Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables)

12 Months Ended

Dec. 31, 2013

Reserve for Life-Contingent Contract Benefits and Contractholder Funds

Reserve for life-contingent contract benefits

($ in millions)		2013		2012
Immediate fixed annuities:
Structured settlement annuities	$	6,645	$	7,274
Other immediate fixed annuities		2,279		2,382
Traditional life insurance		2,329		2,899
Accident and health insurance		236		1,448
Other		100		114
Total reserve for life-contingent contract benefits	$	11,589	$	14,117

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 0% 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 2000 mortality table with internal modifications	Interest rate assumptions range from 4.0% 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

($ in millions)		2013		2012
Interest-sensitive life insurance	$	7,104	$	10,356
Investment contracts:
Fixed annuities		16,172		25,851
Funding agreements backing medium-term notes		89		1,867
Other investment contracts		239		560
Total contractholder funds	$	23,604	$	38,634

Key contract provisions relating to contractholder funds

Product	Interest rate	Withdrawal/surrender charges
Interest-sensitive life insurance	Interest rates credited range from 0% to 10.0% 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% to 9.8% for immediate annuities; (8.0)% to 13.5% 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 25.8% of fixed annuities are subject to market value adjustment for discretionary withdrawals
Funding agreements backing       medium-term notes	Interest rates credited range from 1.8% to 5.4%	Not applicable
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

($ in millions)		2013			2012			2011
Balance, beginning of year	$	38,634		$	41,669		$	46,458
Deposits		2,338			2,180			1,869
Interest credited		1,268			1,296			1,592
Benefits		(1,521	)		(1,454	)		(1,454	)
Surrenders and partial withdrawals		(3,279	)		(3,969	)		(4,908	)
Maturities of and interest payments on institutional products		(1,799	)		(138	)		(867	)
Contract charges		(1,032	)		(995	)		(962	)
Net transfers from separate accounts		12			11			12
Fair value hedge adjustments for institutional products		--			--			(34	)
Other adjustments		(72	)		34			(37	)
Classified as held for sale		(10,945	)		--			--
Balance, end of year	$	23,604		$	38,634		$	41,669

Variable annuity contracts with guarantees

($ in millions)		December 31,
		2013		2012
In the event of death
Separate account value	$	5,951	$	5,947
Net amount at risk (1)	$	636	$	1,044
Average attained age of contractholders		68 years		67 years
At annuitization (includes income benefit guarantees)
Separate account value	$	1,463	$	1,416
Net amount at risk (2)	$	252	$	418
Weighted average waiting period until annuitization options available		None		None
For cumulative periodic withdrawals
Separate account value	$	488	$	532
Net amount at risk (3)	$	9	$	16
Accumulation at specified dates
Separate account value	$	732	$	811
Net amount at risk (4)	$	27	$	50
Weighted average waiting period until guarantee date		5 years		6 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

($ 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, 2012 (1)	$	309		$	235		$	129	$	673
Less reinsurance recoverables		113			220			125		458
Net balance as of December 31, 2012		196			15			4		215
Incurred guarantee benefits		83			(1	)		5		87
Paid guarantee benefits		(2	)		--			--		(2	)
Net change		81			(1	)		5		85
Net balance as of December 31, 2013		277			14			9		300
Plus reinsurance recoverables		100			99			56		255
Balance, December 31, 2013 (2)	$	377		$	113		$	65	$	555
Balance, December 31, 2011 (3)	$	289		$	191		$	164	$	644
Less reinsurance recoverables		116			175			162		453
Net balance as of December 31, 2011		173			16			2		191
Incurred guarantee benefits		25			(1	)		2		26
Paid guarantee benefits		(2	)		--			--		(2	)
Net change		23			(1	)		2		24
Net balance as of December 31, 2012		196			15			4		215
Plus reinsurance recoverables		113			220			125		458
Balance, December 31, 2012 (1)	$	309		$	235		$	129	$	673
(1) Included in the total liability balance as of December 31, 2012 are reserves for variable annuity death benefits of $112 million, variable annuity income benefits of $221 million, variable annuity accumulation benefits of $86 million, variable annuity withdrawal benefits of $39 million and other guarantees of $215 million. (2) Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $98 million, variable annuity income benefits of $99 million, variable annuity accumulation benefits of $43 million, variable annuity withdrawal benefits of $13 million and other guarantees of $302 million. (3) Included in the total liability balance as of December 31, 2011 are reserves for variable annuity death benefits of $116 million, variable annuity income benefits of $175 million, variable annuity accumulation benefits of $105 million, variable annuity withdrawal benefits of $57 million and other guarantees of $191 million.