Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value for Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013. The amounts presented below for Collateral held/pledged under securities agreements, Other investments, Cash equivalents, Other assets, Assets and Liabilities held in separate accounts and Other liabilities differ from the amounts presented in the consolidated balance sheets because only certain investments or certain assets and liabilities within these line items are measured at estimated fair value. Other investments are comprised of investments in the Assurant Investment Plan, American Security Insurance Company Investment Plan, Assurant Deferred Compensation Plan, a modified coinsurance arrangement and other derivatives. Other liabilities are comprised of investments in the Assurant Investment Plan, contingent consideration related to a business combination and other derivatives. The fair value amount and the majority of the associated levels presented for Other investments and Assets and Liabilities held in separate accounts are received directly from third parties.



	September 30, 2014
	Total		Level 1			Level 2			Level 3
Financial Assets
Fixed maturity securities:
United States Government and government agencies and authorities	$	177,408	$	—		$	177,408		$	—
State, municipalities and political subdivisions	830,367		—			830,367			—
Foreign governments	668,356		705			667,651			—
Asset-backed	5,758		—			5,758			—
Commercial mortgage-backed	58,061		—			57,608			453
Residential mortgage-backed	997,605		—			997,605			—
Corporate	8,886,454		—			8,771,973			114,481
Equity securities:
Common stocks	34,823		34,139			684			—
Non-redeemable preferred stocks	486,884		—			482,839			4,045
Short-term investments	465,295		392,642		b	72,653		c	—
Collateral held/pledged under securities agreements	74,976		66,971		b	8,005		c	—
Other investments	268,842		58,021		a	208,234		c	2,587		d
Cash equivalents	821,233		818,528		b	2,705		c	—
Other assets	1,735		—			755		f	980		e
Assets held in separate accounts	1,820,241		1,639,251		a	180,990		c	—
Total financial assets	$	15,598,038	$	3,010,257		$	12,465,235		$	122,546

Financial Liabilities
Other liabilities	$	86,155	$	58,021	a	$	34	f	$	28,100	f
Liabilities related to separate accounts	1,820,241		1,639,251		a	180,990		c	—
Total financial liabilities	$	1,906,396	$	1,697,272		$	181,024		$	28,100



	December 31, 2013
	Total		Level 1			Level 2			Level 3
Financial Assets
Fixed maturity securities:
United States Government and government agencies and authorities	$	410,656	$	—		$	410,656		$	—
State, municipalities and political subdivisions	835,152		—			812,495			22,657
Foreign governments	675,421		789			657,775			16,857
Asset-backed	6,174		—			6,174			—
Commercial mortgage-backed	60,362		—			59,764			598
Residential mortgage-backed	947,904		—			943,737			4,167
Corporate	8,356,206		—			8,240,862			115,344
Equity securities:
Common stocks	29,232		28,548			684			—
Non-redeemable preferred stocks	429,126		—			421,616			7,510
Short-term investments	470,458		273,518		b	196,940		c	—
Collateral held/pledged under securities agreements	74,212		67,202		b	7,010		c	—
Other investments	246,748		66,659		a	175,918		c	4,171		d
Cash equivalents	1,233,701		967,372		b	266,329		c	—
Other assets	3,726		—			1,235		f	2,491		e
Assets held in separate accounts	1,887,988		1,696,811		a	191,177		c	—
Total financial assets	$	15,667,066	$	3,100,899		$	12,392,372		$	173,795

Financial Liabilities
Other liabilities	$	106,992	$	54,794	a	$	31,868	g	$	20,330	f
Liabilities related to separate accounts	1,887,988		1,696,811		a	191,177		c	—
Total financial liabilities	$	1,994,980	$	1,751,605		$	223,045		$	20,330


a.	Mainly includes mutual funds.


b.	Mainly includes money market funds.


c.	Mainly includes fixed maturity securities.


d.	Mainly includes fixed maturity securities and other derivatives.


e.	Mainly includes the Consumer Price Index Cap Derivatives (“CPI Caps”).


f.	Mainly includes other derivatives.


g.	Mainly includes contingent consideration liability related to a business combination.

