Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2012

DeferredPolicyAcquisitionCostsDisclosuresAbstract

4. DEFERRED POLICY ACQUISITION COSTS

The balances of and changes in DAC as of and for the years ended December 31, are as follows:

			2012		2011		2010
	(in thousands)
Balance, beginning of year		$	666,764	$	1,357,156	$	1,242,791
Capitalization of commissions, sales and issue expenses			25,081		41,994		275,316
Amortization - Impact of Assumption and experience unlocking and true-ups			274,503		(113,539)		59,874
Amortization - All Other			(86,461)		(602,550)		(238,543)
Changes in unrealized investment gains and losses			26,927		(62)		17,718
Other (1)			-		(16,235)		-
Balance, end of year		$	906,814	$	666,764	$	1,357,156

(1) Balance sheet reclassification between DAC and DSI relating to refinement in methodology for allocating DAC/DSI balances for cohorts with both DAC and DSI persistency credits. Refer to Note 7 for impact to DSI.

- Definition

Disclosure of accounting policy for capitalizing costs incurred to write or acquire insurance contracts, the basis for and methodology for capitalizing such costs, the accounting for such deferred acquisition costs (DAC) when modifications or internal replacements of related insurance contracts occur and the effect on results of operations, and the methodology and amount of amortization. This disclosure addresses the nature, type, and amount of capitalized costs incurred to write or acquire insurance contracts.

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