Deferred Acquisition Costs and Value of Business Acquired

12 Months Ended

Dec. 31, 2012

Deferred Acquisition Costs and Value of Business Acquired

Deferred Acquisition Costs and Value of Business Acquired

8. Deferred Acquisition Costs and Value of Business Acquired

The following table summarizes activity in DAC and VOBA for the years ended December 31, 2012, 2011 and 2010:

	DAC (1)			VOBA			Total (1)
Balance, January 1, 2010 (2)	$	253,038		$	48,669		$	301,707
Capitalized additions (1)	47,513			—			47,513
Amortization and writedowns (1)	(27,506		)	(1,837		)	(29,343		)
Unrealized investment (gains) losses (1)	(114,519		)	(427		)	(114,946		)
Balance, December 31, 2010 (1)	158,526			46,405			204,931
Capitalized additions (1)	57,108			—			57,108
Amortization and writedowns (1)	(25,184		)	(3,636		)	(28,820		)
Unrealized investment (gains) losses (1)	(12,669		)	(717		)	(13,386		)
Balance, December 31, 2011 (1)	177,781			42,052			219,833
Capitalized additions	94,826			—			94,826
Amortization and writedowns	(51,434		)	(9,045		)	(60,479		)
Unrealized investment (gains) losses	(48,757		)	(962		)	(49,719		)
Balance, December 31, 2012	$	172,416		$	32,045		$	204,461

(1) As adjusted; See Note 1

(2) Adjusted by $143,550 from $396,588 to $253,038 for the adoption of ASU No. 2010-26; See Note 1

The estimated future amortization of VOBA for the years ended December 31, 2013 through December 31, 2017 is approximately $4,000 per annum.

- Definition

Disclosure of accounting policy for capitalizing costs incurred to write or acquire insurance contracts, the basis for and methodology for capitalizing such costs, the accounting for such deferred acquisition costs (DAC) when modifications or internal replacements of related insurance contracts occur and the effect on results of operations, and the methodology and amount of amortization. This disclosure addresses the nature, type, and amount of capitalized costs incurred to write or acquire insurance contracts.

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