Item 1. Business

Assurant, Inc. was incorporated as a Delaware corporation in 2004.

Assurant is a global provider of risk management solutions in the housing and lifestyle markets, protecting where people live and the goods they buy. Assurant operates in North America, Latin America, Europe and Asia through three operating segments: Global Housing, Global Lifestyle, and Global Preneed. Assurant partners with clients who are leaders in their industries to provide consumers a diverse range of protection products and services. Through its Global Housing segment, Assurant provides lender-placed homeowners, manufactured housing and flood insurance; renters insurance and related products (also referred to as our “multi-family housing” business); and field services, valuation services and other property risk management services (also referred to as our “mortgage solutions” business). Through its Global Lifestyle segment, Assurant provides mobile device protection products and related services and extended service products and related services for consumer electronics and appliances (also referred to as our “global connected living” business); vehicle protection services; and credit insurance. Global Preneed provides pre-funded funeral insurance and annuity products.

Our Competitive Strengths

Our financial strength and our core capabilities across our businesses create competitive advantages that we believe allow us to support our clients and our profitable growth over the long-term.

Our financial strength. We believe we have a strong balance sheet with a low leverage ratio. As of December 31, 2016, we had $29,709,128 in assets and our debt to total capital was 20.7%. In addition, our Global Housing, Global Lifestyle and Global Preneed segments generate significant amounts of cash flow, which provides us flexibility to make appropriate investments in strategic capabilities, as well as in partnerships with our clients.

Client and consumer insights support product innovation. During our long business tenure, we have developed a comprehensive understanding of our clients and the consumer markets we serve. We seek to leverage consumer insights, together with deep market knowledge and capabilities, to anticipate and identify the specific needs of our clients and consumers they serve. We intend to continue to capitalize on our client and consumer insights to introduce new and innovative products and services and to adapt those products and services to address emerging issues.

Value chain integration. We own or manage multiple pieces of the value chain, which enables us to create products and service offerings based on specific client needs and provide a more seamless experience for consumers. Offering end-to-end solutions allows us to adapt more quickly and efficiently to client and consumer needs. Visibility across the value chain helps us collect and share insights to improve the consumer experience and our offerings.

Our Strategy for Profitable Growth

Assurant’s vision is to be the premier provider of risk management solutions in our addressable markets within the housing and lifestyle markets globally. To achieve this vision, we are undergoing a multi-year transformation to position ourselves for long-term profitable growth by:

Growing our portfolio of market leading businesses. We leverage our competitive strengths to focus on niche businesses where we can maintain or reach market leading positions and achieve attractive returns. We periodically assess our business portfolio to ensure we align resources with the best opportunities within the housing and lifestyle markets and, currently, we have identified connected living, mortgage solutions and multi-family housing as key businesses targeted for growth. We are focused on growing our businesses by continuing to invest in niche capabilities, further expanding our offerings and diversifying our distribution channels.

Providing integrated risk management offerings. We are expanding our offerings beyond our risk-based businesses to fee-based services along the lifecycle of our core products. As we adapt our business portfolio to respond to client and consumer needs, our mix of business is shifting towards more fee-based capital-light service offerings. In 2016, fee-based, capital-light businesses accounted for $3,220,349, or 52%, of net earned premiums, fees and other income for Global Housing, Global Lifestyle and Global Preneed, compared to 50% in 2015. As we grow our integrated offerings, this business mix shift will diversify our revenue and earnings; and we expect it will also provide attractive returns over time.

Implementing a more agile and efficient operating model. The implementation of our global operating model, including a more integrated organizational structure across our global operations, should achieve efficiencies to support our profitable growth long-term. We are reorganizing our global business operating structure to increase competitive agility and deliver

superior customer experience and centralizing key support functions to reduce overall expenditures over time and benefit from economies of scale.

Deploying our capital strategically. We deploy capital to invest in and grow our businesses, repurchase shares and pay dividends. Our approach to mergers, acquisitions and other growth opportunities reflects our prudent and disciplined approach to managing our capital. We target new business and capabilities that complements or supports our business model, which is focused on expanding capabilities and distribution in targeted growth businesses globally.

2016 Highlights

Assurant made significant progress in executing its multi-year transformation in 2016. As part of its business portfolio realignment to focus on specialty housing and lifestyle protection products and services, the Company substantially exited the health insurance market and sold its employee benefits business to Sun Life Assurance Company of Canada ("Sun Life"), a subsidiary of Sun Life Financial Inc. See Note 4 and Note 5, respectively, to the Consolidated Financial Statements included elsewhere in this Report for more information. The Company also made select acquisitions within the housing and lifestyle markets in 2016 to broaden its capabilities and fee-based capital-light service offerings. In July 2016, the Company acquired American Title, Inc., a leader in title and valuation services for home equity lenders, and in March 2016, the Company acquired certain renewal rights to a National Flood Insurance Program block of business. In addition, in December 2016, the Company entered into a definitive agreement to purchase Green Tree Insurance Agency, Inc. which sells housing protection products, including voluntary homeowners and manufactured housing policies, and other insurance products. The transaction closed in February 2017.

In addition, the Company implemented a new global organizational structure for its business operations and key support functions and will continue to cascade those changes down the organization in 2017. We created a new Chief Operating Officer ("COO") role responsible for overseeing the operations of Assurant’s business lines worldwide. This evolving operating structure should improve coordination and execution across the global housing and lifestyle markets. We also implemented global organizational structures for human resources, communications, marketing, strategy and procurement. We created a Chief Technology Officer role to lead technology strategy and align IT with business objectives across our global enterprise and a Chief Risk Officer ("CRO") role to enhance and expand our global risk management framework. Within finance, our newly appointed Chief Financial Officer ("CFO") is leading the integration of the Company’s global finance and accounting organization, asset management and tax functions to more closely align with our operational and risk functions within our global operating model.

