Ameriprise 2009 Annual Report Download - page 149

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December 31,
2009 2008
Carrying Carrying
Value Fair Value Value Fair Value
(in millions)
Financial Assets
Commercial mortgage loans, net $ 2,663 $ 2,652 $ 2,887 $ 2,643
Policy loans 720 795 729 785
Receivables 1,387 1,055 1,178 903
Restricted and segregated cash 1,633 1,633 1,883 1,883
Other investments and assets 451 468 521 419
Financial Liabilities
Future policy benefits and claims $ 15,540 $ 15,657 $ 13,116 $ 12,418
Investment certificate reserves 4,050 4,053 4,869 4,798
Banking and brokerage customer deposits 4,478 4,478 3,355 3,355
Separate account liabilities 4,268 4,268 3,345 3,345
Debt and other liabilities 2,365 2,407 2,246 1,835
Investments
The fair value of commercial mortgage loans, except those with significant credit deterioration, is determined by discounting contractual
cash flows using discount rates that reflect current pricing for loans with similar remaining maturities and characteristics including
loan-to-value ratio, occupancy rate, refinance risk, debt-service coverage, location, and property condition. For commercial mortgage
loans with significant credit deterioration, fair value is determined using the same adjustments as above with an additional adjustment
for the Company’s estimate of the amount recoverable on the loan.
The fair value of policy loans is determined using discounted cash flows.
Receivables
The fair value of consumer banking loans is determined by discounting estimated cash flows and incorporating adjustments for
prepayment, administration expenses, severity and credit loss estimates, with discount rates based on the Company’s estimate of current
market conditions.
Loans held for sale are measured at the lower of cost or market and fair value is based on what secondary markets are currently offering
for loans with similar characteristics.
Brokerage margin loans are measured at outstanding balances, which are a reasonable estimate of fair value because of the sufficiency of
the collateral and short term nature of these loans.
Restricted and segregated cash
Restricted and segregated cash is generally set aside for specific business transactions and restrictions are specific to the Company and do
not transfer to third party market participants, therefore, the carrying amount is a reasonable estimate of fair value. This includes
amounts segregated under federal and other regulations at December 31, 2009.
Amounts segregated under federal and other regulations at December 31, 2008 reflect resale agreements and are measured at the cost at
which the securities will be sold. This measurement is a reasonable estimate of fair value because of the short time between entering into
the transaction and its expected realization and the reduced risk of credit loss due to pledging U.S. government-backed securities as
collateral.
Other investments and assets
Other investments and assets primarily consist of syndicated loans. The fair value of syndicated loans is obtained from a nationally-
recognized pricing service.
Future policy benefits and claims
The fair value of fixed annuities, in deferral status, is determined by discounting cash flows using a risk neutral discount rate with
adjustments for profit margin, expense margin, early policy surrender behavior, a provision for adverse deviation from estimated early
134 ANNUAL REPORT 2009