Assurant 2015 Annual Report Download - page 94

ASSURANT, INC. – 2015 Form 10-KF-8
2 Summary of Signicant Accounting Policies
Notes to Consolidated Financial Statements
December 31, 2015, 2014 and 2013
(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 specialty protection products and related
services in North America, Latin America, Europe and other
select worldwide markets�
The Company is traded on the New York Stock Exchange
under the symbol “AIZ�”
Through its operating subsidiaries, the Company provides
mobile device protection products and services; extended
service products and related services for consumer electronics,
appliances and vehicles; pre-funded funeral insurance;
lender-placed homeowners insurance; property preservation
and valuation services; ood insurance; renters insurance
and related products; debt protection administration; credit
insurance; manufactured housing homeowners insurance;
group dental insurance; group disability insurance; and
group life insurance�
As previously announced, the Company concluded a
comprehensive review of its portfolio and decided to sharpen
its focus on specialty housing and lifestyle protection products
and services� As a result, the Company will exit the health
insurance market and has signed a denitive agreement to
sell its Assurant Employee Benets segment. See Note 3 and
Note 4, respectively, for more information�
2� Summary of Signicant Accounting Policies
Basis of Presentation
The 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
The 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�
Variable Interest Entities
The Company may enter into agreements with other entities
that are deemed to be variable interest entities (“VIEs”)�
At the time these agreements are executed, the Company
evaluates the applicability of the accounting guidance for
VIEs. Entities which do not have sufcient equity at risk to
allow the entity to nance its activities without additional
nancial support or in which the equity investors, as a group,
do not have the characteristic of a controlling nancial interest
are referred to as VIEs� A VIE is consolidated by the variable
interest holder that is determined to have the controlling
nancial interest (“primary beneciary”) as a result of having
both the power to direct the activities of a VIE that most
signicantly impact the VIE’s economic performance and the
obligation to absorb losses or right to receive benets from
the VIE that could potentially be signicant to the VIE. The
Company determines whether it is the primary beneciary
of an entity subject to consolidation based on a qualitative
assessment of the VIE’s capital structure, contractual terms,
nature of the VIE’s operations and purpose and the Company’s
relative exposure to the related risks of the VIE on the
date it becomes initially involved in the VIE� The Company
reassesses its VIE determination with respect to an entity
on an ongoing basis�
Use of Estimates
The preparation of nancial statements in conformity with
GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities�
The items on the Company’s balance sheets affected 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�
The estimates are sensitive to market conditions, investment
yields, mortality, morbidity, commissions and other acquisition
expenses, policyholder behavior and other factors� Actual
results could differ from the estimates recorded� The Company
believes all amounts reported are reasonable and adequate.
During the fourth quarter of 2015, we identied and corrected
errors that originated in prior periods and assessed the
materiality of the errors using quantitative and qualitative