Assurant 2015 Annual Report Download - page 104

ASSURANT, INC. – 2015 Form 10-KF-18
4 Dispositions
3� Reorganization
On June 7, 2015, the Company concluded its comprehensive
review of strategic alternatives for the Assurant Health
business segment and decided to sharpen its focus on housing
and lifestyle specialty protection products and services�
The Company has begun a process to wind down its major
medical operations and expects to substantially complete its
exit from the health insurance market by the end of 2016�
As part of this process, Assurant reinsured its supplemental
and small-group self-funded lines of business and sold certain
legal entities to National General Holdings Corp� (“National
General”), effective October 1, 2015�
The following table presents information regarding exit-related charges:
Severance
and
retention
Long-
lived asset
impairments
and contract
and lease
terminations
Other
transaction
costs Total
BALANCE AT JANUARY 1, 2015 $—$— $ — $ —
Charges 14,435 22,307 4,996 41,738
Non-cash adjustment —(21,247) (2,947) (24,194)
Cash payments — — — —
BALANCE AT JUNE 30, 2015 $ 14,435 $ 1,060 $ 2,049 $ 17,544
Charges 20,927 13 5,795 26,735
Cash payments (10,728) (168) (4,338) (15,234)
BALANCE AT SEPTEMBER 30, 2015 $ 24,634 $ 905 $ 3,506 $ 29,045
Charges 16,344 17 795 17,156
Cash payments (4,413) (152) (3,808) (8,373)
BALANCE AT DECEMBER 31, 2015 $ 36,565 $ 770 $ 493 $ 37,828
Amount expected to be incurred $82,038 $27,651 $11,586 $121,275
Premium deciency reserves $169,101
TOTAL AMOUNT EXPECTED TO BE INCURRED $ 290,376
Amounts in the above table are included in underwriting, general
and administrative expenses on the Consolidated Statements
of Operations�
The total amount expected to be incurred is an estimate that
is subject to change as facts and circumstances evolve� For
instance, severance and retention estimates could change
if employees previously identied for separation resign
from the Company before the date through which they are
required to be employed in order to receive severance and
retention benets.
The premium deciency reserve liability decreased $91,054 from
$169,101 at September 30, 2015 to $78,047 at December 31,
2015� The $91,054 decrease is consistent with the estimate
established at September 30, 2015�
Future cash payments, for these exit-related charges, are
expected to be substantially complete by 2016�
4� Dispositions
On October 7, 2015, the Company sold certain assets
related to the Assurant Specialty Property’s automobile title
administration services business for cash consideration of
$19,600� The Company recognized a gain on sale of $16,773
in the fourth quarter 2015, which is classied in fees and
other income on the Consolidated Statements of Operations�
On October 1, 2015, the Company completed the sale of
Assurant Health’s supplemental and small-group self-funded
lines of business and certain assets to National General
Holdings Corp� (“National General”), for cash consideration
of $14,000, consisting primarily of a ceding commission� Since
the form of sale did not discharge the Company’s primary
liability to the insureds, a $5,336 gain on the disposal of
the small-group self-funded business was deferred and
reported as a liability as of the date of sale� The liability is
decreased and recognized as revenue over the estimated life
of contract terms� The Company will review and evaluate
the estimates affecting the deferred gain annually or when
signicant information affecting the estimates becomes known
to the Company, and will adjust the revenue recognized
accordingly� Losses resulting from coinsurance transactions
are recognized immediately, thus in the fourth quarter 2015
the Company recognized a loss of $11,587, primarily related
to the write-off of deferred acquisition costs, on the sale of
the supplemental business. The loss on sale is classied in
underwriting, general and administrative expenses on the