Other Revenues and Other Expenses

6 Months Ended

Jun. 30, 2018

Other Income and Expenses [Abstract]

Other Expenses

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 $64 million and $130 million for the three months and six months ended June 30, 2018, respectively, and $69 million and $131 million for the three months and six months ended June 30, 2017, respectively, of which substantially all were reported in the Annuities segment.

Other Expenses

Information on other expenses was as follows:

	Three Months Ended    June 30,						Six Months   Ended   June 30,
	2018			2017			2018			2017
	(In millions)
Compensation	$	78		$	63		$	150		$	118
Commissions	191			174			383			368
Volume-related costs	26			59			56			115
Related party expenses on ceded and assumed reinsurance	(3		)	(4		)	(8		)	4
Capitalization of DAC	(76		)	(61		)	(151		)	(128		)
Interest expense on debt	(3		)	25			(2		)	57
Premium taxes, licenses and fees	24			17			40			30
Professional services	60			46			93			81
Rent and related expenses	3			4			6			7
Other	147			137			277			244
Total other expenses	$	447		$	460		$	844		$	896

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.