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This excerpt taken from the ALL 10-Q filed Oct 31, 2007. Amortization of DAC and DSI,
excluding amortization related to realized capital gains and losses, increased
14.2% in the third quarter of 2007 and decreased 6.2% in the first nine months
of 2007 compared to the same periods of 2006. The increase in the third quarter
of 2007 was primarily the result of an increase in gross margin attributable to
annuities. The decline in the first nine months of 2007 was due to the absence
of amortization in 2007 on the variable annuity business that was reinsured
effective June 1, 2006. Excluding the impact of the reinsured variable annuity
business, DAC and DSI amortization increased 10.5% in the first nine months of
2007 compared to the same period in the prior year due primarily to higher
gross margin on annuities, partially offset by a favorable impact totaling $18
million relating to our annual comprehensive review of DAC and DSI assumptions
(commonly referred to as “unlocking”). DAC and DSI amortization related to
realized capital gains and losses, after-tax, reflected a credit to income of
$11 million in third quarter of 2007 and a charge to income of $4 million in
the first nine months of 2007. This is compared to a credit to income of $16
million and $40 million in the third quarter and first nine months of 2006,
respectively. The impact of realized capital gains and losses on amortization
of DAC and DSI is dependent upon the relationship between the assets that give
rise to the gain or loss and the product liability supported by the assets. Fluctuations
result from changes in the impact of realized capital gains and losses on
actual and expected gross profits.
DAC and DSI were reduced by $726 million and $70 million, respectively, in 2006 as a result of the disposition of substantially all of Allstate Financial’s variable annuity business.
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This excerpt taken from the ALL 10-Q filed Aug 1, 2007. Amortization of DAC and DSI, excluding
amortization related to realized capital gains and losses, declined 12.2% in
the second quarter of 2007 and 14.7% in the first six months of 2007 compared
to the same periods of 2006 due to the absence of amortization in 2007 on the
variable annuity business that was reinsured effective June 1, 2006. Excluding the impact of the reinsured
variable annuity business and amortization related to realized capital gains
and losses, DAC and DSI amortization increased 11.8% and 7.8% in the second
quarter and first six months of 2007, respectively, compared to the same
periods in the prior year. The increase
in both periods was primarily the result of improved benefit margin on certain
interest-sensitive life contracts. DAC
and DSI amortization related to realized capital gains and losses, after-tax,
reflected a charge to income of $15 million and $3 million in the second
quarter of 2007 and 2006, respectively, and reflected a charge to income of $15
million in the first six months of 2007 and a credit to income of $24 million
in the first six months of 2006. The
impact of realized capital gains and losses on amortization of DAC and DSI is
dependent upon the relationship between the assets that give rise to the gain
or loss and the product liability supported by the assets. Fluctuations result from changes in the
impact of realized capital gains and losses on actual and expected gross
profits.
DAC and DSI were reduced by $726 million and $70 million, respectively, in 2006 as a result of the disposition of substantially all of Allstate Financial’s variable annuity business. This excerpt taken from the ALL 10-Q filed May 1, 2007. Amortization
of DAC and DSI, excluding amortization relating to
realized capital gains and losses, declined 17.8% in the first quarter of 2007
compared to the same period in the prior year due to the absence of
amortization in the first quarter of 2007 on the variable annuity business that
was reinsured effective June 1, 2006.
Excluding the impact of the reinsured variable annuity business, DAC and
DSI amortization was flat in the first quarter of 2007 compared to the same
period in the prior year as a favorable impact totaling $15 million relating to
the annual review of DAC assumptions (commonly referred to as “unlocking”)
offset higher amortization resulting from improved gross margin. There was no DAC and DSI amortization
relating to realized capital gains and losses in the first quarter of 2007
compared to a credit to income of $27 million, after-tax, for the first quarter
of 2006. The impact of realized capital gains and losses on amortization of DAC
and DSI is dependent upon the relationship between the assets that give rise to
the gain or the loss and the product liability supported by the assets. Fluctuations result from changes in the
impact of realized capital gains and losses on actual and expected gross
profits.
