Minnesota (State or other jurisdiction of incorporation or organization) | 6311 (Primary Standard Industrial Classification Code Number) | 41-1366075 (I.R.S. Employer Identification No.) |
Calculation of Registration Fee | ||||
Title of each class of securities to be registered | Amount to be registered pursant to this Registration Statement | Proposed maximum offering price per unit | Proposed maximum aggregate offering price including previously registered securities(1) | Amount of aggregate registration fee, including fee paid for previously registered securities |
Individual Flexible Purchase Payment Index-Linked Deferred Annuity Contract | $ | NA(2) | $ | $ |
(1) | This amount is in addition to the $1,300,000,000 previously registered on April 13, 2017, and the $1,000,000 previously registered with the initial registration on Form S-1, filed on December 15, 2016 by the Registrant under the Registration Statement on Form S-1 (File No. 333-215303) initially declared effective on May 1, 2017 (the “Prior Registration Statement”). Pursuant to Rule 415(a)(6) under the Securities Act of 1933, as amended (the “Securities Act”), all unsold securities from the Prior Registration Statements will be added to this Registration Statement and the offering of securities under the Prior Registration Statements will be deemed terminated as of the date of effectiveness of this Registration Statement. As of December 31, 2019 there were $ 779,177,919 of unsold shares registered pursuant to the Prior Registration Statement. |
(2) | The proposed maximum offering price per unit is not applicable since these securities are not issued in predetermined amounts or units. |
(3) | The Registrant previously paid a registration fee in the amounts of $115.90 and $150,670.00 with respect to the securities registered pursuant to the Prior Registration Statements. Securities registered pursuant to the Prior Registration Statements that are unsold as of the effective date of this Registration Statement will be included in this Registration Statement pursuant to Rule 415(a)(6) as of the effective date. The previously paid fee will continue to be applied to such unsold shares, which the Registrant may continue to offer and sell. A filing fee of $38,940 is paid herewith in connection with the new amount registered hereunder. |
Standard Annuity Features | Available Investment Options | |
(Annuity Options) (not available in all states) (Traditional Death Benefit) | (Variable Options) | Locks in any annual investment gains to potentially provide a death benefit greater than the Traditional Death Benefit. This optional benefit |
The risk of loss can become greater in the case of an early withdrawal due to withdrawal charges. Withdrawals will be subject to federal and state taxation, and (the Code). |
Crediting Methods Currently Available Only the Index Performance Strategy offers both 1-year and 3-year Terms. All other Crediting Methods only offer 1-year Terms. | Indexes Currently Available with 1-year Terms | Indexes Currently Available with 3-year Terms (Index Performance Strategy only) |
• Index Precision Strategy • Index Guard Strategy • Index Performance Strategy | • Russell 2000® Index • Nasdaq-100® Index • EURO STOXX 50® • iShares® MSCI Emerging Markets ETF | • S&P 500® Index • Russell 2000® Index |
Crediting Methods, Indexes, and or to |
Crediting Method Highlights All Crediting Methods provide a level of protection against negative Credits from negative Index performance, and a limit on positive Credits from positive Index performance. Credits are the | ||
Negative Index Performance Protection | Positive Index Performance Participation Limit | |
Index Protection Strategy | –You will never receive a negative Credit | |
(the return you receive if Index performance is zero or positive) – DPSCs cannot be less than 0.10% | ||
Index Precision Strategy | • Buffers (the amount of negative Index performance we absorb over the duration of a Term) – Buffers cannot be less than 5% | • – Precision Rates cannot be less than |
Index Guard Strategy | • Floors (the maximum amount of negative Index performance you absorb) – Floors cannot be less than -25% | • Caps (the upper limit on positive Index performance) – Caps cannot be less than 0.10% |
Crediting Method Highlights All Crediting Methods provide a level of protection against negative Credits from negative Index performance, and a limit on positive Credits from positive Index performance. Credits are the | ||
Negative Index Performance Protection | Positive Index Performance Participation Limit | |
Index Strategy | ||
–Buffers cannot be less than 5% | –Caps cannot be less than 0.10% for 1-year Terms, and cannot be less than 2% for 3-year Terms |
Variable Options Currently Available | ||
AZL® MVP Growth Index Strategy Fund | AZL® MVP Balanced Index Strategy Fund | AZL® Government Money Market Fund |
Glossary | 6 | |
Summary | 12 | |
Who Should Consider Purchasing the Contract? | 15 | |
How Do the Crediting Methods Work? | 16 | |
How Do the Crediting Methods Compare? | 17 | |
Bar Chart Examples of the Crediting Methods Performance | 20 | |
Can the Crediting Methods or Indexes Change? | 22 | |
When Does Allianz Establish the Values Used to Determine Index Credits? | 23 | |
What Are the Different Values Within the Contract? | 23 | |
What Is the Daily Adjustment? | 24 | |
What is the Performance Lock? | 25 | |
How Does the Income Benefit Work? | 25 | |
What Happens During the Income Period? | 27 | |
Risk Factors | 27 | |
Liquidity Risks | 27 | |
Income Benefit Risks | 28 | |
Risk of Change to the Income Benefit Supplement Prior to the Issue Date | 29 | |
Risks of Investing in Securities | 29 | |
Risk of Negative Returns | 30 | |
Risks Associated with Calculation of Credits | 31 | |
Risks Associated with Performance Locks | 31 | |
Substitution of an Index | 32 | |
Changes to Declared Protection Strategy Credits (DPSCs), Precision Rates, Caps, Buffers and Floors | 32 | |
Investment in Derivative Securities | 33 | |
Our Financial Strength and Claims-Paying Ability | 34 | |
Regulatory Protections | 34 | |
Fee Tables | 35 | |
Owner Transaction Expenses | 35 | |
Owner Periodic Expenses | 35 | |
Annual Operating Expenses of the AZL Government Money Market Fund | 36 | |
Examples | 36 | |
Condensed Financial Information | 37 | |
1. | The Contract | 37 |
When the Accumulation Phase Ends | 38 | |
Financial Adviser Fees | 38 | |
When The Contract Ends | 38 | |
2. | Ownership, Annuitant, Determining Life, Beneficiary, and Payee | 39 |
Owner | 39 | |
Joint Owner | 39 | |
Annuitant | 39 | |
Determining Life (Lives) | 40 | |
Beneficiary | 41 | |
Eligible Person(s) And Covered Person(s) | 41 | |
Payee | 42 | |
Assignments, Changes of Ownership and Other Transfers of Contract Rights | 42 | |
3. | Purchasing the Contract | 43 |
Purchase Requirements | 43 | |
Applications Sent Electronically | 43 | |
Allocation of Purchase Payments and Transfers Between the Allocation Options | 44 | |
Electronic Transfer and Allocation Instructions | 45 | |
Automatic Investment Plan (AIP) | 45 | |
Free Look/Right to Examine Period | 46 | |
4. | AZL Government Money Market Fund | 46 |
Substitution and Limitation on Holdings | 47 | |
Excessive Trading and Market Timing | 48 | |
Voting Privileges | 49 | |
5. | Valuing Your Contract | 50 |
Determining Variable Account Value | 50 | |
Determining Index Option Values | 51 | |
Calculating Credits | 53 | |
Daily Adjustment for the Index Precision Strategy, Index Guard Strategy and Index Performance Strategy | 53 | |
Performance Locks | 54 | |
The Alternate Minimum Value | 55 | |
Optional Reallocation Program | 55 |
6. | Expenses | 55 |
Annual Contract Fees: Product and Rider Fees | 55 | |
Contract Maintenance Charge | 57 | |
Withdrawal Charge | 57 | |
Premium Tax | 59 | |
Income Tax | 59 | |
AZL Government Money Market Fund Expenses | 59 | |
7. | Access to Your Money | 60 |
Free Withdrawal Privilege | 61 | |
Systematic Withdrawal Program | 61 | |
Minimum Distribution Program and Required Minimum Distribution (RMD) Payments | 61 | |
Waiver of Withdrawal Charge Benefit | 61 | |
Suspension of Payments or Transfers | 62 | |
8. | The Annuity Phase | 62 |
Calculating Your Annuity Payments | 62 | |
Annuity Payment Options | 62 | |
When Annuity Payments Begin | 63 | |
9. | Income Benefit | 64 |
Removing the Income Benefit | 64 | |
Requesting Income Payments | 64 | |
Lifetime Income Percentage Calculation Example | 64 | |
Calculating Your Income Payments | 65 | |
Excess Withdrawals | 66 | |
Automatic Annual Income Payment Increases | 67 | |
Taxation of Income Payments | 68 | |
When the Income Period Ends | 68 | |
When the Income Benefit Ends | 68 | |
10. | Death Benefit | 69 |
Maximum Anniversary Value | 70 | |
Death of the Owner and/or Annuitant | 71 | |
Death Benefit Payment Options During the Accumulation Phase | 71 | |
Death Benefit Payment Options | 72 | |
11. | Taxes | 72 |
Qualified and Non-Qualified Contracts | 72 | |
Taxation of Annuity Contracts | 73 | |
Taxation of Income Payments | 73 | |
Tax-Free Section 1035 Exchanges | 74 | |
12. | Other Information | 74 |
The Registered Separate Account | 74 | |
Our General Account | 74 | |
Our Unregistered Separate Account | 75 | |
Distribution | 75 | |
Additional Credits for Certain Groups | 76 | |
Administration/Allianz Service Center | 77 | |
Legal Proceedings | 77 | |
Status Pursuant to Securities Exchange Act of 1934 | 77 | |
13. | Information on Allianz Life | 78 |
Directors, Executive Officers and Corporate Governance | 78 | |
Executive Compensation | 82 | |
Security Ownership of Certain Beneficial Owners and Management | 94 | |
Transactions With Related Persons, Promoters and Certain Control Persons | 94 | |
Business and Operational Risks Relevant to the Contract | 94 | |
14. | Financial Statements | 101 |
Auditor Update | 101 | |
15. | Privacy Notice | 103 |
16. | Table of Contents of the Form N-4 SAI | 104 |
Appendix A – Available Indexes | 105 | |
Standard & Poor’s 500 Index | 105 | |
Russell 2000® Index | 106 | |
Nasdaq-100® Index | 106 | |
EURO STOXX 50® | 107 | |
iShares® MSCI Emerging Markets ETF | 107 | |
Appendix B – Daily Adjustment | 108 | |
Appendix C – Historical Buffers, Floors, and Initial DPSCs, Precision Rates, and Caps | 110 | |
Index Protection Strategy with DPSC | 110 | |
Index Protection Strategy with CAP | 110 | |
Index Precision Strategy | 110 | |
Index Guard Strategy | 110 | |
Index Performance Strategy | 110 | |
Appendix D – Annual Contract Fees Calculation Examples | 111 | |
Assuming You Purchase a Contract with the Traditional Death Benefit | 111 | |
Assuming You Purchase a Contract with the Maximum Anniversary Value Death Benefit | 112 | |
Appendix E – Previous Versions of Income Benefit | 113 | |
Appendix F – Material Contract Variations by State | 114 | |
Accumulated Alternate Interest Variation | 114 | |
Appendix G – Selected Financial Data and Statutory Financial Statements | 119 | |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (For the 12 month period ended December 31, 2018) | 119 | |
Statutory Financial Statements | 119 | |
For Service or More Information | 120 | |
Our Service Center | 120 |
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Purchasing a Contract: Key Features | |
Issue Age (see section 3) | On the date we issue the Contract (the Issue Date), all Owners and the Annuitant must be: • age 80 or younger if you select the Traditional Death Benefit, or • age 75 or younger if you select the Maximum Anniversary Value Death Benefit. The Owner is the person or entity designated at issue who may exercise all Contract rights. The Annuitant is the individual upon whose life we base Annuity Payments. |
Purchase Payment Standards (see section 3) | • You can make additional Purchase Payments of at least $50 during the Accumulation Phase. • $1 million maximum in total Purchase Payments unless we give prior approval for a higher amount. |
Allocation of Purchase Payments and Contract Value Transfers (see section 3) | You can allocate your Purchase Payments to any or all of the • As a result, we hold Purchase Payments you allocate to the Index Options in the AZL Government Money Market Fund until we transfer them to your selected Index Options according to your instructions. For additional Purchase Payments we receive after the Index Effective Date, • On each Index • • Purchase Payments • You can only transfer Index Option Value to the Variable Options on every sixth Index Anniversary, at which point you can do so even if the assets you wish to transfer have been in the Index Options for less than six full years. |
Daily Adjustment (see “What is the Daily Adjustment?” in this Summary and section 5) | The Daily Adjustment is how we calculate Index Option Values on days other than the |
Purchasing a Contract: Key Features at a Glance | |
Performance Lock (see “What is the Performance Lock?” in this Summary and section 5) | A feature that allows you to capture the current Index Option Value during the Term End Date. |
(see the Fee Tables and section 6) | • Rider fee is 0.20% for the Maximum Anniversary Value Death Benefit. Accrued daily and deducted on each Quarterly Contract |
Other Contract Fees and Expenses (see the Fee Tables and section 6) | A mortality and expense risk charge • An 8.5% declining withdrawal charge applies to withdrawals taken within six years after receipt of each Purchase Payment during the Accumulation • $50 contract maintenance charge assessed annually if the total Contract Value is less than $100,000. • $25 fee per transfer if you make more than twelve transfers between Variable Options in a Contract Year. • Variable Option operating expenses before fee waivers and expense reimbursements of |
• A Contract Year is any period of twelve months beginning on the Issue Date or a subsequent Contract Anniversary. A Contract Anniversary is a twelve-month anniversary of the Issue Date or any subsequent Contract Anniversary. | |
You can withdraw your Contract Value, subject to any applicable withdrawal charge, and federal and state taxation. Withdrawals taken before age 59 1⁄ | |
Free Withdrawal Privilege (see section 7) | Allows you to withdraw 10% of your total Purchase Payments each Contract Year during the Accumulation Phase without incurring a withdrawal charge. • Any unused free withdrawal privilege in one Contract Year is not added to the amount available in the next Contract Year. • If you withdraw more than the free withdrawal privilege we will assess a withdrawal charge if the withdrawal is taken from a Purchase Payment we received within the last six years. • Not available if you take a full withdrawal of your total Contract |
Systematic Withdrawal Program (see section 7) | • reduce the amount available under the free withdrawal privilege, and • are subject to a withdrawal charge if you exceed the free withdrawal privilege. |
Minimum Distribution Program (see section 7) | If you own an Individual Retirement Annuity (IRA), SEP IRA or • reduce the amount available under the free withdrawal privilege, • are not subject to a withdrawal charge if you exceed the free withdrawal |
Waiver of Withdrawal Charge Benefit (see section 7) | In most states, this benefit allows you to take a withdrawal without incurring a withdrawal charge if you are confined to a nursing home for a period of at least 90 consecutive days. |
Purchasing a Contract: Key Features at a Glance | |
Annuity Payments (see section 8) | Annuity Payments can provide a guaranteed lifetime fixed income stream with certain tax advantages. We designed the Annuity Payments for Owners who no longer need immediate access to Contract Value to meet their short-term income needs. • We offer five Annuity Options that provide payments for life, life and term certain, or life with refund. • We base Annuity Payments on your Contract Value, the Annuity Option you select, and the lifetime and age of the Annuitant(s). • For an individually owned Contract, Annuity Payments can be either single or joint. |
Death Benefit (see section | When you purchase the Contract you select either the Traditional Death Benefit (no additional fee) or the Maximum Anniversary Value Death Benefit (0.20% rider fee). In either case, the death benefit is paid upon the first death of any Determining Life during the Accumulation Phase. • We establish the Determining Lives at Contract issue and they generally do not change unless there is a divorce or you establish a Trust. • The Determining Life (or Lives) is either the Owner(s) or the Annuitant if the Owner is a • total Purchase Payments adjusted for withdrawals if you select the Traditional Death Benefit, or • the • Withdrawals |
