GE 2008 Annual Report Download - page 84

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82 ge 2008 annual report
notes to consolidated financial statements
Note 20.
All Other Liabilities
This caption includes liabilities for various items including non-
current compensation and benefits, deferred income, interest on
tax liabilities, unrecognized tax benefits, accrued participation and
residuals, environmental remediation, asset retirement obligations,
derivative instruments, product warranties and a variety of sun-
dry items.
Accruals for non-current compensation and benefits amounted
to $22,543 million and $22,322 million for year-end 2008 and
2007, respectively. These amounts include postretirement benefits,
pension accruals, and other compensation and benefit accruals
such as deferred incentive compensation. The increase in 2008
was primarily the result of an increase in pension accruals, partially
offset by a decrease in accrued deferred incentive compensation
and benefits from new healthcare supplier contracts.
We are involved in numerous remediation actions to clean up
hazardous wastes as required by federal and state laws. Liabilities
for remediation costs exclude possible insurance recoveries and,
when dates and amounts of such costs are not known, are not
discounted. When there appears to be a range of possible costs
with equal likelihood, liabilities are based on the low end of such
range. Uncertainties about the status of laws, regulations, tech-
nology and information related to individual sites make it difficult
to develop a meaningful estimate of the reasonably possible
aggregate environmental remediation exposure.
Note 19.
GECS Investment Contracts, Insurance Liabilities and
Insurance Annuity Benefits
GECS investment contracts, insurance liabilities and insurance
annuity benefits comprise mainly obligations to annuitants and
policyholders in our run-off insurance operations and holders of
guaranteed investment contracts.
December 31 (In millions) 2008 2007
Investment contracts $ 4,212 $ 4,536
Guaranteed investment contracts 10,828 11,705
Total investment contracts 15,040 16,241
Life insurance benefits (a) 16,259 15,416
Unpaid claims and claims adjustment expenses 2,145 1,726
Unearned premiums 623 656
Universal life benefits 302 320
Total $34,369 $34,359
(a) Life insurance benefits are accounted for mainly by a net-level-premium method
using estimated yields generally ranging from 3.0% to 8.5% in both 2008 and 2007.
When insurance affiliates cede insurance to third parties, such
as reinsurers, they are not relieved of their primary obligation
to policyholders. Losses on ceded risks give rise to claims for
recovery; we establish allowances for probable losses on such
receivables from reinsurers as required. Reinsurance recoverables
are included in the caption “Other GECS receivables” on our
Statement of Financial Position, and amounted to $1,062 million
and $381 million at December 31, 2008 and 2007, respectively.
We recognize reinsurance recoveries as a reduction of the
Statement of Earnings caption “Investment contracts, insurance
losses and insurance annuity benefits.” Reinsurance recoveries
were $221 million, $104 million and $162 million for the years
ended December 31, 2008, 2007 and 2006, respectively.