Change in Balance Sheet Carrying Value Associated with Level 3 Financial Assets and Liabilities Carried at Fair Value

The following tables summarize the change in balance sheet carrying value associated with Level 3 financial assets and liabilities carried at fair value during the three and nine months ended September 30, 2014 and 2013:



	Three Months Ended September 30, 2014
	Balance, beginning of period			Total gains (losses) (realized/ unrealized) included in earnings (1)			Net unrealized (losses) gains included in other comprehensive income (2)			Purchases		Sales			Transfers in (3)		Transfers out (3)			Balance, end of period
Financial Assets
Fixed Maturity Securities
Commercial mortgage- backed	$	503		$	—		$	(5	)	$	—	$	(45	)	$	—	$	—		$	453
Corporate	116,827			1,684			(1,840		)	9,637		(3,325		)	1,515		(10,017		)	114,481
Equity Securities
Non-redeemable preferred stocks	4,099			(1		)	(53		)	—		—			—		—			4,045
Other investments	2,615			(437		)	2			439		(32		)	—		—			2,587
Other assets	2,268			(1,288		)	—			—		—			—		—			980

Financial Liabilities
Other liabilities	(23,160		)	(4,940		)	—			—		—			—		—			(28,100		)
Total level 3 assets and liabilities	$	103,152		$	(4,982	)	$	(1,896	)	$	10,076	$	(3,402	)	$	1,515	$	(10,017	)	$	94,446



	Three Months Ended September 30, 2013
	Balance, beginning of period			Total (losses) gains (realized/ unrealized) included in earnings (1)			Net unrealized (losses) gains included in other comprehensive income (2)			Purchases			Sales			Transfers in (3)		Transfers out (3)			Balance, end of period
Financial Assets
Fixed Maturity Securities
United States Government and government agencies and authorities	$	84		$	—		$	—		$	—		$	(84	)	$	—	$	—		$	—
Foreign governments	21,032			(2		)	(433		)	—			—			—		—			20,597
Commercial mortgage- backed	683			—			—			—			(42		)	—		—			641
Residential mortgage- backed	20,326			(18		)	64			—			(583		)	—		(9,004		)	10,785
Corporate	133,623			109			(2,070		)	—			(1,543		)	—		(6,965		)	123,154
Equity Securities
Non-redeemable preferred stocks	2,301			—			289			—			—			3,527		—			6,117
Other investments	10,601			85			693			—			(636		)	—		—			10,743
Other assets	2,963			(217		)	—			—			—			—		—			2,746

Financial Liabilities
Other liabilities	(1,590		)	(589		)	—			(1,897		)	—			—		—			(4,076		)
Total level 3 assets and liabilities	$	190,023		$	(632	)	$	(1,457	)	$	(1,897	)	$	(2,888	)	$	3,527	$	(15,969	)	$	170,707



	Nine Months Ended September 30, 2014
	Balance, beginning of period			Total (losses) gains (realized/ unrealized) included in earnings (1)			Net unrealized gains (losses) included in other comprehensive income (2)			Purchases			Sales			Transfers in (3)		Transfers out (3)			Balance, end of period
Financial Assets
Fixed Maturity Securities
States, municipalities and political subdivisions	$	22,657		$	—		$	—		$	—		$	—		$	—	$	(22,657	)	$	—
Foreign governments	16,857			(2		)	18			—			—			—		(16,873		)	—
Commercial mortgage- backed	598			—			(14		)	—			(131		)	—		—			453
Residential mortgage- backed	4,167			—			—			—			—			—		(4,167		)	—
Corporate	115,344			1,739			2,286			19,578			(8,608		)	1,515		(17,373		)	114,481
Equity Securities
Non-redeemable preferred stocks	7,510			327			(186		)	—			(1,830		)	—		(1,776		)	4,045
Other investments	4,171			(1,952		)	11			439			(82		)	—		—			2,587
Other assets	2,491			(1,511		)	—			—			—			—		—			980
Financial Liabilities
Other liabilities	(20,330		)	(3,770		)	—			(4,000		)	—			—		—			(28,100		)
Total level 3 assets and liabilities	$	153,465		$	(5,169	)	$	2,115		$	16,017		$	(10,651	)	$	1,515	$	(62,846	)	$	94,446



