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Deferred Acquisition Costs and Deferred Sales Inducement Costs
 12 Months Ended
Dec. 31, 2018
Deferred Charges, Insurers [Abstract]  
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 updated market-related inputs and implemented model changes related to the living benefit valuation. In addition, management conducted its annual review of life insurance and annuity valuation assumptions relative to current experience and management expectations including modeling changes. These aforementioned changes are collectively referred to as unlocking. The impact of unlocking to DAC for the year ended December 31, 2018 primarily reflected updated mortality assumptions on UL and VUL insurance products and lower surrender rate assumptions on variable annuities, partially offset by an unfavorable impact from updates to assumptions on utilization of guaranteed withdrawal benefits. The impact of unlocking to DAC for the year ended December 31, 2017 primarily reflected improved persistency and mortality on UL and VUL insurance products and a correction related to a variable annuity model assumption partially offset by updates to market-related inputs to the living benefit valuation. The impact of unlocking to DAC for the year ended December 31, 2016 primarily reflected 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 in 2016 resulted in the write-off of DAC, which was included in the impact of unlocking.
The balances of and changes in DAC were as follows:
 
2018
 
2017
 
2016
 
(in millions)
 
Balance at January 1
$
2,676

 
$
2,648

 
$
2,730

 
Capitalization of acquisition costs
318

 
302

 
360

(1) 
Amortization, excluding the impact of valuation assumptions review
(355
)
 
(279
)
 
(334
)
 
Amortization, impact of valuation assumptions review
33

 
12

 
(81
)
(2) 
Impact of change in net unrealized (gains) losses on securities
104

 
(7
)
 
(27
)
 
Balance at December 31
$
2,776

 
$
2,676

 
$
2,648

 

(1) Includes a $27 million benefit related to the write-off 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.
(2) 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:
 
2018
 
2017
 
2016
(in millions)
Balance at January 1
$
276

 
$
302

 
$
335

Capitalization of sales inducement costs
2

 
4

 
5

Amortization, excluding the impact of valuation assumptions review
(43
)
 
(35
)
 
(42
)
Amortization, impact of valuation assumptions review
—

 
(1
)
 
4

Impact of change in net unrealized (gains) losses on securities
16

 
6

 
—

Balance at December 31
$
251

 
$
276

 
$
302