Summary of Significant Accounting Policies (Tables)
|
12 Months Ended |
Dec. 31, 2015 |
Summary of Significant Accounting Policies [Abstract] |
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Consolidation, Subsidiary, Effects of Changes |
In consolidating the statutory financial statements of its insurance subsidiaries, the Company has therefore made necessary adjustments to conform their accounts with GAAP. The following table reflects a summary of all such adjustments: | | | | | | | | | | | | | | | | | | | | | | Shareholders' Equity | | Net Income (Loss) | | December 31, | | Years Ended December 31, | | 2015 | | 2014 | | 2015 | | 2014 | | 2013 | Statutory totals of insurance | | | | | | | | | | company subsidiaries (a): | | | | | | | | | | General | $ | 3,345.4 |
| | $ | 3,288.4 |
| | $ | 245.1 |
| | $ | 304.5 |
| | $ | 314.4 |
| Title | 481.4 |
| | 459.4 |
| | 117.7 |
| | 89.1 |
| | 88.7 |
| RFIG Run-off | 53.2 |
| | 64.3 |
| | 89.9 |
| | 127.4 |
| | 125.2 |
| Life & Accident | 35.6 |
| | 57.7 |
| | (.2 | ) | | (.1 | ) | | 3.6 |
| Sub-total | 3,915.6 |
| | 3,869.8 |
| | 452.5 |
| | 520.9 |
| | 531.9 |
| GAAP totals of non-insurance company | | | | | | | | | | subsidiaries and consolidation adjustments | 153.9 |
| | 32.5 |
| | 12.2 |
| | (66.4 | ) | | 23.2 |
| Unadjusted totals | 4,069.5 |
| | 3,902.3 |
| | 464.6 |
| | 454.4 |
| | 555.1 |
| Adjustments to conform to GAAP statements: | | | | | | | | | | Deferred policy acquisition costs | 163.6 |
| | 160.5 |
| | 3.3 |
| | 1.4 |
| | .9 |
| Fair value of fixed maturity securities | 95.5 |
| | 298.5 |
| | — |
| | — |
| | — |
| Non-admitted assets | 77.9 |
| | 81.8 |
| | — |
| | — |
| | — |
| Deferred income taxes | (41.6 | ) | | (111.9 | ) | | (22.4 | ) | | (39.3 | ) | | (79.5 | ) | Mortgage contingency reserves | 265.8 |
| | 167.8 |
| | — |
| | — |
| | — |
| Title insurance premium reserves | 468.2 |
| | 441.5 |
| | 26.6 |
| | 8.9 |
| | 42.1 |
| Loss reserves | (504.3 | ) | | (453.9 | ) | | (50.3 | ) | | (21.3 | ) | | (71.8 | ) | Surplus notes | (732.5 | ) | | (582.5 | ) | | — |
| | — |
| | — |
| Sundry adjustments | 18.1 |
| | 19.7 |
| | .2 |
| | 5.1 |
| | .9 |
| Total adjustments | (189.0 | ) | | 21.5 |
| | (42.4 | ) | | (44.9 | ) | | (107.3 | ) | Consolidated GAAP totals | $ | 3,880.8 |
| | $ | 3,924.0 |
| | $ | 422.1 |
| | $ | 409.7 |
| | $ | 447.8 |
|
| | (a) | The insurance laws of the respective states in which the Company’s insurance subsidiaries are incorporated prescribe minimum capital and surplus requirements for the lines of business they are licensed to write. For domestic property and casualty and life and accident insurance companies the National Association of Insurance Commissioners also prescribes risk-based capital ("RBC") requirements. The RBC is a measure of statutory capital in relationship to a formula-driven definition of risk relative to a company’s balance sheet and mix of business. The combined RBC ratio of our primary General insurance subsidiaries was 636% and 692% of the company action level RBC at December 31, 2015 and 2014, respectively. The minimum capital requirements for the Company’s Title Insurance subsidiaries are established by statute in the respective states of domicile. The minimum regulatory capital requirements are not significant in relationship to the recorded statutory capital of the Company’s Title and Life & Accident insurance subsidiaries. At December 31, 2015 and 2014 each of the Company’s General, Title, and Life and Accident insurance subsidiaries exceeded the minimum statutory capital and surplus requirements. Refer to Note 1(s) - Regulatory Matters for a discussion regarding the RFIG Run-off group. |
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Amortized Cost and Estimated Fair Values Of Fixed Maturities |
The amortized cost and estimated fair values by type and contractual maturity of fixed maturity securities are shown in the following tables. Expected maturities will differ from contractual maturities since borrowers may have the right to call or repay obligations with or without call or prepayment penalties. | | | | | | | | | | | | | | | | | | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Estimated Fair Value | Fixed Maturity Securities by Type: | | | | | | | | December 31, 2015: | | | | | | | | Available for sale: | | | | | | | | U.S. & Canadian Governments | $ | 1,269.5 |
| | $ | 18.9 |
| | $ | 3.6 |
| | $ | 1,284.9 |
| Corporate | 6,879.9 |
| | 166.8 |
| | 150.2 |
| | 6,896.5 |
| | $ | 8,149.4 |
| | $ | 185.8 |
| | $ | 153.8 |
| | $ | 8,181.5 |
| | | | | | | | | Held to maturity: | | | | | | | | Tax-exempt | $ | 355.8 |
| | $ | 4.0 |
| | $ | .1 |
| | $ | 359.7 |
| | | | | | | | | December 31, 2014: | | | | | | | | Available for sale: | | | | | | | | U.S. & Canadian Governments | $ | 1,116.4 |
