Cash and Cash Equivalents

3 Months Ended

Mar. 31, 2013

Cash, Cash Equivalents, and Short-term Investments [Abstract]

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include cash balances and all highly liquid investments with initial maturities of three months or less.  Short-term investments include certificates of deposit, money market funds and highly liquid debt instruments purchased with initial maturities in excess of three months but less than one year and are carried at amortized cost, which approximates fair value.

The Company is required to hold £77 million of operating funds in the U.K. as required by the Financial Conduct Authority, which were included in Short-term investments.  These operating funds, when translated to U.S. dollars, were $117 million and $124 million at March 31, 2013 and December 31, 2012, respectively.  Cash and cash equivalents included restricted balances of $153 million and $76 million at March 31, 2013 and December 31, 2012 respectively. The increase in restricted balances is due to a short-term funding requirement for a catastrophe bond that was in place on March 31, 2013 and settled in early April 2013, after which the requirement was lifted.