 2017, respectively, and $21.2 million and $23.1 million in the first nine months of 2018 and 2017, respectively. Insurance policy benefits related to reinsurance assumed totaled $8.6 million and $10.5 million in the third quarters of 2018 and 2017, respectively, and $26.6 million and $34.0 million in the first nine months of 2018 and 2017, respectively.

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INCOME TAXES

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company's interim tax expense is based upon the estimated annual effective tax rate for the respective period. Under authoritative guidance, certain items are required to be excluded from the estimated annual effective tax rate calculation. Such items include changes in judgment about the realizability of deferred tax assets resulting from changes in projections of income expected to be available in future years, and items deemed to be unusual, infrequent, or that can not be reliably estimated. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item. The components of income tax expense are as follows (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Current tax expense (benefit)	$	(16.9	)	$	25.9		$	3.8		$	68.5
Deferred tax expense	50.0			18.2			80.7			55.1
Valuation allowance applicable to current year income	—			(2.2		)	—			(2.2		)
Income tax expense calculated based on estimated annual effective tax rate	33.1			41.9			84.5			121.4
Tax benefit on long-term care reinsurance transaction	(147.9		)	—			(147.9		)	—
Income tax expense on discrete items:
Change in valuation allowance	104.8			(12.8		)	104.8			(12.8		)
Total income tax expense (benefit)	$	(10.0	)	$	29.1		$	41.4		$	108.6

On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Reform Act") was signed into law and enacted a broad range of changes to the Internal Revenue Code (the "Code") including individual and corporate reforms and numerous changes to U.S. international tax provisions. The Tax Reform Act reduced the corporate tax rate to 21 percent from 35 percent effective January 1, 2018, and made significant changes to the taxation of life insurance companies. Among other things, the Tax Reform Act modified the computation of life insurance reserves, increased the capitalization rate and extended the amortization period for policy acquisition costs, imposed limitations on the deductibility of performance-based compensation to "covered employees" and interest expense, and allowed for the expensing of certain capital expenditures. For net operating losses ("NOLs") arising after December 31, 2017, the Tax Reform Act limits the ability to utilize NOL carryforwards to 80% of taxable income. In addition, NOLs arising after 2017 can be carried forward indefinitely, but carryback is prohibited. As a result of the reduction in the federal corporate income tax rate, we reduced the value of our net deferred tax assets by $172.5 million (net of the reduction in the valuation allowance for deferred tax assets) which was recorded as additional income tax expense in the fourth quarter of 2017.

The $172.5 million adjustment to our net deferred tax assets was a provisional amount as defined in the SEC's Staff Accounting Bulletin No. 118 ("SAB 118"), issued in December 2017 to address complexities in completing the calculations resulting from the Tax Reform Act. Although we were able to make a reasonable estimate of the impact of the Tax Reform Act based on the information available, we have not analyzed the calculations in sufficient detail to complete the accounting process, including the analysis of the calculations of life insurance tax reserves and future taxable income used to estimate the deferred tax valuation allowance. SAB 118 provides guidance on accounting for the effects of the Tax Reform Act when our accounting process is incomplete but we are able to determine a reasonable estimate. A final determination is required to be made within a measurement period not to extend beyond one year from the enactment date of the Tax Reform Act. We continue to analyze our estimate of the impact of the Tax Reform Act and expect the process to be completed in the fourth quarter of 2018.

A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, reflected in the consolidated statement of operations is as follows:

	Nine months ended
	September 30,
	2018		2017
U.S. statutory corporate rate	21.0	%	35.0	%
Valuation allowance	(34.7	)	(.6	)
Non-taxable income and nondeductible benefits, net	.4		(1.5	)
State taxes	(.4	)	1.3
Estimated annual effective tax rate	(13.7	)%	34.2	%

The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):

	September 30, 2018			December 31, 2017
Deferred tax assets:
Net federal operating loss carryforwards	$	685.0		$	489.6
Net state operating loss carryforwards	19.5			9.3
Investments	—			4.3
Insurance liabilities	301.0			415.8
Other	43.8			48.9
Gross deferred tax assets	1,049.3			967.9
Deferred tax liabilities:
Investments	(9.6		)	—
Present value of future profits and deferred acquisition costs	(174.2		)	(165.4		)
Accumulated other comprehensive income	(111.7		)	(337.2		)
Gross deferred tax liabilities	(295.5		)	(502.6		)
Net deferred tax assets before valuation allowance	753.8			465.3
Valuation allowance	(193.9		)	(89.1		)
Net deferred tax assets	559.9			376.2
Current income taxes prepaid (accrued)	17.9			(9.3		)
Income tax assets, net	$	577.8		$	366.9

Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities and NOLs. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted.

A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, shall be considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies. We evaluate the need to establish a valuation allowance for our deferred income tax assets on an ongoing basis. The realization of our deferred tax assets depends upon generating sufficient future taxable income of the appropriate type during the periods in which our temporary differences become deductible and before our NOLs expire.

Based on our assessment, it appears more likely than not that $559.9 million of our net deferred tax assets of $753.8 million will be realized through future taxable earnings. Accordingly, we have established a deferred tax valuation allowance of $193.9 million at September 30, 2018 ($182.2 million of which relates to our net federal operating loss carryforwards and $11.7 million relates to state operating loss carryforwards). As a result of the completion of the long-term care reinsurance transaction in the third quarter of 2018, we increased the valuation allowance for deferred tax assets by $104.8 million. The increase in life company NOLs generated by the tax loss on the reinsurance transaction is expected to impact our ability to utilize non-life NOLs in the future. Accordingly, we increased the valuation allowance for deferred taxes by $104.8 million. We will continue to assess the need for a valuation allowance in the future. If future results are less than projected, an increase to the valuation allowance may be required to reduce the deferred tax asset, which could have a material impact on our results of operations in the period in which it is recorded.

We use a deferred tax valuation model to assess the need for a valuation allowance. Our model is adjusted to reflect changes in our projections of future taxable income including changes resulting from the Tax Reform Act, investment strategies, the impact of the sale or reinsurance of business and the recapture of business previously ceded. Our estimates of future taxable income are based on evidence we consider to be objective and verifiable.

Our projection of future taxable income for purposes of determining the valuation allowance is based on our adjusted average annual taxable income which is assumed to increase by 3 percent for the next five years, and level taxable income is assumed thereafter. In the projections used for our analysis, our adjusted average taxable income of approximately $345 million consisted of $85 million of non-life taxable income and $260 million of life taxable income.

Recovery of our deferred tax asset is dependent on achieving the level of future taxable income projected in our deferred tax valuation model and failure to do so could result in an increase in the valuation allowance in a future period.  Any future increase in the valuation allowance may result in additional income tax expense and reduce shareholders' equity, and such an increase could have a significant impact upon our earnings in the future.

The Code limits the extent to which losses realized by a non-life entity (or entities) may offset income from a life insurance company (or companies) to the lesser of: (i) 35 percent of the income of the life insurance company; or (ii) 35 percent of the total loss of the non-life entities (including NOLs of the non-life entities).  This limitation is the primary reason a valuation allowance for NOLs is required. There is no similar limitation on the extent to which losses realized by a life insurance entity (or entities) may offset income from a non-life entity (or entities).

Section 382 of the Code imposes limitations on a corporation's ability to use its NOLs when the company undergoes a 50 percent ownership change over a three-year period.  Future transactions and the timing of such transactions could cause an ownership change for Section 382 income tax purposes.  Such transactions may include, but are not limited to, additional repurchases under our securities repurchase program, issuances of common stock and acquisitions or sales of shares of CNO stock by certain holders of our shares, including persons who have held, currently hold or may accumulate in the future five percent or more of our outstanding common stock for their own account.  Many of these transactions are beyond our control.  If an additional ownership change were to occur for purposes of Section 382, we would be required to calculate an annual restriction on the use of our NOLs to offset future taxable income.  The annual restriction would be calculated based upon the value of CNO's equity at the time of such ownership change, multiplied by a federal long-term tax exempt rate (2.32 percent at September 30, 2018), and the annual restriction could limit our ability to use a substantial portion of our NOLs to offset future taxable income.  We regularly monitor ownership change (as calculated for purposes of Section 382) and, as of September 30, 2018, we were below the 50 percent ownership change level that would trigger further impairment of our ability to utilize our NOLs.

Pursuant to the Tax Reform Act, NOLs generated subsequent to 2017 do not have an expiration date. We have $3.3 billion of federal NOLs as of September 30, 2018, as summarized below (dollars in millions):

	Net operating loss
Year of expiration	carryforwards
2023	$	1,744.8
2025	85.2
2026	149.9
2027	10.8
2028	80.3
2029	213.2
2030	.3
2031	.2
2032	44.4
2033	.6
2034	.9
2035	.8
Total federal non-life NOLs	2,331.4
Post 2017 life NOLs with no expiration	930.7
Total federal NOLs	$	3,262.1

The loss on the reinsurance transaction that was completed in September 2018 resulted in a life NOL of $930.7 million. The life NOL is expected to be used to offset 80 percent of our future life insurance company taxable income due to limitations prescribed in the Tax Reform Act. Our life NOL has no expiration date and we expect it to be fully utilized over the next three to four years, depending on the level of life taxable income during such period. Our non-life NOLs can be used to offset 35 percent of remaining life insurance company taxable income after application of the life NOLs, until all non-life NOLs are utilized or expire.

At September 30, 2018, we also had deferred tax assets related to NOLs for state income taxes of $19.5 million.  The related state NOLs are available to offset future state taxable income in certain states through 2033.

The Company’s various state income tax returns are generally open for tax years beginning in 2015, based on individual state statutes of limitation. Generally, for tax years which generate NOLs, capital losses or tax credit carryforwards, the statute remains open until the expiration of the statute of limitations for the tax year in which such carryforwards are utilized.

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NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS

NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS

The following notes payable were direct corporate obligations of the Company as of September 30, 2018 and December 31, 2017 (dollars in millions):

	September 30, 2018			December 31, 2017
4.500% Senior Notes due May 2020	$	325.0		$	325.0
5.250% Senior Notes due May 2025	500.0			500.0
Revolving Credit Agreement (as defined below)	100.0			100.0
Unamortized debt issue costs	(8.8		)	(10.4		)
Direct corporate obligations	$	916.2		$	914.6

Revolving Credit Agreement

On May 19, 2015, the Company entered into a $150.0 millionfour-year unsecured revolving credit agreement with KeyBank National Association, as administrative agent (the "Agent"), and the lenders from time to time party thereto. On May 19, 2015, the Company made an initial drawing of $100.0 million under the Revolving Credit Agreement, resulting in $50.0 million available for additional borrowings. On October 13, 2017, the Company entered into an amendment and restatement agreement (the "Amendment Agreement") with respect to its revolving credit agreement (as amended by the Amendment Agreement, the "Revolving Credit Agreement"). The Amendment Agreement, among other things, increased the total commitments available under the revolving credit facility from $150.0 million to $250.0 million, increased the aggregate amount of additional incremental loans the Company may incur from $50.0 million to $100.0 million and extended the maturity date of the revolving credit facility from May 19, 2019 to the earlier of October 13, 2022 and the date that is six months prior to the maturity date of the 2020 Notes, which is November 30, 2019.

The interest rates with respect to loans under the Revolving Credit Agreement are based on, at the Company's option, a floating base rate (defined as a per annum rate equal to the highest of: (i) the federal funds rate plus 0.50%; (ii) the "prime rate" of the Agent; and (iii) the eurodollar rate for a one-month interest period plus an applicable margin based on the Company's unsecured debt rating), or a eurodollar rate plus an applicable margin based on the Company's unsecured debt rating. The margins under the Revolving Credit Agreement range from 1.375 percent to 2.125 percent, in the case of loans at the eurodollar rate, and 0.375 percent to 1.125 percent, in the case of loans at the base rate. At September 30, 2018, the interest rate on the amounts outstanding under the Revolving Credit Agreement was 4.12 percent. In addition, the daily average undrawn portion of the Revolving Credit Agreement accrues a commitment fee payable quarterly in arrears. The applicable margin for, and the commitment fee applicable to, the Revolving Credit Agreement, will be adjusted from time to time pursuant to a ratings-based pricing grid.

The Revolving Credit Agreement requires the Company to maintain (each as calculated in accordance with the Revolving Credit Agreement): (i) a debt to total capitalization ratio of not more than 35.0 percent (such ratio was 22.6 percent at September 30, 2018); (ii) an aggregate ratio of total adjusted capital to company action level risk-based capital for the Company's insurance subsidiaries of not less than 250 percent (such ratio was approximately 450 percent at September 30, 2018); and (iii) a minimum consolidated net worth of not less than the sum of (x) $2,674 million plus (y) 50.0 percent of the net equity proceeds received by the Company from the issuance and sale of equity interests in the Company (the Company's consolidated net worth was $3,619.9 million at September 30, 2018 compared to the minimum requirement of $2,687.2 million).

Scheduled Repayment of our Direct Corporate Obligations

The scheduled repayment of our direct corporate obligations was as follows at September 30, 2018 (dollars in millions):

Year ending September 30,
2019	$	—
2020	425.0
2021	—
2022	—
2023	—
Thereafter	500.0
	$	925.0

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INVESTMENT BORROWINGS

9 Months Ended

Sep. 30, 2018

Investment Borrowings [Abstract]

INVESTMENT BORROWINGS

INVESTMENT BORROWINGS

Three of the Company's insurance subsidiaries (Washington National Insurance Company ("Washington National"), Bankers Life and Colonial Penn Life Insurance Company ("Colonial Penn")) are members of the Federal Home Loan Bank ("FHLB").  As members of the FHLB, our insurance subsidiaries have the ability to borrow on a collateralized basis from the FHLB. We are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings.  New guidance effective January 1, 2018, requiring equity investments to be measured at fair value (as described in the note entitled "Recently Issued Accounting Standards - Adopted Accounting Standards") do not apply to FHLB common stock and prohibit such investments from being classified as equity securities subject to the new guidance. Accordingly, we have classified our investment in the FHLB common stock as other invested assets. In order to conform to the current presentation, the prior period investment in the FHLB common stock has been reclassified to other invested assets. At September 30, 2018, the carrying value of the FHLB common stock was $71.1 million.  As of September 30, 2018, collateralized borrowings from the FHLB totaled $1.6 billion and the proceeds were used to purchase fixed maturity securities.  The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet.  The borrowings are collateralized by investments with an estimated fair value of $2.0 billion at September 30, 2018, which are maintained in a custodial account for the benefit of the FHLB.  Substantially all of such investments are classified as fixed maturities, available for sale, in our consolidated balance sheet.  

The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions):

Amount		Maturity	Interest rate at
borrowed		date	September 30, 2018
$	50.0	February 2019	Variable rate – 2.405%
21.8		July 2019	Variable rate – 2.672%
15.0		October 2019	Variable rate – 2.850%
50.0		May 2020	Variable rate – 2.678%
21.8		June 2020	Fixed rate – 1.960%
25.0		September 2020	Variable rate – 2.991%
100.0		September 2020	Variable rate – 2.876%
50.0		September 2020	Variable rate – 2.902%
75.0		September 2020	Variable rate – 2.506%
100.0		October 2020	Variable rate – 2.453%
50.0		December 2020	Variable rate – 2.814%
100.0		July 2021	Variable rate – 2.889%
100.0		July 2021	Variable rate – 2.859%
28.2		August 2021	Fixed rate – 2.550%
57.7		August 2021	Variable rate - 2.871%
125.0		August 2021	Variable rate – 2.696%
50.0		September 2021	Variable rate – 2.851%
22.0		May 2022	Variable rate – 2.665%
100.0		May 2022	Variable rate – 2.505%
10.0		June 2022	Variable rate – 2.941%
50.0		July 2022	Variable rate – 2.703%
50.0		July 2022	Variable rate – 2.722%
50.0		July 2022	Variable rate – 2.719%
50.0		August 2022	Variable rate – 2.733%
50.0		December 2022	Variable rate – 2.621%
50.0		December 2022	Variable rate – 2.621%
24.1		March 2023	Fixed rate – 2.160%
50.0		July 2023	Variable rate – 2.548%
100.0		July 2023	Variable rate – 2.548%
20.5		June 2025	Fixed rate – 2.940%
$	1,646.1

The variable rate borrowings are pre-payable on each interest reset date without penalty.  The fixed rate borrowings are pre-payable subject to payment of a yield maintenance fee based on prevailing market interest rates.  At September 30, 2018, the aggregate yield maintenance fee to prepay all fixed rate borrowings was $1.0 million.

Interest expense of $30.3 million and $19.5 million in the first nine months of 2018 and 2017, respectively, was recognized related to total borrowings from the FHLB.

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CHANGES IN COMMON STOCK

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

CHANGES IN COMMON STOCK

CHANGES IN COMMON STOCK

Changes in the number of shares of common stock outstanding were as follows (shares in thousands):

Balance, December 31, 2017	166,858
Treasury stock purchased and retired	(2,998	)
Stock options exercised	327		(a)
Restricted and performance stock vested	447		(b)
Balance, September 30, 2018	164,634

____________________

(a) Such amount was reduced by 69 thousand shares which were tendered to the Company for the payment of the exercise price and required federal and state tax withholdings.

(b) Such amount was reduced by 239 thousand shares which were tendered to the Company for the payment of required federal and state tax withholdings owed on the vesting of restricted and performance stock.

In the first nine months of 2018, we repurchased 3.0 million shares of common stock for $60.5 million under our securities repurchase program. The Company had remaining repurchase authority of $325.1 million as of September 30, 2018.

In the first nine months of 2018, dividends declared on common stock totaled $48.6 million ($0.29 per common share). In May 2018, the Company increased its quarterly common stock dividend to $0.10 per share from $0.09 per share.

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SALES INDUCEMENTS

9 Months Ended

Sep. 30, 2018

Deferred Sales Inducements [Abstract]

SALES INDUCEMENTS

SALES INDUCEMENTS

Certain of our annuity products offer sales inducements to contract holders in the form of enhanced crediting rates or bonus payments in the initial period of the contract.  Certain of our life insurance products offer persistency bonuses credited to the contract holder's balance after the policy has been outstanding for a specified period of time.  These enhanced rates and persistency bonuses are considered sales inducements in accordance with GAAP.  Such amounts are deferred and amortized in the same manner as deferred acquisition costs.  Sales inducements deferred totaled $4.8 million and $1.5 million during the nine months ended September 30, 2018 and 2017, respectively.  Amounts amortized totaled $7.6 million and $6.6 million during the nine months ended September 30, 2018 and 2017, respectively.  The unamortized balance of deferred sales inducements was $39.7 million and $42.5 million at September 30, 2018 and December 31, 2017, respectively.

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OUT-OF-PERIOD ADJUSTMENTS

9 Months Ended

Sep. 30, 2018

Other Liabilities Disclosure [Abstract]

OUT-OF-PERIOD ADJUSTMENTS

OUT-OF-PERIOD ADJUSTMENTS

In the first nine months of 2018, we recorded the net effect of out-of-period adjustments related to the calculation of certain insurance liabilities which increased insurance policy benefits by $2.5 million (of which, $1.4 million related to long-term care reserves in the Bankers Life segment and $1.1 million related to a closed block of payout annuities in the Colonial Penn segment), decreased tax expense by $.5 million and decreased our net income (loss) by $2.0 million (or 1 cent per diluted share). We evaluated these adjustments taking into account both qualitative and quantitative factors and considered the impact of these adjustments in relation to each period, as well as the periods in which they originated. The impact of recognizing these adjustments in prior years was not significant to any individual period. Management believes these adjustments are immaterial to the consolidated financial statements and all previously issued financial statements.

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RECENTLY ISSUED ACCOUNTING STANDARDS

9 Months Ended

Sep. 30, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

RECENTLY ISSUED ACCOUNTING STANDARDS

RECENTLY ISSUED ACCOUNTING STANDARDS

Pending Accounting Standards

In February 2016, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance related to accounting for leases, requiring lessees to report most leases on their balance sheets, regardless of whether the lease is classified as a finance lease or an operating lease. For lessees, the initial lease liability is equal to the present value of future lease payments, and a corresponding asset, adjusted for certain items, is also recorded. Expense recognition for lessees will remain similar to current accounting requirements for capital and operating leases. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance will be effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Based on lease contracts in effect at September 30, 2018, the Company's analysis currently indicates that the primary impact of implementation of the new leasing guidance will be the recognition of a "right to use" asset and a "lease liability" of approximately $55 million. The cumulative effect adjustment to retained earnings as of January 1, 2019 is not expected to be material.

In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. The guidance will be effective for the Company for fiscal years beginning in 2020, including interim periods within the fiscal year. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company has not yet determined the expected impact of adoption of this guidance on its consolidated financial position, results of operations or cash flows.

In January 2017, the FASB issued authoritative guidance that removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reported unit's fair value. Upon adoption, the guidance is to be applied prospectively. The guidance will be effective for the Company on January 1, 2020, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

In March 2017, the FASB issued authoritative guidance related to the premium amortization on purchased callable debt securities. The guidance shortens the amortization period for certain callable debt securities held at a premium. Specifically, the new guidance requires the premium to be amortized to the earliest call date. The guidance does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows based on the investments held by the Company at September 30, 2018, that are applicable to this guidance.

In August 2017, the FASB issued authoritative guidance related to derivatives and hedging. The new guidance expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instruments and the hedged item in the financial statements. The new guidance also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance will be effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Based on the Company's current use of derivatives and hedging activities, the adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

In August 2018, the FASB issued authoritative guidance that makes targeted improvements to the accounting for long-duration contracts. The new guidance: (i) improves the timeliness of recognizing changes in the liability for future benefits and modifies the rate used to discount future cash flows; (ii) simplifies and improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts; (iii) simplifies the amortization of deferred acquisition costs; and (iv) requires enhanced disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account balances, market risk benefits and deferred acquisition costs. Additionally, qualitative and quantitative information about expected cash flows, estimates and assumptions will be required. The new measurement guidance for traditional and limited-payment contract liabilities and the new guidance for the amortization of deferred acquisition costs are required to be adopted on a modified retrospective transition approach, with an option to elect a full retrospective transition if certain criteria are met. The transition approach for deferred acquisition costs is required to be consistent with the transition applied to the liability for future policyholder benefits. Under the modified retrospective approach, for contracts in-force at the transition date, an entity would continue to use the existing locked-in investment yield interest rate assumption to calculate the net premium ratio, rather than the upper-medium grade fixed-income corporate instrument yield. However, for balance sheet remeasurement purposes, the current upper-medium grade fixed-income corporate instrument yield would be used at transition through accumulated other comprehensive income and subsequently through other comprehensive income. For market risk benefits, retrospective application is required, with the ability to use hindsight to measure fair value components to the extent assumptions in a prior period are unobservable or otherwise unavailable. The guidance will be effective for the Company on January 1, 2021, with early adoption permitted. The Company has not yet determined the expected impact of adoption of this guidance on its consolidated financial position, results of operations or cash flows.

In August 2018, the FASB issued authoritative guidance related to changes to the disclosure requirements for fair value measurement. The new guidance removes, modifies and adds certain disclosure requirements. The guidance will be effective for the Company on January 1, 2020. The adoption of such guidance will impact certain fair value disclosures, but will not impact our consolidated financial position, results of operations or cash flows.

Adopted Accounting Standards

In May 2014, the FASB issued authoritative guidance for recognizing revenue from contracts with customers. Certain contracts with customers are specifically excluded from this guidance, including insurance contracts. The core principle of the new guidance is that an entity should recognize revenue when it transfers promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance was effective for the Company on January 1, 2018. The adoption of this new guidance impacts the timing of certain revenues and expenses between quarters of a calendar year for various distribution and marketing agreements with other insurance companies pursuant to which Bankers Life's career agents distribute third party products including prescription drug and Medicare Advantage plans. The annual fee income earned during a calendar year will not change, but the amount recognized during each quarterly period will vary based on the sales of such products in each period. Furthermore, we are recognizing distribution expenses in the same period that the associated fee revenue is earned. Periods prior to the January 1, 2018 adoption date were not restated to reflect the new guidance. The impact of adoption was as follows (dollars in millions):

	Three months ended September 30, 2018
			Impact of			Amounts prior
	As reported		adoption			to adoption
Fee revenue	$	6.4	$	(2.4	)	$	8.8
Distribution expense (included in other operating costs and expenses)	.6		(2.9		)	3.5
Impact on pre-tax income	$	5.8	$	.5		$	5.3

	Nine months ended September 30, 2018
			Impact of			Amounts prior
	As reported		adoption			to adoption
Fee revenue	$	28.8	$	3.1		$	25.7
Distribution expense (included in other operating costs and expenses)	13.0		3.6			9.4
Impact on pre-tax income	$	15.8	$	(.5	)	$	16.3

In January 2016, the FASB issued authoritative guidance related to the recognition and measurement of financial assets and financial liabilities which made targeted improvements to GAAP as follows:

(i) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

(ii) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value.