| | $ | 31.8 |
| | $ | 2.3 |
| | $ | 1,145.9 |
| Tax-exempt | 50.0 |
| | 1.5 |
| | .2 |
| | 51.4 |
| Corporate | 6,960.0 |
| | 289.6 |
| | 29.8 |
| | 7,219.9 |
| | $ | 8,126.5 |
| | $ | 323.0 |
| | $ | 32.3 |
| | $ | 8,417.2 |
|
|
Amortized Cost and Estimated Fair Values Of Fixed Maturities By Contractual Maturities |
| | | | | | | | | | Amortized Cost | | Estimated Fair Value | Fixed Maturity Securities Stratified by Contractual Maturity at December 31, 2015: | | | | Available for sale: | | | | Due in one year or less | $ | 841.2 |
| | $ | 847.3 |
| Due after one year through five years | 3,468.4 |
| | 3,571.9 |
| Due after five years through ten years | 3,663.6 |
| | 3,586.5 |
| Due after ten years | 176.1 |
| | 175.6 |
| | $ | 8,149.4 |
| | $ | 8,181.5 |
| Held to maturity: | | | | Due in one year or less | $ | — |
| | $ | — |
| Due after one year through five years | — |
| | — |
| Due after five years through ten years | 334.9 |
| | 338.6 |
| Due after ten years | 20.8 |
| | 21.1 |
| | $ | 355.8 |
| | $ | 359.7 |
| | | | |
|
Equity Securities Reflecting Reported Adjusted Cost, Net Of OTTI |
A summary of the Company's equity securities follows: | | | | | | | | | | | | | | | | | Equity Securities: | Adjusted Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Estimated Fair Value | December 31, 2015 | $ | 1,826.4 |
| | $ | 266.7 |
| | $ | 105.3 |
| | $ | 1,987.8 |
| December 31, 2014 | $ | 1,726.5 |
| | $ | 309.1 |
| | $ | 23.9 |
| | $ | 2,011.7 |
|
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Gross Unrealized Losses and Fair Value, Aggregated |
The following table reflects the Company's gross unrealized losses and fair value, aggregated by category and the length of time that individual available for sale and held to maturity securities have been in an unrealized loss position. Fair value and issuer's cost comparisons follow: | | | | | | | | | | | | | | | | | | | | | | | | | | 12 Months or Less | | Greater than 12 Months | | Total | | Fair Value | | Unrealized Losses | | Fair Value | | Unrealized Losses | | Fair Value | | Unrealized Losses | December 31, 2015: | | | | | | | | | | | | Fixed Maturity Securities: | | | | | | | | | | | | U.S. & Canadian Governments | $ | 363.3 |
| | $ | 2.8 |
| | $ | 59.2 |
| | $ | .7 |
| | $ | 422.6 |
| | $ | 3.6 |
| Tax-exempt | 49.5 |
| | .1 |
| | — |
| | — |
| | 49.5 |
| | .1 |
| Corporate | 2,214.5 |
| | 100.0 |
| | 336.4 |
| | 50.2 |
| | 2,550.9 |
| | 150.2 |
| Subtotal | 2,627.4 |
| | 103.0 |
| | 395.7 |
| | 50.9 |
| | 3,023.1 |
| | 154.0 |
| Equity Securities | 502.1 |
| | 87.3 |
| | 31.3 |
| | 17.9 |
| | 533.4 |
| | 105.3 |
| Total | $ | 3,129.5 |
| | $ | 190.4 |
| | $ | 427.0 |
| | $ | 68.9 |
| | $ | 3,556.6 |
| | $ | 259.3 |
| | | | | | | | | | | | | December 31, 2014: | | | | | | | | | | | | Fixed Maturity Securities: | | | | | | | | | | | | U.S. & Canadian Governments | $ | 47.7 |
| | $ | — |
| | $ | 144.9 |
| | $ | 2.2 |
| | $ | 192.6 |
| | $ | 2.3 |
| Tax-exempt | 1.6 |
| | — |
| | 6.7 |
| | .1 |
| | 8.4 |
| | .2 |
| Corporate | 750.8 |
| | 18.4 |
| | 505.8 |
| | 11.3 |
| | 1,256.6 |
| | 29.8 |
| Subtotal | 800.2 |
| | 18.6 |
| | 657.5 |
| | 13.7 |
| | 1,457.7 |
| | 32.3 |
| Equity Securities | 384.1 |
| | 23.9 |
| | — |
| | — |
| | 384.1 |
| | 23.9 |
| Total | $ | 1,184.3 |
| | $ | 42.6 |
| | $ | 657.5 |
| | $ | 13.7 |
| | $ | 1,841.8 |
| | $ | 56.3 |
|
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Fair Value, Assets Measured on Recurring Basis |
The following tables show a summary of the fair value of financial assets segregated among the various input levels described above: | | | | | | | | | | | | | | | | | | | | Fair Value Measurements | As of December 31, 2015: | | Level 1 | | Level 2 | | Level 3 | | Total | Available for sale: | | | | | | | | | Fixed maturity securities: | | | | | | | | | U.S. & Canadian Governments | | $ | 606.6 |
| | $ | 678.2 |
| | $ | — |
| | $ | 1,284.9 |
| Corporate | | — |
| | 6,886.0 |
| | 10.5 |
| | 6,896.5 |
| Equity securities | | 1,985.8 |
| | — |
| | 2.0 |
| | 1,987.8 |
| Short-term investments | | 669.4 |
| | — |
| | — |
| | 669.4 |
| Held to maturity: | | | | | | | | | Fixed maturity securities: | | | | | | | | | Tax-exempt | | $ | — |
| | $ | 359.7 |
| | $ | — |
| | $ | 359.7 |
| | | | | | | | | | As of December 31, 2014: | | | | | | | | | Available for sale: | | | | | | | | | Fixed maturity securities: | | | | | | | | | U.S. & Canadian Governments | | $ | 472.0 |
| | $ | 673.8 |
| | $ | — |
| | $ | 1,145.9 |
| Tax-exempt | | — |
| | 51.4 |
| | — |
| | 51.4 |
| Corporate | | — |
| | 7,209.4 |
| | 10.5 |
| | 7,219.9 |
| Equity securities | | 2,009.8 |
| | — |
| | 1.9 |
| | 2,011.7 |
