2.2.0.25falsefalse006002 - Disclosure - Accounting Policies and Basis of Presentationtruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010 USD ($) $FROM_Jan01_2010_TO_Dec31_2010http://www.sec.gov/CIK0001289592duration2010-01-01T00:00:002010-12-31T00:00:00USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0us-gaap_GeneralPoliciesAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalseAccounting Policies and Basis of Presentation [Abstract]3false0us-gaap_SignificantAccountingPoliciesTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00Note 2—Accounting Policies and Basis of PresentationBasis of PresentationThe accompanying consolidated financial statements include the accounts of Tower and its insurance subsidiaries: Tower Insurance Company of New York (“TICNY”), Tower National Insurance Company (“TNIC”), Preserver Insurance Company (“PIC”), North East Insurance Company (“NEIC”), Mountain Valley Indemnity Company (“MVIC”), CastlePoint Insurance Company (“CPIC”), CastlePoint Reinsurance Company, Ltd. (“CastlePoint Re”), CastlePoint Florida Insurance Company (“CPFL”), Hermitage Insurance Company (“HIC”), Kodiak Insurance Company (“KIC”), SUA Insurance Company (“SUA”) (renamed CastlePoint National Insurance Company (“CPNIC”)), Massachusetts Homeland Insurance Company (“MHIC”) and York Insurance Company of Maine (“York”) (collectively the “Insurance Subsidiaries”); its managing general agencies: Tower Risk Management Corp. (“TRM”), CastlePoint Management Corp. (“CPM”) and AequiCap CP Services Group, Inc. (renamed CastlePoint Risk Management of Florida, Inc. (“CPRMFL”)); and its management companies: Adirondack AIF, LLC (“ADAIF”) and New Jersey Skylands Management Company LLC (“NJSM”). The Company also consolidates Preserver Group, Inc. (“PGI”), CastlePoint Bermuda Holdings (“CBH”) and HIG, Inc. (“Hermitage”) which are intermediate holding companies. The consolidated financial statements include the accounts of Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer and its wholly owned insurance subsidiary, New Jersey Skylands Insurance Company (together, the “Reciprocal Exchanges”). The Company does not own the Reciprocal Exchanges but manages them through ADAIF and NJSM. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All significant inter-company accounts and transactions have been eliminated in consolidation.Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.ReclassificationsCertain reclassifications have been made to prior years' financial information to conform to the current year presentation. As disclosed in “Note 1 – Nature of Business”, the Company has restated its segments for prior years to be consistent with the presentation in 2010.Net Premiums EarnedInsurance policies issued or reinsured by the Company are short-duration contracts. Accordingly, premium revenue, including direct business and reinsurance assumed, net of business ceded to reinsurers, is recognized on a pro-rata basis over the terms of the underlying policies. Unearned premiums represent premium applicable to the unexpired risk of in-force insurance contracts at each balance sheet date. Prepaid reinsurance premiums represent the unexpired portion of reinsurance premiums on risks ceded and are earned consistent with premiums.Ceding Commission RevenueCommissions on reinsurance premiums ceded are earned in a manner consistent with the recognition of the costs to acquire the underlying policies, generally on a pro-rata basis over the terms of the policies reinsured. Certain reinsurance agreements contain provisions whereby the ceding commission rates vary based on the loss experience of the policies covered by the agreements. The Company records ceding commission revenue based on its current estimate of losses on the reinsured policies subject to variable commission rates. The Company records adjustments to the ceding commission revenue in the period that changes in the estimated losses are determined.Insurance Services RevenueDirect commission revenue from the Company's managing general underwriting services is recognized and earned as insurance policies are placed with the issuing companies of TRM, CPM, and CPRMFL. Fees relating to the provision of reinsurance intermediary services are earned when the Company's Insurance Subsidiaries or the issuing companies of TRM, CPM, and CPRMFL cede premiums to reinsurers. Claims administration fees and other administration revenues are earned as services are performed. Management fees earned by the management companies, ADAIF and NJSM, for services provided to the Reciprocal Exchanges are reported as management fee income within the segment but are eliminated in consolidation.Policy Billing FeesPolicy billing fees are earned on a pro-rata basis over the terms of the underlying policies. These fees include installment and other fees related to billing and collections.Loss and Loss Adjustment Expenses (“LAE”)The liability for loss and LAE represents management's best estimate of the ultimate cost and expense of all reported and unreported losses that are unpaid as of the balance sheet date and the fair value adjustments related to the acquisitions of CastlePoint, Hermitage, SUA and OBPL. The liability for loss and LAE is recorded net of a tabular reserve discount for workers' compensation