(iii) Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.

(iv) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.

(v) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.

(vi) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements.

(vii) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

The guidance was effective for the Company on January 1, 2018. Accordingly, the Company recorded a cumulative effect adjustment to the balance sheet as of January 1, 2018, related to certain equity investments that are measured at fair value. The impact of adoption was as follows (dollars in millions):

	January 1, 2018
	Amounts prior to effect of adoption of authoritative guidance		Effect of adoption of authoritative guidance			As adjusted
Accumulated other comprehensive income	$	1,212.1	$	(16.3	)	$	1,195.8
Retained earnings	560.4		16.3			576.7
Total shareholders' equity	4,847.5		—			4,847.5

In August 2016, the FASB issued authoritative guidance related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance addresses eight specific cash flow issues including debt prepayment or debt extinguishment costs, proceeds from the settlement of corporate-owned life insurance policies ("COLI"), distributions received from equity method investees, and others. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance resulted in reclassifications to certain cash receipts and payments within our consolidated statement of cash flows, but had no impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

In November 2016, the FASB issued authoritative guidance to address the diversity in practice that currently exists regarding the classification and presentation of changes in restricted cash on the statement of cash flows. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Entities are also required to disclose information about the nature of their restricted cash and restricted cash equivalents. Additionally, if cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item in the statement of financial position, entities will be required to present a reconciliation, either on the face of the statement of cash flows or disclosed in the notes, of the totals in the statement of cash flows to the related line item captions in the statement of financial position. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance impacted the presentation of our consolidated statement of cash flows and related cash flow disclosures, but did not have an impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

The impact of adopting the cash flow guidance described above was as follows (dollars in millions):

	Nine months ended
	September 30, 2017
	Amounts prior to effect of adoption of authoritative guidance			Restricted cash			COLI death benefits			Distributions received from equity method investments			As adjusted
Cash flows from operating activities:
Net investment income	$	898.9		$	—		$	—		$	19.0		$	917.9
Other operating costs	(546.0		)	—			(3.2		)	—			(549.2		)
Net cash flow from operating activities	433.7			—			(3.2		)	19.0			449.5
Cash flows from investing activities:
Sales of investments	1,742.5			—			—			(19.0		)	1,723.5
Change in cash and cash equivalents held by variable interest entities	83.4			(83.4		)	—			—			—
Other	(23.6		)	—			3.2			—			(20.4		)
Net cash provided (used) by investing activities	363.3			(83.4		)	3.2			(19.0		)	264.1
Net increase (decrease) in cash and cash equivalents	287.0			(83.4		)	—			—			203.6
Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period	478.9			189.3			—			—			668.2
Cash and cash equivalents - unrestricted and held by variable interest entities, end of period	765.9			105.9			—			—			871.8

In May 2017, the FASB issued authoritative guidance related to which changes to the terms or conditions of a share-based award require an entity to apply modification accounting. The guidance was effective for the Company for fiscal years beginning after December 15, 2017. Early adoption was permitted, including adoption in an interim period. The guidance is to be applied prospectively to an award modified on or after the adoption date. The adoption of this guidance did not have a material impact to the Company's consolidated financial position, results of operations or cash flows.

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LITIGATION AND OTHER LEGAL PROCEEDINGS

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

LITIGATION AND OTHER LEGAL PROCEEDINGS

LITIGATION AND OTHER LEGAL PROCEEDINGS

Legal Proceedings

The Company and its subsidiaries are involved in various legal actions in the normal course of business, in which claims for compensatory and punitive damages are asserted, some for substantial amounts.  We recognize an estimated loss from these loss contingencies when we believe it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Some of the pending matters have been filed as purported class actions and some actions have been filed in certain jurisdictions that permit punitive damage awards that are disproportionate to the actual damages incurred.  The amounts sought in certain of these actions are often large or indeterminate and the ultimate outcome of certain actions is difficult to predict.  In the event of an adverse outcome in one or more of these matters, there is a possibility that the ultimate liability may be in excess of the liabilities we have established and could have a material adverse effect on our business, financial condition, results of operations and cash flows.  In addition, the resolution of pending or future litigation may involve modifications to the terms of outstanding insurance policies or could impact the timing and amount of rate increases, which could adversely affect the future profitability of the related insurance policies.  Based upon information presently available, and in light of legal, factual and other defenses available to the Company and its subsidiaries, the Company does not believe that it is probable that the ultimate liability from either pending or threatened legal actions, after consideration of existing loss provisions, will have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows. However, given the inherent difficulty in predicting the outcome of legal proceedings, there exists the possibility that such legal actions could have a material adverse effect on the Company's consolidated financial condition, operating results or cash flows.

In addition to the inherent difficulty of predicting litigation outcomes, particularly those that will be decided by a jury, some matters purport to seek substantial or an unspecified amount of damages for unsubstantiated conduct spanning several years based on complex legal theories and damages models. The alleged damages typically are indeterminate or not factually supported in the complaint, and, in any event, the Company's experience indicates that monetary demands for damages often bear little relation to the ultimate loss. In some cases, plaintiffs are seeking to certify classes in the litigation and class certification either has been denied or is pending and we have filed oppositions to class certification or sought to decertify a prior class certification. In addition, for many of these cases: (i) there is uncertainty as to the outcome of pending appeals or motions; (ii) there are significant factual issues to be resolved; and/or (iii) there are novel legal issues presented. Accordingly, the Company cannot reasonably estimate the possible loss or range of loss in excess of amounts accrued, if any, or predict the timing of the eventual resolution of these matters.  The Company reviews these matters on an ongoing basis.  When assessing reasonably possible and probable outcomes, the Company bases its assessment on the expected ultimate outcome following all appeals.

On September 29, 2016, Washington National and Bankers Conseco Life Insurance Company ("BCLIC") commenced an arbitration proceeding seeking compensatory, consequential and punitive damages against Beechwood Re Ltd. ("BRe") based upon BRe’s incurable material breaches of the long-term care reinsurance agreements, conversion, fraud, and breaches of fiduciary duties and the obligation to deal honestly and in good faith. BRe filed a counterclaim against Washington National and BCLIC in the arbitration alleging damages relating to the reinsurance agreements and their termination. In addition, on September 29, 2016, a complaint was filed by BCLIC and Washington National in the United States District Court for the Southern District of New York, Bankers Conseco Life Insurance Company and Washington National Insurance Company v. Moshe M. Feuer, Scott Taylor and David Levy, Case No. 16-cv-7646, alleging, among other claims, fraud/fraudulent concealment, and violation of the Racketeer Influenced and Corrupt Organizations Act. These allegations relate to the long-term care reinsurance agreements between BRe and Washington National and BCLIC, respectively, and emanate from the undisclosed relationships between and among the defendants (who were the principal owners and officers of BRe) and Platinum Partners, LP and its affiliates. On April 27, 2017, an amended complaint was filed adding Beechwood Capital Group, LLC as a defendant. On March 13, 2018, the District Court granted the motion that had been filed by Feuer, Taylor and Levy to compel arbitration of Washington National's and BCLIC's claims and the litigation is now stayed pending the outcome of the arbitration. Washington National and BCLIC intend to vigorously pursue their claims for damages and other remedies in the arbitration and the litigation described above.

By public notice dated July 26, 2017, the Cayman Islands Monetary Authority advised that, effective July 25, 2017, two individuals (the "Controllers") had been appointed pursuant to Section 24(2)(h) of the Cayman Islands Insurance Law to assume control of the affairs of BRe.  According to the public notice, effective with their appointment, the Controllers assumed immediate control of the affairs of BRe and have all the powers necessary to administer the affairs of BRe including power to terminate its insurance business.  The Controllers are responsible for assessing the financial position of BRe and submitting a report to the Cayman Islands Monetary Authority.  On August 10, 2018, the Cayman Islands Monetary Authority filed a public petition in the Grand Court of the Cayman Islands to officially wind up Beechwood, concluding that Beechwood was now of doubtful solvency. We are in the process of assessing the potential impact of this action on the proceedings described in the foregoing paragraph.

Regulatory Examinations and Fines

Insurance companies face significant risks related to regulatory investigations and actions.  Regulatory investigations generally result from matters related to sales or underwriting practices, payment of contingent or other sales commissions, claim payments and procedures, product design, product disclosure, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, charging excessive or impermissible fees on products, procedures related to canceling policies, changing the way cost of insurance charges are calculated for certain life insurance products or recommending unsuitable products to customers.  We are, in the ordinary course of our business, subject to various examinations, inquiries and information requests from state, federal and other authorities.  The ultimate outcome of these regulatory actions (including the costs of complying with information requests and policy reviews) cannot be predicted with certainty.  In the event of an unfavorable outcome in one or more of these matters, the ultimate liability may be in excess of liabilities we have established and we could suffer significant reputational harm as a result of these matters, which could also have a material adverse effect on our business, financial condition, results of operations or cash flows.

In August 2011, we were notified of an examination to be done on behalf of a number of states for the purpose of determining compliance with unclaimed property laws by the Company and its subsidiaries.  Such examination has included inquiries related to the use of data available on the U.S. Social Security Administration's Death Master File to identify instances where benefits under life insurance policies, annuities and retained asset accounts are payable. We are continuing to provide information to the examiners in response to their requests. A total of 40 states and the District of Columbia are currently participating in this examination.

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CONSOLIDATED STATEMENT OF CASH FLOW

9 Months Ended

Sep. 30, 2018

Supplemental Cash Flow Elements [Abstract]

CONSOLIDATED STATEMENT OF CASH FLOWS

CONSOLIDATED STATEMENT OF CASH FLOWS

The following reconciles net income (loss) to net cash from operating activities (dollars in millions):

	Nine months ended
	September 30,
	2018			2017
Cash flows from operating activities:
Net income (loss)	$	(343.3	)	$	246.5
Adjustments to reconcile net income (loss) to net cash from operating activities:
Amortization and depreciation	216.1			200.8
Income taxes	10.5			50.6
Insurance liabilities	209.1			321.5
Accrual and amortization of investment income	(117.9		)	(214.2		)
Deferral of policy acquisition costs	(187.2		)	(183.4		)
Net realized investment gains	(27.0		)	(52.3		)
Net realized gains on the transfer of assets related to reinsurance transaction	(363.4		)	—
Loss related to reinsurance transaction	1,067.6			—
Payment to reinsurer pursuant to long-term care business reinsured	(365.0		)	—
Loss on extinguishment of borrowings related to variable interest entities	3.8			5.5
Other	11.7			74.5
Net cash from operating activities	$	115.0		$	449.5

The following summarizes the impact of the reinsurance transaction completed on September 27, 2018 (dollars in millions):

Investments transferred	$	(3,582.1	)	(a)
Cash paid to reinsurer	(365.0		)
Accrued interest on investments transferred	(51.6		)
Present value of future profits and deferred acquisition costs written-off	(61.6		)
Reinsurance receivables	2,818.0
Transaction expenses and other	(14.6		)
Release of future loss reserve	189.3
Subtotal	(1,067.6		)
Realized gains on investments transferred	363.4
Pre-tax loss related to reinsurance transaction	$	(704.2	)

______________

(a) Such non-cash amounts are not included in the consolidated statement of cash flows.

Other non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions):

	Nine months ended
	September 30,
	2018		2017
Stock options, restricted stock and performance units	$	19.6	$	17.8

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INVESTMENTS IN VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

INVESTMENTS IN VARIABLE INTEREST ENTITIES

INVESTMENTS IN VARIABLE INTEREST ENTITIES

We have concluded that we are the primary beneficiary with respect to certain VIEs, which are consolidated in our financial statements.  In consolidating the VIEs, we consistently use the financial information most recently distributed to investors in the VIE.

All of the VIEs are collateralized loan trusts that were established to issue securities to finance the purchase of corporate loans and other permitted investments.  The assets held by the trusts are legally isolated and not available to the Company.  The liabilities of the VIEs are expected to be satisfied from the cash flows generated by the underlying loans held by the trusts, not from the assets of the Company.  The Company has no financial obligation to the VIEs beyond its investment in each VIE.

Certain of our subsidiaries are noteholders of the VIEs.  Another subsidiary of the Company is the investment manager for the VIEs.  As such, it has the power to direct the most significant activities of the VIEs which materially impacts the economic performance of the VIEs.

The following tables provide supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions):

	September 30, 2018
	VIEs		Eliminations			Net effect on consolidated balance sheet
Assets:
Investments held by variable interest entities	$	1,550.5	$	—		$	1,550.5
Notes receivable of VIEs held by subsidiaries	—		(142.8		)	(142.8		)
Cash and cash equivalents held by variable interest entities	56.4		—			56.4
Accrued investment income	2.6		—			2.6
Income tax assets, net	2.3		—			2.3
Other assets	4.5		(3.9		)	.6
Total assets	$	1,616.3	$	(146.7	)	$	1,469.6
Liabilities:
Other liabilities	$	66.9	$	(6.2	)	$	60.7
Borrowings related to variable interest entities	1,417.6		—			1,417.6
Notes payable of VIEs held by subsidiaries	155.2		(155.2		)	—
Total liabilities	$	1,639.7	$	(161.4	)	$	1,478.3

	December 31, 2017
	VIEs		Eliminations			Net effect on consolidated balance sheet
Assets:
Investments held by variable interest entities	$	1,526.9	$	—		$	1,526.9
Notes receivable of VIEs held by subsidiaries	—		(155.5		)	(155.5		)
Cash and cash equivalents held by variable interest entities	178.9		—			178.9
Accrued investment income	2.6		(.1		)	2.5
Income tax assets, net	.7		—			.7
Other assets	10.0		(1.5		)	8.5
Total assets	$	1,719.1	$	(157.1	)	$	1,562.0
Liabilities:
Other liabilities	$	158.3	$	(4.4	)	$	153.9
Borrowings related to variable interest entities	1,410.7		—			1,410.7
Notes payable of VIEs held by subsidiaries	167.6		(167.6		)	—
Total liabilities	$	1,736.6	$	(172.0	)	$	1,564.6

The investment portfolios held by the VIEs are primarily comprised of commercial bank loans to corporate obligors which are almost entirely rated below-investment grade.  At September 30, 2018, such loans had an amortized cost of $1,553.1 million; gross unrealized gains of $6.8 million; gross unrealized losses of $9.4 million; and an estimated fair value of $1,550.5 million.

The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at September 30, 2018, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	5.0	$	5.0
Due after one year through five years	523.8		521.9
Due after five years through ten years	1,024.3		1,023.6
Total	$	1,553.1	$	1,550.5

During the first nine months of 2018, the VIEs recognized net realized investment losses of $3.2 million from the sales of fixed maturities. During the first nine months of 2017, the VIEs recognized net realized investment losses of $2.5 million, which were comprised of: (i) $2.2 million of net gains from the sales of fixed maturities; (ii) $4.3 million of losses on the dissolution of VIEs; and (iii) $.4 million of writedowns of investments for other than temporary declines in fair value recognized through net income.

At September 30, 2018, there were no investments held by the VIEs that were in default.

During the first nine months of 2018, $41.9 million of investments held by VIEs were sold which resulted in gross investment losses (before income taxes) of $3.4 million. During the first nine months of 2017, $86.0 million of investments held by the VIEs were sold which resulted in gross investment losses (before income taxes) of $2.0 million.

At September 30, 2018, the VIEs held: (i) investments with a fair value of $474.6 million and gross unrealized losses of $5.4 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $101.1 million and gross unrealized losses of $4.0 million that had been in an unrealized loss position for twelve months or greater.

At December 31, 2017, the VIEs held: (i) investments with a fair value of $445.4 million and gross unrealized losses of $4.9 million that had been in an unrealized loss position for less than twelve months; and (ii) investments with a fair value of $28.4 million and gross unrealized losses of $1.7 million that had been in an unrealized loss position for twelve months or greater.

The investments held by the VIEs are evaluated for other-than-temporary declines in fair value in a manner that is consistent with the Company's fixed maturities, available for sale.

In addition, the Company, in the normal course of business, makes passive investments in structured securities issued by VIEs for which the Company is not the investment manager.  These structured securities include asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, residential mortgage-backed securities and collateralized mortgage obligations.  Our maximum exposure to loss on these securities is limited to our cost basis in the investment.  We have determined that we are not the primary beneficiary of these structured securities due to the relative size of our investment in comparison to the total principal amount of the individual structured securities and the level of credit subordination which reduces our obligation to absorb gains or losses.

At September 30, 2018, we held investments in various limited partnerships and hedge funds, in which we are not the primary beneficiary, totaling $459.1 million (classified as other invested assets).  At September 30, 2018, we had unfunded commitments to these partnerships and hedge funds totaling $231.5 million.  Our maximum exposure to loss on these investments is limited to the amount of our investment.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price.  We carry certain assets and liabilities at fair value on a recurring basis, including fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, separate account assets and embedded derivatives.  We carry our company-owned life insurance policy, which is invested in a series of mutual funds, at its cash surrender value which approximates fair value. In addition, we disclose fair value for certain financial instruments, including mortgage loans, policy loans, cash and cash equivalents, insurance liabilities for interest-sensitive products, investment borrowings, notes payable and borrowings related to VIEs.

The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs.  Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information.  Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value.  Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value.

Valuation Hierarchy

There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable.

• Level 1 – includes assets and liabilities valued using inputs that are unadjusted quoted prices in active markets for identical assets or liabilities.  Our Level 1 assets primarily include cash and cash equivalents and exchange-traded securities.

• Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data.  Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies.  These models consider various inputs such as credit rating, maturity, corporate credit spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by transactions executed in the marketplace. Financial assets in this category primarily include:  certain publicly registered and privately placed corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; certain equity securities; most investments held by our consolidated VIEs; certain mutual fund investments; most short-term investments; and non-exchange-traded derivatives such as call options. Financial liabilities in this category include investment borrowings, notes payable and borrowings related to VIEs.

• Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions.  Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on broker/dealer quotes, pricing services or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information.  Financial assets in this category include certain corporate securities (primarily certain below-investment grade privately placed securities), certain structured securities, mortgage loans, and other less liquid securities.  Financial liabilities in this category include our insurance liabilities for interest-sensitive products, which includes embedded derivatives (including embedded derivatives related to our fixed index annuity products and to a modified coinsurance arrangement) since their values include significant unobservable inputs including actuarial assumptions.

At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value.  This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions.  Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment and is subject to change from period to period based on the observability of the valuation inputs. Any transfers between levels are reported as having occurred at the beginning of the period. There were no transfers between Level 1 and Level 2 in both the first nine months of 2018 and 2017.

The vast majority of our fixed maturity and equity securities, including those held in trading portfolios and those held by consolidated VIEs, short-term and separate account assets use Level 2 inputs for the determination of fair value.  These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value.  Our Level 2 assets are valued as follows:

•Fixed maturities available for sale, equity securities and trading securities

Corporate securities are generally priced using market and income approaches. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads.

U.S. Treasuries and obligations of U.S. Government corporations and agencies are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity.

States and political subdivisions are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads.

Asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations are generally priced using market and income approaches. Inputs generally consist of quoted prices in inactive markets, spreads on actively traded securities, expected prepayments, expected default rates, expected recovery rates, and issue specific information including, but not limited to, collateral type, seniority and vintage.

Equity securities (primarily comprised of non-redeemable preferred stock) are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads.

• Investments held by VIEs

Corporate securities are generally priced using market and income approaches using pricing vendors. Inputs generally consist of issuer rating, benchmark yields, maturity, and credit spreads.

• Other invested assets - derivatives

The fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, are determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotes; time value and volatility factors underlying options; market interest rates; and non-performance risk.

Third-party pricing services normally derive security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information.  If there are no recently reported trades, the third-party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are discounted at an estimated risk-adjusted market rate.  The number of prices obtained for a given security is dependent on the Company's analysis of such prices as further described below.

As the Company is responsible for the determination of fair value, we have control processes designed to ensure that the fair values received from third-party pricing sources are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. Additionally, when inputs are provided by third-party pricing sources, we have controls in place to review those inputs for reasonableness. As part of these controls, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value.  The Company's analysis includes: (i) a review of the methodology used by third-party pricing services; (ii) where available, a comparison of multiple pricing services' valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably dated; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties.  As a result of such procedures, the Company may conclude a particular price received from a third party is not reflective of current market conditions.  In those instances, we may request additional pricing quotes or apply internally developed valuations.  However, the number of such instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received.

The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company's judgment of the inputs or methodologies used by the independent pricing services to value different asset classes.  Such inputs typically include:  benchmark yields, reported trades, broker dealer quotes, issuer spreads, benchmark securities, bids, offers and other relevant data.  The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments.

For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes.  These broker quotes are non-binding andrepresent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs.  Approximately 29 percent of our Level 3 fixed maturity securities were valued using unadjusted broker quotes or broker-provided valuation inputs.  The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs.  For these securities, we use internally developed valuations.  Key assumptions used to determine fair value for these securities may include risk premiums, projected performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market.  For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are discounted at an estimated market rate.  The pricing matrix incorporates term interest rates as well as a spread level based on the issuer's credit rating, other factors relating to the issuer, and the security's maturity.  In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity.

For certain embedded derivatives, we use actuarial assumptions in the determination of fair value which we consider to be Level 3 inputs.

