Deferred Policy Acquisition Costs and Present Value of Future Profits

3 Months Ended

Mar. 31, 2012

Deferred Policy Acquisition Costs and Present Value of Future Profits [Abstract]

Deferred Policy Acquisition Costs and Present Value of Future Profits

6. Deferred Policy Acquisition Costs and Present Value of Future Profits

The Company capitalizes policy acquisition costs that are directly related to the successful acquisition of new and renewal insurance contracts in accordance with ASU No. 2010-26. On January 1, 2012, the Company adopted ASU No. 2010-26 as further discussed in Note 1 of the Notes to Condensed Consolidated Financial Statements. As a result of this change in accounting policy, deferred policy acquisition costs and present value of future profits as of January 1, 2011 decreased by approximately $2.4 billion from $9.9 billion, as previously reported.

Changes in the DAC balance are as follows:

	Three Months Ended
	March 31,
	2012			2011
Balance, beginning of period, as currently reported	$	6,556		$	7,473
Deferred Costs		439			421
Amortization – DAC		(445	)		(488	)
Amortization – Unlock benefit, pre-tax		124			38
Adjustments to unrealized gains and losses on securities available-for-sale and other		(21	)		48
Effect of currency translation		(76	)		(32	)
Balance, end of period	$	6,577		$	7,460

The Unlock benefit, pre-tax for the three months ended March 31, 2012 and 2011 was driven by actual separate account returns being above our aggregated estimated returns.