Aetna 2013 Annual Report Download - page 145
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Annual Report- Page 139
Assets and liabilities supporting discontinued products at 2013 and 2012 were as follows: (1)
(Millions) 2013 2012
Assets:
Debt and equity securities available for sale $ 2,372.6 $ 2,515.3
Mortgage loans 407.0 448.6
Other investments 663.9 711.6
Total investments 3,443.5 3,675.5
Other assets 85.2 79.2
Collateral received under securities loan agreements 204.4 3.8
Current and deferred income taxes 14.4 19.3
Receivable from continuing products (2) 533.1 556.0
Total assets $ 4,280.6 $ 4,333.8
Liabilities:
Future policy benefits $ 2,804.8 $ 2,857.6
Policyholders' funds —6.6
Reserve for anticipated future losses on discontinued products 979.5 978.5
Collateral payable under securities loan agreements 204.4 3.8
Other liabilities (3) 291.9 487.3
Total liabilities $ 4,280.6 $ 4,333.8
(1) Assets supporting the discontinued products are distinguished from assets supporting continuing products.
(2) At the time of discontinuance, a receivable from Large Case Pensions' continuing products was established on the discontinued products
balance sheet. This receivable represented the net present value of anticipated cash shortfalls in the discontinued products, which will be
funded from continuing products. Interest on the receivable is accrued at the discount rate that was used to calculate the reserve. The
offsetting payable, on which interest is similarly accrued, is reflected in continuing products. Interest on the payable generally offsets
investment income on the assets available to fund the shortfall. These amounts are eliminated in consolidation.
(3) Net unrealized capital gains on the available-for-sale debt securities are included in other liabilities and are not reflected in consolidated
shareholders’ equity.
The discontinued products investment portfolio has changed since inception. Mortgage loans have decreased from
$5.4 billion (37% of the investment portfolio) at December 31, 1993 to $407 million (12% of the investment
portfolio) at December 31, 2013. This was a result of maturities, prepayments and the securitization and sale of
commercial mortgages. Also, real estate decreased from $500 million (4% of the investment portfolio) at December
31, 1993 to $70 million (2% of the investment portfolio) at December 31, 2013, primarily as a result of sales. The
resulting proceeds were primarily reinvested in debt and equity securities. Over time, the then-existing mortgage
loan and real estate portfolios and the reinvested proceeds have resulted in greater investment returns than we
originally assumed in 1993.
At December 31, 2013, the expected run-off of the SPA and GIC liabilities, including future interest, was as
follows: (1)
(Millions)
2014 $ 400.4
2015 382.8
2016 364.9
2017 347.3
2018 329.8
Thereafter 4,191.1
(1) As of December 31, 2013, our remaining GIC liability was not material.