Fair Value of Financial Instruments (Tables)

6 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Assets and Liabilities Carrying at Fair Value on Recurring Basis

The carrying amounts and estimated fair values of the Company’s consolidated financial instruments for which the disclosure of fair values is required, including (i) financial assets and liabilities measured and carried at fair value on a recurring basis, and (ii) financial assets and liabilities not measured at fair value but for which fair value disclosures are required; are summarized according to the hierarchy previously described as follows:

	March 31, 2013
	Level 1		Level 2		Level 3		Fair Value		Carrying Amount
Assets
Cash and cash equivalents (a)	$	1,475.0	$	—	$	—	$	1,475.0	$	1,475.0
Contingent purchase price reduction receivable	—		—		41.0		41.0		41.0
Derivatives:
Foreign exchange forward agreements	—		3.2		—		3.2		3.2
Commodity swap and option agreements	—		0.4		—		0.4		0.4
Call options and futures contracts	—		262.4		—		262.4		262.4
Fixed maturity securities, available-for-sale:
Asset-backed securities	—		1,413.1		5.3		1,418.4		1,418.4
Commercial mortgage-backed securities	—		540.0		6.2		546.2		546.2
Corporates	—		10,434.8		356.5		10,791.3		10,791.3
Hybrids	—		466.9		—		466.9		466.9
Municipals	—		1,077.7		—		1,077.7		1,077.7
Agency residential mortgage-backed securities	—		126.0		—		126.0		126.0
Non-agency residential mortgage-backed securities	—		1,298.5		—		1,298.5		1,298.5
U.S. Government	349.3		109.2		—		458.5		458.5
Equity securities:
Available-for-sale	—		245.7		10.0		255.7		255.7
Trading	57.7		—		—		57.7		57.7
Policy loans and other invested assets	—		—		32.4		32.4		32.4
Asset-backed loans	—		—		241.6		241.6		241.6
Total financial assets	$	1,882.0	$	15,977.9	$	693.0	$	18,552.9	$	18,552.9
Liabilities
Total debt (a)	$	—	$	4,881.4	$	—	$	4,881.4	$	4,596.7
Derivatives:
FIA embedded derivatives, included in contractholder funds	—		—		1,639.6		1,639.6		1,639.6
Foreign exchange forward agreements	—		4.8		—		4.8		4.8
Commodity swap and option agreements	—		9.1		—		9.1		9.1
Equity conversion feature of preferred stock	—		—		202.7		202.7		202.7
Redeemable preferred stock, excluding equity conversion feature	—		—		379.4		379.4		326.8
Investment contracts, included in contractholder funds	—		—		12,288.1		12,288.1		13,770.3
Total financial liabilities	$	—	$	4,895.3	$	14,509.8	$	19,405.1	$	20,550.0

	September 30, 2012
	Level 1		Level 2		Level 3		Fair Value		Carrying Amount
Assets
Cash and cash equivalents (a)	$	1,468.4	$	2.3	$	—	$	1,470.7	$	1,470.7
Contingent purchase price reduction receivable	—		—		41.0		41.0		41.0
Derivatives:
Foreign exchange forward agreements	—		1.2		—		1.2		1.2
Commodity swap and option agreements	—		2.0		—		2.0		2.0
Call options	—		200.7		—		200.7		200.7
Fixed maturity securities, available-for-sale:
Asset-backed securities	—		1,012.0		15.9		1,027.9		1,027.9
Commercial mortgage-backed securities	—		548.8		5.0		553.8		553.8
Corporates	—		10,873.7		135.3		11,009.0		11,009.0
Hybrids	—		519.4		8.8		528.2		528.2
Municipals	—		1,224.0		—		1,224.0		1,224.0
Agency residential mortgage-backed securities	—		155.0		—		155.0		155.0
Non-agency residential mortgage-backed securities	—		660.6		—		660.6		660.6
U.S. Government	930.4		—		—		930.4		930.4
Equity securities
Available-for-sale	—		248.1		—		248.1		248.1
Trading	146.8		—		—		146.8		146.8
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
Asset-backed loans	—		—		180.1		180.1		180.1
Total financial assets	$	2,545.6	$	15,482.8	$	404.9	$	18,433.3	$	18,433.3
Liabilities
Total debt (a)	$	524.0	$	1,804.8	$	—	$	2,328.8	$	2,167.0
Derivatives:
FIA embedded derivatives, included in contractholder funds	—		—		1,550.8		1,550.8		1,550.8
Futures contracts	—		0.9		—		0.9		0.9
Foreign exchange forward agreements	—		10.0		—		10.0		10.0
Commodity swap and option agreements	—		—		—		—		—
Equity conversion feature of preferred stock	—		—		232.0		232.0		232.0
Redeemable preferred stock, excluding equity conversion feature	—		—		368.9		368.9		319.2
Investment contracts, included in contractholder funds	—		—		12,271.9		12,271.9		13,739.6
Total financial liabilities	$	524.0	$	1,815.7	$	14,423.6	$	16,763.3	$	18,019.5

(a) The fair values of cash equivalents, short-term investments and debt set forth above are generally based on quoted or observed market prices.

