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Investments (Tables)
 6 Months Ended
Mar. 31, 2013
Investments, Debt and Equity Securities [Abstract]  
Available-for-Sale Securities
The Company’s consolidated investments are summarized as follows:
 
March 31, 2013
 
Cost or Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
 
Carrying Value
 
 
 
 
 
 
 
 
 
 
Fixed-maturity securities, available-for sale
 
 
 
 
 
 
 
 
 
Asset-backed securities
$
1,388.5

 
$
30.6

 
$
(0.7
)
 
$
1,418.4

 
$
1,418.4

Commercial mortgage-backed securities
506.8

 
39.9

 
(0.5
)
 
546.2

 
546.2

Corporates
10,118.0

 
686.3

 
(13.0
)
 
10,791.3

 
10,791.3

Hybrids
438.8

 
28.1

 
—

 
466.9

 
466.9

Municipals
969.1

 
109.4

 
(0.8
)
 
1,077.7

 
1,077.7

Agency residential mortgage-backed securities
122.2

 
4.1

 
(0.3
)
 
126.0

 
126.0

Non-agency residential mortgage-backed securities
1,209.5

 
91.6

 
(2.6
)
 
1,298.5

 
1,298.5

U.S. Government
447.1

 
11.5

 
(0.1
)
 
458.5

 
458.5

Total fixed maturities
15,200.0

 
1,001.5

 
(18.0
)
 
16,183.5

 
16,183.5

Equity securities
 
 
 
 
 
 
 
 
 
Available-for-sale
247.4

 
10.2

 
(1.9
)
 
255.7

 
255.7

Held for trading
102.1

 
—

 
(44.4
)
 
57.7

 
57.7

Total equity securities
349.5

 
10.2

 
(46.3
)
 
313.4

 
313.4

Derivatives
141.8

 
124.6

 
(3.8
)
 
262.6

 
262.6

Asset-backed loans
241.6

 
—

 
—

 
241.6

 
241.6

Other invested assets
 
 
 
 
 
 
 
 
 
Policy loans and other invested assets
32.4

 
—

 
—

 
32.4

 
32.4

Total investments
$
15,965.3

 
$
1,136.3

 
$
(68.1
)
 
$
17,033.5

 
$
17,033.5


 
September 30, 2012
 
Cost or Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
 
Carrying Value
 
 
 
 
 
 
 
 
 
 
Fixed-maturity securities, available-for-sale
 
 
 
 
 
 
 
 
 
Asset-backed securities
$
1,010.9

 
$
18.6

 
$
(1.6
)
 
$
1,027.9

 
$
1,027.9

Commercial mortgage-backed securities
520.0

 
36.2

 
(2.4
)
 
553.8

 
553.8

Corporates
10,211.8

 
807.2

 
(10.0
)
 
11,009.0

 
11,009.0

Hybrids
519.0

 
18.8

 
(9.6
)
 
528.2

 
528.2

Municipals
1,083.2

 
141.9

 
(1.1
)
 
1,224.0

 
1,224.0

Agency residential mortgage-backed securities
149.5

 
5.8

 
(0.3
)
 
155.0

 
155.0

Non-agency residential mortgage-backed securities
629.1

 
35.8

 
(4.3
)
 
660.6

 
660.6

U.S. Government
917.5

 
12.9

 
—

 
930.4

 
930.4

Total fixed-maturity securities
15,041.0

 
1,077.2

 
(29.3
)
 
16,088.9

 
16,088.9

Equity securities
 
 
 
 
 
 
 
 
 
Available-for-sale
237.5

 
11.9

 
(1.3
)
 
248.1

 
248.1

Held for trading
191.8

 
—

 
(45.0
)
 
146.8

 
146.8

Total equity securities
429.3

 
11.9

 
(46.3
)
 
394.9

 
394.9

Derivatives
142.1

 
67.0

 
(8.4
)
 
200.7

 
200.7

Asset-backed loans
180.1

 
—

 
—

 
180.1

 
180.1

Other invested assets
 
 
 
 
 
 
 
 
 
