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Derivatives
9 Months Ended
Sep. 30, 2011
Derivatives [Abstract] 
DERIVATIVES
9. DERIVATIVES
     HealthMarkets uses derivative instruments, specifically interest rate swaps, as part of its risk management activities to protect against the risk of changes in prevailing interest rates adversely affecting future cash flows associated with certain debt. The Company accounts for such interest rate swaps in accordance with ASC Topic 815 Derivatives and Hedging. These swap agreements are designed as hedging instruments and the Company formally documents qualifying hedged transactions and hedging instruments, and assesses, both at inception of the contract and on an ongoing basis, whether the hedging instruments are effective in offsetting changes in cash flows of the hedged transaction. The Company uses regression analysis to assess the hedge effectiveness in achieving the offsetting cash flows attributable to the risk being hedged. In addition, the Company utilizes the hypothetical derivative methodology for the measurement of ineffectiveness. Derivative gains and losses not effective in hedging the expected cash flows will be recognized immediately in earnings. In accordance with ASC 820, the fair values of the Company’s interest rate swaps are also contained in Note 5 of Notes to Consolidated Condensed Financial Statements. In assessing the fair value, the Company takes into consideration the current interest rates and the current creditworthiness of the counterparties, as well as the current creditworthiness of the Company, as applicable.
     As of April 11, 2011, the remaining interest rate swap agreement has matured.
     The Company employs control procedures to validate the reasonableness of valuation estimates obtained from a third party. The table below represents the fair values of the Company’s derivative assets and liabilities as of September 30, 2011 and December 31, 2010:
                                                 
             
    Asset Derivatives           Liability Derivatives    
            September 30,     December 31,           September 30,     December 31,  
    Balance Sheet     2011     2010     Balance Sheet     2011     2010  
    Location     Fair Value     Fair Value     Location     Fair Value     Fair Value  
                (In thousands)              
Derivatives designated as hedging instruments under ASC Topic 815:
                                               
Interest rate swaps
  Other assets   $ —     $ —     Other liabilities     $ —     $ 2,367  
 
                                       
Total derivatives
          $ —     $ —             $ —     $ 2,367  
 
                                       
     The table below represents the effect of derivative instruments in hedging relationships under ASC Topic 815 on the Company’s consolidated condensed statements of income for the three and nine months ended September 30, 2011 and 2010:
                                                                 
Derivative Instruments in Hedging Relationships for the Three Months Ended September 30, 2011 and 2010  
                    Location of Gain     Amount of Interest     Location of (Gain)        
                    (Loss) from     Expense (Income)     Loss Recognized in        
                    Accumulated     Reclassified from     Income on     Amount of (Gain) Loss  
    Amount of Gain (Loss)     OCI into Income     Accumulated OCI     Derivative     Recognized in Income on  
    Recognized in OCI on     (Effective     into Income     (Ineffective     Derivative  
    Derivative (Effective Portion)     Portion)     (Expense) (Effective Portion)     Portion)     (Ineffective Portion)  
    2011     2010             2011     2010             2011     2010  
                            (In thousands)                                  
Interest rate swaps
  $ —     $ 1,489     Interest Expense     $ —     $ 1,339     Investment income     $ —     $ 129  
 
                                                   
                                                                 
Derivative Instruments in Hedging Relationships for the Nine Months Ended September 30, 2011 and 2010  
                    Location of Gain     Amount of Interest     Location of (Gain)        
                    (Loss) from     Expense (Income)     Loss Recognized in        
                    Accumulated OCI     Reclassified from     Income on        
    Amount of Gain (Loss) Recognized     into Income     Accumulated OCI     Derivative     Amount of (Gain) Loss Recognized  
    in OCI on Derivative (Effective     (Effective     into Income     (Ineffective     in Income on Derivative  
    Portion)     Portion)     (Expense) (Effective Portion)     Portion)     (Ineffective Portion)  
    2011     2010             2011     2010             2011     2010  
                            (In thousands)                                  
Interest rate swaps
  $ 1,340     $ 3,506     Interest Expense     $ 1,308     $ 3,715     Investment income     $ 35     $ 257  
 
                                                   
     During 2011 and 2010, the Company did not have any derivative instruments not designated as hedging instruments.
     There were no components of the derivative instruments that were excluded from the assessment of hedge effectiveness.