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DEFERRED POLICY ACQUISITION COSTS

12 Months Ended

Dec. 31, 2011

Deferred Policy Acquisition Costs Disclosures [Abstract]

Deferred Policy Acquisition Costs [Text Block]

		2011		2010
Balance at January 1	$	1,682,559	$	2,173,642
Acquisition costs deferred		244,659		241,182
Amortized to expense during the year (1)		279,668		(732,265)
Balance at December 31	$	2,206,886	$	1,682,559

Includes interest, unlocking and loss recognition.

Refer to Note 1 of the Company's consolidated financial statements for information regarding the deferral and amortization methodologies related to DAC asset and SIA. The Company tested its DAC asset and SIA for future recoverability and determined that the assets were not impaired at December 31, 2011.

During the year ended December 31, 2011, the Company recorded a negative amortization increasing DAC asset and SIA by $770.2 million. The negative amortization related to a decrease in actual gross profit which was due to a $1.3 billion increase in the fair value of GMAB and GMWB liabilities related to certain variable annuity products. The increase in DAC asset and SIA was offset by an unlocking adjustment decreasing DAC asset and SIA by $575.2 million. The unlocking adjustment recorded in 2011 was due to the total present value of the gross profit for the largest cohort of the Company's fixed annuities, which was negative at December 31, 2011 resulting in decrease in DAC asset and SIA.

The Company wrote down DAC asset and SIA by $21.0 million and $126.0 million as a result of loss recognition related to certain annuity products for the years ended December 31, 2011 and 2010, respectively. Of the $21.0 million charge for loss recognition in 2011, $18.3 million related to DAC and was reported as amortization of DAC. The remaining $2.7 million related to SIA and was reported as a component of interest credited in the Company's consolidated statement of operations. Of the $126.0 million charge for loss recognition in 2010, $117.7 million related to DAC and was reported as amortization of DAC. The remaining $8.3 million related to SIA and was reported as a component of interest credited in the Company's consolidated statement of operations.

- 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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