Ameriprise 2008 Annual Report Download - page 135

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The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts
providing guaranteed benefits:
December 31,
2008 2007
(in millions)
Mutual funds:
Equity $ 21,899 $ 34,540
Bond 12,135 12,549
Other 3,463 4,478
Total mutual funds $ 37,497 $ 51,567
No gains or losses were recognized on assets transferred to separate accounts for the periods presented.
13. Customer Deposits
Customer deposits consisted of the following:
December 31,
2008 2007
(in millions)
Fixed rate certificates $ 3,909 $ 2,616
Stock market based certificates 909 1,031
Stock market embedded derivative reserve 5 32
Other 62 78
Less: accrued interest classified in other liabilities (11) (18)
Total investment certificate reserves 4,874 3,739
Brokerage deposits 1,988 1,100
Banking deposits 1,367 1,367
Total $ 8,229 $ 6,206
Investment Certificates
The Company offers fixed rate investment certificates primarily in amounts ranging from $1,000 to $1 million with terms
ranging from three to 36 months. Investment certificates may be purchased either with a lump sum payment or installment
payments. Certificate product owners are entitled to receive, at maturity, a definite sum of money. Payments from certificate
owners are credited to investment certificate reserves. Investment certificate reserves generally accumulate interest at
specified percentage rates. Reserves are maintained for advance payments made by certificate owners, accrued interest
thereon and for additional credits in excess of minimum guaranteed rates and accrued interest thereon. On certificates
allowing for the deduction of a surrender charge, the cash surrender values may be less than accumulated investment
certificate reserves prior to maturity dates. Cash surrender values on certificates allowing for no surrender charge are equal to
certificate reserves. The Company generally invests the proceeds from investment certificates in fixed and variable rate
securities. The Company may hedge the interest rate risks under these obligations with derivative instruments. As of
December 31, 2008 and 2007, there were no outstanding derivatives to hedge these interest rate risks.
Certain investment certificate products have returns tied to the performance of equity markets. The Company guarantees the
principal for purchasers who hold the certificate for the full 52-week term and purchasers may participate in increases in the
stock market based on the S&P 500 Index, up to a maximum return. Purchasers can choose 100% participation in the market
index up to the cap or 25% participation plus fixed interest with a combined total up to the cap. Current in force certificates
have maximum returns of 6% or 7%. The equity component of these certificates is considered an embedded derivative and is
accounted for separately. The change in fair values of the embedded derivative reserve is reflected in banking and deposit
interest expense. See Note 20 for addition information about derivative instruments used to economically hedge the price risk
related to the Company’s stock market certificates.
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