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Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables)
 12 Months Ended
Dec. 31, 2019
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)
2019
 
2018
Immediate fixed annuities:
 

 
 

Structured settlement annuities
$
6,840

 
$
6,701

Other immediate fixed annuities
1,607

 
1,709

Traditional life insurance
2,552

 
2,517

Accident and health insurance
195

 
203

Other
78

 
109

Total reserve for life-contingent contract benefits
$
11,272

 
$
11,239
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 3.8% to 7.5%
 
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 0.3% to 9.0%
 
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 7.0%
 
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)
2019
 
2018
Interest-sensitive life insurance
$
7,442

 
$
7,369

Investment contracts:
 

 
 

Fixed annuities
8,811

 
9,645

Other investment contracts
458

 
456

Total contractholder funds
$
16,711

 
$
17,470
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 0.0% to 10.0% 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 0.5% to 7.5% for immediate annuities; (8.0)% to 10.0% 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 12.0% 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 1.7% 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)
2019
 
2018
 
2017
Balance, beginning of year
$
17,470

 
$
18,592

 
$
19,470

Deposits
834

 
863

 
909

Interest credited
581

 
597

 
635

Benefits
(769
)
 
(810
)
 
(871
)
Surrenders and partial withdrawals
(844
)
 
(1,095
)
 
(960
)
Contract charges
(637
)
 
(645
)
 
(655
)
Net transfers from separate accounts
11

 
7

 
4

Other adjustments
65

 
(39
)
 
60

Balance, end of year
$
16,711

 
$
17,470

 
$
18,592
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)
As of December 31,
 
2019
 
2018
In the event of death
 

 
 

Separate account value
$
2,908

 
$
2,694

Net amount at risk (1)
$
373

 
$
605

Average attained age of contractholders
71 years

 
71 years

At annuitization (includes income benefit guarantees)
 

 
 

Separate account value
$
848

 
$
778

Net amount at risk (2)
$
173

 
$
264

Weighted average waiting period until annuitization options available
None

 
None

For cumulative periodic withdrawals
 

 
 

Separate account value
$
190

 
$
190

Net amount at risk (3)
$
13

 
$
16

Accumulation at specified dates
 

 
 

Separate account value
$
123

 
$
129

Net amount at risk (4)
$
15

 
$
26

Weighted average waiting period until guarantee date
4 years

 
4 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, 2018 (1)
$
307

 
$
38

 
$
98

 
$
443

Less reinsurance recoverables
111

 
35

 
39

 
185

Net balance as of December 31, 2018
196

 
3

 
59

 
258

Incurred guarantee benefits
18

 
—

 
12

 
30

Paid guarantee benefits
(3
)
 
—

 
—

 
(3
)
Net change
15

 
—

 
12

 
27

Net balance as of December 31, 2019
211

 
3

 
71

 
285

Plus reinsurance recoverables
81

 
20

 
32

 
133

Balance, December 31, 2019 (2)
$
292

 
$
23

 
$
103

 
$
418

 
 
 
 
 
 
 
 
Balance, December 31, 2017 (3)
$
261

 
$
28

 
$
80

 
$
369

Less reinsurance recoverables
87

 
25

 
34

 
146

Net balance as of December 31, 2017
174

 
3

 
46

 
223

Incurred guarantee benefits
24

 
—

 
13

 
37

Paid guarantee benefits
(2
)
 
—

 
—

 
(2
)
Net change
22

 
—

 
13

 
35

Net balance as of December 31, 2018
196

 
3

 
59

 
258

Plus reinsurance recoverables
111

 
35

 
39

 
185

Balance, December 31, 2018 (1)
$
307

 
$
38

 
$
98

 
$
443

____________
(1) 
Included in the total liability balance as of December 31, 2018 are reserves for variable annuity death benefits of $109 million, variable annuity income benefits of $36 million, variable annuity accumulation benefits of $25 million, variable annuity withdrawal benefits of $14 million and other guarantees of $259 million.
(2) 
Included in the total liability balance as of December 31, 2019 are reserves for variable annuity death benefits of $78 million, variable annuity income benefits of $21 million, variable annuity accumulation benefits of $18 million, variable annuity withdrawal benefits of $14 million and other guarantees of $287 million.
(3) 
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.