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ASSURANT, INC. – 2015 Form 10-KF-32
6 Fair Value Disclosures
Fair Value of Financial Instruments Disclosures
The 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. Therefore, 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 agreements
•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.
The 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 consolidated balance sheets approximates fair value�
Other investments: Other investments include equity
investments accounted for under the cost method, real
estate held for sale, Certied Capital Company and low
income housing tax credits, business debentures, credit
tenant loans and social impact loans which are recorded at
cost or amortized cost� The carrying value reported for these
investments approximates fair value� Due to the nature of
these investments, there is a lack of liquidity in the primary
market which results in the holdings being classied as Level 3.
Policy reserves under investment products: 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-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 tables disclose the carrying value, fair value amount and hierarchy level of the nancial instruments that are
not recognized or are not carried at fair value in the consolidated balance sheets:
December 31, 2015
Fair Value
Carrying Value Total Level 1 Level 2 Level 3
Financial Assets
Commercial mortgage loans on real estate $ 1,151,256 $ 1,201,806 $ —$—$ 1,201,806
Policy loans 43,858 43,858 43,858 — —
Other investments 27,534 27,534 — — 27,534
TOTAL FINANCIAL ASSETS $1,222,648 $1,273,198 $43,858 $ — $ 1,229,340
Financial Liabilities
Policy reserves under investment products
(Individual and group annuities, subject to
discretionary withdrawal)(1)
$ 666,068 $ 676,586 $ —$—$ 676,586
Funds withheld under reinsurance 94,417 94,417 94,417 — —
Debt 1,171,382 1,250,602 —1,250,602 —
TOTAL FINANCIAL LIABILITIES $1,931,867 $2,021,605 $94,417 $1,250,602 $676,586