Material Contract Variations (see Appendix | The product or certain product features may not currently be available in all states or all Contracts, may vary in your state, or may not be available from all selling firms or from all Financial Professionals. Your Financial Professional can also provide information regarding availability of |
Customer Service (see the last page of this prospectus) | If you need customer service (for Contract changes, information on Contract Values, requesting a withdrawal or transfer, changing your allocation instructions, etc.) please contact our Service Center at (800) 624-0197. Our Service Center is the area of our company that issues Contracts and provides Contract maintenance and routine customer service. You can also contact us by: • mail at Allianz Life Insurance Company of North America, P.O. Box 561, Minneapolis, MN • email at |
If the |
If the Index Return is negative and the loss is: |
less than or equal to the Buffer, the Performance Credit is zero. We absorb any loss up to the Buffer. |
greater than the Buffer, the negative Performance Credit is equal to the negative Index Return in excess of the Buffer. You participate in any losses beyond the Buffer. |
If the Index Return is positive, the Performance Credit is equal to the Index Return up to the Cap. |
If the |
If the Index Return is negative, the negative Performance Credit is equal to the negative Index Return down to the Floor. You participate in any losses down to the Floor. We absorb any negative Index Return beyond the Floor. |
If the Index Return is positive, the Performance Credit is equal to the Index Return up to the Cap. We apply the Cap for the entire Term length; we do not apply the Cap annually on a 3-year Term Index Option. If we do not declare a Cap (“uncapped”) for a 3-year Term Index Option the Performance Credit is equal to the Index Return. |
If the |
If the Index Return is negative and the loss is: |
less than or equal to the Buffer, the Performance Credit is zero. We absorb any loss up to the Buffer. We apply the Buffer for the entire Term length; we do not apply the Buffer annually on a 3-year Term Index Option. |
greater than the Buffer, the negative Performance Credit is equal to the negative Index Return in excess of the Buffer. You participate in any losses beyond the Buffer. |
• The Index Precision Strategy, Index Guard Strategy, and Index Performance Strategy allow negative Performance Credits. A negative Performance Credit means you can lose principal and previous earnings. These losses could be significant. |
• Because we calculate Index Returns only on a single date in time, you may experience negative or flat performance even though the Index you selected for a given Crediting Method experienced gains through some, or most, of the Term. | |
• If a 3-year Term Index |
What is the asset protection? | |||||
• Most protection. • If the Index loses value, you do not receive a negative Credit. | |||||
Index Precision Strategy | • Buffer absorbs a percentage of loss, but you receive a negative Performance Credit for losses greater than the Buffer. • Potential for large losses in any • More sensitive to large negative market movements because small negative market movements are absorbed by the Buffer. In a period of extreme negative market performance, the risk of loss is greater with the Index Precision Strategy than with the Index Guard Strategy. | ||||
Index Guard Strategy | • Permits a negative Performance Credit down to the Floor. • Protection from significant losses. • More sensitive to smaller negative market movements that persist over time because the Floor reduces the impact of large negative market movements. • In an extended period of smaller negative market returns, the risk of loss is greater with the Index Guard Strategy than with the Index Performance Strategy and Index Precision Strategy. • Provides certainty regarding the maximum loss in any | ||||
Index | • Buffers may be different between 1-year and 3-year Terms. • Buffer absorbs a percentage of loss, but you receive a negative Performance Credit for losses greater than the Buffer. • Potential for large losses in any • More sensitive to large negative market movements because small negative market movements are absorbed by the Buffer. In a period of extreme negative market performance, the risk of loss is greater with the Index Performance Strategy than with the Index Guard Strategy. • In extended periods of moderate to large negative market performance, 3-year Terms may provide less protection than the 1-year Terms because, in part, the Buffer is applied over a longer period of time. |
What is the growth opportunity? | |||||
• Growth opportunity limited by the DPSCs. • Least growth opportunity. • May perform best in periods of small positive market movements. • DPSCs will generally be less than the Precision Rates and Caps. | |||||
Index Precision Strategy | • May perform best in periods of small positive market movements. • Generally more growth opportunity than the Index Protection Strategy, | • Growth opportunity may be more or less than the Index Guard Strategy depending on Precision Rates and Caps. | |||
Index Guard Strategy | • May perform best in a strong market. • Growth opportunity that generally may be matched or exceeded only by the Index Performance Strategy. However, growth opportunity may be more or less than the Index Precision Strategy or Index Performance Strategy depending on Precision Rates and Caps. |
What is the growth opportunity? | |
Index Performance Strategy | • Generally the most growth opportunity. However, growth opportunity may be less than the Index Precision Strategy or Index Guard Strategy depending on Precision Rates and Caps. |
What can change within a Crediting Method? | |||||
• Renewal DPSCs for existing Contracts can change • DPSCs are subject to a | |||||
Index Precision Strategy | • Precision Rates are subject to a | ||||
Index Guard Strategy | • Caps are subject to a -25% minimum. | ||||
Index Performance Strategy | • Caps are subject to a |
• The minimum Buffer and Floor are the least amount of protection that you could receive from negative Index Returns for any Index Option with the Index Precision Strategy, Index Guard Strategy, or Index Performance Strategy. |
• DPSCs, Precision Rates, and Caps as set by us from time-to-time may vary substantially based on market conditions. However, in extreme market environments, it is possible that all DPSCs, Precision Rates, and Caps will be equal and reduced to their respective minimums of |
• DPSCs, Precision Rates, Caps, Buffers, and Floors can be different from Index Option to Index Option.For example, Caps for the Index Performance Strategy 1-year Terms can be different between the S&P 500® Index and the Nasdaq-100® Index, and Caps for the S&P 500® Index can be different between 1-year and 3-year Terms on the Index Performance Strategy, and between the 1-year Terms for the Index Guard Strategy and Index Performance Strategy.They may also be different from Contract-to-Contract depending on the Index Effective Date and the state of issuance. |
Historical information on the DPSCs, Precision Rates, Caps, Buffers, and Floors is provided in Appendix C. This information is for historical purposes only and is not a representation as to future DPSCs, Precision Rates, Caps, Buffers, or Floors. |
• DPSCs, Precision Rates, and Caps may be different between newly issued and existing Contracts, and between existing Contracts issued on the same month and day in different years. For example, assume that in |
– 13% initial rate for new Contracts issued in 2019, |
– 14% renewal rate for existing Contracts issued in |
• If your Contract is within its Free Look/Right to Examine period you may be able to take advantage of any increase in initial DPSCs, Precision Rates, or Caps by cancelling your Contract and purchasing a new Contract. |
The Contract Value is the sum of your Variable Account Value and Index Option Values. Contract Value reflects any previously deducted fees and charges, but does not reflect fees and charges that we would apply on liquidation. The cash surrender value reflects all fees and charges that we would apply on liquidation. |
Your Variable Account Value is the |
Your total Index Option Value is the sum of the values in each of your selected Index Options. Each Index Option Value includes any Credits from previous |
– | On each Business Day during the |
During the |
(i) | any Index gains during the Term subject to the Precision Rate |
(ii) | either any Index losses greater than the Buffer or Index losses down to the Floor, and |
(iii) | the number of days until the Term End Date. |
The outbreak of the novel coronavirus known as COVID-19 was declared a pandemic by the World Health Organization in March 2020. As of May 1, 2020, the COVID-19 pandemic has led to significant volatility and negative returns in the financial markets. These market conditions have impacted the performance of the Indexes to which the Index Options are linked, as well as the funds underlying the Variable Options. If these market conditions continue, and depending on your individual circumstances (e.g., your selected Allocation Options and the timing of any Purchase Payments, transfers, or withdrawals), you may experience (perhaps significant) negative returns under the Contract. The COVID-19 pandemic and other market factors have resulted in an abnormally low interest rate environment, in which certain rates have gone negative. This low level of rates can affect the returns of an Index, the level of DPSCs, Precision Rates, and Caps, and other product features, and the performance of your Contract. The duration of the COVID-19 pandemic, and the future impact that the pandemic may have on the financial markets and global economy, cannot be foreseen. You should consult with a Financial Professional about how the COVID-19 pandemic and the recent market conditions may impact your future investment decisions related to the Contract, such as purchasing the Contract or making Purchase Payments, transfers, or withdrawals, based on your individual circumstances. |
interest rate decreases, |
dividend rate increases, |
poor market performance, and |
the expected volatility of |
January 1, 2009 through December 31, 2018 | January 1, 2010 through December 31, 2019 | |||||||||||||
S&P 500® Index | Nasdaq-100® Index | Russell 2000® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | S&P 500® Index | Nasdaq-100® Index | Russell 2000® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||
Returns without dividends | 11.26% | 19.00% | 11.50% | 2.79% | 7.19% | 11.80% | 17.44% | 11.35% | 3.16% | 2.26% | ||||
Returns with dividends | 13.61% | 20.29% | 13.02% | 6.93% | 9.16% | 14.12% | 18.77% | 12.86% | 7.17% | 4.21% |
You will no longer participate in Index performance, positive or negative, for the remainder of the Index Year for the locked Index Option. This means that under no circumstances will your Index Option Value increase during the remainder of the Index Year. An Index Year is a twelve-month period beginning on the Index Effective Date or a subsequent Index Anniversary. |
You will not receive a Performance Credit on any locked Index Option on the |
We use the Daily Adjustment calculated at the end of the current Business Day on the Lock Date to determine your locked Index Option Value. This means you will not be able to determine in advance your locked Index Option Value, and it may be higher or lower than it was at the point in time you requested a manual Performance Lock, or that your Index Option reached its target for an automatic Performance Lock. |
If a Performance Lock is executed when your Daily Adjustment has declined, you will lock in any loss. It is possible that you would have realized less of a loss or no loss if the Performance Lock occurred at a later time, or if the Index Option was not locked. |
the Index is discontinued, |
we are unable to use the Index because, for example, changes to an Index make it impractical or expensive to purchase derivative |
the method of calculation of the Index Values changes substantially, resulting in significantly different Index Values and performance results. This could occur, for example, if an Index altered the types of securities tracked, or the weighting of different categories of securities. |
we do not change the Charge Base we use to calculate the |
the Term Start Date. |
You can only transfer Index Option Value to a Variable Option on a sixth Index Anniversary. |
market volatility, |
our hedging strategies and investment performance, |
the availability of hedging instruments, |
the amount of money available to us through Contract fees and expenses to purchase hedging instruments, |
your Index Effective Date, |
the level of interest rates, |
utilization of Contract benefits by Owners, and |
our profitability goals. |
As a result of the COVID-19 pandemic, economic uncertainties have arisen which are likely to negatively impact Allianz Life’s net income and surplus. The extent to which the COVID-19 pandemic impacts our business (including our ability to timely process applications or claims), net income, and surplus, as well as our capital and liquidity position, will depend on future developments, which are highly uncertain and cannot be estimated, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic. |
Number of Complete Years Since Purchase Payment | Withdrawal Charge Amount |
0 | 8.5% |
1 | 8% |
2 | 7% |
3 | 6% |
4 | 5% |
5 | 4% |
6 years or more | 0% |
Number of Complete Years Since Purchase Payment | Withdrawal Charge Amount | |
0 | 8.5% | |
1 | 8% | |
2 | 7% | |
3 | 6% | |
4 | 5% | |
5 | 4% | |
6 years or more | 0% |
Transfer Fee(3) | $25 |
(for each transfer between Variable Options after twelve in a Contract Year) |
Premium Tax | 3.5% |
(as a percentage of each Purchase Payment) |
Contract Maintenance Charge | $50 |
(per Contract per year) |
(1) | The Contract provides a free withdrawal privilege |
(2) | The Withdrawal Charge Basis is the total amount under your Contract that is subject to a withdrawal charge, as discussed in section 6, Expenses – Withdrawal Charge. |
(3) | We count all transfers made in the same Business Day as one transfer, as discussed in section 6, Expenses – Transfer Fee. The transfer fee does not apply to transfers to or from the Index Options and these transfers do not count against your free transfers. Transfers are subject to the policies discussed in section 4, Variable Options – Excessive Trading and Market Timing. |
(4) | Not currently deducted, but we reserve the right to do so in the future. This is the maximum charge we could deduct if we exercise this right, as discussed in section 6, Expenses – Premium Tax. |
Waived if the Contract Value is at least $100,000, as discussed in section 6, Expenses – Contract Maintenance Charge. |
Mortality and Expense Risk (m&e) charge(6) | ||
(as a percentage of | ||
Rider Fee for the optional Maximum Anniversary Value Death Benefit | 0.20% | |
We | |
(7) | We do not assess the rider fee during the Annuity Phase. See section 6, Expenses – Rider |
Management fees | Rule 12b‑1 fees | Other expenses | Acquired fund fees and expenses | Total annual fund operating expenses before fee waivers and/or expense reimbursements | |
BLACKROCK | |||||
AZL Government Money Market Fund(1) | .35 | .25 | .28 | – | .88 |
Minimum | Maximum | ||
Total annual Variable Option operating expenses (including management fees, distribution or 12b-1 fees, and other expenses) before fee waivers and expense reimbursements | 0.64% | 0.72% |
Variable Option | Management fees | Rule 12b-1 fees | Other expenses | Acquired fund fees and expenses | Total annual fund operating expenses before fee waivers and/or expense reimbursements |
BLACKROCK | |||||
AZL Government Money Market Fund(1) | .35 | .25 | .04 | – | .64 |
ALLIANZ FUND OF FUNDS | |||||
AZL MVP Balanced Index Strategy Fund(2) | .10 | – | .04 | .58 | .72 |
AZL MVP Growth Index Strategy Fund(2) | .10 | – | .02 | .56 | .68 |
