Variable Annuity and Insurance Guarantees

9 Months Ended

Sep. 30, 2018

Variable Annuity and Insurance Guarantees [Text Block]

Variable Annuity and Insurance Guarantees

The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions.

Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.

The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities:



Variable Annuity Guarantees by Benefit Type ⁽¹⁾	September 30, 2018							December 31, 2017
Variable Annuity Guarantees by Benefit Type ⁽¹⁾	Total Contract Value		Contract Value in Separate Accounts		Net Amount at Risk		Weighted Average Attained Age	Total Contract Value		Contract Value in Separate Accounts		Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)
GMDB:
Return of premium	$	61,379	$	59,441	$	12	67	$	61,418	$	59,461	$	9	66
Five/six-year reset	8,504		5,781		11		66	8,870		6,149		12		66
One-year ratchet	6,215		5,864		19		69	6,548		6,187		11		69
Five-year ratchet	1,471		1,416		1		65	1,563		1,506		1		65
Other	1,126		1,107		63		72	1,099		1,075		50		72
Total — GMDB	$	78,695	$	73,609	$	106	67	$	79,498	$	74,378	$	83	66

GGU death benefit	$	1,105	$	1,055	$	129	70	$	1,118	$	1,067	$	133	70

GMIB	$	208	$	192	$	7	69	$	233	$	216	$	7	69

GMWB:
GMWB	$	2,252	$	2,245	$	1	72	$	2,508	$	2,500	$	1	71
GMWB for life	44,871		44,776		217		68	44,375		44,259		129		67
Total — GMWB	$	47,123	$	47,021	$	218	68	$	46,883	$	46,759	$	130	67

GMAB	$	2,762	$	2,758	$	—	59	$	3,086	$	3,083	$	—	59


⁽¹⁾	Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table.

The net amount at risk for GMDB, GGU and GMAB is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB is defined as the greater of the present value of the minimum guaranteed annuity payments less the current contract value or zero. The net amount at risk for GMWB is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero.

The following table provides information related to insurance guarantees for which the Company has established additional liabilities:



	September 30, 2018			December 31, 2017
	Net Amount at Risk		Weighted Average Attained Age	Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)
UL secondary guarantees	$	6,499	66	$	6,460	65

The net amount at risk for UL secondary guarantees is defined as the current guaranteed death benefit amount in excess of the current policyholder account balance.

Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows:



	GMDB & GGU			GMIB			GMWB ⁽¹⁾			GMAB ⁽¹⁾			UL
	(in millions)
Balance at January 1, 2017	$	16		$	8		$	1,017		$	(24	)	$	434
Incurred claims	3			—			(478		)	(49		)	59
Paid claims	(3		)	(1		)	—			—			(22		)
Balance at September 30, 2017	$	16		$	7		$	539		$	(73	)	$	471

Balance at January 1, 2018	$	17		$	6		$	463		$	(80	)	$	489
Incurred claims	5			—			(588		)	(3		)	171
Paid claims	(4		)	—			—			—			(19		)
Balance at September 30, 2018	$	18		$	6		$	(125	)	$	(83	)	$	641

⁽¹⁾The incurred claims for GMWB and GMAB include the change in the fair value of the liabilities (contra liabilities) less paid claims.

The liabilities for guaranteed benefits are supported by general account assets.

The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits:



	September 30, 2018		December 31, 2017
	(in millions)
Mutual funds:
Equity	$	44,968	$	46,038
Bond	22,846		23,529
Other	6,059		5,109
Total mutual funds	$	73,873	$	74,676