2011 fact book

7/30/2019 2011 Fact Book

1/194

AMERICAN COUNCIL OF LIFE INSURERS

FINANCIAL SECURITY...FOR LIFE.

2011 LIFE INSURERS

FACT BOOK

7/30/2019 2011 Fact Book

2/194

AMERICAN COUNCIL OF LIFE INSURERS

LIFE INSURERS

FACt BOOk 2011

7/30/2019 2011 Fact Book

3/194

The American Council o Lie Insurers is a Washington, D.C.-based trade association. Its member

companies oer lie insurance, long-term care insurance, disability income insurance, reinsurance,

annuities, pensions, and other retirement and nancial protection products.

2011 American Council o Lie Insurers

No part o this publication may be reproduced, sorted in a retrieval system, or transmitted in any

orm or by any meanselectronic, mechanical, photocopying, recording, or otherwisewithout

permission o the publisher.

Library o Congress Catalog Number 4727134

ii

7/30/2019 2011 Fact Book

4/194

CONtENtS

Preace ix

Methodology xi

Key Statistics xiii

1 Overview 1

Organizational Structure 1Stock and Mutual Lie Insurers 1Other Lie Insurance Providers 1

Employment 2Foreign Ownership 2

2 Assets 7

Bond Holdings and Acquisitions 7Types o Bonds 8Characteristics o Bonds 8

Stock Holdings and Acquisitions 9Mortgages 9Real Estate 9Policy Loans 10Miscellaneous Assets 10Foreign-Controlled Assets 10

3 Liabilities 23

Policy Reserves 23Deposit-Type Contracts 24Asset Fluctuation Reserves 24Other Liabilities 24Surplus Funds and Capital Stock 24Capital Ratios 24

4 Income 35

Premium Income 35Investment Income and Rate o Return 36

Net Gain From Operations 365 Expenditures 47

Contract Payments 47From Lie Insurance Policies 47From Annuity Contracts 48From Health Insurance Policies 48

Operating Expenses 48Taxes 48Investment Expenses 49

6 Reinsurance 57

Allocating Risk 57Managing Risk 58

Underwriting Strength 58Product Flexibility 58Financial Positioning 58

Types o Reinsurance 59Proportional Reinsurance 59

Non-Proportional Reinsurance 59

7 Lie Insurance 63

Individual Lie Insurance 63Types o Policies 64Characteristics o Individual Policies 64

Group Lie Insurance 65Credit Lie Insurance 65Policy Claims Resisted or Compromised 66

8 Annuities 75

Group and Individual Annuities 75

Supplementary Contracts, AnnuitiesCertain, and Other Annuities 76

9 Disability Income

and Long-Term Care Insurance 81

Disability Income Insurance 81Individual Disability Income Insurance 81Group Disability Income Insurance 82

Long-Term Care Insurance 83Individual Long-Term Care Insurance 83Group Long-Term Care Coverage 84

Accelerated Benets 84

10 In the States85

11 Industry Rankings 97

12 Mortality and Lie Expectancy 123

APPENDIX 135

A Glossary o Insurance Related Terms 137

B Historic Dates 153

C Lie Insurance Related Organizations 163

D State Insurance Ofcials 171

iii

7/30/2019 2011 Fact Book

5/194

7/30/2019 2011 Fact Book

6/194

5

ILLUStRAtIONSTables

Overview

1.1 U.S. Lie Insurers Organizational Structure, by Number o Companies 2

1.2 Size o U.S. Lie Insurers by Organizational Structure, 2010 (millions) 3

1.3 Veterans Lie Insurance, 2010 3

1.4 Insurance Industry Employment in the United States 3

1.5 Foreign-Owned U.S. Lie Insurers, 20052010 4

1.6 Foreign-Owned Lie Insurers Operating in the United States, by Country o Origin 4

1.7 U.S. Lie Insurers Organizational Structure 5

1.8 Insurance Industry Employment in the United States, by Year 6Assets

2.1 Distribution o Lie Insurer Assets, by Account Type, 2010 (millions) 11

2.2 Distribution o Lie Insurer Assets, by Account Type and Year 12

2.3 Distribution o Long-Term General Account Bond Investments 14

2.4 Distribution o General Account Bonds, by Remaining Maturity, 20052010 15

2.5 Distribution o General Account Bonds at Time o Purchase, 2010 15

2.6 Distribution o General Account Bonds, by NAIC Quality Class 16

2.7 Quality o Mortgages Held by Lie Insurers (millions) 18

2.8 General Account Mortgages or Lie Insurers, by Type and Loan-to-Value

Ratios, 2010 (millions) 192.9 Real Estate Owned by Lie Insurers, by Type 19

2.10 Foreign-Controlled Assets o U.S. Lie Insurers, by Country and Year (millions) 20

2.11 Asset Distribution o Lie Insurers, by Year (millions) 21

Liabilities

3.1 Liabilities and Surplus Funds o Lie Insurers 25

3.2 Policy Reserves o Lie Insurers, by Line o Business 27

3.3 Deposit-Type Contracts, 2010 (millions) 29

3.4 Capital Ratios o Lie Insurers (percent) 29

3.5 Levels o Risk-Based Capital Held by Lie Insurers, 20002010 30

3.6 Lie Insurers Policy Reserves, by Line o Business and Year (millions) 31

3.7 Lie Insurance Policy Reserves, by Type and Year (millions) 32

3.8 Lie Insurer Liabilities and Surplus Funds, by Year (millions) 33

3.9 Capital Ratios o Lie Insurers, by Year (percent) 34

v

7/30/2019 2011 Fact Book

7/194

6 Ittion

Income

4.1 Income o Lie Insurers 37

4.2 Premium Receipts o Lie Insurers 37

4.3 Individual and Group Lie Insurance Net Premium Receipts, 2010 (millions) 38

4.4 Individual and Group Annuity Considerations, 2010 (millions) 39

4.5 Individual Lie Premiums and Annuity Considerations as Percentage

o Disposable Personal Income 39

4.6 Accident and Health Insurance Net Premium Receipts 39

4.7 Net Investment Income 40

4.8 Rates o Return on Invested Assets o Lie Insurers 40

4.9 Net Gain From Operations Ater Federal Income Taxes 41

4.10 Income o Lie Insurers, by Year (millions) 42

4.11 Individual Lie Insurance Premium Receipts, by Year (millions) 43

4.12 Individual Annuity Considerations, by Year (millions) 44

4.13 Rates o Return on Invested Assets o Lie Insurers, by Year (percent) 45

Expenditures

5.1 Expenditures o Lie Insurers 49

5.2 Payments From Lie Insurance Policies 50

5.3 Payments From Annuity Contracts 51

5.4 Payments From Health Insurance Policies 51

5.5 Lie Insurer Home- and Field-Oce Expenses 52

5.6 Taxes, Licenses, and Fees 52

5.7 Investment Expenses o Lie Insurers 53

5.8 Payments Under Lie Insurance Policies and Annuity Contracts,

by Year (millions) 54

5.9 Payments to Lie Insurance Beneciaries, by Year 55

5.10 Health Insurance Benet Payments by Lie Insurers, by Year (millions) 56

Reinsurance

6.1 Reinsurance Assumed and CededPremiums 60

6.2 Lie Reinsurance Assumed (ace amount) 61

Life Insurance

7.1 Lie Insurance in the United States 66

7.2 Individual Lie Insurance Purchases in the United States, by Plan Type, 2010 68

7.3 Lie Insurance Purchases, by Participating Status 68

7.4 Voluntary Termination Rates or Lie Insurance Policies, Calculated by FaceAmount (percent) 69

7.5 Voluntary Termination Rates or Lie Insurance Policies, Calculated by Number

o Policies (percent) 697.6 Lie Insurance With Disability Provisions, 2010 70

7.7 New Policy Claims Resisted or Compromised (thousands) 71

7.8 Lie Insurance Purchases, by Year 72

7.9 Lie Insurance in Force in the United States, by Year (millions) 73

vi

7/30/2019 2011 Fact Book

8/194

7Ittion

Annuities

8.1 Annuity Considerations 76

8.2 Reserves or Annuity Contracts 77

8.3 Annuity Benet Payments 77

8.4 Annuity Considerations, by Year (millions) 78

8.5 Annuity Reserves, by Year 79

In the States

10.1 Lie Insurers, by State o Domicile, 2010 86

10.2 Lie Insurance Purchases, by State, 2010 (millions) 87

10.3 Lie Insurance in Force, by State, 2010 88

10.4 Lie Insurance and Annuity Benet Payments, by State, 2010 (thousands) 90

10.5 Payments to Lie Insurance Beneciaries, by State, 2010 (thousands) 92

10.6 Direct Premium Receipts o Lie Insurers, by State, 2010 (millions) 94

10.7 Mortgages Owned by Lie Insurers, by Type and State, 2010 (thousands) 95

10.8 Real Estate Owned by Lie Insurers, by State, 2010 (thousands) 96

Industry Rankings

11.1 Largest Lie Insurers, by Total Assets, 2010 (thousands) 98

11.2 Largest Lie Insurers, by General Account Assets, 2010 (thousands) 99

11.3 Largest Lie Insurers, by Separate Account Assets, 2010 (thousands) 100

11.4 Largest Lie Insurers, by Individual Net Lie Insurance Premiums, 2010 (thousands) 101

11.5 Largest Lie Insurers, by Group Net Lie Insurance Premiums, 2010 (thousands) 102

11.6 Largest Lie Insurers, by Total Net Lie Insurance Premiums, 2010 (thousands) 103

11.7 Largest Lie Insurers, by Individual Direct Lie Insurance Premiums,

2010 (thousands) 104

11.8 Largest Lie Insurers, by Group Direct Lie Insurance Premiums, 2010 (thousands) 105

11.9 Largest Lie Insurers, by Total Direct Lie Insurance Premiums, 2010 (thousands) 106

11.10 Largest Lie Insurers, by Individual Lie Insurance Issued, 2010 (thousands) 107

11.11 Largest Lie Insurers, by Group Lie Insurance Issued, 2010 (thousands) 108

11.12 Largest Lie Insurers, by Total Lie Insurance Issued, 2010 (thousands) 109

11.13 Largest Lie Insurers, by Individual Lie Insurance in Force, 2010 (thousands) 110

11.14 Largest Lie Insurers, by Group Lie Insurance in Force, 2010 (thousands) 111

11.15 Largest Lie Insurers, by Total Lie Insurance in Force, 2010 (thousands) 112

11.16 Largest Lie Insurers, by Individual Net Annuity Considerations, 2010 (thousands) 113

11.17 Largest Lie Insurers, by Group Net Annuity Considerations, 2010 (thousands) 114

11.18 Largest Lie Insurers, by Total Net Annuity Considerations, 2010 (thousands) 115

11.19 Largest Lie Insurers, by Individual Direct Annuity Considerations, 2010

(thousands) 116

11.20 Largest Lie Insurers, by Group Direct Annuity Considerations, 2010 (thousands) 11711.21 Largest Lie Insurers, by Total Direct Annuity Considerations, 2010 (thousands) 118

