Fair Values of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements [Abstract]

Carrying Amount and Fair Value of Financial Instruments

Presented as follows are the carrying amounts and fair values of financial instruments. The carrying values of financial instruments such as short-term investments, cash and bank deposits, accounts and premiums receivable, accrued investment income, and short-term debt approximate fair value due to the short-term nature of the instruments. As such, these financial instruments are not included in the following chart. Certain prior year amounts have been reclassified to conform to current presentation.

	December 31
	2012				2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in millions of dollars)
Assets
Fixed Maturity Securities	$	44,973.0	$	44,973.0	$	42,486.7	$	42,486.7
Mortgage Loans	1,712.7		1,937.1		1,612.3		1,789.8
Policy Loans	3,133.8		3,215.3		3,051.4		3,124.4
Other Long-term Investments
Derivatives	81.6		81.6		137.7		137.7
Equity Securities	14.6		14.6		11.2		11.2
Miscellaneous Long-term Investments	455.1		455.1		436.4		436.4
Liabilities
Policyholders' Funds
Deferred Annuity Products	$	640.1	$	640.1	$	641.1	$	641.1
Supplementary Contracts without Life Contingencies	535.5		535.5		502.6		502.6
Long-term Debt	2,755.4		2,968.8		2,570.2		2,540.2
Other Liabilities
Derivatives	170.5		170.5		173.7		173.7
Embedded Derivative in Modified Coinsurance Arrangement	83.9		83.9		135.7		135.7
Unfunded Commitments to Investment Partnerships	83.7		83.7		160.6		160.6

Fair Value, Measurement Inputs, Disclosure

Fair value measurements by input level for financial instruments carried at fair value are as follows:

	December 31, 2012
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in millions of dollars)
Assets
Fixed Maturity Securities
United States Government and Government Agencies and Authorities	$	104.1	$	1,244.7	$	—	$	1,348.8
States, Municipalities, and Political Subdivisions	53.0		1,625.1		128.7		1,806.8
Foreign Governments	—		1,424.9		82.1		1,507.0
Public Utilities	84.2		10,485.6		574.4		11,144.2
Mortgage/Asset-Backed Securities	—		2,216.0		0.5		2,216.5
All Other Corporate Bonds	1,977.1		23,755.5		1,177.8		26,910.4
Redeemable Preferred Stocks	—		14.5		24.8		39.3
Total Fixed Maturity Securities	2,218.4		40,766.3		1,988.3		44,973.0
Other Long-term Investments
Derivatives
Interest Rate Swaps	—		76.5		—		76.5
Foreign Exchange Contracts	—		5.1		—		5.1
Total Derivatives	—		81.6		—		81.6
Equity Securities	—		10.3		4.3		14.6
Liabilities
Other Liabilities
Derivatives
Interest Rate Swaps	$	—	$	31.7	$	—	$	31.7
Foreign Exchange Contracts	—		138.8		—		138.8
Embedded Derivative in Modified Coinsurance Arrangement	—		—		83.9		83.9
Total Derivatives	—		170.5		83.9		254.4

Note 2 - Fair Values of Financial Instruments - Continued

	December 31, 2011
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in millions of dollars)
Assets
Fixed Maturity Securities
United States Government and Government Agencies and Authorities	$	326.6	$	977.8	$	—	$	1,304.4
States, Municipalities, and Political Subdivisions	107.3		1,416.2		68.1		1,591.6
Foreign Governments	—		1,376.7		—		1,376.7
Public Utilities	718.0		9,576.4		338.9		10,633.3
Mortgage/Asset-Backed Securities	—		2,941.5		31.7		2,973.2
All Other Corporate Bonds	3,469.5		20,415.1		665.5		24,550.1
Redeemable Preferred Stocks	—		20.2		37.2		57.4
Total Fixed Maturity Securities	4,621.4		36,723.9		1,141.4		42,486.7
Other Long-term Investments
Derivatives
Interest Rate Swaps	—		134.2		—		134.2
Foreign Exchange Contracts	—		3.5		—		3.5
Total Derivatives	—		137.7		—		137.7
Equity Securities	—		—		11.2		11.2
Liabilities
Other Liabilities
Derivatives
Interest Rate Swaps	$	—	$	32.9	$	—	$	32.9
Foreign Exchange Contracts	—		140.8		—		140.8
Embedded Derivative in Modified Coinsurance Arrangement	—		—		135.7		135.7
Total Derivatives	—		173.7		135.7		309.4