Segments

As part of the business portfolio realignment and organizational changes, the composition of the Company’s reportable segments changed accordingly. Corresponding items of segment information for prior periods have been revised to conform to the new reportable segments. For additional information on our segments, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations” and Note 3 to the Consolidated Financial Statements included elsewhere in this Report.

Global Housing

	For the Years Ended
	December 31, 2016				December 31, 2015
Net earned premiums, fees and other by major product grouping:
Lender-placed insurance	$	1,317,190			$	1,561,396
Multi-family housing	320,941				282,680
Mortgage solutions	329,265				289,575
Manufactured housing and other	321,405				316,595
Total	$	2,288,801			$	2,450,246
Segment net income	$	188,666			$	307,705
Combined ratio for risk-based businesses (1)	91.1		%		83.4		%
Pre-tax income margin for fee-based, capital-light businesses (2)	10.8		%		11.6		%
Equity, excluding accumulated other comprehensive income	$	1,398,339			$	1,351,122

(1)	The combined ratio for risk-based businesses is equal to total policyholder benefits, losses and expenses, including reportable catastrophe losses, divided by net earned premiums and fees and other income for lender-placed insurance, manufactured housing and other insurance businesses.

(2)	The pre-tax margin for fee-based, capital-light businesses equals income before provision for income taxes divided by net earned premiums and fees and other income for multi-family housing and mortgage solutions.

Our Products and Services

Global Housing has three key lines of business: lender-placed insurance; multi-family housing (which is comprised of renters insurance and related products) and mortgage solutions (which is comprised of property inspection and preservation, valuation and title services and other property risk management services). We also provide voluntary manufactured housing, homeowners and flood insurance.

Lender-placed insurance: We provide lender-placed insurance for homeowners, manufactured housing and flood as described below.

Lender-placed homeowners insurance. Lender-placed homeowners insurance consists principally of fire and dwelling hazard insurance offered through our lender-placed program. The lender-placed program provides collateral protection to lenders, mortgage servicers and investors in mortgaged properties in the event that a homeowner does not maintain insurance on a mortgaged dwelling. Lender-placed insurance provides structural coverage, similar to that of a standard homeowners policy. The amount of coverage is often based on the last known insurance coverage under the prior policy for the property and provides replacement cost coverage on the property. It protects both the lender’s interest and the borrower’s interest and equity. We also provide Real Estate Owned (“REO”) insurance, consisting of insurance on foreclosed properties managed by our clients.

In the majority of cases, we use a proprietary insurance-tracking administration system linked with the administrative systems of our clients to monitor clients’ mortgage portfolios to verify the existence of insurance on each mortgaged property and identify those that are uninsured. If there is a potential lapse in insurance coverage, we begin a process of notification and outreach to both the homeowner and the last-known insurance carrier or agent through phone calls and written correspondence, which generally takes up to 90 days to complete. If coverage cannot be verified at the end of this process, the mortgage servicer procures a lender-placed policy for which the homeowner is responsible for paying the related premiums. Our placement rates reflect the percentage of insurance policies placed to loans tracked. The homeowner always retains the option to obtain or renew the insurance of his or her choice.

Lender-placed manufactured housing insurance. Lender-placed manufactured housing insurance consists principally of fire and dwelling hazard insurance for manufactured housing offered through our lender-placed program. Lender-placed insurance for manufactured housing is issued after an insurance tracking process similar to that described above. Tracking is performed using a proprietary insurance tracking administration system.

Lender-placed flood insurance. Lender-placed flood insurance consists of flood insurance offered through our lender-placed program. It provides collateral protection to lenders in mortgaged properties in the event a homeowner does not maintain flood insurance. Lender-placed flood insurance is issued after an insurance tracking process similar to that described above.

Multi-family housing: We offer renters insurance for a wide variety of multi-family rental properties, including vacation rentals, providing content protection for renters’ personal belongings and liability protection for the property owners against renter-caused damage. We also provide tenant bonds as an alternative to a security deposit, which allows our clients to offer a lower move-in cost option while minimizing the risk of loss from damages, and receivables management, which helps our clients to maximize the collection of amounts owed by prior tenants.

Mortgage solutions: We have expanded our capabilities across the mortgage loan lifecycle through a series of acquisitions to better serve our clients by offering mortgage related services. Our service offerings include:

• Field Services. We provide field services, inspection services, restoration and REO asset management to mortgage servicing clients and investors through a nationwide network of independent contractors.

• Valuation and Title Services. We provide valuation services across the origination, home equity and default markets through a nationwide network of independent contractors as well as internal appraisers. Valuation services include origination, default and home equity appraisals, broker price opinions which assist mortgage servicing clients with determining property values and alternative valuations products. We also provide title and settlement services to home equity lenders, as well as conventional mortgage lenders and refinancing lenders.

Manufactured housing and other insurance products: We also offer voluntary manufactured housing insurance, homeowners insurance and flood insurance, as well as flood insurance under the National Flood Insurance Program. Our voluntary insurance generally provides structural coverage, as well as content and liability coverage. We are the second largest administrator for the U.S. government under the voluntary National Flood Insurance Program, for which we earn fees for collecting premiums and processing claims. This business is 100% reinsured to the U.S. government.

Distribution and Clients

Global Housing establishes long-term relationships with leading mortgage lenders, servicers and property management companies. The majority of our lender-placed agreements are exclusive. Typically, these agreements have terms of three to five years and allow us to integrate our systems with those of our clients. We offer our manufactured housing insurance programs primarily through manufactured housing lenders and retailers, along with independent specialty agents. Independent specialty agents also distribute flood products and other specialty property products. multi-family housing products are distributed primarily through property management companies and affinity marketing partners. Our mortgage solutions services are provided directly to mortgage lenders and servicers, typically under non-exclusive arrangements.

