POLICY LIABILITIES

Policy liabilities consist of future policy benefits, unpaid policy claims, unearned premiums, and other policyholders' funds, which accounted for 80%, 4%, 9% and 7% of total policy liabilities at December 31, 2015, respectively. We regularly review the adequacy of our policy liabilities in total and by component.

The liability for future policy benefits as of December 31 consisted of the following:



		Liability Amounts						Interest Rates
(In millions)	Policy Issue Year	2015				2014		Year of Issue		In 20 Years
Health insurance:
Japan:	1992 - 2015	$	7,633			$	3,900	1.25 - 2.5	%	1.25 - 2.5	%
	1974 - 2013	1,078				3,449		2.7 - 2.75		2.25 - 2.75
	1998 - 2014	11,008				10,641		3.0		3.0
	1997 - 1999	2,435				2,461		3.5		3.5
	1994 - 1996	2,998				3,023		4.0 - 4.5		4.0 - 4.5
	1987 - 1994	14,161				14,394		5.5		5.5
	1985 - 1991	1,868				1,923		5.25 - 6.75		5.25 - 5.5
	1978 - 1984	2,163				2,260		6.5		5.5

U.S.:	2013 - 2015	57				42		3.0 - 3.5		3.0 - 3.5
	2012 - 2015	794				546		3.75		3.75
	2011	300				276		4.75		4.75
	2005 - 2010	2,986				2,951		5.5		5.5
	1988 - 2004	687				706		8.0		6.0
	1986 - 2004	1,276				1,293		6.0		6.0
	1981 - 1986	174				183		6.5 - 7.0		5.5 - 6.5
	1998 - 2004	1,279				1,260		7.0		7.0
	Other	21				21

Intercompany eliminations:	2015	(646		)	⁽¹⁾	0		2.0		2.0


Life insurance:
Japan:	2001 - 2015	5,441				3,986		1.5 - 1.85		1.5 - 1.85
	2011 - 2015	3,226				2,298		2.0		2.0
	2009 - 2011	2,332				1,890		2.25		2.25
	1992 - 2006	5				0		2.35		1.77
	2005 - 2011	1,330				1,214		2.5		2.5
	1985 - 2006	1,962				2,006		2.7		2.25
	2007 - 2011	1,105				1,010		2.75		2.75
	1999 - 2011	1,988				1,944		3.0		3.0
	1996 - 2009	635				633		3.5		3.5
	1994 - 1996	877				884		4.0 - 4.5		4.0 - 4.5

U.S.:	1956 - 2015	514				452		3.5 - 6.0		3.5 - 6.0
Total		$	69,687			$	65,646

⁽¹⁾ Elimination entry necessary due to recapture of a portion of policy liabilities ceded externally, as a result of the reinsurance retrocession transaction as described in Note 8 of the Notes to the Consolidated Financial Statements

The weighted-average interest rates reflected in the consolidated statements of earnings for future policy benefits for Japanese policies were 3.6% in 2015, compared with 3.8% in 2014 and 3.9% in 2013; and for U.S. policies, 5.6% in 2015, compared with 5.7% in 2014 and 5.8% in 2013.

Changes in the liability for unpaid policy claims were as follows for the years ended December 31:



(In millions)	2015				2014				2013
Unpaid supplemental health claims, beginning of year		$	3,412			$	3,537			$	3,781
Less reinsurance recoverables		7				9				10
Net balance, beginning of year		3,405				3,528				3,771
Add claims incurred during the year related to:
Current year		6,416				6,866				7,215
Prior years		(353		)		(301		)		(236		)
Total incurred		6,063				6,565				6,979
Less claims paid during the year on claims incurred during:
Current year		4,227				4,532				4,834
Prior years		1,718				1,873				1,931
Total paid		5,945				6,405				6,765
Effect of foreign exchange rate changes on unpaid claims		(1		)		(283		)		(457		)
Net balance, end of year		3,522				3,405				3,528
Add reinsurance recoverables		26				7				9
Unpaid supplemental health claims, end of year		3,548				3,412				3,537
Unpaid life claims, end of year		254				218				226
Total liability for unpaid policy claims		$	3,802			$	3,630			$	3,763

The incurred claims development related to prior years reflects favorable claims experience compared to previous estimates, primarily in our lines of business in Japan.

As of December 31, 2015 and 2014, unearned premiums consisted primarily of discounted advance premiums on deposit. Discounted advance premiums are premiums on deposit from policyholders in conjunction with their purchase of certain Aflac Japan limited-pay insurance products. These advanced premiums are deferred upon collection and recognized as premium revenue over the contractual premium payment period. These advanced premiums represented 77% of the December 31, 2015 and 80% of the December 31, 2014 unearned premiums balances.

As of December 31, 2015 and 2014, the largest component of the other policyholders' funds liability is our annuity line of business in Aflac Japan. Our annuities have fixed benefits and premiums. These annuities represented 98% of the December 31, 2015 and 2014 other policyholders' funds liability.