| Short-term investments | | $ | 605.8 |
| | $ | — |
| | $ | 3.6 |
| | $ | 609.4 |
|
|
Investment Income |
The following table reflects the composition of net investment income, net realized gains or losses, and the net change in unrealized investment gains or losses for each of the years shown. | | | | | | | | | | | | | | Years Ended December 31: | | 2015 | | 2014 | | 2013 | Investment income from: | | | | | | | Fixed maturity securities | | $ | 296.4 |
| | $ | 296.0 |
| | $ | 298.7 |
| Equity securities | | 91.0 |
| | 49.3 |
| | 21.2 |
| Short-term investments | | .8 |
| | .8 |
| | 1.1 |
| Other sources | | 3.7 |
| | 3.0 |
| | 2.6 |
| Gross investment income | | 392.1 |
| | 349.2 |
| | 323.7 |
| Investment expenses (a) | | 3.4 |
| | 3.7 |
| | 4.9 |
| Net investment income | | $ | 388.6 |
| | $ | 345.5 |
| | $ | 318.7 |
| | | | | | | | Realized gains (losses) on: | | | | | | | Fixed maturity securities: | | | | | | | Gains | | $ | 17.2 |
| | $ | 32.1 |
| | $ | 9.9 |
| Losses | | (.9 | ) | | (5.0 | ) | | (8.2 | ) | Net | | 16.3 |
| | 27.0 |
| | 1.7 |
| Equity securities: | | | | | | | Gains | | 96.2 |
| | 247.2 |
| | 142.6 |
| Losses | | (20.9 | ) | | (2.3 | ) | | — |
| Net | | 75.3 |
| | 244.9 |
| | 142.5 |
| Other long-term investments, net | | (.3 | ) | | .3 |
| | 3.7 |
| Total realized gains (losses) | | 91.3 |
| | 272.3 |
| | 148.1 |
| Income taxes (credits)(b) | | 31.9 |
| | 95.3 |
| | 51.8 |
| Net realized gains (losses) | | $ | 59.3 |
| | $ | 177.0 |
| | $ | 96.2 |
| | | | | | | | Changes in unrealized investment gains (losses) on: | | | | | | | Fixed maturity securities | | $ | (256.1 | ) | | $ | 55.1 |
| | $ | (337.9 | ) | Less: Deferred income taxes (credits) | | (89.5 | ) | | 19.2 |
| | (117.9 | ) | | | (166.6 | ) | | 35.9 |
| | (219.9 | ) | | | | | | | | Equity securities & other long-term investments | | (126.5 | ) | | (86.8 | ) | | 82.6 |
| Less: Deferred income taxes (credits) | | (44.2 | ) | | (30.3 | ) | | 28.9 |
| | | (82.2 | ) | | (56.4 | ) | | 53.7 |
| Net changes in unrealized investment gains (losses) | | $ | (248.9 | ) | | $ | (20.4 | ) | | $ | (166.2 | ) |
__________
| | (a) | Investment expenses consist of personnel costs and investment management and custody service fees, as well as interest incurred on funds held of $.3, $.4 and $1.7 for the years ended December 31, 2015, 2014 and 2013, respectively. |
| | (b) | Reflects primarily the combination of fully taxable realized investment gains or losses and judgments about the recoverability of deferred tax assets. |
|
Capitalization of Deferred Policy Acquisition Costs |
The following table shows a reconciliation of deferred acquisition costs between succeeding balance sheet dates. | | | | | | | | | | | | | | Years Ended December 31: | | 2015 | | 2014 | | 2013 | Deferred, beginning of year | | $ | 230.8 |
| | $ | 192.6 |
| | $ | 165.5 |
| Acquisition costs deferred: | | | | | | | Commissions - net of reinsurance | | 267.3 |
| | 258.9 |
| | 222.7 |
| Premium taxes | | 107.3 |
| | 102.3 |
| | 93.8 |
| Salaries and other marketing expenses | | 46.0 |
| | 41.4 |
| | 42.5 |
| Sub-total | | 420.7 |
| | 402.7 |
| | 359.1 |
| Amortization charged to income | | (396.1 | ) | | (364.6 | ) | | (331.9 | ) | Change for the year | | 24.6 |
| | 38.1 |
| | 27.1 |
| Deferred, end of year | | $ | 255.4 |
| | $ | 230.8 |
| | $ | 192.6 |
|
|
Unearned Premiums |
At December 31, 2015 and 2014, unearned premiums consisted of the following: | | | | | | | | | | As of December 31: | | 2015 | | 2014 | General Insurance Group | | $ | 1,735.0 |
| | $ | 1,606.5 |
| RFIG Run-off Business | | 13.7 |
| | 21.1 |
| Total | | $ | 1,748.7 |
| | $ | 1,627.7 |
|
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Schedule of Effects of Coverage Rescissions and Claim Denials on Loss Reserves |
The table below shows the estimated effects of coverage rescissions and claim denials on loss reserves and settled and incurred losses. | | | | | | | | | | | | | | 2015 | | 2014 | | 2013 | Estimated reduction in beginning reserve | $ | 79.3 |
| | $ | 115.2 |
| | $ | 174.9 |
| Total incurred claims and settlement expenses reduced | | | | | | (increased) by changes in estimated rescissions: | | | | | | Current year | 18.8 |
| | 47.1 |
| | 80.5 |
| Prior year | (17.6 | ) | | 10.4 |
| | 71.9 |
| Sub-total | 1.2 |
| | 57.6 |
| | 152.5 |
| Estimated rescission reduction in settled claims | (33.0 | ) | | (93.5 | ) | | (212.2 | ) | Estimated reduction in ending reserve | $ | 47.5 |
| | $ | 79.3 |
| | $ | 115.2 |
|
|
Schedule of Changes in Aggregate Reserves for the Company's Losses, Claims and Settlement Expenses |