11.22 Largest Lie Insurers, by Individual Annuity Reserves, 2010 (millions) 119

11.23 Largest Lie Insurers, by Group Annuity Reserves, 2010 (millions) 120

11.24 Largest Lie Insurers, by Total Annuity Reserves, 2010 (millions) 121

vii

7/30/2019 2011 Fact Book

9/194

8 Ittion

Mortality and Life Expectancy

12.1 Death Rates in the United States 124

12.2 Lie Expectancy, by Age and Gender, 19002009 125

12.3 Mortality Tables 131

FIgures

2.1 Growth o Lie Insurers Assets 12

2.2 Asset Distribution o Lie Insurers, 2010 14

2.3 Mortgages Held by Lie Insurers, by Type 17

2.4 Real Estate Owned by Lie Insurers, 2010 17

3.1 Growth o Lie Insurers Policy Reserves 26

3.2 Distribution o Lie Insurers Policy Reserves, 2010 28

4.1 Distribution o Lie Insurers Net Premium Receipts, 2010 38

5.1 Distribution o Lie Insurers Expenditures, 2010 50

7.1 Individual, Group, and Credit Lie Insurance in Force in the United States

(ace amount) 67

7.2 Average Face Amount o Individual Lie Insurance Policies Purchased 67

viii

7/30/2019 2011 Fact Book

10/194

9

PREFACE

The Life Insurers Fact Book, the annual statistical

report o the American Council o Lie Insurers (ACLI),

provides inormation on trends and statistics about the

lie insurance industry. ACLI represents more than 300

legal reserve lie insurance and raternal benet society

member companies operating in the United States. These

member companies represent over 90% o the assets and

premiums o the U.S lie insurance and annuity industry.

ACLI advocates the interests o lie insurers and their

millions o policyholders beore ederal and state

legislators, state insurance departments, administration

ocials, ederal regulatory agencies, and the courts. ACLI

expands awareness o how the products oered by lie

insurerslie insurance, pensions, annuities, disability

income insurance, and long-term care insurancehelp

Americans plan or and achieve nancial and retirement

security.

Unless otherwise noted, the data reported in the Life

Insurers Fact Book 2011 are ACLI tabulations o the

National Association o Insurance Commissioners (NAIC)

2010 statutory data or the lie industry as o June 2011,

and represent U.S. legal reserve lie insurance companies

and raternal benet societies. NAIC data are used bypermission. The NAIC does not endorse any analysis or

conclusions based on use o its data.

We would like to acknowledge ACLI sta who prepared

the Life Insurers Fact Book 2011: Michele Alexander,

Khari Cook, Jim Bishop, Bill Hart, Alex Olson, Laura

Polutanovich, Ken Shields, Anna Varnavas, and Jiangmei

Wang.

Andrew Melnyk, Ph.D.

Vice President, Research

ix

7/30/2019 2011 Fact Book

11/194

7/30/2019 2011 Fact Book

12/194

MEtHODOLOGY

The assets o a feet typically dier slightly rom the sum

o the assets o individual companies in the feet, because

the net value (stockholder equity) o the subsidiary is

counted at both the subsidiary and the parent level. This

same double-counting discrepancy exists or liabilities,

investment income, and surplus. Adjustments have beenmade, when possible, to eliminate the double-counting

o assets, liabilities, investment income, and surplus.

Chapter 4 presents calculations o gross and net rates

o return on investment based on ormulas traditionally

used in the industry. The net rate o return is calculated

as:

(net investment income)/ 2-year average net invested

assets. The ormula or average net invested assets

is (current year net invested assets + current year

investment income due current year borrowed money

current year payable or securities current year capital

notes current year surplus notes + previous year net

invested assets + previous year investment income due

previous year borrowed money previous year payable

or securities previous year capital notes previous

year surplus notes net investment income) / 2.

The gross rate o return on xed-rate assets is calculated

as:

(Gross investment income on bonds)/ average net

investment in bonds. The denominator is (CY bonds

+ PY Bonds gross investment income on bonds) /2.

Unless otherwise noted, data in the Life Insurers Fact

Bookcome rom the annual statements o lie insurers

iled with the National Association o Insurance

Commissioners (NAIC). These data represent the U.S.

insurance business o companies (or branches o oreign

companies) regulated by state insurance commissioners.Unless otherwise noted, data or years ater 2002 include

inormation or both lie insurance companies and or

raternal benet societies that sell lie insurance products.

Prior to 2003, data do not include raternal benet

insurance sales. Where raternal data are included, they

are included as individual, rather than group, business.

Data on lie insurance sales by savings banks and the U.S.

Department o Veterans Aairs are provided separately

in Chapter 1 only.

Most o theFact Bookdata are reported in standardized

tables that summarize inormation or the current year

(2010 data), last year (2009 data), and 10 years previous

(2000 data), along with the average annual percentage

change over the last year and the last ten years. In

cases where 2000 data are not available, then the oldest

available data are reported.

Company ownership is refected on a feet basis. That is,

i a stock company is owned by a mutual parent, bothare now classied as mutual companies. The same is

true or insurance companies owned by non-U.S. parents.

This aects most notably tables in Chapter 1.

xi

7/30/2019 2011 Fact Book

13/194

7/30/2019 2011 Fact Book

14/194

xiii

key U.S. Life Insurers Saisics

Average annual percent change

2000 2009 2010 2000/2010 2009/2010

Lie insurance in orce (millions)1

Individ $9,376,370 $10,324,455 $10,483,516 1.1 1.5

Cdit 200,770 125,512 111,805 -5.7 -10.9

gop 6,376,127 7,688,328 7,830,631 2.1 1.9

Tot 15,953,267 18,138,295 18,425,952 1.5 1.6Annuity considerations (millions)2

Individ3 $143,071 $128,853 $189,946 2.9 47.4

gop 163,622 102,727 103,677 -4.5 0.9

Tot 306,693 231,580 293,622 -0.4 26.8

Payments under lie insurance and annuity contracts (millions)

Pymnt to nfcii $44,143 $59,470 $58,392 2.8 -1.8

snd v4 241,162 230,846 219,914 -0.9 -4.7

Poicyhod dividnd 20,001 16,163 15,942 -2.2 -1.4

annity pymnt5 68,668 67,068 70,090 0.2 4.5

Mtd ndowmnt 604 573 562 -0.7 -1.8

Oth pymnt6 605 768 699 1.5 -8.9

Tot 375,181 374,888 365,599 -0.3 -2.5Income o lie insurers (millions)

li innc pmim $130,616 $124,564 $104,648 -2.2 -16.0

annity conidtion2 306,693 231,580 293,622 -0.4 26.8

Hth innc pmim 105,619 166,164 172,717 5.0 3.9

Tot 542,928 522,308 570,987 0.5 9.3

Invtmnt incom 220,862 211,650 212,841 -0.4 0.6

Oth incom7 47,679 47,468 78,741 5.1 65.9

at tot 811,469 781,426 862,570 0.6 10.4

Lie insurers doing business in the United States (units)

stock 1,016 709 693 -3.8 -2.3

Mt8 223 136 128 -5.4 -5.9

Ftn9

Na 93 89 Na -4.3Oth10 30 8 7 -13.5 -12.5

Tot 1,269 946 917 -3.2 -3.1

Source:aClI ttion o Ntion aocition o Innc Commiion (NaIC) dt, d y pmiion.

Notes:NaIC do not ndo ny nyi o concion d on o it dt. Codifction ctiv with 2001 ann sttmnt fin chndth potin o ctin in o in, pticy dpoit-typ contct, xpind in nmd ootnot.

Na: Not vi.1Dt pnt dict in.2binnin in 2001, xcd dpoit o ntd intt contct d to codifction.3Fo 2009 nd 2010, incd ppmnty contct with i continnci.4binnin in 2001, xcd pymnt nd dpoit-typ contct, nd incd nnity withdw o nd, o which comp mont in pioy i not vi.5Fo 2009 nd 2010, xcd pymnt nd dpoit-typ contct.6Incd om diiity nft nd tind t.7Incd commiion nd xpn ownc on innc cdd. Fo 2009 nd 2010, incd motiztion o intt mintnnc v.8Incd tock compni ownd y mt hodin compni.9Incd tock compni ownd y tn nft ociti.10Incd m , cipoc, nd ik tntion op.

7/30/2019 2011 Fact Book

15/194

7/30/2019 2011 Fact Book

16/194

FACt BOOk 2011

7/30/2019 2011 Fact Book

17/194

7/30/2019 2011 Fact Book

18/194

1

U.S. lie insurance companies sell the vast majority o lie

insurance and annuities purchased in the United States.

Fraternal organizations and ederal government agencies

are also in the marketplace, and certain Canadian lie

insurers with U.S. legal reserves are allowed to sell

insurance directly rom their Canadian oces to U.S.purchasers. Data rom Canadian companies are not

included in this chapter.

At the end o 2010, 917 lie insurance companies were

in business in the United States (Table 1.1). The number

o active companies peaked in 1988 (Table 1.7), and has

since allen steadily, mostly due to company mergers

and consolidations. This streamlining has helped to

reduce operating costs and general overhead, and has

signicantly increased eciency.

OrganizatiOnal Structure

Stock and Mutual Lie Insurers

Most lie insurers are organized as either stock or

mutual companies. Stock lie insurance companies issue

stock and are owned by their stockholders. Mutual

companies are legally owned by their policyholders and

consequently do not issue stock.

Stock lie insurers can be owned by other stock lieinsurance companies, mutual lie insurance companies,

or companies outside the lie insurance industry. Only

policyholders own a mutual company, however. I a

stock company is owned by a mutual company, that

stock company is categorized as a mutual company. The

majority o lie insurers are stock companies693, or 76

percent o the industry (Table 1.1). Many lie insurers

are aliated with other lie and non-lie insurance

companies in feets with a single owner.