DAC and DSI assets were reduced by $726 million and $70 million, respectively, in 2006 as a result of the disposition of substantially all of Allstate Financial’s variable annuity business. This excerpt taken from the ALL 10-Q filed Nov 1, 2006. Amortization of DAC and DSI, excluding
amortization related to realized capital gains and losses, increased 11.5% in
the third quarter of 2006 and 32.9% in the first nine months of 2006 compared
to the same periods of 2005. The
increase in both periods was primarily due to improved gross profits on
investment contracts resulting from increased investment and benefit margin,
and lower expenses. Partially
offsetting this impact, in both periods, was the absence of amortization on the
variable annuity contracts that were reinsured effective June 1, 2006. DAC and DSI amortization related to realized
capital gains and losses, after-tax, changed by a favorable $18 million and
$146 million in the third quarter and first nine months of 2006, respectively,
compared to the same periods in 2005.
The impact of realized capital gains and losses on amortization of DAC
and DSI is dependent upon the relationship
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between the assets that give rise to the gain or loss and the product liability supported by the assets. Fluctuations result from changes in the impact of realized capital gains and losses on actual and expected gross profits. DAC and DSI were reduced by $726 million and $70 million, respectively, in the first nine months of 2006 as a result of the disposition of substantially all of Allstate Financial’s variable annuity business. This excerpt taken from the ALL 10-Q filed Aug 8, 2006. Amortization
of DAC and DSI, excluding amortization related to realized
capital gains and losses, increased 57.7% in the three months ended June 30,
2006 and 44.4% in the first six months of 2006 compared to the same periods of
2005 due to higher gross margin. DAC and
DSI amortization related to realized capital gains and losses, after-tax,
changed by a favorable $40 million and $128 million in the second quarter and first
six months of 2006, respectively, compared to the same periods in 2005. The impact of realized capital gains and
losses on amortization of DAC and DSI is dependent upon the relationship
between the assets that give rise to the gain or loss and the product liability
supported by the assets. Fluctuations
result from changes in the impact of realized capital gains and losses on
actual and expected gross profits.
DAC and DSI were reduced by $726 million and $70 million, respectively, in the second quarter of 2006 as a result of the disposition of substantially all of Allstate Financial’s variable annuity business. This decline will result 52
in a reduction to the amortization of DAC and DSI in the future, which is expected to be offset by the absence of gross margin on the business subject to the disposition. This excerpt taken from the ALL 10-Q filed May 3, 2006. Amortization of DAC and DSI,
excluding amortization related to realized capital gains and losses, increased 31.0%
in the first quarter of 2006 compared to the same period in the prior year due
to higher gross margin on fixed and variable annuities. DAC and DSI
amortization related to realized capital gains and losses, after-tax, increased
$88 million with an associated credit to net income of $27 million in the first
quarter of 2006 compared to an expense charge to net income of $61 million in
the same period in 2005. This fluctuation was the result of the impact of
realized capital gains and losses on the actual and expected gross profits for
certain products in each of the periods. In the first quarter of 2006, the
credit to net income for DAC and DSI amortization was mostly attributable to
the recognition of net realized capital losses on assets that support variable
annuities. The expense charge to net income in the first quarter of 2005 was
primarily due to the recognition of net realized capital gains on assets that
support market value adjusted annuities.The impact of realized capital gains
and losses on amortization of DAC and DSI is dependent upon the relationship
between the assets that give rise to the gain or loss and the product liability
supported by the assets.
DAC and DSI amortization is expected to decline in the future as a result of the anticipated disposition of substantially all of Allstate Financial’s variable annuity business. This decline is expected to be offset by the absence of gross margin on the business subject to the disposition.
This excerpt taken from the ALL 10-Q filed Nov 1, 2005. Amortization of DAC
and DSI, excluding amortization related to realized
capital gains and losses, increased 15.8% or $19 million in the three months
ended September 30, 2005 and 6.1% or $23 million in the first nine months
of 2005 compared to the same periods of 2004 as a result of higher gross
margin. DAC and DSI amortization related
to realized capital gains and losses, after-tax, decreased $13 million in the
third quarter and increased $78 million in the first nine months of 2005
compared to the same periods in the prior year.
