AIG 2013 Annual Report Download - page 301

The following table presents Policyholder contract deposits by product type:
Policyholder contract deposits:
Life Insurance and A&H $ 12,201
Fixed Annuities 55,985
Retirement Income Solutions 5,451
Group Retirement 36,778
Institutional Markets 12,056
All other Institutional 509
Total Policyholder contract deposits $ 122,980
The products for which reserves are included in Policyholder contract deposits at December 31, 2013 had the
following characteristics:
• Interest rates credited on deferred annuities, which vary by year of issuance, range from 1.0 percent to, including
bonuses, 8.4 percent. Current declared interest rates are generally guaranteed to remain in effect for a period of
one year though some are guaranteed for longer periods. Withdrawal charges generally range from zero percent to
15 percent grading to zero over a period of zero to 20 years.
• Guaranteed investment contracts (GICs) have market value withdrawal provisions for any funds withdrawn other
than benefit responsive payments. Interest rates credited generally range from 0.3 percent to 8.3 percent. The
majority of these GICs mature within seven years.
• Interest rates on corporate life insurance products are guaranteed at 3.0 percent and the weighted average rate
credited in 2013 was 4.4 percent.
• The universal life products have credited interest rates of 1.0 percent to 8.0 percent and guarantees ranging from
1.0 percent to 5.5 percent depending on the year of issue. Additionally, universal life funds are subject to surrender
charges that amount to 8.7 percent of the aggregate fund balance grading to zero over a period not longer than
20 years.
• For variable products and investment contracts, policy values are expressed in terms of investment units. Each unit
is linked to an asset portfolio. The value of a unit increases or decreases based on the value of the linked asset
portfolio. The current liability at any time is the sum of the current unit value of all investment units plus any
liabilities for guaranteed minimum death or guaranteed minimum withdrawal benefits.
Other policyholder funds include provisions for future dividends to participating policyholders, accrued in accordance
with all applicable regulatory or contractual provisions. Participating life business represented approximately
2.1 percent of the gross insurance in force at December 31, 2013 and 3.7 percent of gross Premiums and other
considerations in 2013. The amount of annual dividends to be paid is approved locally by the boards of directors of
the insurance companies. Provisions for future dividend payments are computed by jurisdiction, reflecting local
regulations. The portions of current and prior net income and of current unrealized appreciation of investments that
can inure to our benefit are restricted in some cases by the insurance contracts and by the local insurance
regulations of the jurisdictions in which the policies are in force.
Certain products are subject to experience adjustments. These include group life and group medical products, credit
life contracts, accident and health insurance contracts/riders attached to life policies and, to a limited extent,
reinsurance agreements with other direct insurers. Ultimate premiums from these contracts are estimated and
recognized as revenue, and the unearned portions of the premiums recorded as liabilities. Experience adjustments
vary according to the type of contract and the territory in which the policy is in force and are subject to local
regulatory guidance.
Other Policyholder Funds
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AIG 2013 Form 10-K 283
ITEM 8 / NOTE 12. LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSE, FUTURE
POLICY BENEFITS FOR LIFE AND ACCIDENT AND HEALTH INSURANCE CONTRACTS, AND
POLICYHOLDER CONTRACT DEPOSITS
At December 31,
(in millions) 2013 2012
$ 13,081
54,515
6,729
37,694
9,433
564
$ 122,016
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