Deferred Acquisition Costs

9 Months Ended

Sep. 30, 2013

Deferred Costs [Abstract]

Deferred Acquisition Costs

DEFERRED ACQUISITION COSTS

Expenses directly related to successfully acquiring insurance policies – primarily commissions, premium taxes and underwriting costs – are deferred and amortized over the terms of the policies. We update our acquisition cost assumptions periodically to reflect actual experience, and we evaluate the costs for recoverability. The table below shows the deferred policy acquisition costs and asset reconciliation.

(In millions)	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Deferred policy acquisition costs asset at beginning of period	$	546		$	484		$	470		$	477
Capitalized deferred policy acquisition costs	211			192			612			554
Amortized deferred policy acquisition costs	(190		)	(180		)	(552		)	(517		)
Amortized shadow deferred policy acquisition costs	9			(5		)	46			(23		)
Deferred policy acquisition costs asset at end of period	$	576		$	491		$	576		$	491

No premium deficiencies were recorded in the condensed consolidated statements of income, as the sum of the anticipated loss and loss adjustment expenses, policyholder dividends and unamortized deferred acquisition expenses did not exceed the related unearned premiums and anticipated investment income.