and excess workers' compensation claims in the amount of $3.7 million and $4.5 million at December 31, 2010 and 2009, respectively. The 2010 discount relates to $300 million total reserves for workers' compensation. The gross undiscounted amount of these reserves was $166.8 million at December 31, 2009. The projection of future claims payments and reporting is based on an analysis of the Company's historical experience, supplemented by analyses of industry loss data. Management believes that the liability for loss and LAE is adequate to cover the ultimate cost of losses and claims to date; however, because of the uncertainty from various sources, including changes in reporting patterns, claims settlement patterns, judicial decisions, legislation, and economic conditions, actual loss experience may not conform to the assumptions used in determining the estimated amounts for such liability at the balance sheet date. As adjustments to these estimates become necessary, such adjustments are reflected in expense for the period in which the estimates are changed. Because of the nature of the business historically written, the Company's management believes that the Company has limited exposure to environmental claim liabilities.Tower estimates reserves separately for losses, allocated loss adjustment expenses, and unallocated loss adjustment expenses. Allocated loss adjustment expenses (“ALAE”) refers to costs of attorneys as well as miscellaneous costs such as investigators, witness fees and court costs attributable to specific claims that generally are in various stages of litigation. Unallocated loss adjustment expenses (“ULAE”) refers to costs for administering claims that are not related to attorney fees and miscellaneous costs associated with litigated claims. Tower estimates the ALAE liability separately for claims that are defended by in-house attorneys, claims that are handled by other attorneys that are not employees, and miscellaneous ALAE costs such as witness fees and court costs. Similarly, Tower estimates the ULAE liability separately for claims which are handled internally by our employees and for claims which are handled by third party administrators.The Company determines a fixed fee per in-house litigated claim for ALAE stemming from defense by in-house attorneys and allocates to each of these litigated claims 50% of this fixed fee when litigation on a particular claim begins and 50% of the fee when the litigation is closed. The fee is determined actuarially based upon the projected number of litigated claims and expected closing patterns at the beginning of each year as well as the projected budget for the Company's in-house attorneys, and these amounts are subject to adjustment each quarter based upon actual experience.The Company determines a standard cost per claim for ULAE for each line of business that represents the ultimate average cost to administer that claim. 50% of this standard cost is recorded as paid ULAE when a claim is opened, and 50% of this standard cost is recorded as paid ULAE when a claim is closed. The standard costs are determined actuarially and subject to adjustment each quarter. Calendar period costs for the claims function is recorded as paid ULAE each quarter.ReinsuranceThe Company uses reinsurance to limit its exposure to certain risks. Management has evaluated its reinsurance arrangements and determined that significant insurance risk is transferred to the reinsurers. Reinsurance agreements have been determined to be short-duration prospective contracts and, accordingly, the costs of reinsurance are recognized over the life of the contracts in a manner consistent with the earning of premiums on the underlying policies subject to the reinsurance contract.Reinsurance recoverable represents management's best estimate of paid and unpaid loss and LAE recoverable from reinsurers. Ceded losses recoverable are estimated using techniques and assumptions consistent with those used in estimating the liability for loss and LAE. These techniques and assumptions are continually reviewed and updated with any resulting adjustments recorded in current earnings. Loss and LAE incurred as presented in the consolidated statement of income and comprehensive net income are net of reinsurance recoveries.Management estimates uncollectible amounts receivable from reinsurers based on an assessment of a number of factors. The Company recorded no allowance for uncollectible reinsurance at December 31, 2010 or 2009. The Company did not write-off balances from reinsurers during the three year period ended December 31, 2010.Cash and Cash EquivalentsCash consists of cash in banks, generally in operating accounts. The Company maintains its cash balances at several financial institutions. Management monitors balances and believes they do not represent a significant credit risk to the Company.The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are presented at cost, which approximates fair value. InvestmentsThe Company's fixed-maturity and equity securities are classified as available-for-sale and carried at fair value. The Company may sell its available-for-sale securities in response to changes in interest rates, risk/reward characteristics, liquidity needs or other factors.Fair value for