Unum 2009 Annual Report Download - page 142

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Expense
Compensation expense for the stock plans, as reported in our consolidated statements of income, is as follows:
Year Ended December 31
(in millions of dollars) 2009 2008 2007
Nonvested Stock Awards $22.4 $18.3 $10.7
Performance Restricted Stock Units 6.8 6.7 2.0
Stock Options 3.7 2.9 0.5
Employee Stock Purchase Plan 1.0 0.9 0.5
Total Compensation Expense, Before Income Tax $33.9 $28.8 $13.7
Total Compensation Expense, Net of Income Tax $22.0 $18.7 $ 8.9
Cash received under all share-based payment arrangements for the years ended December 31, 2009, 2008, and 2007 was $8.0 million,
$4.4 million, and $7.8 million, respectively.
Note 12. Reinsurance
In the normal course of business, we assume reinsurance from and cede reinsurance to other insurance companies. The primary
purpose of ceded reinsurance is to limit losses from large exposures. However, if the assuming reinsurer is unable to meet its obligations,
we remain contingently liable. We evaluate the financial condition of reinsurers and monitor concentration of credit risk to minimize this
exposure. We may also require assets in trust, letters of credit, or other acceptable collateral to support reinsurance recoverable balances.
The reinsurance recoverable at December 31, 2009 relates to 89 companies. Fourteen major companies account for approximately
92 percent of the reinsurance recoverable at December 31, 2009, and are all companies rated A or better by A.M. Best Company (AM Best)
or are fully securitized by letters of credit or investment-grade fixed maturity securities held in trust. Of the remaining reinsurance recoverable,
approximately seven percent relates to business reinsured either with companies rated A- or better by AM Best, with overseas entities with
equivalent ratings or backed by letters of credit or trust agreements, or through reinsurance arrangements wherein we retain the assets in
our general account. Approximately one percent of the reinsurance recoverable is held by companies either rated below A- by AM Best or
not rated.
Reinsurance activity is accounted for on a basis consistent with the terms of the reinsurance contracts and the accounting used for the
original policies issued. Premium income and benefits and change in reserves for future benefits are presented in our consolidated statements
of income net of reinsurance ceded.
Reinsurance data is as follows:
Year Ended December 31
(in millions of dollars) 2009 2008 2007
Direct Premium Income $7,494.7 $7,817.1 $7,997.5
Reinsurance Assumed 239.5 264.4 289.6
Reinsurance Ceded (258.7) (298.2) (386.0)
Net Premium Income $7,475.5 $7,783.3 $7,901.1
Ceded Benefits and Change in Reserves for Future Benefits $ 604.2 $ 737.2 $ 947.8
During 2008, we entered into a reinsurance arrangement for the ongoing administration and management of a closed block of group
long-term disability claims in our Unum UK segment. As a result of the assumption, we received cash of £24.5 million, recorded £0.4 million in
accrued premiums receivable, assumed reserves of £22.2 million (approximately $44.2 million), and recorded a deferred gain of £2.7 million.
140
Notes To Consolidated Financial Statements
Unum
2009