The Hartford 2015 Annual Report Download - page 63

63
Reserves were decreased in 2014 for accident year 2013 driven by lower estimated claim handling costs for workers' compensation and
lower frequency of reported claims for professional liability. Reserves were also decreased in 2014 for accident year 2013 driven by
favorable development of fourth quarter catastrophes and favorable emergence of losses for property lines of business. Reserves were
decreased in 2015 for accident year 2013 driven by favorable frequency and medical severity trends for workers' compensation and
favorable professional liability claim emergence, partially offset by unfavorable reserve re-estimates in commercial auto liability driven
by increased severity of large claims.
Reserve changes for accident year 2014
Reserves were decreased in 2015 driven by favorable frequency and medical severity trends for workers' compensation and favorable
development of fourth quarter catastrophes, partially offset by increased severity of liability claims on package business.
Estimated Gross Profits Used in the Valuation and Amortization of Assets and Liabilities Associated with Variable Annuity and Other
Universal Life-Type Contracts
Estimated gross profits (“EGPs”) are used in the amortization of the deferred policy acquisition costs ("DAC") asset and sales
inducement assets (“SIA”). Portions of EGPs are also used in the valuation of reserves for death and other insurance benefit features on
variable annuity and other universal life type contracts.
The most significant EGP based balances are as follows:
Talcott Resolution
As of December 31,
2015 2014
DAC [1] $ 1,180 $ 1,200
SIA $ 56 $ 89
Death and Other Insurance Benefit Reserves, net of reinsurance [2] $ 340 $ 331
[1] For additional information on DAC, see Note 7 - Deferred Policy Acquisition Costs of Notes to Consolidated Financial Statements.
[2] For additional information on death and other insurance benefit reserves, see Note 9 - Separate Accounts, Death Benefits and Other Insurance
Benefit Features of Notes to Consolidated Financial Statements.
Unlocks
The benefit (charge) to income from continuing operations, net of tax by asset and liability as a result of the Unlocks is as follows:
Talcott Resolution
For the years ended December 31,
2015 2014 2013
DAC $ 69 $ (136) $ (199)
SIA (17)(35) (20)
URR — 42 16
Death and Other Insurance Benefit Reserves 28 34 36
Total (before tax) $ 80 $ (95) $ (167)
Income tax effect 28 (33) (58)
Total (after-tax) $ 52 $ (62) $ (109)
The Unlock benefit, after-tax, for the year ended December 31, 2015 was primarily due to assumption changes related to benefit
utilization and lower assumed lapse rates, partially offset by a lower assumed general account spread and higher assumed withdrawal
rates.
The Unlock charge for the year ended December 31, 2014 was primarily due to lower future estimated gross profits on the fixed annuity
block driven by the continued low interest rate environment as well as higher variable annuity unit costs due to higher than expected
surrenders, partially offset by actual separate account returns being above our aggregated estimated returns during the period.
The Unlock charge for the year ended December 31, 2013 was primarily due to assumption changes in connection with the annual
policyholder behavior assumption study, partially offset by actual separate account returns above our aggregated estimated returns
during the period.