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Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2013
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2013:
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Assets:
 
 
 
 
 
 
 
 
Fixed maturities, including securities pledged:
 
 
 
 
 
 
 
 
U.S. Treasuries
$
618.8

 
$
51.3

 
$
—

 
$
670.1

 
U.S. Government agencies and authorities
—

 
237.0

 
5.1

 
242.1

 
U.S. corporate, state and municipalities
—

 
10,605.9

 
145.3

 
10,751.2

 
Foreign(1)
—

 
5,727.8

 
42.8

 
5,770.6

 
Residential mortgage-backed securities
—

 
2,076.0

 
23.7

 
2,099.7

 
Commercial mortgage-backed securities
—

 
691.7

 
—

 
691.7

 
Other asset-backed securities
—

 
462.7

 
17.7

 
480.4

 
Total fixed maturities, including securities pledged
618.8

 
19,852.4

 
234.6

 
20,705.8

 
Equity securities, available-for-sale
99.0

 
—

 
35.9

 
134.9

 
Derivatives:
 

 
 

 
 

 
 
 
Interest rate contracts
—

 
448.6

 
—

 
448.6

 
Foreign exchange contracts
—

 
7.7

 
—

 
7.7

 
Equity contracts
—

*
—

 
—

 
—

*
Credit contracts
—

 
8.1

 
—

 
8.1

 
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements
529.7

 
—

 
—

 
529.7

 
Assets held in separate accounts
54,715.3

 
5,376.5

 
13.1

 
60,104.9

 
Total assets
$
55,962.8

 
$
25,693.3

 
$
283.6

 
$
81,939.7

 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
Annuity product guarantees:
 
 
 
 
 
 
 
 
FIA
$
—

 
$
—

 
$
23.1

 
$
23.1

 
Stabilizer and MCGs
—

 
—

 
—

 
—

 
Other derivatives:
 
 
 
 
 
 
 
 
Interest rate contracts
—

 
206.4

 
—

 
206.4

 
Foreign exchange contracts
—

 
10.2

 
—

 
10.2

 
Embedded derivative on reinsurance
—

 
(54.0
)
 
—

 
(54.0
)
 
Total liabilities
$
—

 
$
162.6

 
$
23.1

 
$
185.7

 
* Less than $0.1.
(1) Primarily U.S. dollar denominated.

The following table presents the Company's hierarchy for its assets and liabilities measured at fair value on a recurring basis as
of December 31, 2012:
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Assets:
 
 
 
 
 
 
 
 
Fixed maturities, including securities pledged:
 
 
 
 
 
 
 
 
U.S. Treasuries
$
1,093.4

 
$
53.2

 
$
—

 
$
1,146.6

 
U.S. Government agencies and authorities
—

 
397.0

 
—

 
397.0

 
U.S. corporate, state and municipalities
—

 
10,512.8

 
154.6

 
10,667.4

 
Foreign(1)
—

 
5,527.4

 
24.6

 
5,552.0

 
Residential mortgage-backed securities
—

 
2,348.4

 
9.1

 
2,357.5

 
Commercial mortgage-backed securities
—

 
839.1

 
—

 
839.1

 
Other asset-backed securities
—

 
462.4

 
33.2

 
495.6

 
Total fixed maturities, including securities pledged
1,093.4

 
20,140.3

 
221.5

 
21,455.2

 
Equity securities, available-for-sale
125.8

 
—

 
17.0

 
142.8

 
Derivatives:
 

 
 

 
 

 
 
 
Interest rate contracts
—

 
508.3

 
—

 
508.3

 
Foreign exchange contracts
—

 
0.4

 
—

 
0.4

 
Equity contracts
0.4

 
—

 
—

 
0.4

 
Credit contracts
—

 
3.6

 
—

 
3.6

 
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements
1,229.3

 
—

 
—

 
1,229.3

 
Assets held in separate accounts
47,916.5

 
5,722.5

 
16.3

 
53,655.3

 
Total assets
$
50,365.4

 
$
26,375.1

 
$
254.8

 
$
76,995.3

 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
Annuity product guarantees:
 