U.S. Treasuries and certificate of deposit, held-to-maturity
35.0

 
—

 
—

 
35.0

 
35.0

Policy loans and other invested assets
18.8

 
—

 
—

 
18.8

 
18.8

Total other invested assets
53.8

 
—

 
—

 
53.8

 
53.8

Total investments
$
15,846.3

 
$
1,156.1

 
$
(84.0
)
 
$
16,918.4

 
$
16,918.4
Amortized Cost and Fair Value of Fixed Maturity Available-for-Sale Securities
The amortized cost and fair value of fixed maturity available-for-sale securities by contractual maturities, as applicable, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or pre-pay obligations.
 
March 31, 2013
 
Amortized Cost
 
 Fair Value
Corporate, Non-structured Hybrids, Municipal and U.S. Government securities:
 
 
 
Due in one year or less
$
615.2

 
$
619.4

Due after one year through five years
2,888.8

 
2,985.3

Due after five years through ten years
3,702.2

 
3,958.0

Due after ten years
4,683.2

 
5,144.6

Subtotal
11,889.4

 
12,707.3

Other securities which provide for periodic payments:
 
 
 
Asset-backed securities
1,388.5

 
1,418.4

Commercial-mortgage-backed securities
506.8

 
546.2

Structured hybrids
83.6

 
87.1

Agency residential mortgage-backed securities
122.2

 
126.0

Non-agency residential mortgage-backed securities
1,209.5

 
1,298.5

Total fixed maturity available-for-sale securities
$
15,200.0

 
$
16,183.5
Fair Value and Gross Unrealized Losses of Available-for-Sale-Securities
The fair value and gross unrealized losses of available-for-sale securities, aggregated by investment category, were as follows:
 
March 31, 2013
 
Less than 12 months
 
12 months or longer
 
Total
 
Fair Value
 
Gross Unrealized
Losses
 
Fair Value
 
Gross Unrealized
Losses
 
Fair Value
 
Gross Unrealized
Losses
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
Asset-backed securities
$
116.3

 
$
(0.5
)
 
$
21.8

 
$
(0.2
)
 
$
138.1

 
$
(0.7
)
Commercial-mortgage-backed securities
—

 
—

 
0.2

 
(0.5
)
 
0.2

 
(0.5
)
Corporates
1,044.4

 
(11.2
)
 
125.3

 
(1.8
)
 
1,169.7

 
(13.0
)
Equities
17.7

 
(0.7
)
 
32.2

 
(1.2
)
 
49.9

 
(1.9
)
Municipals
79.1

 
(0.8
)
 
—

 
—

 
79.1

 
(0.8
)
Agency residential mortgage-backed securities
4.9

 
(0.2
)
 
4.1

 
(0.1
)
 
9.0

 
(0.3
)
Non-agency residential mortgage-backed securities
143.4

 
(1.6
)
 
68.3

 
(1.0
)
 
211.7

 
(2.6
)
U.S. Government
20.0

 
(0.1
)
 
—

 
—

 
20.0

 
(0.1
)
Total available-for-sale securities
$
1,425.8

 
$
(15.1
)
 
$
251.9

 
$
(4.8
)
 
$
1,677.7

 
$
(19.9
)
Total number of available-for-sale securities in an unrealized loss position
 
 
213

 
 
 
51

 
 
 
264


 
September 30, 2012
 
Less than 12 months
 
12 months or longer
 
Total
 
Fair Value
 
Gross Unrealized
Losses
 
Fair Value
 
Gross Unrealized
Losses
 
Fair Value
 
Gross Unrealized
Losses
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
Asset-backed securities
$
169.8

 
$
(1.0
)
 
$
7.5

 
$
(0.6
)
 
$
177.3

 
$
(1.6
)
Commercial-mortgage-backed securities
0.8

 
(0.8
)
 
10.7

 
(1.6
)
 
11.5

 
(2.4
)
Corporates
411.3

 
(8.1
)
 
45.5

 
(1.9
)
 
456.8

 
(10.0
)
Equities
—

 
—

 
44.5

 
(1.3
)
 