The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at September 30, 2018 is as follows (dollars in millions):

	Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs  (Level 3)		Total
Assets:
Fixed maturities, available for sale:
Corporate securities	$	—	$	11,371.7	$	152.8	$	11,524.5
United States Treasury securities and obligations of United States government corporations and agencies	—		168.7		—		168.7
States and political subdivisions	—		1,887.0		—		1,887.0
Debt securities issued by foreign governments	—		59.2		1.0		60.2
Asset-backed securities	—		2,487.0		12.1		2,499.1
Collateralized debt obligations	—		354.0		—		354.0
Commercial mortgage-backed securities	—		1,433.3		—		1,433.3
Mortgage pass-through securities	—		1.6		—		1.6
Collateralized mortgage obligations	—		584.0		—		584.0
Total fixed maturities, available for sale	—		18,346.5		165.9		18,512.4
Equity securities - corporate securities	216.3		109.7		9.5		335.5
Trading securities:
Asset-backed securities	—		89.7		—		89.7
Commercial mortgage-backed securities	—		93.2		—		93.2
Collateralized mortgage obligations	—		56.1		—		56.1
Total trading securities	—		239.0		—		239.0
Investments held by variable interest entities - corporate securities	—		1,550.5		—		1,550.5
Other invested assets - derivatives	—		143.5		—		143.5
Assets held in separate accounts	—		5.1		—		5.1
Total assets carried at fair value by category	$	216.3	$	20,394.3	$	175.4	$	20,786.0
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	$	—	$	—	$	1,370.0	$	1,370.0

The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2017 is as follows (dollars in millions):

	Quoted prices in active markets  for identical assets or liabilities (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)		Total
Assets:
Fixed maturities, available for sale:
Corporate securities	$	—	$	14,728.0	$	230.4	$	14,958.4
United States Treasury securities and obligations of United States government corporations and agencies	—		177.7		—		177.7
States and political subdivisions	—		2,056.3		—		2,056.3
Debt securities issued by foreign governments	—		79.2		3.9		83.1
Asset-backed securities	—		3,230.2		24.2		3,254.4
Collateralized debt obligations	—		259.4		—		259.4
Commercial mortgage-backed securities	—		1,377.5		—		1,377.5
Mortgage pass-through securities	—		2.0		—		2.0
Collateralized mortgage obligations	—		742.1		—		742.1
Total fixed maturities, available for sale	—		22,652.4		258.5		22,910.9
Equity securities - corporate securities	287.8		131.6		21.2		440.6
Trading securities:
Corporate securities	—		21.6		—		21.6
United States Treasury securities and obligations of United States government corporations and agencies	—		.5		—		.5
Asset-backed securities	—		95.8		—		95.8
Collateralized debt obligations	—		2.7		—		2.7
Commercial mortgage-backed securities	—		92.5		—		92.5
Collateralized mortgage obligations	—		68.7		—		68.7
Equity securities	2.8		—		—		2.8
Total trading securities	2.8		281.8		—		284.6
Investments held by variable interest entities - corporate securities	—		1,522.0		4.9		1,526.9
Other invested assets - derivatives	—		170.2		—		170.2
Assets held in separate accounts	—		5.0		—		5.0
Total assets carried at fair value by category	$	290.6	$	24,763.0	$	284.6	$	25,338.2
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	$	—	$	—	$	1,334.8	$	1,334.8

The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions):

	September 30, 2018
	Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)		Total estimated fair value		Total carrying amount
Assets:
Mortgage loans	$	—	$	—	$	1,671.5	$	1,671.5	$	1,680.6
Policy loans	—		—		117.4		117.4		117.4
Other invested assets:
Company-owned life insurance	—		186.2		—		186.2		186.2
Cash and cash equivalents:
Unrestricted	539.2		—		—		539.2		539.2
Held by variable interest entities	56.4		—		—		56.4		56.4
Liabilities:
Policyholder account balances	—		—		11,449.7		11,449.7		11,449.7
Investment borrowings	—		1,647.1		—		1,647.1		1,646.1
Borrowings related to variable interest entities	—		1,426.7		—		1,426.7		1,417.6
Notes payable – direct corporate obligations	—		938.9		—		938.9		916.2

	December 31, 2017
	Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)		Total estimated fair value		Total carrying amount
Assets:
Mortgage loans	$	—	$	—	$	1,677.3	$	1,677.3	$	1,650.6
Policy loans	—		—		116.0		116.0		116.0
Other invested assets:
Company-owned life insurance	—		182.3		—		182.3		182.3
Cash and cash equivalents:
Unrestricted	578.4		—		—		578.4		578.4
Held by variable interest entities	178.9		—		—		178.9		178.9
Liabilities:
Policyholder account balances	—		—		11,220.7		11,220.7		11,220.7
Investment borrowings	—		1,648.8		—		1,648.8		1,646.7
Borrowings related to variable interest entities	—		1,432.9		—		1,432.9		1,410.7
Notes payable – direct corporate obligations	—		962.3		—		962.3		914.6

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended September 30, 2018 (dollars in millions):

	September 30, 2018
	Beginning balance as of June 30, 2018			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income			Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2018			Amount of total gains (losses) for the three months ended September 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	181.9		$	(23.9	)	$	(.8	)	$	.1		$	—	$	(4.5	)	$	152.8		$	—
Debt securities issued by foreign governments	3.9			(2.9		)	(.1		)	.1			—		—			1.0			—
Asset-backed securities	18.4			(.2		)	—			(.1		)	—		(6.0		)	12.1			—
Total fixed maturities, available for sale	204.2			(27.0		)	(.9		)	.1			—		(10.5		)	165.9			—
Equity securities - corporate securities	9.5			—			—			—			—		—			9.5			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,333.3		)	(71.3		)	34.6			—			—		—			(1,370.0		)	34.6

_________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended September 30, 2018 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	20.4		$	(44.3	)	$	—		$	—	$	(23.9	)
Debt securities issued by foreign governments	3.0			(5.9		)	—			—		(2.9		)
Asset-backed securities	—			(.2		)	—			—		(.2		)
Total fixed maturities, available for sale	23.4			(50.4		)	—			—		(27.0		)
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(41.8		)	.8			(50.3		)	20.0		(71.3		)

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the nine months ended September 30, 2018 (dollars in millions):

	September 30, 2018
	Beginning balance as of December 31, 2017			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income			Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2018			Amount of total gains (losses) for the nine months ended September 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	230.4		$	(23.2	)	$	.7		$	(3.1	)	$	—	$	(52.0	)	$	152.8		$	—
Debt securities issued by foreign governments	3.9			(2.9		)	(.1		)	.1			—		—			1.0			—
Asset-backed securities	24.2			(11.4		)	—			(.7		)	—		—			12.1			—
Total fixed maturities, available for sale	258.5			(37.5		)	.6			(3.7		)	—		(52.0		)	165.9			—
Equity securities - corporate securities	21.2			(10.9		)	(.8		)	—			—		—			9.5			—
Investments held by variable interest entities - corporate securities	4.9			—			—			—			—		(4.9		)	—			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,334.8		)	(122.8		)	87.6			—			—		—			(1,370.0		)	87.6

_________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the nine months ended September 30, 2018 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	31.5		$	(54.7	)	$	—		$	—	$	(23.2	)
Debt securities issued by foreign governments	3.0			(5.9		)	—			—		(2.9		)
Asset-backed securities	—			(11.4		)	—			—		(11.4		)
Total fixed maturities, available for sale	34.5			(72.0		)	—			—		(37.5		)
Equity securities - corporate securities	—			(10.9		)	—			—		(10.9		)
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(125.1		)	7.7			(64.4		)	59.0		(122.8		)

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended September 30, 2017 (dollars in millions):

	September 30, 2017
	Beginning balance as of June 30, 2017			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income		Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2017			Amount of total gains (losses) for the three months ended September 30, 2017 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	263.3		$	(44.8	)	$	1.7	$	1.3		$	34.2	$	—		$	255.7		$	(3.2	)
Debt securities issued by foreign governments	3.9			—			—		.1			—		—			4.0			—
Asset-backed securities	59.6			(1.3		)	—		.7			7.1		(6.2		)	59.9			—
Collateralized debt obligations	2.5			(2.5		)	—		—			—		—			—			—
Collateralized mortgage obligations	.2			—			—		(.2		)	—		—			—			—
Total fixed maturities, available for sale	329.5			(48.6		)	1.7		1.9			41.3		(6.2		)	319.6			(3.2		)
Equity securities - corporate securities	24.6			(8.3		)	6.4		(1.1		)	—		—			21.6			(.5		)
Investments held by variable interest entities - corporate securities	—			—			—		—			5.0		—			5.0			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,205.4		)	(56.3		)	12.4		—			—		—			(1,249.3		)	12.4

____________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended September 30, 2017 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	15.3		$	(60.1	)	$	—		$	—	$	(44.8	)
Asset-backed securities	9.9			(11.2		)	—			—		(1.3		)
Collateralized debt obligations	—			(2.5		)	—			—		(2.5		)
Total fixed maturities, available for sale	25.2			(73.8		)	—			—		(48.6		)
Equity securities - corporate securities	—			(8.3		)	—			—		(8.3		)
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(41.0		)	1.8			(31.4		)	14.3		(56.3		)

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the nine months ended September 30, 2017 (dollars in millions):

	September 30, 2017
	Beginning balance as of December 31, 2016			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income		Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2017			Amount of total gains (losses) for the nine months ended September 30, 2017 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	258.5		$	(44.1	)	$	9.5	$	.6		$	31.2	$	—		$	255.7		$	(6.5	)
Debt securities issued by foreign governments	3.9			—			—		.1			—		—			4.0			—
Asset-backed securities	60.4			3.8			—		2.3			4.2		(10.8		)	59.9			—
Collateralized debt obligations	5.4			(2.5		)	—		—			—		(2.9		)	—			—
Commercial mortgage-backed securities	32.0			—			—		—			—		(32.0		)	—			—
Total fixed maturities, available for sale	360.2			(42.8		)	9.5		3.0			35.4		(45.7		)	319.6			(6.5		)
Equity securities - corporate securities	25.2			(8.5		)	6.3		(1.4		)	—		—			21.6			(.5		)
Investments held by variable interest entities - corporate securities	—			5.0			—		—			—		—			5.0			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,092.3		)	(174.2		)	17.2		—			—		—			(1,249.3		)	17.2

____________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the nine months ended September 30, 2017 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	64.3		$	(108.4	)	$	—		$	—	$	(44.1	)
Asset-backed securities	21.9			(18.1		)	—			—		3.8
Collateralized debt obligations	—			(2.5		)	—			—		(2.5		)
Total fixed maturities, available for sale	86.2			(129.0		)	—			—		(42.8		)
Equity securities - corporate securities	—			(8.5		)	—			—		(8.5		)
Investments held by variable interest entities - corporate securities	5.0			—			—			—		5.0
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(130.1		)	5.3			(95.7		)	46.3		(174.2		)

At September 30, 2018, 55 percent of our Level 3 fixed maturities, available for sale, were investment grade and 92 percent of our Level 3 fixed maturities, available for sale, consisted of corporate securities.

Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3.

Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and other special-purpose portfolios, net realized investment gains (losses) or insurance policy benefits within the consolidated statement of operations or accumulated other comprehensive income within shareholders' equity based on the appropriate accounting treatment for the instrument.

The amount presented for gains (losses) included in our net loss for assets and liabilities still held as of the reporting date primarily represents impairments for fixed maturities, available for sale, changes in fair value of trading securities and certain derivatives and changes in fair value of embedded derivative instruments included in liabilities for insurance products that exist as of the reporting date.

The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at September 30, 2018 (dollars in millions):

	Fair value at September 30, 2018		Valuation techniques	Unobservable inputs	Range (weighted average)
Assets:
Corporate securities (a)	$	98.0	Discounted cash flow analysis	Discount margins	1.35% - 8.91% (3.94%)
Corporate securities (b)	5.3		Recovery method	Percent of recovery expected	0% - 62.20% (57.70%)
Asset-backed securities (c)	12.1		Discounted cash flow analysis	Discount margins	1.87%
Equity securities (d)	1.2		Market comparables	EBITDA multiples	1.1X
Equity securities (e)	8.3		Recovery method	Percent of recovery expected	59.27% - 100.00% (59.52%)
Other assets categorized as Level 3 (f)	50.5		Unadjusted third-party price source	Not applicable	Not applicable
Total	175.4
Liabilities:
Future policy benefits (g)	1,370.0		Discounted projected embedded derivatives	Projected portfolio yields	5.15% - 5.61% (5.60%)
				Discount rates	1.50% - 2.98% (2.70%)
				Surrender rates	1.20% - 46.40% (12.30%)

________________________________

(a) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(b) Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(c) Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(d) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"). Generally, increases (decreases) in the EBITDA multiples would result in higher (lower) fair value measurements.

(e) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(f) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.

(g) Future policy benefits - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative.

The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2017 (dollars in millions):

	Fair value at December 31, 2017		Valuation techniques	Unobservable inputs	Range (weighted average)
Assets:
Corporate securities (a)	$	149.2	Discounted cash flow analysis	Discount margins	1.45% - 71.29% (6.96%)
Corporate securities (b)	2.8		Recovery method	Percent of recovery expected	0% - 21.73% (18.42%)
Asset-backed securities (c)	24.2		Discounted cash flow analysis	Discount margins	1.80% - 3.71% (2.67%)
Equity securities (d)	1.1		Market comparables	EBITDA multiples	1.1X
Equity securities (e)	20.1		Recovery method	Percent of recovery expected	59.1%
Other assets categorized as Level 3 (f)	87.2		Unadjusted third-party price source	Not applicable	Not applicable
Total	284.6
Liabilities:
Future policy benefits (g)	1,334.8		Discounted projected embedded derivatives	Projected portfolio yields	5.15% - 5.61% (5.60%)
				Discount rates	0.92% - 2.51% (2.00%)
				Surrender rates	1.20% - 46.40% (12.30%)

________________________________

(a) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(b) Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(c) Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(d) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is EBITDA multiples. Generally, increases (decreases) in EBITDA multiples would result in higher (lower) fair value measurements.

(e) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(f) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.

(g) Future policy benefits - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative.

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RECENTLY ISSUED ACCOUNTING STANDARDS (Policies)

9 Months Ended

Sep. 30, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Investments

We regularly evaluate all of our investments with unrealized losses for possible impairment.  Our assessment of whether unrealized losses are "other than temporary" requires significant judgment.  Factors considered include: (i) the extent to which fair value is less than the cost basis; (ii) the length of time that the fair value has been less than cost; (iii) whether the unrealized loss is event driven, credit-driven or a result of changes in market interest rates or risk premium; (iv) the near-term prospects for specific events, developments or circumstances likely to affect the value of the investment; (v) the investment's rating and whether the investment is investment-grade and/or has been downgraded since its purchase; (vi) whether the issuer is current on all payments in accordance with the contractual terms of the investment and is expected to meet all of its obligations under the terms of the investment; (vii) whether we intend to sell the investment or it is more likely than not that circumstances will require us to sell the investment before recovery occurs; (viii) the underlying current and prospective asset and enterprise values of the issuer and the extent to which the recoverability of the carrying value of our investment may be affected by changes in such values; (ix) projections of, and unfavorable changes in, cash flows on structured securities including mortgage-backed and asset-backed securities; (x) our best estimate of the value of any collateral; and (xi) other objective and subjective factors.

Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio.  Significant losses could have a material adverse effect on our consolidated financial statements in future periods.

The manner in which impairment losses on fixed maturity securities, available for sale, are recognized in the financial statements is dependent on the facts and circumstances related to the specific security.  If we intend to sell a security or it is more likely than not that we would be required to sell a security before the recovery of its amortized cost, the security is other-than-temporarily impaired and the full amount of the impairment is recognized as a loss through earnings.  If we do not expect to recover the amortized cost basis, we do not plan to sell the security, and if it is not more likely than not that we would be required to sell a security before the recovery of its amortized cost, less any current period credit loss, the recognition of the other-than-temporary impairment is bifurcated.  We recognize the credit loss portion in net income and the noncredit loss portion in accumulated other comprehensive income.

We estimate the amount of the credit loss component of a fixed maturity security impairment as the difference between amortized cost and the present value of the expected cash flows of the security.  The present value is determined using the best estimate of future cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating-rate security.  The methodology and assumptions for establishing the best estimate of future cash flows vary depending on the type of security.

For most structured securities, cash flow estimates are based on bond-specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity, prepayment speeds and structural support, including overcollateralization, excess spread, subordination and guarantees.  For corporate bonds, cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond-specific facts and circumstances. The previous amortized cost basis less the impairment recognized in net income becomes the security's new cost basis.  We accrete the new cost basis to the estimated future cash flows over the expected remaining life of the security, except when the security is in default or considered nonperforming.

The remaining noncredit impairment, which is recorded in accumulated other comprehensive income, is the difference between the security's estimated fair value and our best estimate of future cash flows discounted at the effective interest rate prior to impairment.  The remaining noncredit impairment typically represents changes in the market interest rates, current market liquidity and risk premiums.

We classify our fixed maturity securities into one of two categories: (i) "available for sale" (which we carry at estimated fair value with any unrealized gain or loss, net of tax and related adjustments, recorded as a component of shareholders' equity); or (ii) "trading" (which we carry at estimated fair value with changes in such value recognized as net investment income (classified as investment income from policyholder and other special-purpose portfolios)).

Ourtrading securities include: (i) investments purchased with the intent of selling in the near term to generate income; (ii) investments supporting certain insurance liabilities and certain reinsurance agreements; and (iii) certain fixed maturity securities containing embedded derivatives for which we have elected the fair value option.  The change in fair value of the income generating investments and investments supporting insurance liabilities is recognized in income from policyholder and other special-purpose portfolios (a component of net investment income). The change in fair value of securities with embedded derivatives is recognized in realized investment gains (losses). Investment income related to investments supporting certain insurance liabilities is substantially offset by the change in insurance policy benefits related to certain products.

Earnings Per Share

Basic earnings per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period.  Restricted shares (including our performance units) are not included in basic earnings per share until vested.  Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options were exercised and restricted stock was vested.  The dilution from options and restricted shares is calculated using the treasury stock method.  Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the average market price during the period, reducing the dilutive effect of the exercise of the options (or the vesting of the restricted stock and performance units).

Segment Reporting

The Company manages its business through the following operating segments: Bankers Life, Washington National and Colonial Penn, which are defined on the basis of product distribution; long-term care in run-off; and corporate operations, comprised of holding company activities and certain noninsurance company businesses.

On September 27, 2018, the Company completed a long-term care reinsurance transaction pursuant to which its wholly-owned subsidiary, Bankers Life and Casualty Company ("Bankers Life"), entered into an agreement with Wilton Reassurance Company ("Wilton Re") to cede all of its legacy (prior to 2003) comprehensive and nursing home long-term care policies (with statutory reserves of approximately $2.7 billion) through 100% indemnity coinsurance, as further described in the note to the consolidated financial statements entitled "Reinsurance". In anticipation of the reinsurance agreement, the Company reorganized its business segments to move the block to be ceded from the "Bankers Life segment" to the "Long-term care in run-off segment" in the third quarter of 2018. As a result of the reorganization of the Company's business segments, total assets of $2.8 billion were transferred from the "Banker Life segment" to the "Long-term care in run-off segment" as of September 30, 2018. All prior period segment disclosures have been revised to conform to management's current view of the Company's operating segments.

We measure segment performance by excluding net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan, loss related to reinsurance transaction, income taxes and other non-operating items consisting primarily of earnings attributable to VIEs ("pre-tax operating earnings") because we believe that this performance measure is a better indicator of the ongoing business and trends in our business.  Our primary investment focus is on investment income to support our liabilities for insurance products as opposed to the generation of net realized investment gains (losses), and a long-term focus is necessary to maintain profitability over the life of the business.

The net realized investment gains (losses), fair value changes in embedded derivative liabilities (net of related amortization), fair value changes related to the agent deferred compensation plan and other non-operating items consisting primarily of earnings attributable to VIEs depend on market conditions or represent unusual items that do not necessarily relate to the underlying business of our segments.  Net realized investment gains (losses) and fair value changes in embedded derivative liabilities (net of related amortization) may affect future earnings levels since our underlying business is long-term in nature and changes in our investment portfolio may impact our ability to earn the assumed interest rates needed to maintain the profitability of our business.

Recently Issued Accounting Standards

RECENTLY ISSUED ACCOUNTING STANDARDS

Pending Accounting Standards

In February 2016, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance related to accounting for leases, requiring lessees to report most leases on their balance sheets, regardless of whether the lease is classified as a finance lease or an operating lease. For lessees, the initial lease liability is equal to the present value of future lease payments, and a corresponding asset, adjusted for certain items, is also recorded. Expense recognition for lessees will remain similar to current accounting requirements for capital and operating leases. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance will be effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Based on lease contracts in effect at September 30, 2018, the Company's analysis currently indicates that the primary impact of implementation of the new leasing guidance will be the recognition of a "right to use" asset and a "lease liability" of approximately $55 million. The cumulative effect adjustment to retained earnings as of January 1, 2019 is not expected to be material.

In June 2016, the FASB issued authoritative guidance related to the measurement of credit losses on financial instruments. The new guidance replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. The guidance will be effective for the Company for fiscal years beginning in 2020, including interim periods within the fiscal year. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company has not yet determined the expected impact of adoption of this guidance on its consolidated financial position, results of operations or cash flows.

In January 2017, the FASB issued authoritative guidance that removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reported unit's fair value. Upon adoption, the guidance is to be applied prospectively. The guidance will be effective for the Company on January 1, 2020, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

In March 2017, the FASB issued authoritative guidance related to the premium amortization on purchased callable debt securities. The guidance shortens the amortization period for certain callable debt securities held at a premium. Specifically, the new guidance requires the premium to be amortized to the earliest call date. The guidance does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows based on the investments held by the Company at September 30, 2018, that are applicable to this guidance.

In August 2017, the FASB issued authoritative guidance related to derivatives and hedging. The new guidance expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instruments and the hedged item in the financial statements. The new guidance also includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The guidance will be effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Based on the Company's current use of derivatives and hedging activities, the adoption of this guidance is not expected to have a material impact on the Company's consolidated financial position, results of operations or cash flows.

In August 2018, the FASB issued authoritative guidance that makes targeted improvements to the accounting for long-duration contracts. The new guidance: (i) improves the timeliness of recognizing changes in the liability for future benefits and modifies the rate used to discount future cash flows; (ii) simplifies and improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts; (iii) simplifies the amortization of deferred acquisition costs; and (iv) requires enhanced disclosures, including disaggregated rollforwards of the liability for future policy benefits, policyholder account balances, market risk benefits and deferred acquisition costs. Additionally, qualitative and quantitative information about expected cash flows, estimates and assumptions will be required. The new measurement guidance for traditional and limited-payment contract liabilities and the new guidance for the amortization of deferred acquisition costs are required to be adopted on a modified retrospective transition approach, with an option to elect a full retrospective transition if certain criteria are met. The transition approach for deferred acquisition costs is required to be consistent with the transition applied to the liability for future policyholder benefits. Under the modified retrospective approach, for contracts in-force at the transition date, an entity would continue to use the existing locked-in investment yield interest rate assumption to calculate the net premium ratio, rather than the upper-medium grade fixed-income corporate instrument yield. However, for balance sheet remeasurement purposes, the current upper-medium grade fixed-income corporate instrument yield would be used at transition through accumulated other comprehensive income and subsequently through other comprehensive income. For market risk benefits, retrospective application is required, with the ability to use hindsight to measure fair value components to the extent assumptions in a prior period are unobservable or otherwise unavailable. The guidance will be effective for the Company on January 1, 2021, with early adoption permitted. The Company has not yet determined the expected impact of adoption of this guidance on its consolidated financial position, results of operations or cash flows.

In August 2018, the FASB issued authoritative guidance related to changes to the disclosure requirements for fair value measurement. The new guidance removes, modifies and adds certain disclosure requirements. The guidance will be effective for the Company on January 1, 2020. The adoption of such guidance will impact certain fair value disclosures, but will not impact our consolidated financial position, results of operations or cash flows.

Adopted Accounting Standards

In May 2014, the FASB issued authoritative guidance for recognizing revenue from contracts with customers. Certain contracts with customers are specifically excluded from this guidance, including insurance contracts. The core principle of the new guidance is that an entity should recognize revenue when it transfers promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance was effective for the Company on January 1, 2018. The adoption of this new guidance impacts the timing of certain revenues and expenses between quarters of a calendar year for various distribution and marketing agreements with other insurance companies pursuant to which Bankers Life's career agents distribute third party products including prescription drug and Medicare Advantage plans. The annual fee income earned during a calendar year will not change, but the amount recognized during each quarterly period will vary based on the sales of such products in each period. Furthermore, we are recognizing distribution expenses in the same period that the associated fee revenue is earned. Periods prior to the January 1, 2018 adoption date were not restated to reflect the new guidance. The impact of adoption was as follows (dollars in millions):

	Three months ended September 30, 2018
			Impact of			Amounts prior
	As reported		adoption			to adoption
Fee revenue	$	6.4	$	(2.4	)	$	8.8
Distribution expense (included in other operating costs and expenses)	.6		(2.9		)	3.5
Impact on pre-tax income	$	5.8	$	.5		$	5.3

	Nine months ended September 30, 2018
			Impact of			Amounts prior
	As reported		adoption			to adoption
Fee revenue	$	28.8	$	3.1		$	25.7
Distribution expense (included in other operating costs and expenses)	13.0		3.6			9.4
Impact on pre-tax income	$	15.8	$	(.5	)	$	16.3

In January 2016, the FASB issued authoritative guidance related to the recognition and measurement of financial assets and financial liabilities which made targeted improvements to GAAP as follows:

(i) Require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

(ii) Simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value.

(iii) Eliminate the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.

(iv) Require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes.

(v) Require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments.

(vi) Require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements.

(vii) Clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

The guidance was effective for the Company on January 1, 2018. Accordingly, the Company recorded a cumulative effect adjustment to the balance sheet as of January 1, 2018, related to certain equity investments that are measured at fair value. The impact of adoption was as follows (dollars in millions):

	January 1, 2018
	Amounts prior to effect of adoption of authoritative guidance		Effect of adoption of authoritative guidance			As adjusted
Accumulated other comprehensive income	$	1,212.1	$	(16.3	)	$	1,195.8
Retained earnings	560.4		16.3			576.7
Total shareholders' equity	4,847.5		—			4,847.5

In August 2016, the FASB issued authoritative guidance related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance addresses eight specific cash flow issues including debt prepayment or debt extinguishment costs, proceeds from the settlement of corporate-owned life insurance policies ("COLI"), distributions received from equity method investees, and others. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance resulted in reclassifications to certain cash receipts and payments within our consolidated statement of cash flows, but had no impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

In November 2016, the FASB issued authoritative guidance to address the diversity in practice that currently exists regarding the classification and presentation of changes in restricted cash on the statement of cash flows. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Entities are also required to disclose information about the nature of their restricted cash and restricted cash equivalents. Additionally, if cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item in the statement of financial position, entities will be required to present a reconciliation, either on the face of the statement of cash flows or disclosed in the notes, of the totals in the statement of cash flows to the related line item captions in the statement of financial position. The guidance was effective for the Company on January 1, 2018. The adoption of this guidance impacted the presentation of our consolidated statement of cash flows and related cash flow disclosures, but did not have an impact on our consolidated financial position, results of operations or cash flows. Periods prior to the January 1, 2018 adoption date have been restated to reflect the new guidance.