Besides consolidation, another recent trend in the lie

insurance industry is demutualization and the ormation

o mutual holding companiesa structure that allows

easier and less expensive access to capital. In creating a

mutual holding company, the mutual insurer either starts

a stock insurance company or acquires a stock company.

For data in this chapter, mutual holding companies are

included in the totals or pure mutual companies.

Together, stock and mutual lie insurers provide most

o the insurance and annuities underwritten by U.S.

organizations (Table 1.2). Mutual companies had $4.9

trillion o lie insurance in orce in 2010 and stock lie

insurers, $13.1 trillion. Fraternal societies and other type

companies underwrite the remainder o U.S. insurance.

Other Lie Insurance Providers

Fraternal benet societies provide both social and

insurance benets to their members. These organizations

are legally required to operate through a lodge system,

allowing only lodge members and their amilies to own

the raternal societys insurance. In 2010, there were 89

raternal lie insurance companies that had $315 billion olie insurance in orce and $116 billion in assets (Tables

1.1 and 1.2).

The Department o Veterans Aairs provides protection

to U.S. veterans under six insurance programs: U.S.

Government Lie Insurance, National Service Lie

Insurance, Veterans Special Lie Insurance, Service-

OVerVieW

7/30/2019 2011 Fact Book

19/194

2 American Council of Life Insurers

Disabled Veterans Insurance, Veterans Reopened

Insurance, and Veterans Mortgage Lie Insurance.

The ederal agency also oversees three lie insurance

programs or members o the uniormed services:

Servicemembers Group Lie Insurance, SGLI Family

Coverage, and Veterans Group Lie Insurance.

Veterans lie insurance in orce totaled $1.3 trillion

in 2010 (Table 1.3). U.S. Government Lie Insurance,

covering World War I veterans, had $10 million o

insurance in orce in 2010, while National Service Lie

Insurance, or veterans o World War II and those covered

by the Insurance Act o 1951, totaled $8.7 billion. Service-

Disabled Veterans Insuranceor veterans separated

rom service ater April 1951 who have a service-

connected disability but are otherwise insurablehad

$2.2 billion o insurance in orce in 2010.

The largest lie insurance plan, Servicemembers Group

Lie Insurance, had $906 billion o insurance in orce

with 2.4 million policies at year-end 2010 (Table 1.3).

Table 1.1

u.S. lf iss Oo S, b nb of cos

In business at years end Average annual percent change

2009 2010 2009/2010

Stock 709 693 -2.3

Mutual1 136 128 -5.9

Fraternal2

93 89 -4.3Other3 8 7 -12.5

Total 946 917 -3.1

Source: ACLI tabulations o National Association o Insurance Commissioners (NAIC) data, used by permission.

Note: NAIC does not endorse any analysis or conclusions based on use o its data.1Includes stock companies owned by mutual parents (lie & PC) and mutual holding companies.2Includes stock companies owned by raternal benet societies.3Includes arm bureau, reciprocal, and risk retention groups.

emplOyment

The insurance industry plays an important role in the

nations economy. In 2010, U.S. insurers employed 2.2

million individuals in all o their branches, remaining

stable rom a year earlier (Table 1.4).

Government data on employees o insurance agencies

and home oces in 2010 show 1.4 million insurance

home-oce personnel (375,800 in lie insurance) and

870,500 insurance agents, brokers, and service personnel.

FOreign OWnerShip

The proportion o lie insurance companies operating

in the United States that are oreign-owned was 11.6

percent in 2010 (Table 1.5).

Practically, the same countries have elded the majororeign players in the U.S. market since the mid-1990s.

Among lie insurance companies operating in the United

States during 2010, Canada controlled 27 companies; the

Netherlands, 13; Switzerland, 13; Germany, 12; France,

12; the United Kingdom, 11 (Table 1.6).

7/30/2019 2011 Fact Book

20/194

3Overview

Table 1.2

S of u.S. lf iss, b Oo S, 2010 (os)

Stock Mutual1 Fraternal Other2 Total

Lie insurance in orce $13,064,536 $4,895,868 $315,355 $150,194 $18,425,952

Lie insurance purchased 2,035,280 785,442 31,298 24,906 2,876,925

Assets 3,982,818 1,182,766 116,091 29,528 5,311,204

Beneft payments3 383,196 103,748 7,865 2,317 497,126

Premium income4 437,581 120,873 10,187 2,346 570,987


Note: NAIC does not endorse any analysis or conclusions based on use o its data.1Includes stock companies owned by mutual holding companies.2Includes arm bureau, reciprocal, and risk retention groups.3Includes payments to beneciaries, surrender values, policy dividends, annuity payments, matured endowments, and other payments.4Includes lie insurance premiums, annuity considerations, and accident and health premiums.

Table 1.3

Vs lf is, 2010

Policies Face amount

in orce (millions)

Veterans programs

U.S. Government Lie Insurance 3,579 $10

National Service Lie Insurance 728,957 8,720

Veterans Special Lie Insurance 165,287 2,200

Service-Disabled Veterans Insurance 215,874 2,207

Veterans Reopened Insurance 30,500 309

Veterans Mortgage Lie Insurance 2,431 181

Total 1,146,628 13,627

Uniormed service member programs

Servicemembers Group Lie Insurance (SGLI) 2,418,500 905,676

Traumatic Injury Protection (TSGLI)* - 233,250

SGLI Family Coverage 3,274,000 135,102

Veterans Group Lie Insurance 426,894 59,330

Total 6,119,394 1,333,358

Aggregate total 7,266,022 1,346,985

Source: U.S. Department o Veterans Aairs.

*TSGLI is a rider to the basic SGLI coverage.

Table 1.4

is ids eo ud Ss

Number employed Average annual percent change

2000 2009 2010 2000/2010 2009/2010

Home-ofce personnel

Lie insurance 481,100 362,600 375,800 -2.4 3.6Health insurance 327,700 437,100 431,500 2.8 -1.3

Other 623,900 577,700 560,200 -1.1 -3.0

Total 1,432,700 1,377,400 1,367,500 -0.5 -0.7

Agents, brokers, and service personnel 787,800 886,700 870,500 1.0 -1.8

Aggregate total 2,220,500 2,264,100 2,238,000 0.1 -1.2

Source: U.S. Department o Labor, Bureau o Labor Statistics. Current Employment Statistics survey (National).Note: The Bureau o Labor Statistics adjusts annual employment data in April o the year ollowing its survey.

7/30/2019 2011 Fact Book

21/194


Table 1.5

Fo-Owd u.S. lf iss, 20062010

Number o companies Average annual percent change

2006 2007 2008 2009 2010 2006/2010 2009/2010

U.S. lie insurers 1,072 1,009 976 946 917 -3.8 -3.1

Foreign-owned U.S. lie insurers 102 101 105 103 106 1.0 2.9

Percentage o U.S. lie insurers 9.5% 10.0% 10.8% 10.9% 11.6%


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Companies are dened as oreign owned i more than 50 percento stock is owned by a oreign entity or entities.

Table 1.6

Fo-Owd lf iss O ud Ss, b co of O

Number o companies

2006 2007 2008 2009 2010

Barbados 2 2 2 2 2

Bermuda 3 3 4 5 5

Canada 24 26 26 23 27

Cayman Islands 5 6 5 5 5

France 13 13 11 11 12

Germany 4 5 12 12 12

Italy 1 1 1 1 1

Japan 2 3 3 3 2

Netherlands 15 15 13 13 13

South Arica 1 1 1 1 1

Spain 2 2 2 2 1

Sweden 1 1 1 1 1

Switzerland 12 11 13 13 13

United Kingdom 17 12 11 11 11

Total 102 101 105 103 106


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Companies are dened as oreign owned i more than 50 percento stock is owned by a oreign entity or entities.

7/30/2019 2011 Fact Book

22/194

5Overview

Table 1.7

u.S. lf iss Oo S, b y

In business at years end

Year Stock Mutual Fraternals Other1 Total

1950 507 142 NA NA 649

1955 942 165 NA NA 1,107

1960 1,286 155 NA NA 1,441

1965 1,475 154 NA NA 1,6291970 1,627 153 NA NA 1,780

1975 1,603 143 NA NA 1,746

1980 1,823 135 NA NA 1,958

1981 1,855 136 NA NA 1,991

1982 1,926 134 NA NA 2,060

1983 1,985 132 NA NA 2,117

1984 2,062 131 NA NA 2,193

1985 2,133 128 NA NA 2,261

1986 2,128 126 NA NA 2,254

1987 2,212 125 NA NA 2,337

1988 2,225 118 NA NA 2,343

1989 2,153 117 NA NA 2,270

1990 2,078 117 NA NA 2,1951991 1,947 117 NA NA 2,064

1992 1,835 109 NA NA 1,944

1993 1,736 108 NA NA 1,844

1994 1,565 115 NA 10 1,690

1995* 1,356 259 NA 35 1,650

1996* 1,331 240 NA 36 1,607

1997* 1,193 238 NA 45 1,476

1998* 1,167 248 NA 29 1,444

1999* 1,064 250 NA 33 1,347

2000* 1,016 223 NA 30 1,269

2001* 981 227 117 16 1,341

2002* 957 203 114 10 1,284

2003* 928 183 105 11 1,227

2004* 898 164 108 9 1,179

2005* 854 154 102 9 1,119

2006* 815 145 103 9 1,072

2007* 763 138 99 9 1,009

2008* 736 137 95 8 976

2009* 709 136 93 8 946

2010* 693 128 89 7 917


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Ater 1993, data include lie insurance companies that sell accidentand health insurance.

NA: Not available.

*Beginning with 1995 data, stock companies that are part o feets headed by non-stock companies are counted by the parents ownership type, not as

stock companies.1Includes hospital, medical, dental, and indemnity companies.