As of December 31, 2016 no single Global Housing client accounted for 10% or more of our consolidated revenue. However, Global Housing is dependent on a few clients, the loss of any one or more such clients could have a material adverse effect on the Company's results of operations and cash flows. See “Item 1A. Risk Factors - Our revenues and profits may decline if we are unable to maintain relationships with significant clients, distributors and other parties important to the success of our business, or renew contracts with them on favorable terms, or if those parties face financial, reputational or regulatory issues.”

Our Addressable Markets and Market Activity

With respect to the lender-placed market, as the housing market has improved, placement rates have declined, resulting in lower net earned premiums. We expect placement rates to continue to decline, with additional declines in 2017 at a pace consistent with 2016 as the lender-placed market moves closer to what we expect to be its steady state.

The U.S. renters insurance market is a growing market where we believe there is opportunity to increase our market share. Decreasing homeownership rates have contributed to growth of rental households and, therefore, demand for rental insurance.

While the field services and valuation markets are expected to decline from 2016 levels, due to expected lower origination, refinancing, delinquency and default volumes, we believe there may be opportunities for growth from expanding offerings to existing clients and increasing our market share.

In February 2017, the Company acquired Green Tree Insurance Agency, Inc., which sells housing protection products, including voluntary homeowners and manufactured housing policies, and other insurance products. In 2016, the Company acquired American Title, Inc., a leader in title and valuation services for home equity lenders, and renewal rights to the National Flood Insurance Program block of business of Nationwide Mutual Insurance Company. In 2014, we acquired StreetLinks, one of the largest independent appraisal management companies in the United States, and e-Mortgage Logic, a leading provider of broker price opinions. In 2015, we sold our general agency business and primary associated insurance carrier, American Reliable Insurance Company (“ARIC”) to Global Indemnity Group, Inc., a subsidiary of Global Indemnity plc.

Risk Management

The Company earns premiums on its insurance products and fees for its other services. Our lender-placed homeowners insurance program and certain of our lender-placed manufactured housing products are not underwritten on an individual policy basis. Contracts with our clients require us to issue these policies automatically when a borrower’s insurance coverage is not maintained. These products are priced to factor in the additional risk from ensuring all client properties are provided continuous insurance coverage. We monitor pricing adequacy based on a variety of factors and adjust pricing as required, subject to regulatory constraints.

Because several of our business lines (such as homeowners, manufactured housing, and other property policies) are exposed to catastrophe risks, we purchase reinsurance coverage to protect the capital of Assurant and to mitigate earnings volatility. Our reinsurance program generally incorporates a provision to allow for the reinstatement of coverage, which provides protection against the risk of multiple catastrophes in a single year. For 2016 and continuing into 2017, Assurant had a $1.4 billion property catastrophe reinsurance program. The U.S. per-occurrence catastrophe coverage provides $1.1 billion of protection in excess of $125 million of retention and Caribbean and Latin American catastrophe coverage provides up to $151.5 million in excess of $4.5 million retention and $145 million in excess of $15 million retention, respectively.

Seasonality

We experience seasonal fluctuation in some of our lines of businesses but we have not experienced material seasonal trends overall. Seasonality for mortgage solutions is in line with seasonality in the overall housing and mortgage markets. In addition, results for this business may be subject to fluctuation based on interest rates. Several of our business lines are exposed to catastrophe risks, which experience seasonal fluctuations as large catastrophes such as hurricanes typically occur in the second half of the year.

Global Lifestyle

	For the Years Ended
	December 31, 2016				December 31, 2015
Net earned premiums, fees and other for selected product groupings:
Global connected living (mobile and service contracts) (1)	$	2,570,143			$	2,550,990
Global vehicle protection services	715,794				608,372
Global credit and other	420,230				474,654
Total	$	3,706,167			$	3,634,016
Segment net income	$	154,425			$	153,004
Combined ratio for risk-based businesses (2)	95.9		%		95.5		%
Pre-tax income margin for fee-based, capital-light businesses (3)	3.5		%		3.6		%
Equity, excluding accumulated other comprehensive income (4)	$	1,594,480			$	1,600,984

(1)	In 2016 and 2015, 45.2% and 40.2% of the total was from mobile products and 54.8% and 59.8% was from service contracts, respectively.

(2)	The combined ratio for risk-based businesses is equal to total benefits, losses and expenses divided by net earned premiums and fees and other income for global vehicle protection services, global credit and other insurance businesses.

(3)	The pre-tax income margin for fee-based, capital-light businesses equals income before provision for income taxes divided by net earned premiums and fees and other income for global connected living.

(4)	For purposes of presentation comparability, the 2015 equity measure reflects goodwill as if it were reallocated using the same fair value percentage as 2016. However, such segment change and reallocation did not occur until 2016.

Our Products and Services

Global Lifestyle has three key lines of business: global connected living, which includes mobile device protection products and related services and extended service contracts (insurance policies and warranties) (“ESCs”) for consumer electronics and appliances; global vehicle protection services; and global credit and other insurance.

