XML 95 R14.htm IDEA: XBRL DOCUMENT v2.4.0.6
Deferred Policy Acquisition Costs
 12 Months Ended
Dec. 31, 2012
Deferred Policy Acquisition Costs Disclosures [Abstract]  
Deferred Policy Acquisition Costs
G.    Deferred Policy Acquisition Costs

A progression of deferred policy acquisition costs is presented below (in millions): 
 
P&C
 
 
Annuity and Other (*)
 
 
 
 
Deferred
 
 
Deferred
 
Sales
 
Present Value
 
 
 
 
 
 
Consolidated
 
Costs
 
 
Costs
 
Inducements
 
of Future Profits
 
Unrealized
 
Total
 
 
Total
Balance at December 31, 2009
$
186

 
 
$
781

 
$
189

 
$
190

 
$
(17
)
 
$
1,143

 
 
$
1,329

Additions
399

 
 
195

 
31

 
—

 
—

 
226

 
 
625

Amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Periodic amortization
(404
)
 
 
(139
)
 
(22
)
 
(27
)
 
—

 
(188
)
 
 
(592
)
Annuity unlocking
—

 
 
(34
)
 
(9
)
 
1

 
—

 
(42
)
 
 
(42
)
Included in realized gains
—

 
 
9

 
—

 
—

 
—

 
9

 
 
9

Change in unrealized
—

 
 
—

 
—

 
—

 
(298
)
 
(298
)
 
 
(298
)
Balance at December 31, 2010
181

 
 
812

 
189

 
164

 
(315
)
 
850

 
 
1,031

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additions
433

 
 
239

 
18

 
—

 
—

 
257

 
 
690

Amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Periodic amortization
(425
)
 
 
(146
)
 
(24
)
 
(21
)
 
—

 
(191
)
 
 
(616
)
Annuity unlocking
—

 
 
(2
)
 
6

 
1

 
—

 
5

 
 
5

Included in realized gains
—

 
 
13

 
—

 
—

 
—

 
13

 
 
13

Change in unrealized
—

 
 
—

 
—

 
—

 
(222
)
 
(222
)
 
 
(222
)
Balance at December 31, 2011
189

 
 
916

 
189

 
144

 
(537
)
 
712

 
 
901

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additions
438

 
 
212

 
15

 
—

 
—

 
227

 
 
665

Amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Periodic amortization
(423
)
 
 
(148
)
 
(30
)
 
(17
)
 
—

 
(195
)
 
 
(618
)
Annuity unlocking
—

 
 
(33
)
 
(4
)
 
—

 
—

 
(37
)
 
 
(37
)
Loss recognition charge
—

 
 
(67
)
 
—

 
(12
)
 
—

 
(79
)
 
 
(79
)
Included in realized gains
—

 
 
(1
)
 
—

 
—

 
—

 
(1
)
 
 
(1
)
Sale of subsidiaries
—

 
 
(92
)
 
—

 
(16
)
 
—

 
(108
)
 
 
(108
)
Change in unrealized
—

 
 
—

 
—

 
—

 
(173
)
 
(173
)
 
 
(173
)
Balance at December 31, 2012
$
204

 
 
$
787

 
$
170

 
$
99

 
$
(710
)
 
$
346

 
 
$
550

(*)
Includes AFG’s Medicare supplement and critical illness business (sold in 2012) and AFG’s run-off long-term care and life businesses.

See Accounting Standards Adopted in 2012 under Note A — “Accounting Policies.”

The PVFP amounts in the table above are net of $184 million and $195 million of accumulated amortization at December 31, 2012 and 2011, respectively. The loss recognition charge recorded in the fourth quarter of 2012 for AFG’s closed block of long-term care insurance resulted in the write off of all remaining deferred policy acquisition costs for this business. During each of the next five years, the PVFP is expected to decrease at a rate of approximately one-sixth of the balance at the beginning of each respective year.