Ameriprise 2015 Annual Report Download - page 163

The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at
fair value. All other financial instruments that are reported at fair value have been included above in the table with
balances of assets and liabilities Ameriprise Financial measured at fair value on a recurring basis.
December 31, 2015
Fair Value
Carrying
Value Level 1 Level 2 Level 3 Total
(in millions)
Financial Assets
Mortgage loans, net $ 3,359 $ — $ — $ 3,372 $ 3,372
Policy and certificate loans 824 — 1 803 804
Receivables 1,471 148 1,322 3 1,473
Restricted and segregated cash 2,548 2,548 — — 2,548
Other investments and assets 583 1 510 54 565
Financial Liabilities
Policyholder account balances, future policy benefits and
claims $ 11,523 $ — $ — $ 12,424 $ 12,424
Investment certificate reserves 4,831 — — 4,823 4,823
Brokerage customer deposits 3,802 3,802 — — 3,802
Separate account liabilities 4,704 — 4,704 — 4,704
Debt and other liabilities 3,173 202 2,958 113 3,273
December 31, 2014
Fair Value
Carrying
Value Level 1 Level 2 Level 3 Total
(in millions)
Financial Assets
Mortgage loans, net $ 3,440 $ — $ — $ 3,512 $ 3,512
Policy and certificate loans 806 — 1 793 794
Receivables 1,418 215 1,200 3 1,418
Restricted and segregated cash 2,614 2,614 — — 2,614
Other investments and assets 551 — 460 84 544
Financial Liabilities
Policyholder account balances, future policy benefits and
claims $ 12,979 $ — $ — $ 13,996 $ 13,996
Investment certificate reserves 4,201 — — 4,195 4,195
Brokerage customer deposits 3,465 3,465 — — 3,465
Separate account liabilities 4,478 — 4,478 — 4,478
Debt and other liabilities 3,576 261 3,446 121 3,828
Mortgage Loans, Net
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, liquidity and characteristics including LTV 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. Given the significant unobservable inputs to the valuation of commercial mortgage loans, these measurements
are classified as Level 3.
The fair value of consumer loans is determined by discounting estimated cash flows and incorporating adjustments for
prepayment, administration expenses, loss severity, liquidity and credit loss estimates, with discount rates based on the
Company’s estimate of current market conditions. The fair value of consumer loans is classified as Level 3 as the valuation
includes significant unobservable inputs.
Policy and Certificate Loans
Policy loans represent loans made against the cash surrender value of the underlying life insurance or annuity product.
These loans and the related interest are usually realized at death of the policyholder or contractholder or at surrender of
the contract and are not transferable without the underlying insurance or annuity contract. The fair value of policy loans is
determined by estimating expected cash flows discounted at rates based on the U.S. Treasury curve. Policy loans are
classified as Level 3 as the discount rate used may be adjusted for the underlying performance of individual policies.
Certificate loans represent loans made against and collateralized by the underlying certificate balance. These loans do not
transfer to third parties separate from the underlying certificate. The outstanding balance of these loans is considered a
reasonable estimate of fair value and is classified as Level 2.
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