7/30/2019 2011 Fact Book

23/194


Table 1.8

is ids eo ud Ss, b y

Home-ofce personnel

Agents, brokers,Lie Health and service Aggregate

Year insurance insurance Other Total personnel total

1960 452,400 50,200 329,100 831,700 217,300 1,049,000

1965 481,200 54,200 358,000 893,400 250,300 1,143,700

1970 525,600 93,900 410,200 1,029,700 288,000 1,317,7001975 520,500 122,100 442,700 1,085,300 356,600 1,441,900

1980 531,900 141,900 550,300 1,224,100 463,800 1,687,900

1981 542,200 142,700 552,000 1,236,900 475,800 1,712,700

1982 546,100 142,100 549,100 1,237,300 485,900 1,723,200

1983 539,900 144,800 544,200 1,228,900 498,900 1,727,800

1984 536,700 153,900 549,100 1,239,700 525,000 1,764,700

1985 559,300 170,700 561,600 1,291,600 548,200 1,839,800

1986 578,200 188,100 598,500 1,364,800 579,400 1,944,200

1987 578,000 202,100 634,900 1,415,000 611,800 2,026,800

1988 570,400 216,500 648,500 1,435,400 639,600 2,075,000

1989 550,200 228,100 660,100 1,438,400 651,800 2,090,200

1990 547,500 241,600 673,100 1,462,200 663,300 2,125,500

1991 560,000 258,700 675,900 1,494,600 666,300 2,160,900

1992 550,300 270,100 675,200 1,495,600 656,600 2,152,200

1993 552,500 237,900 608,100 1,398,500 684,000 2,082,500

1994 562,600 249,400 606,500 1,418,500 700,300 2,118,800

1995 547,200 260,100 588,300 1,395,600 712,600 2,108,200

1996 510,000 278,000 593,600 1,381,600 726,400 2,108,000

1997 505,300 292,100 602,000 1,399,400 744,100 2,143,500

1998 510,600 306,200 626,300 1,443,100 766,300 2,209,400

1999 496,100 319,200 637,400 1,452,700 783,400 2,236,100

2000 481,100 327,700 623,900 1,432,700 787,800 2,220,500

2001 470,300 337,500 622,700 1,430,500 803,200 2,233,700

2002 446,000 345,100 621,700 1,412,800 820,400 2,233,200

2003 440,500 348,500 639,600 1,428,600 837,400 2,266,0002004 392,400 372,000 634,200 1,398,600 860,100 2,258,700

2005 334,500 427,400 623,800 1,385,700 873,600 2,259,300

2006 362,400 425,000 625,400 1,412,800 890,800 2,303,600

2007 352,800 431,200 613,000 1,397,000 909,800 2,306,800

2008 356,300 441,300 599,100 1,396,700 908,500 2,305,200

2009 362,600 437,100 577,700 1,377,400 886,700 2,264,100

2010 375,800 431,500 560,200 1,367,500 870,500 2,238,000

Source: U.S. Department o Labor, Bureau o Labor Statistics, Current Employment Statistics survey (National).

Note: Figures comprise only those on the payroll o insurers that participate in the unemployment insurance program;The Bureau o Labor Statistics adjusts annual employment data in April o the year ollowing its survey.

7/30/2019 2011 Fact Book

24/194

2

Assets held by lie insurers back the companies

lie, annuity, and health liabilities. Accumulating

these assetsvia the collection o premiums rom

policyholders and earnings on investmentsprovides

the U.S. economy with an important source o investment

capital. Lie insurers held $5.3 trillion in assets in 2010(Table 2.1). Assets o U.S. lie insurers rose 7 percent

during 2010 (Table 2.2).

Financial instruments comprise most lie insurance

company assets and can generally be classied into:

n Bonds, both corporate and government

n Stocks

n Mortgage and real estate holdings

n Policy loans

A lie insurer divides its assets between two accounts that

dier largely in the nature o the liabilities or obligations

or which the assets are being held and invested. The

general account supports contractual obligations or

guaranteed, xed-dollar benet payments, such as

lie insurance policies. The separate accountsupports

liabilities associated with investment risk pass-through

products or lines o business, such as variable annuities,

variable lie insurance, and pension products.

State laws allow assets in separate accounts to be

invested without regard to the restrictions usually

placed on the general account. A separate account

portolio might comprise only common stocks or bonds

or mortgages, or some combination o these and other

investments. Separate account assets totaled $1.9 trillion

at the end o 2010up 13 percent rom the previous year

(Table 2.2). General account assets amounted to $3.5

trillion in 2010, up 4 percent rom 2009.

Bond Holdings and acquisitions

Bonds are publicly traded debt securities. Oten reerred

to as xed-income securities, bonds generally oer lowrisk and a greater certainty o rates o return. Not only

does the borrower (seller o the bond) agree to pay a

xed amount o interest periodically and repay a xed

amount o principal at maturity, but the obligation to

make payments on the bond takes precedence over

other claims o lenders and stockholders.

At year-end 2010, 52 percent o lie insurer assets were

held in bonds. Total bond holdings o both general and

separate accounts amounted to $2.7 trillion, up $163billion rom 2009 (Tables 2.12.2). Holdings o bonds in

separate accounts increased 10 percent in 2010 to $241

billion. Bond holdings in general accounts increased to

$2.5 trillion (Table 2.2).

Bonds are issued by a variety o borrowing organizations,

including domestic and oreign corporations, the U.S.

Treasury, various U.S. government agencies, and state,

local, and oreign governments. Long-term U.S. Treasury

securities in the general account totaled $120 billion,U.S. government obligations $61 billion, and oreign

government bonds $71 billion (Table 2.3). The largest

portion o long-term bonds was in unaliated securities,

with both U.S. and oreign investments totaling $1.6

trillion, or nearly two-thirds o all long-term general

account bonds (64%). Long-term bonds issued by U.S.

assEts

7/30/2019 2011 Fact Book

25/194


states, territories, and political subdivisions came to $40

billion, while bonds issued or revenue, assessment, and

industrial development totaled $73 billion.

Types of Bonds

Corporate Bonds

Lie insurers are signicant investors in the corporatebond market, having been the largest institutional holder

o corporate bonds issued in U.S. markets since the

1930s. Private or direct placementswhere the nancial

institution negotiates directly with the corporation over

the terms o the oeringaccount or a sizable share

o lie insurer investments in corporate bonds. Lie

insurance companies are the major lenders in the direct

placement market.

Corporate debt issues in 2010 represented the largestcomponent o lie insurer assets at 32 percent (Table 2.1).

Corporate debt issues totaled $1.7 trillion by years end

(Table 2.2). These investments have generally increased

steadily or many years and have grown at a 3 percent

annual rate in the last decade.

Government Bonds

Bonds o the U.S. government include U.S. Treasury

securities and others issued by ederal agencies or

sponsored by the ederal government, such as the

Federal National Mortgage Association and the Federal

Home Loan Banks. Government securities rose to

$413 billion at the end o 2010, up $82 billion rom

the previous year (Tables 2.12.2). These holdings, in

addition to U.S. Treasury and ederal agency holdings,

include guaranteed, special revenue, and other issues

o the 50 states, District o Columbia, Puerto Rico,

and U.S. territories and possessions and their political

subdivisions.

The vast majority o long-term securities were invested in

U.S. government securities ($338 billion) as opposed to

those o oreign governments and international agencies

($75 billion, Table 2.1), such as the International Bank

or Reconstruction and Development.

Characteristics of Bonds

Maturity

Bonds have limited lives and expire on a given date,

called the issues maturity date. Twenty-nine percent

o general account bonds held at year-end 2010 had a

maturity between ve and 10 years. Another 28 percent

matured between one and ve years, 20 percent had amaturity over 20 years, 14 percent matured between 10

and 20 years, and 10 percent had a maturity o one year

or less (Table 2.4).

At the time o purchase, 33 percent o bonds had a

maturity date o 20 years or more (Table 2.5), while 29

percent had a maturity date o 10 to 20 years. Bonds

with maturity dates o ve to 10 years (30%), and less

than ve years (8%) were the remainder.

Quality

In purchasing a bond, investors examine its quality. The

higher the quality o the bond, the lower the risk, and

the higher the degree o assurance that investors will get

their money back at maturity. Consequently, high-quality

bonds are ideal or long-term capital accumulation.

Bond holdings can be categorized among six quality

classes established by the National Association o

Insurance Commissioners. At year-end 2010, 93 percento total general account bonds were investment grade,

Classes 1 and 2 (Table 2.6). The percentage o total bonds

in or near deault (Class 6) was 0.2 percent.

O the $2.6 trillion in general account bonds held by

insurance companies in 2010, $1.9 trillion was invested

in publicly traded bonds and $654 billion in privately

traded bonds (Table 2.6). Ninety-ve percent o the

publicly traded bonds were investment grade (Classes 1

and 2) compared with 88 percent o the privately tradedbonds. O the publicly traded bonds, 0.1 percent were

in or near deault (Class 6), compared with 0.5 percent

o the privately traded bonds.

7/30/2019 2011 Fact Book

26/194

9Assets

stock Holdings and acquisitions

Lie insurers changing portolios refect long-term shits

in investment demand. Since the early 1990s, the share

o assets held in stocks has been increasing. The average

annual growth in equity holdings was 5 percent between

2000 and 2010 (Table 2.2).

Historically, stocks had been a small percentage o

total assets or reasons rooted in both the investment

philosophy o the industry and the laws regulating lie

insurance. Stocks had not been heavily used as a major

investment medium or unds backing lie insurance

policies because o the policies contractual guarantees

or specied dollar amounts.

Part o the investment shit is due to changes in the

relative yields o various investment types. Other actors

are the introduction o variable lie insurance and the

growth in unding pension plans with equity securities o

lie insurers and variable annuities. State laws generally

permit certain assets o these and other plans to be

maintained in an account separate rom a companys

other assets, with up to 100 percent invested in stocks

or other equities.

Lie insurer holdings o corporate stock rose 13 percent

between 2009 and 2010 to $1.6 trillion, accounting or

more than a quarter o total assets (30%). At year-end

2010, $1.5 trillion, or 95 percent, o stock held by lie

insurance companies was in separate accounts (Table

2.2).

Common stock accounted or $1.6 trillion, or 99 percent,

o all stock held by lie insurers in 2010 (Table 2.1).

Holdings o common stock increased 14 percent in 2010

while there was a $2.7 billion decrease in preerred-stock

holdings (Tables 2.12.2).

MortgagEs

Mortgages generally are considered riskier xed-income

investments than bonds. Over the past decade, lie

insurers have slightly reduced the relative size o their

mortgage portolios in avor o other investments. In

2010, mortgages decreased by 3 percent, alling to $327

billion and accounting or 6 percent o combined account

assets (Tables 2.12.2).

Properties underlying lie insurer holdings o non-

arm, nonresidential mortgages cover a broad range o

commercial, industrial, and institutional uses. Among

them are retail stores and shopping centers, oce

buildings and actories, hospitals and medical centers,

and apartment buildings. Commercial mortgages have

grown in importance, representing 93 percent ($305

billion) o U.S. mortgages held by lie insurers at the end

o 2010 (Table 2.7). Mortgages or residential properties

were $4 billion, or 1 percent o total mortgages held

by lie insurers on U.S. properties. Farm mortgages

decreased to $17.8 billion, accounting or 5 percent o

total mortgages in 2010.