fixed-maturity securities and equity securities is primarily based on quoted market prices or a matrix pricing using observable inputs, with limited exceptions as discussed in “Note 6 – Fair Value Measurements”. Changes in unrealized gains and losses, net of tax effects, are reported as a separate component of other comprehensive income while cumulative unrealized gains and losses are reported net of tax effects within accumulated other comprehensive income in stockholders' equity. Realized gains and losses are determined on the specific identification method. Investment income is recorded when earned and includes the amortization of premium and discount on investments.The Company, along with its outside portfolio managers, regularly reviews its fixed-maturity and equity security portfolios to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of investments. In evaluating potential impairment, management considers, among other criteria: (i) the overall financial condition of the issuer, (ii) the current fair value compared to amortized cost or cost, as appropriate; (iii) the length of time the security's fair value has been below amortized cost or cost; (iv) specific credit issues related to the issuer such as changes in credit rating, reduction or elimination of dividends or non-payment of scheduled interest payments; (v) whether management intends to sell the security and, if not, whether it is not more likely than not that the Company will be required to sell the security before recovery of its cost or amortized cost basis; (vi) specific cash flow estimations for fixed-maturity securities and (vii) current economic conditions. If an other-than-temporary-impairment (“OTTI”) loss is determined for a fixed-maturity security (and management does not intend to sell the security or it is not more likely than not that the Company will be required to sell the security), the credit portion is recorded in the statement of income as net realized losses on investments and the non-credit portion is recorded in accumulated other comprehensive income. The credit portion results in a permanent reduction of the cost basis of the underlying investment. OTTI losses on fixed-maturity securities management has the intent to sell or it is more likely than not that the Company will be required to sell and on equity securities are reported in realized losses for the entire impairment.Fair ValueGAAP establishes a three-level hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) followed by similar but not identical assets or liabilities (Level 2) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the assets or liabilities fall within different levels of the hierarchy, the classification is based on the lowest level input that is significant to the fair value measurement of the asset or liability. Classification of assets and liabilities within the hierarchy considers the markets in which the assets and liabilities are traded, including during periods of market disruption, and the reliability and transparency of the assumptions used to determine fair value. The hierarchy requires the use of observable market data when available. The Company primarily uses outside pricing services to assist in determining fair values. For investments in active markets, the Company uses the quoted market prices provided by the outside pricing services to determine fair value. In circumstances where quoted market prices are unavailable, the pricing services utilize fair value estimates based upon other observable inputs including matrix pricing, benchmark interest rates, market comparables and other relevant inputs.The Company's process to validate the market prices obtained from the outside pricing sources include, but are not limited to, periodic evaluation of model pricing methodologies and analytical reviews of certain prices. The Company also periodically performs back-testing of selected sales activity to determine whether there are any significant differences between the market price used to value the security prior to sale and the actual sale price.Premiums ReceivablePremiums receivable represent amounts due from insureds and reinsureds for insurance coverage and are presented net of an allowance for doubtful accounts of $2.1 million and $1.3 million at December 31, 2010 and 2009, respectively. The allowance for uncollectible amounts is based on an analysis of amounts receivable giving consideration to historical loss experience and current economic conditions and reflects an amount that, in management's judgment, is adequate. Uncollectible agent's premiums receivable of $1.8 million, $0.9 million and $0.4 million were written off in 2010, 2009 and 2008, respectively.Deferred Acquisition CostsAcquisition costs represent the costs of writing business that vary with, and are primarily related to, the production of insurance business (principally commissions, premium taxes and certain underwriting costs). Policy acquisition costs are deferred and recognized as expense as related premiums are earned. Deferred acquisition costs (“DAC”) presented in the balance sheet are net of deferred ceding commission revenue. The value of business acquired (“VOBA”) is an intangible asset relating to the estimated fair value of the unexpired insurance policies