The increase in the nine-month period was due to increased realized
capital gains on investments supporting certain fixed annuities.
In the first quarter of 2005, we performed our annual comprehensive evaluation of the assumptions used in our valuation models for all investment products, including variable and fixed annuities and interest-sensitive and variable life products, which resulted in net DAC and DSI amortization acceleration of $7 million (commonly referred to as “DAC and DSI unlocking”). The DAC and DSI unlocking includes amortization acceleration on fixed annuities of $62 million and $3 million on interest-sensitive and variable life products, partially offset by amortization deceleration on variable annuities of $58 million. The amortization acceleration on fixed annuities was primarily due to higher than expected lapses on market value adjusted annuities and faster than anticipated investment portfolio yield declines. The amortization deceleration on variable annuities was mostly attributable to better than anticipated equity market performance and persistency.
In the prior year, the comparable DAC and DSI unlocking was a net acceleration of amortization of $0.5 million, which included deceleration of amortization related to interest-sensitive life and acceleration of amortization related to fixed annuities.
This excerpt taken from the ALL 10-Q filed Aug 3, 2005. Amortization of DAC
and DSI, excluding amortization related to realized
capital gains and losses, increased 4.0% or $5 million in the three months
ended June 30, 2005 and 1.6% or $4 million in the first six months of 2005
compared to the same periods of 2004.
DAC and DSI amortization related to realized capital gains and losses,
after-tax, increased $40 million and $91 million in the three and six month
periods ended June 30, 2005 compared to the same periods in the prior year
due to increased realized capital gains on investments supporting certain fixed
annuities.
In the first quarter of 2005, we performed our annual comprehensive evaluation of the assumptions used in our valuation models for all investment products, including variable and fixed annuities and interest-sensitive and variable life products, which resulted in net DAC and DSI amortization acceleration of $7 million (commonly referred to as “DAC and DSI unlocking”). The DAC and DSI unlocking includes amortization acceleration on fixed annuities of $62 million and $3 million on interest-sensitive and variable life products, partially offset by amortization deceleration on variable annuities of $58 million. The amortization acceleration on fixed annuities was primarily due to higher than expected lapses on market value adjusted annuities and faster than anticipated portfolio yield declines. The amortization deceleration on variable annuities was mostly attributable to better than anticipated equity market performance and persistency.
In the prior year, the comparable DAC and DSI unlocking was a net acceleration of amortization of $0.5 million, which included deceleration of amortization related to interest-sensitive life and acceleration of amortization related to fixed annuities.
This excerpt taken from the ALL 10-Q filed May 3, 2005. Amortization of DAC and DSI,
excluding amortization related to realized capital gains and losses, for the
first quarter of 2005 was consistent with the first quarter of 2004. DAC and DSI amortization related to realized
capital gains and losses, after-tax, increased $51 million due to increased
realized capital gains primarily related to investments supporting market value
adjusted annuities.
In the first quarter of 2005, we performed our annual comprehensive evaluation of the assumptions used in our valuation models for all investment products, including variable and fixed annuities and interest-sensitive and variable life products, which resulted in net DAC and DSI amortization acceleration of $7 million (commonly referred to as “DAC and DSI unlocking”). The DAC and DSI unlocking includes amortization acceleration on fixed annuities of $62 million and $3 million on interest-sensitive and variable life products, partially offset by amortization deceleration on variable annuities of $58 million. The amortization acceleration on fixed annuities was primarily due to higher than expected lapses on market value adjusted annuities during the 30-45 day window period in which there were no surrender charges or market value adjustments and faster than anticipated portfolio yield declines. The amortization deceleration on variable annuities was mostly attributable to better than anticipated equity market performance and persistency.
In the first quarter of 2004, the comparable DAC and DSI unlocking was a net acceleration of amortization of $0.5 million, which included deceleration of amortization related to interest-sensitive life and acceleration of amortization related to fixed annuities.
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