(1) | Other Expenses for the AZL Government Money Market Fund include recoupment of prior waived fees in the amount of 0.24%. The Manager has voluntarily undertaken to waive, reimburse, or pay the Fund’s expenses to the extent necessary in order to maintain a minimum daily net investment income for the Fund of 0.00%. The recoupment of prior waived fees reflects the recoupment of amounts previously waived, reimbursed, or paid by the Manager under this arrangement. Such recoupments are subject to the following limitations: (1) the repayments will not cause the Fund’s net investment income to fall below 0.00%; (2) the repayments must be made no later than three years after the end of the fiscal year in which the waiver, reimbursement, or payment took place; and (3) any expense recovery paid by the Fund will not cause its expense ratio to exceed 0.87%. See the Investment Option prospectus for further information. |
(2) | The underlying funds may pay 12b-1 fees to the distributor of the Contracts for distribution and/or administrative services. The underlying funds do not pay service fees or 12b-1 fees to the Allianz Fund of Funds and the Allianz Fund of Funds do not pay service fees or 12b-1 fees. The underlying funds of the Allianz Fund of Funds may pay service fees to the insurance companies issuing variable contracts, or their affiliates, for providing customer service and other administrative services to contract purchasers. The amount of such service fees may vary depending on the underlying fund. |
0.88% total annual operating expenses for the AZL Government Money Market Fund before any fee waivers or expense reimbursements: | 1 Year | 3 Years | 5 Years | 10 Years |
· If you surrender your Contract (take a full withdrawal) at the end of each time period. | $1,206 | $1,791 | $2,355 | $3,912 |
· If you annuitize your Contract and begin Annuity Payments at the end of each time period. The earliest available Annuity Date (the date we begin making Annuity Payments) is two years after the Issue Date. | N/A | $1,091 | $1,855 | $3,912 |
· If you do not surrender your Contract. | $ 356 | $1,091 | $1,855 | $3,912 |
1) | If you surrender your Contract (take a full withdrawal) at the end of each time period. |
Total annual Variable Option operating expenses before any fee waivers or expense reimbursements of: | 1 Year | 3 Years | 5 Years | 10 years |
0.72% (maximum Investment Option operating exp.) | $1,120 | $1,526 | $1,905 | $2,965 |
0.64% (minimum Investment Option operating exp.) | $1,112 | $1,502 | $1,865 | $2,884 |
2) | If you annuitize your Contract and begin Annuity Payments at the end of each time period. The earliest available Annuity Date (the date we begin making Annuity Payments) is two years after the Issue Date. |
Total annual Variable Option operating expenses before any fee waivers or expense reimbursements of: | 1 Year | 3 Years | 5 Years | 10 years |
0.72% (maximum Investment Option operating expense) | N/A | $826 | $1,405 | $2,965 |
0.64% (minimum Investment Option operating expense) | N/A | $802 | $1,365 | $2,884 |
3) | If you do not surrender your Contract. |
Total annual Variable Option operating expenses before any fee waivers or expense reimbursements of: | 1 Year | 3 Years | 5 Years | 10 years |
0.72% (maximum Investment Option operating expense) | $270 | $826 | $1,405 | $2,965 |
0.64% (minimum Investment Option operating expense) | $262 | $802 | $1,365 | $2,884 |
Period or Year Ended | AUV at Beginning of Period | AUV at End of Period | Number of Accumulation Units Outstanding at End of Period |
AZL Government Money Market Fund | |||
12/31/2013 | NA | 12.754 | 346 |
12/31/2014 | 12.754 | 12.755 | 1560 |
12/31/2015 | 12.755 | 12.756 | 2726 |
12/31/2016 | 12.756 | 12.757 | 5376 |
12/31/2017 | 12.757 | 12.763 | 3831 |
12/31/2018 | 12.763 | 12.893 | 375 |
M&E Charge 1.25% | |||
Period or Year Ended | AUV at Beginning of Period | AUV at End of Period | Number of Accumulation Units Outstanding at End of Period |
AZL Government Money Market Fund | |||
12/31/2017 | N/A | 10.203 | 28.00 |
12/31/2018 | 10.203 | 10.178 | 134.00 |
12/31/2019 | 10.178 | 10.192 | 1898.00 |
AZL MVP Balanced Index Strategy Fund | |||
12/31/2017 | N/A | 14.257 | 1.00 |
12/31/2018 | 14.257 | 13.455 | 3.00 |
12/31/2019 | 13.455 | 15.536 | 18.00 |
AZL MVP Growth Index Strategy Fund | |||
12/31/2017 | N/A | 16.291 | 1.00 |
12/31/2018 | 16.291 | 15.051 | 1.00 |
12/31/2019 | 15.051 | 17.916 | 9.00 |
• | The Business Day before the Annuity Date. |
• | The Business Day we process your request for a full withdrawal. |
• | Upon the death of any Owner (or the Annuitant if the Owner is a non-individual), the Business Day we first receive a Valid Claim from any one Beneficiary, unless the surviving spouse/Beneficiary continues the Contract. If there are multiple Beneficiaries, the remaining Contract Value continues to fluctuate with the performance of the Allocation Options until the complete distribution of the death benefit. A Valid Claim is the documents we require to be received in Good Order at our Service Center before we pay any death claim. |
all applicable phases of the Contract (Accumulation Phase |
if we received a Valid Claim, all applicable death benefit payments have been made. |
• | If the deceased Owner was a Determining Life and the surviving spouse Beneficiary continues the Contract: |
– | we increase the Contract Value to equal the Guaranteed Death Benefit Value if greater and available, and the death benefit ends, |
– | the surviving spouse becomes the new Owner, |
– | the Accumulation Phase continues, and |
– | upon the surviving spouse’s death, his or her Beneficiary(s) receives the Contract Value. |
• | |
• | If the deceased was not an Annuitant, Annuity Payments to the Payee continue. No death benefit is payable. |
• | If the deceased was the only surviving Annuitant, Annuity Payments end or continue as follows. |
– | Annuity Option 1 or 3, payments end. |
– | Annuity Option 2 or 4, payments end when the guarantee period ends. |
– | Annuity Option 5, payments end and the Payee may receive a lump sum refund. |
you remove a Joint Owner due to divorce, we also remove that person as a Determining Life, or |
you establish a jointly owned Non-Qualified Contract and change ownership to a Trust, we remove the prior Owner who is not the Annuitant as a Determining Life. |
• An assignment may be a taxable . |
• An assignment does not change the Determining Life (Lives). |
age 80 or younger if you select the Traditional Death Benefit, or |
age 75 or younger if you select the Maximum Anniversary Value Death Benefit. |
The minimum initial Purchase Payment due on the Issue Date is |
We do not accept additional Purchase Payments on or after the |
The maximum total Purchase Payments we accept without our prior approval is $1 million. |
On your application if you | Your Index Effective Date will be either… |
the earliest Index Effective Date | • the first Business Day of the next month if the Issue Date is the 29th, 30th, or 31st of a month |
the deferred Index Effective Date | • the next Business Day if the first Quarterly Contract Anniversary occurs on a non-Business Day, or the first Business Day of the next month if the first Quarterly Contract Anniversary is the 29th, 30th, or 31st of a month |
• In order to apply Purchase Payments we receive after the Index Effective Date to your selected Index Option(s) on the next Index Anniversary, we must receive them before the end of the Business Day on the Index Anniversary (or before the end of the prior Business Day if the anniversary is a non-Business Day). |
Variable Options are subject to Contract fees and expenses (e.g. m&e charge), and market risk and a m&e charge. Assets you allocate to them may lose value, including any Purchase Payments we hold in the AZL Government Money Market before transferring them to your selected Index Options |
For Owners of Qualified Contracts, AIP is not available if you have an Inherited IRA Contract, an Inherited Roth IRA Contract, or if your Contract is funding a plan that is tax qualified under Section 401 of the Code. |
• | cancel your Contract during this time, we return the greater of Purchase Payments less withdrawals, or Contract Value. We do not assess a withdrawal charge or deduct any Contract fees or expenses other than the m&e charge if you cancel your Contract during the free look period. |
• | do not cancel your Contract during this time, we re-allocate your Contract Value according to your Purchase Payment default instructions after the free look period as follows: |
– | if your instructions include the Variable Options, we re-allocate this portion of your Contract Value on the next Business Day after the free look period. |
– | if your instructions include the Index Options, we re-allocate this portion of your Contract Value on the Index Effective Date. |
Investment Management Company and Adviser/Subadviser | Investment Option Name | Asset Class | Investment Objective | Principal Investment Strategies (Normal market conditions) |
Allianz Fund of Funds |
Investment Management Company and Adviser/Subadviser | Investment Option Name | Asset Class | Investment Objective | Principal Investment Strategies (Normal market conditions) |
Allianz Investment Management LLC | AZL MVP Balanced Index Strategy Fund | A “Fund of Funds” Model Portfolio | Long-term capital appreciation with preservation of capital as an important consideration | Invests primarily (approximately 95%) in a combination of five underlying index funds (generally allocated 40% to 60% to underlying equity index funds and 40% to 60% to underlying bond index fund), combined with the MVP (Managed Volatility Portfolio) risk management process intended to adjust the risk of the portfolio based on quantitative indicators of market risk. |
AZL MVP Growth Index Strategy Fund | A “Fund of Funds” Model Portfolio | Long-term capital appreciation | Invests primarily (approximately 95%) in a combination of five underlying index funds (generally allocated 65% to 85% to underlying equity index funds and 15% to 35% to underlying bond index fund), combined with the MVP (Managed Volatility Portfolio) risk management process intended to adjust the risk of the portfolio based on quantitative indicators of market risk. | |
Blackrock | ||||
Allianz Investment Management LLC/BlackRock Advisors, LLC | AZL Government Money Market Fund | Cash Equivalent | Current income consistent with stability of principal | Invests at least 99.5% of its total assets in cash, government securities, or repurchase agreements that are collateralized fully. Invests at least 80% in government securities or in repurchase agreements collateralized by government securities. Investments include U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and repurchase agreements secured by such obligations. In addition, the Fund may invest in variable and floating rate instruments. During extended periods of low interest rates, and due in part to contract fees and expenses, the yield of the AZL Government Money Market Fund may also become extremely low and possibly negative. |
• | Your request for a transfer must clearly state the Variable Options involved and how much to transfer. |
• | Your right to make transfers is subject to the Excessive Trading and Market Timing policy discussed later in this section. |
• | Variable Account Value transfers between Variable Options do not change your Purchase Payment default instructions. |
Dilution of the interests of long-term investors in a |
An adverse effect on portfolio management, such as causing a |
Increased brokerage and administrative expenses. |
Limit transfer frequency (for example, prohibit more than one transfer a week, or more than two a month, etc.). |
Restrict the transfer method (for example, requiring all transfers be sent by first-class U.S. mail and rescinding electronic transfer privileges). |
Require a minimum time period between each transfer into or out of the same |
Refuse transfer requests made on your behalf by an asset allocation and/or market timing service. |
Limit the dollar amount of any single Purchase Payment or transfer request to a |
Prohibit transfers into specific |
Impose other limitations or restrictions to the extent permitted by federal securities laws. |
Our monitoring will be 100% successful in detecting all potentially disruptive trading activity. |
Revoking electronic transfer privileges will successfully deter all potentially disruptive trading. |
This Contract is not designed for professional market timing organizations, or other persons using programmed, large, or frequent transfers, and we may restrict excessive or inappropriate transfer activity. |
You can provide voting instructions based on the dollar value of the |
You receive proxy materials and a voting instruction form. |
Variable Account Value increases when…. | Variable Account Value decreases when…. |
• there is positive Variable Option performance | • you take assets out of a Variable Option by withdrawal or Contract Value transfer • there is negative Variable Option performance • we deduct Contract expenses |
Contract expenses we deduct from the Variable Options include the m&e charge, rider fee, contract maintenance charge, withdrawal charge and transfer fee as described in section 6, Expenses. Variable Options include Purchase Payments we hold |
Index Option Values increase when…. | Index Option Values decrease when…. |
• you add assets to an Index Option by Purchase Payment or Contract Value transfer • you receive a positive | • you receive a negative • we deduct Contract expenses |
Contract expenses we deduct from the |
increase |
decrease |
We receive at our Service Center an additional Purchase Payment of $3,000 from you before the end of the Business Day. |
When the New York Stock Exchange closes on that Business Day, we determine that the accumulation unit value is $13.25 for the subaccount of |
We then divide $3,000 by $13.25 and credit your Contract that night with 226.415094 subaccount accumulation units for |
the Daily Adjustment if this is not |
a Credit if this is |
We multiply each Index Option Base by its Credit and add this amount to its Index Option Base. |
Then we set each Index Option Value equal to its Index Option Base. |
Additional Purchase Payments received on |
Transfers out of this Index Option reduce these values by the dollar amount removed from the Index Option. |
We deduct partial withdrawals and Contract expenses from the Index Options proportionately based on the percentage of Contract Value in each Index Option using values determined at the end of the Business Day before we process the withdrawal or deduct the Contract expense. However, if you specifically direct us to take a partial withdrawal from a specific Index Option we reduce that Index Option Value by the dollar amount you specify, including any applicable withdrawal charge. |
We then reduce each Index Option Base by the same percentage that the amount withdrawn reduced its associated Index Option Value. |
• Partial withdrawals and Contract expenses we deduct from the Index Options during the Term End Date. |
• You cannot specify from which |
Crediting Method | If Index Value is less than it was on the Term Start Date (i.e., Index Return is negative): | If Index Value is equal to or greater than it was on the (i.e., Index Return is zero or positive): |
Index Protection Strategy | Credit is zero | Credit is equal to the DPSC set on the |
Index Precision Strategy | Performance Credit is equal to the negative Index Return in excess of the • -8%, the Performance Credit is zero. • -12%, the Performance Credit is -2%. | Performance Credit is equal to the Precision Rate set on the |
Index Guard Strategy | Performance Credit is equal to the negative Index Return subject to the • -8%, the Performance Credit is -8%. • -12%, the Performance Credit is -10%. | Performance Credit is equal to the Index Return • 0%, the Performance Credit is zero. • 6%, the Performance Credit is 6%. • 12%, the Performance Credit is 8%. |
Crediting Method | If Index Value is less than it was on the Term Start Date (i.e., Index Return is negative): | If Index Value is equal to or greater than it was on the Term Start Date (i.e., Index Return is zero or positive): |