acquired in a business combination. VOBA is determined at the time of a business combination and is reported on the consolidated balance sheet with DAC and is amortized in proportion to the timing of the estimated underwriting profit associated with the in force policies acquired. The Company considers anticipated investment income in determining the recoverability of these costs and believes they are fully recoverable. See “Note 8 – Deferred Acquisition Costs” for additional information regarding deferred acquisition costs.Goodwill and Intangible AssetsIn business combinations, including the acquisition of a group of assets, the Company allocates the purchase price to the net tangible and intangible assets acquired based on their relative fair values. Any portion of the purchase price in excess of this amount results in goodwill. Identifiable intangible assets with a finite useful life are amortized over the period that the asset is expected to contribute directly or indirectly to the future cash flows of the Company. Intangible assets with an indefinite life and goodwill are not amortized and are subject to annual impairment testing. The Company conducted the required annual goodwill and intangible asset impairment testing as of September 30 for 2010. Additionally, identifiable intangible assets and goodwill are tested for recoverability whenever events or changes in circumstances indicate that a carrying amount may not be recoverable. No impairment losses were recognized in 2010, 2009 or 2008.Fixed AssetsFurniture, leasehold improvements, computer equipment, and software, including internally developed software, are reported at cost less accumulated depreciation and amortization. Gross fixed assets were $174.4 million and $113.4 million as of December 31, 2010 and 2009, respectively. Accumulated depreciation and amortization of $86.0 million and $47.0 million were recorded as of December 31, 2010 and 2009, respectively. Depreciation and amortization is provided using the straight-line method over the estimated useful lives of the assets. The Company estimates the useful life for computer equipment to be three years, computer software, three to seven years, furniture and other equipment seven years and leasehold improvements is the term of the lease. Depreciation and amortization expense of $15.0 million, $13.3 million and $10.5 million were recorded for the years ended December 31, 2010, 2009 and 2008, respectively. Fixed assets are recorded in Other Assets on the balance sheet.Variable Interest EntitiesThe Company consolidates the Reciprocal Exchanges as it has determined that these are variable interest entities and that the Company is the primary beneficiary. See “Note 4 – Variable Interest Entities” for more details.Income TaxesPursuant to a written tax agreement (the “Tax Sharing Agreement”), each of the entities in the group is required to make payments to Tower for federal income tax imposed on its taxable income in a manner consistent with filing a separate federal income tax return (but subject to certain limitations that are applied to the Tower consolidated group as a whole). The Reciprocal Exchanges are not subject to the Tax Sharing Agreement but file separate tax returns annually.Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that all or some portion of the deferred tax asset will not be realized.Treasury StockThe Company accounts for the treasury stock at the repurchase price as a reduction to stockholders' equity as it does not currently intend to retire the treasury stock held at December 31, 2010.Stock-based CompensationThe Company accounts for restricted stock shares and options awarded at fair value at the date awarded and compensation expense is recorded over the requisite service period that has not been rendered. The Company amortizes awards with graded vesting on a straight-line basis over the requisite service period.AssessmentsInsurance related assessments are accrued in the period in which they have been incurred. The Company is subject to a variety of assessments. Among such assessments are state guaranty funds and workers' compensation second injury funds. State guaranty fund assessments are used by state insurance oversight boards to cover losses of policyholders of insolvent insurance companies and for the operating expenses of such agencies. The Company uses estimates derived from state regulators and/or NAIC Tax and Assessments Guidelines.Earnings per ShareThe Company measures earnings per share at two levels: basic earnings per share and diluted earnings per share. Basic earnings per share is calculated by dividing net income attributable to Tower common stockholders by the weighted average number of common shares outstanding during the year. This weighted average number of shares includes unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents whether paid or unpaid (“participating securities”). Diluted earnings per share is calculated by dividing income net income attributable to Tower common stockholders by the weighted average number of common shares outstanding during the year, as adjusted for the potentially dilutive effects of stock options, warrants, unvested restricted stock and/or preferred stock that are not participating securities, unless such items