Aetna 2012 Annual Report Download - page 139

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Annual Report- Page 133
The discontinued products investment portfolio has changed since inception. Mortgage loans have decreased from
$5.4 billion (37% of the investment portfolio) at December 31, 1993 to $449 million (12% of the investment
portfolio) at December 31, 2012. This was a result of maturities, prepayments and the securitization and sale of
commercial mortgages. Also, real estate decreased from $500 million (4% of the investment portfolio) at December
31, 1993 to $76 million (2% of the investment portfolio) at December 31, 2012, primarily as a result of sales. The
resulting proceeds were primarily reinvested in debt and equity securities. Over time, the then-existing mortgage
loan and real estate portfolios and the reinvested proceeds have resulted in greater investment returns than we
originally assumed in 1993.
At December 31, 2012, the expected run-off of the SPA and GIC liabilities, including future interest, was as
follows:
(Millions)
2013 $ 413.2
2014 389.4
2015 372.0
2016 354.8
2017 337.6
Thereafter 4,371.8
The expected run-off of the SPA and GIC liabilities can vary from actual due to several factors, including, among
other things, contract holders redeeming their contracts prior to contract maturity or additional amounts being
received from existing contracts. The liability expected at December 31, 1993 and actual liability balances at
December 31, 2012, 2011 and 2010 for the GIC and SPA liabilities were as follows:
Expected Actual
(Millions) GIC SPA GIC SPA
2010 $ 18.0 $ 2,943.5 $ 10.2 $ 3,162.2
2011 17.0 2,780.5 8.2 3,005.8
2012 16.1 2,615.4 6.6 2,857.6
The GIC balances were lower than expected in each period because several contract holders redeemed their
contracts prior to contract maturity. The SPA balances in each period were higher than expected because of
additional amounts received under existing contracts.
The distributions on our discontinued products consisted of scheduled contract maturities, settlements and benefit
payments of $399.5 million, $412.0 million and $432.2 million for the years ended December 31, 2012, 2011 and
2010, respectively. Participant-directed withdrawals from our discontinued products were not significant in the
years ended ended December 31, 2012, 2011 or 2010. Cash required to fund these distributions was provided by
earnings and scheduled payments on, and sales of, invested assets.
21. Subsequent Events
In January 2013, we entered into four-year reinsurance agreements with Vitality Re IV Limited, an unrelated
insurer. The agreements allow us to reduce our required capital and provide $150 million of collateralized excess of
loss reinsurance coverage on a portion of Aetna's group Commercial Insured Health Care business.
In January 2013, we announced that we have agreed to sell our Missouri Medicaid business, Missouri Care,
Incorporated (“Missouri Care”), to WellCare Health Plans, Inc. The sale of Missouri Care is related to our proposed
acquisition of Coventry.
On February 19, 2013, our Board declared a cash dividend of $.20 per common share that will be paid on April 26,
2013, to shareholders of record at the close of business on April 11, 2013.