Assurant 2012 Annual Report Download - page 83

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ASSURANT, INC.2012 Form10-K F-7
2 Summary of Signi cant Accounting Policies
Notes to Consolidated Financial Statements
December 31, 2012, 2011 and 2010
(In thousands except number of shares and per share amounts)
1. Nature of Operations
Assurant, Inc. (the “Company”) is a holding company whose subsidiaries
provide specialized insurance products and related services in North
America and select worldwide markets.
e Company is traded on the New York Stock Exchange under the
symbol AIZ.
rough its operating subsidiaries, the Company provides debt
protection administration, credit-related insurance, warranties and
service contracts, pre-funded funeral insurance, solar project insurance,
lender-placed homeowners insurance, renters insurance and related
products, manufactured housing homeowners insurance, individual health
and small employer group health insurance, group dental insurance,
group disability insurance and reinsurance, and group life insurance.
2. Summary of Signifi cant Accounting Policies
Basis of Presentation
e consolidated  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  nancial statements include the accounts of the
Company and all of its wholly owned subsidiaries. All inter-company
transactions and balances are eliminated in consolidation.
Use of Estimates
e preparation of  nancial statements in conformity with GAAP
requires management to make estimates and assumptions that a ect the
reported amounts of assets and liabilities.  e items on the Company’s
balance sheets a 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 bene ts and expenses,
unearned premiums, claims and bene 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 di er from the estimates recorded.  e Company
believes all 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 re 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
Comprehensive income is comprised of net income, net unrealized gains
and losses on foreign currency translation, net unrealized gains and
losses on securities classi 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 reclassi ed to conform to
the 2012 presentation.
Foreign Currency Translation
For foreign a liates where the local currency is the functional currency,
unrealized foreign currency translation gains and losses net of deferred
income taxes have been re ected in accumulated other comprehensive
income (“AOCI”). Other than for two of our wholly owned Canadian
subsidiaries, deferred taxes have not been provided for unrealized currency
translation gains and losses since the Company intends to inde 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.