(b) The carrying amounts of trade receivables, accounts payable, accrued investment income and portions of other insurance liabilities approximate fair value due to their short duration and, accordingly, they are not presented in the tables above.

Schedule of Unobservable Inputs Used for Level Three Fair Value Measurements of Financial Instruments on Recurring Basis

Quantitative information regarding significant unobservable inputs used for recurring Level 3 fair value measurements of financial instruments carried at fair value as of March 31, 2013 is as follows:

			Fair Value at				Range (Weighted average)
Assets	Valuation Technique	Unobservable Input(s)	March 31, 2013		September 30, 2012		March 31, 2013	September 30, 2012
Contingent purchase price reduction receivable	Discounted cash flow	Probability of collection	$	41.0	$	41.0	88% - 96% (92%)	88% - 96% (92%)
		Expected term					9 months	9 months
		Discount rate					0.94%	0.72%
		Credit insurance risk premium					11%	12%
Asset-backed securities	Broker-quoted	Offered quotes	5.3		15.9		109%	100% - 110% (103%)
Commercial mortgage-backed securities	Broker-quoted	Offered quotes	6.2		5.0		104%	101%
Corporates	Broker-quoted	Offered quotes	353.9		103.3		0% - 116% (91%)	0% - 141% (69%)
Corporates	Market pricing	Quoted prices	2.6		32.0		88% - 141% (123%)	88% - 158% (98%)
Hybrids	Broker-quoted	Offered quotes	—		8.8		—	0% - 103% (25%)
Equity	Broker-quoted	Offered quotes	10.0		—		100%	—
Total			$	419.0	$	206.0
Liabilities
FIA embedded derivatives, included in contractholder funds	Discounted cash flow	Market value of option	$	1,639.6	$	1,550.8	0% - 35% (4%)	0% - 31% (4%)
		SWAP rates					0.95% - 2% (1.5%)	0.76% - 2% (1%)
		Mortality multiplier					80%	70%
		Surrender rates					0.50% - 75% (7%)	2% - 50% (7%)
		Non-performance spread					0.25% - 0.25% (0.25%)	0.25% - 0.25% (0.25%)
Equity conversion feature of preferred stock	Monte Carlo simulation / Option model	Annualized volatility of equity	202.7		232.0		43%	41%
		Discount yield					11%	12% - 13% (12%)
		Non-cash accretion rate					0%	0%
		Calibration adjustment					12% - 14% (13%)	10% - 13% (11%)
Total			$	1,842.3	$	1,782.8

Changes in Fair Value of Financial Instruments

The following tables summarize changes to the Company’s financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the three and six months ended March 31, 2013 and April 1, 2012. This summary excludes any impact of amortization of VOBA and DAC. The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.

	Three months ended March 31, 2013
	Balance at Beginning of Period		Total Gains (Losses)												Net transfer In (Out) of Level 3 (a)			Balance at End of Period
			Included in Earnings			Included in AOCI		Purchases		Sales		Settlements
Assets
Contingent purchase price reduction receivable	$	41.0	$	—		$	—	$	—	$	—	$	—		$	—		$	41.0
Fixed maturity securities available-for-sale:
Asset-backed securities	5.3		—			—		—		—		—			—			5.3
Commercial mortgage-backed securities	6.1		—			0.1		—		—		—			—			6.2
Corporates	256.1		(0.1		)	3.2		144.2		—		(13.0		)	(33.9		)	356.5
Hybrids	5.0		—			—		—		—		—			(5.0		)	—
Equity securities available-for-sale	—		—			—		10.0		—		—			—			10.0
Total assets at fair value	$	313.5	$	(0.1	)	$	3.3	$	154.2	$	—	$	(13.0	)	$	(38.9	)	$	419.0
Liabilities
FIA embedded derivatives, included in contractholder funds	$	1,517.0	$	122.6		$	—	$	—	$	—	$	—		$	—		$	1,639.6
Equity conversion feature of preferred stock	163.1		39.6			—		—		—		—			—			202.7
Total liabilities at fair value	$	1,680.1	$	162.2		$	—	$	—	$	—	$	—		$	—		$	1,842.3