The impact of adopting the cash flow guidance described above was as follows (dollars in millions):

	Nine months ended
	September 30, 2017
	Amounts prior to effect of adoption of authoritative guidance			Restricted cash			COLI death benefits			Distributions received from equity method investments			As adjusted
Cash flows from operating activities:
Net investment income	$	898.9		$	—		$	—		$	19.0		$	917.9
Other operating costs	(546.0		)	—			(3.2		)	—			(549.2		)
Net cash flow from operating activities	433.7			—			(3.2		)	19.0			449.5
Cash flows from investing activities:
Sales of investments	1,742.5			—			—			(19.0		)	1,723.5
Change in cash and cash equivalents held by variable interest entities	83.4			(83.4		)	—			—			—
Other	(23.6		)	—			3.2			—			(20.4		)
Net cash provided (used) by investing activities	363.3			(83.4		)	3.2			(19.0		)	264.1
Net increase (decrease) in cash and cash equivalents	287.0			(83.4		)	—			—			203.6
Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period	478.9			189.3			—			—			668.2
Cash and cash equivalents - unrestricted and held by variable interest entities, end of period	765.9			105.9			—			—			871.8

In May 2017, the FASB issued authoritative guidance related to which changes to the terms or conditions of a share-based award require an entity to apply modification accounting. The guidance was effective for the Company for fiscal years beginning after December 15, 2017. Early adoption was permitted, including adoption in an interim period. The guidance is to be applied prospectively to an award modified on or after the adoption date. The adoption of this guidance did not have a material impact to the Company's consolidated financial position, results of operations or cash flows.

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, therefore, represents an exit price, not an entry price.  We carry certain assets and liabilities at fair value on a recurring basis, including fixed maturities, equity securities, trading securities, investments held by VIEs, derivatives, separate account assets and embedded derivatives.  We carry our company-owned life insurance policy, which is invested in a series of mutual funds, at its cash surrender value which approximates fair value. In addition, we disclose fair value for certain financial instruments, including mortgage loans, policy loans, cash and cash equivalents, insurance liabilities for interest-sensitive products, investment borrowings, notes payable and borrowings related to VIEs.

The degree of judgment utilized in measuring the fair value of financial instruments is largely dependent on the level to which pricing is based on observable inputs.  Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information.  Financial instruments with readily available active quoted prices would be considered to have fair values based on the highest level of observable inputs, and little judgment would be utilized in measuring fair value.  Financial instruments that rarely trade would often have fair value based on a lower level of observable inputs, and more judgment would be utilized in measuring fair value.

Valuation Hierarchy

There is a three-level hierarchy for valuing assets or liabilities at fair value based on whether inputs are observable or unobservable.

• Level 1 – includes assets and liabilities valued using inputs that are unadjusted quoted prices in active markets for identical assets or liabilities.  Our Level 1 assets primarily include cash and cash equivalents and exchange-traded securities.

• Level 2 – includes assets and liabilities valued using inputs that are quoted prices for similar assets in an active market, quoted prices for identical or similar assets in a market that is not active, observable inputs, or observable inputs that can be corroborated by market data.  Level 2 assets and liabilities include those financial instruments that are valued by independent pricing services using models or other valuation methodologies.  These models consider various inputs such as credit rating, maturity, corporate credit spreads, reported trades and other inputs that are observable or derived from observable information in the marketplace or are supported by transactions executed in the marketplace. Financial assets in this category primarily include:  certain publicly registered and privately placed corporate fixed maturity securities; certain government or agency securities; certain mortgage and asset-backed securities; certain equity securities; most investments held by our consolidated VIEs; certain mutual fund investments; most short-term investments; and non-exchange-traded derivatives such as call options. Financial liabilities in this category include investment borrowings, notes payable and borrowings related to VIEs.

• Level 3 – includes assets and liabilities valued using unobservable inputs that are used in model-based valuations that contain management assumptions.  Level 3 assets and liabilities include those financial instruments whose fair value is estimated based on broker/dealer quotes, pricing services or internally developed models or methodologies utilizing significant inputs not based on, or corroborated by, readily available market information.  Financial assets in this category include certain corporate securities (primarily certain below-investment grade privately placed securities), certain structured securities, mortgage loans, and other less liquid securities.  Financial liabilities in this category include our insurance liabilities for interest-sensitive products, which includes embedded derivatives (including embedded derivatives related to our fixed index annuity products and to a modified coinsurance arrangement) since their values include significant unobservable inputs including actuarial assumptions.

At each reporting date, we classify assets and liabilities into the three input levels based on the lowest level of input that is significant to the measurement of fair value for each asset and liability reported at fair value.  This classification is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction and overall market conditions.  Our assessment of the significance of a particular input to the fair value measurement and the ultimate classification of each asset and liability requires judgment and is subject to change from period to period based on the observability of the valuation inputs. Any transfers between levels are reported as having occurred at the beginning of the period. There were no transfers between Level 1 and Level 2 in both the first nine months of 2018 and 2017.

The vast majority of our fixed maturity and equity securities, including those held in trading portfolios and those held by consolidated VIEs, short-term and separate account assets use Level 2 inputs for the determination of fair value.  These fair values are obtained primarily from independent pricing services, which use Level 2 inputs for the determination of fair value.  Our Level 2 assets are valued as follows:

•Fixed maturities available for sale, equity securities and trading securities

Corporate securities are generally priced using market and income approaches. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads.

U.S. Treasuries and obligations of U.S. Government corporations and agencies are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets and maturity.

States and political subdivisions are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, new issuances and credit spreads.

Asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations are generally priced using market and income approaches. Inputs generally consist of quoted prices in inactive markets, spreads on actively traded securities, expected prepayments, expected default rates, expected recovery rates, and issue specific information including, but not limited to, collateral type, seniority and vintage.

Equity securities (primarily comprised of non-redeemable preferred stock) are generally priced using the market approach. Inputs generally consist of trades of identical or similar securities, quoted prices in inactive markets, issuer rating, benchmark yields, maturity, and credit spreads.

• Investments held by VIEs

Corporate securities are generally priced using market and income approaches using pricing vendors. Inputs generally consist of issuer rating, benchmark yields, maturity, and credit spreads.

• Other invested assets - derivatives

The fair value measurements for derivative instruments, including embedded derivatives requiring bifurcation, are determined based on the consideration of several inputs including closing exchange or over-the-counter market price quotes; time value and volatility factors underlying options; market interest rates; and non-performance risk.

Third-party pricing services normally derive security prices through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information.  If there are no recently reported trades, the third-party pricing services may use matrix or model processes to develop a security price where future cash flow expectations are discounted at an estimated risk-adjusted market rate.  The number of prices obtained for a given security is dependent on the Company's analysis of such prices as further described below.

As the Company is responsible for the determination of fair value, we have control processes designed to ensure that the fair values received from third-party pricing sources are reasonable and the valuation techniques and assumptions used appear reasonable and consistent with prevailing market conditions. Additionally, when inputs are provided by third-party pricing sources, we have controls in place to review those inputs for reasonableness. As part of these controls, we perform monthly quantitative and qualitative analysis on the prices received from third parties to determine whether the prices are reasonable estimates of fair value.  The Company's analysis includes: (i) a review of the methodology used by third-party pricing services; (ii) where available, a comparison of multiple pricing services' valuations for the same security; (iii) a review of month to month price fluctuations; (iv) a review to ensure valuations are not unreasonably dated; and (v) back testing to compare actual purchase and sale transactions with valuations received from third parties.  As a result of such procedures, the Company may conclude a particular price received from a third party is not reflective of current market conditions.  In those instances, we may request additional pricing quotes or apply internally developed valuations.  However, the number of such instances is insignificant and the aggregate change in value of such investments is not materially different from the original prices received.

The categorization of the fair value measurements of our investments priced by independent pricing services was based upon the Company's judgment of the inputs or methodologies used by the independent pricing services to value different asset classes.  Such inputs typically include:  benchmark yields, reported trades, broker dealer quotes, issuer spreads, benchmark securities, bids, offers and other relevant data.  The Company categorizes such fair value measurements based upon asset classes and the underlying observable or unobservable inputs used to value such investments.

For securities that are not priced by pricing services and may not be reliably priced using pricing models, we obtain broker quotes.  These broker quotes are non-binding andrepresent an exit price, but assumptions used to establish the fair value may not be observable and therefore represent Level 3 inputs.  Approximately 29 percent of our Level 3 fixed maturity securities were valued using unadjusted broker quotes or broker-provided valuation inputs.  The remaining Level 3 fixed maturity investments do not have readily determinable market prices and/or observable inputs.  For these securities, we use internally developed valuations.  Key assumptions used to determine fair value for these securities may include risk premiums, projected performance of underlying collateral and other factors involving significant assumptions which may not be reflective of an active market.  For certain investments, we use a matrix or model process to develop a security price where future cash flow expectations are discounted at an estimated market rate.  The pricing matrix incorporates term interest rates as well as a spread level based on the issuer's credit rating, other factors relating to the issuer, and the security's maturity.  In some instances issuer-specific spread adjustments, which can be positive or negative, are made based upon internal analysis of security specifics such as liquidity, deal size, and time to maturity.

For certain embedded derivatives, we use actuarial assumptions in the determination of fair value which we consider to be Level 3 inputs.

Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses during the time the applicable financial instruments were classified as Level 3.

Realized and unrealized gains (losses) on Level 3 assets are primarily reported in either net investment income for policyholder and other special-purpose portfolios, net realized investment gains (losses) or insurance policy benefits within the consolidated statement of operations or accumulated other comprehensive income within shareholders' equity based on the appropriate accounting treatment for the instrument.

The amount presented for gains (losses) included in our net loss for assets and liabilities still held as of the reporting date primarily represents impairments for fixed maturities, available for sale, changes in fair value of trading securities and certain derivatives and changes in fair value of embedded derivative instruments included in liabilities for insurance products that exist as of the reporting date.

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INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2018

Investments, Debt and Equity Securities [Abstract]

Schedule of accumulated other comprehensive income (loss)

These amounts, included in shareholders' equity as of September 30, 2018 and December 31, 2017, were as follows (dollars in millions):

	September 30, 2018			December 31, 2017
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized	$	1.6		$	2.6
Net unrealized gains on all other investments	577.2			2,227.3
Adjustment to present value of future profits (a)	(4.5		)	(94.0		)
Adjustment to deferred acquisition costs	(56.1		)	(292.6		)
Adjustment to insurance liabilities	(5.0		)	(295.8		)
Deferred income tax liabilities	(109.7		)	(335.4		)
Accumulated other comprehensive income	$	403.5		$	1,212.1

________

(a) The present value of future profits is the value assigned to the right to receive future cash flows from contracts existing at September 10, 2003, the date Conseco, Inc., an Indiana corporation, emerged from bankruptcy.

Schedule of fixed maturities for available for sale and equity securities

At September 30, 2018, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, were as follows (dollars in millions):

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value		Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities	$	11,266.5	$	468.8	$	(210.8	)	$	11,524.5	$	—
United States Treasury securities and obligations of United States government corporations and agencies	151.9		17.3		(.5		)	168.7		—
States and political subdivisions	1,749.7		141.9		(4.6		)	1,887.0		—
Debt securities issued by foreign governments	60.3		1.3		(1.4		)	60.2		—
Asset-backed securities	2,363.7		143.6		(8.2		)	2,499.1		—
Collateralized debt obligations	355.6		.4		(2.0		)	354.0		—
Commercial mortgage-backed securities	1,439.3		14.3		(20.3		)	1,433.3		—
Mortgage pass-through securities	1.5		.1		—			1.6		—
Collateralized mortgage obligations	541.0		48.1		(5.1		)	584.0		(.6		)
Total fixed maturities, available for sale	$	17,929.5	$	835.8	$	(252.9	)	$	18,512.4	$	(.6	)

At December 31, 2017, the amortized cost, gross unrealized gains and losses, estimated fair value, other-than-temporary impairments in accumulated other comprehensive income of fixed maturities, available for sale, and equity securities were as follows (dollars in millions):

	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value		Other-than-temporary impairments included in accumulated other comprehensive income
Corporate securities	$	13,286.3	$	1,699.1	$	(27.0	)	$	14,958.4	$	—
United States Treasury securities and obligations of United States government corporations and agencies	146.4		31.5		(.2		)	177.7		—
States and political subdivisions	1,821.9		234.8		(.4		)	2,056.3		—
Debt securities issued by foreign governments	79.5		3.8		(.2		)	83.1		—
Asset-backed securities	3,085.9		172.6		(4.1		)	3,254.4		—
Collateralized debt obligations	257.1		2.3		—			259.4		—
Commercial mortgage-backed securities	1,354.0		33.8		(10.3		)	1,377.5		—
Mortgage pass-through securities	1.8		.2		—			2.0		—
Collateralized mortgage obligations	669.2		73.2		(.3		)	742.1		(1.0		)
Total fixed maturities, available for sale	$	20,702.1	$	2,251.3	$	(42.5	)	$	22,910.9	$	(1.0	)
Equity securities	$	420.0	$	23.6	$	(3.0	)	$	440.6

Schedule of investments classified by contractual maturity date

The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at September 30, 2018, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.  Structured securities (such as asset-backed securities, collateralized debt obligations, commercial mortgage-backed securities, mortgage pass-through securities and collateralized mortgage obligations, collectively referred to as "structured securities") frequently include provisions for periodic principal payments and permit periodic unscheduled payments.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	367.7	$	372.8
Due after one year through five years	1,496.2		1,536.2
Due after five years through ten years	1,625.1		1,632.8
Due after ten years	9,739.4		10,098.6
Subtotal	13,228.4		13,640.4
Structured securities	4,701.1		4,872.0
Total fixed maturities, available for sale	$	17,929.5	$	18,512.4

The following table sets forth the amortized cost and estimated fair value of fixed maturities, available for sale, at December 31, 2017, by contractual maturity.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	328.1	$	335.1
Due after one year through five years	1,947.3		2,052.3
Due after five years through ten years	1,508.7		1,601.3
Due after ten years	11,550.0		13,286.8
Subtotal	15,334.1		17,275.5
Structured securities	5,368.0		5,635.4
Total fixed maturities, available for sale	$	20,702.1	$	22,910.9

Schedule of realized gain (loss) on investments

The following table sets forth the net realized investment gains (losses) for the periods indicated (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Fixed maturity securities, available for sale:
Gross realized gains on sale	$	5.4		$	32.3		$	45.5		$	60.4
Gross realized losses on sale	(11.4		)	(8.5		)	(36.9		)	(16.4		)
Impairments:
Total other-than-temporary impairment losses	—			(3.2		)	—			(10.0		)
Other-than-temporary impairment losses recognized in accumulated other comprehensive income	—			—			—			(.9		)
Net impairment losses recognized	—			(3.2		)	—			(10.9		)
Net realized investment gains (losses) from fixed maturities	(6.0		)	20.6			8.6			33.1
Equity securities, including change in fair value (a)	(3.0		)	7.7			(13.3		)	9.6
Mortgage loans	—			—			—			1.0
Impairments of other investments	(2.1		)	(1.5		)	(2.1		)	(7.3		)
Loss on dissolution of variable interest entities	—			(.6		)	—			(4.3		)
Other (a) (b)	42.3			3.0			33.8			20.2
Net realized investment gains before net realized gains on the transfer of assets related to reinsurance transaction	31.2			29.2			27.0			52.3
Net realized gains on the transfer of assets related to reinsurance transaction	363.4			—			363.4			—
Net realized investment gains	$	394.6		$	29.2		$	390.4		$	52.3

_________________

(a) Changes in the estimated fair value of trading securities that we have elected the fair value option and equity securities (and are still held as of the end of the respective periods) were $(6.0) million and $13.0 million for the nine months ended September 30, 2018 and 2017, respectively.

(b) In April 2016, the Company announced that it had invested in a non-controlling minority interest in Tennenbaum Capital Partners, LLC ("TCP"), a Los Angeles-based investment management firm. In August 2018, Blackrock, Inc. announced the completion of its acquisition of TCP. The sale of our interest in TCP resulted in a significant portion of the net realized gains in the third quarter of 2018.

Schedule of credit losses recognized in earnings

The following table summarizes the amount of credit losses recognized in earnings on fixed maturity securities, available for sale, held at the beginning of the period, for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income for the three and nine months ended September 30, 2018 and 2017 (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Credit losses on fixed maturity securities, available for sale, beginning of period	$	(.3	)	$	(4.9	)	$	(2.8	)	$	(5.5	)
Add: credit losses on other-than-temporary impairments not previously recognized	—			—			—			—
Less: credit losses on securities sold	.1			—			2.6			1.6
Less: credit losses on securities impaired due to intent to sell (a)	—			—			—			—
Add: credit losses on previously impaired securities	—			—			—			(1.0		)
Less: increases in cash flows expected on previously impaired securities	—			—			—			—
Credit losses on fixed maturity securities, available for sale, end of period	$	(.2	)	$	(4.9	)	$	(.2	)	$	(4.9	)

__________

(a) Represents securities for which the amount previously recognized in accumulated other comprehensive income was recognized in earnings because we intend to sell the security or we more likely than not will be required to sell the security before recovery of its amortized cost basis.

Schedule of unrealized loss on investments

The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at September 30, 2018 (dollars in millions):

	Less than 12 months					12 months or greater					Total
Description of securities	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
United States Treasury securities and obligations of United States government corporations and agencies	$	29.6	$	(.3	)	$	9.9	$	(.2	)	$	39.5	$	(.5	)
States and political subdivisions	174.2		(3.8		)	16.8		(.8		)	191.0		(4.6		)
Debt securities issued by foreign governments	24.4		(1.2		)	4.3		(.2		)	28.7		(1.4		)
Corporate securities	4,114.8		(178.8		)	315.9		(32.0		)	4,430.7		(210.8		)
Asset-backed securities	512.9		(4.1		)	165.3		(4.1		)	678.2		(8.2		)
Collateralized debt obligations	242.7		(2.0		)	—		—			242.7		(2.0		)
Commercial mortgage-backed securities	431.8		(6.4		)	209.3		(13.9		)	641.1		(20.3		)
Mortgage pass-through securities	.1		—			—		—			.1		—
Collateralized mortgage obligations	95.7		(4.3		)	16.8		(.8		)	112.5		(5.1		)
Total fixed maturities, available for sale	$	5,626.2	$	(200.9	)	$	738.3	$	(52.0	)	$	6,364.5	$	(252.9	)

The following table summarizes the gross unrealized losses and fair values of our investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that such securities have been in a continuous unrealized loss position, at December 31, 2017 (dollars in millions):

	Less than 12 months					12 months or greater					Total
Description of securities	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
United States Treasury securities and obligations of United States government corporations and agencies	$	28.2	$	(.2	)	$	.7	$	—		$	28.9	$	(.2	)
States and political subdivisions	18.3		(.1		)	14.9		(.3		)	33.2		(.4		)
Debt securities issued by foreign governments	7.7		(.1		)	5.4		(.1		)	13.1		(.2		)
Corporate securities	470.5		(6.8		)	359.7		(20.2		)	830.2		(27.0		)
Asset-backed securities	601.4		(2.0		)	122.2		(2.1		)	723.6		(4.1		)
Collateralized debt obligations	3.0		—			—		—			3.0		—
Commercial mortgage-backed securities	276.8		(1.7		)	218.2		(8.6		)	495.0		(10.3		)
Collateralized mortgage obligations	20.5		(.2		)	11.5		(.1		)	32.0		(.3		)
Total fixed maturities, available for sale	$	1,426.4	$	(11.1	)	$	732.6	$	(31.4	)	$	2,159.0	$	(42.5	)
Equity securities	$	58.7	$	(1.7	)	$	21.2	$	(1.3	)	$	79.9	$	(3.0	)

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of earnings per share reconciliation

A reconciliation of net income (loss) and shares used to calculate basic and diluted earnings per share is as follows (dollars in millions and shares in thousands):

	Three months ended					Nine months ended
	September 30,					September 30,
	2018			2017		2018			2017
Net income (loss) for basic and diluted earnings per share	$	(529.8	)	$	100.8	$	(343.3	)	$	246.5
Shares:
Weighted average shares outstanding for basic earnings per share	164,551			168,684		165,903			170,890
Effect of dilutive securities on weighted average shares:
Stock options, restricted stock and performance units	—			2,298		—			1,910
Weighted average shares outstanding for diluted earnings per share	164,551			170,982		165,903			172,800

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BUSINESS SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule of segment reporting information by segment

Operating information by segment is as follows (dollars in millions):

	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
Revenues:
Bankers Life:
Insurance policy income:
Annuities	$	4.3	$	3.7	$	13.7	$	15.5
Health	255.8		259.4		769.0		780.5
Life	103.9		103.7		312.8		310.4
Net investment income (a)	256.9		222.7		661.2		658.9
Fee revenue and other income (a)	10.7		11.3		40.9		32.5
Total Bankers Life revenues	631.6		600.8		1,797.6		1,797.8
Washington National:
Insurance policy income:
Annuities	.4		.5		1.1		1.6
Health	163.7		160.4		491.5		480.3
Life	6.7		6.5		20.2		20.1
Net investment income (a)	69.9		68.0		199.4		201.9
Fee revenue and other income (a)	.2		.3		.7		.8
Total Washington National revenues	240.9		235.7		712.9		704.7
Colonial Penn:
Insurance policy income:
Health	.4		.5		1.3		1.6
Life	74.7		72.6		222.4		217.5
Net investment income (a)	11.1		11.0		33.4		33.1
Fee revenue and other income (a)	.5		.3		1.4		.9
Total Colonial Penn revenues	86.7		84.4		258.5		253.1
Long-term care in run-off:
Insurance policy income - health	47.0		52.0		144.6		159.7
Net investment income (a)	54.1		54.7		164.2		168.0
Total Long-term care in run-off revenues	101.1		106.7		308.8		327.7
Corporate operations:
Net investment income	8.0		7.0		13.2		24.8
Fee and other income	1.6		1.8		4.9		6.5
Total corporate revenues	9.6		8.8		18.1		31.3
Total revenues	$	1,069.9	$	1,036.4	$	3,095.9	$	3,114.6

(continued on next page)

(continued from previous page)

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Expenses:
Bankers Life:
Insurance policy benefits	$	390.5		$	362.1		$	1,080.5		$	1,086.7
Amortization	37.3			35.9			119.4			118.3
Interest expense on investment borrowings	7.9			5.3			21.5			14.3
Other operating costs and expenses	101.5			102.2			313.6			310.4
Total Bankers Life expenses	537.2			505.5			1,535.0			1,529.7
Washington National:
Insurance policy benefits	143.5			144.7			423.7			436.7
Amortization	14.0			14.3			42.9			43.9
Interest expense on investment borrowings	3.0			1.7			7.8			4.5
Other operating costs and expenses	50.1			47.5			148.5			145.0
Total Washington National expenses	210.6			208.2			622.9			630.1
Colonial Penn:
Insurance policy benefits	49.8			47.7			157.1			150.8
Amortization	4.2			3.9			12.9			11.9
Interest expense on investment borrowings	.3			.3			1.0			.7
Other operating costs and expenses	26.3			23.5			77.5			73.0
Total Colonial Penn expenses	80.6			75.4			248.5			236.4
Long-term care in run-off:
Insurance policy benefits	91.3			86.5			259.9			257.6
Amortization	2.1			2.8			7.0			8.0
Other operating costs and expenses	5.6			6.8			19.3			19.9
Total Long-term care in run-off expenses	99.0			96.1			286.2			285.5
Corporate operations:
Interest expense on corporate debt	12.1			11.7			35.9			34.8
Other operating costs and expenses	21.4			23.7			59.4			68.3
Total corporate expenses	33.5			35.4			95.3			103.1
Total expenses	960.9			920.6			2,787.9			2,784.8
Pre-tax operating earnings by segment:
Bankers Life	94.4			95.3			262.6			268.1
Washington National	30.3			27.5			90.0			74.6
Colonial Penn	6.1			9.0			10.0			16.7
Long-term care in run-off	2.1			10.6			22.6			42.2
Corporate operations	(23.9		)	(26.6		)	(77.2		)	(71.8		)
Pre-tax operating earnings	$	109.0		$	115.8		$	308.0		$	329.8

___________________

(a) It is not practicable to provide additional components of revenue by product or services.