 
 
 
 
 
 
 
FIA
$
—

 
$
—

 
$
20.4

 
$
20.4

 
Stabilizer and MCGs
—

 
—

 
102.0

 
102.0

 
Other derivatives:
 
 
 
 
 
 
 
 
Interest rate contracts
0.7

 
327.8

 
—

 
328.5

 
Foreign exchange contracts
—

 
18.3

 
—

 
18.3

 
Embedded derivative on reinsurance
—

 
—

 
—

 
—

 
Total liabilities
$
0.7

 
$
346.1

 
$
122.4

 
$
469.2

 
(1) Primarily U.S. dollar denominated.
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
The following table summarizes the change in fair value of the Company's Level 3 assets and liabilities and transfers in and out of Level 3 for the year ended December 31, 2013:
 
Fair Value
as of
January 1
 
Total
Realized/Unrealized
Gains (Losses) Included in:
 
Purchases
 
Issuances
 
Sales
 
Settlements
 
Transfers in to Level 3(2)
 
Transfers out of Level 3(2)
 
Fair Value
as of
December 31
 
Change in Unrealized Gains (Losses) Included in Earnings(3)
 
 
 
Net Income
 
OCI
Fixed maturities, including securities pledged:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies and authorities
$
—

 
$
—

 
$
—

 
$
5.1

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
5.1

 
$
—

 
U.S. corporate, state and municipalities
154.6

 
(0.3
)
 
0.4

 
—

*
—

 
(6.0
)
 
(4.3
)
 
0.9

 
—

 
145.3

 
(0.3
)
 
Foreign
24.6

 
—

*
1.3

 
22.2

 
—

 
(1.9
)
 
(10.7
)
 
7.3

 
—

*
42.8

 
—

*
Residential mortgage-backed securities
9.1

 
(2.0
)
 
(0.3
)
 
17.5

 
—

 
—

 
—

 
—

 
(0.6
)
 
23.7

 
(2.0
)
 
Other asset-backed securities
33.2

 
2.3

 
(0.7
)
 
—

 
—

 
(2.8
)
 
(9.9
)
 
—

 
(4.4
)
 
17.7

 
0.9

 
Total fixed maturities, including securities pledged
221.5

 
—

*
0.7

 
44.8

 
—

 
(10.7
)
 
(24.9
)
 
8.2

 
(5.0
)
 
234.6

 
(1.4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities, available-for-sale
17.0

 
(0.3
)
 
1.4

 
—

 
—

 
—

*
—

*
34.5

 
(16.7
)
 
35.9

 
—

 
Derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product guarantees:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilizer and MCGs(1)
(102.0
)
 
108.2

 
—

 
(6.2
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
FIA(1)
(20.4
)
 
(2.7
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(23.1
)
 
—

 
Other derivatives, net
—

*
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

*
—

 
Assets held in separate accounts(4)
16.3

 
0.1

 
—

 
16.0

 
—

 
(11.6
)
 
—

 
2.2

 
(9.9
)
 
13.1

 
—

 
* Less than $0.1
 
(1) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Consolidated Statements of Operations.
(2) The Company's policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
(3) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net realized capital gains (losses) in the Consolidated Statements of Operations.
(4) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which result in a net zero impact on net income (loss) for the Company.
The following table summarizes the change in fair value of the Company's Level 3 assets and liabilities and transfers in and out of Level 3 for the year ended December 31, 2012:
 
Fair Value
as of
January 1
 
Total
Realized/Unrealized
Gains (Losses) Included in:
 
Purchases
 
Issuances
 
Sales
 
Settlements
 
Transfers in to Level 3(2)
 
Transfers out of Level 3(2)
 
Fair Value
as of
December 31
 
Change in Unrealized Gains (Losses) Included in Earnings(3)
 
 
Net Income
 
OCI
 
 
 
