Assurant 2015 Annual Report Download - page 139

ASSURANT, INC. – 2015 Form 10-K F-53
21 Retirement and Other Employee Benets
State regulators require insurance companies to meet minimum
capitalization standards designed to ensure that they can fulll
obligations to policyholders. Minimum capital requirements
are expressed as a ratio of a company’s total adjusted capital
(“TAC”) to its risk-based capital (“RBC”) (the “RBC Ratio”)�
TAC is equal to statutory surplus adjusted to exclude certain
statutory liabilities. RBC is calculated by applying specied
factors to various asset, premium, expense, liability, and
reserve items�
Generally, if a company’s RBC Ratio is below 100% (the
“Authorized Control Level”), the insurance commissioner of
the company’s state of domicile is authorized to take control
of the company, to protect the interests of policyholders.
If the RBC Ratio is greater than 100% but less than 200%
(the “Company Action Level”), the company must submit
a RBC plan to the commissioner of the state of domicile�
Corrective actions may also be required if the RBC Ratio is
greater than the Company Action Level but the company
fails certain trend tests�
As of December 31, 2015, the TAC of each of our insurance
subsidiaries exceeded the Company Action Level and no trend
tests that would require regulatory action were violated.
As of December 31, 2015, the TAC of our life and health
entities subject to RBC requirements was $1,218,018. The
corresponding Authorized Control Level was $214,611. As
of December 31, 2015, the TAC of our P&C entities subject
to RBC requirements was $1,137,978. The corresponding
Authorized Control Level was $233,544.
21� Retirement and Other Employee Benets
Dened Benet Plans
The Company and its subsidiaries participate in a non-
contributory, qualied dened benet pension plan (“Assurant
Pension Plan”) covering substantially all employees� The
Assurant Pension Plan is considered “qualied” because it meets
the requirements of Internal Revenue Code Section 401(a)
(“IRC 401(a)”) and the Employee Retirement Income Security
Act of 1974 (“ERISA”)� The Assurant Pension Plan is a pension
equity plan with a grandfathered nal average earnings plan
for a certain group of employees. Benets are based on
certain years of service and the employee’s compensation
during certain such years of service� The Company’s funding
policy is to contribute amounts to the Assurant Pension Plan
sufcient to meet the minimum funding requirements in ERISA,
plus such additional amounts as the Company may determine
to be appropriate from time to time up to the maximum
permitted� The funding policy considers several factors to
determine such additional amounts, including items such as
the amount of service cost plus 15% of the Assurant Pension
Plan decit and the capital position of the Company. During
2015, we contributed $10,750 in cash to the Assurant Pension
Plan. Due to the Plan’s current funding status, no cash is
expected to be contributed to the Assurant Pension Plan over
the course of 2016� Contributions are intended to provide not
only for benets attributed to service to date, but also for
those expected to be earned in the future� Assurant Pension
Plan assets are maintained in a separate trust and as such
are not included in the consolidated balance sheets of the
Company. Plan assets and benet obligations are measured
as of December 31, 2015.
The Company also has various non-contributory, non-qualied
supplemental plans covering certain employees� Since these
plans are “non-qualied” they are not subject to the laws and
regulations of IRC 401(a) and ERISA. As such, the Company is
not required, and does not, fund these plans. The qualied
and nonqualied plans are referred to as “Pension Benets”
unless otherwise noted� The Company has the right to modify
or terminate these benets; however, the Company will not
be relieved of its obligation to plan participants for their
vested benets.
As of January 1, 2014, the Assurant Pension Plan and Executive
Pension Plans are no longer offered to new hires. Subsequently,
effective January 1, 2016, the Assurant Pension Plan was
amended and split into two separate plans (Plan No� 1 and
Plan No� 2)� The new Plan No� 2 will include a subset of
the terminated vested population and the total in-payment
population as of January 1, 2016. Assets for both plans will
remain in the Assurant, Inc. Pension Plan Trust, however
separate accounting entities will be maintained for Plan No� 1
and Plan No� 2�
Effective March 1, 2016, the Assurant Pension Plan and various
non-qualied pension plans (including an Executive Pension
Plan) were frozen. No additional benets will be earned after
February 29, 2016.
In addition, the Company provides certain life and health care
benets (“Retirement Health Benets”) for retired employees
and their dependents. On July 1, 2011, the Company terminated
certain health care benets for employees who did not qualify
for “grandfathered” status and no longer offers these benets
to new hires. The Company contribution, plan design and
other terms of the remaining benets will not change for
those grandfathered employees� The Company has the right
to modify or terminate these benets.