Deferred Policy Acquisition Costs

12 Months Ended

Dec. 31, 2012

Deferred Policy Acquisition Costs Disclosures [Abstract]

Note 12. Deferred Policy Acquisition Costs

The following table summarizes the components of the Property and Casualty Group’s and EFL’s deferred policy acquisition costs assets for the years ended December 31:



(in millions)	Erie Insurance Group
	2012			2011
Property and Casualty Group
Deferred policy acquisition costs asset at beginning of year	$	343		$	327
Capitalized deferred policy acquisition costs	726			684
Amortized deferred policy acquisition costs	(705		)	(668		)
Deferred policy acquisition costs asset at end of year – Property and Casualty Group	$	364		$	343
Erie Family Life Insurance Company
Deferred policy acquisition costs asset at beginning of year	$	144		$	140
Capitalized deferred policy acquisition costs	17			18
Amortized deferred policy acquisition costs	(10		)	(12		)
Change in shadow deferred policy acquisition costs	(11		)	(2		)
Deferred policy acquisition costs asset at end of year – EFL	$	140		$	144
Deferred policy acquisition costs asset at end of year – Erie Insurance Group	$	504		$	487

- 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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