Global connected living: Through partnerships with mobile carriers, original equipment manufacturers (“OEMs”), e-commerce and other retailers and multiple system operators ("MSOs"), we underwrite and provide administrative services for ESCs. These contracts provide consumers with coverage on mobile devices and consumer electronics and appliances, protecting them from certain covered losses. We pay the cost of repairing or replacing these consumer goods in the event of loss, theft, accidental damage and mechanical breakdown or electronic malfunction after the manufacturer's warranty expires. Our strategy is to provide integrated service offerings to our clients that address all aspects of the ESC or warranty: program design and marketing strategy, risk management, data analytics, customer support and claims handling, supply chain and service delivery, including repair and logistics, and device disposition. For example, we seek to provide end-to-end mobile device lifecycle services in our mobile business - from when the device is received and inspected, repaired or refurbished, and ultimately disposed of through a sale to third parties or used to meet an insurance claim. In addition to extended protection for multiple devices, our mobile offerings include trade-ins and upgrades and premium customer support including device self-diagnostic tools. We believe that with both the required administrative, supply chain and technical support infrastructure and insurance underwriting capabilities, we maintain a differentiated position in this marketplace.

In addition, global connected living also includes our investment in Ike Asistencia (“Iké”), a services assistance business with significant business in Mexico and other countries in Latin America. Iké primarily provides roadside assistance, home assistance, travel, mobile and other protection products and services.

Global vehicle protection services: We underwrite and provide administrative services for vehicle service contracts (“VSCs”) and ancillary products providing coverage for vehicles, including parts, such as automobiles, trucks, recreational vehicles and motorcycles. For VSCs, we pay the cost of repairing a customer’s vehicle in the event of mechanical breakdown. For ancillary products, coverage varies but generally we pay the cost of repairing, servicing, or replacing parts or other financial compensation in the event of mechanical breakdown, accidental damage or theft. We provide integrated service offerings to our clients, including program design and marketing strategy, risk management, data analytics, customer support and claims handling, reinsurance facilitation, as well as actuarial consulting.

Global credit and other insurance: Our credit insurance products offer protection from life events and uncertainties that arise in purchasing and borrowing transactions. Credit insurance programs generally offer consumers the option to protect a credit card or installment loan balance or payments in the event of death, involuntary unemployment or disability, and are generally available to all consumers without the underwriting restrictions that apply to term life insurance. Credit insurance is primarily sold internationally; our credit insurance business in the U.S. has been in decline due to regulatory changes.

Distribution and Clients

Global Lifestyle operates in the U.S., Canada, the United Kingdom (“U.K.”), Ireland, Argentina, Brazil, Puerto Rico, Chile, Germany, Spain, Italy, France, Mexico, China, Colombia, Peru and South Korea. Global Lifestyle focuses on establishing strong, long-term relationships with clients that are leaders in their markets, including leading distributors of our products and services. In our mobile business, we partner with mobile carriers, retailers and financial institutions that market our mobile device protection and related services. We also partner with some of the largest OEMs and consumer electronics retailers, appliance retailers (including electronic commerce retailers) and MSOs to market our ESC products.

In international markets, we primarily sell consumer service contracts, including mobile device protection, and credit insurance products through agreements with financial institutions, retailers and mobile service providers. Systems, training, computer hardware and our overall market development approach are customized to fit the particular needs of each targeted international market. For additional information relating to our international operations, see “Item 1A. Risk Factors - We face risks associated with our international operations.”

Most of our distribution agreements are exclusive. Typically these agreements are multi-year with terms between 3 and 5 years on average and allow us to integrate our administrative systems with those of our clients.

As of December 31, 2016, no single Global Lifestyle client accounted for 10% or more of our consolidated revenue. However, Global Lifestyle is dependent on a few clients, the loss of any one or more such clients could have a material adverse effect on the Company's results of operations and cash flows. See “Item 1A. Risk Factors - Our revenues and profits may decline if we are unable to maintain relationships with significant clients, distributors and other parties important to the success of our business, or renew contracts from them on favorable terms, or if these parties face financial, reputational or regulatory issues.”

Our Addressable Markets and Market Activity

The mobile insurance market is a large and growing global market. While smartphone penetration in the U.S. and European markets is very high, the international markets have continued to grow. The worldwide used and refurbished smartphone market is also expected to continue to grow.

In addition, consumer needs relating to mobile devices are continuing to increase and expand in scope. We believe there is growth opportunities in bundled protection products, including buyback and trade-in programs, repair and logistics, technical support for customers and digital security.

Our business is subject to fluctuations in mobile device trade-in volumes based on the release of new devices and carrier promotional programs, as well as to changes in the mobile market dynamics. For example, as a general trend, we believe the average smartphone replacement cycle is lengthening; however, this trend may be reversed based on new technology and innovation.

In the vehicle sales markets, there has been an ongoing trend of rising new and used vehicle sales in the U.S., as well as select international markets.

In 2014, we acquired CWI Group (“CWI”), a market-leading mobile administrator in France. This acquisition has strengthened Global Lifestyle’s market-leading capabilities in mobile device protection and expanded its distribution into independent retailers and the financial services affinity market in Europe.

Risk Management

The Company earns premiums on its insurance and warranty products and fees for its other services. We write a significant portion of our contracts on a retrospective commission basis. This allows us to adjust commissions on the basis of claims experience. Under these commission arrangements, the compensation of our clients is based upon the actual losses incurred compared to premiums earned after a specified net allowance to us. We believe that these arrangements better align our clients’ interests with ours and help us to better manage risk exposure.

Inventory

In our mobile business, we carry inventory to meet delivery requirements of certain clients. Our mobile business is subject to the risk that the value of the inventory (as well as devices that are subject to guaranteed buybacks) will be impacted adversely by price reductions or technological changes affecting the usefulness or desirability of the devices and parts, physical problems resulting from faulty design or manufacturing as well as increased competition and growing industry emphasis on cost containment. We take various actions to reduce our risk, including through pricing, monitoring our inventory levels and controlling the timing of purchases, as well as obtaining return rights for some programs and devices. However, no assurance can be given that we will be adequately protected against declines in value. Inventory levels may vary from period to period, due to, among other things, differences between actual demand from forecast, the addition of new devices and parts and

strategic purchases. Payment terms with clients may also vary, resulting in fewer inventory financed by clients and more inventory financed with our own capital. See “Item 1A. Risk Factors - A decline in the value of devices in our inventory or subject to guaranteed buybacks could have a material adverse effect on our profitability.”

