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Deferred Acquisition Costs and Deferred Sales Inducement Costs
 9 Months Ended
Sep. 30, 2019
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, management updates market-related assumptions and implements model changes related to the living benefit valuation. In addition, management conducts 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 in the third quarter of 2019 primarily reflected updates to interest rate assumptions, partially offset by a favorable impact from lower surrenders on annuity contracts with a withdrawal benefit. The impact of unlocking to DAC in the third quarter of 2018 primarily reflected updated mortality assumptions on universal life (“UL”) and variable universal life (“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 balances of and changes in DAC were as follows:
 
2019
 
2018
(in millions)
Balance at January 1
$
2,776

 
$
2,676

Capitalization of acquisition costs
226

 
241

Amortization, excluding the impact of valuation assumptions review
(172
)
 
(213
)
Amortization, impact of valuation assumptions review
(14
)
 
33

Impact of change in net unrealized (gains) losses on securities
(175
)
 
95

Reclassified to assets held for sale (1)
(15
)
 
—

Balance at September 30
$
2,626

 
$
2,832


(1) See Note 15 for additional information on held for sale classification.
The balances of and changes in DSIC, which is included in other assets, were as follows:
 
2019
 
2018
(in millions)
Balance at January 1
$
251

 
$
276

Capitalization of sales inducement costs
1

 
2

Amortization, excluding the impact of valuation assumptions review
(13
)
 
(26
)
Amortization, impact of valuation assumptions review
—

 
—

Impact of change in net unrealized (gains) losses on securities
(21
)
 
16

Balance at September 30
$
218

 
$
268