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Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables)
 12 Months Ended
Dec. 31, 2015
Reserve for Life-Contingent Contract Benefits and Contractholder Funds  
Reserve for life-contingent contract benefits
As of December 31, the reserve for life-contingent contract benefits consists of the following:
($ in millions)
2015
 
2014
Immediate fixed annuities:
 
 
 
Structured settlement annuities
$
6,673

 
$
6,682

Other immediate fixed annuities
2,041

 
2,250

Traditional life insurance
2,584

 
2,521

Accident and health insurance
844

 
830

Other
105

 
97

Total reserve for life-contingent contract benefits
$
12,247

 
$
12,380
Key assumptions generally used in calculating the reserve for life-contingent contract benefits
The following table highlights the 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 2.7% 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 7.0%
 
Unearned premium; additional contract reserves for mortality risk and unpaid claims
Other:
Variable annuity guaranteed minimum death benefits (1)
 
Annuity 2012 mortality table with internal modifications
 
Interest rate assumptions range from 2.1% 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
As of December 31, contractholder funds consist of the following:
($ in millions)
2015
 
2014
Interest-sensitive life insurance
$
7,975

 
$
7,880

Investment contracts:
 
 
 
Fixed annuities
12,974

 
14,310

Funding agreements backing medium-term notes
85

 
85

Other investment contracts
261

 
254

Total contractholder funds
$
21,295

 
$
22,529
Key contract provisions relating to contractholder funds
The following table highlights the key contract provisions relating to contractholder funds:
Product
 
Interest rate
 
Withdrawal/surrender charges
Interest-sensitive life insurance
 
Interest rates credited range from 0% to 10.5% 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 19.2% of fixed annuities are subject to market value adjustment for discretionary withdrawals
Funding agreements backing medium-term notes
 
Interest rate credited is a floating rate, currently 0%
 
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
Contractholder funds activity for the years ended December 31 is as follows:
($ in millions)
2015
 
2014
 
2013
Balance, beginning of year
$
22,529

 
$
24,304

 
$
39,319

Classified as held for sale, beginning balance
—

 
10,945

 
—

Total, including those classified as held for sale
22,529

 
35,249


39,319

Deposits
1,203

 
1,333

 
2,440

Interest credited
760

 
919

 
1,295

Benefits
(1,077
)
 
(1,197
)
 
(1,535
)
Surrenders and partial withdrawals
(1,278
)
 
(2,273
)
 
(3,299
)
Maturities of and interest payments on institutional products
(1
)
 
(2
)
 
(1,799
)
Contract charges
(818
)
 
(881
)
 
(1,112
)
Net transfers from separate accounts
7

 
7

 
12

Other adjustments
(30
)
 
36

 
(72
)
Sold in LBL disposition
—

 
(10,662
)
 
—

Classified as held for sale, ending balance
—

 
—

 
(10,945
)
Balance, end of year
$
21,295

 
$
22,529

 
$
24,304
Variable annuity contracts with guarantees
The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees.
($ in millions)
December 31,
 
2015
 
2014
In the event of death
 
 
 
Separate account value
$
3,560

 
$
4,288

Net amount at risk (1)
$
675

 
$
581

Average attained age of contractholders
69 years

 
69 years

At annuitization (includes income benefit guarantees)
 
 
 
Separate account value
$
967

 
$
1,142

Net amount at risk (2)
$
281

 
$
238

Weighted average waiting period until annuitization options available
None

 
None

For cumulative periodic withdrawals
 
 
 
Separate account value
$
294

 
$
382

Net amount at risk (3)
$
10

 
$
8

Accumulation at specified dates
 
 
 
Separate account value
$
371

 
$
480

Net amount at risk (4)
$
31

 
$
24

Weighted average waiting period until guarantee date
4 years

 
4 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
The following table summarizes the 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, 2014 (1)
$
195

 
$
95

 
$
60

 
$
350

Less reinsurance recoverables
98

 
91

 
45

 
234

Net balance as of December 31, 2014
97


4


15


116

Incurred guarantee benefits
20

 
—

 
8

 
28

Paid guarantee benefits
—

 
—

 
—

 
—

Net change
20


—


8


28

Net balance as of December 31, 2015
117

 
4

 
23

 
144

Plus reinsurance recoverables
106

 
64

 
52

 
222

Balance, December 31, 2015 (2)
$
223


$
68


$
75


$
366

 
 
 
 
 
 
 
 
Balance, December 31, 2013 (3)
$
377

 
$
113

 
$
65

 
$
555

Less reinsurance recoverables
100

 
99

 
56

 
255

Net balance as of December 31, 2013
277


14


9


300

Incurred guarantee benefits
34

 
—

 
9

 
43

Paid guarantee benefits
—

 
—

 
—

 
—

Sold in LBL disposition
(214
)
 
(10
)
 
(3
)
 
(227
)
Net change
(180
)

(10
)

6


(184
)
Net balance as of December 31, 2014
97

 
4

 
15

 
116

Plus reinsurance recoverables
98

 
91

 
45

 
234

Balance, December 31, 2014 (1)
$
195


$
95


$
60


$
350

______________________________
(1) 
Included in the total liability balance as of December 31, 2014 are reserves for variable annuity death benefits of $96 million, variable annuity income benefits of $92 million, variable annuity accumulation benefits of $32 million, variable annuity withdrawal benefits of $13 million and other guarantees of $117 million.
(2) 
Included in the total liability balance as of December 31, 2015 are reserves for variable annuity death benefits of $105 million, variable annuity income benefits of $65 million, variable annuity accumulation benefits of $38 million, variable annuity withdrawal benefits of $14 million and other guarantees of $144 million.
(3) 
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.