Reconciliation of operating profit (loss) from segments to consolidated

A reconciliation of segment revenues and expenses to consolidated revenues and expenses and net income (loss) is as follows (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Total segment revenues	$	1,069.9		$	1,036.4		$	3,095.9		$	3,114.6
Net realized investment gains (losses)	31.2			29.2			27.0			52.3
Net realized gains on the transfer of assets related to reinsurance transaction	363.4			—			363.4			—
Revenues related to VIEs	16.7			13.7			49.0			40.2
Consolidated revenues	1,481.2			1,079.3			3,535.3			3,207.1
Total segment expenses	960.9			920.6			2,787.9			2,784.8
Insurance policy benefits - fair value changes in embedded derivative liabilities	(28.2		)	(2.9		)	(69.5		)	9.8
Amortization related to fair value changes in embedded derivative liabilities	5.3			.6			13.2			(1.8		)
Amortization related to net realized investment gains	(.5		)	.7			(.1		)	1.0
Expenses related to VIEs	15.9			17.0			49.1			44.8
Fair value changes related to agent deferred compensation plan	—			13.4			(11.0		)	13.4
Loss related to reinsurance transaction	1,067.6			—			1,067.6			—
Consolidated expenses	2,021.0			949.4			3,837.2			2,852.0
Income (loss) before tax	(539.8		)	129.9			(301.9		)	355.1
Income tax expense (benefit):
Tax expense (benefit) on period income (loss)	(114.8		)	44.1			(63.4		)	123.6
Valuation allowance for deferred tax assets and other tax items	104.8			(15.0		)	104.8			(15.0		)
Net income (loss)	$	(529.8	)	$	100.8		$	(343.3	)	$	246.5

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ACCOUNTING FOR DERIVATIVES (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair value by balance sheet location

Our freestanding and embedded derivatives, which are not designated as hedging instruments, are held at fair value and are summarized as follows (dollars in millions):

	Fair value
	September 30, 2018			December 31, 2017
Assets:
Other invested assets:
Fixed index call options	$	143.5		$	170.2
Reinsurance receivables	(6.4		)	(1.4		)
Total assets	$	137.1		$	168.8
Liabilities:
Future policy benefits:
Fixed index products	$	1,370.0		$	1,334.8
Total liabilities	$	1,370.0		$	1,334.8

Schedule pre-tax gains (losses) recognized in net income for derivative instruments

The following table provides the pre-tax gains (losses) recognized in net income for derivative instruments, which are not designated as hedges for the periods indicated (dollars in millions):

	Three months ended					Nine months ended
	September 30,					September 30,
	2018			2017		2018			2017
Net investment income (loss) from policyholder and other special-purpose portfolios:
Fixed index call options	$	59.0		$	30.6	$	66.8		$	95.4
Net realized gains (losses):
Embedded derivative related to modified coinsurance agreement	(.8		)	.3		(5.0		)	2.4
Insurance policy benefits:
Embedded derivative related to fixed index annuities	34.6			12.4		87.6			17.2
Total	$	92.8		$	43.3	$	149.4		$	115.0

Derivatives with master netting arrangements

The following table summarizes information related to derivatives with master netting arrangements or collateral as of September 30, 2018 and December 31, 2017 (dollars in millions):

								Gross amounts not offset in the balance sheet
		Gross amounts recognized		Gross amounts offset in the balance sheet		Net amounts of assets presented in the balance sheet		Financial instruments		Cash collateral received		Net amount
September 30, 2018:
	Fixed index call options	$	143.5	$	—	$	143.5	$	—	$	—	$	143.5
December 31, 2017:
	Fixed index call options	170.2		—		170.2		—		—		170.2

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INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Schedule of components of income tax expense

The components of income tax expense are as follows (dollars in millions):

	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017			2018			2017
Current tax expense (benefit)	$	(16.9	)	$	25.9		$	3.8		$	68.5
Deferred tax expense	50.0			18.2			80.7			55.1
Valuation allowance applicable to current year income	—			(2.2		)	—			(2.2		)
Income tax expense calculated based on estimated annual effective tax rate	33.1			41.9			84.5			121.4
Tax benefit on long-term care reinsurance transaction	(147.9		)	—			(147.9		)	—
Income tax expense on discrete items:
Change in valuation allowance	104.8			(12.8		)	104.8			(12.8		)
Total income tax expense (benefit)	$	(10.0	)	$	29.1		$	41.4		$	108.6

Schedule of effective income tax rate reconciliation

A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, reflected in the consolidated statement of operations is as follows:

	Nine months ended
	September 30,
	2018		2017
U.S. statutory corporate rate	21.0	%	35.0	%
Valuation allowance	(34.7	)	(.6	)
Non-taxable income and nondeductible benefits, net	.4		(1.5	)
State taxes	(.4	)	1.3
Estimated annual effective tax rate	(13.7	)%	34.2	%

Schedule of deferred tax assets and liabilities

The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):

	September 30, 2018			December 31, 2017
Deferred tax assets:
Net federal operating loss carryforwards	$	685.0		$	489.6
Net state operating loss carryforwards	19.5			9.3
Investments	—			4.3
Insurance liabilities	301.0			415.8
Other	43.8			48.9
Gross deferred tax assets	1,049.3			967.9
Deferred tax liabilities:
Investments	(9.6		)	—
Present value of future profits and deferred acquisition costs	(174.2		)	(165.4		)
Accumulated other comprehensive income	(111.7		)	(337.2		)
Gross deferred tax liabilities	(295.5		)	(502.6		)
Net deferred tax assets before valuation allowance	753.8			465.3
Valuation allowance	(193.9		)	(89.1		)
Net deferred tax assets	559.9			376.2
Current income taxes prepaid (accrued)	17.9			(9.3		)
Income tax assets, net	$	577.8		$	366.9

Summary of operating loss carryforwards

(dollars in millions):

	Net operating loss
Year of expiration	carryforwards
2023	$	1,744.8
2025	85.2
2026	149.9
2027	10.8
2028	80.3
2029	213.2
2030	.3
2031	.2
2032	44.4
2033	.6
2034	.9
2035	.8
Total federal non-life NOLs	2,331.4
Post 2017 life NOLs with no expiration	930.7
Total federal NOLs	$	3,262.1

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NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of long-term debt instruments

The following notes payable were direct corporate obligations of the Company as of September 30, 2018 and December 31, 2017 (dollars in millions):

	September 30, 2018			December 31, 2017
4.500% Senior Notes due May 2020	$	325.0		$	325.0
5.250% Senior Notes due May 2025	500.0			500.0
Revolving Credit Agreement (as defined below)	100.0			100.0
Unamortized debt issue costs	(8.8		)	(10.4		)
Direct corporate obligations	$	916.2		$	914.6

Schedule of maturities of long-term debt

The scheduled repayment of our direct corporate obligations was as follows at September 30, 2018 (dollars in millions):

Year ending September 30,
2019	$	—
2020	425.0
2021	—
2022	—
2023	—
Thereafter	500.0
	$	925.0

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INVESTMENT BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2018

Investment Borrowings [Abstract]

Schedule of terms of federal home loan bank borrowing

The following summarizes the terms of the borrowings from the FHLB by our insurance subsidiaries (dollars in millions):

Amount		Maturity	Interest rate at
borrowed		date	September 30, 2018
$	50.0	February 2019	Variable rate – 2.405%
21.8		July 2019	Variable rate – 2.672%
15.0		October 2019	Variable rate – 2.850%
50.0		May 2020	Variable rate – 2.678%
21.8		June 2020	Fixed rate – 1.960%
25.0		September 2020	Variable rate – 2.991%
100.0		September 2020	Variable rate – 2.876%
50.0		September 2020	Variable rate – 2.902%
75.0		September 2020	Variable rate – 2.506%
100.0		October 2020	Variable rate – 2.453%
50.0		December 2020	Variable rate – 2.814%
100.0		July 2021	Variable rate – 2.889%
100.0		July 2021	Variable rate – 2.859%
28.2		August 2021	Fixed rate – 2.550%
57.7		August 2021	Variable rate - 2.871%
125.0		August 2021	Variable rate – 2.696%
50.0		September 2021	Variable rate – 2.851%
22.0		May 2022	Variable rate – 2.665%
100.0		May 2022	Variable rate – 2.505%
10.0		June 2022	Variable rate – 2.941%
50.0		July 2022	Variable rate – 2.703%
50.0		July 2022	Variable rate – 2.722%
50.0		July 2022	Variable rate – 2.719%
50.0		August 2022	Variable rate – 2.733%
50.0		December 2022	Variable rate – 2.621%
50.0		December 2022	Variable rate – 2.621%
24.1		March 2023	Fixed rate – 2.160%
50.0		July 2023	Variable rate – 2.548%
100.0		July 2023	Variable rate – 2.548%
20.5		June 2025	Fixed rate – 2.940%
$	1,646.1

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CHANGES IN COMMON STOCK (Tables)

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Schedule of options activity

Changes in the number of shares of common stock outstanding were as follows (shares in thousands):

Balance, December 31, 2017	166,858
Treasury stock purchased and retired	(2,998	)
Stock options exercised	327		(a)
Restricted and performance stock vested	447		(b)
Balance, September 30, 2018	164,634

____________________

(a) Such amount was reduced by 69 thousand shares which were tendered to the Company for the payment of the exercise price and required federal and state tax withholdings.

(b) Such amount was reduced by 239 thousand shares which were tendered to the Company for the payment of required federal and state tax withholdings owed on the vesting of restricted and performance stock.

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RECENTLY ISSUED ACCOUNTING STANDARDS (Tables)

9 Months Ended

Sep. 30, 2018

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The impact of adoption was as follows (dollars in millions):

	January 1, 2018
	Amounts prior to effect of adoption of authoritative guidance		Effect of adoption of authoritative guidance			As adjusted
Accumulated other comprehensive income	$	1,212.1	$	(16.3	)	$	1,195.8
Retained earnings	560.4		16.3			576.7
Total shareholders' equity	4,847.5		—			4,847.5

The impact of adopting the cash flow guidance described above was as follows (dollars in millions):

	Nine months ended
	September 30, 2017
	Amounts prior to effect of adoption of authoritative guidance			Restricted cash			COLI death benefits			Distributions received from equity method investments			As adjusted
Cash flows from operating activities:
Net investment income	$	898.9		$	—		$	—		$	19.0		$	917.9
Other operating costs	(546.0		)	—			(3.2		)	—			(549.2		)
Net cash flow from operating activities	433.7			—			(3.2		)	19.0			449.5
Cash flows from investing activities:
Sales of investments	1,742.5			—			—			(19.0		)	1,723.5
Change in cash and cash equivalents held by variable interest entities	83.4			(83.4		)	—			—			—
Other	(23.6		)	—			3.2			—			(20.4		)
Net cash provided (used) by investing activities	363.3			(83.4		)	3.2			(19.0		)	264.1
Net increase (decrease) in cash and cash equivalents	287.0			(83.4		)	—			—			203.6
Cash and cash equivalents - unrestricted and held by variable interest entities, beginning of period	478.9			189.3			—			—			668.2
Cash and cash equivalents - unrestricted and held by variable interest entities, end of period	765.9			105.9			—			—			871.8

The impact of adoption was as follows (dollars in millions):

	Three months ended September 30, 2018
			Impact of			Amounts prior
	As reported		adoption			to adoption
Fee revenue	$	6.4	$	(2.4	)	$	8.8
Distribution expense (included in other operating costs and expenses)	.6		(2.9		)	3.5
Impact on pre-tax income	$	5.8	$	.5		$	5.3

	Nine months ended September 30, 2018
			Impact of			Amounts prior
	As reported		adoption			to adoption
Fee revenue	$	28.8	$	3.1		$	25.7
Distribution expense (included in other operating costs and expenses)	13.0		3.6			9.4
Impact on pre-tax income	$	15.8	$	(.5	)	$	16.3

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CONSOLIDATED STATEMENT OF CASH FLOW (Tables)

9 Months Ended

Sep. 30, 2018

Supplemental Cash Flow Elements [Abstract]

Schedule of the reconciliation for net income provided by operating activities

The following reconciles net income (loss) to net cash from operating activities (dollars in millions):

	Nine months ended
	September 30,
	2018			2017
Cash flows from operating activities:
Net income (loss)	$	(343.3	)	$	246.5
Adjustments to reconcile net income (loss) to net cash from operating activities:
Amortization and depreciation	216.1			200.8
Income taxes	10.5			50.6
Insurance liabilities	209.1			321.5
Accrual and amortization of investment income	(117.9		)	(214.2		)
Deferral of policy acquisition costs	(187.2		)	(183.4		)
Net realized investment gains	(27.0		)	(52.3		)
Net realized gains on the transfer of assets related to reinsurance transaction	(363.4		)	—
Loss related to reinsurance transaction	1,067.6			—
Payment to reinsurer pursuant to long-term care business reinsured	(365.0		)	—
Loss on extinguishment of borrowings related to variable interest entities	3.8			5.5
Other	11.7			74.5
Net cash from operating activities	$	115.0		$	449.5

Schedule of other significant noncash transactions

Other non-cash items not reflected in the investing and financing activities sections of the consolidated statement of cash flows (dollars in millions):

	Nine months ended
	September 30,
	2018		2017
Stock options, restricted stock and performance units	$	19.6	$	17.8

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INVESTMENTS IN VARIABLE INTEREST ENTITIES (Tables)

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of impact on balance sheet of consolidating variable interest entities

The following tables provide supplemental information about the assets and liabilities of the VIEs which have been consolidated in accordance with authoritative guidance (dollars in millions):

	September 30, 2018
	VIEs		Eliminations			Net effect on consolidated balance sheet
Assets:
Investments held by variable interest entities	$	1,550.5	$	—		$	1,550.5
Notes receivable of VIEs held by subsidiaries	—		(142.8		)	(142.8		)
Cash and cash equivalents held by variable interest entities	56.4		—			56.4
Accrued investment income	2.6		—			2.6
Income tax assets, net	2.3		—			2.3
Other assets	4.5		(3.9		)	.6
Total assets	$	1,616.3	$	(146.7	)	$	1,469.6
Liabilities:
Other liabilities	$	66.9	$	(6.2	)	$	60.7
Borrowings related to variable interest entities	1,417.6		—			1,417.6
Notes payable of VIEs held by subsidiaries	155.2		(155.2		)	—
Total liabilities	$	1,639.7	$	(161.4	)	$	1,478.3

	December 31, 2017
	VIEs		Eliminations			Net effect on consolidated balance sheet
Assets:
Investments held by variable interest entities	$	1,526.9	$	—		$	1,526.9
Notes receivable of VIEs held by subsidiaries	—		(155.5		)	(155.5		)
Cash and cash equivalents held by variable interest entities	178.9		—			178.9
Accrued investment income	2.6		(.1		)	2.5
Income tax assets, net	.7		—			.7
Other assets	10.0		(1.5		)	8.5
Total assets	$	1,719.1	$	(157.1	)	$	1,562.0
Liabilities:
Other liabilities	$	158.3	$	(4.4	)	$	153.9
Borrowings related to variable interest entities	1,410.7		—			1,410.7
Notes payable of VIEs held by subsidiaries	167.6		(167.6		)	—
Total liabilities	$	1,736.6	$	(172.0	)	$	1,564.6

Summary of variable interest entities by contractual maturity

The following table sets forth the amortized cost and estimated fair value of the investments held by the VIEs at September 30, 2018, by contractual maturity.  Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

	Amortized cost		Estimated fair value
	(Dollars in millions)
Due in one year or less	$	5.0	$	5.0
Due after one year through five years	523.8		521.9
Due after five years through ten years	1,024.3		1,023.6
Total	$	1,553.1	$	1,550.5

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of financial instruments carried at fair value categorized by input level

The fair value measurements for our financial instruments disclosed at fair value on a recurring basis are as follows (dollars in millions):

	September 30, 2018
	Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)		Total estimated fair value		Total carrying amount
Assets:
Mortgage loans	$	—	$	—	$	1,671.5	$	1,671.5	$	1,680.6
Policy loans	—		—		117.4		117.4		117.4
Other invested assets:
Company-owned life insurance	—		186.2		—		186.2		186.2
Cash and cash equivalents:
Unrestricted	539.2		—		—		539.2		539.2
Held by variable interest entities	56.4		—		—		56.4		56.4
Liabilities:
Policyholder account balances	—		—		11,449.7		11,449.7		11,449.7
Investment borrowings	—		1,647.1		—		1,647.1		1,646.1
Borrowings related to variable interest entities	—		1,426.7		—		1,426.7		1,417.6
Notes payable – direct corporate obligations	—		938.9		—		938.9		916.2

	December 31, 2017
	Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)		Total estimated fair value		Total carrying amount
Assets:
Mortgage loans	$	—	$	—	$	1,677.3	$	1,677.3	$	1,650.6
Policy loans	—		—		116.0		116.0		116.0
Other invested assets:
Company-owned life insurance	—		182.3		—		182.3		182.3
Cash and cash equivalents:
Unrestricted	578.4		—		—		578.4		578.4
Held by variable interest entities	178.9		—		—		178.9		178.9
Liabilities:
Policyholder account balances	—		—		11,220.7		11,220.7		11,220.7
Investment borrowings	—		1,648.8		—		1,648.8		1,646.7
Borrowings related to variable interest entities	—		1,432.9		—		1,432.9		1,410.7
Notes payable – direct corporate obligations	—		962.3		—		962.3		914.6

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended September 30, 2018 (dollars in millions):

	September 30, 2018
	Beginning balance as of June 30, 2018			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income			Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2018			Amount of total gains (losses) for the three months ended September 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	181.9		$	(23.9	)	$	(.8	)	$	.1		$	—	$	(4.5	)	$	152.8		$	—
Debt securities issued by foreign governments	3.9			(2.9		)	(.1		)	.1			—		—			1.0			—
Asset-backed securities	18.4			(.2		)	—			(.1		)	—		(6.0		)	12.1			—
Total fixed maturities, available for sale	204.2			(27.0		)	(.9		)	.1			—		(10.5		)	165.9			—
Equity securities - corporate securities	9.5			—			—			—			—		—			9.5			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,333.3		)	(71.3		)	34.6			—			—		—			(1,370.0		)	34.6

_________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended September 30, 2018 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	20.4		$	(44.3	)	$	—		$	—	$	(23.9	)
Debt securities issued by foreign governments	3.0			(5.9		)	—			—		(2.9		)
Asset-backed securities	—			(.2		)	—			—		(.2		)
Total fixed maturities, available for sale	23.4			(50.4		)	—			—		(27.0		)
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(41.8		)	.8			(50.3		)	20.0		(71.3		)

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the nine months ended September 30, 2018 (dollars in millions):

	September 30, 2018
	Beginning balance as of December 31, 2017			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income			Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2018			Amount of total gains (losses) for the nine months ended September 30, 2018 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	230.4		$	(23.2	)	$	.7		$	(3.1	)	$	—	$	(52.0	)	$	152.8		$	—
Debt securities issued by foreign governments	3.9			(2.9		)	(.1		)	.1			—		—			1.0			—
Asset-backed securities	24.2			(11.4		)	—			(.7		)	—		—			12.1			—
Total fixed maturities, available for sale	258.5			(37.5		)	.6			(3.7		)	—		(52.0		)	165.9			—
Equity securities - corporate securities	21.2			(10.9		)	(.8		)	—			—		—			9.5			—
Investments held by variable interest entities - corporate securities	4.9			—			—			—			—		(4.9		)	—			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,334.8		)	(122.8		)	87.6			—			—		—			(1,370.0		)	87.6

_________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the nine months ended September 30, 2018 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	31.5		$	(54.7	)	$	—		$	—	$	(23.2	)
Debt securities issued by foreign governments	3.0			(5.9		)	—			—		(2.9		)
Asset-backed securities	—			(11.4		)	—			—		(11.4		)
Total fixed maturities, available for sale	34.5			(72.0		)	—			—		(37.5		)
Equity securities - corporate securities	—			(10.9		)	—			—		(10.9		)
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(125.1		)	7.7			(64.4		)	59.0		(122.8		)

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the three months ended September 30, 2017 (dollars in millions):

	September 30, 2017
	Beginning balance as of June 30, 2017			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income		Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2017			Amount of total gains (losses) for the three months ended September 30, 2017 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	263.3		$	(44.8	)	$	1.7	$	1.3		$	34.2	$	—		$	255.7		$	(3.2	)
Debt securities issued by foreign governments	3.9			—			—		.1			—		—			4.0			—
Asset-backed securities	59.6			(1.3		)	—		.7			7.1		(6.2		)	59.9			—
Collateralized debt obligations	2.5			(2.5		)	—		—			—		—			—			—
Collateralized mortgage obligations	.2			—			—		(.2		)	—		—			—			—
Total fixed maturities, available for sale	329.5			(48.6		)	1.7		1.9			41.3		(6.2		)	319.6			(3.2		)
Equity securities - corporate securities	24.6			(8.3		)	6.4		(1.1		)	—		—			21.6			(.5		)
Investments held by variable interest entities - corporate securities	—			—			—		—			5.0		—			5.0			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,205.4		)	(56.3		)	12.4		—			—		—			(1,249.3		)	12.4

____________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the three months ended September 30, 2017 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	15.3		$	(60.1	)	$	—		$	—	$	(44.8	)
Asset-backed securities	9.9			(11.2		)	—			—		(1.3		)
Collateralized debt obligations	—			(2.5		)	—			—		(2.5		)
Total fixed maturities, available for sale	25.2			(73.8		)	—			—		(48.6		)
Equity securities - corporate securities	—			(8.3		)	—			—		(8.3		)
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(41.0		)	1.8			(31.4		)	14.3		(56.3		)

The following table presents additional information about assets and liabilities measured at fair value on a recurring basis and for which we have utilized significant unobservable (Level 3) inputs to determine fair value for the nine months ended September 30, 2017 (dollars in millions):

	September 30, 2017
	Beginning balance as of December 31, 2016			Purchases, sales, issuances and settlements, net (b)			Total realized and unrealized gains (losses) included in net income		Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)			Transfers into Level 3 (a)		Transfers out of Level 3 (a)			Ending balance as of September 30, 2017			Amount of total gains (losses) for the nine months ended September 30, 2017 included in our net income relating to assets and liabilities still held as of the reporting date
Assets:
Fixed maturities, available for sale:
Corporate securities	$	258.5		$	(44.1	)	$	9.5	$	.6		$	31.2	$	—		$	255.7		$	(6.5	)
Debt securities issued by foreign governments	3.9			—			—		.1			—		—			4.0			—
Asset-backed securities	60.4			3.8			—		2.3			4.2		(10.8		)	59.9			—
Collateralized debt obligations	5.4			(2.5		)	—		—			—		(2.9		)	—			—
Commercial mortgage-backed securities	32.0			—			—		—			—		(32.0		)	—			—
Total fixed maturities, available for sale	360.2			(42.8		)	9.5		3.0			35.4		(45.7		)	319.6			(6.5		)
Equity securities - corporate securities	25.2			(8.5		)	6.3		(1.4		)	—		—			21.6			(.5		)
Investments held by variable interest entities - corporate securities	—			5.0			—		—			—		—			5.0			—
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(1,092.3		)	(174.2		)	17.2		—			—		—			(1,249.3		)	17.2

____________

(a) Transfers into Level 3 are the result of unobservable inputs utilized within valuation methodologies for assets that were previously valued using observable inputs. Transfers out of Level 3 are due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company is able to validate.

