Ameriprise 2011 Annual Report Download - page 143
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9. Deferred Acquisition Costs and Deferred Sales Inducement Costs
During the third quarter of 2011, 2010 and 2009, management reviewed and updated the DAC and DSIC valuation
assumptions for the Company’s products. As part of its third quarter 2010 process, management extended the projection
periods used for its annuity products and revised client asset value growth rates assumed for variable annuity and VUL
contracts.
The balances of and changes in DAC were as follows:
2011 2010 2009
(in millions)
Balance at January 1 $ 4,619 $ 4,334 $ 4,383
Capitalization of acquisition costs 492 525 620
Amortization, excluding the impact of valuation assumptions review (567) (450) (336)
Amortization, impact of valuation assumptions review (51) 323 119
Impact of change in net unrealized securities gains (91) (113) (452)
Balance at December 31 $ 4,402 $ 4,619 $ 4,334
The balances of and changes in DSIC, which is included in other assets, were as follows:
2011 2010 2009
(in millions)
Balance at January 1 $ 545 $ 524 $ 518
Capitalization of sales inducement costs 9 35 82
Amortization, excluding the impact of valuation assumptions review (70) (49) (19)
Amortization, impact of valuation assumptions review (11) 52 9
Impact of change in net unrealized securities gains (9) (17) (66)
Balance at December 31 $ 464 $ 545 $ 524
As described in Note 3, the Company adopted a new accounting standard on the recognition and presentation of
other-than-temporary impairments in the first quarter of 2009. The adoption had no net impact to DAC and DSIC.
10. Future Policy Benefits and Claims and Separate Account Liabilities
Future policy benefits and claims consisted of the following:
December 31,
2011 2010
(in millions)
Fixed annuities $ 16,401 $ 16,520
EIA accumulated host values 58 100
EIA embedded derivatives 23
Variable annuity fixed sub-accounts 4,852 4,868
Variable annuity GMWB 1,377 337
Variable annuity GMAB 237 104
Other variable annuity guarantees 14 13
Total annuities 22,941 21,945
VUL/UL insurance 2,662 2,588
IUL accumulated host values 4—
IUL embedded derivatives 3—
VUL/UL insurance additional liabilities 220 143
Other life, disability income and long term care insurance 5,352 5,004
Auto, home and other insurance 420 394
Policy claims and other policyholders’ funds 121 134
Total $ 31,723 $ 30,208
128