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Dispositions
12 Months Ended
Dec. 31, 2015
Discontinued Operations and Disposal Groups [Abstract]  
Dispositions
Dispositions
On October 7, 2015, the Company sold certain assets related to the Assurant Specialty Property’s automobile title administration services business for cash consideration of $19,600. The Company recognized a gain on sale of $16,773 in the fourth quarter 2015, which is classified in fees and other income on the Consolidated Statements of Operations.
On October 1, 2015, the Company completed the sale of Assurant Health’s supplemental and small-group self-funded lines of business and certain assets to National General Holdings Corp. ("National General"), for cash consideration of $14,000, consisting primarily of a ceding commission. Since the form of sale did not discharge the Company’s primary liability to the insureds, a $5,336 gain on the disposal of the small-group self-funded business was deferred and reported as a liability as of the date of sale. The liability is decreased and recognized as revenue over the estimated life of contract terms. The Company will review and evaluate the estimates affecting the deferred gain annually or when significant information affecting the estimates becomes known to the Company, and will adjust the revenue recognized accordingly. Losses resulting from coinsurance transactions are recognized immediately, thus in the fourth quarter 2015 the Company recognized a loss of $11,587, primarily related to the write-off of deferred acquisition costs, on the sale of the supplemental business. The loss on sale is classified in underwriting, general and administrative expenses on the Consolidated Statements of Operations. In the third quarter of 2015, the Company recognized a tax benefit related to the sale of these legal entities. See Note 8 for more information on the tax benefit.
On September 9, 2015, the Company entered into a Master Transaction Agreement with Sun Life Assurance Company of Canada, a subsidiary of Sun Life Financial Inc., to sell its Assurant Employee Benefits segment for cash consideration of approximately $940,000 consisting primarily of a ceding commission. The sale structure includes the following: coinsurance agreements, with related trust accounts, for the insurance business; stock sale for certain legal entities; administrative agreement for certain non-insurance contracts; and asset sale of certain software and fixed assets. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the first quarter of 2016. The assets and liabilities related to the coinsurance agreements do not qualify as held for sale. The sale of the legal entities and other non-insurance assets and liabilities meets the criteria for held for sale accounting as of December 31, 2015.
As of December 31, 2015, the divested legal entities and other non-insurance assets and liabilities had assets of $83,004 (primarily consisting of $35,920 of investments and cash and cash equivalents, $17,312 of premiums and accounts receivable, $19,368 of property and equipment, and $8,674 of other intangible assets) and liabilities of $14,923 (primarily consisting of $13,622 of accounts payable and other liabilities). These assets and liabilities are classified as held for sale and are included in other assets and accounts payable and other liabilities in the Company’s Consolidated Balance Sheets, respectively.
In January 2015, the Company completed the sale of its general agency business and primary insurance carrier, American Reliable Insurance Company (“ARIC”), to Global Indemnity Group, Inc., a subsidiary of Global Indemnity plc, for $117,860 in net cash consideration. The business was part of the Assurant Specialty Property segment and offers specialty personal lines and agricultural insurance through general and independent agents. The sale price was based on the GAAP book value of the business from June 30, 2014 adjusted as of January 1, 2015. In accordance with held for sale accounting, the Company recorded a loss of $21,526 for the period ended December 31, 2014. Upon final settlement, the Company recorded gains (losses) of $5,284 and $(4,164) for the three months ended March 31, 2015 and June 30, 2015, respectively. The $1,120 net gain recorded on the sale is classified in underwriting, general and administrative expenses on the Consolidated Statements of Operations.
As of December 31, 2014, the divested business had assets, excluding goodwill, of $441,942 (primarily consisting of $199,097 fixed maturity securities, $48,695 cash and cash equivalents, $26,186 premiums and accounts receivable, $105,603 reinsurance recoverables and $25,055 deferred acquisition costs) and liabilities of $321,820 (primarily consisting of $172,235 unearned premiums, $72,645 claims and benefits payable and $54,949 funds held under reinsurance). These assets and liabilities are classified as held for sale and are included in other assets and accounts payable and other liabilities in the Company’s Consolidated Balance Sheets, respectively. The loss associated with the divested business of $21,526 includes a $15,451 goodwill write-off and is classified in underwriting, general and administrative expenses on the Consolidated Statements of Operations.