Allstate 2012 Annual Report Download - page 231

Contractholder funds activity for the years ended December 31 is as follows:
($ in millions) 2011 2010
Balance, beginning of year $ 48,195 $ 52,582
Deposits 2,318 3,438
Interest credited 1,629 1,794
Benefits (1,461) (1,552)
Surrenders and partial withdrawals (6,398) (5,203)
Maturities and retirements of institutional products (867) (1,833)
Contract charges (1,028) (983)
Net transfers from separate accounts 12 11
Fair value hedge adjustments for institutional products (34) (196)
Other adjustments (34) 137
Balance, end of year $ 42,332 $ 48,195
The Company offered various guarantees to variable annuity contractholders. Liabilities for variable contract
guarantees related to death benefits are included in the reserve for life-contingent contract benefits and the liabilities
related to the income, withdrawal and accumulation benefits are included in contractholder funds. All liabilities for
variable contract guarantees are reported on a gross basis on the balance sheet with a corresponding reinsurance
recoverable asset for those contracts subject to reinsurance. In 2006, the Company disposed of substantially all of its
variable annuity business through reinsurance agreements with Prudential.
Absent any contract provision wherein the Company guarantees either a minimum return or account value upon
death, a specified contract anniversary date, partial withdrawal or annuitization, variable annuity and variable life
insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated
investment objectives. The account balances of variable annuities contracts’ separate accounts with guarantees
included $5.54 billion and $6.94 billion of equity, fixed income and balanced mutual funds and $837 million and
$1.09 billion of money market mutual funds as of December 31, 2011 and 2010, respectively.
The table below presents information regarding the Company’s variable annuity contracts with guarantees. The
Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of
amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees.
December 31,
($ in millions)
2011 2010
In the event of death
Separate account value $ 6,372 $ 8,029
Net amount at risk (1) $ 1,502 $ 1,402
Average attained age of contractholders 66 years 66 years
At annuitization (includes income benefit guarantees)
Separate account value $ 1,489 $ 1,945
Net amount at risk (2) $ 574 $ 580
Weighted average waiting period until annuitization options available 1 year 2 years
For cumulative periodic withdrawals
Separate account value $ 587 $ 735
Net amount at risk (3) $27$ 21
Accumulation at specified dates
Separate account value $ 906 $ 1,100
Net amount at risk (4) $78$64
Weighted average waiting period until guarantee date 6 years 7 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.
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