	Six months ended March 31, 2013
	Balance at Beginning of Period		Total Gains (Losses)														Net transfer In (Out) of Level 3 (a)			Balance at End of Period
			Included in Earnings			Included in AOCI			Purchases		Sales			Settlements
Assets
Contingent purchase price reduction receivable	$	41.0	$	—		$	—		$	—	$	—		$	—		$	—		$	41.0
Fixed maturity securities available-for-sale:
Asset-backed securities	15.9		—			(0.1		)	—		—			—			(10.5		)	5.3
Commercial mortgage-backed securities	5.0		—			0.2			1.0		—			—			—			6.2
Corporates	135.3		(0.3		)	1.2			277.4		(9.6		)	(13.7		)	(33.8		)	356.5
Hybrids	8.8		—			(0.1		)	—		—			—			(8.7		)	—
Equity securities available-for-sale	—		—			—			10.0		—			—			—			10.0
Total assets at fair value	$	206.0	$	(0.3	)	$	1.2		$	288.4	$	(9.6	)	$	(13.7	)	$	(53.0	)	$	419.0
Liabilities
FIA embedded derivatives, included in contractholder funds	$	1,550.8	$	88.8		$	—		$	—	$	—		$	—		$	—		$	1,639.6
Equity conversion feature of preferred stock	232.0		(29.3		)	—			—		—			—			—			202.7
Total liabilities at fair value	$	1,782.8	$	59.5		$	—		$	—	$	—		$	—		$	—		$	1,842.3

(a) The net transfers in and out of Level 3 during the three and six months ended March 31, 2013 were exclusively to or from Level 2.

	Three months ended April 1, 2012
	Balance at Beginning of Period		Total Gains (Losses)													Net transfer In (Out) of Level 3 (a)			Balance at End of Period
			Included in Earnings		Included in AOCI			Purchases		Sales			Settlements
Assets
Contingent purchase price reduction receivable	$	—	$	41.0	$	—		$	—	$	—		$	—		$	—		$	41.0
Fixed maturity securities available-for-sale:
Asset-backed securities	400.7		—		10.7			93.6		—			(12.8		)	10.8			503.0
Corporates	138.5		0.1		(1.4		)	1.3		(9.7		)	(8.8		)	0.1			120.1
Hybrids	5.1		—		—			—		—			—			—			5.1
Municipals	0.1		—		0.1			10.2		—			—			—			10.4
Agency residential mortgage-backed securities	3.3		—		—			—		—			—			—			3.3
Non-agency residential mortgage-backed securities	3.7		—		(0.1		)	—		—			(0.1		)	(2.3		)	1.2
Total assets at fair value	$	551.4	$	41.1	$	9.3		$	105.1	$	(9.7	)	$	(21.7	)	$	8.6		$	684.1
Liabilities
FIA embedded derivatives, included in contractholder funds	$	1,455.0	$	41.7	$	—		$	—	$	—		$	—		$	—		$	1,496.7
Equity conversion feature of preferred stock	47.5		26.4		—			—		—			—			—			73.9
Available-for-sale embedded derivatives	0.4		—		—			—		—			—			—			0.4
Total liabilities at fair value	$	1,502.9	$	68.1	$	—		$	—	$	—		$	—		$	—		$	1,571.0

	Six months ended April 1, 2012
	Balance at Beginning of Period		Total Gains (Losses)														Net transfer In (Out) of Level 3 (a)			Balance at End of Period
			Included in Earnings			Included in AOCI			Purchases		Sales			Settlements
Assets
Contingent purchase price reduction receivable	$	—	$	41.0		$	—		$	—	$	—		$	—		$	—		41.0
Fixed maturity securities available-for-sale:
Asset-backed securities	374.5		—			6.1			132.4		—			(20.8		)	10.8			503.0
Corporates	159.7		—			(2.3		)	1.3		(16.7		)	(11.6		)	(10.3		)	120.1
Hybrids	5.2		—			(0.1		)	—		—			—			—			5.1
Municipals	—		—			0.1			10.2		—			—			0.1			10.4
Agency residential mortgage-backed securities	3.3		—			—			—		—			—			—			3.3
Non-agency residential mortgage-backed securities	3.8		—			(0.1		)	—		—			(0.2		)	(2.3		)	1.2
Total assets at fair value	$	546.5	$	41.0		$	3.7		$	143.9	$	(16.7	)	$	(32.6	)	$	(1.7	)	$	684.1
Liabilities
FIA embedded derivatives, included in contractholder funds	$	1,396.3	$	100.4		$	—		$	—	$	—		$	—		$	—		$	1,496.7
Equity conversion feature of preferred stock	75.4		(1.5		)	—			—		—			—			—			73.9
Available-for-sale embedded derivatives	0.4		—			—			—		—			—			—			0.4
Total liabilities at fair value	$	1,472.1	$	98.9		$	—		$	—	$	—		$	—		$	—		$	1,571.0

(a) The net transfers in and out of Level 3 during the three and six months ended April 1, 2012 was exclusively to or from Level 2.