Assurant 2010 Annual Report Download - page 77

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F-7ASSURANT, INC.2010 Form 10K
2 Summary of Signifi cant Accounting Policies
Notes to Consolidated Financial Statements
December 31, 2010, 2009 and 2008
(In thousands except number of shares and per share amounts)
1. Nature of Operations
Assurant, Inc. (“Assurant” or the “Company”) is a Delaware corporation,
whose common stock trades on the New York Stock Exchange (“NYSE”)
under the symbol AIZ. Assurant is a holding company whose subsidiaries
provide specialized insurance products and related services in North
America and select worldwide markets.
rough its operating subsidiaries, the Company provides debt protection
administration, credit-related insurance, warranties and service contracts,
pre-funded funeral insurance, lender-placed homeowners insurance,
manufactured housing homeowners insurance, individual health and
small employer group health insurance, group dental insurance, group
disability insurance and group life insurance.
2. Summary of Signifi cant Accounting Policies
Basis of Presentation
e consolidated fi nancial statements have been prepared in accordance
with accounting principles generally accepted in the United States
of America (“GAAP”). Amounts are presented in United States of
America (“U.S.”) dollars and all amounts are in thousands, except for
number of shares, per share amounts and number of securities in an
unrealized loss position.
Principles of Consolidation
e consolidated fi nancial statements include the accounts of the
Company and all of its wholly owned subsidiaries. All signifi cant inter-
company transactions and balances are eliminated in consolidation.
Use of Estimates
e preparation of fi nancial statements in conformity with GAAP
requires management to make estimates and assumptions that aff ect the
reported amounts of assets and liabilities.  e items on the Company’s
balance sheets aff ected by the use of estimates include but are not
limited to, investments, premiums and accounts receivable, reinsurance
recoverables, deferred acquisition costs (“DAC”), deferred income
taxes and associated valuation allowances, goodwill, valuation of
business acquired (“VOBA”), future policy benefi ts and expenses,
unearned premiums, claims and benefi ts payable, deferred gain on
disposal of businesses, pension and post-retirement liabilities and
commitments and contingencies.  e estimates are sensitive to market
conditions, investment yields, mortality, morbidity, commissions and
other acquisition expenses, policyholder behavior and other factors.
Actual results could diff er from the estimates recorded.  e Company
believes the amounts reported are reasonable and adequate.
Earnings Per Share
Basic earnings per share is computed by dividing net income by the
weighted average number of common shares outstanding for the
period. Diluted earnings per share refl ects the potential dilution that
could occur if securities or other contracts that can be converted into
common stock were exercised as of the end of the period. Restricted
stock and restricted stock units which have non-forfeitable rights to
dividends or dividend equivalents are included in calculating basic and
diluted earnings per share under the two-class method.
Comprehensive Income (Loss)
Comprehensive income (loss) is comprised of net income, net unrealized
gains and losses on foreign currency translation, net unrealized gains and
losses on securities classifi ed as available for sale, net unrealized gains
and losses on other-than-temporarily impaired securities and expenses
for pension and post-retirement plans, less deferred income taxes.
Reclassifi cations
Certain prior period amounts have been reclassifi ed to conform to
the 2010 presentation.
Foreign Currency Translation
For foreign affi liates where the local currency is the functional currency,
unrealized foreign currency translation gains and losses net of deferred
income taxes have been refl ected in accumulated other comprehensive
income (loss) (“AOCI”). Other than for one of our wholly owned
Canadian subsidiaries, deferred taxes have not been provided for
unrealized currency translation gains and losses since the Company
intends to indefi nitely reinvest the earnings in these other jurisdictions.
Transaction gains and losses on assets and liabilities denominated
in foreign currencies are recorded in underwriting, general and
administration expenses in the consolidated statements of operations
during the period in which they occur.