 
Fixed maturities, including securities pledged:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies and authorities
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

U.S. corporate, state and municipalities
129.1

 
(0.3
)
 
(1.4
)
 
0.4

 
—

 
—

 
(7.9
)
 
38.3

 
(3.6
)
 
154.6

 
(0.4
)
Foreign
51.1

 
0.9

 
(4.2
)
 
—

 
—

 
(5.7
)
 
(12.5
)
 
20.7

 
(25.7
)
 
24.6

 
—

Residential mortgage-backed securities
41.0

 
0.7

 
2.7

 
2.3

 
—

 
(6.0
)
 
—

 
—

 
(31.6
)
 
9.1

 
(0.1
)
Other asset-backed securities
27.7

 
1.1

 
2.5

 
—

 
—

 
—

 
(1.9
)
 
3.8

 
—

 
33.2

 
0.8

Total fixed maturities, including securities pledged
248.9

 
2.4

 
(0.4
)
 
2.7

 
—

 
(11.7
)
 
(22.3
)
 
62.8

 
(60.9
)
 
221.5

 
0.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity securities, available-for-sale
19.0

 
(0.2
)
 
(0.2
)
 
0.8

 
—

 
(2.4
)
 
—

 
0.3

 
(0.3
)
 
17.0

 
(0.5
)
Derivatives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product guarantees:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stabilizer and MCGs(1)
(221.0
)
 
124.5

 
—

 
(5.5
)
 
—

 
—

 
—

 
—

 
—

 
(102.0
)
 
—

FIA(1)
(16.3
)
 
(4.1
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(20.4
)
 
—

Other derivatives, net
(12.6
)
 
(1.8
)
 
—

 
—

 
—

 
—

 
14.4

 
—

 
—

 
—

 
—

Assets held in separate accounts(4)
16.1

 
0.3

 
—

 
16.3

 
—

 
(8.3
)
 
—

 
—

 
(8.1
)
 
16.3

 
0.6

(1) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Consolidated Statements of Operations.
(2) The Company's policy is to recognize transfers in and transfers out as of the beginning of the reporting period.
(3) For financial instruments still held as of December 31, amounts are included in Net investment income and Total net realized capital gains (losses) in the Consolidated Statements of Operations.
(4) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which result in a net zero impact on net income (loss) for the Company.
Fair Value Inputs, Liabilities, Quantitative Information
The following table presents the unobservable inputs for Level 3 fair value measurements as of December 31, 2013:
 
 
Range(1)
 
Unobservable Input
 
FIA
 
Stabilizer / MCG
 
Interest rate implied volatility
 
—

 
0.2% to 8.0%
 
Nonperformance risk
 
-0.1% to 0.79%

 
-0.1% to 0.79%
 
Actuarial Assumptions:
 
 
 
 
 
Lapses
 
0% to 10%

(2) 
0% to 55%
(3) 
Policyholder Deposits(4)
 
—

 
0% to 60%
(3) 

(1) Represents the range of reasonable assumptions that management has used in its fair value calculations.
(2) Lapse rates tend to be lower during the contractual surrender charge period and higher after the surrender charge period ends; the highest lapse rates occur in the year immediately after the end of the surrender charge period. The Company makes dynamic adjustments to lower the lapse rates for contracts that are more "in the money."
(3) Stabilizer contracts with recordkeeping agreements have different range of lapse and policyholder deposit assumptions from Stabilizer (Investment only) and MCG contracts as shown below:
 
Percentage of Plans
 
Overall Range of Lapse Rates
 
Range of Lapse Rates for 85% of Plans
 
Overall Range of Policyholder Deposits
 
Range of Policyholder Deposits for 85% of Plans
Stabilizer (Investment Only) and MCG Contracts
88
%
 
0-30%
 
0-15%
 
0-55%
 
0-15%
Stabilizer with Recordkeeping Agreements
12
%
 
0-55%
 
0-25%
 
0-60%
 
0-30%
Aggregate of all plans
100
%
 
0-55%
 
0-25%
 
0-60%
 
0-30%

(4) Measured as a percentage of assets under management or assets under administration.