Index Performance Strategy | Performance Credit is equal to the negative Index Return in excess of the Buffer. Assume the Buffer for the 1-year Term is 10%. If the Index Return for the year is… • -8%, the Performance Credit is zero. • -12%, the Performance Credit is -2%. Assume the Buffer for the 3-year Term is 10%. If the Index Return for the three years is… • -10%, the Performance Credit is zero. • -14%, the Performance Credit is -4%. | Performance Credit is equal to the Index Return Term Start Date Assume the Cap for the 1-year Term is 8%. If the Index Return for the year is… • 0%, the Performance Credit is zero. • 6%, the Performance Credit is 6%. • 12%, the Performance Credit is 8%. |
Assume the Cap for the 3-year Term is 30%. If the Index • 0%, the Performance Credit is zero. • 28%, the Performance Credit is 28%. • 45%, the Performance Credit is 30%. However, if |
Mortality and Expense Risk (m&e) charge(1) | |
(as a percentage of | |
(1) | Upon the death of the Owner, we continue to assess this |
Rider Fee for the optional Maximum Anniversary Value Death Benefit(1) | 0.20% |
(as a percentage of the Charge Base) |
(1) | We no longer assess the 0.20% rider fee for the Maximum Anniversary Value Death Benefit once we receive either the first Valid Claim from any one Beneficiary, or due proof of a Determining Life’s death if you and the Determining Life are different individuals and the Determining Life predeceases you. |
Issue Date | Non-Quarterly Contract Anniversaries | Quarterly Contract Anniversaries* |
– If we receive an additional Purchase Payment, we increase the Charge Base by the amount we receive. – If you take a partial withdrawal (including a Penalty-Free Withdrawal), or we withdraw Contract fees and expenses, we decrease the Charge Base by the percentage of Contract Value withdrawn. | • First we process all daily transactions and determine your Contract Value. Daily transactions include any gains/losses due to Variable Option performance or application of any Daily Adjustment (or Credit if this is also the Term End Date), any additional Purchase Payment, and deductions for withdrawals and Contract fees and expenses, including deduction of the accrued daily rider fee for the prior quarter. – We deduct the accrued rider fee for the prior quarter on a dollar for dollar basis from the Contract Value, and proportionately from each Allocation Option.• Then we set the Charge Base equal to this Contract Value and we calculate and accrue the next quarter’s daily rider fee using the newly set Charge Base.* Or the next Business Day if the Quarterly Contract Anniversary is a non-Business Day. | |
Example: Contract Value is $125,000; Charge Base is $127,000; a $10,000 partial withdrawal (including any withdrawal charge) would decrease the Charge Base by $10,160. [($10,000 ÷ $125,000) x $127,000] Any increase/decrease to the Charge Base will increase/decrease the daily | ||
Examples of how we calculate the |
We do not treat the deduction of the accrued rider fee as a withdrawal when computing your Guaranteed Death Benefit Value (see section 9). However, if you select the Maximum Anniversary Value Death Benefit we deduct all Contract fees and expenses on the Index Anniversary (including the accrued rider fee if this is also a Quarterly Contract Anniversary) before we capture any annual investment gains in the Maximum Anniversary Value. |
If you take a full withdrawal of the total Contract Value, we deduct the final accrued |
If you annuitize the Contract, we deduct the final accrued |
Upon the death of an Owner (or Annuitant if the Owner is a non-individual), we deduct the final accrued rider fee |
If on a Quarterly Contract Anniversary (or the next Business Day if the Quarterly Contract Anniversary is a non-Business Day) the Contract Value is less than the accrued rider fee, we deduct your total remaining Contract Value to cover the accrued rider fee and reduce your Contract Value to zero. If the deduction of the accrued rider fee reduces your Contract Value to zero and the Maximum Anniversary Value Death Benefit has ended, we treat this as a full withdrawal and your Contract ends. |
During the Accumulation Phase, |
During the Annuity Phase if the total Contract Value for all Index Advantage NF® Contracts on the last Business Day before the Annuity Date is at least $100,000. |
When paying death benefits under death benefit payment options A, B, or C. |
on a dollar for dollar basis from the Contract Value on the Contract Anniversary (or the next Business Day if the Contract Anniversary is a non-Business Day), and |
we deduct it proportionately from each |
Calculating a Withdrawal Charge | Example | |
For purposes of calculating any withdrawal charge, we withdraw Purchase Payments on a “first-in-first-out” (FIFO) basis and we process withdrawal requests as follows. | You make an initial Purchase Payment of $30,000 and make another Purchase Payment in the first month of the second Contract Year of $70,000. In the third month of the third Contract Year, your Contract Value is $110,000 and you request a $52,000 withdrawal. We withdraw money and compute the withdrawal charge as follows. | |
1. First we withdraw from Purchase Payments that we have had for six or more complete years, which is your Contract’s withdrawal charge period. This withdrawal is not subject to a withdrawal charge and it reduces the Withdrawal Charge Basis. | 1. Purchase Payments beyond the withdrawal charge period. All payments are still within the withdrawal charge period, so this does not apply. |
Calculating a Withdrawal Charge | Example | |
For purposes of calculating any withdrawal charge, we withdraw Purchase Payments on a “first-in-first-out” (FIFO) basis and we process withdrawal requests as follows. | You make an initial Purchase Payment of $55,000 and make another Purchase Payment in the first month of the second Contract Year of $45,000. In the third month of the third Contract Year, your Contract Value is $110,000 and you request a $70,000 withdrawal. We withdraw money and compute the withdrawal charge as follows. | |
1. First we withdraw from Purchase Payments that we have had for six or more complete years, which is your Contract’s withdrawal charge period. This withdrawal is not subject to a withdrawal charge and it reduces the Withdrawal Charge Basis. | 1. Purchase Payments beyond the withdrawal charge period. All payments are still within the withdrawal charge period, so this does not apply. | |
2. Then, if this is a partial withdrawal during the Accumulation Phase and before the Income Period, we withdraw from the free withdrawal privilege (see section 7, Access to Your Money – Free Withdrawal Privilege). This withdrawal is not subject to a withdrawal charge and it does not reduce the Withdrawal Charge Basis. | 2. Amounts available under the free withdrawal privilege. You did not take any other withdrawals this year, so you can withdraw up to 10% of your total payments (or $10,000) without incurring a withdrawal charge. | |
3. Next, on a FIFO basis, we withdraw from Purchase Payments within your Contract’s withdrawal charge period and assess a withdrawal charge. Withdrawing payments on a FIFO basis may help reduce the total withdrawal charge because the charge declines over time. We determine your total withdrawal charge by multiplying each payment by its applicable withdrawal charge percentage and then totaling the charges. This withdrawal reduces the Withdrawal Charge Basis. The withdrawal charge as a percentage of each Purchase Payment withdrawn is as follows. | 3. Purchase Payments within the withdrawal charge period on a FIFO basis. The total amount we withdraw from the first Purchase Payment is $55,000, which is subject to a 7% withdrawal charge, and you receive $51,150. We determine this amount as follows: (amount withdrawn) x (1 – withdrawal charge) = the amount you receive, or: $55,000 x 0.93 = $51,150. Next we withdraw from the second Purchase Payment. So far, you received $61,150 ($10,000 under the free withdrawal privilege and $51,150 from the first Purchase Payment), so we withdraw $8,850 from the second Purchase Payment to equal the $70,000 you requested. The second Purchase Payment is subject to an 8% withdrawal charge. We calculate the total amount withdrawn and its withdrawal charge as follows: (the amount you receive) ÷ (1 – withdrawal charge) = amount withdrawn, or: $8,850 ÷ 0.92 = $9,620. | |
Number of Complete Years Since Purchase Payment | Withdrawal Charge Amount | |
0 | 8.5% | |
1 | 8% | |
2 | 7% | |
3 | 6% | |
4 | 5% | |
5 | 4% | |
6 years or more | 0% | |
4. Finally we withdraw any Contract earnings. This withdrawal is not subject to a withdrawal charge and it does not reduce the Withdrawal Charge Basis. | 4. Contract earnings. We already withdrew your requested amount, so this does not apply. In total we withdrew $74,620 from your Contract, of which you received $70,000 and paid a withdrawal charge of $4,620. |
Calculating a Withdrawal Charge | Example | |||
2. Then, if this is a partial withdrawal, we withdraw from the free withdrawal privilege (see section 7, Access to Your Money – Free Withdrawal Privilege). This withdrawal is not subject to a withdrawal charge and it does not reduce the Withdrawal Charge Basis. | 2. Amounts available under the free withdrawal privilege. You did not take any other withdrawals this year, so you can withdraw up to 10% of your total payments (or $10,000) without incurring a withdrawal charge. | |||
3. Next, on a FIFO basis, we withdraw from Purchase Payments within your Contract’s withdrawal charge period and assess a withdrawal charge. Withdrawing payments on a FIFO basis may help reduce the total withdrawal charge because the charge declines over time. We determine your total withdrawal charge by multiplying each payment by its applicable withdrawal charge percentage and then totaling the charges. This withdrawal reduces the Withdrawal Charge Basis. The withdrawal charge as a percentage of each Purchase Payment withdrawn is as follows. | 3. Purchase Payments within the withdrawal charge period on a FIFO basis. The total amount we withdraw from the first Purchase Payment is $30,000, which is subject to a 7% withdrawal charge, and you receive $27,900. We determine this amount as follows: (amount withdrawn) x (1 – withdrawal charge) = the amount you receive, or: $30,000 x 0.93 = $27,900 Next we withdraw from the second Purchase Payment. So far, you received $37,900 ($10,000 under the free withdrawal privilege and $27,900 from the first Purchase Payment), so we withdraw $14,100 from the second Purchase Payment to equal the $52,000 you requested. The second Purchase Payment is subject to an 8% withdrawal charge. We calculate the total amount withdrawn and its withdrawal charge as follows: (the amount you receive) ÷ (1 – withdrawal charge) = amount withdrawn, or: $14,100 ÷ 0.92 = $15,326. | |||
Number of Complete Years Since Purchase Payment | Withdrawal Charge Amount | |||
0 1 2 3 4 5 6 years or more | 8.5% 8% 7% 6% 5% 4% 0% | |||
4. Finally we withdraw any Contract earnings. This withdrawal is not subject to a withdrawal charge and it does not reduce the Withdrawal Charge Basis. | 4. Contract earnings. We already withdrew your requested amount, so this does not apply. In total we withdrew $55,326 from your Contract, of which you received $52,000 and paid a withdrawal charge of $3,326. |
• We do not reduce the Withdrawal Charge Basis for Penalty-Free Withdrawals or the deduction of Contract expenses other than the withdrawal charge. This means that upon a full withdrawal, if your Contract Value is less than your remaining Purchase Payments that are still subject to a withdrawal charge we will assess a withdrawal charge on more than the amount withdrawn. This can occur because your Contract Value was reduced for: |
– prior Penalty-Free Withdrawals, |
– deductions of Contract expenses other than the withdrawal charge, and/or |
– poor performance. |
• Withdrawals may also be subject to ordinary income taxes, and a 10% additional federal tax if you are under age |
• For tax purposes in most instances, withdrawals from Non-Qualified Contracts are considered to come from earnings first, not Purchase Payments. |
by taking required minimum distributions (Qualified Contracts only) as discussed in “Minimum Distribution Program and Required Minimum Distribution (RMD) Payments” later in this section; |
by taking Annuity Payments; or |
when we pay a death benefit. |
* | Does not apply to |
total Contract Value, |
less any |
less any withdrawal |
• Withdrawals may be subject to a withdrawal charge, ordinary income taxes, and a 10% additional federal tax if you are under age |
• We may be required to provide information about you or your Contract to government regulators. We may also be required to stop Contract disbursements and thereby refuse any transfer requests, and refuse to pay any withdrawals, surrenders, or death benefits until we receive instructions from the appropriate regulator. If, pursuant to SEC rules, the AZL Government Money Market Fund suspends payment of redemption proceeds in connection with a fund liquidation, we will delay payment of any transfer, partial withdrawal, surrender, or death benefit from the AZL Government Money Market Fund subaccount until the fund is liquidated. |
The free withdrawal privilege is not available upon a full withdrawal. |
• Ordinary income taxes and tax penalties may apply to systematic withdrawals. |
• The systematic withdrawal program is not available |
• You should consult a tax adviser before purchasing a Qualified Contract that is subject to RMD payments. |
• The minimum distribution program is not available while you are receiving systematic withdrawals. |
the New York Stock Exchange is closed (other than customary weekend and holiday closings); |
trading on the New York Stock Exchange is restricted; |
an emergency (as determined by the SEC) exists as a result of which disposal of the |
during any other period when the SEC, by order, so permits for the protection of Owners. |
The Contract Value on the Annuity Date. |
The age of the Annuitant and any joint Annuitant on the Annuity Date. |
The gender of the Annuitant and any joint Annuitant where permitted. |
The Annuity Option you select. |
Your Contract’s interest rate (or current rates, if higher) and mortality table. |
If you do not choose an Annuity Option before the Annuity Date, we make Annuity Payments to the Payee under Annuity Option 2 with ten years of guaranteed monthly payments. |
If on the Annuity Date (which may occur as early as age 90 or as late as age 100) your Contract Value is greater than zero, you must annuitize the Contract. We notify you of your available options in writing 60 days in advance, including the option to extend your Annuity Date if available. If on your Annuity Date you have not selected an Annuity Option, we make payments under Annuity Option 2 with ten years of guaranteed monthly payments. Upon annuitization you no longer have Contract Value or a death benefit, and you cannot receive any other periodic withdrawals or payments other than Annuity Payments. |
9. |
Excess Withdrawal | Contract Value | Guaranteed Death Benefit Value for a Contract with the Traditional Death Benefit | Guaranteed Death Benefit Value for a Contract with the Maximum Anniversary Value Death Benefit | Next anniverary’s annual maximum Income Payment |
Prior to withdrawal | $ 100,000 | $ 90,000 | $ 105,000 | $ 4,800 |
$5,000 withdrawal | –[($5,000/ 100,000) | –[($5,000/ 100,000) | –[($5,000/ 100,000) | |
x 90,000)] | x 105,000)] | x 4,800)] | ||
– $5,000 | =– $4,500 | =– $5,250 | =– $240 | |
After withdrawal | $ 95,000 | $ 85,500 | $ 99,750 | $ 4,560 |
total Purchase Payments adjusted for |
the Maximum Anniversary |
We increase it by the amount of any additional Purchase Payments. |
We reduce it by the percentage of any Contract Value withdrawn. |
its current value after processing any additional Purchase Payments or withdrawals, or |
the Contract Value determined at the end of the Business Day after we process all daily transactions including Credits, any additional Purchase Payments or withdrawals, and amounts we withdraw for Contract expenses. Contract Value reflects the Daily Adjustment if you select a 3-year Term Index Option and this anniversary is not a Term End Date. |
the older Determining Life’s 91st |
the end of the Business Day we receive the first Valid Claim from any one Beneficiary. |
their portion of |
their portion of the Contract Value determined at the end of the Business Day during which we receive his or her Valid Claim. |