Seasonality

We experience some seasonal fluctuation in demand in each of our lines of businesses but we have not experienced material seasonal trends overall. For example, seasonality for ESCs and VSCs is in line with seasonality of retail and automobile markets. In addition, our mobile results may fluctuate quarter to quarter due to the timing of release of new devices and carrier promotional programs.

Global Preneed

	For the Years Ended
	December 31, 2016				December 31, 2015
Net earned premiums, fees and other income	$	171,279			$	167,441
Segment net income	$	42,304			$	44,179
Equity, excluding other comprehensive income (1)	$	440,600			$	434,788

(1)	For purposes of presentation comparability, the 2015 equity measure reflects goodwill as if it were reallocated using the same fair value percentage as 2016. However, such segment change and reallocation did not occur until 2016.

Global Preneed offers pre-funded funeral insurance and annuity products in the U.S. and Canada.

Our Products and Services

Pre-funded funeral insurance provides insurance or annuity death benefits to fund the costs associated with pre-arranged funerals, which are planned and paid for in advance of death. Our pre-funded funeral insurance products are typically structured to be similar to whole life insurance policies in the U.S. and offer limited pay or pay for life options. In Canada, our pre-funded funeral insurance products are typically structured as limited pay annuity contracts. Product choices are based on the health and financial situation of the customer and the distribution channel.

Consumers have the choice of making their policy payments as a single lump-sum payment, through multi-payment plans that spread payments out over a period of time, or as a pay for life policy. Our insurance policy is intended to cover the cost of the prearranged funeral and the funeral home generally becomes the irrevocable assignee of any proceeds from the policy. However, the insured may name a beneficiary for excess proceeds; otherwise, any excess proceeds are paid to the estate. The funeral home agrees to provide the selected funeral at death in exchange for the policy proceeds. Because the death benefit under many of our policies is designed to grow over time, it assists the funeral firm that is the assignee in managing its funeral inflation risk. Assurant does not provide any funeral goods and services in connection with our pre-funded funeral insurance policies; the life insurance and annuity policies pay death benefits in cash only.

Distribution and Clients

Assurant distributes its pre-funded funeral insurance products through funeral homes, general agents and funeral home partners in both the U.S. and Canada. We distribute our pre-funded funeral insurance products through two distribution channels: the independent funeral home market (in Canada) through general agents representing those locations and corporate funeral home partners (in both the U.S. and Canada). Our policies are sold by licensed insurance agents or enrollers, who in some cases may also be funeral directors.

With our acquisition of American Memorial Life Insurance Company (“AMLIC”) in 2000, we became the sole provider of pre-funded funeral insurance for Service Corporation International (“SCI”) in Canada and the U.S. SCI is the largest funeral provider in North America based on total revenues. In 2014, we extended our exclusive distribution partnership with SCI in the U.S. for an additional 10 years; in Canada, the exclusive agreement runs through September 2018.

Our Addressable Market and Market Activity

Growth in preneed sales has been traditionally driven by distribution with a high correlation between new sales of pre-funded funeral insurance and the number of preneed counselors or enrollers marketing the product and expansion in sales and marketing capabilities. In addition, as alternative distribution channels are identified, such as targeting affinity groups and employers, we believe growth in this market could accelerate. We believe that the preneed market is characterized by an aging population combined with low penetration of the over-65 market.

We intend to increase sales by broadening our distribution relationships and increasing share in Canada. Through our general agency system, we provide programs and a sales force for our funeral firm clients to increase their local market share. In the U.S., we also intend to direct funerals to SCI’s funeral locations and reduce SCI’s cost to sell and manage its preneed

operation through their sales counselors and third party sellers. We integrate our processes with SCI’s insurance production to support SCI managing their preneed business.

Risk Management

Global Preneed generally writes policies with increasing death benefits and earns most of its income from interest rate spreads. Interest rate spreads refer to the difference between the death benefit growth rates on pre-funded funeral insurance policies and the investment returns generated on the assets we hold related to those policies. To manage these spreads, we monitor the movement in new money yields and evaluate our actual net new achievable yields. This information is used to evaluate rates to be credited on applicable new and in force pre-funded funeral insurance policies and annuities. In addition, we review asset benchmarks and perform asset/liability matching studies to maximize yield and reduce risk.

Global Preneed utilizes underwriting to select and price insurance risks. We regularly monitor mortality assumptions to determine if experience remains consistent with these assumptions and to ensure that our product pricing remains appropriate. We periodically review our underwriting, agent and policy contract provisions and pricing guidelines so that our policies remain competitive and supportive of our marketing strategies and profitability goals.

Most of our pre-funded policies have increasing death benefits, some of which are pegged to changes in the Consumer Price Index (“CPI”). We have employed risk mitigation strategies to seek to minimize our exposure to a rapid increase in inflation, including derivative instruments. However, exposure can still exist, including due to potential differences in the amount of business and the notional amount of the protection.

Ratings

Independent rating organizations periodically review the financial strength of insurers, including our insurance subsidiaries. Financial strength ratings represent the opinions of rating agencies regarding the ability of an insurance company to meet its financial obligations to policyholders and contract holders. These ratings are not applicable to our common stock or debt securities. Ratings are an important factor in establishing the competitive position of insurance companies.