Almost all o the mortgages held by lie insurers were

in good standing (99.3%) in 2010. O industry-held

mortgages, only 0.7 percent were either restructured,

overdue, or in oreclosure in 2010.

At year-end 2010, $14 billion (4%) was held in general

account mortgages with a loan-to-value ratio above 95

percent, compared with $228 billion (72%) in mortgages

with a loan-to-value ratio below 71 percent (Table 2.8).

rEal EstatE

U.S. lie insurers holdings o directly owned real estate

were $28 billion at the end o 2010. This represents a

hal percent increase rom 2009 (Tables 2.9).

By the end o 2010 real estate amounted to a hal percent

o lie insurers assets (Table 2.1). Real estate holdings

in separate accounts decreased $117 million during the

year as real estate in general accounts increased $254

million (Table 2.2).

Real estate held to produce income totaled $21 billion,

or 77 percent o all real estate owned, while real estate

held or sale amounted to $446 million (Table 2.9, Figure

2.4). The remainder was in land and property held or

company use, primarily home and regional oces.

7/30/2019 2011 Fact Book

27/194


Policy loans

Lie insurance companies can loan money to policyholders

up to the cash value o their lie insurance. Lie insurers

must make these policy loans rom unds that otherwise

would be invested. Since premium rates are based in

part on an anticipated investment return, interest must be

charged on the loans. Because the amount o a policysprotection is reduced by the amount o the loan, lie

insurers advise policyholders that an outstanding loan

can seriously impair a amilys insurance planning. The

policy loan amounts shown in Tables 2.12.2 do not

include loans made to policyholders by banks or other

lending institutions holding borrowers lie insurance

policies as collateral.

Lie insurer loans to policyholders against the cash value

o their lie insurance amounted to $127 billion by year-end 2010, up rom the loans outstanding a year earlier

(Tables 2.12.2). Policy loans accounted or 2 percent

o company assets at the end o 2010.

MiscEllanEous assEts

U.S. lie insurers held $515 billion at the end o 2010 in

miscellaneous assets (Table 2.1), which has two major

components. Due and deferred premiums reers to

premiums not yet received at years end or which lie

insurance companies have established reserves.Due and

accrued investment income is income earned but not

yet received by years end, such as interest.

Another main item in this category is cash holdings.

Relatively moderate amounts o cash are held or

providing prompt payments to beneciaries, policy

loans, and other services.

ForEign-controllEd assEts

Foreign-controlled assets were $1.2 trillion, or 23 percent,

o total industry assets in 2010, up rom $1.1 trillion in

2009 (Table 2.10). The Netherlands, ollowed by Canada,

the United Kingdom, and France own the most oreign-

controlled assets o U.S. lie insurers.

7/30/2019 2011 Fact Book

28/194

11Assets

Table 2.1

db f lfe ie ae, b a tpe, 2010 (m)

General account Separate account Combined accounts

Years Percent Years Percent Years Percentend distribution end distribution end distribution

Bonds

Government securities

U.S. $294,489 8.5 $43,790 2.4 $338,279 6.4

Foreign 71,211 2.1 3,955 0.2 75,166 1.4

Total government 365,700 10.6 47,745 2.6 413,445 7.8

Corporate securities 1,611,217 46.6 89,144 4.8 1,700,360 32.0

Mortgage-backed

securities1 526,877 15.2 104,075 5.6 630,952 11.9

Total long-term bonds 2,503,794 72.4 240,964 13.0 2,744,758 51.7

Stocks

Common 73,026 2.1 1,487,111 80.2 1,560,138 29.4

Preerred 9,484 0.3 603 0.0 10,087 0.2

Total 82,510 2.4 1,487,714 80.3 1,570,225 29.6

Mortgages

Farm 17,645 0.5 166 0.0 17,811 0.3

Residential 3,898 0.1 50 0.0 3,948 0.1

Commercial 295,730 8.6 9,499 0.5 305,229 5.7

Total 317,273 9.2 9,715 0.5 326,988 6.2

Real estate 20,026 0.6 7,826 0.4 27,851 0.5

Policy loans 126,273 3.7 549 0.0 126,821 2.4

Short-term

investments 63,688 1.8 19,745 1.1 83,432 1.6

Cash & cash

equivalents 33,892 1.0 19,316 1.0 53,208 1.0

Other invested assets 149,940 4.3 37,384 2.0 187,324 3.5

Non-invested assets 160,549 4.6 30,048 1.6 190,597 3.6

Aggregate total 3,457,944 100.0 1,853,260 100.0 5,311,204 100.0


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data reect investments held at years end. Data represent U.S. lieinsurers and raternal beneft societies.1Includes Ginnie Mae (GNMA); separate accounts includes ABS.

7/30/2019 2011 Fact Book

29/194


Table 2.2

db f lfe ie ae, b a tpe ye1

General account (millions) Average annual percent change

2000 2009 2010 2000/2010 2009/2010

BondsGovernment $306,373 $292,860 $365,700 1.8 24.9

Corporate 1,143,407 1,507,604 1,611,217 3.5 6.9

MBS1 NA 561,136 526,877 NA -6.1

Total 1,449,780 2,361,600 2,503,794 5.6 6.0

Stocks

Common 74,337 65,597 73,026 -0.2 11.3

Preerred 20,002 12,125 9,484 -7.2 -21.8

Total 94,339 77,723 82,510 -1.3 6.2

Mortgages 230,531 325,942 317,273 3.2 -2.7

Real estate 23,682 19,772 20,026 -1.7 1.3

Policy loans 100,805 122,707 126,273 2.3 2.9Short-term investments NA 89,608 63,688 NA -28.9

Cash & cash equivalents 4,178 36,285 33,892 23.3 -6.6

Other invested assets 55,383 130,597 149,940 10.5 14.8

Non-invested assets 81,370 160,028 160,549 7.0 0.3

Aggregate total 2,040,069 3,324,262 3,457,944 5.4 4.0

ce

Figure 2.1

gwh f lfe ie ae


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data represent U.S. lie insurers and, as o 2003, raternal beneftsocieties.

20102008200620042002200019981996199419921990

0

1,000

2,000

3,000

4,000

5,000

6,000

$Billions

5,311

4,6484,823

4,253

3,3803,182

2,827

2,324

1,9421,665

1,408

7/30/2019 2011 Fact Book

30/194

13Assets

Separate account (millions) Average annual percent change

2000 2009 2010 2000/2010 2009/2010

Bonds

Government $57,793 $38,323 $47,745 -1.9 24.6

Corporate 97,604 85,130 89,144 -0.9 4.7

MBS1

NA 96,522 104,075 NA 7.8Total 155,397 219,975 240,964 4.5 9.5

Stocks

Common 902,365 1,307,460 1,487,111 5.1 13.7

Preerred 625 739 603 -0.4 -18.4

Total 902,990 1,308,200 1,487,714 5.1 13.7

Mortgages 6,169 10,374 9,715 4.6 -6.3

Real estate 12,377 7,942 7,826 -4.5 -1.5

Policy loans 1,172 576 549 -7.3 -4.7

Short-term investments NA 19,143 19,745 NA 3.1

Cash & cash equivalents 1,001 16,156 19,316 34.4 19.6

Other invested assets 56,672 32,953 37,384 -4.1 13.4Non-invested assets 5,887 19,114 30,048 17.7 57.2

Aggregate total 1,141,667 1,634,432 1,853,260 5.0 13.4

Combined accounts (millions) Average annual percent change

2000 2009 2010 2000/2010 2009/2010

Bonds

Government $364,166 $331,183 $413,445 1.3 24.8

Corporate 1,241,012 1,592,735 1,700,360 3.2 6.8

MBS1 NA 657,658 630,952 NA -4.1

Total 1,605,178 2,581,575 2,744,758 5.5 6.3

StocksCommon 976,702 1,373,058 1,560,138 4.8 13.6

Preerred 20,627 12,865 10,087 -6.9 -21.6

Total 997,329 1,385,923 1,570,225 4.6 13.3

Mortgages 236,701 336,316 326,988 3.3 -2.8

Real estate 36,059 27,714 27,851 -2.5 0.5

Policy loans 101,977 123,283 126,821 2.2 2.9

Short-term investments NA 108,751 83,432 NA -23.3

Cash & cash equivalents 5,179 52,442 53,208 26.2 1.5

Other invested assets 112,056 163,550 187,324 5.3 14.5

Non-invested assets 87,257 179,141 190,597 8.1 6.4

Aggregate total 3,181,736 4,958,693 5,311,204 5.3 7.1


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data reect investments held at years end. Data represent U.S. lieinsurers and, as o 2003, raternal beneft societies.1Includes Ginnie Mae (GNMA); separate accounts includes ABS.

Table 2.2

db f lfe ie ae, b a tpe yece

7/30/2019 2011 Fact Book

31/194


Table 2.3

db f l-tem gee a B iveme

2009 2010

Amount Percent Amount Percent(millions) distribution (millions) distribution

U.S. Treasury securities $101,114 4.3 $120,468 4.8

U.S. government obligations 64,291 2.7 61,141 2.4

Foreign government 56,167 2.4 71,211 2.8U.S. states and territories 11,638 0.5 17,258 0.7

U.S. political subdivisions 12,712 0.5 22,305 0.9

Revenue and assessment 45,041 1.9 71,406 2.9

Industrial development 1,898 0.1 1,910 0.1

Mortgage-backed securities 561,136 23.8 526,877 21.0

Pass-through securities

GNMA 17,858 0.8 17,985 0.7

FNMA and FHLMC 93,211 3.9 87,506 3.5

Privately issued 18,395 0.8 14,174 0.6

CMOs and REMICs

GNMA, FNMA, FHLMC or VA 128,835 5.5 132,802 5.3

Privately issued and collateralized by MBS 32,801 1.4 8,693 0.3

All other privately issued 270,035 11.4 265,718 10.6

Other

Unafliated securities 1,490,716 63.1 1,592,467 63.6

Afliated securities 16,888 0.7 18,750 0.7

Total 2,361,600 100.0 2,503,794 100.0


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data represent U.S. lie insurers and raternal beneft societies.



