Allstate 2012 Annual Report Download - page 236

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As of December 31, 2011 and 2010, approximately 94% of Allstate Financial’s reinsurance recoverables are due
from companies rated Aor better by S&P.
11. Deferred Policy Acquisition and Sales Inducement Costs
Deferred policy acquisition costs for the years ended December 31 are as follows:
2011
($ in millions)
Allstate Property-
Financial Liability Total
Balance, beginning of year $ 3,392 $ 1,377 $ 4,769
Esurance acquisition present value of future profits — 42 42
Acquisition costs deferred 433 3,633 4,066
Amortization charged to income (593) (3,640) (4,233)
Effect of unrealized gains and losses (201) — (201)
Balance, end of year $ 3,031 $ 1,412 $ 4,443
2010
Allstate Property-
Financial Liability Total
Balance, beginning of year $ 4,060 $ 1,410 $ 5,470
Acquisition costs deferred 483 3,645 4,128
Amortization charged to income (356) (3,678) (4,034)
Effect of unrealized gains and losses (795) — (795)
Balance, end of year $ 3,392 $ 1,377 $ 4,769
2009
Allstate Property-
Financial Liability Total
Balance, beginning of year $ 7,089 $ 1,453 $ 8,542
Impact of adoption of new other-than-temporary
impairment accounting guidance before unrealized
impact (1) (176) — (176)
Impact of adoption of new other-than-temporary
impairment accounting guidance effect of unrealized
capital gains and losses (2) 176 — 176
Acquisition costs deferred 495 3,746 4,241
Amortization charged to income (965) (3,789) (4,754)
Effect of unrealized gains and losses (2,559) — (2,559)
Balance, end of year $ 4,060 $ 1,410 $ 5,470
(1) The adoption of new other-than-temporary impairment accounting guidance on April 1, 2009 resulted in an adjustment to
DAC to reverse previously recorded DAC accretion related to realized capital losses that were reclassified to other
comprehensive income upon adoption.
(2) The adoption of new other-than-temporary impairment accounting guidance resulted in an adjustment to DAC due to the
change in unrealized capital gains and losses that occurred upon adoption on April 1, 2009 when previously recorded realized
capital losses were reclassified to other comprehensive income. The adjustment was recorded as an increase of the DAC
balance and unrealized capital gains and losses.
150