Deferred Acquisition Costs and Deferred Sales Inducement Costs

9 Months Ended

Sep. 30, 2011

Deferred Acquisition Costs and Deferred Sales Inducement Costs

Deferred Acquisition Costs and Deferred Sales Inducement Costs

6.  Deferred Acquisition Costs and Deferred Sales Inducement Costs

In the third quarter of 2011, management reviewed and updated the Company’s assumptions used to calculate DAC and DSIC.

The balances of and changes in DAC were as follows:

	2011			2010
	(in millions)
Balance at January 1	$	4,619		$	4,334
Capitalization of acquisition costs	367			375
Amortization, excluding the impact of valuation assumptions review	(521		)	(366		)
Amortization impact of valuation assumptions review	(51		)	323
Impact of change in net unrealized securities gains	(90		)	(229		)
Balance at September 30	$	4,324		$	4,437

The balances of and changes in DSIC, which is included in other assets, were as follows:

	2011			2010
	(in millions)
Balance at January 1	$	545		$	524
Capitalization of sales inducement costs	7			32
Amortization, excluding the impact of valuation assumptions review	(69		)	(43		)
Amortization impact of valuation assumptions review	(11		)	52
Impact of change in net unrealized securities gains	(9		)	(34		)
Balance at September 30	$	463		$	531