Figure 2.2

ae db f lfe ie, 2010

GENERAL ACCOUNT

Stocks2%

Miscellaneous assets

12%

Policy loans

4%

Mortgages and real estate

10%

Bonds72%

SEPARATE ACCOUNT

Stocks80%

Bonds13%

Miscellaneous assets

6%

Mortgages and real estate

1%

7/30/2019 2011 Fact Book

32/194

15Assets

Table 2.4

db f gee a B, b rem M, 20062010

Percentage of general account bonds held at years end

More than More than More than1 year 1 year 5 years 10 years More thanor less to 5 years to 10 years to 20 years 20 years Total

Government

2006 8.9 21.4 24.3 24.2 21.2 100.0

2007 8.3 19.9 23.1 25.9 22.8 100.02008 15.0 19.4 20.6 21.6 23.3 100.0

2009 11.1 22.6 20.2 21.1 25.0 100.0

2010 9.5 20.5 19.8 23.9 26.3 100.0

Corporate

2006 9.5 29.6 34.3 10.9 15.8 100.0

2007 10.0 29.2 32.9 11.0 16.9 100.0

2008 10.5 31.2 32.1 10.3 15.8 100.0

2009 10.1 30.9 31.3 10.0 17.7 100.0

2010 9.6 30.5 31.3 10.3 18.3 100.0

Total

2006 9.3 27.8 32.1 13.8 17.0 100.0

2007 9.7 27.3 30.9 14.1 18.1 100.02008 11.5 28.6 29.6 12.8 17.5 100.0

2009 10.3 28.9 28.7 12.6 19.4 100.0

2010 9.6 28.0 28.5 13.7 20.3 100.0



Table 2.5

db f gee a l-tem B tme f Phe, 2010

Maturity Percent distribution

20 years and over 33.1

10 years to less than 20 years 28.8

5 years to less than 10 years 29.8

Less than 5 years 8.2

Total 100.0



7/30/2019 2011 Fact Book

33/194


Table 2.6

db f gee a B, b naic q c1

PUBLIC BONDS 2000 2009 2010

Percentage of Percentage of Percentage ofAmount publicly Amount publicly Amount publicly

NAIC quality class (millions) traded bonds (millions) traded bonds (millions) traded bonds

High quality

Class 1 $760,306 70.0 $1,338,884 72.0 $1,393,533 72.0

Class 2 260,461 24.0 414,793 22.3 440,416 22.8

Medium quality

Class 3 34,052 3.1 62,550 3.4 60,506 3.1

Low quality

Class 4 26,579 2.4 29,666 1.6 28,744 1.5

Class 5 4,007 0.4 10,340 0.6 9,303 0.5

Class 6 939 0.1 2,813 0.2 2,246 0.1

Total 1,086,344 100.0 1,859,047 100.0 1,934,748 100.0

PRIVATE BONDS 2000 2009 2010

Percentage of Percentage of Percentage of

Amount privately Amount privately Amount privatelyNAIC quality class (millions) traded bonds (millions) traded bonds (millions) traded bonds

High quality

Class 1 $171,832 47.3 $283,974 46.0 $311,120 47.5

Class 2 149,634 41.2 252,334 40.9 265,345 40.5

Medium quality

Class 3 23,576 6.5 43,380 7.0 43,303 6.6

Low quality

Class 4 13,230 3.6 21,209 3.4 20,597 3.1

Class 5 3,903 1.1 12,516 2.0 10,550 1.6

Class 6 1,261 0.3 3,284 0.5 3,450 0.5

Total 363,436 100.0 616,697 100.0 654,365 100.0TOTAL BONDS 2000 2009 2010

Percentage of Percentage of Percentage ofAmount general Amount general Amount general

NAIC quality class (millions) account bonds (millions) account bonds (millions) account bonds

High quality

Class 1 $932,138 64.3 $1,622,858 65.6 $1,704,653 65.8

Class 2 410,095 28.3 667,127 26.9 705,760 27.3

Medium quality

Class 3 57,628 4.0 105,929 4.3 103,809 4.0

Low quality

Class 4 39,809 2.7 50,875 2.1 49,341 1.9Class 5 7,910 0.5 22,856 0.9 19,853 0.8

Class 6 2,200 0.2 6,098 0.2 5,696 0.2

Aggregate total 1,449,780 100.0 2,475,744 100.0 2,589,113 100.0


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Figures include both government and corporate bonds held incorporate general accounts o U.S. lie insurers and, as o 2003, raternal beneft societies.

NAIC bond classes are: Class 1highest quality; Class 2high quality; Class 3medium quality; Class 4low quality; Class 5lower quality;Class 6in or near deault. Class 1 and Class 2 bonds are investment grade.1Includes long-term bonds, short-term investments, and cash equivalents.

7/30/2019 2011 Fact Book

34/194

17Assets

Figure 2.4

re Ee owe b lfe ie, 2010

Investment, held for income

77%

Investment, held for sale

2%

Occupied by company

21%

Source: ACLI tabulations o National Association o Insurance Commissioners (NAIC) data, used by permission.Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data represent U.S. lie insurers and raternal beneft societies.

Figure 2.3

Me He b lfe ie, b tpe

Commercial

91%

14 Family dwelling

5%

Farm

4%

1990 2010

Commercial

93%

14 Family dwelling1%

Farm

6%

Source: ACLI tabulations o National Association o Insurance Commissioners (NAIC) data, used by permission.Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data represent U.S. lie insurers and raternal beneft societies.

7/30/2019 2011 Fact Book

35/194


Table 2.7

q f Me He b lfe ie (m)

2000 2009 2010

Percent Percent PercentAmount distribution Amount distribution Amount distribution

Farm

In good standing $12,936 97.3 $17,747 99.9 $17,780 99.8

Restructured 194 1.5 10 0.1 12 0.1

Overdue 129 1.0 3 0.0 16 0.1

Foreclosed 32 0.2 0 0.0 3 0.0

Total 13,291 100.0 17,761 100.0 17,811 100.0

Residential

In good standing 5,049 98.3 4,380 98.5 3,894 98.6

Restructured 37 0.7 30 0.7 8 0.2

Overdue 25 0.5 19 0.4 23 0.6

Foreclosed 28 0.5 18 0.4 24 0.6

Total 5,138 100.0 4,447 100.0 3,948 100.0

Commercial

In good standing 214,996 98.5 312,493 99.5 303,037 99.3

Restructured 2,807 1.3 845 0.3 917 0.3Overdue 188 0.1 473 0.2 796 0.3

Foreclosed 281 0.1 297 0.1 479 0.2

Total 218,272 100.0 314,108 100.0 305,229 100.0

All categories

In good standing 232,980 98.4 334,620 99.5 324,711 99.3

Restructured 3,037 1.3 886 0.3 937 0.3

Overdue 342 0.1 495 0.1 834 0.3

Foreclosed 341 0.1 315 0.1 506 0.2

Aggregate total 236,701 100.0 336,316 100.0 326,988 100.0


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data represent U.S. lie insurers and, as o 2003, raternal beneft societies.

7/30/2019 2011 Fact Book

36/194

19Assets

Table 2.8

gee a Me f lfe ie, b tpe l--Ve r, 2010 (m)

Loan-to-value ratio Farm Non-Farm Total

Above 95% $63 $13,600 $13,663

9195% 32 5,583 5,615

8190% 35 21,898 21,933

7180% 213 47,402 47,615

Below 71% 17,302 211,144 228,446

Total 17,645 299,627 317,273



Table 2.9

re Ee owe b lfe ie, b tpe

Millions Average annual percent change

2000 2009 2010 2000/2010 2009/2010

Investment property

Held or income NA $20,868 $21,486 NA 3.0

Held or sale NA 510 446 NA -12.6

Total1 $29,818 21,379 21,932 -3.0 2.6

Occupied by company 6,241 6,335 5,919 -0.5 -6.6

Aggregate total 36,059 27,714 27,851 -2.5 0.5


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data represent U.S. lie insurers and, as o 2003, raternal beneftsocieties.

NA: Not available.1Prior to 2001, includes properties acquired in the satisaction o debt and investment real estate.

7/30/2019 2011 Fact Book

37/194


Table 2.10

Fe-ce ae f u.s. lfe ie, b c ye (m)

2006 2007 2008 2009 2010

Barbados $516 $564 $569 $716 $839

Bermuda 1,554 1,665 2,425 3,343 3,590

Canada 311,861 333,142 294,401 333,777 368,127

Cayman Islands 4,779 4,526 3,112 2,764 2,373

France 155,874 165,796 133,533 148,828 157,069Germany 69,779 76,323 76,445 86,188 95,975

Italy 732 801 831 913 987

Japan 617 608 589 593 616

Netherlands 354,661 390,678 349,225 359,240 373,712

South Africa 34 28 23 9 4

Spain 139 154 178 193 75

Sweden 1 1 1 1 1

Switzerland 54,875 57,431 56,334 55,345 53,276

United Kingdom 125,531 136,041 135,786 149,075 170,650

Total 1,080,953 1,167,757 1,053,451 1,140,986 1,227,293

Percentage of industry assets 22.4% 22.9% 22.7% 23.0% 23.1%


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Companies are defned as oreign controlled i more than50 percent o stock is owned by a oreign entity or entities.

