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Related Parties
12 Months Ended
Dec. 31, 2012
Related Party Transactions [Abstract]  
Related Parties
NOTE 24. RELATED PARTIES
One of Kemper’s directors, Mr. Fayez Sarofim, is the Chairman of the Board, Chief Executive Officer and the majority shareholder of FS&C, a registered investment advisory firm. In the second quarter of 2010, Kemper’s subsidiary, Trinity, entered into 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. At December 31, 2012, Trinity had $125.2 million in assets managed by FS&C. Investment Expenses incurred in connection with such agreement were $0.3 million, $0.3 million and $0.1 million for the years ended December 31, 2012, 2011 and 2010, respectively.
FS&C also provides investment management services with respect to certain funds of the Company’s defined benefit pension plans. The Company’s defined benefit pension plans had $120.7 million, $107.1 million and $98.3 million in assets managed by FS&C at December 31, 2012, 2011 and 2010, respectively. The Company’s defined benefit pension plans incurred, in the aggregate, expenses of $0.3 million, $0.3 million and $0.3 million to FS&C for the years ended December 31, 2012, 2011 and 2010, respectively.
NOTE 24. RELATED PARTIES (Continued)
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 $20.4 million, $19.3 million and $18.2 million for investment in the Dreyfus Appreciation Fund at December 31, 2012, 2011 and 2010, respectively, representing 7%, 7% and 6% of the total amount invested in the Company’s defined contribution plans at such dates.
The Company believes that the transactions described above have been provided on terms no less favorable to the Company than could have been negotiated with non-affiliated third parties.
As described in Note 21, “Other Reinsurance,” to the Consolidated Financial Statements, the Company also has certain relationships with Capitol, a mutual insurance company which is owned by its policyholders, and its subsidiary, ORCC.