The following table shows an analysis of changes in aggregate reserves for the Company's losses, claims and settlement expenses for each of the years shown. | | | | | | | | | | | | | Years Ended December 31: | 2015 | | 2014 | | 2013 | Gross reserves at beginning of year | $ | 9,122.0 |
| | $ | 9,433.5 |
| | $ | 9,303.3 |
| Less: reinsurance losses recoverable | 3,006.6 |
| | 2,836.7 |
| | 2,847.0 |
| Net reserves at beginning of year: | | | | | | General Insurance | 4,722.0 |
| | 4,334.1 |
| | 4,048.9 |
| Title Insurance | 505.4 |
| | 471.5 |
| | 396.4 |
| RFIG Run-off | 870.2 |
| | 1,774.2 |
| | 1,994.8 |
| Other | 17.5 |
| | 16.8 |
| | 15.9 |
| Sub-total | 6,115.3 |
| | 6,596.8 |
| | 6,456.2 |
| Incurred claims and claim adjustment expenses: | | | | | | Provisions for insured events of the current year: | | | | | | General Insurance | 2,081.6 |
| | 2,009.8 |
| | 1,857.9 |
| Title Insurance | 112.1 |
| | 105.5 |
| | 137.2 |
| RFIG Run-off (a) | 323.7 |
| | 323.1 |
| | 487.5 |
| Other | 25.2 |
| | 44.5 |
| | 41.0 |
| Sub-total | 2,542.8 |
| | 2,483.0 |
| | 2,523.7 |
| Change in provision for insured events of prior years: | | | | | | General Insurance | 43.9 |
| | 107.9 |
| | (23.7 | ) | Title Insurance | (12.8 | ) | | (13.6 | ) | | (3.1 | ) | RFIG Run-off (a) | (130.1 | ) | | (74.8 | ) | | (269.7 | ) | Other | (.6 | ) | | (1.5 | ) | | (2.5 | ) | Sub-total | (99.7 | ) | | 17.8 |
| | (299.1 | ) | Total incurred claims and claim adjustment expenses (a) | 2,443.0 |
| | 2,500.9 |
| | 2,224.5 |
| Payments: | | | | | | Claims and claim adjustment expenses attributable to | | | | | | insured events of the current year: | | | | | | General Insurance | 671.5 |
| | 657.0 |
| | 620.8 |
| Title Insurance | (39.9 | ) | | 4.7 |
| | 6.0 |
| RFIG Run-off (b) | 29.1 |
| | 40.6 |
| | 39.4 |
| Other | 16.9 |
| | 33.4 |
| | 29.5 |
| Sub-total | 677.6 |
| | 735.9 |
| | 695.9 |
| Claims and claim adjustment expenses attributable to | | | | | | insured events of prior years: | | | | | | General Insurance | 1,123.0 |
| | 1,072.8 |
| | 928.2 |
| Title Insurance | 63.8 |
| | 53.2 |
| | 52.8 |
| RFIG Run-off (b) | 297.9 |
| | 1,111.6 |
| | 398.9 |
| Other | 8.3 |
| | 8.7 |
| | 8.0 |
| Sub-total | 1,493.1 |
| | 2,246.5 |
| | 1,388.0 |
| Total payments (b) | 2,170.7 |
| | 2,982.4 |
| | 2,083.9 |
| Amount of reserves for unpaid claims and claim adjustment expenses | | | | | | at the end of each year, net of reinsurance losses recoverable: (c) | | | | | | General Insurance | 5,053.1 |
| | 4,722.0 |
| | 4,334.1 |
| Title Insurance | 580.8 |
| | 505.4 |
| | 471.5 |
| RFIG Run-off | 736.7 |
| | 870.2 |
| | 1,774.2 |
| Other | 16.9 |
| | 17.5 |
| | 16.8 |
| Sub-total | 6,387.6 |
| | 6,115.3 |
| | 6,596.8 |
| Reinsurance losses recoverable | 2,732.5 |
| | 3,006.6 |
| | 2,836.7 |
| Gross reserves at end of year | $ | 9,120.1 |
| | $ | 9,122.0 |
| | $ | 9,433.5 |
|
__________
Excluding the reclassification of CCI from the General Insurance to the RFIG Run-off Business segment, certain elements shown in the preceding table would have been as follows:
| | | | | | | | | | | | | | | | 2015 | | 2014 | | 2013 | | Change in provision for incurred events of prior years: | | | | | | | General Insurance | $ | 41.2 |
| | $ | 190.8 |
| | $ | (40.4 | ) | | RFIG Run-off (a) | (127.4 | ) | | (157.8 | ) | | (253.0 | ) | | | | | | | | | Payment of claim and claim adjustment expenses attributable to | | | | | | | incurred events of the current and prior years: | | | | | | | General Insurance | 1,830.1 |
| | 1,825.5 |
| | 1,597.5 |
| | RFIG Run-off (b) | $ | 291.4 |
| | $ | 1,056.5 |
| | $ | 389.8 |
|
| | (a) | In common with all other insurance lines, RFIG Run-off mortgage guaranty settled and incurred claim and claim adjustment expenses include only those costs actually or expected to be paid by the Company. As previously noted, changes in mortgage guaranty aggregate case, IBNR, and loss adjustment expense reserves shown below and entering into the determination of incurred claim costs, take into account, among a large number of variables, claim cost reductions for anticipated coverage rescissions and claims denials. |
The RFIG Run-off mortgage guaranty provision for insured events of the current year was reduced by estimated coverage rescissions and claims denials of $18.8, $47.1 and $80.5, respectively, for 2015, 2014 and 2013. The provision for insured events of prior years in 2015, 2014 and 2013 was (increased) reduced by estimated coverage rescissions and claims denials of $(17.6), $10.4 and $71.9, respectively. Prior year development was also affected in varying degrees by differences between actual claim settlements relative to expected experience and by subsequent revisions of assumptions in regards to claim frequency, severity or levels of associated claim settlement costs which result from consideration of underlying trends and expectations.
