Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of Reserve for Life-Contingent Contract Benefits

As of December 31, the reserve for life-contingent contract benefits consists of the following:


($ in thousands)	2012		2011
Traditional life insurance	$	1,519,650	$	1,425,848
Immediate fixed annuities		677,986		671,275
Accident and health insurance		1,217,648		1,092,791
Other		9,395		9,576

Total reserve for life-contingent contract benefits	$	3,424,679	$	3,199,490

Schedule of Key Assumptions Used In Calculation Reserve for Life-Contingent Contract Benefits

The following table highlights the key assumptions generally used in calculating the reserve for life-contingent contract benefits:


Product	Mortality	Interest rate	Estimation method
Traditional life insurance	Actual company experience plus loading	Interest rate assumptions range from 4.0% to 8.0%	Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims

Immediate fixed annuities	1983 individual annuity mortality table with internal modifications; 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications	Interest rate assumptions range from 1.3% to 8.8%	Present value of expected future benefits based on historical experience

Accident and health insurance	Actual company experience plus loading	Interest rate assumptions range from 4.0% to 5.3%	Unearned premium; additional contract reserves for mortality risk and unpaid claims

Other: Variable annuity guaranteed minimum death benefits	Annuity 2000 mortality table with internal modifications	Interest rate assumptions range from 4.0% to 5.8%	Projected benefit ratio applied to cumulative assessments

Schedule of Contractholder Funds

As of December 31, contractholder funds consist of the following:


($ in thousands)	2012		2011
Interest-sensitive life insurance	$	4,814,410	$	4,556,892
Investment contracts:
Fixed annuities		9,201,641		10,709,817
Other investment contracts		239,793		222,915

Total contractholder funds	$	14,255,844	$	15,489,624

Schedule of Contract Provisions Related to Contractholder Funds

The following table highlights the key contract provisions relating to contractholder funds:


Product	Interest rate	Withdrawal/surrender charges
Interest-sensitive life insurance	Interest rates credited range from 0% to 11.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.0% to 6.0% for all other products	Either a percentage of account balance or dollar amount grading off generally over 20 years

Fixed annuities	Interest rates credited range from 0% to 8.8% for immediate annuities; 0% to 7.0% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 1.0% to 5.9% for all other products	Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 18.2% of fixed annuities are subject to market value adjustment for discretionary withdrawals.

Other investment contracts: Guaranteed minimum income, accumulation and withdrawal benefits on variable and fixed annuities and secondary guarantees on interest-sensitive life insurance and fixed annuities	Interest rates used in establishing reserves range from 1.7% to 10.3%	Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract

Schedule of Contractholder Funds Activity

Contractholder funds activity for the years ended December 31 is as follows:


($ in thousands)	2012			2011
Balance, beginning of year	$	15,489,624		$	17,247,071
Deposits		1,070,374			1,007,316
Interest credited		406,805			576,331
Benefits		(473,329	)		(459,991	)
Surrenders and partial withdrawals		(1,703,966	)		(2,412,295	)
Contract charges		(558,519	)		(513,068	)
Net transfers from separate accounts		16,463			18,935
Other adjustments		8,392			25,325

Balance, end of year	$	14,255,844		$	15,489,624

Summary of Variable Annuity Contracts with Guarantees

The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees.


	December 31,
($ in millions)	2012		2011
In the event of death
Separate account value	$	926.1	$	1,032.7
Net amount at risk ⁽¹⁾	$	101.6	$	149.5
Average attained age of contractholders		59 years		58 years

At annuitization (includes income benefit guarantees)
Separate account value	$	168.1	$	184.9
Net amount at risk ⁽²⁾	$	29.6	$	45.1
Weighted average waiting period until annuitization options available		1 year		2 years

For cumulative periodic withdrawals
Separate account value	$	24.8	$	27.5
Net amount at risk ⁽³⁾	$	0.2	$	0.4

Accumulation at specified dates
Separate account value	$	172.0	$	198.1
Net amount at risk ⁽⁴⁾	$	13.7	$	21.5
Weighted average waiting period until guarantee date		7 years		8 years

⁽¹⁾	Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date.

⁽²⁾	Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance.

⁽³⁾	Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date.

⁽⁴⁾	Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance.

- Definition

The entire disclosure for the present values of future benefits to be paid to or on behalf of policyholders and related expenses less the present value of future net premiums using assumptions such as estimates of expected investment yields, mortality, morbidity, terminations and expenses, applicable at the time the insurance contracts are made and unpaid claim costs relating to insurance contracts including estimates of costs relating to incurred but not reported claims based on the estimated ultimate cost of settling the claims (including effects of inflation and other societal and economic factors), using past experience adjusted for current trends and any other factors that would modify past experience by element such as business segment, country and interest rate range.

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- Definition

Tabular disclosure of the guaranteed benefits in excess of the current account balance, quantifies such excesses (the net amounts at risk) and includes other relevant, pertinent information as of the most recent balance sheet date by product type.

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