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Deferred Acquisition Costs and Deferred Sales Inducement Costs
 12 Months Ended
Dec. 31, 2016
Deferred Acquisition Costs and Deferred Sales Inducement Costs  
Deferred acquisition costs and deferred sales inducement costs [Text Block]
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 of unlocking for the year ended December 31, 2016 primarily reflected continued low interest rates that more than offset benefits from persistency on annuity contracts without living benefits. In addition, the Company’s review of its closed LTC business resulted in loss recognition due to continued low interest rates, higher morbidity and higher reinsurance expenses, slightly offset by premium increases. The impact of unlocking for the year ended December 31, 2015 primarily reflected the difference between the Company’s previously assumed interest rates versus the low interest rate environment partially offset by improved persistency. The impact of unlocking 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 balances of and changes in DAC were as follows:
 
2016
 
2015
 
2014
(in millions)
Balance at January 1(1)
$
2,730

 
$
2,613

 
$
2,668

Capitalization of acquisition costs
360

(2) 
361

 
336

Amortization, excluding the impact of valuation assumptions review
(334
)
 
(348
)
 
(360
)
Amortization, impact of valuation assumptions review
(81
)
(3) 
(6
)
 
(7
)
Impact of change in net unrealized securities (gains) losses
(27
)
 
110

 
(24
)
Balance at December 31(1)
$
2,648

 
$
2,730

 
$
2,613


(1) Prior period DAC balances have been restated for the correction of the commission expense accrual for certain insurance and annuity products. See Note 1 for more information.
(2) Includes a $27 million benefit for the release of the deferred reinsurance liability in connection with the loss recognition on LTC business. The benefit was reported in Distribution expenses on the Consolidated Statements of Operations.
(3) Includes a $58 million expense related to the loss recognition on LTC business.
The balances of and changes in DSIC, which is included in other assets, were as follows:
 
2016
 
2015
 
2014
(in millions)
Balance at January 1
$
335

 
$
362

 
$
409

Capitalization of sales inducement costs
5

 
4

 
5

Amortization, excluding the impact of valuation assumptions review
(42
)
 
(52
)
 
(51
)
Amortization, impact of valuation assumptions review
4

 
1

 
(2
)
Impact of change in net unrealized securities losses
—

 
20

 
1

Balance at December 31
$
302

 
$
335

 
$
362