(b) Purchases, sales, issuances and settlements, net, represent the activity that occurred during the period that results in a change of the asset or liability but does not represent changes in fair value for the instruments held at the beginning of the period.  Such activity primarily consists of purchases and sales of fixed maturity and equity securities and changes to embedded derivative instruments related to insurance products resulting from the issuance of new contracts, or changes to existing contracts.  The following summarizes such activity for the nine months ended September 30, 2017 (dollars in millions):

	Purchases			Sales			Issuances			Settlements		Purchases, sales, issuances and settlements, net
Assets:
Fixed maturities, available for sale:
Corporate securities	$	64.3		$	(108.4	)	$	—		$	—	$	(44.1	)
Asset-backed securities	21.9			(18.1		)	—			—		3.8
Collateralized debt obligations	—			(2.5		)	—			—		(2.5		)
Total fixed maturities, available for sale	86.2			(129.0		)	—			—		(42.8		)
Equity securities - corporate securities	—			(8.5		)	—			—		(8.5		)
Investments held by variable interest entities - corporate securities	5.0			—			—			—		5.0
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	(130.1		)	5.3			(95.7		)	46.3		(174.2		)

The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at September 30, 2018 is as follows (dollars in millions):

	Quoted prices in active markets for identical assets or liabilities (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs  (Level 3)		Total
Assets:
Fixed maturities, available for sale:
Corporate securities	$	—	$	11,371.7	$	152.8	$	11,524.5
United States Treasury securities and obligations of United States government corporations and agencies	—		168.7		—		168.7
States and political subdivisions	—		1,887.0		—		1,887.0
Debt securities issued by foreign governments	—		59.2		1.0		60.2
Asset-backed securities	—		2,487.0		12.1		2,499.1
Collateralized debt obligations	—		354.0		—		354.0
Commercial mortgage-backed securities	—		1,433.3		—		1,433.3
Mortgage pass-through securities	—		1.6		—		1.6
Collateralized mortgage obligations	—		584.0		—		584.0
Total fixed maturities, available for sale	—		18,346.5		165.9		18,512.4
Equity securities - corporate securities	216.3		109.7		9.5		335.5
Trading securities:
Asset-backed securities	—		89.7		—		89.7
Commercial mortgage-backed securities	—		93.2		—		93.2
Collateralized mortgage obligations	—		56.1		—		56.1
Total trading securities	—		239.0		—		239.0
Investments held by variable interest entities - corporate securities	—		1,550.5		—		1,550.5
Other invested assets - derivatives	—		143.5		—		143.5
Assets held in separate accounts	—		5.1		—		5.1
Total assets carried at fair value by category	$	216.3	$	20,394.3	$	175.4	$	20,786.0
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	$	—	$	—	$	1,370.0	$	1,370.0

The categorization of fair value measurements, by input level, for our financial instruments carried at fair value on a recurring basis at December 31, 2017 is as follows (dollars in millions):

	Quoted prices in active markets  for identical assets or liabilities (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)		Total
Assets:
Fixed maturities, available for sale:
Corporate securities	$	—	$	14,728.0	$	230.4	$	14,958.4
United States Treasury securities and obligations of United States government corporations and agencies	—		177.7		—		177.7
States and political subdivisions	—		2,056.3		—		2,056.3
Debt securities issued by foreign governments	—		79.2		3.9		83.1
Asset-backed securities	—		3,230.2		24.2		3,254.4
Collateralized debt obligations	—		259.4		—		259.4
Commercial mortgage-backed securities	—		1,377.5		—		1,377.5
Mortgage pass-through securities	—		2.0		—		2.0
Collateralized mortgage obligations	—		742.1		—		742.1
Total fixed maturities, available for sale	—		22,652.4		258.5		22,910.9
Equity securities - corporate securities	287.8		131.6		21.2		440.6
Trading securities:
Corporate securities	—		21.6		—		21.6
United States Treasury securities and obligations of United States government corporations and agencies	—		.5		—		.5
Asset-backed securities	—		95.8		—		95.8
Collateralized debt obligations	—		2.7		—		2.7
Commercial mortgage-backed securities	—		92.5		—		92.5
Collateralized mortgage obligations	—		68.7		—		68.7
Equity securities	2.8		—		—		2.8
Total trading securities	2.8		281.8		—		284.6
Investments held by variable interest entities - corporate securities	—		1,522.0		4.9		1,526.9
Other invested assets - derivatives	—		170.2		—		170.2
Assets held in separate accounts	—		5.0		—		5.0
Total assets carried at fair value by category	$	290.6	$	24,763.0	$	284.6	$	25,338.2
Liabilities:
Future policy benefits - embedded derivatives associated with fixed index annuity products	$	—	$	—	$	1,334.8	$	1,334.8

Schedule of fair value measurement inputs

The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at September 30, 2018 (dollars in millions):

	Fair value at September 30, 2018		Valuation techniques	Unobservable inputs	Range (weighted average)
Assets:
Corporate securities (a)	$	98.0	Discounted cash flow analysis	Discount margins	1.35% - 8.91% (3.94%)
Corporate securities (b)	5.3		Recovery method	Percent of recovery expected	0% - 62.20% (57.70%)
Asset-backed securities (c)	12.1		Discounted cash flow analysis	Discount margins	1.87%
Equity securities (d)	1.2		Market comparables	EBITDA multiples	1.1X
Equity securities (e)	8.3		Recovery method	Percent of recovery expected	59.27% - 100.00% (59.52%)
Other assets categorized as Level 3 (f)	50.5		Unadjusted third-party price source	Not applicable	Not applicable
Total	175.4
Liabilities:
Future policy benefits (g)	1,370.0		Discounted projected embedded derivatives	Projected portfolio yields	5.15% - 5.61% (5.60%)
				Discount rates	1.50% - 2.98% (2.70%)
				Surrender rates	1.20% - 46.40% (12.30%)

________________________________

(a) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(b) Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(c) Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(d) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is multiples of earnings before interest, taxes, depreciation and amortization ("EBITDA"). Generally, increases (decreases) in the EBITDA multiples would result in higher (lower) fair value measurements.

(e) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(f) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.

(g) Future policy benefits - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative.

The following table provides additional information about the significant unobservable (Level 3) inputs developed internally by the Company to determine fair value for certain assets and liabilities carried at fair value at December 31, 2017 (dollars in millions):

	Fair value at December 31, 2017		Valuation techniques	Unobservable inputs	Range (weighted average)
Assets:
Corporate securities (a)	$	149.2	Discounted cash flow analysis	Discount margins	1.45% - 71.29% (6.96%)
Corporate securities (b)	2.8		Recovery method	Percent of recovery expected	0% - 21.73% (18.42%)
Asset-backed securities (c)	24.2		Discounted cash flow analysis	Discount margins	1.80% - 3.71% (2.67%)
Equity securities (d)	1.1		Market comparables	EBITDA multiples	1.1X
Equity securities (e)	20.1		Recovery method	Percent of recovery expected	59.1%
Other assets categorized as Level 3 (f)	87.2		Unadjusted third-party price source	Not applicable	Not applicable
Total	284.6
Liabilities:
Future policy benefits (g)	1,334.8		Discounted projected embedded derivatives	Projected portfolio yields	5.15% - 5.61% (5.60%)
				Discount rates	0.92% - 2.51% (2.00%)
				Surrender rates	1.20% - 46.40% (12.30%)

________________________________

(a) Corporate securities - The significant unobservable input used in the fair value measurement of our corporate securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(b) Corporate securities - The significant unobservable input used in the fair value measurement of these corporate securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(c) Asset-backed securities - The significant unobservable input used in the fair value measurement of these asset-backed securities is discount margin added to a riskless market yield. Significant increases (decreases) in discount margin in isolation would result in a significantly lower (higher) fair value measurement.

(d) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is EBITDA multiples. Generally, increases (decreases) in EBITDA multiples would result in higher (lower) fair value measurements.

(e) Equity securities - The significant unobservable input used in the fair value measurement of these equity securities is percentage of recovery expected.  Significant increases (decreases) in percentage of recovery expected in isolation would result in a significantly higher (lower) fair value measurement.

(f) Other assets categorized as Level 3 - For these assets, there were no adjustments to quoted market prices obtained from third-party pricing sources.

(g) Future policy benefits - The significant unobservable inputs used in the fair value measurement of our embedded derivatives associated with fixed index annuity products are projected portfolio yields, discount rates and surrender rates. Increases (decreases) in projected portfolio yields in isolation would lead to a higher (lower) fair value measurement. The discount rate is based on the Treasury rate adjusted by a margin. Increases (decreases) in the discount rates would lead to a lower (higher) fair value measurement. Assumed surrender rates are used to project how long the contracts remain in force. Generally, the longer the contracts are assumed to be in force the higher the fair value of the embedded derivative.

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BUSINESS AND BASIS OF PRESENTATION (Details)	9 Months Ended
	Sep. 30, 2018 distribution_channel
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of distribution channels	3

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INVESTMENTS - SCHEDULE OF UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Millions	Sep. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]
Net unrealized appreciation (depreciation) on fixed maturity securities, available for sale, on which an other-than-temporary impairment loss has been recognized	$ 1.6		$ 2.6
Net unrealized gains on all other investments	577.2		2,227.3
Adjustment to present value of future profits	(4.5)		(94.0)
Adjustment to deferred acquisition costs	(56.1)		(292.6)
Adjustment to insurance liabilities	(5.0)		(295.8)
Deferred income tax liabilities	(109.7)		(335.4)
Accumulated other comprehensive income	$ 403.5	$ 1,195.8	$ 1,212.1

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INVESTMENTS - NARRATIVE (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Adjustment to insurance liabilities	$ (5.0)		$ (5.0)		$ (295.8)
Increase to deferred tax assets due to unrealized gains that would result in premium deficiency if unrealized gains were realized	1.1		1.1
Net realized investment gains (losses)	394.6	$ 29.2	390.4	$ 52.3
Other net realized investment gains, excluding impairment losses	33.3	34.5	29.1	74.8
Gain (loss) on reinsurance transaction, net of taxes	363.4	0.0	363.4	0.0
Loss on dissolution of variable interest entities	0.0	(0.6)	0.0	(4.3)
Total other-than-temporary impairment losses	(2.1)	(4.7)	(2.1)	(18.2)
Value of available for sale securities sold			1,040.4
Impairment losses recognized	2.1	4.7	2.1	17.3
Other-than-temporary impairments included in accumulated other comprehensive income			0.6
Embedded Derivative Related to Reinsurance Contract
Schedule of Available-for-sale Securities [Line Items]
Embedded derivative, loss on embedded derivative			3.0
Increase in fair value of embedded derivative				12.3
Coinsurance | Embedded Derivative Related to Reinsurance Contract
Schedule of Available-for-sale Securities [Line Items]
Embedded derivative, loss on embedded derivative			5.0
Increase in fair value of embedded derivative				2.4
Marketable securities
Schedule of Available-for-sale Securities [Line Items]
Other net realized investment gains, excluding impairment losses			50.4	60.1
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Net realized investment gains (losses)	(3.0)	7.7	(13.3)	9.6
Total fixed maturities, available for sale
Schedule of Available-for-sale Securities [Line Items]
Net realized investment gains (losses)	(6.0)	20.6	8.6	33.1
Gross realized losses on sale	(11.4)	(8.5)	(36.9)	(16.4)
Total other-than-temporary impairment losses	0.0	(3.2)	0.0	(10.9)
Corporate securities
Schedule of Available-for-sale Securities [Line Items]
Gross realized losses on sale			26.9
Commercial mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Gross realized losses on sale			4.0
Various other investments
Schedule of Available-for-sale Securities [Line Items]
Gross realized losses on sale			6.0
Impairment losses recognized				7.3
Mortgage loans
Schedule of Available-for-sale Securities [Line Items]
Net realized investment gains (losses)	$ 0.0	$ 0.0	$ 0.0	1.0
Impairment losses recognized				5.2
Fixed income investments | Energy Sector
Schedule of Available-for-sale Securities [Line Items]
Impairment losses recognized				$ 5.7

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INVESTMENTS - SCHEDULE OF AMORTIZED COST, GROSS UNREALIZED GAINS AND LOSSES, ESTIMATED FAIR VALUE, AND OTHER-THAN-TEMPORARY IMPAIRMENTS (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	$ 17,929.5	$ 20,702.1
Estimated fair value	18,512.4	22,910.9
Other-than-temporary impairments included in accumulated other comprehensive income	(0.6)
Corporate securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	11,266.5	13,286.3
Gross unrealized gains	468.8	1,699.1
Gross unrealized losses	(210.8)	(27.0)
Estimated fair value	11,524.5	14,958.4
Other-than-temporary impairments included in accumulated other comprehensive income	0.0	0.0
United States Treasury securities and obligations of United States government corporations and agencies
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	151.9	146.4
Gross unrealized gains	17.3	31.5
Gross unrealized losses	(0.5)	(0.2)
Estimated fair value	168.7	177.7
Other-than-temporary impairments included in accumulated other comprehensive income	0.0	0.0
States and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	1,749.7	1,821.9
Gross unrealized gains	141.9	234.8
Gross unrealized losses	(4.6)	(0.4)
Estimated fair value	1,887.0	2,056.3
Other-than-temporary impairments included in accumulated other comprehensive income	0.0	0.0
Debt securities issued by foreign governments
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	60.3	79.5
Gross unrealized gains	1.3	3.8
Gross unrealized losses	(1.4)	(0.2)
Estimated fair value	60.2	83.1
Other-than-temporary impairments included in accumulated other comprehensive income	0.0	0.0
Asset-backed securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	2,363.7	3,085.9
Gross unrealized gains	143.6	172.6
Gross unrealized losses	(8.2)	(4.1)
Estimated fair value	2,499.1	3,254.4
Other-than-temporary impairments included in accumulated other comprehensive income	0.0	0.0
Collateralized debt obligations
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	355.6	257.1
Gross unrealized gains	0.4	2.3
Gross unrealized losses	(2.0)	0.0
Estimated fair value	354.0	259.4
Other-than-temporary impairments included in accumulated other comprehensive income	0.0	0.0
Commercial mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	1,439.3	1,354.0
Gross unrealized gains	14.3	33.8
Gross unrealized losses	(20.3)	(10.3)
Estimated fair value	1,433.3	1,377.5
Other-than-temporary impairments included in accumulated other comprehensive income	0.0	0.0
Mortgage pass-through securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	1.5	1.8
Gross unrealized gains	0.1	0.2
Gross unrealized losses	0.0	0.0
Estimated fair value	1.6	2.0
Other-than-temporary impairments included in accumulated other comprehensive income	0.0	0.0
Collateralized mortgage obligations
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	541.0	669.2
Gross unrealized gains	48.1	73.2
Gross unrealized losses	(5.1)	(0.3)
Estimated fair value	584.0	742.1
Other-than-temporary impairments included in accumulated other comprehensive income	(0.6)	(1.0)
Total fixed maturities, available for sale
Schedule of Available-for-sale Securities [Line Items]
Amortized cost	17,929.5	20,702.1
Gross unrealized gains	835.8	2,251.3
Gross unrealized losses	(252.9)	(42.5)
Estimated fair value	18,512.4	22,910.9
Other-than-temporary impairments included in accumulated other comprehensive income	$ (0.6)	(1.0)
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Amortized cost		420.0
Gross unrealized gains		23.6
Gross unrealized losses		(3.0)
Estimated fair value		$ 440.6

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INVESTMENTS - SUMMARY OF INVESTMENTS BY CONTRACTUAL MATURITY (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Amortized cost
Due in one year or less	$ 367.7	$ 328.1
Due after one year through five years	1,496.2	1,947.3
Due after five years through ten years	1,625.1	1,508.7
Due after ten years	9,739.4	11,550.0
Subtotal	13,228.4	15,334.1
Structured securities	4,701.1	5,368.0
Amortized cost	17,929.5	20,702.1
Estimated fair value
Due in one year or less	372.8	335.1
Due after one year through five years	1,536.2	2,052.3
Due after five years through ten years	1,632.8	1,601.3
Due after ten years	10,098.6	13,286.8
Subtotal	13,640.4	17,275.5
Structured securities	4,872.0	5,635.4
Total fixed maturities, available for sale	$ 18,512.4	$ 22,910.9

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INVESTMENTS - NET REALIZED INVESTMENT GAINS (LOSSES) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Gain (Loss) on Investments [Line Items]
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income	$ 0.0	$ 0.0	$ 0.0	$ (0.9)
Net impairment losses recognized	(2.1)	(4.7)	(2.1)	(18.2)
Total realized gains	394.6	29.2	390.4	52.3
Loss on dissolution of variable interest entities	0.0	(0.6)	0.0	(4.3)
Gain (loss) on reinsurance transaction, net of taxes	363.4	0.0	363.4	0.0
Investments
Gain (Loss) on Investments [Line Items]
Change in estimated fair value of trading securities			(6.0)	13.0
Total fixed maturities, available for sale
Gain (Loss) on Investments [Line Items]
Gross realized gains on sale	5.4	32.3	45.5	60.4
Gross realized losses on sale	(11.4)	(8.5)	(36.9)	(16.4)
Impairment losses recognized	0.0	(3.2)	0.0	(10.0)
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income	0.0	0.0	0.0	(0.9)
Net impairment losses recognized	0.0	(3.2)	0.0	(10.9)
Total realized gains	(6.0)	20.6	8.6	33.1
Equity securities
Gain (Loss) on Investments [Line Items]
Total realized gains	(3.0)	7.7	(13.3)	9.6
Mortgage loans
Gain (Loss) on Investments [Line Items]
Total realized gains	0.0	0.0	0.0	1.0
Impairments of other investments
Gain (Loss) on Investments [Line Items]
Total realized gains	(2.1)	(1.5)	(2.1)	(7.3)
Other
Gain (Loss) on Investments [Line Items]
Total realized gains	42.3	3.0	33.8	20.2
Net realized investment gains (losses) before realized gains on the transfer of assets related to reinsurance transaction [Member]
Gain (Loss) on Investments [Line Items]
Total realized gains	31.2	29.2	27.0	52.3
VIEs
Gain (Loss) on Investments [Line Items]
Loss on dissolution of variable interest entities	$ 0.0	$ (0.6)	$ 0.0	$ (4.3)

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INVESTMENTS - SCHEDULE OF OTHER THAN TEMPORARY IMPAIRMENT (Details) - Available-for-sale securities - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Credit losses on fixed maturity securities, available for sale, beginning of period	$ (0.3)	$ (4.9)	$ (2.8)	$ (5.5)
Add: credit losses on other-than-temporary impairments not previously recognized	0.0	0.0	0.0	0.0
Less: credit losses on securities sold	0.1	0.0	2.6	1.6
Less: credit losses on securities impaired due to intent to sell	0.0	0.0	0.0	0.0
Add: credit losses on previously impaired securities	0.0	0.0	0.0	(1.0)
Less: increases in cash flows expected on previously impaired securities	0.0	0.0	0.0	0.0
Credit losses on fixed maturity securities, available for sale, end of period	$ (0.2)	$ (4.9)	$ (0.2)	$ (4.9)

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INVESTMENTS - SUMMARY OF INVESTMENTS WITH UNREALIZED LOSSES BY INVESTMENT CATEGORY (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	$ 5,626.2	$ 1,426.4
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	(200.9)	(11.1)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	738.3	732.6
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	(52.0)	(31.4)
Debt securities, available-for-sale, unrealized loss position	6,364.5	2,159.0
Debt securities, available-for-sale, unrealized loss position, accumulated loss	(252.9)	(42.5)
United States Treasury securities and obligations of United States government corporations and agencies
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	29.6	28.2
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	(0.3)	(0.2)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	9.9	0.7
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	(0.2)	0.0
Debt securities, available-for-sale, unrealized loss position	39.5	28.9
Debt securities, available-for-sale, unrealized loss position, accumulated loss	(0.5)	(0.2)
States and political subdivisions
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	174.2	18.3
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	(3.8)	(0.1)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	16.8	14.9
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	(0.8)	(0.3)
Debt securities, available-for-sale, unrealized loss position	191.0	33.2
Debt securities, available-for-sale, unrealized loss position, accumulated loss	(4.6)	(0.4)
Debt securities issued by foreign governments
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	24.4	7.7
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	(1.2)	(0.1)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	4.3	5.4
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	(0.2)	(0.1)
Debt securities, available-for-sale, unrealized loss position	28.7	13.1
Debt securities, available-for-sale, unrealized loss position, accumulated loss	(1.4)	(0.2)
Corporate securities
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	4,114.8	470.5
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	(178.8)	(6.8)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	315.9	359.7
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	(32.0)	(20.2)
Debt securities, available-for-sale, unrealized loss position	4,430.7	830.2
Debt securities, available-for-sale, unrealized loss position, accumulated loss	(210.8)	(27.0)
Asset-backed securities
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	512.9	601.4
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	(4.1)	(2.0)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	165.3	122.2
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	(4.1)	(2.1)
Debt securities, available-for-sale, unrealized loss position	678.2	723.6
Debt securities, available-for-sale, unrealized loss position, accumulated loss	(8.2)	(4.1)
Collateralized debt obligations
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	242.7	3.0
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	(2.0)	0.0
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	0.0	0.0
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	0.0	0.0
Debt securities, available-for-sale, unrealized loss position	242.7	3.0
Debt securities, available-for-sale, unrealized loss position, accumulated loss	(2.0)	0.0
Commercial mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	431.8	276.8
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	(6.4)	(1.7)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	209.3	218.2
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	(13.9)	(8.6)
Debt securities, available-for-sale, unrealized loss position	641.1	495.0
Debt securities, available-for-sale, unrealized loss position, accumulated loss	(20.3)	(10.3)
Mortgage pass-through securities
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	0.1
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	0.0
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	0.0
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	0.0
Debt securities, available-for-sale, unrealized loss position	0.1
Debt securities, available-for-sale, unrealized loss position, accumulated loss	0.0
Collateralized mortgage obligations
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months	95.7	20.5
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss	(4.3)	(0.2)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer	16.8	11.5
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss	(0.8)	(0.1)
Debt securities, available-for-sale, unrealized loss position	112.5	32.0
Debt securities, available-for-sale, unrealized loss position, accumulated loss	$ (5.1)	(0.3)
Equity securities
Schedule of Available-for-sale Securities [Line Items]
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months		58.7
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss		(1.7)
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer		21.2
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss		(1.3)
Debt securities, available-for-sale, unrealized loss position		79.9
Debt securities, available-for-sale, unrealized loss position, accumulated loss		$ (3.0)

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EARNINGS PER SHARE (Details) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract]
Net income (loss) for basic and diluted earnings per share	$ (529.8)	$ 100.8	$ (343.3)	$ 246.5
Shares:
Weighted average shares outstanding for basic earnings per share (in shares)	164,551	168,684	165,903	170,890
Effect of dilutive securities on weighted average shares:
Stock options, restricted stock and performance units (in shares)	0	2,298	0	1,910
Weighted average shares outstanding for diluted earnings per share (in shares)	164,551	170,982	165,903	172,800
Common stock, shares, excluded from diluted weighted average shares outstanding	2,146		2,214

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BUSINESS SEGMENTS (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Sep. 27, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Segment Reporting Information [Line Items]
Statutory liabilities transferred in reinsurance transaction	$ 2,700.0
Revenues:
Fee revenue and other income		$ 11.9	$ 12.2	$ 44.7	$ 35.5
Total segment revenues		1,069.9	1,036.4	3,095.9	3,114.6
Expenses:
Insurance policy benefits		646.9	638.1	1,851.7	1,941.6
Other operating costs and expenses		205.3	217.5	608.7	631.3
Total expenses		960.9	920.6	2,787.9	2,784.8
Pre-tax operating earnings		109.0	115.8	308.0	329.8
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total segment revenues		1,069.9	1,036.4	3,095.9	3,114.6
Net realized investment gains (losses)		31.2	29.2	27.0	52.3
Net realized gains on the transfer of assets related to reinsurance transaction		363.4	0.0	363.4	0.0
Revenues related to VIEs		16.7	13.7	49.0	40.2
Total revenues		1,481.2	1,079.3	3,535.3	3,207.1
Total segment expenses		960.9	920.6	2,787.9	2,784.8
Insurance policy benefits - fair value changes in embedded derivative liabilities		(28.2)	(2.9)	(69.5)	9.8
Amortization related to fair value changes in embedded derivative liabilities		5.3	0.6	13.2	(1.8)
Amortization related to net realized investment gains		(0.5)	0.7	(0.1)	1.0
Expenses related to VIEs		15.9	17.0	49.1	44.8
Fair value changes related to agent deferred compensation plan		0.0	13.4	(11.0)	13.4
Loss related to reinsurance transaction		1,067.6	0.0	1,067.6	0.0
Total benefits and expenses		2,021.0	949.4	3,837.2	2,852.0
Income (loss) before tax		(539.8)	129.9	(301.9)	355.1
Tax expense (benefit) on period income (loss)		(114.8)	44.1	(63.4)	123.6
Valuation allowance for deferred tax assets and other tax items		104.8	(15.0)	104.8	(15.0)
Net income (loss)		(529.8)	100.8	(343.3)	246.5
Bankers Life:
Segment Reporting Information [Line Items]
Total assets transferred, reinsurance transaction		(2,800.0)		(2,800.0)
Long-term care in run-off:
Segment Reporting Information [Line Items]
Total assets transferred, reinsurance transaction		2,800.0		2,800.0
Operating segments | Bankers Life:
Revenues:
Annuities		4.3	3.7	13.7	15.5
Health		255.8	259.4	769.0	780.5
Life		103.9	103.7	312.8	310.4
Net investment income		256.9	222.7	661.2	658.9
Fee revenue and other income		10.7	11.3	40.9	32.5
Total segment revenues		631.6	600.8	1,797.6	1,797.8
Expenses:
Insurance policy benefits		390.5	362.1	1,080.5	1,086.7
Amortization		37.3	35.9	119.4	118.3
Interest expense on investment borrowings		7.9	5.3	21.5	14.3
Other operating costs and expenses		101.5	102.2	313.6	310.4
Total expenses		537.2	505.5	1,535.0	1,529.7
Pre-tax operating earnings		94.4	95.3	262.6	268.1
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total segment revenues		631.6	600.8	1,797.6	1,797.8
Total segment expenses		537.2	505.5	1,535.0	1,529.7
Operating segments | Washington National:
Revenues:
Annuities		0.4	0.5	1.1	1.6
Health		163.7	160.4	491.5	480.3
Life		6.7	6.5	20.2	20.1
Net investment income		69.9	68.0	199.4	201.9
Fee revenue and other income		0.2	0.3	0.7	0.8
Total segment revenues		240.9	235.7	712.9	704.7
Expenses:
Insurance policy benefits		143.5	144.7	423.7	436.7
Amortization		14.0	14.3	42.9	43.9
Interest expense on investment borrowings		3.0	1.7	7.8	4.5
Other operating costs and expenses		50.1	47.5	148.5	145.0
Total expenses		210.6	208.2	622.9	630.1
Pre-tax operating earnings		30.3	27.5	90.0	74.6
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total segment revenues		240.9	235.7	712.9	704.7
Total segment expenses		210.6	208.2	622.9	630.1
Operating segments | Colonial Penn:
Revenues:
Health		0.4	0.5	1.3	1.6
Life		74.7	72.6	222.4	217.5
Net investment income		11.1	11.0	33.4	33.1
Fee revenue and other income		0.5	0.3	1.4	0.9
Total segment revenues		86.7	84.4	258.5	253.1
Expenses:
Insurance policy benefits		49.8	47.7	157.1	150.8
Amortization		4.2	3.9	12.9	11.9
Interest expense on investment borrowings		0.3	0.3	1.0	0.7
Other operating costs and expenses		26.3	23.5	77.5	73.0
Total expenses		80.6	75.4	248.5	236.4
Pre-tax operating earnings		6.1	9.0	10.0	16.7
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total segment revenues		86.7	84.4	258.5	253.1
Total segment expenses		80.6	75.4	248.5	236.4
Operating segments | Long-term care in run-off:
Revenues:
Health		47.0	52.0	144.6	159.7
Net investment income		54.1	54.7	164.2	168.0
Total segment revenues		101.1	106.7	308.8	327.7
Expenses:
Insurance policy benefits		91.3	86.5	259.9	257.6
Amortization		2.1	2.8	7.0	8.0
Other operating costs and expenses		5.6	6.8	19.3	19.9
Total expenses		99.0	96.1	286.2	285.5
Pre-tax operating earnings		2.1	10.6	22.6	42.2
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total segment revenues		101.1	106.7	308.8	327.7
Total segment expenses		99.0	96.1	286.2	285.5
Corporate
Revenues:
Net investment income		8.0	7.0	13.2	24.8
Fee revenue and other income		1.6	1.8	4.9	6.5
Total segment revenues		9.6	8.8	18.1	31.3
Expenses:
Interest expense on corporate debt		12.1	11.7	35.9	34.8
Other operating costs and expenses		21.4	23.7	59.4	68.3
Total expenses		33.5	35.4	95.3	103.1
Pre-tax operating earnings		(23.9)	(26.6)	(77.2)	(71.8)
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Total segment revenues		9.6	8.8	18.1	31.3
Total segment expenses		$ 33.5	$ 35.4	$ 95.3	$ 103.1

