Aetna 2014 Annual Report Download - page 143
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Annual Report- Page 137
Assets and liabilities supporting discontinued products at 2014 and 2013 were as follows: (1)
(Millions) 2014 2013
Assets:
Debt and equity securities available for sale $ 2,376.2 $ 2,372.6
Mortgage loans 386.8 407.0
Other investments 662.2 663.9
Total investments 3,425.2 3,443.5
Other assets 112.9 85.2
Collateral received under securities loan agreements 200.7 204.4
Current and deferred income taxes —14.4
Receivable from continuing products (2) 566.5 533.1
Total assets $ 4,305.3 $ 4,280.6
Liabilities:
Future policy benefits $ 2,645.8 $ 2,804.8
Reserve for anticipated future losses on discontinued products 1,014.7 979.5
Collateral payable under securities loan agreements 200.7 204.4
Current and deferred income taxes 27.9 —
Other liabilities (3) 416.2 291.9
Total liabilities $ 4,305.3 $ 4,280.6
(1) Assets supporting the discontinued products are distinguished from assets supporting continuing products.
(2) At the time of discontinuance, a receivable from Large Case Pensions’ continuing products was established on the discontinued products
balance sheet. This receivable represented the net present value of anticipated cash shortfalls in the discontinued products, which will be
funded from continuing products. Interest on the receivable is accrued at the discount rate that was used to calculate the reserve. The
offsetting payable, on which interest is similarly accrued, is reflected in continuing products. Interest on the payable generally offsets
investment income on the assets available to fund the shortfall. These amounts are eliminated in consolidation.
(3) Net unrealized capital gains on the available-for-sale debt securities are included in other liabilities and are not reflected in consolidated
shareholders’ equity.
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 $387 million (11% of the investment
portfolio) at December 31, 2014. 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 $74 million (2% of the investment portfolio) at December 31, 2014, 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, 2014, the expected run-off of the SPA and GIC liabilities, including future interest, was as
follows: (1)
(Millions)
2015 $ 383.7
2016 367.8
2017 351.5
2018 335.3
2019 319.3
Thereafter 4,133.4
(1) At both December 31, 2014 and 2013, our remaining GIC liability was not material.