Rating agencies also use an “outlook statement” of “positive,” “stable,” “negative” or “developing” to indicate a medium- or long-term trend in credit fundamentals which, if continued, may lead to a rating change. A rating may have a stable outlook to indicate that the rating is not expected to change; however, a stable rating does not preclude a rating agency from changing a rating at any time, without notice.

Most of our active domestic operating insurance subsidiaries are rated by the A.M. Best Company (“A.M. Best”). In addition, four of our domestic operating insurance subsidiaries are also rated by Moody’s Investor Services (“Moody’s”) and five are rated by Standard & Poor’s Inc., a division of McGraw Hill Companies, Inc. (“S&P”).

For further information on the risks of ratings downgrades, see “Item 1A - Risk Factors - Risks Related to our Company - A.M. Best, Moody’s and S&P rate the financial strength of our insurance company subsidiaries, and a decline in these ratings could affect our standing in the insurance industry and cause our sales and earnings to decrease.”

The following table summarizes our financial strength ratings and outlook of our domestic operating insurance subsidiaries as of December 31, 2016:

	A.M. Best (1)		Moody’s (2)		Standard & Poor’s (3)
Outlook	(4)		(4)		(4)
Company
American Bankers Insurance Company	A		A2		A
American Bankers Life Assurance Company	A-		A3		A
American Memorial Life Insurance Company	A-		N/A		A
American Security Insurance Company	A		A2		A
Assurant Life of Canada	A-		N/A		N/A
Caribbean American Life Assurance Company	A-		N/A		N/A
Caribbean American Property Insurance Company	A		N/A		N/A
Reliable Lloyds	A		N/A		N/A
Standard Guaranty Insurance Company	A		N/A		N/A
Union Security Insurance Company	A-		A3		A
Union Security Life Insurance Company of New York	A-		N/A		N/A
Voyager Indemnity Insurance Company	A		N/A		N/A

(1)	A.M. Best financial strength ratings range from “A++” (superior) to “S” (suspended). Ratings of A and A- fall under the “excellent” category, which is the second highest of ten ratings categories. Ratings of B+ fall under the "good" category, which is the third highest of ten ratings categories.

(2)	Moody’s insurance financial strength ratings range from “Aaa” (exceptional) to “C” (extremely poor). A numeric modifier may be appended to ratings from “Aa” to “Caa” to indicate relative position within a category, with 1 being the highest and 3 being the lowest. Ratings of A2 and A3 are considered “good” and fall within the third highest of the nine ratings categories.

(3)	S&P’s insurer financial strength ratings range from “AAA” (extremely strong) to “R” (under regulatory supervision). A “+” or “-” may be appended to ratings from categories AA to CCC to indicate relative position within a category. Ratings of A (strong) are within the third highest of the nine ratings categories.

(4)	The outlook on all of the ratings above is stable.

Enterprise Risk Management

The Company has made effective risk management a key ongoing corporate objective. As a global risk management provider, the Company faces risks that could have a material adverse effect on its business, financial condition and results of operations. For detailed information on these risks, please see the section entitled “Item 1A - Risk Factors”. Because the risks faced by the Company span a wide variety of disciplines, both senior management and the Board of Directors ("Board") are involved in oversight of the Company’s risk management policies and practices. As described below and consistent with their charters, the committees of the Board oversee risk management in specific areas and regularly discuss risk-related issues with the entire Board.

In 2016, the Company established the Office of Risk Management ("ORM"), which coordinates the Company’s risk management activities, and is led by the Company’s CRO. The Company’s internal risk governance structure is headed by the Executive Risk Committee ("ERC"), which is chaired by our Chief Executive Officer ("CEO") and composed of our CRO, CFO, COO and Chief Legal Officer. The ERC is responsible for the strategic directive of the Company’s enterprise risk management and provides updates to the Board. The Enterprise Risk Management Committee (the “ERMC”), which is chaired by our CRO and includes senior members of risk management and other areas of the company, is responsible for the interdisciplinary oversight of business unit and enterprise risks and the design, management and approval of the risk appetite framework and limits. The ERMC reports to the ERC and provides updates to the Finance and Risk Committee of the Board (the “F&RC”).

The Business Risk Committee, Finance and Investment Risk Committee and Insurance Risk Committee are composed of managers from across the Company with knowledge related to the scope of the committee and are responsible for the oversight, management and reporting of different sets of risks. These committees report to the ERMC and have issue-specific committees that report to them. The ORM develops risk assessment and risk management policies, facilitates reporting and prioritizing in the assessment of risk, and coordinates with the committees described above, the Internal Audit Services department, and other corporate committees and departments charged with functions related to risk management.

As the focus committee for enterprise risk management, the F&RC reviews a number of enterprise risks, including with respect to the Company’s operating segments and the Company’s investment, financing, capital management and catastrophe reinsurance activities. The F&RC regularly reviews risks, policies, strategies and outcomes in those areas with the CFO and Chief Investment Officer. Although the F&RC acts as the focus committee of the Board for enterprise risk management matters, the full Board maintains responsibility for and is actively involved in oversight of enterprise risk management. In addition, the Audit Committee focuses on risks relating to financial reporting, legal compliance, ethics, fraud deterrence and internal controls and procedures; the Compensation Committee focuses on risks relating to executive retention and compensation plan design.

Regulation

The Company is subject to extensive federal, state and international regulation and supervision in the jurisdictions where it does business. Regulations vary from jurisdiction to jurisdiction. In 2016, the Company completed a strategic realignment of its portfolio to focus on specialty housing and lifestyle protection products and services. As a result of the runoff of Assurant Health, which is substantially complete, and the sale of Assurant Employee Benefits, a number of regulations are no longer material for the Company. The following is a summary of significant regulations that apply to our businesses, and where applicable, our health business wind-down operations, but is not intended to be a comprehensive review of every regulation to which the Company is subject. For information on the risks associated with regulations applicable to the Company, please see Item 1A, “Risk Factors.”

