Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Disclosure- Commitments and Contingencies [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

(a) Concentration of Credit Risk

Financing receivables

Included in the Company's Other invested assets are certain notes receivable which meet the definition of financing receivables and are accounted for using the cost method of accounting. These notes receivable are collateralized by commercial or residential property. The Company utilizes a third party consultant to determine the initial investment criteria and to monitor the subsequent performance of the notes receivable. The process undertaken prior to the investment in these notes receivable includes an examination of the underlying collateral. The Company reviews its receivable positions on at least a quarterly basis using actual redemption experience. At June 30, 2013 and December 31, 2012, based on the latest available information, the Company recorded an allowance for credit losses related to these notes receivable of $3.2 million and $3.0 million, respectively.

The Company monitors the performance of the notes receivable based on the type of underlying collateral and by assigning a “performing” or a “non-performing” indicator of credit quality to each individual receivable. At June 30, 2013, the Company's notes receivable of $44.0 million were all performing and were collateralized by residential property and commercial property of $30.1 million and $13.9 million, respectively. At December 31, 2012, the Company's notes receivable of $46.7 million were all performing and were collateralized by residential property and commercial property of $31.3 million and $15.4 million, respectively.

The Company purchased $27.0 million and $27.2 million of financing receivables during the three monthsand six months ended June 30, 2013.The Company purchased $37.4 million of financing receivables during the three months and six months ended June 30, 2012. There were no sales of financing receivables during the three monthsand six months ended June 30, 2013 and 2012, however, the outstanding balances were reduced by settlements of the underlying debt.

(b) Employment Agreements

In April 2013, the Company announced the restructuring of its business support operations into a single integrated worldwide support platform and changes to the structure of its Global Non-life Operations. The restructuring includes involuntary and voluntary employee termination plans in certain jurisdictions (collectively, termination plans). Employees affected by the termination plans have varying leaving dates, largely through to mid-2014.

During the three months and six months ended June 30, 2013, the Company recorded a pre-tax charge of $43.2 million related to the costs of the restructuring, which were primarily related to the termination plans, within other operating expenses. The continuing salary and other employment benefit costs related to the affected employees will be expensed as the employee remains with the Company and provides service.

(c) Legal Proceedings

There has been no significant change in legal proceedings at June 30, 2013 compared to December 31, 2012. See Note 17(e) to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.