Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired

12 Months Ended

Dec. 31, 2020

Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired

DEFERRED POLICY ACQUISITION COSTS, DEFERRED SALES INDUCEMENTS, AND VALUE OF BUSINESS ACQUIRED

A summary of information related to DPAC is provided in the following table:


	Years Ended December 31,
	2020		2019	2018
	(In thousands)

Balance, beginning of year	$	723,972	841,704	819,511
Deferrals	69,857		64,824	84,094
Amortization, net of interest:
Amortization, excluding unlocking, net of interest	(107,917)		(117,748)	(115,721)
Unlocking	(22,358)		8,643	950

Adjustments related to unrealized gains (losses)	(261,186)		(73,451)	52,870
Reinsurance	(20,288)		—	—

Balance, end of year	$	382,080	723,972	841,704

A summary of information related to DSI is provided in the following table:


	Years Ended December 31,
	2020		2019	2018
	(In thousands)

Balance, beginning of year	$	104,359	133,714	135,570
Deferrals	10,344		3,160	7,546
Amortization, net of interest:
Amortization, excluding unlocking, net of interest	(22,808)		(19,714)	(21,569)
Unlocking	—		(641)	1,270

Adjustments related to unrealized gains (losses)	(43,557)		(12,160)	10,897
Reinsurance	(4,493)		—	—

Balance, end of year	$	43,845	104,359	133,714

Changes in VOBA were as follows:


	Years Ended December 31,
	2020		2019
	(In thousands)

Balance, beginning of year	$	138,071	—
Business acquired	—		145,768
Other increase	35,125		—
Amortization:
Amortization, excluding unlocking	(10,228)		(7,697)


Balance as of end of year	$	162,968	138,071

During the year ended December 31, 2020, the cash value of certain acquired reserves was increased which resulted in a commensurate increase in both the traditional life reserve liability and the related VOBA balance reported on the Consolidated Balance Sheets.

Estimated future amortization of VOBA, net of interest (in thousands), as of December 31, 2020, was as follows:


2021	$	9,707
2022	9,214
2023	8,786
2024	8,402
2025	8,070