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Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives (Tables)
 9 Months Ended
Sep. 30, 2014
Insurance [Abstract]  
Separate Account Investments of Account Balances of Variable Annuity Contracts with Guarantees
Separate Account Investments of Account Balances of Variable Annuity Contracts with Insurance Guarantees:
September 30,
 
December 31,
($ in millions)
2014
 
2013
 
 
 
 
Debt securities
$
296.0

 
$
322.1

Equity funds
1,339.1

 
1,538.7

Other
38.9

 
47.4

Total
$
1,674.0

 
$
1,908.2
Changes in Guaranteed Insurance Benefit Liability Balances
Changes in Variable Annuity Guaranteed Insurance Benefit
Liability Balances:
Three Months Ended 
 September 30, 2014
 
Nine Months Ended 
 September 30, 2014
($ in millions)
Annuity
GMDB
 
Annuity
GMIB
 
Annuity
GMDB
 
Annuity
GMIB
 
 
 
 
 
 
 
 
Balance, beginning of period
$
14.4

 
$
5.5

 
$
17.0

 
$
9.5

Incurred
1.5

 
0.5

 
(0.1
)
 
(3.4
)
Paid
(1.6
)
 
—

 
(2.6
)
 
—

Change due to net unrealized gains or losses included in AOCI
—

 
—

 
—

 
(0.1
)
Assumption unlocking
—

 
—

 
—

 
—

Balance, end of period
$
14.3

 
$
6.0

 
$
14.3

 
$
6.0


Changes in Variable Annuity Guaranteed Insurance Benefit
Liability Balances:
Three Months Ended 
 September 30, 2013
 
Nine Months Ended 
 September 30, 2013
($ in millions)
Annuity
GMDB
 
Annuity
GMIB
 
Annuity
GMDB
 
Annuity
GMIB
 
 
 
 
 
 
 
 
Balance, beginning of period
$
10.4

 
$
20.8

 
$
10.8

 
$
20.9

Incurred
0.6

 
(2.2
)
 
1.8

 
(2.2
)
Paid
(0.8
)
 
—

 
(2.4
)
 
—

Change due to net unrealized gains or losses included in AOCI
—

 
—

 
—

 
(0.1
)
Assumption unlocking
—

 
—

 
—

 
—

Balance, end of period
$
10.2

 
$
18.6

 
$
10.2

 
$
18.6
GMDB Benefits by Type
Following are the major types of death benefits currently in force as defined in Note 7 to our financial statements in the 2013 Form 10-K:

GMDB and GMIB Benefits by Type:
September 30, 2014
($ in millions)
Account
Value
 
NAR
before
Reinsurance
 
NAR
after Reinsurance
 
Average
Attained Age
of Annuitant
 
 
 
 
 
 
 
 
GMDB return of premium
$
646.8

 
$
1.5

 
$
1.5

 
63
GMDB step up
1,241.7

 
70.1

 
12.8

 
64
GMDB earnings enhancement benefit (“EEB”)
30.9

 
—

 
—

 
64
GMDB greater of annual step up and roll up
24.8

 
5.0

 
5.0

 
68
Total GMDB at September 30, 2014
1,944.2

 
$
76.6

 
$
19.3

 
 
Less: General account value with GMDB
276.4

 
 
 
 

 
 
Subtotal separate account liabilities with GMDB
1,667.8

 
 
 
 

 
 
Separate account liabilities without GMDB
148.5

 
 
 
 

 
 
Total separate account liabilities
$
1,816.3

 
 
 
 

 
 
GMIB [1] at September 30, 2014
$
324.3

 
 
 
 

 
65
 
 
 
 
 
 
 
 
GMDB and GMIB Benefits by Type:
December 31, 2013
($ in millions)
Account
Value
 
NAR
before
Reinsurance
 
NAR
after Reinsurance
 
Average
Attained Age
of Annuitant
 
 

 
 
 
 

 
 
GMDB return of premium
$
728.8

 
$
1.8

 
$
1.8

 
63
GMDB step up
1,401.0

 
66.7

 
7.0

 
63
GMDB earnings enhancement benefit (“EEB”)
35.9

 
0.1

 
0.1

 
64
GMDB greater of annual step up and roll up
26.7

 
4.8

 
4.8

 
68
Total GMDB at December 31, 2013
2,192.4

 
$
73.4

 
$
13.7

 
 
Less: General account value with GMDB
294.7

 
 
 
 

 
 
Subtotal separate account liabilities with GMDB
1,897.7

 
 
 
 

 
 
Separate account liabilities without GMDB
155.0

 
 
 
 

 
 
Total separate account liabilities
$
2,052.7

 
 
 
 

 
 