The following table reflects the changes in net reserves between succeeding balance sheet dates. | | | | | | | | | | | | | | | | 2015 | | 2014 | | 2013 | | Net reserve increase(decrease): | | | | | | | General Insurance | $ | 331.0 |
| | $ | 387.9 |
| | $ | 285.1 |
| | Title Insurance | 75.3 |
| | 33.8 |
| | 75.1 |
| | RFIG Run-off | (133.4 | ) | | (904.0 | ) | | (220.6 | ) | | Other | (.6 | ) | | .7 |
| | .9 |
| | Total | $ | 272.2 |
| | $ | (481.5 | ) | | $ | 140.6 |
|
| | (b) | Rescissions reduced the Company's settled losses by an estimated $33.0, $93.5, and $212.2 for 2015, 2014, and 2013, respectively. 2013 RFIG Run-off Business claim and claim adjustment expense payments reflect the retention of the deferred payment obligation ("DPO") within claim reserves which amounted to $551.5 as of December 31, 2013. In mid July 2014, in furtherance of a Final Order received from the NCDOI, RMIC and RMICNC processed payments of their accumulated DPO balances of approximately $657.0. Refer to Note 1(s). |
| | (c) | Year end net IBNR reserves for each segment were as follows: |
| | | | | | | | | | | | | | | | 2015 | | 2014 | | 2013 | | General Insurance | $ | 2,324.3 |
| | $ | 2,266.2 |
| | $ | 2,118.4 |
| | Title Insurance | 503.8 |
| | 432.2 |
| | 407.1 |
| | RFIG Run-off | 180.7 |
| | 138.7 |
| | 121.3 |
| | Other | 6.4 |
| | 5.7 |
| | 4.0 |
| | Total | $ | 3,015.3 |
| | $ | 2,843.0 |
| | $ | 2,651.0 |
|
|
Schedule of Effective Income Tax Rate Reconciliation |
The more significant differences, their effect on the statutory income tax rate (credit), and the resulting effective income tax rates (credits) are summarized below: | | | | | | | | | | | Years Ended December 31: | | 2015 | | 2014 | | 2013 | Statutory tax rate (credit) | | 35.0 | % | | 35.0 | % | | 35.0 | % | Tax rate increases (decreases): | | | | | | | Tax-exempt interest | | (.1 | ) | | (.2 | ) | | (.4 | ) | Dividends received exclusion | | (3.0 | ) | | (1.5 | ) | | (.6 | ) | Valuation allowance | | 1.1 |
| | — |
| | — |
| Foreign income (loss) reattribution | | (.2 | ) | | (.2 | ) | | (.2 | ) | Other items - net | | .4 |
| | (.3 | ) | | (.4 | ) | Effective tax rate (credit) | | 33.2 | % | | 32.8 | % | | 33.4 | % |
|
Schedule of Deferred Tax Assets and Liabilities |
The tax effects of temporary differences that give rise to significant portions of the Company's net deferred tax assets (liabilities) are as follows at the dates shown: | | | | | | | | | | | | | | December 31: | | 2015 | | 2014 | | 2013 | Deferred Tax Assets: | | | | | | | Losses, claims, and settlement expenses | | $ | 330.2 |
| | $ | 299.9 |
| | $ | 286.9 |
| Pension and deferred compensation plans | | 71.1 |
| | 75.8 |
| | 51.3 |
| Impairment losses on investments | | — |
| | 3.2 |
| | 3.2 |
| Net operating loss carryforward | | 36.8 |
| | 40.2 |
| | 43.7 |
| AMT credit carryforward | | 9.6 |
| | 9.6 |
| | 9.6 |
| Other temporary differences | | 35.5 |
| | 38.4 |
| | 50.5 |
| Total deferred tax assets before valuation allowance | | 483.3 |
| | 467.2 |
| | 445.3 |
| Valuation allowance | | — |
| | (9.6 | ) | | (9.6 | ) | Total deferred tax assets | | 483.3 |
| | 457.6 |
| | 435.7 |
| Deferred Tax Liabilities: | | | | | | | Unearned premium reserves | | 44.4 |
| | 39.6 |
| | 42.7 |
| Deferred policy acquisition costs | | 84.8 |
| | 76.6 |
| | 63.1 |
| Mortgage guaranty insurers' contingency reserves | | 82.4 |
| | 53.5 |
| | 20.1 |
| Amortization of fixed maturity securities | | 5.6 |
| | 5.1 |
| | 4.9 |
| Net unrealized investment gains | | 74.9 |
| | 208.7 |
| | 220.5 |
| Title plants and records | | 4.9 |
| | 5.0 |
| | 4.9 |
| Other temporary differences | | 31.9 |
| | 31.9 |
| | 30.6 |
| Total deferred tax liabilities | | 328.9 |
| | 420.6 |
| | 387.1 |
| Net deferred tax assets (liabilities) | | $ | 154.5 |
| | $ | 37.0 |
| | $ | 48.4 |
|
|
Schedule of Goodwill |
The following table presents the components of the Company's goodwill balance: | | | | | | | | | | | | | | | | | | | | | | General | | Title | | RFIG Run-off | | Other | | Total | January 1, 2014 | $ | 116.2 |
| | $ | 44.3 |
| | $ | — |
| | $ | .1 |
| | $ | 160.7 |
| Acquisitions | — |
