Sun Life 2015 Annual Report Download - page 75

The following table summarizes the contractual maturities of our significant financial liabilities and contractual commitments as at
December 31, 2015 and December 31, 2014.
Financial Liabilities and Contractual Obligations
December 31, 2015
($ millions)
Within
1 year
1 year to
3 years
3 years to
5 years
Over
5 years Total
Insurance and investment contract liabilities(1) 11,520 8,268 8,422 207,810 236,020
Senior debentures and unsecured financing(2) 150 300 574 6,309 7,333
Subordinated debt(2) 108 217 217 3,208 3,750
Bond repurchase agreements 1,549 –––1,549
Accounts payable and accrued expenses 6,489 –––6,489
Secured borrowings from mortgage securitization 14 83 309 362 768
Borrowed funds(2) 160 629 54 132 975
Total liabilities 19,990 9,497 9,576 217,821 256,884
Contractual commitments(3)
Contractual loans, equities and mortgages 711 290 83 789 1,873
Operating leases 93 178 149 502 922
Total contractual commitments 804 468 232 1,291 2,795
December 31, 2014
($ millions)
Within 1
year
1 year to
3 years
3 years to
5 years
Over
5 years Total
Insurance and investment contract liabilities(1) 11,312 7,918 8,219 183,625 211,074
Senior debentures and unsecured financing(2) 168 336 628 6,972 8,104
Subordinated debt(2) 284 191 191 2,738 3,404
Bond repurchase agreements 1,333 – – – 1,333
Accounts payable and accrued expenses 5,422 – – – 5,422
Secured borrowings from mortgage securitization 7 14 221 107 349
Borrowed funds(2) 45 167 42 121 375
Total liabilities 18,571 8,626 9,301 193,563 230,061
Contractual commitments(3)
Contractual loans, equities and mortgages 1,137 235 47 579 1,998
Operating leases 70 134 115 407 726
Total contractual commitments 1,207 369 162 986 2,724
(1) These amounts represent the undiscounted estimated cash flows of insurance and investment contract liabilities on our Consolidated Statements of Financial Position. These
cash flows include estimates related to the timing and payment of death and disability claims, policy surrenders, policy maturities, annuity payments, minimum guarantees on
segregated fund products, policyholder dividends, amounts on deposit, commissions and premium taxes offset by contractual future premiums and fees on in-force contracts.
These estimated cash flows are based on the best estimated assumptions used in the determination of insurance and investment contract liabilities. Due to the use of
assumptions, actual cash flows will differ from these estimates.
(2) Payments due based on maturity dates and include expected interest payments. Actual redemption of certain securities may occur sooner as some include an option for the
issuer to call the security at par at an earlier date.
(3) Contractual commitments and operating lease commitments are not reported on our Consolidated Statements of Financial Position. Additional information on these
commitments is included in Note 24 of our 2015 Annual Consolidated Financial Statements.
Additional information on liquidity risk can be found in Note 6 to our 2015 Annual Consolidated Financial Statements and the Risk
Factors section in our AIF.
Capital and Liquidity Management
Our liquidity management practices allow us to maintain a strong financial position by ensuring that sufficient liquid assets are available
to cover our anticipated payment obligations and funding requirements. We invest in various types of assets with a view to matching
them with liabilities of various durations.
The regulatory environments in which we operate are expected to evolve as governments and regulators work to develop the
appropriate level of financial regulation required to ensure that capital, liquidity and risk management practices are sufficient to
withstand severe economic downturns.
On January 5, 2015, OSFI released a paper, Life Insurance Capital Framework – Standard Approach, which provides an update on
approaches and methodologies being contemplated by OSFI as it revises the life insurance regulatory capital framework. The
Company is engaged in ongoing discussions with OSFI and other industry participants on the development of this framework, and is
actively participating in the related Quantitative Impact Studies conducted by OSFI. The final outcome of this OSFI initiative remains
uncertain.
Management’s Discussion and Analysis Sun Life Financial Inc. Annual Report 2015 73