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Notes To Consolidated Financial Statements
118 Unum 2015 Annual Report
Although all available and applicable factors are considered in our analysis, loan-to-value and debt service coverage ratios are the
most critical factors in determining whether we will initially issue the loan and also in assigning values and determining impairment.
We assign an overall rating to each loan using an internal rating scale of Aa (highest quality) to B (lowest quality). We review and adjust,
as needed, our internal credit quality ratings on an annual basis. This review process is performed more frequently for mortgage loans
deemed to have a higher risk of delinquency.
Mortgage loans, sorted by the applicable credit quality indicators, are as follows:
December 31
(in millions of dollars) 2015 2014
Internal Rating
Aa $ 1.1 $ 7.7
A 586.6 666.0
Baa 1,285.8 1,156.7
Ba 10.1 13.1
B — 13.1
Total $1,883.6 $1,856.6
Loan-to-Value Ratio
<= 65% $ 937.2 $ 898.7
> 65% <= 75% 842.5 818.0
> 75% <= 85% 88.4 102.3
> 85% 15.5 37.6
Total $1,883.6 $1,856.6
A summary of our troubled debt restructurings is as follows:
Year Ended December 31
(in millions of dollars) 2015 2014 2013
Foreclosure
Carrying Amount $— $18.1 $4.3
Number of Loans — 1 1
We had no realized losses on loan foreclosures for the years ended December 31, 2015, 2014, and 2013 other than the initial impairment
losses recognized prior to foreclosure. During 2014, we modified the terms of a mortgage loan with a carrying value of $18.1 million,
recognized a $3.0 million realized loss on the troubled debt restructuring, and foreclosed on the property in a subsequent quarter of 2014.
At December 31, 2015 and 2014, we held no mortgage loans that were greater than 90 days past due regarding principal and/or
interest payments.
There have been no changes to our accounting policies or methodology from the prior period regarding estimating the allowance for
credit losses on our mortgage loans. The activity in the allowance for credit losses is as follows:
Year Ended December 31
(in millions of dollars) 2015 2014 2013
Balance at Beginning of Year $ 1.5 $ 1.5 $1.5
Provision 0.5 3.0 —
Charge-offs, Net of Recoveries (2.0) (3.0) —
Balance at End of Year $ — $ 1.5 $1.5