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ASSURANT, INC.2012 Form10-K F-27
5 Fair Value Disclosures
and price to estimated 2013 earnings, which were estimated based on
publicly available data related to comparable guideline companies. In
addition,  nancial multiples were also estimated from publicly available
purchase price data for acquisitions of companies operating in the
insurance industry.  e estimated fair value of the reporting units was
more heavily weighted towards the income approach because in the
current economic environment the earnings capacity of a business is
generally considered the most important factor in the valuation of a
business enterprise.  is fair value determination was categorized as
Level 3 (unobservable) in the fair value hierarchy.
During the fourth quarter of 2012, a $26,458 impairment charge
was recorded in connection with the 2007 acquisitions of two U.K.
mortgage insurance brokers due to the persistency rates of the acquired
business declining signi cantly following actions by an independent
underwriter of the business. During the fourth quarter of 2010, a
$47,612 impairment charge was recorded related to the non-renewal
of a block of business related to the 2008 acquisition of the Warranty
Management Group business from General Electric Co.  ese fair
value determinations were categorized as Level 3 (unobservable) in
the fair value hierarchy.
ere was no remaining goodwill or material other intangible assets
measured at fair value on a non-recurring basis on which an impairment
charge was recorded as of December31, 2012, 2011 and 2010.
e following table presents the goodwill and material other intangible
assets impairment charges as of December31, 2012, 2011 and 2010:
Impairment Charges TwelveMonthsEndedDecember31,
2012 2011 2010
Goodwill $ 0 $ 0 $ 306,381
Other intangible assets $ 26,458 $ 0 $ 47,612
Fair Value of Financial Instruments Disclosures
e nancial instruments guidance requires disclosure of fair value
information about  nancial instruments, as de ned therein, for which
it is practicable to estimate such fair value.  erefore, it requires fair
value disclosure for  nancial instruments that are not recognized or are
not carried at fair value in the consolidated balance sheets. However,
this guidance excludes certain  nancial instruments, including those
related to insurance contracts and those accounted for under the equity
method and joint ventures guidance (such as real estate joint ventures).
For the  nancial instruments included within the following  nancial
assets and  nancial liabilities, the carrying value in the consolidated
balance sheets equals or approximates fair value. Please refer to the
Fair Value Inputs and Valuation Techniques for Financial Assets and
Liabilities Disclosures section above for more information on the  nancial
instruments included within the following  nancial assets and  nancial
liabilities and the methods and assumptions used to estimate fair value:
•Cash and cash equivalents
•Fixed maturity securities
•Equity securities
•Short-term investments
•Collateral held/pledged under securities lending
•Other investments
•Other assets
•Assets held in separate accounts
•Other liabilities
•Liabilities related to separate accounts
In estimating the fair value of the  nancial instruments that are not
recognized or are not carried at fair value in the consolidated balance
sheets, the Company used the following methods and assumptions:
Commercial mortgage loans: the fair values of mortgage loans are estimated
using discounted cash  ow models.  e model inputs include mortgage
amortization schedules and loan provisions, an internally developed
credit spread based on the credit risk associated with the borrower and
the U.S. Treasury spot curve. Mortgage loans with similar characteristics
are aggregated for purposes of the calculations.
Policy loans: the carrying value of policy loans reported in the balance
sheets approximates fair value.
Policy reserves under investment product: the fair values for the Company’s
policy reserves under investment products are determined using
discounted cash  ow analysis. Key inputs to the valuation include
projections of policy cash  ows, reserve run-o , market yields and
risk margins.
Funds held under reinsurance: the carrying value reported approximates
fair value due to the short maturity of the instruments.
Debt: the fair value of debt is based upon matrix pricing performed
by the pricing service utilizing the standard inputs.
Obligations under securities agreements: obligation under securities
agreements is reported at the amount of cash received from the selected
broker/dealers.