U.S. Insurance Regulation

We are subject to the insurance holding company laws in the states where our insurance companies are domiciled. These laws generally require insurance companies within the insurance holding company system to register with the insurance departments of their respective states of domicile and to furnish reports to such insurance departments regarding capital structure, ownership, financial condition, general business operations and intercompany transactions. These laws also require that transactions between affiliated companies be fair and equitable. In addition, certain intercompany transactions, changes of control, certain dividend payments and transfers of assets between the companies within the holding company system are subject to prior notice to, or approval by, state regulatory authorities.

Like all U.S. insurance companies, our insurance subsidiaries are subject to regulation and supervision in the jurisdictions where they do business. In general, these regulations are designed to protect the interests of policyholders, and not necessarily the interests of shareholders and other investors. To that end, the laws of the various states and other jurisdictions establish insurance departments with broad powers with respect to such things as:

•	licensing;

•	capital, surplus and dividends;

•	underwriting requirements and limitations (including, in some cases, minimum or target loss ratios);

•	entrance into and exit from states;

•	introduction, cancellation and termination of certain coverages;

•	statutory accounting and annual statement disclosure requirements;

•	product types, policy forms and mandated insurance benefits;

•	premium rates;

•	fines, penalties and assessments;

•	claims practices, including occasional regulatory requirements to pay claims on terms other than those mandated by underlying policy contracts;

•	transactions between affiliates;

•	the form and content of disclosures to consumers;

•	the type, amounts and valuation of investments;

•	annual tests of solvency and reserve adequacy;

•	assessments or other surcharges for guaranty funds and the recovery of assessments through premium increases; and

•	market conduct and sales practices of insurers and agents.

Dividend Payment Limitations. Our holding company’s assets consist primarily of the capital stock of our subsidiaries. Accordingly, our holding company’s future cash flows depend upon the availability of dividends and other statutorily permissible payments from our subsidiaries. The ability to pay such dividends and to make such other payments is regulated by the states in which our subsidiaries are domiciled. These dividend regulations vary from state to state and by type of insurance provided by the applicable subsidiary, but generally require our insurance subsidiaries to maintain minimum solvency

requirements and limit the amount of dividends these subsidiaries can pay to the holding company. For more information, please see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Regulatory Requirements.”

Risk-Based Capital Requirements. In order to enhance the regulation of insurer solvency, the National Association of Insurance Commissioners (“NAIC”) has established certain risk-based capital standards applicable to life, health and property and casualty insurers. Risk-based capital, which regulators use to assess the sufficiency of an insurer’s statutory capital, is calculated by applying factors to various asset, premium, expense, liability and reserve items. Factors are higher for items which in the NAIC’s view have greater underlying risk. The NAIC periodically reviews the risk-based capital formula and changes to the formula could occur in the future.

Investment Regulation. Insurance company investments must comply with applicable laws and regulations that prescribe the kind, quality and concentration of investments. These regulations require diversification of insurance company investment portfolios and limit the amount of investments in certain asset categories.

Financial Reporting. Regulators closely monitor the financial condition of licensed insurance companies. Our insurance subsidiaries are required to file periodic financial reports with insurance regulators. Moreover, states regulate the form and content of these statutory financial statements.

Products and Coverage. Insurance regulators have broad authority to regulate many aspects of our products and services. Additionally, certain non-insurance products and services, such as service contracts, may be regulated by regulatory bodies other than departments of insurance.

Pricing and Premium Rates. Nearly all states have insurance laws requiring insurers to file price schedules and policy forms with the state’s regulatory authority. In many cases, these price schedules and/or policy forms must be approved prior to use, and state insurance departments have the power to disapprove increases or require decreases in the premium rates we charge.

Market Conduct Regulation. Activities of insurers are highly regulated by state insurance laws and regulations, which govern the form and content of disclosure to consumers, advertising, sales practices and complaint handling. State regulatory authorities enforce compliance through periodic market conduct examinations.

Guaranty Associations and Indemnity Funds. Most states require insurance companies to support guaranty associations or indemnity funds, which are established to pay claims on behalf of insolvent insurance companies. These associations may levy assessments on member insurers. In some states member insurers can recover a portion of these assessments through premium tax offsets and/or policyholder surcharges.

Insurance Regulatory Initiatives. The NAIC, state regulators and professional organizations have considered and are considering various proposals that may alter or increase state authority to regulate insurance companies and insurance holding companies. Please see Item 1A, “Risk Factors - Risks Related to Our Industry - Changes in regulation may reduce our profitability and limit our growth” for a discussion of the risks related to such initiatives.

Federal Regulation

Employee Retirement Income Security Act. We are subject to regulation under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). ERISA places certain requirements on how the Company may administer employee benefit plans covered by ERISA. Among other things, regulations under ERISA set standards for certain notice and disclosure requirements and for claim processing and appeals.

Gramm-Leach-Bliley Act, HIPAA and HITECH Act. Certain of our activities are subject to the privacy regulations of the Gramm-Leach-Bliley Act, which, along with regulations adopted thereunder, generally requires insurers to provide customers with notice regarding how their non-public personal financial information is used, and to provide them with the opportunity to “opt out” of certain disclosures, if applicable. In addition, the Health Insurance Portability and Accountability Act of 1996, including the Health Information Technology for Economic and Clinical Health Act and its accompanying Omnibus Rule (“HIPAA”), impose various requirements on covered entities. Some of our entities are subject to HIPAA regulations and are required to ensure the privacy and security of protected health information.

