Other Revenues and Other Expenses

3 Months Ended

Mar. 31, 2018

Other Income and Expenses [Abstract]

9. Other Revenues and Other Expenses

Other Revenues

The Company has entered into contracts with mutual funds, fund managers, and their affiliates (collectively, the “Funds”) whereby the Company is paid monthly or quarterly fees (“12b-1 fees”) for providing certain services to customers and distributors of the Funds. The 12b-1 fees are generally equal to a fixed percentage of the average daily balance of the customer’s investment in a fund are based on a specified in the contract between the Company and the Funds. Payments are generally collected when due and are neither refundable nor able to offset future fees.

To earn these fees, the Company performs services such as responding to phone inquiries, maintaining records, providing information to distributors and shareholders about fund performance and providing training to account managers and sales agents. The passage of time reflects the satisfaction of the Company’s performance obligations to the Funds, and is used to recognize revenue associated with 12b-1 fees.

Other revenues consisted primarily of 12b-1 fees of $66 million and $62 million for the three months ended March 31, 2018 and 2017, respectively, of which substantially all were reported in the annuities segment.

Other Expenses

Information on other expenses was as follows:



	Three Months Ended March 31,
	2018			2017
	(In millions)
Compensation	$	72		$	55
Commissions	192			194
Volume-related costs	30			56
Related party expenses on ceded and assumed reinsurance	(5		)	8
Capitalization of DAC	(75		)	(67		)
Interest expense on debt	1			32
Premium taxes, licenses and fees	16			13
Professional services	33			35
Rent and related expenses	3			3
Other	130			107
Total other expenses	$	397		$	436

Related Party Expenses

Commissions and capitalization of DAC include the impact of related party reinsurance transactions. See Note 11 for a discussion of related party expenses included in the table above.