Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

On October 13, 2020, AFG called its $150 million of 6% Subordinated Debentures due in November 2055 for redemption on November 15, 2020.

On October 19, 2020, AFG entered into a reinsurance agreement with Commonwealth Annuity and Life Insurance Company (“Commonwealth”), a subsidiary of Global Atlantic Financial Group Limited. The agreement has an effective date of October 1, 2020 and will be reported in AFG’s fourth quarter financial statements. Under the terms of the agreement, AFG’s Annuity subsidiary, Great American Life Insurance Company (“GALIC”), ceded approximately $6 billion of inforce traditional fixed and indexed annuities, representing approximately 15% of its inforce business, and transferred a similar amount of investments to Commonwealth. The assets transferred were primarily available for sale fixed maturity securities, the disposal of which will result in the recognition (through net income) of the approximately $275 million to $300 million (net of DAC and tax) in net unrealized gains included in AOCI immediately prior to the transaction. Under the reinsurance accounting guidance, the reinsurance transaction will be accounted for using the deposit method and the loss on the transaction will be deferred and recognized over the expected life of the ceded reserves (7-10 years).