Deferred Acquisition Costs and Deferred Sales Inducement Costs

In the third quarter of the year, management conducts its annual review of insurance and annuity valuation assumptions relative to current experience and management expectations. To the extent that expectations change as a result of this review, management updates valuation assumptions. The impact for the year ended December 31, 2015 primarily reflected the difference between the Company’s previously assumed interest rates versus the continued low interest rate environment partially offset by improved persistency. The impact for the year ended December 31, 2014 primarily reflected lower than previously assumed interest rates partially offset by improved persistency and mortality experience and a benefit from updating the Company's variable annuity living benefit withdrawal utilization assumption. The impact for the year ended December 31, 2013 primarily reflected higher than previously assumed interest rates and changes in assumed policyholder behavior.

The balances of and changes in DAC were as follows:



	2015			2014			2013
	(in millions)
Balance at January 1	$	2,608		$	2,663		$	2,399
Capitalization of acquisition costs	361			336			339
Amortization, excluding the impact of valuation assumptions review	(348		)	(360		)	(285		)
Amortization, impact of valuation assumptions review	(6		)	(7		)	78
Impact of change in net unrealized securities losses (gains)	110			(24		)	132
Balance at December 31	$	2,725		$	2,608		$	2,663

The balances of and changes in DSIC, which is included in other assets, were as follows:



	2015			2014			2013
	(in millions)
Balance at January 1	$	362		$	409		$	404
Capitalization of sales inducement costs	4			5			5
Amortization, excluding the impact of valuation assumptions review	(52		)	(51		)	(48		)
Amortization, impact of valuation assumptions review	1			(2		)	25
Impact of change in net unrealized securities losses	20			1			23
Balance at December 31	$	335		$	362		$	409