Ameriprise 2015 Annual Report Download - page 149

10. Policyholder Account Balances, Future Policy Benefits and Claims and
Separate Account Liabilities
Policyholder account balances, future policy benefits and claims consisted of the following:
December 31,
2015 2014
(in millions)
Policyholder account balances
Fixed annuities $ 11,239 $ 12,700
Variable annuity fixed sub-accounts 4,912 4,860
VUL/UL insurance 2,897 2,856
IUL insurance 808 534
Other life insurance 794 840
Total policyholder account balances 20,650 21,790
Future policy benefits
Variable annuity GMWB 1,057 693
Variable annuity GMAB — (41)(1)
Other annuity liabilities 31 115
Fixed annuities life contingent liabilities 1,501 1,511
EIA 27 29
Life, DI and LTC insurance 5,112 5,106
VUL/UL and other life insurance additional liabilities 452 437
Total future policy benefits 8,180 7,850
Policy claims and other policyholders’ funds 869 710
Total policyholder account balances, future policy benefits and claims $ 29,699 $ 30,350
(1) Includes the fair value of GMAB embedded derivatives that was a net asset at December 31, 2014 reported as a contra liability.
Fixed Annuities
Fixed annuities include both deferred and payout contracts. Deferred contracts offer a guaranteed minimum rate of interest
and security of the principal invested. Payout contracts guarantee a fixed income payment for life or the term of the
contract. The Company generally invests the proceeds from the annuity contracts in fixed rate securities.
The Company’s EIA product is a single premium deferred fixed annuity. The contract is issued with an initial term of seven
years and interest earnings are linked to the performance of the S&P 500 Index. This annuity has a minimum interest
rate guarantee of 3% on 90% of the initial premium, adjusted for any surrenders. The Company generally invests the
proceeds from the annuity contracts in fixed rate securities and hedges the equity risk with derivative instruments. See
Note 16 for additional information regarding the Company’s derivative instruments used to hedge the risk related to EIA. In
2007, the Company discontinued new sales of EIA.
Variable Annuities
Purchasers of variable annuities can select from a variety of investment options and can elect to allocate a portion to a
fixed account. A vast majority of the premiums received for variable annuity contracts are held in separate accounts where
the assets are held for the exclusive benefit of those contractholders.
Most of the variable annuity contracts currently issued by the Company contain one or more guaranteed benefits, including
GMWB, GMAB, GMDB and GGU provisions. The Company previously offered contracts with GMIB provisions. See Note 2
and Note 11 for additional information regarding the Company’s variable annuity guarantees. The Company does not
currently hedge its risk under the GGU and GMIB provisions. See Note 14 and Note 16 for additional information regarding
the Company’s derivative instruments used to hedge risks related to GMWB, GMAB and GMDB provisions.
Insurance Liabilities
VUL/UL is the largest group of insurance policies written by the Company. Purchasers of VUL can select from a variety of
investment options and can elect to allocate a portion to a fixed account or a separate account. A vast majority of the
premiums received for VUL policies are held in separate accounts where the assets are held for the exclusive benefit of
those policyholders.
IUL insurance is similar to UL in many regards, although the rate of credited interest above the minimum guarantee for
funds allocated to an indexed account is linked to the performance of the specific index for the indexed account (subject
to a cap and floor). The Company offers an S&P 500 Index account option and a blended multi-index account option
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