Transfers of Assets between Level 1 and Level 2

Transfers of assets between Level 1 and Level 2 are as follows:

	Year Ended December 31
	2012				2011
	Transfers into
	Level 1 from Level 2		Level 2 from Level 1		Level 1 from Level 2		Level 2 from Level 1
	(in millions of dollars)
Fixed Maturity Securities
United States Government and Government Agencies and Authorities	$	—	$	224.7	$	169.8	$	—
States, Municipalities, and Political Subdivisions	—		43.8		47.7		274.9
Foreign Governments	—		—		—		0.7
Public Utilities	47.1		653.1		362.1		534.2
All Other Corporate Bonds	1,068.6		2,808.9		1,426.5		2,452.7
Total Fixed Maturity Securities	$	1,115.7	$	3,730.5	$	2,006.1	$	3,262.5

Transfers between Level 1 and Level 2 occurred due to the change in availability of either a TRACE or broker market maker price. Depending on current market conditions, the availability of these Level 1 prices can vary from period to period. For fair value measurements of financial instruments that were transferred either into or out of Level 1 or 2, we reflect the transfers using the fair value at the beginning of the period.

Changes in Assets and Liabilities Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs (Level 3)

Changes in assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) are as follows:

	Year Ended December 31, 2012
				Total Realized and Unrealized Investment Gains (Losses) Included in
	Beginning of Year			Earnings			Other Comprehensive Income or Loss			Purchases		Sales			Level 3 Transfers					End of Year
															Into		Out of
	(in millions of dollars)
Fixed Maturity Securities
States, Municipalities, and Political Subdivisions	$	68.1		$	—		$	(0.3	)	$	18.4	$	(0.7	)	$	43.2	$	—		$	128.7
Foreign Governments	—			—			5.0			15.4		—			61.7		—			82.1
Public Utilities	338.9			—			22.3			47.9		(4.2		)	481.4		(311.9		)	574.4
Mortgage/Asset-Backed Securities	31.7			—			—			—		(0.1		)	—		(31.1		)	0.5
All Other Corporate Bonds	665.5			1.2			40.8			151.6		(67.5		)	599.8		(213.6		)	1,177.8
Redeemable Preferred Stocks	37.2			(1.0		)	2.9			—		(14.3		)	—		—			24.8
Total Fixed Maturity Securities	1,141.4			0.2			70.7			233.3		(86.8		)	1,186.1		(556.6		)	1,988.3
Equity Securities	11.2			(0.1		)	—			—		(0.1		)	—		(6.7		)	4.3
Embedded Derivative in Modified Coinsurance Arrangement	(135.7		)	51.8			—			—		—			—		—			(83.9		)
	Year Ended December 31, 2011
				Total Realized and Unrealized Investment Gains (Losses) Included in
	Beginning of Year			Earnings			Other Comprehensive Income or Loss			Purchases		Sales			Level 3 Transfers					End of Year
															Into		Out of
	(in millions of dollars)
Fixed Maturity Securities
States, Municipalities, and Political Subdivisions	$	—		$	—		$	2.5		$	28.0	$	—		$	37.6	$	—		$	68.1
Public Utilities	173.6			0.2			26.9			34.8		(3.2		)	259.9		(153.3		)	338.9
Mortgage/Asset-Backed Securities	0.7			—			(0.8		)	31.9		(0.1		)	—		—			31.7
All Other Corporate Bonds	829.7			(2.4		)	8.9			133.6		(81.4		)	250.1		(473.0		)	665.5
Redeemable Preferred Stocks	21.7			—			1.2			—		—			14.3		—			37.2
Total Fixed Maturity Securities	1,025.7			(2.2		)	38.7			228.3		(84.7		)	561.9		(626.3		)	1,141.4
Equity Securities	1.5			(0.6		)	(1.7		)	3.0		—			9.0		—			11.2
Embedded Derivative in Modified Coinsurance Arrangement	(96.3		)	(39.4		)	—			—		—			—		—			(135.7		)

