Deferred Acquisition Costs

9 Months Ended

Sep. 30, 2014

Deferred Costs [Abstract]

Deferred Acquisition Costs

DEFERRED ACQUISITION COSTS

Expenses directly related to successfully acquired 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,
	2014			2013			2014			2013
Deferred policy acquisition costs asset, beginning   of period	$	571		$	546		$	565		$	470
Capitalized deferred policy acquisition costs	208			211			630			612
Amortized deferred policy acquisition costs	(195		)	(190		)	(598		)	(552		)
Amortized shadow deferred policy acquisition costs	6			9			(7		)	46
Deferred policy acquisition costs asset, end of   period	$	590		$	576		$	590		$	576

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.