GMIB [1] at December 31, 2013
$
385.7

 
 
 
 

 
64
———————
[1]
Policies with a GMIB also have a GMDB, however these benefits are not additive. When a policy terminates due to death, any NAR related to GMIB is released. Similarly, when a policy goes into benefit status on a GMIB, its GMDB NAR is released.
Changes in Guaranteed Liability Balances

Changes in Fixed Indexed Annuity Guaranteed Liability Balances:
Fixed Indexed Annuity
($ in millions)
GMWB & GMDB
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
Balance, beginning of period
$
141.2

 
$
89.4

 
$
90.0

 
$
103.6

Incurred
10.5

 
12.1

 
26.8

 
44.9

Paid
(0.1
)
 
—

 
(0.3
)
 
(0.2
)
Change due to net unrealized gains or losses included in AOCI
(6.1
)
 
(0.9
)
 
29.0

 
(47.7
)
Assumption unlocking
—

 
—

 
—

 
—

Balance, end of period
$
145.5

 
$
100.6

 
$
145.5

 
$
100.6


Universal life

Liabilities for universal life contracts in excess of the account balance, some of which contain secondary guarantees, are generally determined by estimating the expected value of benefits and expenses when claims are triggered and recognizing those benefits and expenses over the accumulation period based on total expected assessments. The assumptions used in estimating these liabilities are generally consistent with those used for amortizing DAC.

Changes in Universal Life Guaranteed Liability Balances:
Universal Life
($ in millions)
Secondary Guarantees
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
Balance, beginning of period
$
164.1

 
$
131.6

 
$
153.2

 
$
115.8

Incurred
8.1

 
9.1

 
20.7

 
31.9

Paid
(2.1
)
 
(6.5
)
 
(5.3
)
 
(11.8
)
Change due to net unrealized gains or losses included in AOCI
(0.2
)
 
(0.1
)
 
1.3

 
(1.8
)
Assumption unlocking
—

 
—

 
—

 
—

Balance, end of period
$
169.9

 
$
134.1

 
$
169.9

 
$
134.1



In addition, the universal life block of business has experience which produces profits in earlier periods followed by losses in later periods for which additional reserves are required to be held above the account value liability. These reserves are accrued ratably over historical and anticipated positive income to offset the future anticipated losses. The assumptions used in estimating these liabilities are generally consistent with those used for amortizing DAC.

Changes in Universal Life Additional Liability Balances:
Universal Life
($ in millions)
Profits Followed by Losses
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
Balance, beginning of period
$
318.2

 
$
326.0

 
$
273.4

 
$
300.4

Expenses
16.6

 
13.3

 
54.6

 
45.3

Change due to net unrealized gains or losses included in AOCI
(4.0
)
 
(10.6
)
 
2.8

 
(17.0
)
Assumption unlocking
—

 
—

 
—

 
—

Balance, end of period
$
330.8

 
$
328.7

 
$
330.8

 
$
328.7
Non-Insurance Guaranteed Product Features
Certain separate account variable products may contain a GMWB, guaranteed minimum accumulation benefit (“GMAB”) and/or combination (“COMBO”) rider as defined in Note 7 to our financial statements in the 2013 Form 10-K. These features are accounted for as embedded derivatives as described below.

Variable Annuity Embedded Derivatives Non-Insurance Guaranteed Product Features:
September 30, 2014
($ in millions)
Account
Value
 
Average
Attained Age
of Annuitant
 
 
 
 
GMWB
$
491.3

 
64
GMAB
318.2

 
59
COMBO
6.9

 
64
Balance, end of period
$
816.4

 
 
 
 
 
 
Variable Annuity Embedded Derivatives Non-Insurance Guaranteed Product Features:
December 31, 2013
($ in millions)
Account
Value
 
Average
Attained Age
of Annuitant
 
 

 
 
GMWB
$
551.1

 
64
GMAB
370.9

 
59
COMBO
7.0

 
63
Balance, end of period
$
929.0

 
 
Variable Annuity Embedded Derivative Liabilities
The fair value of the GMWB, GMAB and COMBO obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior. As markets change, contracts mature and actual policyholder behavior emerges, these assumptions are continually evaluated and may from time to time be adjusted. Embedded derivative liabilities for GMWB, GMAB and COMBO are shown in the table below.

Variable Annuity Embedded Derivative Liabilities:
September 30,
 
December 31,
($ in millions)
2014
 
2013
 
 
 
 
GMWB
$
1.2

 
$
(5.1
)
GMAB
0.5

 
1.4

COMBO
(0.3
)
 
(0.4
)
Total variable annuity embedded derivative liabilities
$
1.4

 
$
(4.1
)