Assurant 2011 Annual Report Download - page 122

ASSURANT, INC.2011 Form10-KF-46
21 Retirement and Other Employee Bene ts
the periods for which services are provided; 4) the classi cation and
carrying amounts of investments in certain securities are di erent
under SAP than under GAAP; 5) the criteria for providing asset
valuation allowances, and the methodologies used to determine the
amounts thereof, are di erent under SAP than under GAAP; 6) the
timing of establishing certain reserves, and the methodologies used to
determine the amounts thereof, are di erent under SAP than under
GAAP; 7) certain assets are not admitted for purposes of determining
surplus under SAP; 8) methodologies used to determine the amounts
of deferred taxes, intangible assets and goodwill are di erent under
SAP than under GAAP; and 9) the criteria for obtaining reinsurance
accounting treatment is di erent under SAP than under GAAP.
 e combined statutory net income, excluding intercompany dividends
and surplus note interest, and capital and surplus of the Company’s
U.S. domiciled statutory insurance subsidiaries follow:
Years Ended December31,
2011 2010 2009
Statutory net income
P&C companies $ 367,315 $ 473,191 $ 488,545(1)
Life companies 148,554 206,817 78,880
TOTAL STATUTORY NET INCOME $ 515,869 $ 680,008 $ 567,425
(1) The $488,545 total statutory P&C companies net income includes a favorable legal settlement of $90,350 (after-tax) with Willis Limited, a subsidiary of Willis Group Holdings Limited.
December31,
2011 2010
Statutory capital and surplus
P&C companies $ 1,227,075 $ 1,227,780
Life companies 1,084,411 1,100,498
TOTAL STATUTORY CAPITAL AND SURPLUS $ 2,311,486 $ 2,328,278
 e Company also has non-insurance subsidiaries and foreign insurance
subsidiaries that are not subject to SAP.  e statutory net income and
statutory capital and surplus presented above do not include foreign
insurance subsidiaries in accordance with SAP.
Insurance enterprises are required by state insurance departments to
adhere to minimum risk-based capital (“RBC”) requirements developed
by the NAIC. All of the Company’s insurance subsidiaries exceed
minimum RBC requirements.
 e payment of dividends to the Company by any of the Company’s
regulated U.S domiciled insurance subsidiaries in excess of a certain
amount (i.e., extraordinary dividends) must be approved by the
subsidiary’s domiciliary state department of insurance. Ordinary
dividends, for which no regulatory approval is generally required, are
limited to amounts determined by a formula, which varies by state.
 e formula for the majority of the states in which the Company’s
subsidiaries are domiciled is based on the prior year’s statutory net
income or 10% of the statutory surplus as of the end of the prior
year. Some states limit ordinary dividends to the greater of these two
amounts, others limit them to the lesser of these two amounts and
some states exclude prior year realized capital gains from prior year
net income in determining ordinary dividend capacity. Some states
have an additional stipulation that dividends may only be paid out of
earned surplus. If insurance regulators determine that payment of an
ordinary dividend or any other payments by the Company’s insurance
subsidiaries to the Company (such as payments under a tax sharing
agreement or payments for employee or other services) would be adverse
to policyholders or creditors, the regulators may block such payments
that would otherwise be permitted without prior approval. Based on
the dividend restrictions under applicable laws and regulations, the
maximum amount of dividends that the Company’s U.S domiciled
insurance subsidiaries could pay to the Company in 2012 without
regulatory approval is approximately $504,000. No assurance can
be given that there will not be further regulatory actions restricting
the ability of the Company’s insurance subsidiaries to pay dividends.
21. Retirement and Other Employee Benefi ts
Defi ned Benefi t Plans
 e Company and its subsidiaries participate in a non-contributory,
quali ed de ned bene t pension plan covering substantially all employees.
 is Plan is considered “quali ed” because it meets the requirements
of Internal Revenue Code Section401(a) (“IRC 401(a)”) and the
Employee Retirement Income Security Act of 1974 (“ERISA”).  e
quali ed de ned bene t pension plan is a pension equity plan with a
grandfathered  nal average earnings plan for a certain group of employees.
Bene ts are based on certain years of service and the employee’s
compensation during certain such years of service.  e Company’s
funding policy is to contribute amounts to the plan su cient to meet
the minimum funding requirements in ERISA, plus such additional
amounts as the Company may determine to be appropriate from time
to time up to the maximum permitted.  e funding policy considers
several factors to determine such additional amounts including items
such as the amount of service cost plus 15% of the Assurant Pension
Plan de cit and the capital position of the Company. During 2011, we
contributed $40,000 in cash to the Assurant Pension Plan. We expect to
contribute $50,000 in cash to the Assurant Pension Plan over the course
of 2012. Contributions are intended to provide not only for bene ts
attributed to service to date, but also for those expected to be earned
in the future. Plan assets are maintained in a separate trust and as such
are not included in the consolidated balance sheets of the Company.