If a Determining Life dies before you, we do not pay a death benefit to the Beneficiary(s) but we may increase the Contract Value if the Traditional Death Benefit or Maximum Anniversary Value Death Benefit are still in |
Upon your death your Beneficiary(s) receive the Contract Value determined at the end of the Business Day during which we receive each Beneficiary’s Valid Claim. |
The Business Day before the Annuity Date. |
The Business Day that the |
Upon the death of a Determining Life, the end of the Business Day we receive a Valid Claim from all Beneficiaries if you and the Determining Life are the same individuals, or if you and the Determining Life (Lives) are different individuals and die simultaneously as defined by applicable state law or regulation. |
Upon the death of a Determining Life, the end of the Business Day we receive due proof of the Determining Life’s death if you and the Determining Life (Lives) are different individuals and do not die simultaneously. |
Upon the death of an Owner (or Annuitant if the Owner is a non-individual), the end of the Business Day we receive the first Valid Claim from any one Beneficiary, if the Owner (or Annuitant) is no longer a Determining Life. |
The Business Day the Contract ends. |
We base the | |
• the Guaranteed Death Benefit Value |
• if you selected the Maximum Anniversary Value Death Benefit, we no longer assess its 0.20% rider fee. | |
Also, if you and the Determining Life (Lives) are different individuals and you die first, the Guaranteed Death Benefit Value is not available to your Beneficiary(s). |
he or she becomes the new Owner and may exercise all of the Owner’s rights, including naming a new Beneficiary or Beneficiaries; |
he or she is subject to any remaining withdrawal charge; and |
upon the surviving spouse’s death their Beneficiary(s) receive the Contract Value determined at the end of the Business Day during which we receive a Valid Claim from each Beneficiary. |
Type of Contract | Persons and Entities that can buy the Contract |
IRA | Must have the same individual as Owner and Annuitant. |
Roth IRA | Must have the same individual as Owner and Annuitant. |
Simplified Employee Pension (SEP) IRA | Must have the same individual as Owner and Annuitant. |
Certain Code Section 401 Plans | A qualified retirement plan is the Owner and the Annuitant must be an individual. We may determine which types of qualified retirement plans are eligible to purchase this Contract. |
Inherited IRA and Inherited Roth IRA | Must have the same individual as Owner and Annuitant. The deceased owner of the previously held tax-qualified arrangement will also be listed in the titling of the Contract. |
Taxes on earnings are deferred until you take money out. Non-Qualified Contracts owned by corporations or partnerships do not receive income tax deferral on earnings. |
When you take money out of a Non-Qualified Contract, earnings are generally subject to federal income tax and applicable state income tax. All pre-tax money distributed from Qualified Contracts are subject to federal and state income tax, but qualified distributions from Roth IRA Contracts are not subject to federal income tax. This prospectus does not address specific state tax laws. You should discuss state taxation with your tax adviser. |
Taxable distributions are subject to an ordinary income tax rate, rather than a capital gains rate. |
Distributions from Non-Qualified Contracts are considered investment income for purposes of the Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may apply to some or all of the taxable portion of distributions (e.g. earnings) to individuals whose income exceeds certain threshold amounts ($200,000 for filing single, $250,000 for married filing jointly and $125,000 for married filing separately.) Please consult a tax advisor for more information. |
If you take partial withdrawals from your Non-Qualified Contract, the withdrawals are generally taxed as though you were paid taxable earnings first, and then as a non-taxable return of Purchase Payments. |
If you annuitize your Non-Qualified Contract and receive a stream of Annuity Payments, you receive the benefit of the exclusion ratio. The exclusion ratio is a calculation that causes a portion of each Annuity Payment to be non-taxable, based upon the percentage of your Contract Value that is from Purchase Payments. Purchase Payments are treated as a non-taxable return of principal, whereas earnings are taxable. |
If you take partial withdrawals or annuitize a Qualified Contract, you will be responsible for determining what portion, if any, of the distribution consists of after-tax money. |
If you take out earnings before age |
A pledge, assignment, or ownership change of a Contract may be treated as a taxable event. You should discuss any pledge, assignment, or ownership change of a Contract with your tax adviser. |
If you purchase multiple non-qualified deferred annuity contracts from an affiliated group of companies in one calendar year, these contracts are treated as one contract for purposes of determining the tax consequences of any distribution. |
Death benefit proceeds from Non-Qualified Contracts are taxable to the beneficiary as ordinary income to the extent of any earnings. Death benefit proceeds must be paid out in accordance with the requirements of the Code. |
Depending upon the type of Qualified Contract you own, required minimum distributions (RMDs) must be satisfied when you reach a certain age. If you enroll in our minimum distribution program, we make RMD payments to you that are designed to meet this Contract’s RMD requirements. |
When you take money out of a Contract, we may deduct premium tax that we pay on your Contract. This tax varies from 0% to 3.5%, depending on your state. Currently, we pay this tax and do not pass it on to you. |
you might have to pay a withdrawal charge on your previous contract, |
there is a new withdrawal charge period for this Contract, |
other charges under this Contract may be higher (or lower), |
the benefits may be different, and |
you no longer have access to any benefits from your previous contract. |
overhead, |
legal fees, |
accounting fees, |
Financial Professional training, |
compensation for the ALFS management team, and |
other expenses associated with the Contracts. |
marketing services and increased access to their Financial Professionals; |
sales promotions relating to the Contracts; |
costs associated with sales conferences and educational seminars; |
the cost of client meetings and presentations; and |
other sales expenses incurred by them. |
issuance and maintenance of the Contracts, |
maintenance of Owner records, and |
routine customer service including: |
– | processing of Contract changes, |
– | processing withdrawal requests (both partial and total), and |
– | processing requests for fixed annuity payments. |
• | William E. Gaumond, Senior Vice President, Chief |
• | Jasmine M. Jirele, Senior Vice President, Chief Growth Officer |
• | Neil H. McKay, Senior Vice President, Chief Actuary |
• | Catherine A. Mahone, Senior Vice President, Chief Administrative Officer |
providing total compensation opportunities that are competitive with the levels of total compensation available at the large diversified financial services companies with which Allianz Life most directly competes in the marketplace; |
setting performance metrics and objectives for variable compensation arrangements that reward executives for attaining both annual targets and medium-range and long-term business objectives, thereby providing individual executives with the opportunity to earn above-average compensation by achieving above-average results; |
establishing equity-based arrangements that align executives’ financial interests with those of Allianz SE by ensuring executives have a material financial stake in the equity value of Allianz SE and the business success of its affiliates; and |
structuring compensation packages and outcomes to foster internal pay equity. |
Compensation Element | Description | Objective |
Base Salary | Fixed rate of pay that compensates employees for fulfilling their basic job responsibilities. For NEOs, increases are generally provided in the case of a significant increase in responsibilities or a significant discrepancy versus the market. | Attract and retain high-caliber leadership. |
Annual Incentive Plan | Incentive compensation that promotes and rewards the achievement of annual performance objectives through awards under the Allianz Life Annual Incentive Plan (“AIP”). | • Attract and motivate high-caliber leadership. • Align the interests of NEOs and our stockholder. |
Long-Term Incentives | Incentive compensation that promotes and rewards the achievement of long-term performance objectives through awards under the Allianz Life Long-Term Performance Unit Plan (“ALTPUP”). Allianz Life’s Chief Executive Officer, Walter R. White, | • Motivate and retain high-caliber leadership with multi-year vesting. • Align the interests of NEOs and our stockholder. |
Performance-Based Equity Incentives | Incentive compensation through restricted stock unit awards made under the Allianz Equity Incentive Plan (“AEI”) that promotes and rewards the achievement of senior executive officers. | • Align the interests of NEOs and our stockholder. |
Severance Arrangements | Severance payments to employees, including NEOs, under certain company-initiated termination events. | Compensate employees |
Perquisites-Benefits | Perquisites provided to our NEOs include employer matching contributions to the NEOs’ accounts in the 401(k) plan and may also include the payment of life insurance premiums, relocation reimbursements, and reimbursements for financial planning, tax preparation services, and spousal travel expenses. | Provide market competitive total compensation package. |
In general, establish the compensation philosophy and strategy of Allianz Life and oversee the development and implementation of compensation, benefit and perquisite programs for corporate executives consistent with the principles of ensuring that leadership is compensated effectively in a manner consistent with the stated compensation strategy, internal equity considerations, competitive practices, shareholder interests, and the requirements of any applicable regulatory bodies in order to attract and retain high-quality leadership. This responsibility includes periodic review of Allianz Life’s compensation programs to pursue certain goals, with the expectation that changes will be made periodically to ensure these goals are attained. |
Review and approve the establishment of, or material modification to, any executive incentive compensation plans or programs for Allianz Life. |
Review and approve any special benefits |
Review and approve any employment | |
• | Review and approve any individual severance agreement with any Allianz Life officer. This does not include |
Oversee Allianz Life’s compliance with regulations with respect to compensation matters and |
evaluating the compensation data from industry groups, national executive pay surveys and other sources for the NEOs and other executive officers as appropriate; |
gathering and correlating performance ratings and reviews for individual executive officers, including the NEOs; |
reviewing executive compensation recommendations against appropriate market data and for internal consistency and equity; and |
reporting to, and answering requests for information from, the Compensation Committee. |
reward the performance of participants who have made significant contributions to the achievement of annual goals and objectives; |
provide an incentive that will encourage future superior individual performance; and |
encourage the retention of employees who have demonstrated exceptional performance and/or are anticipated to significantly contribute to the long-term success of Allianz Life. |
reward the performance of participants who have made significant contributions to the achievement of their company’s annual goals and objectives, |
provide an incentive that will encourage future superior individual performance, and |
encourage the retention of employees who have demonstrated exceptional performance and/or are anticipated to significantly contribute to the long-term success of |
Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total |
(a) | (b) | (c) | (d) | (e)(1) | (f) | (g)(2),(3) | (h) | (i)(4) | (j) |
Walter R. White | 2018 | $865,100 | N/A | $921,332 | N/A | $1,842,663 | N/A | $21,873 | $3,650,968 |
President and Chief | |||||||||
Executive Officer | |||||||||
William E. Gaumond | 2018 | $444,125 | N/A | $270,472 | N/A | $ 536,947 | N/A | $21,380 | $1,272,924 |
Senior Vice President, | |||||||||
Chief Financial Officer | |||||||||
Thomas P. Burns | 2018 | $595,000 | N/A | $353,430 | N/A | $ 472,430 | N/A | $36,329 | $1,457,189 |
Senior Vice President, | |||||||||
Chief Distribution Officer | |||||||||
Neil H. McKay | 2018 | $500,000 | N/A | $304,500 | N/A | $ 604,500 | N/A | $26,215 | $1,435,215 |
Senior Vice President, | |||||||||
Chief Actuary | |||||||||
Gretchen Cepek | 2018 | $436,000 | N/A | $248,520 | N/A | $ 466,520 | N/A | $21,134 | $1,172,174 |
Senior Vice President, | |||||||||
General Counsel and | |||||||||
Secretary |
Name and Principal Position (a) | Year (b) | Salary (c) | Bonus (d)(1) | Stock Awards (e)(2) | Non-Equity Incentive Plan Compensation (g)(3),(4) | All Other Compensation (i)(5) | Total (j) |
Walter R. White President and Chief Executive Officer | 2019 | $865,100 | N/A | $1,081,375 | $2,162,750 | $26,266 | $4,135,491 |
William E. Gaumond Senior Vice President, Chief Financial Officer and Treasurer | 2019 | $455,228 | N/A | $345,518 | $618,655 | $22,140 | $1,441,541 |
Jasmine M. Jirele Senior Vice President, Chief Growth Officer | 2019 | $440,750 | $200,000 | $334,529 | $598,979 | $19,122 | $1,593,381 |
Neil H. McKay Senior Vice President, Chief Actuary | 2019 | $500,000 | N/A | $376,500 | $676,500 | $30,521 | $1,583,521 |
Catherine A. Mahone Senior Vice President, Chief Administrative Officer | 2019 | $425,000 | N/A | $299,625 | $554,625 | $21,609 | $1,300,859 |
(1) | A retention bonus of $800,000 will be paid over four years in increments of $200,000 with the first payment paid in March 2019 and the final payment in 2022 so long as Ms. Jirele remains employed by Allianz Life. |
(2) | Represents the grant date fair value of the RSUs issued pursuant to the AEI. The RSUs vest over a four-year period. The RSUs issued in |
Includes the following payments and grants made pursuant to the AIP and the ALTPUP. | |
Name | Year | Payments made pursuant to the AIP | Grants made pursuant to the ALTPUP(3) |
Walter R. White | 2018 | $921,332 | $921,332 |
William E. Gaumond | 2018 | $270,472 | $266,475 |
Thomas P. Burns | 2018 | $353,430 | $119,000 |
Neil H. McKay | 2018 | $304,500 | $300,000 |
Gretchen Cepek | 2018 | $248,520 | $218,000 |
Name | Year | Payments made pursuant to the AIP | Grants made pursuant to the ALTPUP |
Walter R. White | 2019 | $1,081,375 | $1,081,375 |
William E. Gaumond | 2019 | $345,518 | $273,137 |
Jasmine M. Jirele | 2019 | $334,529 | $264,450 |
Neil H. McKay | 2019 | $376,500 | $300,000 |
Catherine A. Mahone | 2019 | $299,625 | $255,000 |
Walter R. White, as President and Chief Executive Officer, participates in the global Allianz SE Mid-Term Bonus Program rather than the ALTPUP. |
The following table provides additional details regarding compensation found in the “All Other Compensation” column. | |
Name | Year | Spousal Travel (5) | Milestone/ Anniversary/ Recognition(6) | Life Insurance Premiums | Employer Match to 401(k) Plan | ASAAP Cont-ribution(7) | Total |
Walter R. White | 2018 | $ 138 | -- | $1,110 | $20,625 | -- | $21,873 |
William E. Gaumond | 2018 | -- | -- | $ 755 | $18,500 | $2,125 | $21,380 |
Thomas P. Burns | 2018 | $15,127 | -- | $ 577 | $20,625 | -- | $36,326 |
Neil H. McKay | 2018 | $ 4,702 | -- | $ 888 | $20,625 | -- | $26,215 |
Gretchen Cepek | 2018 | -- | -- | $ 509 | $20,625 | -- | $21,134 |
Name | Year | Spousal Travel(6) | Milestone/ Anniversary/ Recognition(7) | Life Insurance Premiums | Employer Match to 401(k) Plan | ASAAP Contribution(8) | Total |
Walter R. White | 2019 | $4,351 | -- | $915 | $21,000 | -- | $26,266 |
William E. Gaumond | 2019 | -- | $489 | $651 | $19,000 | $2,000 | $22,140 |
