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Related Parties
6 Months Ended
Jun. 30, 2011
Related Party Transactions [Abstract]  
Related Parties
Note 15 - Related Parties
One of Unitrin’s directors, Mr. Fayez Sarofim, is the Chairman of the Board, President and the majority shareholder of Fayez Sarofim & Co. (“FS&C”), a registered investment advisory firm. Unitrin’s subsidiary, Trinity Universal Insurance Company (“Trinity”), had $110.9 million in assets managed by FS&C at June 30, 2011, under an agreement with FS&C whereby FS&C provides investment management services with respect to certain assets of Trinity for a fee based on the fair market value of the assets under management. Such agreement is terminable by either party at any time upon 30 days advance written notice. Investment expenses incurred in connection with such agreement were $0.2 million and $0.1 million for the six and three months ended June 30, 2011, respectively. Investment expenses incurred in connection with such agreement were insignificant for the six and three months ended June 30, 2010.
FS&C also provides investment management services with respect to certain funds of the Company’s defined benefit pension plan. At June 30, 2011, the Company’s defined benefit pension plan had $105.9 million in assets managed by FS&C. Investment expenses in connection with such agreement were $0.1 million for the six months ended June 30, 2011.
With respect to the Company’s defined contribution plans, one of the alternative investment choices afforded to participating employees is the Dreyfus Appreciation Fund, an open-end, diversified managed investment fund. FS&C provides investment management services to the Dreyfus Appreciation Fund as a sub-investment advisor. According to published reports filed by FS&C with the SEC, the Dreyfus Appreciation Fund pays monthly fees to FS&C according to a graduated schedule computed at an annual rate based on the value of the Dreyfus Appreciation Fund’s average daily net assets. The Company does not compensate FS&C for services provided to the Dreyfus Appreciation Fund. Participants in the Company’s defined contribution plans had allocated $19.4 million for investment in the Dreyfus Appreciation Fund at June 30, 2011, representing 6.4% of the total amount invested in the Company’s defined contribution plans at June 30, 2011.
The Company believes that the services described above have been provided on terms no less favorable to the Company than could have been negotiated with non-affiliated third parties.