7/30/2019 2011 Fact Book

38/194

21Assets

Table 2.11

ae db f lfe ie, b ye (m)

Real Policy MiscellaneousYear Bonds Stocks Mortgages estate loans assets Total

1917 $2,537 $83 $2,021 $179 $810 $311 $5,941

1920 3,298 75 2,442 172 859 474 7,320

1925 4,333 81 4,808 266 1,446 604 11,538

1930 6,431 519 7,598 548 2,807 977 18,880

1935 10,041 583 5,357 1,990 3,540 1,705 23,2161940 17,092 605 5,972 2,065 3,091 1,977 30,802

1945 32,605 999 6,636 857 1,962 1,738 44,797

1950 39,366 2,103 16,102 1,445 2,413 2,591 64,020

1955 47,741 3,633 29,445 2,581 3,290 3,742 90,432

1960 58,555 4,981 41,771 3,765 5,231 5,273 119,576

1965 70,152 9,126 60,013 4,681 7,678 7,234 158,884

1970 84,166 15,420 74,375 6,320 16,064 10,909 207,254

1975 121,014 28,061 89,167 9,621 24,467 16,974 289,304

1980 212,618 47,366 131,080 15,033 41,411 31,702 479,210

1981 233,308 47,670 137,747 18,278 48,706 40,094 525,803

1982 268,288 55,730 141,989 20,624 52,961 48,571 588,163

1983 308,738 64,868 150,999 22,234 54,063 54,046 654,948

1984 358,897 63,335 156,699 25,767 54,505 63,776 722,979

1985 421,446 77,496 171,797 28,822 54,369 71,971 825,901

1986 486,583 90,864 193,842 31,615 54,055 80,592 937,551

1987 557,110 96,515 213,450 34,172 53,626 89,586 1,044,459

1988 640,094 104,373 232,863 37,371 54,236* 97,933 1,166,870

1989 716,204 125,614 254,215 39,908 57,439 106,376 1,299,756

1990 793,443 128,484 270,109 43,367 62,603 110,202 1,408,208

1991 893,005 164,515 265,258 46,711 66,364 115,348 1,551,201

1992 990,315 192,403 246,702 50,595 72,058 112,458 1,664,531

1993 1,113,853 251,885 229,061 54,249 77,725 112,354 1,839,127

1994 1,186,139 281,816 215,332 53,813 85,499 119,674 1,942,273

1995 1,278,416 371,867 211,815 52,437 95,939 133,070 2,143,544

1996 1,348,425 477,505 207,779 49,484 100,460 139,894 2,323,5471997 1,451,289 598,358 209,898 46,076 104,549 168,908 2,579,078

1998 1,518,998 757,958 216,336 41,313 104,507 187,410 2,826,522

1999 1,551,618 989,762 229,797 38,186 98,757 162,533 3,070,653

2000 1,605,178 997,329 236,701 36,059 101,978 204,491 3,181,736

2001 1,731,792 909,026 243,596 32,368 104,273 247,966 3,269,019

2002 1,955,548 791,429 250,531 32,848 105,229 244,414 3,380,000

2003 2,181,555 1,022,188 268,986 30,673 107,007 276,291 3,886,699

2004 2,347,322 1,179,858 282,534 31,005 108,658 303,470 4,252,846

2005 2,440,412 1,285,468 294,876 32,574 109,500 319,165 4,481,995

2006 2,461,479 1,530,892 313,741 33,096 112,914 370,701 4,822,824

2007 2,571,525 1,670,338 336,150 34,943 116,633 361,997 5,091,586

2008 2,429,173 1,135,797 352,676 32,497 122,485 575,518 4,648,147

2009 2,581,575 1,385,923 336,316 27,714 123,283 503,884 4,958,6932010 2,744,758 1,570,225 326,988 27,851 126,821 514,561 5,311,204


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Beginning with 1962, data include assets in separate accounts.Data represent U.S. lie insurers and, as o 2003, raternal beneft societies.

*Excludes an estimated $600 million o securitized policy loans.

Includes raternal beneft societies.

7/30/2019 2011 Fact Book

39/194


7/30/2019 2011 Fact Book

40/194

The liabilities o U.S. lie insurers primarily comprise

the reserves held by each insurer to back its obligations

to policyholders and their beneciaries. O the many

dierent kinds o reserves, policy and asset fuctuation

reserves are the most important. Liabilities also include

small amounts o other unds and obligations.

Based on standard accounting principles applied to all

businesses, total liabilities plus the companys net value

must equal its total assets. Net value is a companys

surplus plus its capital stock and is available to support

policyholder claims i necessary.

Policy ReseRves

Policy reserves concern an insurers obligation to its

customers arising rom its product in orce. State law

requires each company to maintain its policy reserves at alevel that will assure payment o all policy obligations as

they all due. That level is calculated on an actuarial basis,

taking into account unds rom uture premium payments,

assumed uture interest earnings, and expected mortality

experience. At the end o 2010, policy reserves o U.S. lie

insurers totaled $4 trillion, eight percent higher than 2009

(Table 3.1).

Policy reserves are held and identied or each type o

business conducted by a lie insurer:

n Lie insurance policies

n Annuities and supplementary contracts

n Health insurance policies

The composition o lie insurer policy reserves has

changed over the years, refecting a shit in the basic

types o business undertaken. Annuity contract reserves

now account or a larger proportion o total policy

reserves, while reserves set aside or lie insurance

policies have a lesser share.

In 2010, reserves or lie insurance comprised 30 percent

o total policy reserves, at $1.2 trillion (Figure 3.2, Table

3.2). This proportion has shrunk rom 1980, when lieinsurance products commanded 51 percent o total

reserves (Table 3.6). In 2010, these reserves consisted

o $1 trillion or individual lie policies, $139 billion

or group policies, and around $1 billion or credit lie

policies (Table 3.2).

By contrast, reserves or annuities and supplementary

contracts climbed to nearly two-thirds o total reserves

in 2010 (65%), or nearly $2.7 trillion, rom 44 percent in

1980. Much o the increase refects the strong growth in

retirement plans administered by lie insurers.

In 2010, annuity reserves consisted o $1.8 trillion or

individual annuities, up 10 percent rom 2009, and $863

billion or group annuities, up eight percent. General

account annuity reserves increased by our percent while

separate account reserves increased by 13 percent (Table

3.2). Group annuity reserves had allen signicantly in

2001, primarily due to accounting codication rather

than actual fuctuation. In 2000, liabilities or guaranteed

interest contracts (GICs) and premium and other depositunds had been reported as annuity reserves; however,

as o 2001 these amounts were counted as liabilities

or deposit-type contracts. Since most GICs and other

deposit-type unds are under group contracts, this

accounting change has had a substantial eect on group

annuity reserves.

3liABiliTies

7/30/2019 2011 Fact Book

41/194


Reserves held under supplementary contracts with lie

contingencies in 2010 totaled $17 billion, and or health

insurance policies, $214 billion.

DePosiT-TyPe conTRAcTs

Contracts issued by lie insurers that do not incorporate

mortality or morbidity risks are known as deposit-type

contracts. Benet payments under these contracts are not

contingent upon death or disability as they are in lie and

disability insurance contracts, or upon continued survival

as they are in annuity contracts. Categories o deposit-

type contracts, as dened by the National Association

o Insurance Commissioners (NAIC), include GICs,

supplementary contracts without lie contingencies,

annuities certain, premium and other deposit unds,

dividend and coupon accumulations, lottery payouts,

and structured settlements.

Under codiied statutory accounting practices

implemented in 2001, cash infows and outfows on

deposit-type contracts are no longer reported as income

and expenditure. Instead, they are recorded directly as

increasing or decreasing reserves. During 2010, $133

billion was deposited to these contracts and $159 billion

was withdrawn, with a total reserve o $420 billion at

years end (Table 3.3).

In 2010, premium and other deposit unds was the largest

category o the deposit-type business with $55 billion

in deposits, $59 billion in payments, and $180 billion

in reserve at year-end. GICs received $50 billion rom

policyholders and paid out $69 billion in 2010, leaving

a reserve o $138 billion at years end.

AsseT FlucTuATion ReseRves

Besides policy reserves, insurers are required to establish

two statutory reserves to absorb gains and losses in their

invested assets.

The asset valuation reserve (AVR) absorbs both realized

and unrealized, credit-related capital gains and losses.

The AVR consists o a deault component, which provides

or credit-related losses on xed-income assets, and an

equity component, which provides or all types o equity

investments.

The interest maintenance reserve (IMR) captures all

realized, interest-related capital gains and losses on

xed-income assets. The IMR amortizes these gains

and losses into income over the remaining lie o the

investments sold.

In 2010, the industrys total AVR increased almost 52 percent

to $31 billion, and its IMR increased 48 percent to $16 billion(Table 3.1).

oTheR liABiliTies

In addition to reserves, other liability unds o U.S. lie

insurers at the end o 2010 included $42 billion in policy

and contract claims; $17 billion set aside or the ollowing

years dividend payments to policyholders; and $349 billion

or liabilities not directly allocable to policyholdersincurred

expenses, mandatory reserves or fuctuations in security

values, and insurance premiums paid in advance, orexample (Table 3.1).

suRPlus FunDs AnD cAPiTAl sTock

Surplus and capital amounted to $319 billion or U.S. lie

insurers at the end o 2010 (Table 3.1). Surplus unds

provide extra reserve saeguards or such contingencies

as an unexpected rise in death rates among policyholders,

unusual changes in the value o securities, and general

protection or policy obligations. Several actors infuence

the amount o surplus that a lie insurer retains, includingcompany size, kinds o insurance written, mortality

experience, general business conditions, and government

regulation. Capital reers to the total par value o shares

o the companies capital stock.

cAPiTAl RATios

One measure o the adequacy o a lie insurers surplus is

its capital ratio: surplus unds plus capital stock plus AVR

as a percentage o general account assets. Theoretically,

the higher the capital ratio, the better a company is ableto withstand adverse investment and mortality experience.

However, the type o company and the distribution o its

book o business can make comparisons among companies

and with an industry wide average much less meaningul.

In 2010, the aggregate capital ratio o U.S. lie insurers was

10 percent (Table 3.4).

7/30/2019 2011 Fact Book

42/194

25Liabilities

Lie insurance regulators created the risk-based capital (RBC)

ratio to monitor lie insurance company solvency.

Risk-based capital, calculated according to an NAIC model

law, is considered the minimum amount o capital an insurer

needs to avoid triggering regulatory action. The RBC ratio

is total adjusted capital divided by risk-based capital, or a

threshold ratio o 100 percent. The ratio provides a meansor evaluating the adequacy o an insurers capital relative

to the risks inherent in the insurers operations.

From 1993 when lie insurers began reporting risk-based

capital, the average RBC ratio rose steadily to a plateau o

290 percent in 1997, which remained unbroken until 2001

(Table 3.5). That year, the ratio jumped to 346 percent,

mainly due to two changes enacted by NAIC: accounting

codication and an adjusted RBC ormula that refects

changed risks or assets. In 2010, the ratio rose 32 percentage

points rom 2009 level to 450 percent.

Most companies have an RBC ratio well above the regulatory

minimum level o 100 percent. By year-end 2010, 803companies, or 91 percent o lie insurers, had a ratio o 200

percent or more. These companies carried 99 percent o

the industrys total assets.