Jasmine M. Jirele | 2019 | $2,392 | -- | $409 | $16,321 | -- | $19,122 |
Neil H. McKay | 2019 | $8,789 | -- | $732 | $21,000 | -- | $30,521 |
Catherine A. Mahone | 2019 | -- | -- | $609 | $21,000 | -- | $21,609 |
Represents reimbursement or payments made to defray the costs of a spouse’s travel. |
Represents Milestone Anniversary Program, which pays a bonus at three and five year anniversaries, and then every five years thereafter. |
Represents company matching contribution to the Allianz Supplemental Asset Accumulation Plan for deferrals in excess of IRS compensation limit. |
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1),(2) | Estimated Future Payouts Under Equity Incentive Plan Awards(3),(4) | ||||
Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | ||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) |
Walter R. White | 3/1/2019 | ||||||
RSUs (under AEI) | $0 | $865,100 | $4,282,245 | ||||
AIP Award | $0 | $865,100 | $1,427,415 | ||||
Midterm Bonus Plan | $0 | $865,100 | $1,427,415 | ||||
William E. Gaumond | 3/1/2019 | ||||||
RSUs (under AEI) | $0 | $266,475 | $1,319,051 | ||||
AIP Award | $0 | $266,475 | $ 532,950 | ||||
ALTPUP Award | $0 | $266,475 | $ 532,950 | ||||
Thomas P. Burns | 3/1/2019 | ||||||
RSUs (under AEI) | $0 | $357,000 | $1,767,150 | ||||
AIP Award | $0 | $357,000 | $ 714,000 | ||||
ALTPUP Award | $0 | $357,000 | $ 714,000 | ||||
Neil H. McKay | 3/1/2019 | ||||||
RSUs (under AEI) | $0 | $300,000 | $1,485,000 | ||||
AIP Award | $0 | $300,000 | $ 600,000 | ||||
ALTPUP Award | $0 | $300,000 | $ 600,000 | ||||
Gretchen Cepek | 3/1/2019 | ||||||
RSUs (under AEI) | $0 | $218,000 | $1,079,100 | ||||
AIP Award | $0 | $218,000 | $ 436,000 | ||||
ALTPUP Award | $0 | $218,000 | $ 436,000 |
Name (a) | Grant Date (b) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1),(2) | Estimated Future Payouts Under Equity Incentive Plan Awards(3),(4) | ||||
Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | Threshold ($) (f) | Target ($) (g) | Maximum ($) (h) | ||
Walter R. White | 3/6/2020 | ||||||
RSUs (under AEI) | $0 | $865,100 | $4,282,245 | ||||
AIP Award | $0 | $865,100 | $1,427,415 | ||||
Midterm Bonus Plan | $0 | $865,100 | $1,427,415 | ||||
William E. Gaumond | 3/6/2020 | ||||||
RSUs (under AEI) | $0 | $273,137 | $1,352,027 | ||||
AIP Award | $0 | $273,137 | $546,274 | ||||
ALTPUP Award | $0 | $273,137 | $546,274 | ||||
Jasmine M. Jirele | 3/6/2020 | ||||||
RSUs (under AEI) | $0 | $264,450 | $1,309,028 | ||||
AIP Award | $0 | $264,450 | $528,900 | ||||
ALTPUP Award | $0 | $264,450 | $528,900 | ||||
Neil H. McKay | 3/6/2020 | ||||||
RSUs (under AEI) | $0 | $300,000 | $1,485,000 | ||||
AIP Award | $0 | $300,000 | $600,000 | ||||
ALTPUP Award | $0 | $300,000 | $600,000 | ||||
Catherine A. Mahone | 3/6/2020 | ||||||
RSUs (under AEI) | $0 | $255,000 | $1,262,250 | ||||
AIP Award | $0 | $255,000 | $510,000 | ||||
ALTPUP Award | $0 | $255,000 | $510,000 |
(1) | The target and maximum columns show the target award and maximum award for |
(2) | The target and maximum columns show the target award and maximum award for |
(3) | RSUs have a vesting schedule as disclosed in the footnotes to the Summary Compensation Table. See “Outstanding Equity Awards at December 31, |
(4) | The target and maximum columns show the target award and maximum award for |
Name | RSUs | |||
Number of RSUs That Have Not Vested | Market Value of RSUs That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned RSUs That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned RSUs That Have Not Vested | |
(a) | (g)(1)(2) | (h)(3) | (i) | (j) |
Walter R. White | N/A | N/A | ||
6,364 | $1,277,064 | |||
10,097 | $2,026,165 | |||
8,161 | $1,637,668 | |||
7,030 | $1,410,710 | |||
William E. Gaumond | N/A | N/A | ||
679 | $ 136,255 | |||
721 | $ 144,683 | |||
1,452 | $ 291,373 | |||
2,039 | $ 409,166 | |||
Thomas P. Burns | N/A | N/A | ||
3,151 | $ 632,311 | |||
3,714 | $ 745,288 | |||
3,073 | $ 616,659 | |||
2,603 | $ 522,344 | |||
Neil H. McKay | N/A | N/A | ||
2,586 | $ 518,933 | |||
3,536 | $ 709,569 | |||
2,550 | $ 511,709 | |||
2,203 | $ 442,076 | |||
Gretchen Cepek | N/A | N/A | ||
1,650 | $ 331,106 | |||
2,337 | $ 468,966 | |||
1,917 | $ 384,684 | |||
1,538 | $ 308,630 |
Name (a) | RSUs | |
Number of RSUs That Have Not Vested (g)(1),(2) | Market Value of RSUs That Have Not Vested (h)(3) | |
Walter R. White | ||
10,097 | $2,493,757 | |
8,161 | $2,015,604 | |
7,030 | $1,736,269 | |
5,239 | $1,293,928 | |
William E. Gaumond | ||
721 | $178,073 | |
1,452 | $358,615 | |
2,039 | $503,592 | |
1,538 | $379,855 | |
Jasmine M. Jirele | ||
0 | $0 | |
0 | $0 | |
0 | $0 | |
1,467 | $362,320 | |
Neil H. McKay | ||
3,536 | $873,321 | |
2,550 | $629,799 | |
2,203 | $544,097 | |
1,731 | $427,522 | |
Catherine A. Mahone | ||
2,320 | $572,994 | |
1,928 | $476,177 | |
1,750 | $432,215 | |
1,370 | $338,363 |
(1) | Represents unvested RSUs issued pursuant to the AEI. RSUs issued under the AEI during |
(2) | For each of the NEOs, the number of RSUs listed on the first line were exercised in |
(3) | Based on an assumed stock price of |
Name | Option Awards | Stock Awards | ||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | |
Walter R. White | N/A | N/A | 7,927 | $1,859,358 |
William E. Gaumond | N/A | N/A | 1,559 | $ 365,679 |
Thomas P. Burns | N/A | N/A | 3,723 | $ 873,267 |
Neil H. McKay | N/A | N/A | 3,180 | $ 745,901 |
Gretchen Cepek | N/A | N/A | 1,780 | $ 417,517 |
Name | Stock Awards | |
Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | |
Walter R. White | 6,364 | $1,399,326 |
William E. Gaumond | 679 | $149,300 |
Jasmine M. Jirele | - | $0 |
Neil H. McKay | 2,586 | $568,614 |
Catherine A. Mahone | 1,774 | $390,070 |
(1) | Represents Allianz SE RSUs that were exercised during |
NEOs | Lump Sum Payment |
Walter R. White | N/A(1) |
William E. Gaumond | $ |
$ | |
Neil H. McKay | $750,000 |
$ |
(1) | Mr. White is not eligible to receive payments pursuant to the Executive Severance Plan. See “Allianz Life Executive Severance Agreement” for information regarding severance payments that Mr. White is eligible to receive upon termination of service. |
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total ($) |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) |
Jacqueline Hunt(2) Chair of the Board | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Walter R. White(3) President and Chief Executive Officer | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
William E. Gaumond(3) Senior Vice President, Chief Financial Officer and Treasurer | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
Ronald M. Clark Independent Director | $40,000 | N/A | N/A | N/A | N/A | N/A | $40,000 |
Kevin E. Walker Independent Director | $40,000 | N/A | N/A | N/A | N/A | N/A | $40,000 |
Udo Frank Independent Director | $40,000 | N/A | N/A | N/A | N/A | N/A | $40,000 |
Name | Fees Earned or Paid in Cash ($)(1) | Total ($) |
(a) | (b) | (h) |
Jacqueline Hunt(2) Chair of the Board | N/A | N/A |
Walter R. White(3) President and Chief Executive Officer | N/A | N/A |
William E. Gaumond(3) Senior Vice President, Chief Financial Officer and Treasurer | N/A | N/A |
Anna Sophie Herken(3) Non-Independent Director | N/A | N/A |
Ronald M. Clark Independent Director | $40,000 | $40,000 |
Kevin E. Walker Independent Director | $40,000 | $40,000 |
Udo Frank Independent Director | $55,000 | $55,000 |
Represents cash compensation provided to our independent directors for the year ended December 31, |
As employee directors, Messrs. White and Gaumond do not receive any compensation for their service as directors. The compensation Messrs. White and Gaumond |
Difficult Economic Conditions.Our financial condition is materially affected by conditions in the global capital markets and the economy generally. During an economic downturn, the demand for our financial insurance products and services could be adversely affected. In addition, an economic downturn could cause the number and amount of surrenders and withdrawals under our insurance products to increase significantly, and owners of our insurance products may choose to defer making purchase payments or paying insurance premiums or stop them altogether. |
Unfavorable Interest Rate Environments.During periods of declining interest rates, we may experience financial losses as the spread between interest rates that we credit to customers under our insurance products and returns on our investments tighten. During periods of increasing interest rates, we may experience financial losses due to increases in surrenders and withdrawals under our insurance products as our customers choose to forgo insurance protection in favor of potentially higher returns. Although we take measures to manage economic risks associated with different interest rate environments, we may not be able to fully mitigate those risks. |
Losses on Fixed Maturity Investments. Our fixed maturity investments are subject to interest rate risk and credit risk. Interest rate risk refers to how the values of our fixed maturity investments fluctuate in response to changes in market interest rates. Increases and decreases in prevailing interest rates generally result in decreases and increases, respectively, in the values of our fixed maturity investments. Credit risk refers to the risk that a counterparty will default on its commitments to us under a fixed maturity investment. See “Defaults by Counterparties” below. |
Losses on Equity Investments.Our equity investments are generally valued based on quoted market prices and are subject to market risk. Market risk refers to how market prices for equity investments are subject to fluctuation. A downward fluctuation in the market price for an equity investment could result in losses upon the sale of that investment. Fluctuations in market prices may result from, among other things, actual or perceived changes in the attractiveness of specific investments or in general market conditions. |
Losses on Real Estate Investments. A portion of our investment portfolio consists of mortgage loans and mortgage-backed securities related to commercial, agricultural and residential real estate. The value of our real estate investments may be negatively impacted by general economic conditions in the real estate sector, including supply and demand, market volatility, and interest rate fluctuations, as well as the creditworthiness of obligors. | |
• | Losses upon the Sale of Illiquid Investments.We hold certain investments that may lack liquidity, such as privately placed fixed maturity investments, mortgage loans, collateralized debt obligations, commercial mortgage-backed securities, equity real estate and limited partnership interests. Although we seek to minimize the likelihood that we would need to sell illiquid investments, if we were required to liquidate these investments on short notice, we may have difficulty doing so and may be forced to sell them for less than their fair value. |
Loss of Market Share to Competitors.There is strong competition among insurers, banks, brokerage firms and other financial institutions and providers seeking clients for the types of products and services that we provide. A loss of market share to our competitors could result in financial losses to our business. Our ability to successfully compete is dependent on numerous factors, some of which include the successful implementation of our business strategy, our financial strength, the attractiveness of our products and services, our relationships with distributors, and our reputation. Our ability to compete may also be hindered if our competitors obtain or seek to enforce intellectual property rights against us, or if we are otherwise precluded from offering products or services that are in demand. Our ability to compete may also be hindered if we are not able to protect or enforce our own intellectual property rights. |
Defaults by Counterparties.Third-parties that owe us money, securities, or other assets may not fulfill their obligations to us. These parties may include issuers of investments that we may hold, borrowers under loans that we may hold or extend, counterparties under swap and other derivative contracts and other third-parties |
Impairments of Other Financial Institutions.We routinely execute transactions with counterparties in the financial services industry, including brokers, dealers, commercial banks, investment banks, insurers, reinsurers and other investment and financial institutions. A disruption to, or decline in the financial condition of, such financial institutions may expose us to financial losses. |
Payments through Guaranty Associations.When an insurance company becomes insolvent, state insurance guaranty associations have the right to assess other insurance companies doing business in their state for funds to pay obligations to policyholders of the insolvent company, up to the state-specified limit of coverage. The future failure of a large life, health or annuity insurer could trigger assessments which we would be obligated to pay. Further, amounts for historical insolvencies may be assessed over many years, and there can be significant uncertainty around the total obligation for a given insolvency. |
Ineffectiveness of Risk Management Policies.Our risk management policies and procedures intended to identify, monitor and manage economic risks may not be fully effective at mitigating our risk exposure in all market environments or against all types of risk. This could cause us to incur investment losses or cause our hedging and other risk management strategies to be ineffective. |
reductions in new sales of insurance products, annuities and other investment products; |
increases in our cost of capital or limitations on our access to sources of capital; |
harm to our relationships with distributors and sales specialists; |
material increases in the number or amount of surrenders and withdrawals under our insurance products; |
pressure on us to reduce prices or increase crediting rates for many of our insurance products; and |
harm to our ability to obtain reinsurance or obtain reasonable pricing for reinsurance. |
training and educating our employees regarding our obligations relating to confidential information; |
monitoring changes in state or federal privacy and compliance requirements; |
drafting appropriate contractual provisions into any contract that raises proprietary and confidentiality issues; |
maintaining secure storage facilities for tangible records; |
limiting access to electronic information; and |
in the event of a security breach, providing credit monitoring or other services to affected customers. |
From you, either directly or through our financial professionals. This may include information provided on your insurance application or other forms you may complete. The information we collect includes, but is not limited to, your name, social security number, address, telephone number and e-mail address. |
From others, through the process of issuing a policy or handling a claim. This may include information from consumer reporting agencies and medical or accident reports. |
From your doctor or during a home visit by a health care professional. This may include your health records gathered with your written consent. |
From your relationship with us. For example, this may include the number of years you have been a customer or the types of products you have purchased. |
From data brokers that collect publicly available information about you. This includes household information, financial transactions, and social media activity. |
With people and entities when we have your consent to share your information. |
With our affiliates and other third parties in order to process your application, or administer or service your policy. |
With consumer reporting agencies to obtain a medical report, credit report, or motor vehicle report. These reports are used to decide eligibility for a policy or to process transactions you request. |
With our financial professionals so that they can service your policy. They may also inform you of other Allianz products and services that may be of interest to you. |
With health care providers in order to process your claim. |
As required or otherwise permitted by law. This may include sharing information with state insurance agencies, law enforcement, and other government officials. We may also share your information to respond to subpoenas, court orders and other legal requests. |