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ACCOUNTING FOR DERIVATIVES - FAIR VALUE BY BALANCE SHEET LOCATION (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Fixed index call options
Derivatives, Fair Value [Line Items]
Assets	$ 143.5	$ 170.2
Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Assets	137.1	168.8
Liabilities	1,370.0	1,334.8
Not Designated as Hedging Instrument | Fixed index call options | Other invested assets:
Derivatives, Fair Value [Line Items]
Assets	143.5	170.2
Not Designated as Hedging Instrument | Reinsurance receivables | Other invested assets:
Derivatives, Fair Value [Line Items]
Assets	(6.4)	(1.4)
Not Designated as Hedging Instrument | Fixed index products | Future policy benefits:
Derivatives, Fair Value [Line Items]
Liabilities	$ 1,370.0	$ 1,334.8

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ACCOUNTING FOR DERIVATIVES (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Embedded Derivative Associated With Modified Coinsurance Agreement
Derivative [Line Items]
Embedded derivative	$ 125
Fixed index call options
Derivative [Line Items]
Notional amount	$ 3,000	$ 3,000

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ACCOUNTING FOR DERIVATIVES - SCHEDULE PRE-TAX GAINS (LOSSES) RECOGNIZED IN NET INCOME FOR DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative [Line Items]
Gains (losses) on derivatives not designated as hedging instruments	$ 92.8	$ 43.3	$ 149.4	$ 115.0
Investment Income | Fixed index call options
Derivative [Line Items]
Gains (losses) on derivatives not designated as hedging instruments	59.0	30.6	66.8	95.4
Gain (Loss) on Investments | Embedded Derivative | Coinsurance
Derivative [Line Items]
Gains (losses) on derivatives not designated as hedging instruments	(0.8)	0.3	(5.0)	2.4
Insurance Policy Benefits | Embedded Derivative | Fixed Index Annuity
Derivative [Line Items]
Gains (losses) on derivatives not designated as hedging instruments	$ 34.6	$ 12.4	$ 87.6	$ 17.2

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ACCOUNTING FOR DERIVATIVES - DERIVATIVES WITH MASTER NETTING ARRANGEMENTS (Details) - Fixed index call options - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Derivative [Line Items]
Gross amounts recognized	$ 143.5	$ 170.2
Gross amounts offset in the balance sheet	0.0	0.0
Net amounts of assets presented in the balance sheet	143.5	170.2
Financial instruments	0.0	0.0
Cash collateral received	0.0	0.0
Net amount	$ 143.5	$ 170.2

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REINSURANCE (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Sep. 27, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reinsurance Disclosures [Abstract]
Ceded premiums written		$ 25.4	$ 27.1	$ 76.0	$ 79.9
Ceded insurance policy benefits		19.4	22.6	63.6	69.1
Assumed premiums written		7.0	7.4	21.2	23.1
Insurance policy benefits related to reinsurance		$ 8.6	$ 10.5	$ 26.6	$ 34.0
Statutory liabilities transferred in reinsurance transaction	$ 2,700.0
Negative ceding commission	825.0
Reinsurance transaction, after-tax charge	661.1
Trust account assets, amount of over collateralization	$ 500.0

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INCOME TAXES - COMPONENTS OF TAX EXPENSE (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Current tax expense (benefit)	$ (16.9)	$ 25.9	$ 3.8	$ 68.5
Deferred tax expense	50.0	18.2	80.7	55.1
Valuation allowance applicable to current year income	0.0	(2.2)	0.0	(2.2)
Income tax expense calculated based on estimated annual effective tax rate	33.1	41.9	84.5	121.4
Tax benefit on long-term care reinsurance transaction	(147.9)	0.0	(147.9)	0.0
Change in valuation allowance	104.8	(12.8)	104.8	(12.8)
Total income tax expense (benefit)	$ (10.0)	$ 29.1	$ 41.4	$ 108.6

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INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Operating Loss Carryforwards [Line Items]
Tax reform provisional income tax expense (benefit)		$ 172.5
Deferred tax assets more likely than not to be realized through future taxable earnings	$ 559.9	376.2		$ 559.9
Net deferred tax assets	753.8	465.3		753.8
Valuation allowance	193.9	89.1		193.9
Valuation allowance for deferred tax assets and other tax items	$ 104.8		$ (15.0)	$ 104.8	$ (15.0)
Deferred tax valuation analysis, growth rate for the next five years	3.00%			3.00%
Valuation allowance model, forecast period of Model				5 years
Estimated normalized annual taxable income for the current year				$ 345.0
Adjusted average non-life taxable income				85.0
Adjusted average life taxable income				$ 260.0
Loss limitation based on income of life insurance company, percent	35.00%			35.00%
Loss limitation based on loss of non-life entities, percent	35.00%			35.00%
Federal long-term tax exempt rate	2.32%			2.32%
Ownership change threshold restricting NOL usage	50.00%			50.00%
Net operating loss carryforwards	$ 3,262.1			$ 3,262.1
Net state operating loss carryforwards	19.5	$ 9.3		19.5
Federal
Operating Loss Carryforwards [Line Items]
Valuation allowance	182.2			182.2
Net operating loss carryforwards	3,300.0			3,300.0
State
Operating Loss Carryforwards [Line Items]
Valuation allowance	11.7			11.7
No Expiration
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 930.7			$ 930.7

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INCOME TAXES - RECONCILIATION OF CORPORATE TAX RATE (Details)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Income Tax Disclosure [Abstract]
U.S. statutory corporate rate	21.00%	35.00%
Valuation allowance	(34.70%)	(0.60%)
Non-taxable income and nondeductible benefits, net	0.40%	(1.50%)
State taxes	(0.40%)	1.30%
Estimated annual effective tax rate	(13.70%)	34.20%

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INCOME TAXES - DEFERRED ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Deferred tax assets:
Net federal operating loss carryforwards	$ 685.0	$ 489.6
Net state operating loss carryforwards	19.5	9.3
Investments	0.0	4.3
Insurance liabilities	301.0	415.8
Other	43.8	48.9
Gross deferred tax assets	1,049.3	967.9
Deferred tax liabilities:
Investments	(9.6)	0.0
Present value of future profits and deferred acquisition costs	(174.2)	(165.4)
Accumulated other comprehensive income	(111.7)	(337.2)
Gross deferred tax liabilities	(295.5)	(502.6)
Net deferred tax assets before valuation allowance	753.8	465.3
Valuation allowance	(193.9)	(89.1)
Net deferred tax assets	559.9	376.2
Current income taxes prepaid (accrued)	17.9	(9.3)
Income tax assets, net	$ 577.8	$ 366.9

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INCOME TAXES - NET OPERATING LOSSES (Details) $ in Millions	Sep. 30, 2018 USD ($)
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 3,262.1
Non-life net operating loss carryforwards	2,331.4
Carryforward Expiration 2023
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	1,744.8
Carryforward Expiration 2025
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	85.2
Carryforward Expiration 2026
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	149.9
Carryforward Expiration 2027
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	10.8
Carryforward Expiration 2028
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	80.3
Carryforward Expiration 2029
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	213.2
Carryforward Expiration 2030
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	0.3
Carryforward Expiration 2031
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	0.2
Carryforward Expiration 2032
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	44.4
Carryforward Expiration 2033
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	0.6
Carryforward Expiration 2034
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	0.9
Carryforward Expiration 2035
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	0.8
No Expiration
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	$ 930.7

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NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - SCHEDULE OF LONG-TERM DEBT INSTRUMENTS (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017	May 19, 2015
Debt Instruments [Abstract]
Direct corporate obligations	$ 916.2	$ 914.6
Unamortized debt issue costs	(8.8)	(10.4)
Senior notes | 4.500% Senior Notes due May 2020
Debt Instruments [Abstract]
Direct corporate obligations	$ 325.0	325.0
Interest rate	4.50%
Senior notes | 5.250% Senior Notes due May 2025
Debt Instruments [Abstract]
Direct corporate obligations	$ 500.0	500.0
Interest rate	5.25%
Line of credit | Revolving credit agreement
Debt Instruments [Abstract]
Direct corporate obligations	$ 100.0	$ 100.0	$ 100.0

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NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - REVOLVING CREDIT AGREEMENT (Details) - USD ($) $ in Millions	Oct. 13, 2017	May 19, 2015	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Initial drawing amount			$ 916.2	$ 914.6
Revolving credit agreement | Line of credit
Debt Instrument [Line Items]
Line of credit maximum borrowing capacity	$ 250.0	$ 150.0
Debt instrument, term		4 years
Initial drawing amount		$ 100.0	$ 100.0	$ 100.0
Interest rate on amounts outstanding at period end			4.12%
Debt covenant, required minimum debt to total capitalization ratio	35.00%
Debt covenant, actual debt to total capitalization ratio at period end			22.60%
Debt covenant, minimum required aggregate total adjusted capital to company action level risk-based capital ratio		250.00%
Debt covenant, actual aggregate total adjusted capital to company action level risk-based capital ratio at period end			450.00%
Debt covenant, minimum required consolidated net worth, component one, amount		$ 2,674.0
Debt covenant, minimum required consolidated net worth, component two, as a percent of net equity proceeds received from issuance and sale of equity interests		50.00%
Debt covenant, actual consolidated net worth at period end			$ 3,619.9
Debt covenant, required minimum consolidated net worth, amount			$ 2,687.2
Revolving credit agreement | Line of credit | Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Minimum | Eurodollar
Debt Instrument [Line Items]
Basis spread on variable rate	1.375%
Minimum | Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.375%
Minimum | Revolving credit agreement | Line of credit
Debt Instrument [Line Items]
Remaining borrowing capacity		$ 50.0
Maximum | Eurodollar
Debt Instrument [Line Items]
Basis spread on variable rate	2.125%
Maximum | Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	1.125%
Maximum | Revolving credit agreement | Line of credit
Debt Instrument [Line Items]
Remaining borrowing capacity	$ 100.0

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NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS NOTES PAYABLE - DIRECT CORPORATE OBLIGATIONS - SCHEDULED REPAYMENT (Details) $ in Millions	Sep. 30, 2018 USD ($)
Debt Disclosure [Abstract]
2019	$ 0.0
2020	425.0
2021	0.0
2022	0.0
2023	0.0
Thereafter	500.0
Long-term Debt	$ 925.0

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INVESTMENT BORROWINGS (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($) subsidiary	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Schedule of Trading Securities and Other Trading Assets [Line Items]
Number of insurance subsidiaries that are members of the FHLB | subsidiary	3
Investment borrowings	$ 1,646.1		$ 1,646.7
Federal Home Loan Bank advances
Schedule of Trading Securities and Other Trading Assets [Line Items]
Federal home loan bank stock	71.1
Investment borrowings	1,646.1
Federal home loan bank, advances, collateral pledged	2,000.0
Aggregate fee to prepay all fixed rate FHLB borrowings	1.0
Interest expense on FHLB borrowings	30.3	$ 19.5
Federal Home Loan Bank advances | Borrowings due February 2019
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.405%
Federal Home Loan Bank advances | Borrowings due July 2019
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 21.8
Interest rate	2.672%
Federal Home Loan Bank advances | Borrowings due October 2019
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 15.0
Interest rate	2.85%
Federal Home Loan Bank advances | Borrowing due May 2020
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.678%
Federal Home Loan Bank advances | Borrowings due June 2020
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 21.8
Interest rate	1.96%
Federal Home Loan Bank advances | Borrowings due September 2020
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 25.0
Interest rate	2.991%
Federal Home Loan Bank advances | Borrowings due September 2020 rate two
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 100.0
Interest rate	2.876%
Federal Home Loan Bank advances | Borrowings due September 2020 rate three
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.902%
Federal Home Loan Bank advances | Borrowings due September 2020 rate four
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 75.0
Interest rate	2.506%
Federal Home Loan Bank advances | Borrowings due October 2020
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 100.0
Interest rate	2.453%
Federal Home Loan Bank advances | Borrowings due December 2020
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.814%
Federal Home Loan Bank advances | Borrowings due July 2021
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 100.0
Interest rate	2.889%
Federal Home Loan Bank advances | Borrowings due July 2021 rate two
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 100.0
Interest rate	2.859%
Federal Home Loan Bank advances | Borrowings due August 2021
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 28.2
Interest rate	2.55%
Federal Home Loan Bank advances | Borrowings due August 2021 rate two
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 57.7
Interest rate	2.871%
Federal Home Loan Bank advances | Borrowings due August 2021 Rate Three
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 125.0
Interest rate	2.696%
Federal Home Loan Bank advances | Borrowings due September 2021
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.851%
Federal Home Loan Bank advances | Borrowings due May 2022, Rate One
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 22.0
Interest rate	2.665%
Federal Home Loan Bank advances | Borrowings due May 2022, Rate Two
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 100.0
Interest rate	2.505%
Federal Home Loan Bank advances | Borrowings due June 2022
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 10.0
Interest rate	2.941%
Federal Home Loan Bank advances | Borrowings due July 2022 rate one
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.703%
Federal Home Loan Bank advances | Borrowings due July 2022 rate two
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.722%
Federal Home Loan Bank advances | Borrowings due July 2022 rate three
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.719%
Federal Home Loan Bank advances | Borrowings due August 2022
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.733%
Federal Home Loan Bank advances | Borrowings due December 2022, variable rate 2.621%
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.621%
Federal Home Loan Bank advances | Borrowings due December 2022, variable rate 2.621%, loan 2
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.621%
Federal Home Loan Bank advances | Borrowings due March 2023
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 24.1
Interest rate	2.16%
Federal Home Loan Bank advances | Borrowings Due July 2023 Rate One
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 50.0
Interest rate	2.548%
Federal Home Loan Bank advances | Borrowings Due July 2023 Rate Two
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 100.0
Interest rate	2.548%
Federal Home Loan Bank advances | Borrowings due June 2025
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment borrowings	$ 20.5
Interest rate	2.94%

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CHANGES IN COMMON STOCK (Details) - USD ($) $ / shares in Units, $ in Millions	4 Months Ended	5 Months Ended	9 Months Ended
	Apr. 30, 2018	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017
Number of common shares outstanding
Balance, beginning of year (in shares)	166,857,931		166,857,931
Balance, end of year (in shares)		164,634,365	164,634,365
Number of stock tendered for payment of federal and state taxes owed (in shares)			239,000
Stock repurchased and retired during period, value			$ 60.5	$ 140.1
Stock repurchase program, remaining repurchase authorized amount		$ 325.1	325.1
Common stock dividends declared			$ 48.6	44.7
Dividends (in dollars per share)	$ 0.09	$ 0.10	$ 0.29
Common stock and additional paid-in capital
Number of common shares outstanding
Stock repurchased and retired during period, value			$ 60.5	$ 140.1
Common stock
Number of common shares outstanding
Balance, beginning of year (in shares)	166,858,000		166,858,000
Stock repurchased and retired during period, shares			(2,998,000)
Balance, end of year (in shares)		164,634,000	164,634,000
Stock repurchased and retired during period, shares			2,998,000
Common stock | Stock options
Number of common shares outstanding
Shares issued under employee benefit compensation plans (in shares)			327,000
Number of stock tendered for payment of federal and state taxes owed (in shares)			69,000
Common stock | Restricted and Performance Stock
Number of common shares outstanding
Shares issued under employee benefit compensation plans (in shares)			447,000

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SALES INDUCEMENTS (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Deferred Sales Inducements [Abstract]
Deferred sales inducements	$ 4.8	$ 1.5
Deferred sales inducements, amortization expense	7.6	$ 6.6
Unamortized deferred sales inducements	$ 39.7		$ 42.5

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OUT-OF-PERIOD ADJUSTMENTS (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Increase in insurance policy benefits	$ 646.9	$ 638.1	$ 1,851.7	$ 1,941.6
Decrease in income tax expense	114.8	(44.1)	63.4	(123.6)
Decrease in net income	$ 529.8	$ (100.8)	343.3	$ (246.5)
Restatement Adjustment | Colonial Penn and Bankers Life | Long-term Care and Insurance Benefits and Payouts of Annuities
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Increase in insurance policy benefits			2.5
Decrease in income tax expense			0.5
Decrease in net income			$ 2.0
Adjustment to net income per diluted share (in dollars per share)			$ (0.01)
Restatement Adjustment | Bankers Life | Long-term Care Insurance Benefits
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Increase in insurance policy benefits			$ 1.4
Restatement Adjustment | Colonial Penn | Payout Annuities
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Increase in insurance policy benefits			$ 1.1

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RECENTLY ISSUED ACCOUNTING STANDARDS (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Proceeds from interest and dividends received		$ 1,005,700,000	$ 917,900,000
Fee revenue	$ 6,400,000	28,800,000
Distribution expense (included in other operating costs and expenses)	600,000	13,000,000
Impact on pre-tax income	5,800,000	15,800,000
Accumulated other comprehensive income	403,500,000	403,500,000		$ 1,195,800,000	$ 1,212,100,000
Retained earnings	184,800,000	184,800,000		576,700,000	560,400,000
Total shareholders' equity	3,619,900,000	3,619,900,000	4,881,700,000	4,847,500,000	$ 4,847,500,000	$ 4,486,900,000
Other operating costs		(591,900,000)	(549,200,000)
Net cash flow from operating activities		115,000,000	449,500,000
Sales of investments		2,747,200,000	1,723,500,000
Change in cash and cash equivalents held by variable interest entities			0
Other		(16,300,000)	(20,400,000)
Net cash provided (used) by investing activities		(314,600,000)	264,100,000
Net increase (decrease) in cash and cash equivalents		(161,700,000)	203,600,000
Cash and cash equivalents - unrestricted and held by variable interest entities			668,200,000
Cash and cash equivalents - unrestricted and held by variable interest entities			871,800,000
Accounting Standards Update 2016-01
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accumulated other comprehensive income				(16,300,000)
Retained earnings				16,300,000
Total shareholders' equity				0
Restricted cash
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Proceeds from interest and dividends received			0
Other operating costs			0
Net cash flow from operating activities			0
Sales of investments			0
Change in cash and cash equivalents held by variable interest entities			(83,400,000)
Other			0
Net cash provided (used) by investing activities			(83,400,000)
Net increase (decrease) in cash and cash equivalents			(83,400,000)
Cash and cash equivalents - unrestricted and held by variable interest entities			189,300,000
Cash and cash equivalents - unrestricted and held by variable interest entities			105,900,000
COLI death benefits
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Proceeds from interest and dividends received			0
Other operating costs			(3,200,000)
Net cash flow from operating activities			(3,200,000)
Sales of investments			0
Change in cash and cash equivalents held by variable interest entities			0
Other			3,200,000
Net cash provided (used) by investing activities			3,200,000
Net increase (decrease) in cash and cash equivalents			0
Cash and cash equivalents - unrestricted and held by variable interest entities			0
Cash and cash equivalents - unrestricted and held by variable interest entities			0
Distributions received from equity method investments
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Proceeds from interest and dividends received			19,000,000
Other operating costs			0
Net cash flow from operating activities			19,000,000
Sales of investments			(19,000,000)
Change in cash and cash equivalents held by variable interest entities			0
Other			0
Net cash provided (used) by investing activities			(19,000,000)
Net increase (decrease) in cash and cash equivalents			0
Cash and cash equivalents - unrestricted and held by variable interest entities			0
Cash and cash equivalents - unrestricted and held by variable interest entities			0
Pro Forma | Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease, right-of-use asset	55,000,000	55,000,000
Operating lease, liability	55,000,000	55,000,000
Amounts prior to effect of adoption of authoritative guidance
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Proceeds from interest and dividends received			898,900,000
Accumulated other comprehensive income				1,212,100,000
Retained earnings				560,400,000
Total shareholders' equity				$ 4,847,500,000
Other operating costs			(546,000,000)
Net cash flow from operating activities			433,700,000
Sales of investments			1,742,500,000
Change in cash and cash equivalents held by variable interest entities			83,400,000
Other			(23,600,000)
Net cash provided (used) by investing activities			363,300,000
Net increase (decrease) in cash and cash equivalents			287,000,000
Cash and cash equivalents - unrestricted and held by variable interest entities			478,900,000
Cash and cash equivalents - unrestricted and held by variable interest entities			$ 765,900,000
Calculated under Revenue Guidance in Effect before Topic 606
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Fee revenue	8,800,000	25,700,000
Distribution expense (included in other operating costs and expenses)	3,500,000	9,400,000
Impact on pre-tax income	5,300,000	16,300,000
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Fee revenue	(2,400,000)	3,100,000
Distribution expense (included in other operating costs and expenses)	(2,900,000)	3,600,000
Impact on pre-tax income	$ 500,000	$ (500,000)

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LITIGATION AND OTHER LEGAL PROCEEDINGS (Details)	9 Months Ended
	Sep. 30, 2018 state	Jul. 26, 2017 individual
Commitments and Contingencies Disclosure [Abstract]
Number of individuals appointed to assume immediate control and power over affairs | individual		2
Number of states participating in examination of compliance with unclaimed property laws | state	40

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CONSOLIDATED STATEMENT OF CASH FLOW (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Sep. 27, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income (loss)		$ (529.8)	$ 100.8	$ (343.3)	$ 246.5
Adjustments to reconcile net income (loss) to net cash from operating activities:
Amortization and depreciation				216.1	200.8
Income taxes				10.5	50.6
Insurance liabilities				209.1	321.5
Accrual and amortization of investment income				(117.9)	(214.2)
Deferral of policy acquisition costs				(187.2)	(183.4)
Net realized investment gains				(27.0)	(52.3)
Net Realized Gains On The Transfer Of Assets Related To Reinsurance Transaction, Excluding Cash Expenses				(363.4)	0.0
Loss related to reinsurance transaction				1,067.6	0.0
Payment to reinsurer pursuant to long-term care business reinsured				(365.0)	0.0
Loss on extinguishment of borrowings related to variable interest entities		0.0	5.5	3.8	5.5
Other				11.7	74.5
Net cash flow from operating activities				115.0	449.5
Investments transferred	$ (3,582.1)
Cash paid to reinsurer	(365.0)
Accrued interest on investments transferred	(51.6)
Present value of future profits and deferred acquisition costs written-off	(61.6)
Reinsurance receivables	2,818.0
Transaction expenses and other	(14.6)
Release of future loss reserve	189.3
Subtotal	(1,067.6)
Net realized gains on the transfer of assets related to reinsurance transaction		$ 363.4	$ 0.0	363.4	0.0
Pre-tax loss related to reinsurance transaction	$ (704.2)
Stock options, restricted stock and performance units				$ 19.6	$ 17.8