are not dilutive.Concentration and Credit RiskFinancial instruments that potentially subject the Company to concentration and credit risk are primarily cash and cash equivalents, investments, interest rate swaps and accounts receivable. Investments are diversified through many industries and geographic regions through the use of money managers who employ different investment strategies. The Company limits the amount of credit exposure with any one financial institution and believes that no significant concentration of credit risk exists with respect to cash and investments. The interest rate swap contracts contain credit support annex agreements with collateral posting provisions which reduces counterparty non-performance risk. The premiums receivable balances are generally diversified due to the number of entities comprising the Company's distribution force and its customer base, which is largely concentrated in the Northeast (primarily New York), Florida, Texas and California. To reduce credit risk, the Company performs ongoing evaluations of its distribution force's and customers' financial condition. The Company also has receivables from its reinsurers. Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company periodically evaluates the financial condition of its reinsurers and, in certain cases, requires collateral from its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. Management's policy is to review all outstanding receivables at period end as well as the bad debt write-offs experienced in the past and establish an allowance for doubtful accounts, if deemed necessary.Our largest agent accounted for 12%, 4% and 7%, respectively, of the Insurance Subsidiaries and TRM's premiums receivable balances at December 31, 2010, 2009 and 2008. Our largest agent accounted for 4%, 10% and 10% of the Insurance Subsidiaries' direct premiums written and TRM's premiums produced in 2010, 2009 and 2008, respectively.Statutory Accounting PrinciplesThe Company's Insurance Subsidiaries are required to prepare statutory basis financial statements in accordance with practices prescribed or permitted by the state or country in which they are domiciled. See “Note 18 – Statutory Financial Information and Accounting Policies” for more details.Accounting PronouncementsAccounting guidance adopted in 2010In June 2009, the Financial Accounting Standards Board (“FASB”) issued new guidance which requires more information about transfers of financial assets, including securitization transactions, where entities have continuing exposure to the risks related to the transferred financial assets. This guidance eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures. The new guidance enhances information reported to users of financial statements by providing greater transparency about transfers of financial assets and an entity's continuing involvement in transferred financial assets. The Company adopted this new guidance on January 1, 2010, with no material effects on its financial statements as of December 31, 2010.In June 2009, the FASB issued new guidance which concerns the consolidation of variable interest entities and changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity's purpose and design and the reporting entity's ability to direct the activities of the other entity that most significantly affect the other entity's economic performance. The new guidance requires a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity is required to disclose how its involvement with a variable interest entity affects the reporting entity's financial statements. The Company adopted this new guidance on January 1, 2010, with no material effects as of the date of adoption. As disclosed in “Note 4 – Variable Interest Entities (“VIEs”)”, the Company has determined that the Reciprocal Exchanges managed by the management companies acquired in the OBPL transaction qualify as VIEs and that the Company is their primary beneficiary. Accordingly, the Company has consolidated these VIEs in its financial statements as of July 1, 2010, the closing date of the OBPL transaction. In January 2010, the FASB issued new guidance that requires additional disclosure of the fair value of assets and liabilities. This guidance requires additional disclosures to be made about significant transfers in and out of Levels 1 and 2 of the fair value hierarchy within GAAP. The Company adopted this guidance on January 1, 2010, with the required disclosure included in “Note 6 – Fair Value Measurements”.In July 2010, the FASB issued new guidance concerning the credit quality of financing receivables and the allowance for credit losses. This guidance requires additional disclosures about the credit quality of financing receivables, which include reinsurance recoverables. The additional disclosures cover credit quality indicators, past due information and modifications of its financing receivables. These disclosures must be disaggregated by portfolio segment or class based on how a company develops its allowance for credit losses and how it manages its credit exposure. The required disclosures are included in “Note 9 – Reinsurance”. In December 2010, the FASB issued new guidance on disclosure requirements for business combinations. This guidance requires disclosure