Dodd-Frank Wall Street Reform and Consumer Protection Act. Regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) address mortgage servicers’ obligations to correct errors asserted by mortgage loan borrowers; to provide certain information requested by such borrowers; and to provide protections to such borrowers in connection with lender-placed insurance. These requirements affect our operations because, in many instances, we administer such operations on behalf of our mortgage servicer clients. While the Consumer Financial Protection Bureau ("CFPB") does not have direct jurisdiction over insurance products, it is possible that additional regulations promulgated by the CFPB, such as those mentioned, may extend its authority more broadly to cover these products and thereby affect the Company or our clients.

Patient Protection and Affordable Care Act. Although health insurance is generally regulated at the state level, the Affordable Care Act introduced a significant component of federal regulation for health insurers. Although the Assurant Health business is in runoff, some provisions of the Affordable Care Act continue to apply to us.

International Regulation

We are subject to regulation and supervision of our international operations in various jurisdictions. These regulations, which vary depending on the jurisdiction, include anti-corruption laws; solvency and market conduct regulations; various privacy, insurance, tax, tariff and trade laws and regulations; and corporate, employment, intellectual property and investment laws and regulations.

Outside the U.S., the Company operates in Canada, the U.K., Ireland, France, Argentina, Brazil, Puerto Rico, Chile, Germany, Spain, Italy, Mexico and China and our businesses are supervised by local regulatory authorities of these jurisdictions. We also have business activities in Peru, Colombia and South Korea where we have gained access to these markets by registering certain entities, where required, to act as reinsurers.

Our insurance operations in the U.K., for example, are subject to regulation by the Financial Conduct Authority and Prudential Regulation Authority. Authorized insurers are generally permitted to operate throughout the rest of the European Union, subject to satisfying certain requirements of these regulatory bodies and meeting additional local regulatory requirements. This may be subject to change for U.K. insurers and the entities operating on a cross-border basis depending on changes to the E.U. or U.K. regulatory frameworks in connection with the U.K’s referendum to exit the E.U.

We are also subject to certain U.S. and foreign laws applicable to businesses generally, including anti-corruption laws. The Foreign Corrupt Practices Act of 1977 (the “FCPA”) regulates U.S. companies in their dealings with foreign officials, prohibiting bribes and similar practices. In addition, the U.K. Anti-Bribery Act has wide applicability to certain activities that affect U.K. companies, their commercial activities in the U.K., and potentially that of their affiliates located outside of the U.K.

Additionally, the International Association of Insurance Supervisors (the “IAIS”) is developing a model common framework (“ComFrame”) for the supervision of Internationally Active Insurance Groups (“IAIGs”), which includes additional group-wide supervisory oversight across national boundaries and the establishment of ongoing supervisory colleges. The IAIS has announced that it expects to develop a risk-based global insurance capital standard applicable to IAIGs, which is expected to be rolled out starting in June 2017, with full implementation beginning in 2019. As of December 31, 2016, the Company meets the numerical criteria to qualify as an IAIG and will potentially be required to participate in the data collation requirements for IAIGs in 2017 and 2018 and to comply with ComFrame requirements when they are implemented. While the Company is expected to be subject to the additional requirements of ComFrame; at this time, we cannot predict what additional capital requirements, compliance costs or other burdens these requirements would impose on us.

The Company must also comply with the recently enacted E.U. General Data Protection Regulation (“GDPR”). All E.U. Member States must implement GDPR by May 2018. The regulation’s goal is to impose increased individual rights and protections for all personal data located or originating from the E.U. GDPR is extraterritorial in that it applies to all business in the E.U. and any business outside the E.U. that process E.U. personal data of individuals in the E.U. Moreover, there are significant fines associated with non-compliance.

Securities and Corporate Governance Regulation

As a company with publicly-traded securities, the Company is subject to certain legal and regulatory requirements applicable generally to public companies, including the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange (the “NYSE”) relating to public reporting and disclosure, accounting and financial reporting, and corporate governance matters. Additionally, Assurant, Inc. is subject to the corporate governance laws of Delaware, its state of incorporation.

Environmental Regulation

Because we own and operate real property, we are subject to federal, state and local environmental laws. Potential environmental liabilities and costs in connection with any required remediation of such properties is an inherent risk in property ownership and operation. Under the laws of several states, contamination of a property may give rise to a lien on the property to secure recovery of the costs of the cleanup, which could have priority over the lien of an existing mortgage against the property and thereby impair our ability to foreclose on that property should the related loan be in default. In addition, under certain circumstances, we may be liable for the costs of addressing releases or threatened releases of hazardous substances at properties securing mortgage loans held by us.

Other Regulation

As the Company continues to evolve its business mix to cover other non-insurance based products and services, it becomes subject to other legal and regulatory requirements, including regulations of the Consumer Financial Protection Bureau and other federal, state and municipal regulatory bodies, as well as additional regulatory bodies in non-U.S. jurisdictions. Examples include import and export trade compliance for the movement of mobile devices across geographic borders and health, safety, labor and environmental regulations impacting our mobile supply chain operations.

Other Information

Employees

We had approximately 14,700 employees as of February 7, 2017. Global Lifestyle has employees in Argentina, Brazil, Italy, Spain and Mexico that are represented by labor unions and trade organizations. We believe that employee relations are satisfactory.

Available Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, the Statements of Beneficial Ownership of Securities on Forms 3, 4 and 5 for our Directors and Officers and all amendments to such reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge through the SEC website at www.sec.gov . These documents are also available at the SEC's Public Reference Room at 100F Street, NE, Washington, DC 20549. Further information on the operation of the Public Reference room can be found by calling the SEC at 1-800-SEC-0330. These documents are also available free of charge through the Investor Relations page of our website (www.assurant.com) as soon as reasonably practicable after filing. Other information found on our website is not part of this or any other report filed with or furnished to the SEC.