Accounting Policies - Guaranteed Minimum Death Benefits (Policies)

12 Months Ended

Dec. 31, 2017

Activity in future policy benefits reserves for GMDB business [Line Items]

Future Policy Benefits

G. Future Policy Benefits

Future policy benefits represent the present value of estimated future obligations under long-term life and supplemental health insurance policies and annuity products currently in force. These obligations are estimated using actuarial methods and consist primarily of reserves for annuity contracts, life insurance benefits, GMDB contracts (see Note 9 for additional information) and certain health, life and accident insurance products of our Global Supplemental Benefits segment.

Obligations for annuities represent specified periodic benefits to be paid to an individual or groups of individuals over their remaining lives. Obligations for life insurance policies and GMDB contracts represent benefits expected to be paid to policyholders, net of future premiums expected to be received. Management estimates these obligations based on assumptions as to premiums, interest rates, mortality or morbidity, future claim adjudication expenses and surrenders, allowing for adverse deviation as appropriate. Mortality, morbidity and surrender assumptions are based on the Company’s own experience and published actuarial tables. Interest rate assumptions are based on management’s judgment considering the Company’s experience and future expectations, and range from 0.1% to 9%. Obligations for the run-off settlement annuity business include adjustments for realized and unrealized investment returns consistent with GAAP when a premium deficiency exists.

Variable Annuity [Member] | Guaranteed Minimum Death Benefit [Member]

Activity in future policy benefits reserves for GMDB business [Line Items]

Future Policy Benefits

Accounting policy.The Company estimates the gross liability and reinsurance recoverable with an internal model based on the Company’s experience and future expectations over anextended period, consistent with the long-term nature of this product. As a result of the reinsurance transaction, reserve increases have acorresponding increase in the recorded reinsurance recoverable, provided the increased recoverable remains within the overallBerkshire limit (including the GMIB assetpresented below).The ending net retained reserve covers ongoing administrative expenses, as well as minor claim exposure retained by the Company.

Because the product is premium deficient, the Company records an increase to the net retained reserve if it is inadequate based on the model.