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Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables)
 12 Months Ended
Dec. 31, 2017
Reserve for Life-Contingent Contract Benefits and Contractholder Funds  
Reserve for life-contingent contract benefits
As of December 31, the reserve for life-contingent contract benefits consists of the following:
($ in millions)
2017
 
2016
Immediate fixed annuities:
 

 
 

Structured settlement annuities
$
6,994

 
$
6,681

Other immediate fixed annuities
1,850

 
1,935

Traditional life insurance
2,458

 
2,373

Accident and health insurance
238

 
232

Other
85

 
101

Total reserve for life-contingent contract benefits
$
11,625

 
$
11,322
Key assumptions generally used in calculating the reserve for life-contingent contract benefits
The following table highlights the key assumptions generally used in calculating the reserve for life-contingent contract benefits.
Product
 
Mortality
 
Interest rate
 
Estimation method
Structured settlement annuities
 
U.S. population with projected calendar year improvements; mortality rates adjusted for each impaired life based on reduction in life expectancy
 
Interest rate assumptions range from 2.9% to 9.0%
 
Present value of contractually specified future benefits
Other immediate fixed annuities
 
1983 group annuity mortality table with internal modifications; 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table; 1983 individual annuity mortality table with internal modifications
 
Interest rate assumptions range from 0% to 11.5%
 
Present value of expected future benefits based on historical experience
Traditional life insurance
 
Actual company experience plus loading
 
Interest rate assumptions range from 2.5% to 11.3%
 
Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims
Accident and health insurance
 
Actual company experience plus loading
 
Interest rate assumptions range from 3.0% to 6.0%
 
Unearned premium; additional contract reserves for mortality risk and unpaid claims
Other:
Variable annuity guaranteed minimum death benefits (1)
 
Annuity 2012 mortality table with internal modifications
 
Interest rate assumptions range from 2.0% to 5.8%
 
Projected benefit ratio applied to cumulative assessments
______________________
(1) 
In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively “Prudential”)
Contractholder funds
As of December 31, contractholder funds consist of the following:
($ in millions)
2017
 
2016
Interest-sensitive life insurance
$
7,387

 
$
7,312

Investment contracts:
 

 
 

Fixed annuities
10,790

 
11,893

Other investment contracts
415

 
265

Total contractholder funds
$
18,592

 
$
19,470
Key contract provisions relating to contractholder funds
The following table highlights the key contract provisions relating to contractholder funds.
Product
 
Interest rate
 
Withdrawal/surrender charges
Interest-sensitive life insurance
 
Interest rates credited range from 0% to 10.5% for equity-indexed life (whose returns are indexed to the S&P 500) and 1.0% to 6.0% for all other products
 
Either a percentage of account balance or dollar amount grading off generally over 20 years
Fixed annuities
 
Interest rates credited range from 0% to 9.8% for immediate annuities; (8.0)% to 12.3% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 0.1% to 6.0% for all other products
 
Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 16.7% of fixed annuities are subject to market value adjustment for discretionary withdrawals
Other investment contracts:
Guaranteed minimum income, accumulation and withdrawal benefits on variable (1) and fixed annuities and secondary guarantees on interest-sensitive life insurance and fixed annuities
 
Interest rates used in establishing reserves range from 1.5% to 10.3%
 
Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract
______________________
(1) 
In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with Prudential.
Contractholder funds activity
Contractholder funds activity for the years ended December 31 is as follows:
($ in millions)
2017
 
2016
 
2015
Balance, beginning of year
$
19,470

 
$
20,542

 
$
21,816

Deposits
909

 
969

 
1,052

Interest credited
635

 
672

 
716

Benefits
(871
)
 
(947
)
 
(1,060
)
Surrenders and partial withdrawals
(960
)
 
(1,014
)
 
(1,246
)
Maturities of and interest payments on institutional products
—

 
(86
)
 
(1
)
Contract charges
(655
)
 
(665
)
 
(684
)
Net transfers from separate accounts
4

 
5

 
7

Other adjustments
60

 
(6
)
 
(58
)
Balance, end of year
$
18,592

 
$
19,470

 
$
20,542
Variable annuity contracts with guarantees
The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees.
($ in millions)
December 31,
 
2017
 
2016
In the event of death
 

 
 

Separate account value
$
3,323

 
$
3,280

Net amount at risk (1)
$
453

 
$
585

Average attained age of contractholders
70 years

 
70 years

At annuitization (includes income benefit guarantees)
 

 
 

Separate account value
$
944

 
$
915

Net amount at risk (2)
$
202

 
$
265

Weighted average waiting period until annuitization options available
None

 
None

For cumulative periodic withdrawals
 

 
 

Separate account value
$
253

 
$
267

Net amount at risk (3)
$
10

 
$
10

Accumulation at specified dates
 

 
 

Separate account value
$
170

 
$
310

Net amount at risk (4)
$
17

 
$
26

Weighted average waiting period until guarantee date
5 years

 
3 years

____________
(1) 
Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date.
(2) 
Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance.
(3) 
Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date.
(4) 
Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance.
Liabilities for guarantees
The following table summarizes the liabilities for guarantees.
($ in millions)
Liability for guarantees related to death benefits and interest-sensitive life products
 
Liability for guarantees related to income benefits
 
Liability for guarantees related to accumulation and withdrawal benefits
 
Total
Balance, December 31, 2016 (1)
$
244

 
$
43

 
$
77

 
$
364

Less reinsurance recoverables
101

 
40

 
43

 
184

Net balance as of December 31, 2016
143

 
3

 
34

 
180

Incurred guarantee benefits
33

 
—

 
12

 
45

Paid guarantee benefits
(2
)
 
—

 
—

 
(2
)
Net change
31

 
—

 
12

 
43

Net balance as of December 31, 2017
174

 
3

 
46

 
223

Plus reinsurance recoverables
87

 
25

 
34

 
146

Balance, December 31, 2017 (2)
$
261

 
$
28

 
$
80

 
$
369

 
 
 
 
 
 
 
 
Balance, December 31, 2015 (3)
$
223

 
$
67

 
$
75

 
$
365

Less reinsurance recoverables
106

 
64

 
52

 
222

Net balance as of December 31, 2015
117

 
3

 
23

 
143

Incurred guarantee benefits
26

 
—

 
11

 
37

Paid guarantee benefits
—

 
—

 
—

 
—

Net change
26

 
—

 
11

 
37

Net balance as of December 31, 2016
143

 
3

 
34

 
180

Plus reinsurance recoverables
101

 
40

 
43

 
184

Balance, December 31, 2016 (1)
$
244

 
$
43

 
$
77

 
$
364

____________
(1) 
Included in the total liability balance as of December 31, 2016 are reserves for variable annuity death benefits of $100 million, variable annuity income benefits of $40 million, variable annuity accumulation benefits of $34 million, variable annuity withdrawal benefits of $9 million and other guarantees of $181 million.
(2) 
Included in the total liability balance as of December 31, 2017 are reserves for variable annuity death benefits of $85 million, variable annuity income benefits of $26 million, variable annuity accumulation benefits of $22 million, variable annuity withdrawal benefits of $12 million and other guarantees of $224 million.
(3) 
Included in the total liability balance as of December 31, 2015 are reserves for variable annuity death benefits of $105 million, variable annuity income benefits of $64 million, variable annuity accumulation benefits of $38 million, variable annuity withdrawal benefits of $14 million and other guarantees of $144 million.