44.5

 
(1.3
)
Hybrids
13.4

 
(0.4
)
 
107.7

 
(9.2
)
 
121.1

 
(9.6
)
Municipals
71.1

 
(1.1
)
 
—

 
—

 
71.1

 
(1.1
)
Agency residential mortgage-backed securities
1.8

 
(0.2
)
 
6.1

 
(0.1
)
 
7.9

 
(0.3
)
Non-agency residential mortgage-backed securities
12.9

 
(0.3
)
 
101.8

 
(4.0
)
 
114.7

 
(4.3
)
Total available-for-sale securities
$
681.1

 
$
(11.9
)
 
$
323.8

 
$
(18.7
)
 
$
1,004.9

 
$
(30.6
)
Total number of available-for-sale securities in an unrealized loss position
 
 
100

 
 
 
56

 
 
 
156
Reconciliation of Other-than-Temporary Impairment on Fixed Maturity
The following table provides a reconciliation of the beginning and ending balances of the credit loss portion of other-than-temporary impairments on fixed maturity securities held by FGL for the three and six months ended March 31, 2013 and April 1, 2012, for which a portion of the other-than-temporary impairment was recognized in AOCI:
 
Three months ended
 
Six months ended
 
March 31, 2013
 
April 1, 2012
 
March 31, 2013
 
April 1, 2012
Balance at the beginning of the period
$
2.7

 
$
2.1

 
$
2.7

 
$
0.7

Increases attributable to credit losses on securities:
 
 
 
 
 
 
 
Other-than-temporary impairment was not previously recognized
—

 
0.5

 
—

 
1.9

Balance at the end of the period
$
2.7

 
$
2.6

 
$
2.7

 
$
2.6
Other-than-Temporary Impairments
Details underlying write-downs taken as a result of other-than-temporary impairments that were recognized in earnings and included in net realized gains on securities were as follows:
 
Three months ended
 
Six months ended
 
March 31,
2013
 
April 1,
2012
 
March 31,
2013
 
April 1,
2012
Other-than-temporary impairments recognized in net income:
 
 
 
 
 
 
 
Corporates
$
—

 
$
—

 
$
—

 
$
0.7

Non-agency residential mortgage-backed securities
0.4

 
3.3

 
0.9

 
6.1

Hybrids
—

 
—

 
—

 
9.7

Other invested assets
—

 
0.8

 
—

 
0.8

Total other-than-temporary impairments
$
0.4

 
$
4.1

 
$
0.9

 
$
17.3
Portfolio of Asset-Backed Loans and Other Invested Assets
Salus’ portfolio of asset-backed loans receivable, included in "Asset-backed loans" in the Condensed Consolidated Balance Sheets as of March 31, 2013 and September 30, 2012, consisted of the following:
 
March 31,
2013
 
September 30, 2012
Asset-backed loans, by major industry:
 
 
 
Wholesale
$
66.0

 
$
77.2

Apparel
96.7

 
70.1

Jewelry
39.2

 
27.9

Other
42.5

 
6.3

Total asset-backed loans
244.4

 
181.5

Less: Allowance for credit losses
2.8

 
1.4

Total asset-backed loans, net
$
241.6

 
$
180.1
Schedule of Allowance for Credit Losses
The following table presents the activity in its allowance for credit losses for the three and six months ended March 31, 2013 and April 1, 2012:
 
Three months ended
 
Six months ended
 
March 31, 2013
 
April 1, 2012
 
March 31, 2013
 
April 1, 2012
Allowance for credit losses:
 
 
 
 
 
 
 
Balance at beginning of period
$
2.6

 
$
—

 
$
1.4

 
$
—

Provision for credit losses
0.2

 
0.2

 
1.4

 
0.2

Charge-offs
—

 
—

 
—

 
—

Recoveries
—

 
—

 
—

 
—

Balance at end of period
$
2.8

 
$
0.2

 
$
2.8

 
$
0.2
Schedule of Credit Quality of Asset-Based Loan Portfolio
The following tables present information about the credit quality of Salus’ asset-based loan portfolio, based on National Association of Insurance Commissioners ("NAIC") risk rating, as of March 31, 2013 and September 30, 2012:

NAIC Designation
 
Credit Equivalent Rating
 
March 31,
2013
 
Percent of Total
 
September 30, 2012
 
Percent of Total
1
 
AAA/AA/A
 
$
18.0

 
7.4
%
 
$
75.8

 
41.7
%
2
 
BBB
 
200.2

 
81.9
%
 
94.9

 
52.3
%
3
 
BB
 
—

 
—
%
 
10.8

 
6.0
%
4
 
B
 
—

 
—
%
 
—

 
—
%
5
 
CCC
 
26.2

 
10.7
%
 
—

 
—
%
Not rated
 
 
 
—

 
—
%
 
—

 
—
%
Total
 
 
 
$
244.4

 
100.0
%
 
$
181.5

 
100.0
%
Net Investment Income
The major sources of "Net investment income" on the accompanying Condensed Consolidated Statements of Operations were as follows:
 
Three months ended
 
Six months ended
 
March 31, 2013
 
April 1, 2012
 
March 31, 2013
 
April 1, 2012
Fixed maturity available-for-sale securities
$
165.9

 
$
170.5

 
$
333.5

 
$
357.7

Equity available-for-sale securities
2.9

 
3.4

 
7.6

 
6.0

Policy loans
0.2

 
0.1

 
0.5

 
0.4

Invested cash and short-term investments
0.4

 
1.3

 
1.2

 
1.4

Other investments
5.4

 
0.9

 
14.2

 
0.6

Gross investment income
174.8

 
176.2

 
357.0

 
366.1

External investment expense
(2.8
)
 
(3.2
)
 
(6.9
)
 
(6.3
)
Net investment income
$
172.0

 
$
173.0

 
$
350.1

 
$
359.8
Net Investment Gains
Net investment gains" reported on the accompanying Condensed Consolidated Statements of Operations were as follows:
 
Three months ended
 
Six months ended
 
March 31, 2013
 
April 1, 2012
 
March 31, 2013
 
April 1, 2012
Net realized gains before other-than-temporary impairments
$
73.0

 
$
69.7

 
$
245.5

 
$
151.6

Gross other-than-temporary impairments
(0.4
)
 
(4.8
)
 
(0.9
)
 
(18.9
)
Non-credit portion of other-than-temporary impairments included in other comprehensive income
—

 
0.7

 
—

 
1.6

Net realized gains on fixed maturity available-for-sale securities
72.6

 
65.6

 
244.6

 
134.3

Realized gains on equity securities
1.9

 
0.1

 
1.9

 
0.4

Net realized gains on securities
74.5

 
65.7

 
246.5

 
134.7

Realized gains (losses) on certain derivative instruments
29.7

 
9.8

 
45.3

 
(5.7
)
Unrealized gains on certain derivative instruments
102.5

 
89.2

 
61.3

 
139.5

Change in fair value of derivatives
132.2

 
99.0

 
106.6

 
133.8

Realized gains on other invested assets
—

 
(1.1
)
 
0.1

 
(1.0
)
Net investment gains
$
206.7

 
$
163.6

 
$
353.2

 
$
267.5
Cash Flows from Consolidated Investing Activities by Security
Cash flows from consolidated investing activities by security classification were as follows:
 
Six months ended
 
March 31, 2013
 
April 1,
2012
Proceeds from investments sold, matured or repaid:
 
 
 
Available-for-sale
$
5,769.7

 
$
3,059.7

Held-to-maturity
—

 
74.9

Trading (acquired for holding)
91.8

 
9.2

Derivatives and other
154.8

 
79.4

 
$
6,016.3

 
$
3,223.2

Cost of investments acquired:
 
 
 
Available-for-sale
$
(5,839.0
)
 
$
(2,022.0
)
Held-to-maturity
—

 
(34.0
)
Trading (acquired for holding)
(0.9
)
 
(70.4
)
Derivatives and other
(76.3
)
 
(67.9
)
 
$
(5,916.2
)
 
$
(2,194.3
)