Variable Annuity and Insurance Guarantees

3 Months Ended

Mar. 31, 2019

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⁾	March 31, 2019							December 31, 2018
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	$	59,779	$	57,840	$	36	67	$	55,810	$	53,872	$	417	67
Five/six-year reset	8,026		5,296		16		67	7,670		4,941		112		67
One-year ratchet	5,891		5,545		48		70	5,560		5,210		417		70
Five-year ratchet	1,388		1,331		2		66	1,307		1,251		23		66
Other	1,113		1,093		84		72	1,033		1,014		148		72
Total — GMDB	$	76,197	$	71,105	$	186	67	$	71,380	$	66,288	$	1,117	67

GGU death benefit	$	1,058	$	1,006	$	119	70	$	992	$	940	$	112	70

GMIB	$	190	$	175	$	8	70	$	180	$	164	$	12	69

GMWB:
GMWB	$	2,084	$	2,078	$	2	72	$	1,990	$	1,984	$	3	72
GMWB for life	44,025		43,936		360		68	40,966		40,876		742		68
Total — GMWB	$	46,109	$	46,014	$	362	68	$	42,956	$	42,860	$	745	68

GMAB	$	2,571	$	2,565	$	2	59	$	2,456	$	2,450	$	24	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:



	March 31, 2019			December 31, 2018
	Net Amount at Risk		Weighted Average Attained Age	Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)
UL secondary guarantees	$	6,496	66	$	6,513	66

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, 2018	$	17		$	6		$	463		$	(80	)	$	489
Incurred claims	1			—			(261		)	4			26
Paid claims	(1		)	—			—			—			(7		)
Balance at March 31, 2018	$	17		$	6		$	202		$	(76	)	$	508

Balance at January 1, 2019	$	19		$	8		$	875		$	(19	)	$	659
Incurred claims	—			(1		)	(104		)	(26		)	34
Paid claims	(2		)	—			—			—			(17		)
Balance at March 31, 2019	$	17		$	7		$	771		$	(45	)	$	676

⁽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:



	March 31, 2019		December 31, 2018
	(in millions)
Mutual funds:
Equity	$	42,976	$	39,764
Bond	22,622		21,190
Other	5,748		5,568
Total mutual funds	$	71,346	$	66,522