With research groups to conduct studies on our business to improve the products and services we offer. |
To inform you of products and services that may be of interest to you. These communications may be made by us, our financial professionals, or through third parties. |
Allianz Life Insurance Company of North America |
Allianz Life Financial Services, LLC |
Allianz Life as Custodian………………………… | 2 | Income Tax Withholding…………………….……………….. | 8 |
Legal Opinions………………………………..….. | 2 | Multiple Contracts……………………………………………. | 9 |
Distributor…………………………………………. | 2 | Partial 1035 Exchanges……………………………………… | 9 |
Administrative Service Fees……………………. | 2 | Assignments, Pledges and Gratuitous Transfers…………. | 9 |
Federal Tax Status…………………………..….… | 3 | Death Benefits………………………………………………… | 9 |
Annuity Contracts in General……………….… | 3 | Spousal Continuation and the Federal Defense of | |
Taxation of Annuities in General……………… | 3 | Marriage Act (DOMA)…………………………………… | 9 |
Qualified Contracts……………………..……… | 3 | Federal Estate Taxes………………………………………… | 10 |
Purchasing a Qualified Contract……………… | 5 | Generation-Skipping Transfer Tax…………………………. | 10 |
Distributions-Qualified Contracts……………… | 5 | Foreign Tax Credits………………………………………….. | 10 |
Distributions-Non-Qualified Contracts……..… | 6 | Possible Tax Law Changes…………………………………. | 10 |
Required Distributions………………………..… | 7 | Annuity Payments…………………………………………….. | 10 |
Diversification……………………………………. | 7 | Annuity Payment Options…………………………………… | 10 |
Owner Control……………………………….…. | 7 | Appendix A – Death of the Owner and/or Annuitant……… | 12 |
Contracts Owned by Non-Individuals………… | 8 | Appendix B – Previous Versions of the Income Benefit | |
Annuity Purchases by Nonresident Aliens and | Supplement…………………………………… | 14 | |
Foreign Corporations…………………………. | 8 |
Allianz Life as Custodian | 3 |
Legal Opinions | 3 |
Distributor | 3 |
Administrative Service Fees | 3 |
Federal Tax Status | 4 |
Annuity Contracts in General | 4 |
Taxation of Annuities in General | 4 |
Qualified Contracts | 4 |
Purchasing a Qualified Contract | 6 |
Distributions-Qualified Contracts | 6 |
Distributions-Non-Qualified Contracts | 9 |
Required Distributions | 9 |
Diversification | 10 |
Owner Control | 10 |
Contracts Owned by Non-Individuals | 10 |
Annuity Purchases by Nonresident Aliens and Foreign Corporations | 10 |
Income Tax Withholding | 10 |
Multiple Contracts | 11 |
Partial 1035 Exchanges | 11 |
Assignments, Pledges and Gratuitous Transfers | 11 |
Death Benefits | 11 |
Spousal Continuation and the Federal Defense of Marriage Act (DOMA) | 11 |
Federal Estate Taxes | 12 |
Generation-Skipping Transfer Tax | 12 |
Foreign Tax Credits | 12 |
Possible Tax Law Changes | 12 |
Annuity Payments | 13 |
Annuity Payment Options | 13 |
Appendix – Death of the Owner and/or Annuitant | 14 |
• | sponsor, endorse, sell or promote Allianz products. |
• | recommend that any person invest in Allianz products or any other securities. |
• | have any responsibility or liability for or make any decisions about the timing, amount or pricing of Allianz products. |
• | have any responsibility or liability for the administration, management or marketing of Allianz products. |
• | STOXX, Deutsche Börse Group and their licensors, research partners or data providers do not give any warranty, express or implied, and exclude any liability about: |
• | The results to be obtained by Allianz products, the owner of Allianz products or any other person in connection with the use of the EURO STOXX 50 and the data included in the EURO STOXX 50; |
• | The accuracy, timeliness, and completeness of the EURO STOXX 50 and its data; |
• | The merchantability and the fitness for a particular purpose or use of the EURO STOXX 50 and its data; |
• | The performance of Allianz products generally; |
• | STOXX, Deutsche Börse Group and their licensors, research partners or data providers give no warranty and exclude any liability, for any errors, omissions or interruptions in the EURO STOXX 50 or its data; |
• | Under no circumstances will STOXX, Deutsche Börse Group or their licensors, research partners or data providers be liable (whether in negligence or otherwise) for any lost profits or indirect, punitive, special or consequential damages or losses, arising as a result of such errors, omissions or interruptions in the EURO STOXX 50 or its data or generally in relation to Allianz products, even in circumstances where STOXX, Deutsche Börse Group or their licensors, research partners or data providers are aware that such loss or damage may occur. |
(i) | any Index gains during the Term subject to the Precision Rate or Cap, |
(ii) | either any Index losses greater than the Buffer or Index losses down to the Floor, and |
(iii) | the number of days until the Term End Date. |
(a) | change in Proxy Value = (current Proxy Value – beginning Proxy Value) |
(b) | proxy interest = beginning Proxy Value x (1 |
• The iShares® MSCI Emerging Markets ETF first became available to newly issued Contract on April 29, 2019, and became available to existing Contracts on the first Index Anniversary that occurred on or after August 20, 2019. For more information, please see Appendix G. |
• The Index Performance Strategy 3-year Term Index Options were not available before May 1, 2020. Therefore, no Buffers or Caps for these Index Options are included here. |
The S&P 500® Index was the only Index available with the Index Protection Strategy prior to May 1, 2018. The Index Protection Strategy with the Russell 2000® Index, Nasdaq-100® Index and EURO STOXX 50® first became available to newly issued Contracts on May 1, 2018, and became available to existing Contracts on the first Index Anniversary that occurred on or after June 4, 2018. For more information, please see Appendix G. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
DPSCs | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial DPSCs | 1.50% | 2.50% | NA | NA | NA | NA | NA | NA | NA | NA | ||||||||||
1st Anniversary Renewal DPSCs | 2.00% | 3.10% | 2.00% | 3.10% | 2.00% | 3.10% | 2.50% | 3.70% | NA | NA | ||||||||||
2nd Anniversary Renewal DPSCs1 | 2.10% | 3.20% | 2.20% | 3.20% | 2.10% | 3.20% | 2.70% | 3.80% | 2.30% | 3.30% |
1 | The 2nd Anniversary Renewal DPSCs for the iShares® MSCI Emerging Markets ETF are for a partial period of August 20, 2019 through January 2, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | ||||
DPSCs | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest |
Initial DPSC | 4.10% | 5.40% | 4.20% | 5.50% | 4.20% | 5.50% | 5.40% | 7.10% |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
DPSCs | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial DPSCs1 | 1.75% | 3.40% | 2.00% | 3.40% | 2.00% | 3.40% | 2.50% | 4.40% | NA | NA | ||||||||||
1st Anniversary Renewal DPSCs2 | 2.00% | 3.20% | 2.00% | 3.20% | 2.00% | 3.20% | 2.50% | 3.70% | 2.30% | 3.30% |
1 | The initial DPSCs for the Russell 2000® Index, Nasdaq-100® Index and EURO STOXX 50® are for a partial period of June 4, 2018 |
2 | The 1st Anniversary Renewal DPSCs for the iShares® MSCI Emerging Markets ETF are for a partial period of August 20, 2019 through January 1, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | ||||
Caps | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest |
Initial Cap | 4.50% | 6.00% | 4.75% | 6.25% | 4.50% | 6.00% | 7.00% | 10.75% |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
DPSCs | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial DPSCs1 | 3.30% | 5.00% | 3.30% | 5.00% | 3.30% | 5.00% | 3.80% | 5.50% | 3.30% | 5.20% |
1 | The initial DPSCs for the iShares® MSCI Emerging Markets ETF are for a partial period of April 29, 2019 through January 6, 2020. |
The Index Precision Strategy first became available to newly issued Contracts on November 14, 2017, and became available to existing Contracts on the first Index Anniversary that occurred on or after January 15, 2018. For more information, please see Appendix G. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
Precision Rates | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial Precision Rates1 | 5.00% | 5.25% | 6.75% | 7.00% | 6.00% | 6.25% | 8.25% | 8.25% | NA | NA | ||||||||||
1st Anniversary Renewal Precision Rates | 5.80% | 7.90% | 6.30% | 8.40% | 6.80% | 9.40% | 8.40% | 10.20% | NA | NA | ||||||||||
2nd Anniversary Renewal Precision Rates2 | 6.10% | 8.20% | 7.20% | 8.90% | 7.30% | 9.70% | 8.80% | 11.00% | 8.40% | 9.50% |
1 | The initial Precision Rates are for a partial period from November 14, 2017 through January 2, 2018. |
2 | The 2nd Anniversary Renewal Precision Rates for the iShares® MSCI Emerging Markets ETF are for a partial period of August 20, 2019 through January 2, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | ||||
Precision Rates | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest |
Initial Precision Rate | 8.00% | 10.20% | 8.60% | 11.00% | 9.50% | 12.10% | 11.70% | 13.80% |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
Precision Rates | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial Precision Rates | 5.15% | 8.30% | 6.30% | 9.10% | 6.35% | 10.20% | 8.25% | 11.30% | NA | NA | ||||||||||
1st Anniversary Renewal Precision Rates1 | 5.90% | 8.30% | 7.10% | 9.30% | 7.00% | 9.30% | 8.90% | 10.50% | 8.30% | 10.00% |
1 | The 1st Anniversary Renewal Precision Rates for the iShares® MSCI Emerging Markets ETF are for a partial period of August 20, 2019 through January 1, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
Precision Rates | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial Precision Rates1 | 6.70% | 9.20% | 7.90% | 9.50% | 7.70% | 11.30% | 9.10% | 11.60% | 8.80% | 10.00% |
1 | The initial Precision Rates for the iShares® MSCI Emerging Markets ETF are for a partial period of April 29, 2019 through January 6, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
Caps | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial Caps | 6.50% | 9.00% | 7.75% | 10.50% | 6.75% | 8.75% | 8.50% | 12.25% | NA | NA | ||||||||||
1st Anniversary Renewal Caps | 6.75% | 8.75% | 7.25% | 9.25% | 7.00% | 9.00% | 15.00% | 18.50% | NA | NA | ||||||||||
2nd Anniversary Renewal Caps1 | 7.25% | 10.00% | 8.00% | 10.50% | 7.75% | 10.25% | 15.00% | 18.75% | 9.00% | 11.25% |
1 | The 2nd Anniversary Renewal Caps for the iShares® MSCI Emerging Markets ETF are for a partial period of August 20, 2019 through January 2, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | ||||
Caps | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest |
Initial Cap | 10.25% | 12.50% | 10.50% | 12.75% | 10.25% | 12.50% | 22.00% | 25.50% |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
Caps | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial Caps | 6.50% | 9.00% | 7.25% | 9.50% | 6.75% | 9.50% | 12.50% | 19.00% | NA | NA | ||||||||||
1st Anniversary Renewal Caps1 | 7.25% | 9.25% | 7.75% | 10.00% | 7.50% | 9.00% | 15.00% | 18.50% | 9.50% | 10.75% |
1 | The 1st Anniversary Renewal Caps for the iShares® MSCI Emerging Markets ETF are for a partial period of August 20, 2019 through January 1, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
Caps | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial Caps1 | 8.50% | 10.25% | 9.00% | 10.25% | 8.25% | 10.25% | 16.00% | 19.50% | 9.50% | 11.00% |
1 | The initial Caps for the iShares® MSCI Emerging Markets ETF are for a partial period of April 29, 2019 through January 6, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
Caps | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial Caps | 6.00% | 8.75% | 9.00% | 12.25% | 6.50% | 9.00% | 10.75% | 12.75% | NA | NA | ||||||||||
1st Anniversary Renewal Caps | 7.25% | 10.50% | 9.00% | 11.25% | 9.25% | 12.50% | 15.00% | 20.00% | NA | NA | ||||||||||
2nd Anniversary Renewal Caps1 | 7.50% | 10.75% | 8.75% | 11.75% | 9.25% | 12.50% | 15.50% | 19.25% | 11.00% | 13.00% |
1 | The 2nd Anniversary Renewal Caps for the iShares® MSCI Emerging Markets ETF are for a partial period of August 20, 2019 through January 2, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | ||||
Caps | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest |
Initial Cap | 14.00% | 16.25% | 14.25% | 16.00% | 14.75% | 17.00% | 24.00% | 27.50% |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
Caps | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial Caps | 6.75% | 10.75% | 9.00% | 11.75% | 8.25% | 13.00% | 11.25% | 20.00% | NA | NA | ||||||||||
1st Anniversary Renewal Caps1 | 7.25% | 10.50% | 8.75% | 12.50% | 8.75% | 12.00% | 14.25% | 19.00% | 11.00% | 14.75% |
1 | The 1st Anniversary Renewal Caps for the iShares® MSCI Emerging Markets ETF are for a partial period of August 20, 2019 through January 1, 2020. |
Indexes: | S&P 500® Index | Russell 2000® Index | Nasdaq-100® Index | EURO STOXX 50® | iShares® MSCI Emerging Markets ETF | |||||||||||||||
Caps | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | Lowest | Highest | ||||||||||
Initial Caps1 | 8.50% | 12.25% | 10.25% | 12.50% | 9.75% | 14.75% | 17.50% | 20.00% | 11.75% | 14.75% |
1 | The initial Caps for the iShares® MSCI Emerging Markets ETF are for a partial period of April 29, 2019 through January 6, 2020. |
The Index Performance Strategy with the S&P 500® Index and 3-year Term was not available before May 1, 2020. Therefore, no performance for this Index Option will be included here until after May 1, 2023. For more information, please see Appendix G. |
Index Effective Date | 5/23/2017- 6/5/2017 | 6/6/2017- 7/4/2017 | 7/5/2017- 7/16/2017 | 7/17/2017- 7/31/2017 | 8/1/2017- 9/5/2017 | 9/6/2017- 10/2/2017 | 10/3/2017- 11/6/2017 | |||||||
Initial DPSC | 1.50% | 1.50% | 1.50% | 2.50% | 2.50% | 1.50% | 1.50% | |||||||
1st Index Year Index Return | 10.12% to 15.40% | 11.29% to 14.71% | 12.50% to 15.09% | 13.28% to 14.89% | 13.61% to 18.57% | 15.54% to 17.16% | 2.33% to 15.42% | |||||||
1st Index Anniversary Credit | 1.50% | 1.50% | 1.50% | 2.50% | 2.50% | 1.50% | 1.50% | |||||||
1st Anniversary Renewal DPSC | 2.05% | 2.00% | 2.10% | 3.10% | 3.10% | 2.10% | 2.10% | |||||||
2nd Index Year Index Return | -0.09% to 12.01% | 2.57% to 10.42% | 6.89% to 9.27% | 5.54% to 7.79% | -0.63% to 4.98% | -1.23% to 4.18% | -0.51% to 15.08% | |||||||
2nd Index Anniversary Credit | 0% or 2.05% | 2.00% | 2.10% | 3.10% | 0% or 3.10% | 0% or 2.10% | 0% or 2.10% |
Index Effective Date | 11/7/2017- 12/4/2017 | 12/5/2017- 1/2/2018 | 1/3/2018- 2/5/2018 | 2/6/2018- 3/5/2018 | 3/6/2018- 4/2/2018 | 4/3/2018- 4/30/2018 | 5/1/2018- 6/4/2018 | |||||||
Initial DPSC | 1.50% | 1.75% | 1.75% | 1.80% | 1.85% | 1.90% | 2.05% | |||||||
1st Index Year Index Return | 1.37% to 8.62% | -12.38% to 2.68% | -9.77% to 3.35% | 0.51% to 4.92% | -0.12% to 11.05% | 7.17% to 11.18% | 0.36% to 12.01% | |||||||
1st Index Anniversary Credit | 1.50% | 0% or 1.75% | 0% or 1.75% | 1.80% | 0% or 1.85% | 1.90% | 2.05% | |||||||
1st Anniversary Renewal DPSC | 2.10% | 2.20% | ||||||||||||
2nd Index Year Index Return | 9.64% to 19.03% | 15.46% to 37.13% | ||||||||||||
2nd Index Anniversary Credit | 2.10% | 2.20% |
The Index Precision Strategy was not available before November 14, 2017. The Buffer was 10% for all time periods. For Index Anniversaries with a range of Credits, any positive Credit cannot be less than the stated positive number. |
Index Effective Date | 11/14/2017- 12/4/2017 | 12/5/2017- 1/2/2018 | 1/3/2018- 2/5/2018 | 2/6/2018- 3/5/2018 | 3/6/2018- 4/2/2018 | 4/3/2018- 4/30/2018 | 5/1/2018- 6/4/2018 | |||||||
Initial Precision Rate | 5.00% | 5.25% | 5.25% | 5.15% | 6.75% | 6.40% | 7.90% | |||||||
1st Index Year Index Return | 1.37% to 6.46% | -12.38% to 2.68% | -9.77% to 3.35% | 0.51% to 4.92% | -0.12% to 11.05% | 7.17% to 11.18% | 0.36% to 12.01% | |||||||
1st Index Anniversary Credit | 5.00% | -2.38% to 5.25% | 0% or 5.25% | 5.15% | 0% or 6.75% | 6.40% | 7.90% |
Index Effective Date | 6/5/2018- 7/2/2018 | 7/3/2018- 8/6/2018 | 8/7/2018- 9/4/2018 | 9/5/2018- 10/1/2018 | 10/2/2018- 11/5/2018 | 11/6/2018- 12/3/2018 | ||||||
Initial Precision Rate | 6.60% | 6.00% | 6.10% | 6.50% | 6.70% | 7.10% | ||||||
1st Index Year Index Return | 2.57% to 9.03% | 0.15% to 10.42% | -0.95% to 3.70% | 0.54% to 4.18% | -1.23% to 14.32% | 9.64% to 19.03% | ||||||
1st Index Anniversary Credit | 6.60% | 6.00% | 0% or 6.10% | 6.50% | 0% or 6.70% | 7.10% |
The Floor was -10% for all time periods |