| | — |
| | — |
| | — |
| | — |
| Impairments | — |
| | — |
| | — |
| | — |
| | — |
| December 31, 2014 | 116.2 |
| | 44.3 |
| | — |
| | .1 |
| | 160.7 |
| Acquisitions | — |
| | — |
| | — |
| | — |
| | — |
| Impairments | — |
| | — |
| | — |
| | — |
| | — |
| December 31, 2015 | $ | 116.2 |
| | $ | 44.3 |
| | $ | — |
| | $ | .1 |
| | $ | 160.7 |
|
|
Schedule of Accumulated and Projected Benefit Obligations |
The effects of these measurements and the resulting funded status of the Plan are reflected below. | | | | | | | | | | | | | | Years Ended December 31: | | 2015 | | 2014 | | 2013 | Projected Benefit Obligation | | | | | | | Projected benefit obligation at beginning of year | | $ | 552.9 |
| | $ | 479.3 |
| | $ | 525.7 |
| Increases (decreases) during the year attributable to: | | | | | | | Service cost | | — |
| | — |
| | 9.5 |
| Interest cost | | 22.1 |
| | 23.4 |
| | 21.6 |
| Plan curtailments | | — |
| | — |
| | (26.6 | ) | Actuarial (gains) losses | | (31.0 | ) | | 68.9 |
| | (32.8 | ) | Benefits paid | | (20.2 | ) | | (18.7 | ) | | (18.1 | ) | Net increase (decrease) for the year | | (29.1 | ) | | 73.5 |
| | (46.4 | ) | Projected benefit obligation at end of year | | $ | 523.7 |
| | $ | 552.9 |
| | $ | 479.3 |
| Accumulated benefit obligation at end of year | | $ | 523.7 |
| | $ | 552.9 |
| | $ | 479.3 |
|
|
Schedule of Changes in Fair Value of Plan Assets |
| | | | | | | | | | | | | | Fair Value of Net Assets Available for Plan Benefits | | | | | | | Fair value of net assets available for plan benefits | | | | | | | At beginning of the year | | $ | 419.2 |
| | $ | 408.8 |
| | $ | 352.3 |
| Increases (decreases) during the year attributable to: | | | | | | | Actual return on plan assets | | 4.7 |
| | 19.8 |
| | 61.9 |
| Sponsor contributions | | 5.5 |
| | 9.2 |
| | 12.7 |
| Benefits paid | | (20.2 | ) | | (18.7 | ) | | (18.1 | ) | Net increase (decrease) for year | | (9.9 | ) | | 10.3 |
| | 56.5 |
| Fair value of net assets available for plan benefits | | | | | | | At end of the year | | $ | 409.2 |
| | $ | 419.2 |
| | $ | 408.8 |
|
|
Schedule of Net Funded Status [Table Text Block] |
| | | | | | | | | | | | | | Funded Status | | $ | (114.5 | ) | | $ | (133.6 | ) | | $ | (70.4 | ) | Amounts recognized in accumulated other comprehensive income | | $ | (118.2 | ) | | $ | (126.9 | ) | | $ | (48.3 | ) |
|
Schedule of Net Benefit Costs |
The components of aggregate annual net periodic pension costs consisted of the following: | | | | | | | | | | | | | | Years Ended December 31: | | 2015 | | 2014 | | 2013 | Service cost | | $ | — |
| | $ | — |
| | $ | 9.5 |
| Interest cost | | 22.1 |
| | 23.4 |
| | 21.6 |
| Curtailment loss recognized | | — |
| | — |
| | .6 |
| Expected return on plan assets | | (29.8 | ) | | (29.4 | ) | | (26.7 | ) | Recognized loss | | 2.6 |
| | — |
| | 8.8 |
| Prior service costs | | — |
| | — |
| | .1 |
| Net cost | | $ | (4.9 | ) | | $ | (6.0 | ) | | $ | 14.1 |
|
|
Schedule of Assumptions Used |
The projected benefit obligation and net periodic benefit cost for the Plan were determined using the following weighted-average assumptions: | | | | | | | | | | | | | | | | | | | Projected Benefit Obligation | | Net Periodic Benefit Cost | As of December 31: | | 2015 | | 2014 | | 2015 | | 2014 | | 2013 | Settlement discount rates | | 4.55 | % | | 4.10 | % | | 4.10 | % | | 5.00 | % | | 4.17 | % | Rates of compensation increase | | N/A |
| | N/A |
| | N/A |
| | N/A |
| | 3.22 | % | Long-term rates of return on plans' assets | | N/A |
| | N/A |
| | 7.25 | % | | 7.25 | % | | 7.56 | % |
|
Schedule of Weighted Average Asset Allocations Of Benefit Plans |
The weighted-average asset allocations of the Plan were as follows: | | | | | | | | | | | | | | Investment Policy Asset Allocation % Range Target | As of December 31: | | 2015 | | 2014 | | Equity securities: | | | | | | | Common shares of Company stock | | 12.9 | % | | 9.9 | % | | | Other | | 61.1 |
| | 61.1 |
| | | Sub-total | | 74.0 |
| | 71.0 |
| | 30% to 70% | Fixed maturity securities | | 21.4 |
| | 25.4 |
| | 30% to 70% | Other | | 4.6 |
| | 3.6 |
| | 1% to 20% | Total | | 100.0 | % | | 100.0 | % | | |
