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Deferred Acquisition Costs and Deferred Sales Inducement Costs
 9 Months Ended
Sep. 30, 2022
Deferred Charges, Insurers [Abstract]  
Deferred Acquisition Costs and Deferred Sales Inducement Costs Deferred Acquisition Costs and Deferred Sales Inducement Costs
During 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 deferred acquisition costs (“DAC”) in the third quarter of 2022 primarily reflected a $49 million increase from lower surrenders on variable annuities with living benefits and universal life (“UL”) and variable universal life (“VUL”) insurance products partially offset by a $27 million decrease from updating mortality assumptions for variable annuities and a $13 million decrease from updating the fair value discount rate for variable annuities. The impact of unlocking to DAC in the third quarter of 2021 primarily reflected a favorable impact from lower surrenders on variable annuities with living benefits and universal life UL and VUL insurance products.
The balances of and changes in DAC were as follows:
20222021
(in millions)
Balance at January 1$2,782 $2,532 
Capitalization of acquisition costs151 205 
Amortization(363)(137)
Amortization, impact of valuation assumptions review8 60 
Impact of change in net unrealized (gains) losses on securities420 75 
Balance at September 30
$2,998 $2,735 
The balances of and changes in deferred sales inducement costs (“DSIC”), which is included in Other assets, were as follows:
20222021
(in millions)
Balance at January 1$189 $189 
Capitalization of sales inducement costs1 1 
Amortization(35)(15)
Amortization, impact of valuation assumptions review2 2 
Impact of change in net unrealized (gains) losses on securities15 11 
Balance at September 30
$172 $188