Table 3.1

labt ad srp Fd f lf irr


2000 2009 2010 2000/2010 2009/2010

Reserves

Policy reserves1 $1,589,343 $2,373,867 $2,473,369 4.5 4.2

Other reserves

Liabilities or deposit-type contracts2 41,379 288,533 281,494 21.1 -2.4

Asset valuation reserve (AVR) 37,893 20,667 31,340 -1.9 51.6

Policy and contract claims 33,161 42,358 42,106 2.4 -0.6

Funds set aside or policyholder dividends 18,137 17,591 17,356 -0.4 -1.3

Interest maintenance reserve (IMR) 8,680 10,789 15,973 6.3 48.1

Miscellaneous reserves3 NA 16,652 18,619 NA 11.8

Total other reserves 139,250 396,590 406,887 11.3 2.6

Total reserves 1,728,592 2,770,456 2,880,256 5.2 4.0

Non-reserve liabilities 139,886 255,813 262,695 6.5 2.7

Total liabilities 1,868,478 3,026,270 3,142,951 5.3 3.9

Capital and surplus 185,781 297,992 314,993 5.4 5.7

Total liabilities and surplus unds 2,054,259 3,324,262 3,457,944 5.3 4.0


2000 2009 2010 2000/2010 2009/2010

Reserves

Policy reserves1 $1,101,002 $1,438,384 $1,624,219 4.0 12.9

Other reservesLiabilities or deposit-type contracts2 1,276 127,945 139,000 59.8 8.6

Interest maintenance reserve (IMR) 66 119 160 9.2 34.3


Total reserves 1,102,345 1,566,448 1,763,379 4.8 12.6

Non-reserve liabilities 22,414 64,754 86,155 14.4 33.0


Surplus 2,718 3,229 3,727 3.2 15.4


7/30/2019 2011 Fact Book

43/194


Table 3.1

labt ad srp Fd f lf irrctd

Combined accounts (millions) Average annual percent change

2000 2009 2010 2000/2010 2009/2010

Reserves

Policy reserves1 $2,690,345 $3,812,251 $4,097,587 4.3 7.5

Other reserves

Liabilities or deposit-type contracts

2

42,656 416,478 420,494 NA 1.0Asset valuation reserve (AVR) 37,893 20,667 31,340 -1.9 51.6

Policy and contract claims 33,161 42,358 42,106 2.4 -0.6

Funds set aside or policyholder dividends 18,137 17,591 17,356 -0.4 -1.3

Interest maintenance reserve (IMR) 8,746 10,908 16,133 6.3 47.9

Miscellaneous reserves3 NA 16,652 18,619 NA 11.8


Total reserves 2,830,937 4,336,905 4,643,635 5.1 7.1

Non-reserve liabilities 162,300 320,568 348,850 NA 8.8


Capital and surplus 188,499 301,221 318,720 5.4 5.8


Source: ACLI tabulations o National Association o Insurance Commissioners (NAIC) data, used by permission.Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Codication eective with 2001 Annual Statement lings changedthe reporting o certain lines o business, particularly deposit-type contracts, as explained in numbered ootnotes. Data represent U.S. lie insurers and,as o 2003, raternal benet societies.

NA: Not available.1Beginning in 2001, excludes reserves or guaranteed interest contracts (GICs).2Prior to 2001, included supplementary contracts without lie contingencies, policyholder dividend accumulations; beginning in 2001, also includesliabilities or GICs, and premium and other deposits.3Includes insurance premiums paid in advance. The amount previously was included in non-reserve liabilities.

OtherAnnuity

Life

20102008200620042002200019981996199419921990

Source: ACLI tabulations of National Association of Insurance Commissioners (NAIC) data, used by permission.Notes:NAIC does not endorse any analysis or conclusions based on use of its data. Data represent U.S. life insurers and, as of 2003, fraternal benefit societies.

Growth of Life Insurers' Policy Reserves

Figure 3.1

0

1,500

3,000

4,500

$Billions

7/30/2019 2011 Fact Book

44/194

27Liabilities

Table 3.2

P Rr f lf irr, b l f B


2000 2009 2010 2000/2010 2009/2010

Life insurance

Individual $591,248 $901,014 $935,109 4.7 3.8

Group 30,159 52,018 53,371 5.9 2.6

Credit 3,564 969 807 -13.8 -16.7Total 624,970 954,001 989,288 4.7 3.7

Annuities1

Individual 494,499 901,716 942,007 6.7 4.5

Group 362,880 308,836 314,873 -1.4 2.0

Supplementary contracts

with lie contingencies 12,036 15,316 15,946 2.9 4.1

Total 869,415 1,225,868 1,272,826 3.9 3.8

Health insurance

Individual 63,690 142,203 158,231 9.5 11.3

Group 28,318 50,410 51,794 6.2 2.7

Credit 2,949 1,385 1,229 -8.4 -11.3

Total 94,958 193,998 211,255 8.3 8.9

Aggregate total 1,589,343 2,373,867 2,473,369 4.5 4.2


2000 2009 2010 2000/2010 2009/2010

Life insurance

Individual $88,298 $142,479 $148,622 5.3 4.3

Group 28,334 81,809 85,989 11.7 5.1

Total 116,633 224,289 234,611 7.2 4.6

Annuities1

Individual 386,375 722,048 837,924 8.0 16.0

Group 597,248 489,152 548,227 -0.9 12.1


with lie contingencies NA 761 815 NA 7.1

Total 983,623 1,211,962 1,386,967 3.5 14.4

Health insurance

Individual 0 276 310 NA 12.4

Group 746 1,857 2,330 12.1 25.5

Total 746 2,133 2,641 13.5 23.8

Aggregate total 1,101,002 1,438,384 1,624,219 4.0 12.9ctd

7/30/2019 2011 Fact Book

45/194


Figure 3.2

Dtrbt f lf irr P Rr, 2010

Annuities

65%

Health Insurance

5%

Life Insurance

30%


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data represent U.S. lie insurers and, as o 2003, raternal benetsocieties.

Table 3.2

P Rr f lf irr, b l f Bctd

Combined account (millions) Average annual percent change

2000 2009 2010 2000/2010 2009/2010

Life insurance

Individual $679,546 $1,043,493 $1,083,731 4.8 3.9

Group 58,493 133,828 139,360 9.1 4.1

Credit 3,564 969 807 -13.8 -16.7

Total 741,603 1,178,290 1,223,899 5.1 3.9

Annuities1

Individual 880,874 1,623,764 1,779,931 7.3 9.6

Group 960,128 797,989 863,100 -1.1 8.2


with lie contingencies 12,036 16,077 16,761 3.4 4.3

Total 1,853,038 2,437,830 2,659,793 3.7 9.1

Health insurance

Individual 63,690 142,479 158,542 9.5 11.3

Group 29,064 52,267 54,125 6.4 3.6

Credit 2,949 1,385 1,229 -8.4 -11.3

Total 95,704 196,131 213,896 8.4 9.1

Aggregate total 2,690,345 3,812,251 4,097,587 4.3 7.5


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Codication eective with 2001 Annual Statement lings changedthe reporting o certain lines o business, particularly deposit-type contracts, as explained in numbered ootnotes. Data represent U.S. lie insurers and,as o 2003, raternal benet socieites.NA: Not available1As o 2001, excludes reserves or guaranteed interest contracts (GICs). Figures or GICs are presented in Table 3.3.

7/30/2019 2011 Fact Book

46/194

29Liabilities

Table 3.3

Dpt-Tp ctrat, 2010 (m)

Deposits Withdrawals Reserves

General account

Guaranteed interest contracts (GICs) $41,679 $58,868 $81,286

Annuities certain 3,642 6,184 38,586


without lie contingencies 23,675 22,787 40,633Dividend accumulations or reunds 1,012 1,986 22,936

Premium and other deposit unds 41,491 45,950 98,053

Total 111,498 135,775 281,494

Separate account

Guaranteed interest contracts (GICs) 8,112 10,061 56,295

Annuities certain 16 166 517


without lie contingencies 39 35 158

Dividend accumulations or reunds 0 0 1


Total 21,920 23,692 139,000

Combined account

Guaranteed interest contracts (GICs) 49,791 68,928 137,580

Annuities certain 3,658 6,350 39,103


without lie contingencies 23,714 22,822 40,790

Dividend accumulations or reunds 1,012 1,986 22,937


Total 133,418 159,467 420,494


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Data represent U.S. lie insurers and raternal benet societies.

Table 3.4

capta Rat f lf irr (prt)

2000 2009 2010

Including AVR 11.1 9.7 10.1

Excluding AVR 9.2 9.1 9.2


Notes: NAIC does not endorse any analysis or conclusions based on use o its data. Capital ratio is equal to capital plus surplus plus the asset valuationreserve (AVR) divided by general account assets. Data represent U.S. lie insurers and, as o 2003, raternal benet societies.

7/30/2019 2011 Fact Book

47/194


Table 3.5

l f R-Bad capta hd b lf irr, 20002010

Number of companies

Risk-based capital ratio 2000 20011 2002 2003 2004 2005 2006 2007 2008 2009 2010

200 percent or more 1,061 1,046 1,002 1,051 1,026 997 948 892 830 812 803

175199 44 37 31 30 18 19 19 23 31 29 20

150174 28 29 25 24 21 16 22 11 17 20 26

125149 31 31 30 30 25 15 21 13 19 15 13100124 19 14 13 18 13 10 5 5 8 10 10

Less than 100 percent 15 21 25 22 16 14 14 16 36 19 11

Total 1,198 1,178 1,126 1,175 1,119 1,071 1,029 960 941 905 883

Average risk-based

capital ratio 287% 346% 325% 357% 390% 409% 411% 406% 382% 418% 450%

Percentage of companies (percent)


200 percent or more 88.6 88.8 89.0 89.4 91.7 93.1 92.1 92.9 88.2 89.7 90.9

175199 3.7 3.1 2.8 2.6 1.6 1.8 1.8 2.4 3.3 3.2 2.3

150174 2.3 2.5 2.2 2.0 1.9 1.5 2.1 1.1 1.8 2.2 2.9

125149 2.6 2.6 2.7 2.6 2.2 1.4 2.0 1.4 2.0 1.7 1.5100124 1.6 1.2 1.2 1.5 1.2 0.9 0.5 0.5 0.9 1.1 1.1

Less than 100 percent 1.3 1.8 2.2 1.9 1.4 1.3 1.4 1.7 3.8 2.1 1.2

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Distribution of total assets (percent)


200 percent or more 96.6 96.5 96.8 98.3 98.4 98.8 99.0 99.4 97.0 98.7 99.0

175199 2.2 2.2 1.6 0.4 0.1 0.5 0.2 0.2 2.2 0.2 0.2

150174 0.3 0.4 0.3 0.4 0.5 0.4 0.3 0.0 0.5 0.5 0.6

125149 0.7 0.8 0.8 0.3 0.9 0.2 0.4 0.4 0.1 0.5 0.1

100124 0.1 0.0 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Less than 100 percent 0.1 0.1 0.2 0.3 0.1 0.1 0.0 0.0 0.

2011 fact book

Documents