|
Schedule of Allocation of Plan Assets |
The following tables present a summary of the Plan's assets segregated among the various input levels described in Note 1(d). | | | | | | | | | | | | | | | | | | | | Fair Value Measurements | As of December 31, 2015: | | Level 1 | | Level 2 | | Level 3 | | Total | Equity securities: | | | | | | | | | Common shares of Company stock | | $ | 52.7 |
| | $ | — |
| | $ | — |
| | $ | 52.7 |
| Other | | 231.9 |
| | 18.2 |
| | — |
| | 250.2 |
| Sub-total | | 284.6 |
| | 18.2 |
| | — |
| | 302.9 |
| Fixed maturity securities | | — |
| | 87.5 |
| | — |
| | 87.5 |
| Other | | 8.7 |
| | 4.5 |
| | 5.5 |
| | 18.7 |
| Total | | $ | 293.3 |
| | $ | 110.2 |
| | $ | 5.5 |
| | $ | 409.2 |
| | | | | | | | | | As of December 31, 2014: | | | | | | | | | Equity securities: | | | | | | | | | Common shares of Company stock | | $ | 41.3 |
| | $ | — |
| | $ | — |
| | $ | 41.3 |
| Other | | 238.5 |
| | 17.4 |
| | — |
| | 256.0 |
| Sub-total | | 279.9 |
| | 17.4 |
| | — |
| | 297.4 |
| Fixed maturity securities | | — |
| | 106.3 |
| | — |
| | 106.3 |
| Other | | 6.2 |
| | 3.1 |
| | 6.0 |
| | 15.4 |
| Total | | $ | 286.2 |
| | $ | 126.9 |
| | $ | 6.0 |
| | $ | 419.2 |
|
|
Schedule of Profit Sharing and Other Incentive Compensation Programs |
The Company has a number of profit sharing and other incentive compensation programs for the benefit of a substantial number of its employees. The costs related to such programs are summarized below: | | | | | | | | | | | | | | Years Ended December 31: | | 2015 | | 2014 | | 2013 | Employees Savings and Stock Ownership Plan "ESSOP" | | $ | 9.9 |
| | $ | 9.3 |
| | $ | 7.8 |
| Other profit sharing plans | | 10.6 |
| | 10.9 |
| | 12.1 |
| Cash and deferred incentive compensation | | $ | 26.6 |
| | $ | 21.4 |
| | $ | 21.6 |
|
|
Schedule of Calculation of Numerator and Denominator in Earnings Per Share |
The following table provides a reconciliation of net income (loss) and the number of shares used in basic and diluted earnings per share calculations. | | | | | | | | | | | | | | Years Ended December 31: | | 2015 | | 2014 | | 2013 | Numerator: | | | | | | | Net income (loss) | | $ | 422.1 |
| | $ | 409.7 |
| | $ | 447.8 |
| Numerator for basic earnings per share - | | | | | | | income (loss) available to common stockholders | | 422.1 |
| | 409.7 |
| | 447.8 |
| Adjustment for interest expense incurred on | | | | | | | assumed conversion of convertible senior notes | | 14.6 |
| | 14.6 |
| | 14.6 |
| Numerator for diluted earnings per share - | | | | | | | income (loss) available to common stockholders | | | | | | | after assumed conversion of convertible senior notes | | $ | 436.7 |
| | $ | 424.3 |
| | $ | 462.4 |
| | | | | | | | Denominator: | | | | | | | Denominator for basic earnings per share - | | | | | | | weighted-average shares (a) | | 259,502,067 |
| | 258,553,662 |
| | 257,443,999 |
| Effect of dilutive securities - stock based compensation awards | | 988,091 |
| | 1,004,518 |
| | 784,080 |
| Effect of dilutive securities - convertible senior notes | | 35,598,805 |
| | 35,515,026 |
| | 35,455,956 |
| Denominator for diluted earnings per share - | | | | | | | adjusted weighted-average shares | | | | | | | and assumed conversion of convertible senior notes (a) | | 296,088,963 | | 295,073,206 |
| | 293,684,035 |
| Earnings per share: Basic | | $ | 1.63 |
| | $ | 1.58 |
| | $ | 1.74 |
| Diluted | | $ | 1.48 |
| | $ | 1.44 |
| | $ | 1.57 |
| | | | | | | | Anti-dilutive common stock equivalents | | | | | | | excluded from earning per share computations: | | | | | | | Stock based compensation awards | | 4,933,490 |
| | 6,631,196 |
| | 7,563,456 |
| Convertible senior notes | | — |
| | — |
| | — |
| Total | | 4,933,490 |
| | 6,631,196 |
| | 7,563,456 |
|
__________
(a) In calculating earnings per share, pertinent accounting rules require that common shares owned by the Company's Employee Savings and Stock Ownership Plan that are as yet unallocated to participants in the plan be excluded from the calculation. Such shares are issued and outstanding, and have the same voting and other rights applicable to all other common shares.