Note 2 - Fair Values of Financial Instruments - Continued

Realized and unrealized investment gains and losses presented in the preceding tables represent gains and losses only for the time during which the applicable financial instruments were classified as Level 3. The transfers between levels resulted primarily from a change in observability of three inputs used to determine fair values of the securities transferred: (1) transactional data for new issuance and secondary trades, (2) broker/dealer quotes and pricing, primarily related to changes in the level of activity in the market and whether the market was considered orderly, and (3) comparable bond metrics from which to perform an analysis. For fair value measurements of financial instruments that were transferred either into or out of Level 3, we reflect the transfers using the fair value at the beginning of the period. Gains (losses) for the years ended December 31, 2012 and 2011 which are included in earnings and are attributable to the change in unrealized gains or losses relating to assets or liabilities valued using significant unobservable inputs and still held at each year end were $51.8 million and $(39.4) million, respectively. These amounts relate entirely to the changes in fair value of an embedded derivative in a modified coinsurance arrangement which are reported as realized investment gains and losses.

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

Quantitative information regarding the significant unobservable inputs used in Level 3 fair value measurements, all of which are internally derived, is as follows:

	December 31, 2012
	Fair Value			Unobservable Input		Range/Weighted Average
	(in millions of dollars)
Fixed Maturity Securities
Public Utilities	$	17.4		- Comparability Adjustment	(b)	0.20% - 0.20% / 0.20%
States, Municipalities, and Political Subdivisions - Private	42.7			- Comparability Adjustment - Lack of Marketability - Volatility of Credit	(b) (d) (e)	0.25% - 0.25% / 0.25% 0.25% - 0.25% / 0.25% 0.15% - 0.15% / 0.15%
Mortgage/Asset-Backed Securities - Private	0.5			- Discount for Size	(c)	5.74% - 5.84% / 5.81%
All Other Corporate Bonds - Private	391.8			- Change in Benchmark Reference - Comparability Adjustment - Discount for Size - Lack of Marketability - Volatility of Credit - Market Convention	(a) (b) (c) (d) (e) (f)	0.04% - 2.89% / 0.28% 1.48% - 1.48% / 1.48% 0.10% - 0.50% / 0.24% 0.10% - 1.00% / 0.46% (0.25)% -7.72% / 1.51% Priced at Par
All Other Corporate Bonds - Public	165.0			- Change in Benchmark Reference - Comparability Adjustment - Discount for Size - Lack of Marketability - Volatility of Credit - Market Convention	(a) (b) (c) (d) (e) (f)	0.25% - 0.25% / 0.25% (0.59)% - 1.00% / 0.27% 0.25% - 0.25% / 0.25% 0.20% - 0.30% / 0.24% (0.30)% - (0.30)% / (0.30)% Priced at Par
Equity Securities - Private	4.0			- Market Convention	(f)	Priced at Cost or Owner's Equity
Embedded Derivative in Modified Coinsurance Arrangement	(83.9		)	- Projected Liability Cash Flows	(g)	Actuarial Assumptions

(a) Represents basis point adjustments for changes in benchmark spreads associated with various ratings categories

(b) Represents basis point adjustments for changes in benchmark spreads associated with various industry sectors

(c) Represents basis point adjustments based on issue/issuer size relative to the benchmark

(d) Represents basis point adjustments to apply a discount due to the illiquidity of an investment

(e) Represents basis point adjustments for credit-specific factors

(f) Represents a decision to price based on par value, cost, or owner's equity when limited data is available

(g) Represents various actuarial assumptions required to derive the liability cash flows including incidence, termination, and lapse rates

Note 2 - Fair Values of Financial Instruments - Continued

Isolated increases in unobservable inputs other than market convention will result in a lower fair value measurement, whereas isolated decreases will result in a higher fair value measurement. The unobservable input for market convention is not sensitive to input movements. The projected liability cash flows used in the fair value measurement of our Level 3 embedded derivative are based on expected claim payments. If claim payments increase, the projected liability cash flows will increase, resulting in a decrease in the fair value of the embedded derivative. Decreases in projected liability cash flows will result in an increase in the fair value of the embedded derivative.