The Hartford 2009 Annual Report Download - page 60
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60
For the year ended 2007:
Segment
After-tax (charge) benefit DAC URR
Death and
Other
Insurance
Benefit
Reserves[1] SIA Total [2]
Retail $ 180 $ (5) $ (4) $ 9 $ 180
Retirement Plans (9) — — — (9)
Institutional 1 — — — 1
Individual Life 24 (8) — — 16
International 16 — 6 — 22
Corporate 3 — — — 3
Total $ 215 $ (13) $ 2 $ 9 $ 213
[1] As a result of the Unlock, Retail reserves decreased $4, pre-tax, offset by a decrease, in reinsurance recoverables of $10, pre-tax.
[2] The most significant contributors to the Unlock were:
• Actual separate account returns were above our aggregated estimated return.
• During the third quarter of 2007, the Company estimated gross profits using the mean of EGPs derived from a set of stochastic scenarios
that have been calibrated to our estimated separate account return as compared to prior year where we used a single deterministic
estimation. The impact of this change in estimation was a benefit of $20, after-tax, for U.S. variable annuities, and $13, after-tax, for Japan
variable annuities.
• Dynamic lapse behavior assumptions, reflecting that lapse behavior will be different depending upon market movements, along with other
base lapse rate assumption changes resulted in an approximate benefit of $40, after-tax, for U.S. variable annuities.
Other-Than-Temporary Impairments and Valuation Allowances on Investments
The Company has a monitoring process overseen by a committee of investment and accounting professionals that identifies investments
that are subject to an enhanced evaluation on a quarterly basis to determine if an other-than-temporary impairment (“impairment”) is
present for AFS securities or a valuation allowance is required for mortgage loans. This evaluation is a quantitative and qualitative
process, which is subject to risks and uncertainties. For further discussion of the accounting policies, see the Significant Investment
Accounting Policies Section in Note 5 of the Notes to Consolidated Financial Statements. For a discussion of results, see Other-Than-
Temporary Impairments within the Investment Credit Risk section of the MD&A.