The following table presents the unobservable inputs for Level 3 fair value measurements as of December 31, 2012:
 
 
Range(1)
 
Unobservable Input
 
FIA
 
Stabilizer / MCG
 
Interest rate implied volatility
 
-
 
0.1% to 7.6%
 
Nonperformance risk
 
0.1% to 1.3%
 
0.1% to 1.3%
 
Actuarial Assumptions:
 
 
 
 
 
Lapses
 
0% - 10%
(2) 
0% to 55%
(3) 
Policyholder Deposits(4)
 
-
 
0% to 60%
(3) 

(1) Represents the range of reasonable assumptions that management has used in its fair value calculations.
(2) Lapse rates tend to be lower during the contractual surrender charge period and higher after the surrender charge period ends; the highest lapse rates occur in the year immediately after the end of the surrender charge period. The Company makes dynamic adjustments to lower the lapse rates for contracts that are more "in the money."
(3) Stabilizer contracts with recordkeeping agreements have different range of lapse and policyholder deposit assumptions from Stabilizer (Investment only) and MCG contracts as shown below:
 
Percentage of Plans
 
Overall Range of Lapse Rates
 
Range of Lapse Rates for 85% of Plans
 
Overall Range of Policyholder Deposits
 
Range of Policyholder Deposits for 85% of Plans
Stabilizer (Investment Only) and MCG Contracts
87
%
 
0-30%
 
0-15%
 
0-55%
 
0-20%
Stabilizer with Recordkeeping Agreements
13
%
 
0-55%
 
0-25%
 
0-60%
 
0-30%
Aggregate of all plans
100
%
 
0-55%
 
0-25%
 
0-60%
 
0-30%

(4) Measured as a percentage of assets under management or assets under administration.
Fair Value, by Balance Sheet Grouping
The carrying values and estimated fair values of the Company's financial instruments as of the dates indicated:
 
December 31,
 
2013
 
2012
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
Assets:
 
 
 
 
 
 
 
Fixed maturities, including securities pledged
$
20,705.8

 
$
20,705.8

 
$
21,455.2

 
$
21,455.2

Equity securities, available-for-sale
134.9

 
134.9

 
142.8

 
142.8

Mortgage loans on real estate
3,396.1

 
3,403.9

 
2,872.7

 
2,946.9

Policy loans
242.0

 
242.0

 
240.9

 
240.9

Limited partnerships/corporations
180.9

 
180.9

 
179.6

 
179.6

Cash, cash equivalents, short-term investments and short-term investments under securities loan agreements
529.7

 
529.7

 
1,229.3

 
1,229.3

Derivatives
464.4

 
464.4

 
512.7

 
512.7

Notes receivable from affiliates
175.0

 
186.4

 
175.0

 
194.3

Assets held in separate accounts
60,104.9

 
60,104.9

 
53,655.3

 
53,655.3

Liabilities:
 
 
 
 
 
 
 
Investment contract liabilities:
 
 
 
 
 
 
 
Funding agreements without fixed maturities and deferred annuities(1)
21,010.8

 
24,379.6

 
20,263.4

 
25,156.5

Supplementary contracts, immediate annuities and other
624.3

 
727.1

 
680.0

 
837.3

Derivatives:
 
 
 
 
 
 
 
Annuity product guarantees:
 
 
 
 
 
 
 
FIA
23.1

 
23.1

 
20.4

 
20.4

Stabilizer and MCGs
—

 
—

 
102.0

 
102.0

Other derivatives
216.6

 
216.6

 
346.8

 
346.8

Long-term debt
4.9

 
4.9

 
4.9

 
4.9

Embedded derivatives on reinsurance
(54.0
)
 
(54.0
)
 
—

 
—


(1) Certain amounts included in Funding agreements without fixed maturities and deferred annuities are also reflected within the Annuity product guarantees section of the table above.