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ASSURANT, INC. – 2013 Form 10-KF-30
5 Fair Value Disclosures
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 consolidated balance sheets approximates fair value.
Policy reserves under investment products: the fair values for
the Company’s policy reserves under investment products are
determined using discounted cash fl ow analysis. Key inputs
to the valuation include projections of policy cash fl ows,
reserve run-off, 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.
Obligation under securities agreements: obligation under
securities agreements is reported at the amount of cash
received from the selected broker/dealers.
The following table discloses the carrying value, fair value amount and hierarchy level of the fi nancial instruments that are
not recognized or are not carried at fair value in the consolidated balance sheets:
Carrying Value
December 31, 2013
Fair Value
Total Level 1 Level 2 Level 3
Financial Assets
Commercial mortgage loans on real estate $ 1,287,032 $ 1,444,974 $ 0 $ 0 $ 1,444,974
Policy loans 51,678 51,678 51,678 0 0
TOTAL FINANCIAL ASSETS $ 1,338,710 $ 1,496,652 $ 51,678 $ 0 $ 1,444,974
Financial Liabilities
Policy reserves under investment products
(Individual and group annuities, subject to
discretionary withdrawal)(1) $ 809,628 $ 808,734 $ 0 $ 0 $ 808,734
Funds withheld under reinsurance 76,778 76,778 76,778 0 0
Debt 1,638,118 1,656,588 0 1,656,588 0
Obligations under securities agreements 95,206 95,206 95,206 0 0
TOTAL FINANCIAL LIABILITIES $ 2,619,730 $ 2,637,306 $ 171,984 $ 1,656,588 $ 808,734
Carrying Value
December 31, 2012
Fair Value
Total Level 1 Level 2 Level 3
Financial Assets
Commercial mortgage loans on real estate $ 1,311,682 $ 1,468,723 $ 0 $ 0 $ 1,468,723
Policy loans 52,938 52,938 52,938 0 0
TOTAL FINANCIAL ASSETS $ 1,364,620 $ 1,521,661 $ 52,938 $ 0 $ 1,468,723
Financial Liabilities
Policy reserves under investment products
(Individual and group annuities, subject to
discretionary withdrawal)(1) $ 862,398 $ 902,449 $ 0 $ 0 $ 902,449
Funds withheld under reinsurance 61,413 61,413 61,413 0 0
Debt 972,399 1,050,920 0 1,050,920 0
Obligations under securities agreements 94,714 94,714 94,714 0 0
TOTAL FINANCIAL LIABILITIES $ 1,990,924 $ 2,109,496 $ 156,127 $ 1,050,920 $ 902,449
(1) Only the fair value of the Company’s policy reserves for investment-type contracts (those without significant mortality or morbidity risk) are
reflected in the table above.