	Nine Months Ended September 30, 2013
	Balance, beginning of period			Total (losses) gains (realized/ unrealized) included in earnings (1)			Net unrealized (losses) gains included in other comprehensive income (2)			Purchases			Sales			Transfers in (3)		Transfers out (3)			Balance, end of period
Financial Assets
Fixed Maturity Securities
United States Government and government agencies and authorities	$	4,175		$	—		$	(3	)	$	—		$	(4,172	)	$	—	$	—		$	—
Foreign governments	23,097			(4		)	(2,496		)	—			—			—		—			20,597
Commercial mortgage- backed	1,774			20			(30		)	—			(1,123		)	—		—			641
Residential mortgage- backed	8,211			(31		)	(1,145		)	29,938			(1,326		)	—		(24,862		)	10,785
Corporate	158,003			(390		)	(4,000		)	5,325			(25,045		)	4,997		(15,736		)	123,154
Equity Securities
Non-redeemable preferred stocks	14			12			309			4,308			(2,040		)	3,527		(13		)	6,117
Other investments	11,327			(813		)	1,275			8			(1,054		)	—		—			10,743
Other assets	5,886			(3,140		)	—			—			—			—		—			2,746
Financial Liabilities
Other liabilities	(2,560		)	381			—			(1,897		)	—			—		—			(4,076		)
Total level 3 assets and liabilities	$	209,927		$	(3,965	)	$	(6,090	)	$	37,682		$	(34,760	)	$	8,524	$	(40,611	)	$	170,707


(1)	Included as part of net realized gains on investments in the consolidated statement of operations.


(2)	Included as part of change in unrealized gains on securities in the consolidated statement of comprehensive income.


(3)	Transfers are primarily attributable to changes in the availability of observable market information and re-evaluation of the observability of pricing inputs.

Carrying Value and Fair Value of the Financial Instruments that are not recognized or are not Carried at Fair Value

The following tables disclose the carrying value, fair value amount and hierarchy level of the financial instruments that are not recognized or are not carried at fair value in the consolidated balance sheets:



	September 30, 2014
			Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets
Commercial mortgage loans on real estate	$	1,253,424	$	1,434,289	$	—	$	—	$	1,434,289
Policy loans	48,979		48,979		48,979		—		—
Total financial assets	$	1,302,403	$	1,483,268	$	48,979	$	—	$	1,434,289
Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	766,039	$	787,947	$	—	$	—	$	787,947
Funds withheld under reinsurance	78,707		78,707		78,707		—		—
Debt	1,171,005		1,273,705		—		1,273,705		—
Obligations under securities agreements	95,973		95,973		95,973		—		—
Total financial liabilities	$	2,111,724	$	2,236,332	$	174,680	$	1,273,705	$	787,947

	December 31, 2013
			Fair Value
	Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets
Commercial mortgage loans on real estate	$	1,287,032	$	1,444,974	$	—	$	—	$	1,444,974
Policy loans	51,678		51,678		51,678		—		—
Total financial assets	$	1,338,710	$	1,496,652	$	51,678	$	—	$	1,444,974
Financial Liabilities
Policy reserves under investment products (Individual and group annuities, subject to discretionary withdrawal) (1)	$	809,628	$	808,734	—		—		$	808,734
Funds withheld under reinsurance	76,778		76,778		76,778		—		—
Debt	1,638,118		1,656,588		—		1,656,588		—
Obligations under securities agreements	95,206		95,206		95,206		—		—
Total financial liabilities	$	2,619,730	$	2,637,306	$	171,984	$	1,656,588	$	808,734


(1)	Only the fair value of the Company’s policy reserves for investment-type contracts (those without significant mortality or morbidity risk) are reflected in the table above.