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INVESTMENTS IN VARIABLE INTEREST ENTITIES - BALANCE SHEET ITEMS (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Assets:
Investments held by variable interest entities	$ 1,550.5	$ 1,526.9
Cash and cash equivalents held by variable interest entities	56.4	178.9
Liabilities:
Borrowings related to variable interest entities	1,417.6	1,410.7
VIEs
Assets:
Investments held by variable interest entities	1,550.5	1,526.9
Notes receivable of VIEs held by subsidiaries	0.0	0.0
Cash and cash equivalents held by variable interest entities	56.4	178.9
Accrued investment income	2.6	2.6
Income tax assets, net	2.3	0.7
Other assets	4.5	10.0
Total assets	1,616.3	1,719.1
Liabilities:
Other liabilities	66.9	158.3
Borrowings related to variable interest entities	1,417.6	1,410.7
Notes payable of VIEs held by subsidiaries	155.2	167.6
Total liabilities	1,639.7	1,736.6
Eliminations
Assets:
Investments held by variable interest entities	0.0	0.0
Notes receivable of VIEs held by subsidiaries	(142.8)	(155.5)
Cash and cash equivalents held by variable interest entities	0.0	0.0
Accrued investment income	0.0	(0.1)
Income tax assets, net	0.0	0.0
Other assets	(3.9)	(1.5)
Total assets	(146.7)	(157.1)
Liabilities:
Other liabilities	(6.2)	(4.4)
Borrowings related to variable interest entities	0.0	0.0
Notes payable of VIEs held by subsidiaries	(155.2)	(167.6)
Total liabilities	(161.4)	(172.0)
Net effect on consolidated balance sheet
Assets:
Investments held by variable interest entities	1,550.5	1,526.9
Notes receivable of VIEs held by subsidiaries	(142.8)	(155.5)
Cash and cash equivalents held by variable interest entities	56.4	178.9
Accrued investment income	2.6	2.5
Income tax assets, net	2.3	0.7
Other assets	0.6	8.5
Total assets	1,469.6	1,562.0
Liabilities:
Other liabilities	60.7	153.9
Borrowings related to variable interest entities	1,417.6	1,410.7
Notes payable of VIEs held by subsidiaries	0.0	0.0
Total liabilities	$ 1,478.3	$ 1,564.6

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INVESTMENTS IN VARIABLE INTEREST ENTITIES - NARRATIVE (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018 USD ($) investment	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) investment	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Variable Interest Entity [Line Items]
Variable interest entity amortized cost securities held	$ 1,553.1		$ 1,553.1
Variable interest entity, gross unrealized gains fixed maturity securities	6.8		6.8
Variable interest entity gross unrealized losses fixed maturity securities	(9.4)		(9.4)
Estimated fair value of fixed maturity securities	1,550.5		1,550.5
Variable interest entities net realized gain (loss) on investments			(3.2)	$ (2.5)
Variable interest entities net gain (loss) from sale of fixed maturity investments				2.2
Loss on dissolution of variable interest entities	$ 0.0	$ 0.6	$ 0.0	4.3
Total other than temporary impairment losses on investments held by variable interest entities				0.4
Number of investments held by VIE, in default | investment	0		0
Variable interest entities, investments sold			$ 41.9	86.0
Variable interest entity, gross investment losses from sale			3.4	$ 2.0
Investments held in limited partnerships	$ 459.1		459.1
Unfunded commitments to limited partnerships	231.5		231.5
Less than twelve months
Variable Interest Entity [Line Items]
Fair value investments held by variable interest entity that had been in an unrealized loss position	474.6		474.6		$ 445.4
Gross unrealized losses for a period			5.4		4.9
Greater than twelve months
Variable Interest Entity [Line Items]
Fair value investments held by variable interest entity that had been in an unrealized loss position	$ 101.1		101.1		28.4
Gross unrealized losses for a period			$ 4.0		$ 1.7

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INVESTMENTS IN VARIABLE INTEREST ENTITIES - SCHEDULE OF VIEs (Details) $ in Millions	Sep. 30, 2018 USD ($)
Investment Holdings [Line Items]
Total amortized cost	$ 1,553.1
Total fair value	1,550.5
Amortized cost
Investment Holdings [Line Items]
Due in one year or less	5.0
Due after one year through five years	523.8
Due after five years through ten years	1,024.3
Total amortized cost	1,553.1
Estimated fair value
Investment Holdings [Line Items]
Due in one year or less	5.0
Due after one year through five years	521.9
Due after five years through ten years	1,023.6
Total fair value	$ 1,550.5

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FAIR VALUE MEASUREMENTS - NARRATIVE (Details)	9 Months Ended
	Sep. 30, 2018
Fair Value Disclosures [Abstract]
Fair value of level 3 fixed maturity securities valued using broker quotes, percentage	29.00%
Available for sale fixed maturities classified as level 3, investment grade, percent	55.00%
Available for sale fixed maturities classified as Level 3 and corporate securities	92.00%

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FAIR VALUE MEASUREMENTS - MEASUREMENTS BY INPUT LEVEL (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	$ 18,512.4	$ 22,910.9
Trading securities	239.0	284.6
Investments held by variable interest entities	1,550.5	1,526.9
Assets held in separate accounts	5.1	5.0
Corporate securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	11,524.5	14,958.4
United States Treasury securities and obligations of United States government corporations and agencies
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	168.7	177.7
States and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1,887.0	2,056.3
Debt securities issued by foreign governments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	60.2	83.1
Asset-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	2,499.1	3,254.4
Collateralized debt obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	354.0	259.4
Commercial mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1,433.3	1,377.5
Mortgage pass-through securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1.6	2.0
Collateralized mortgage obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	584.0	742.1
Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value		440.6
Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities	239.0	284.6
Investments held by variable interest entities	1,550.5	1,526.9
Assets held in separate accounts	5.1	5.0
Total assets carried at fair value by category	20,786.0	25,338.2
Fair Value, Measurements, Recurring | Embedded derivatives associated with fixed index annuity products
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Future policy benefits - embedded derivatives associated with fixed index annuity products	1,370.0	1,334.8
Fair Value, Measurements, Recurring | Derivatives
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other invested assets - derivatives	143.5	170.2
Fair Value, Measurements, Recurring | Corporate securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	11,524.5	14,958.4
Equity securities - corporate securities	335.5	440.6
Trading securities		21.6
Fair Value, Measurements, Recurring | United States Treasury securities and obligations of United States government corporations and agencies
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	168.7	177.7
Trading securities		0.5
Fair Value, Measurements, Recurring | States and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1,887.0	2,056.3
Fair Value, Measurements, Recurring | Debt securities issued by foreign governments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	60.2	83.1
Fair Value, Measurements, Recurring | Asset-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	2,499.1	3,254.4
Trading securities	89.7	95.8
Fair Value, Measurements, Recurring | Collateralized debt obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	354.0	259.4
Trading securities		2.7
Fair Value, Measurements, Recurring | Commercial mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1,433.3	1,377.5
Trading securities	93.2	92.5
Fair Value, Measurements, Recurring | Mortgage pass-through securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1.6	2.0
Fair Value, Measurements, Recurring | Collateralized mortgage obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	584.0	742.1
Trading securities	56.1	68.7
Fair Value, Measurements, Recurring | Total fixed maturities, available for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	18,512.4	22,910.9
Fair Value, Measurements, Recurring | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities		2.8
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities	0.0	2.8
Investments held by variable interest entities	0.0	0.0
Assets held in separate accounts	0.0	0.0
Total assets carried at fair value by category	216.3	290.6
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Embedded derivatives associated with fixed index annuity products
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Future policy benefits - embedded derivatives associated with fixed index annuity products	0.0	0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Derivatives
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other invested assets - derivatives	0.0	0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Corporate securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Equity securities - corporate securities	216.3	287.8
Trading securities		0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | United States Treasury securities and obligations of United States government corporations and agencies
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Trading securities		0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | States and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Debt securities issued by foreign governments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Asset-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Trading securities	0.0	0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Collateralized debt obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Trading securities		0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Commercial mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Trading securities	0.0	0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Mortgage pass-through securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Collateralized mortgage obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Trading securities	0.0	0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Total fixed maturities, available for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1) | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities		2.8
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities	239.0	281.8
Investments held by variable interest entities	1,550.5	1,522.0
Assets held in separate accounts	5.1	5.0
Total assets carried at fair value by category	20,394.3	24,763.0
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Embedded derivatives associated with fixed index annuity products
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Future policy benefits - embedded derivatives associated with fixed index annuity products	0.0	0.0
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Derivatives
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other invested assets - derivatives	143.5	170.2
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Corporate securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	11,371.7	14,728.0
Equity securities - corporate securities	109.7	131.6
Trading securities		21.6
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | United States Treasury securities and obligations of United States government corporations and agencies
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	168.7	177.7
Trading securities		0.5
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | States and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1,887.0	2,056.3
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Debt securities issued by foreign governments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	59.2	79.2
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Asset-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	2,487.0	3,230.2
Trading securities	89.7	95.8
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Collateralized debt obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	354.0	259.4
Trading securities		2.7
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Commercial mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1,433.3	1,377.5
Trading securities	93.2	92.5
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Mortgage pass-through securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1.6	2.0
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Collateralized mortgage obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	584.0	742.1
Trading securities	56.1	68.7
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Total fixed maturities, available for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	18,346.5	22,652.4
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities		0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities	0.0	0.0
Investments held by variable interest entities	0.0	4.9
Assets held in separate accounts	0.0	0.0
Total assets carried at fair value by category	175.4	284.6
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Embedded derivatives associated with fixed index annuity products
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Future policy benefits - embedded derivatives associated with fixed index annuity products	1,370.0	1,334.8
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Derivatives
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other invested assets - derivatives	0.0	0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Corporate securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	152.8	230.4
Equity securities - corporate securities	9.5	21.2
Trading securities		0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | United States Treasury securities and obligations of United States government corporations and agencies
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Trading securities		0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | States and political subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Debt securities issued by foreign governments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	1.0	3.9
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Asset-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	12.1	24.2
Trading securities	0.0	0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Collateralized debt obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Trading securities		0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Commercial mortgage-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Trading securities	0.0	0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Mortgage pass-through securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Collateralized mortgage obligations
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	0.0	0.0
Trading securities	0.0	0.0
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Total fixed maturities, available for sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Estimated fair value	$ 165.9	258.5
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Equity securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Trading securities		$ 0.0

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FAIR VALUE MEASUREMENTS - RECURRING BASIS (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unrestricted	$ 595.6	$ 757.3	$ 871.8	$ 668.2
Cash and cash equivalents held by variable interest entities	56.4	178.9
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans	1,680.6	1,650.6
Policy loans	117.4	116.0
Company-owned life insurance	186.2	182.3
Unrestricted	539.2	578.4
Cash and cash equivalents held by variable interest entities	56.4	178.9
Policyholder account balances	11,449.7	11,220.7
Investment borrowings	1,646.1	1,646.7
Borrowings related to variable interest entities	1,417.6	1,410.7
Notes payable – direct corporate obligations	916.2	914.6
Fair Value, Measurements, Recurring | Estimate of fair value measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans	1,671.5	1,677.3
Policy loans	117.4	116.0
Company-owned life insurance	186.2	182.3
Unrestricted	539.2	578.4
Cash and cash equivalents held by variable interest entities	56.4	178.9
Policyholder account balances	11,449.7	11,220.7
Investment borrowings	1,647.1	1,648.8
Borrowings related to variable interest entities	1,426.7	1,432.9
Notes payable – direct corporate obligations	938.9	962.3
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets or liabilities (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans	0.0	0.0
Policy loans	0.0	0.0
Company-owned life insurance	0.0	0.0
Unrestricted	539.2	578.4
Cash and cash equivalents held by variable interest entities	56.4	178.9
Policyholder account balances	0.0	0.0
Investment borrowings	0.0	0.0
Borrowings related to variable interest entities	0.0	0.0
Notes payable – direct corporate obligations	0.0	0.0
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans	0.0	0.0
Policy loans	0.0	0.0
Company-owned life insurance	186.2	182.3
Unrestricted	0.0	0.0
Cash and cash equivalents held by variable interest entities	0.0	0.0
Policyholder account balances	0.0	0.0
Investment borrowings	1,647.1	1,648.8
Borrowings related to variable interest entities	1,426.7	1,432.9
Notes payable – direct corporate obligations	938.9	962.3
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans	1,671.5	1,677.3
Policy loans	117.4	116.0
Company-owned life insurance	0.0	0.0
Unrestricted	0.0	0.0
Cash and cash equivalents held by variable interest entities	0.0	0.0
Policyholder account balances	11,449.7	11,220.7
Investment borrowings	0.0	0.0
Borrowings related to variable interest entities	0.0	0.0
Notes payable – direct corporate obligations	$ 0.0	$ 0.0

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FAIR VALUE MEASUREMENTS - BALANCE SHEET RECURRING (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Interest sensitive products
Liabilities:
Fair value, measurement with unobservable inputs reconciliation, beginning balance	$ (1,333.3)	$ (1,205.4)	$ (1,334.8)	$ (1,092.3)
Purchases, sales, issuances and settlements, net	(71.3)	(56.3)	(122.8)	(174.2)
Total realized and unrealized gains (losses) included in net income	34.6	12.4	87.6	17.2
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)	0.0	0.0	0.0	0.0
Transfers into level 3	0.0	0.0	0.0	0.0
Transfers out of level 3	0.0	0.0	0.0	0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance	(1,370.0)	(1,249.3)	(1,370.0)	(1,249.3)
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date	34.6	12.4	87.6	17.2
Corporate securities
Assets:
Fair value, measurement with unobservable inputs reconciliation, beginning balance	181.9	263.3	230.4	258.5
Purchases, sales, issuances and settlements, net	(23.9)	(44.8)	(23.2)	(44.1)
Total realized and unrealized gains (losses) included in net income	(0.8)	1.7	0.7	9.5
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)	0.1	1.3	(3.1)	0.6
Transfers into level 3	0.0	34.2	0.0	31.2
Transfers out of level 3	(4.5)	0.0	(52.0)	0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance	152.8	255.7	152.8	255.7
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date	0.0	(3.2)	0.0	(6.5)
Debt securities issued by foreign governments
Assets:
Fair value, measurement with unobservable inputs reconciliation, beginning balance	3.9	3.9	3.9	3.9
Purchases, sales, issuances and settlements, net	(2.9)	0.0	(2.9)	0.0
Total realized and unrealized gains (losses) included in net income	(0.1)	0.0	(0.1)	0.0
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)	0.1	0.1	0.1	0.1
Transfers into level 3	0.0	0.0	0.0	0.0
Transfers out of level 3	0.0	0.0	0.0	0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance	1.0	4.0	1.0	4.0
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date	0.0	0.0	0.0	0.0
Asset-backed securities
Assets:
Fair value, measurement with unobservable inputs reconciliation, beginning balance	18.4	59.6	24.2	60.4
Purchases, sales, issuances and settlements, net	(0.2)	(1.3)	(11.4)	3.8
Total realized and unrealized gains (losses) included in net income	0.0	0.0	0.0	0.0
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)	(0.1)	0.7	(0.7)	2.3
Transfers into level 3	0.0	7.1	0.0	4.2
Transfers out of level 3	(6.0)	(6.2)	0.0	(10.8)
Fair value, measurement with unobservable inputs reconciliation, ending balance	12.1	59.9	12.1	59.9
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date	0.0	0.0	0.0	0.0
Collateralized debt obligations
Assets:
Fair value, measurement with unobservable inputs reconciliation, beginning balance		2.5		5.4
Purchases, sales, issuances and settlements, net		(2.5)		(2.5)
Total realized and unrealized gains (losses) included in net income		0.0		0.0
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)		0.0		0.0
Transfers into level 3		0.0		0.0
Transfers out of level 3		0.0		(2.9)
Fair value, measurement with unobservable inputs reconciliation, ending balance		0.0		0.0
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date		0.0		0.0
Collateralized mortgage obligations
Assets:
Fair value, measurement with unobservable inputs reconciliation, beginning balance		0.2
Purchases, sales, issuances and settlements, net		0.0
Total realized and unrealized gains (losses) included in net income		0.0
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)		(0.2)
Transfers into level 3		0.0
Transfers out of level 3		0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance		0.0		0.0
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date		0.0
Commercial mortgage-backed securities
Assets:
Fair value, measurement with unobservable inputs reconciliation, beginning balance				32.0
Purchases, sales, issuances and settlements, net				0.0
Total realized and unrealized gains (losses) included in net income				0.0
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)				0.0
Transfers into level 3				0.0
Transfers out of level 3				(32.0)
Fair value, measurement with unobservable inputs reconciliation, ending balance		0.0		0.0
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date				0.0
Total fixed maturities, available for sale
Assets:
Fair value, measurement with unobservable inputs reconciliation, beginning balance	204.2	329.5	258.5	360.2
Purchases, sales, issuances and settlements, net	(27.0)	(48.6)	(37.5)	(42.8)
Total realized and unrealized gains (losses) included in net income	(0.9)	1.7	0.6	9.5
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)	0.1	1.9	(3.7)	3.0
Transfers into level 3	0.0	41.3	0.0	35.4
Transfers out of level 3	(10.5)	(6.2)	(52.0)	(45.7)
Fair value, measurement with unobservable inputs reconciliation, ending balance	165.9	319.6	165.9	319.6
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date	0.0	(3.2)	0.0	(6.5)
Equity securities
Assets:
Fair value, measurement with unobservable inputs reconciliation, beginning balance	9.5	24.6	21.2	25.2
Purchases, sales, issuances and settlements, net	0.0	(8.3)	(10.9)	(8.5)
Total realized and unrealized gains (losses) included in net income	0.0	6.4	(0.8)	6.3
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)	0.0	(1.1)	0.0	(1.4)
Transfers into level 3	0.0	0.0	0.0	0.0
Transfers out of level 3	0.0	0.0	0.0	0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance	9.5	21.6	9.5	21.6
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date	0.0	(0.5)	0.0	(0.5)
Investments held by variable interest entities - corporate securities
Assets:
Purchases, sales, issuances and settlements, net				5.0
Investments held by variable interest entities | Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Investments held by variable interest entities - corporate securities
Assets:
Fair value, measurement with unobservable inputs reconciliation, beginning balance		0.0	4.9	0.0
Purchases, sales, issuances and settlements, net		0.0	0.0	5.0
Total realized and unrealized gains (losses) included in net income		0.0	0.0	0.0
Total realized and unrealized gains (losses) included in accumulated other comprehensive income (loss)		0.0	0.0	0.0
Transfers into level 3		5.0	0.0	0.0
Transfers out of level 3		0.0	(4.9)	0.0
Fair value, measurement with unobservable inputs reconciliation, ending balance	$ 0.0	5.0	0.0	5.0
Amount of total gains (losses) for the period included in our net income relating to assets and liabilities still held as of the reporting date		$ 0.0	$ 0.0	$ 0.0

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FAIR VALUE MEASUREMENTS - FAIR VALUE ACTIVITY (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Interest sensitive products
Liabilities:
Purchases	$ (41.8)	$ (41.0)	$ (125.1)	$ (130.1)
Sales	0.8	1.8	7.7	5.3
Issuances	(50.3)	(31.4)	(64.4)	(95.7)
Settlements	20.0	14.3	59.0	46.3
Purchases, sales, issuances and settlements, net	(71.3)	(56.3)	(122.8)	(174.2)
Corporate securities
Assets:
Purchases	20.4	15.3	31.5	64.3
Sales	(44.3)	(60.1)	(54.7)	(108.4)
Issuances	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Purchases, sales, issuances and settlements, net	(23.9)	(44.8)	(23.2)	(44.1)
Debt securities issued by foreign governments
Assets:
Purchases	3.0		3.0
Sales	(5.9)		(5.9)
Issuances	0.0		0.0
Settlements	0.0		0.0
Purchases, sales, issuances and settlements, net	(2.9)	0.0	(2.9)	0.0
Asset-backed securities
Assets:
Purchases	0.0	9.9	0.0	21.9
Sales	(0.2)	(11.2)	(11.4)	(18.1)
Issuances	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Purchases, sales, issuances and settlements, net	(0.2)	(1.3)	(11.4)	3.8
Collateralized debt obligations
Assets:
Purchases		0.0		0.0
Sales		(2.5)		(2.5)
Issuances		0.0		0.0
Settlements		0.0		0.0
Purchases, sales, issuances and settlements, net		(2.5)		(2.5)
Total fixed maturities, available for sale
Assets:
Purchases	23.4	25.2	34.5	86.2
Sales	(50.4)	(73.8)	(72.0)	(129.0)
Issuances	0.0	0.0	0.0	0.0
Settlements	0.0	0.0	0.0	0.0
Purchases, sales, issuances and settlements, net	(27.0)	(48.6)	(37.5)	(42.8)
Equity securities
Assets:
Purchases		0.0	0.0	0.0
Sales		(8.3)	(10.9)	(8.5)
Issuances		0.0	0.0	0.0
Settlements		0.0	0.0	0.0
Purchases, sales, issuances and settlements, net	$ 0.0	$ (8.3)	$ (10.9)	(8.5)
Investments held by variable interest entities - corporate securities
Assets:
Purchases				5.0
Sales				0.0
Issuances				0.0
Settlements				0.0
Purchases, sales, issuances and settlements, net				$ 5.0

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FAIR VALUE MEASUREMENTS - FAIR VALUE INPUTS (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments	$ 23,355.4	$ 27,854.1
Other invested assets	920.0	924.5
Significant unobservable inputs (Level 3)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments	175.4	284.6
Other invested assets	50.5	87.2
Policyholder account balances	$ 1,370.0	$ 1,334.8
Significant unobservable inputs (Level 3) | Minimum | Interest sensitive products
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Projected portfolio yields	5.15%	5.15%
Discount rates	1.50%	0.92%
Surrender rates	1.20%	1.20%
Significant unobservable inputs (Level 3) | Maximum | Interest sensitive products
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Projected portfolio yields	5.61%	5.61%
Discount rates	2.98%	2.51%
Surrender rates	46.40%	46.40%
Significant unobservable inputs (Level 3) | Weighted Average | Interest sensitive products
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Projected portfolio yields	5.60%	5.60%
Discount rates	2.70%	2.00%
Surrender rates	12.30%	12.30%
Significant unobservable inputs (Level 3) | Corporate securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments	$ 98.0	$ 149.2
Significant unobservable inputs (Level 3) | Corporate securities | Minimum
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Discount margins	1.35%	1.45%
Significant unobservable inputs (Level 3) | Corporate securities | Maximum
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Discount margins	8.91%	71.29%
Significant unobservable inputs (Level 3) | Corporate securities | Weighted Average
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Discount margins	3.94%	6.96%
Significant unobservable inputs (Level 3) | Asset-backed securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments	$ 12.1	$ 24.2
Significant unobservable inputs (Level 3) | Asset-backed securities | Minimum
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Discount margins		1.80%
Significant unobservable inputs (Level 3) | Asset-backed securities | Maximum
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Discount margins		3.71%
Significant unobservable inputs (Level 3) | Asset-backed securities | Weighted Average
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Discount margins	1.87%	2.67%
Significant unobservable inputs (Level 3) | Equity securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments	$ 1.2	$ 1.1
Significant unobservable inputs (Level 3) | Equity securities | Weighted Average
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
EBITDA multiple	110.00%	110.00%
Percent of recovery expected		59.10%
Recovery method | Significant unobservable inputs (Level 3) | Corporate securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments	$ 5.3	$ 2.8
Recovery method | Significant unobservable inputs (Level 3) | Corporate securities | Minimum
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percent of recovery expected	0.00%	0.00%
Recovery method | Significant unobservable inputs (Level 3) | Corporate securities | Maximum
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percent of recovery expected	62.20%	21.73%
Recovery method | Significant unobservable inputs (Level 3) | Corporate securities | Weighted Average
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percent of recovery expected	57.70%	18.42%
Recovery method | Significant unobservable inputs (Level 3) | Equity securities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments	$ 8.3	$ 20.1
Recovery method | Significant unobservable inputs (Level 3) | Equity securities | Minimum
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percent of recovery expected	59.27%
Recovery method | Significant unobservable inputs (Level 3) | Equity securities | Maximum
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percent of recovery expected	100.00%
Recovery method | Significant unobservable inputs (Level 3) | Equity securities | Weighted Average
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percent of recovery expected	59.52%