Deferred Policy Acquisition Costs (Notes)

12 Months Ended

Dec. 31, 2013

Deferred Policy Acquisition Costs Disclosures [Abstract]

Deferred Policy Acquisition Costs [Text Block]

(6) Deferred Policy Acquisition Costs

The balances of and activity in DAC were as follows:

	Year ended December 31,
	2013			2012			2011
	(In thousands)
DAC balance, beginning of period	$	1,066,422		$	904,485		$	738,946
Capitalization	283,341			276,840			270,661
Amortization	(129,183		)	(118,598		)	(104,034		)
Foreign exchange and other	(12,114		)	3,695			(1,088		)
DAC balance, end of period	$	1,208,466		$	1,066,422		$	904,485

Capitalization of DAC represents incremental direct costs of successful acquisitions or renewals of life insurance policies that result directly from and are essential to the policy acquisition(s) and would not have been incurred had the policy acquisition(s) not occurred.

In determining amortization expense, we use investment yields available at the time a policy is issued. For policies issued in 2010 and after, we have been using an increasing investment yield assumption based on the historically low interest rate environment.Investment yield assumptions for new policies acquired during the years ended December 31, 2013, 2012 and 2011 ranged from 3.5% to 7.0%.

DAC is subject to recoverability testing annually and when impairment indicators exist. The recoverability of DAC is dependent on the future profitability of the related policies, which, in turn, is dependent principally upon mortality, persistency, investment returns, and the expense of administering the business, as well as upon certain economic variables, such as inflation.

See Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies) for details regarding the accounting for DAC.