|
Schedule of Stock Based Compensation and Tax Benefit |
The following table presents the stock based compensation expense and income tax benefit recognized in the financial statements: | | | | | | | | | | | | | | Years Ended December 31: | | 2015 | | 2014 | | 2013 | Stock based compensation expense | | $ | 2.3 |
| | $ | 2.7 |
| | $ | 1.6 |
| Income tax benefit | | $ | .8 |
| | $ | .9 |
| | $ | .5 |
|
|
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions |
| | | | | | | | | | | 2015 | | 2014 | | 2013 | Expected volatility | .28 |
| | .33 |
| | .33 |
| Expected dividends | 5.06 | % | | 4.75 | % | | 5.99 | % | Expected term (in years) | 7 |
| | 7 |
| | 7 |
| Risk-free rate | 1.70 | % | | 2.10 | % | | 1.19 | % |
|
Schedule of Share-based Compensation, Stock Options, Activity |
A summary of stock option activity under the plan as of December 31, 2015, 2014 and 2013, and changes in outstanding options during the years then ended is presented below: | | | | | | | | | | | | | | | | | | | | | | | | | | As of and for the Years Ended December 31, | | 2015 | | 2014 | | 2013 | | Shares | | Weighted Average Exercise Price | | Shares | | Weighted Average Exercise Price | | Shares | | Weighted Average Exercise Price | Outstanding at beginning of year | 11,510,433 |
| | $ | 16.67 |
| | 12,807,272 |
| | $ | 16.97 |
| | 14,293,149 |
| | $ | 16.75 |
| Granted | 991,750 |
| | 15.26 |
| | 1,085,000 |
| | 16.06 |
| | 922,500 |
| | 12.57 |
| Exercised | 920,350 |
| | 12.14 |
| | 409,229 |
| | 11.85 |
| | 897,909 |
| | 12.22 |
| Forfeited and expired | 1,706,259 |
| | 18.69 |
| | 1,972,610 |
| | 19.26 |
| | 1,510,468 |
| | 15.01 |
| Outstanding at end of year | 9,875,574 |
| | 16.60 |
| | 11,510,433 |
| | 16.67 |
| | 12,807,272 |
| | 16.97 |
| | | | | | | | | | | | | Exercisable at end of year | 7,870,396 |
| | $ | 17.17 |
| | 9,349,180 |
| | $ | 17.44 |
| | 10,582,298 |
| | $ | 18.03 |
| | | | | | | | | | | | | Weighted average fair value of | | | | | | | | | | | | options granted during the year (a) | $ | 2.25 |
| | per share | | $ | 3.15 |
| | per share | | $ | 1.94 |
| | per share |
__________
(a) Based on the Black-Scholes option pricing model and the assumptions outlined above.
|
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding |
A summary of stock options outstanding and exercisable at December 31, 2015 follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Options Outstanding | | Options Exercisable | | | | | | | | | | Weighted - Average | | | | Weighted Average Exercise Price | Ranges of Exercise Prices | | Year(s) Of Grant | | Number Out- Standing | | Remaining Contractual Life | | Exercise Price | | Number Exercisable | | $21.36 | to | $22.35 | | 2006 | | | 1,983,100 |
| | 0.25 | | $ | 21.99 |
| | 1,983,100 |
| | $ | 21.99 |
| $21.78 | to | $23.16 | | 2007 | | | 1,877,000 |
| | 1.25 | | 21.77 |
| | 1,877,000 |
| | 21.77 |
| $7.73 | to | $12.95 | | 2008 | | | 582,200 |
| | 2.25 | | 12.92 |
| | 582,200 |
| | 12.92 |
| $10.48 | |
| | 2009 | | | 404,115 |
| | 3.25 | | 10.48 |
| | 404,115 |
| | 10.48 |
| $12.08 | |
| | 2010 | | | 458,685 |
| | 4.25 | | 12.08 |
| | 458,685 |
| | 12.08 |
| $12.33 | |
| | 2011 | | | 804,005 |
| | 5.25 | | 12.33 |
| | 804,005 |
| | 12.33 |
| $10.80 | |
| | 2012 | | | 841,058 |
| | 6.25 | | 10.80 |
| | 611,846 |
| | 10.80 |
| $12.57 | |
| | 2013 | | | 860,771 |
| | 7.25 | | 12.57 |
| | 408,352 |
| | 12.57 |
| $16.06 | |
| | 2014 | | | 1,073,390 |
| | 8.25 | | 16.06 |
| | 465,646 |
| | 16.06 |
| $15.26 | |
| | 2015 | | | 991,250 |
| | 9.25 | | 15.26 |
| | 275,447 |
| | 15.26 |
| Total | | | | | | | 9,875,574 |
| | | | $ | 16.60 |
| | 7,870,396 |
| | $ | 17.17 |
|
|
Schedule of Cash Proceeds Received from Share-based Payment Awards |
The cash received from stock option exercises, the total intrinsic value of stock options exercised, and the actual tax benefit realized for the tax deductions from option exercises are as follows: | | | | | | | | | | | | | | 2015 | | 2014 | | 2013 | Cash received from stock option exercise | $ | 11.1 |
| | $ | 4.8 |
| | $ | 10.9 |
| Intrinsic value of stock options exercised | 4.2 |
| | 1.7 |
| | 2.9 |
| Actual tax benefit realized for tax deductions from stock options exercised | $ | 1.4 |
| | $ | .6 |
| | $ | 1.1 |
|
|