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Variable Annuity and Insurance Guarantees
 12 Months Ended
Dec. 31, 2019
Insurance [Abstract]  
Variable annuity and insurance guarantees [Text Block] Variable Annuity and Insurance Guarantees
The majority of the variable annuity contracts offered by the Company contain GMDB provisions. The Company also offers variable annuities with GGU, GMWB and GMAB provisions. The Company previously offered contracts containing GMIB provisions. See Notes 2 and 11 for additional information regarding the Company’s variable annuity guarantees.
The GMDB and GGU provisions provide a specified minimum return upon death of the contractholder. The death benefit payable is the greater of (i) the contract value less any purchase payment credits subject to recapture less a pro-rata portion of any rider fees, or (ii) the GMDB provisions specified in the contract. The Company has the following primary GMDB provisions:
•
Return of premium — provides purchase payments minus adjusted partial surrenders.
•
Reset — provides that the value resets to the account value every sixth contract anniversary minus adjusted partial surrenders. This provision was often provided in combination with the return of premium provision and is no longer offered.
•
Ratchet — provides that the value ratchets up to the maximum account value at specified anniversary intervals, plus subsequent purchase payments less adjusted partial surrenders.
The variable annuity contracts with GMWB riders typically have account values that are based on an underlying portfolio of mutual funds, the values of which fluctuate based on fund performance. At issue the guaranteed amount is equal to the amount deposited but the guarantee may be increased annually to the account value (a “step-up”) in the case of favorable market performance or by a benefit credit if the contract includes this provision.
The Company has GMWB riders in force, which contain one or more of the following provisions:
•
Withdrawals at a specified rate per year until the amount withdrawn is equal to the guaranteed amount.
•
Withdrawals at a specified rate per year for the life of the contractholder (“GMWB for life”).
•
Withdrawals at a specified rate per year for joint contractholders while either is alive.
•
Withdrawals based on performance of the contract.
•
Withdrawals based on the age withdrawals begin.
•
Credits are applied annually for a specified number of years to increase the guaranteed amount as long as withdrawals have not been taken.
Variable annuity contractholders age 79 or younger at contract issue can also obtain a principal-back guarantee by purchasing the optional GMAB rider for an additional charge. The GMAB rider guarantees that, regardless of market performance at the end of the 10-year waiting period, the contract value will be no less than the original investment or a specified percentage of the highest anniversary value, adjusted for withdrawals. If the contract value is less than the guarantee at the end of the 10-year period, a lump sum will be added to the contract value to make the contract value equal to the guarantee value.
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)
December 31, 2019
 
December 31, 2018
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
$
62,909
 
$
60,967
 
$
5

 
67
 
$
55,810
 
$
53,872
 
$
417

 
67
Five/six-year reset
7,983
 
5,263
 
7

 
67
 
7,670
 
4,941
 
112

 
67
One-year ratchet
5,935
 
5,600
 
7

 
70
 
5,560
 
5,210
 
417

 
70
Five-year ratchet
1,396
 
1,340
 
—

 
66
 
1,307
 
1,251
 
23

 
66
Other
1,192
 
1,174
 
65

 
73
 
1,033
 
1,014
 
148

 
72
Total — GMDB
$
79,415
 
$
74,344
 
$
84

 
67
 
$
71,380
 
$
66,288
 
$
1,117

 
67
 
 
 
 
 
 
 
 
 
 
 
 
GGU death benefit
$
1,115
 
$
1,063
 
$
133

 
71
 
$
992
 
$
940
 
$
112

 
70
 
 
 
 
 
 
 
 
 
 
 
 
GMIB
$
186
 
$
172
 
$
6

 
70
 
$
180
 
$
164
 
$
12

 
69
 
 
 
 
 
 
 
 
 
 
 
 
GMWB:
 
 
 
 
 
 
 
 
 
 
 
GMWB
$
1,999
 
$
1,993
 
$
1

 
73
 
$
1,990
 
$
1,984
 
$
3

 
72
GMWB for life
46,799
 
46,691
 
272

 
68
 
40,966
 
40,876
 
742

 
68
Total — GMWB
$
48,798
 
$
48,684
 
$
273

 
68
 
$
42,956
 
$
42,860
 
$
745

 
68
 
 
 
 
 
 
 
 
 
 
 
 
GMAB
$
2,528
 
$
2,524
 
$
—

 
60
 
$
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:
 
December 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
$
6,550

 
67
 
$
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, 2017
$
16

 
$
8

 
$
1,017

 
$
(24
)
 
$
434

Incurred claims
5

 
—

 
(554
)
 
(56
)
 
84

Paid claims
(4
)
 
(2
)
 
—

 
—

 
(29
)
Balance at December 31, 2017
17

 
6

 
463

 
(80
)
 
489

Incurred claims
8

 
2

 
412

 
61

 
201

Paid claims
(6
)
 
—

 
—

 
—

 
(31
)
Balance at December 31, 2018
19

 
8

 
875

 
(19
)
 
659

Incurred claims
2

 
(1
)
 
587

 
(20
)
 
141

Paid claims
(5
)
 
—

 
—

 
—

 
(42
)
Balance at December 31, 2019
$
16

 
$
7

 
$
1,462

 
$
(39
)
 
$
758


(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:
 
December 31,
2019
 
2018
(in millions)
Mutual funds:
 
 
 
Equity
$
44,739

 
$
39,764

Bond
23,374

 
21,190

Other
6,471

 
5,568

Total mutual funds
$
74,584

 
$
66,522


No gains or losses were recognized on assets transferred to separate accounts for the years ended December 31, 2019, 2018 and 2017.