of revenue and earnings of the combined entity as though the business combinations that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Additionally, this guidance requires a description of the nature and amount of material non-recurring pro forma adjustments directly attributable to the business combination included in the pro forma revenue and earnings. The Company early adopted this guidance as of January 1, 2010. The disclosures in “Note 3 – Acquisitions” have been conformed to this new guidance.Accounting guidance not yet effectiveGuidance issued by the FASB in January 2010 requires additional disclosure about the gross activity within Level 3 of the fair value hierarchy within GAAP as opposed to the net disclosure currently required. This disclosure will be effective for annual and interim periods beginning after December 15, 2010. As this guidance relates to disclosure rather than measurement of assets and liabilities, there will be no effect on the financial results or position of the Company. The Company will comply with this disclosure requirement when it becomes effective.In October 2010, the FASB issued new guidance concerning the accounting for costs associated with acquiring or renewing insurance contracts. This guidance generally follows the model of that for loan origination costs. Under the new guidance, only direct incremental costs associated with successful insurance contract acquisitions or renewals would be deferrable. The guidance also states that advertising costs and indirect costs should be expensed as incurred. Although this guidance states that certain advertising costs that meet current accounting guidance could be deferred and treated as deferred acquisition costs (“DAC”), the Company does not currently record any advertising costs in DAC. The following categories of acquisitions costs are included within the December 31, 2010 caption “Deferred acquisition costs, net”:<div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 15px"><td style="width: 567px; text-align:left;border-color:#000000;min-width:567px;"> </td><td style="width: 10px; text-align:left;border-color:#000000;min-width:10px;"> </td><td style="width: 48px; text-align:left;border-color:#000000;min-width:48px;"> </td></tr><tr style="height: 15px"><td style="width: 567px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:567px;">($ in millions)</td><td style="width: 10px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:10px;"> </td><td style="width: 48px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:48px;">2010</td></tr><tr style="height: 15px"><td style="width: 567px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:567px;">Commissions</td><td style="width: 10px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:10px;">$</td><td style="width: 48px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:48px;">140.9</td></tr><tr style="height: 15px"><td style="width: 567px; text-align:left;border-color:#000000;min-width:567px;">Taxes and assessments</td><td style="width: 10px; text-align:center;border-color:#000000;min-width:10px;"> </td><td style="width: 48px; text-align:right;border-color:#000000;min-width:48px;">27.9</td></tr><tr style="height: 15px"><td style="width: 567px; text-align:left;border-color:#000000;min-width:567px;">Other deferred acquisition expenses</td><td style="width: 10px; text-align:center;border-color:#000000;min-width:10px;"> </td><td style="width: 48px; text-align:right;border-color:#000000;min-width:48px;">93.9</td></tr><tr style="height: 15px"><td style="width: 567px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:567px;">Deferred ceding commission revenue</td><td style="width: 10px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:10px;"> </td><td style="width: 48px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:48px;">(19.9)</td></tr><tr style="height: 16px"><td style="width: 567px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:left;border-color:#000000;min-width:567px;">Net deferred acquisition costs</td><td style="width: 10px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:center;border-color:#000000;min-width:10px;">$</td><td style="width: 48px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:2px;text-align:right;border-color:#000000;min-width:48px;">242.8</td></tr></table></div>This guidance will be effective for fiscal years beginning after December 15, 2011 with earlier adoption permitted as of the first day of a company's fiscal year. The Company expects to early adopt this guidance retrospectively as of January 1, 2011 and believes the reduction to deferred acquisition costs will range from $71.0 million to $75.0 million and the reduction to stockholders' equity could range from $46.2 million to $48.8 million as of December 31, 2010.Note 2—Accounting Policies and Basis of PresentationBasis of PresentationThe accompanying consolidated financial statements include the accounts of TowerfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis element may be used to describe all significant accounting policies of the reporting entity.Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 22 -Paragraph 8 falsefalseSignificant Accounting Policies Text Block12Accounting Policies and Basis of PresentationUnKnownUnKnownUnKnownUnKnownfalsetrue