Index Effective Date | 5/23/2017- 6/5/2017 | 6/6/2017- 7/4/2017 | 7/5/2017- 7/16/2017 | 7/17/2017- 7/31/2017 | 8/1/2017- 9/5/2017 | 9/6/2017- 10/2/2017 | 10/3/2017- 11/6/2017 | |||||||
Initial Cap | 7.25% | 7.25% | 7.25% | 9.00% | 9.00% | 7.00% | 6.75% | |||||||
1st Index Year Index Return | 10.12% to 15.40% | 11.29% to 14.71% | 12.50% to 15.09% | 13.28% to 14.89% | 13.61% to 18.57% | 15.54% to 17.16% | 2.33% to 15.42% | |||||||
1st Index Anniversary Credit | 7.25% | 7.25% | 7.25% | 9.00% | 9.00% | 7.00% | 2.33% to 6.75% | |||||||
1st Anniversary Renewal Cap | 7.75% | 7.25% | 7.00% | 8.75% | 8.75% | 6.75% | 6.75% | |||||||
2nd Index Year Index Return | -0.09% to 12.01% | 2.57% to 10.42% | 6.89% to 9.27% | 5.54% to 7.79% | -0.63% to 4.98% | -1.23% to 4.18% | -0.51% to 15.08% | |||||||
2nd Index Anniversary Credit | -0.09% to 7.75% | 2.57% to 7.25% | 6.89% to 7.00% | 5.54% to 7.79% | -0.63% to 4.98% | -1.23% to 4.18% | -0.51% to 6.75% |
Index Effective Date | 11/7/2017- 12/4/2017 | 12/5/2017- 1/2/2018 | 1/3/2018- 2/5/2018 | 2/6/2018- 3/5/2018 | 3/6/2018- 4/2/2018 | 4/3/2018- 4/30/2018 | 5/1/2018- 6/4/2018 | |||||||
Initial Cap | 6.75% | 6.50% | 6.50% | 6.50% | 6.75% | 6.75% | 7.75% | |||||||
1st Index Year Index Return | 1.37% to 8.62% | -12.38% to 2.68% | -9.77% to 3.35% | 0.51% to 4.92% | -0.12% to 11.05% | 7.17% to 11.18% | 0.36% to 12.01% | |||||||
1st Index Anniversary Credit | 1.37% to 6.75% | -10.00% to 2.68% | -9.77% to 3.35% | 0.51% to 4.92% | -0.12% to 6.75% | 6.75% | 0.36% to 7.75% | |||||||
1st Anniversary Renewal Cap | 6.75% | 7.50% | ||||||||||||
2nd Index Year Index Return | 9.64% to 19.03% | 15.46% to 37.13% | ||||||||||||
2nd Index Anniversary Credit | 6.75% | 7.50% |
The Buffer was 10% for all time periods. |
Index Effective Date | 5/23/2017- 6/5/2017 | 6/6/2017- 7/4/2017 | 7/5/2017- 7/16/2017 | 7/17/2017- 7/31/2017 | 8/1/2017- 9/5/2017 | 9/6/2017- 10/2/2017 | 10/3/2017- 11/6/2017 | |||||||
Initial Cap | 7.25% | 6.75% | 7.00% | 8.75% | 8.75% | 6.00% | 7.00% | |||||||
1st Index Year Index Return | 10.12% to 15.40% | 11.29% to 14.71% | 12.50% to 15.09% | 13.28% to 14.89% | 13.61% to 18.57% | 15.54% to 17.16% | 2.33% to 15.42% | |||||||
1st Index Anniversary Credit | 7.25% | 6.75% | 7.00% | 8.75% | 8.75% | 6.00% | 2.33% to 7.00% | |||||||
1st Anniversary Renewal Cap | 10.25% | 10.00% | 8.75% | 10.50% | 10.50% | 7.75% | 7.25% | |||||||
2nd Index Year Index Return | -0.09% to 12.01% | 2.57% to 10.42% | 6.89% to 9.27% | 5.54% to 7.79% | -0.63% to 4.98% | -1.23% to 4.18% | -0.51% to 15.08% | |||||||
2nd Index Anniversary Credit | 0% to 10.25% | 2.57% to 10.00% | 6.89% to 8.75% | 5.54% to 7.79% | 0% to 4.98% | 0% to 4.18% | 0% to 7.25% |
Index Effective Date | 11/7/2017- 12/4/2017 | 12/5/2017- 1/2/2018 | 1/3/2018- 2/5/2018 | 2/6/2018- 3/5/2018 | 3/6/2018- 4/2/2018 | 4/3/2018- 4/30/2018 | 5/1/2018- 6/4/2018 | |||||||
Initial Cap | 7.00% | 7.00% | 6.75% | 6.75% | 8.75% | 8.25% | 10.25% | |||||||
1st Index Year Index Return | 1.37% to 8.62% | -12.38% to 2.68% | -9.77% to 3.35% | 0.51% to 4.92% | -0.12% to 11.05% | 7.17% to 11.18% | 0.36% to 12.01% | |||||||
1st Index Anniversary Credit | 1.37% to 7.00% | -2.38% to 2.68% | 0% to 3.35% | 0.51% to 4.92% | 0% to 8.75% | 7.17% to 8.25% | 0.36% to 10.25% | |||||||
1st Anniversary Renewal Cap | 8.00% | 9.00% | ||||||||||||
2nd Index Year Index Return | 9.64% to 19.03% | 15.46% to 37.13% | ||||||||||||
2nd Index Anniversary Credit | 8.00% | 9.00% |
The Alternate Minimum Value continues to be available to Contracts issued in Pennsylvania. For all other states, the Alternate Minimum Value became unavailable to Contracts: |
• issued in California, Hawaii, Indiana, Montana, Nebraska, and Rhode Island on or after January 27, 2020; and |
• issued in all other states on or after November 18, 2019. |
We use 70% if your Contract was issued in …. | We use 87.5% if your Contract was issued in …. |
• Pennsylvania from April 29, 2019 to February 21, 2020, • California and Montana on or after July 22, 2019 • New Hampshire on or after June 24, 2019 • any other state on or after April 29, 2019 | • Pennsylvania before April 29, 2019, or on or after February 24, 2020, • California and Montana before July 22, 2019 • New Hampshire before June 24, 2019 • any other state before April 29, 2019 |
Eligible Person’s Age (or younger Eligible Person’s age for joint Income Payments) | Income Percentages | Income Percentage Increases | |||
Level Income | Increasing Income | ||||
Single Income Payments | Joint Income Payments | Single Income Payments | Joint Income Payments | ||
0-50 | 4.00% | 3.50% | 3.00% | 2.50% | 0.25% |
51 | 4.10% | 3.60% | 3.10% | 2.60% | 0.25% |
52 | 4.20% | 3.70% | 3.20% | 2.70% | 0.25% |
53 | 4.30% | 3.80% | 3.30% | 2.80% | 0.25% |
54 | 4.40% | 3.90% | 3.40% | 2.90% | 0.25% |
55 | 4.50% | 4.00% | 3.50% | 3.00% | 0.30% |
56 | 4.60% | 4.10% | 3.60% | 3.10% | 0.30% |
57 | 4.70% | 4.20% | 3.70% | 3.20% | 0.30% |
58 | 4.80% | 4.30% | 3.80% | 3.30% | 0.30% |
59 | 4.90% | 4.40% | 3.90% | 3.40% | 0.30% |
60 | 5.00% | 4.50% | 4.00% | 3.50% | 0.35% |
61 | 5.10% | 4.60% | 4.10% | 3.60% | 0.35% |
62 | 5.20% | 4.70% | 4.20% | 3.70% | 0.35% |
63 | 5.30% | 4.80% | 4.30% | 3.80% | 0.35% |
64 | 5.40% | 4.90% | 4.40% | 3.90% | 0.35% |
65 | 5.50% | 5.00% | 4.50% | 4.00% | 0.40% |
66 | 5.60% | 5.10% | 4.60% | 4.10% | 0.40% |
67 | 5.70% | 5.20% | 4.70% | 4.20% | 0.40% |
68 | 5.80% | 5.30% | 4.80% | 4.30% | 0.40% |
69 | 5.90% | 5.40% | 4.90% | 4.40% | 0.40% |
70 | 6.00% | 5.50% | 5.00% | 4.50% | 0.45% |
71 | 6.10% | 5.60% | 5.10% | 4.60% | 0.45% |
72 | 6.20% | 5.70% | 5.20% | 4.70% | 0.45% |
73 | 6.30% | 5.80% | 5.30% | 4.80% | 0.45% |
74 | 6.40% | 5.90% | 5.40% | 4.90% | 0.45% |
75 | 6.50% | 6.00% | 5.50% | 5.00% | 0.50% |
76 | 6.60% | 6.10% | 5.60% | 5.10% | 0.50% |
77 | 6.70% | 6.20% | 5.70% | 5.20% | 0.50% |
78 | 6.80% | 6.30% | 5.80% | 5.30% | 0.50% |
79 | 6.90% | 6.40% | 5.90% | 5.40% | 0.50% |
80+ | 7.00% | 6.50% | 6.00% | 5.50% | 0.55% |
Crediting Method / Indexes | Availability Restrictions: | |
Index Protection Strategy | – Not available to Contracts issued in Washington or Missouri on or before November 15, 2019 | |
Index Protection Strategy with the Russell 2000® Index, Nasdaq-100® Index, and EURO STOXX 50® | – These first became available to newly issued Contracts on May 1, 2018, and to inforce Contracts on the first Index Anniversary that occurred on or after June 4, 2018. | |
Index Precision Strategy | – This first became available to newly issued Contracts on November 14, 2017, and to inforce Contracts on the first Index Anniversary that occurred on or after January 15, 2018. | |
iShares® MSCI Emerging Markets ETF with the Index Protection Strategy, Index Precision Strategy, Index Guard Strategy, and Index Performance Strategy | – For Contracts issued in California and Montana, these first became available to newly issued Contracts on July 22, 2019. – For Contracts issued in New Hampshire, these first became available to newly issued Contracts on June 24, 2019. – For Contracts issued in all other states, these first became available to newly issued Contracts on April 29, 2019. – For Contracts issued before April 29, 2019, these first became available to Contracts that have a number starting with AV on the first Index Anniversary that occurred on or after June 3, 2019. | |
Index Performance Strategy with the 3-year Term | – Not available to Contracts issued in New Hampshire. – For Contracts issued in all other states, it first became available to newly issued Contracts on May 1, 2020. – Not currently available to inforce Contracts issued before May 1, 2020. |
CONTRACTS WITHOUT THE INDEX PROTECTION STRATEGY: If in future years the renewal Cap and Precision Rates are not acceptable to you, you will not be able to transfer into the Index Protection Strategy and take advantage of its principal protection. This would subject you to ongoing market risk and you could lose principal and previous earnings. |
ISSUE STATE | FEATURE AND BENEFITS | VARIATION |
California | ||
Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 | We cannot restrict assignments or changes of ownership | |
Free Look/Right to Examine Period See section 3 | For Owners age 60 or older (or Annuitants age 60 or older for non-individually owned Contracts), we are required to allocate your initial Purchase Payment to the AZL Government Money Market Fund during the 30 day free look period unless you specify otherwise on the appropriate form. If you want to immediately apply your Purchase Payment to the Index Options or other Variable Options you must opt out of this allocation. If you do not opt out of this allocation to the AZL Government Money Market Fund your Index Effective Date cannot occur until the free look period has ended. | |
Connecticut | Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 | We can only restrict assignments to settlement companies and institutional investors as described in your Contract. • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. |
Delaware | Our Unregistered Separate Account See section 11 | All of the assets backing the Index Precision Strategy, Index Guard Strategy and Index Performance Strategy Index Options are allocated to Separate Account IANA. We do not move assets between the general account and Separate Account IANA for Contracts issued in Delaware. |
Florida | Withdrawal Charges See Fee Tables and section 6 | The total withdrawal charge on a partial or full withdrawal cannot be greater than 10% of the Contract Value withdrawn. |
Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 | We cannot restrict assignments or changes of ownership • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. | |
Purchase Requirements See section 3 | We can only decline a Purchase Payment if it would cause total Purchase Payments to be more than $1 million, or if it would otherwise violate the Purchase Payment restrictions of your Contract (for example, we do not allow additional Purchase Payments on or after the Annuity Date). | |
When Annuity Payments Begin See section 8 | The earliest acceptable Annuity Date is one year after the Issue Date. | |
Iowa | Withdrawal Charges See Fee Tables and section 6 | The withdrawal charge is 8.25%, 8%, 7%, 6%, 5%, 4% and 0% for time periods referenced in the Fee Tables and section 6. |
Massachusetts | Waiver of Withdrawal Charge Benefit See section 7 | The waiver of withdrawal charge benefit is not available. |
ISSUE STATE | FEATURE AND BENEFITS | VARIATION |
Mississippi | Withdrawal Charges See Fee Tables and section 6 | The withdrawal charge is 8.5%, 7.5%, 6.5%, 5.5%, 5%, 4% and 0% for time periods referenced in the Fee Tables and section 6. |
Purchase Requirements See section 3 | • For Contracts issued before November 18, 2019: We do not accept additional Purchase Payments on or after the first Contract Anniversary. We also limit the amount of additional Purchase Payments you can make on or after the first Quarterly Contract Anniversary to the amount of total Purchase Payments we received before the first Quarterly Contract Anniversary. • For Contracts issued on or after November 18, 2019: Each Contract Year that we allow additional Purchase Payments you cannot add more than your initial amount without our prior approval. Your initial amount is all Purchase Payments received before the first Quarterly Contract Anniversary of the first Contract Year. We do not allow additional Purchase Payments on or after the tenth Contract Anniversary. However, we allow you to add up to the initial amount in the remainder of the first Contract Year (the first Quarterly Contract Anniversary to the last Business Day before the first Contract Anniversary). | |
Missouri | Our Unregistered Separate Account See section 11 | All of the assets backing the Index Precision Strategy, Index Guard Strategy and Index Performance Strategy Index Options are allocated to Separate Account IANA. We do not move assets between the general account and Separate Account IANA for Contracts issued in Missouri. |
Montana | Access to Your Money See section 7 | If you take a partial withdrawal that reduces the Contract Value below $2,000, we contact you by phone and give you the option of modifying your withdrawal request. If we cannot reach you, we process your request as a full withdrawal. |
New Hampshire | Waiver of Withdrawal Charge Benefit See section 7 | The definition of nursing home is an institution operated in accordance with state law. |
New Jersey | Joint Owner See section 2 | We allow civil union partners to be Joint Owners. |
Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 | We cannot restrict assignments or changes of ownership. • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. | |
Purchase Requirements See section 3 | The maximum total Purchase Payments that we can accept is $1 million. We can only decline a Purchase Payment if it would cause total Purchase Payments to be more than $1 million, or if it would otherwise violate the Purchase Payment restrictions of your Contract (for example, we do not allow additional Purchase Payments on or after the Annuity Date). | |
Ohio | Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 | We cannot restrict assignments or changes of ownership. • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. |
ISSUE STATE | FEATURE AND BENEFITS | VARIATION |
Pennsylvannia | Withdrawal Charges See Fee Tables and section 6 | The withdrawal charge is 8.25%, 8%, 7%, 6%, 5%, 4% and 0% for time periods referenced in the Fee Tables and section 6. |
Waiver of Withdrawal Charge Benefit See section 7 | The waiver is not available if on the Issue Date, an Owner was confined to a nursing home or was already diagnosed with a terminal illness. Also, the nursing home confinement requirement is a total of 90 days within a six month period. These 90 days do not need to be consecutive. | |
Texas | Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 | We cannot restrict assignments or changes of ownership. • We do not change the Determining Life (Lives) following an assignment or ownership change. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit or Maximum Anniversary Value Death Benefit may not be available and on the Owner’s death the Beneficiary(s) will only receive the Contract Value. |
Purchase Requirements See section 3 | • For Contracts issued from April 29, 2019 through November 15, 2019: we do not accept additional Purchase Payments on or after the first Contract Anniversary. • For Contracts issued on or after November 18, 2019: We do not accept additional Purchase Payments on or after the tenth Contract Anniversary. | |
Access to Your Money See section 7 | We only treat a partial withdrawal that reduces the Contract Value below $2,000 as a full withdrawal if you have not made an additional Purchase Payment in the past two calendar years. |
Our Unregistered Separate Account See section | For Contracts issued before May 1, 2020: We hold all assets that you allocate to the Index Precision Strategy, Index Guard Strategy and Index Performance Strategy Index Options that are not invested in the general account in an unregistered, non-unitized, insulated separate account (Separate Account IATX). Separate Account IATX is structured differently from Separate Account IANA. Unlike Separate Account IANA, Separate Account IATX is for the exclusive benefit of persons purchasing a Contract in the State of Texas. Separate Account IATX is insulated from the claims of creditors and Contract purchasers are given priority with regard to Separate Account IATX’s assets over Contract purchasers from other states as well as general creditors. Separate Account IATX was established under Minnesota law for the benefit of Texas Contract purchasers. Separate Account IATX supports our obligations to pay Performance Credits to Texas Contract Owners. Allocations and reallocations to and from the Separate Account IATX are managed in the same manner as Separate Account IANA. Neither Texas Contract purchasers nor these Index Options participate in any way in the performance of assets held in Separate Account IATX. | |
Utah | Purchase Requirements See section 3 | • For Contracts issued before November 18, 2019: We do not accept additional Purchase Payments on or after the first Contract Anniversary. • For Contracts issued on or after November 18, 2019: We do not accept additional Purchase Payments on or after the tenth Contract Anniversary. |
Washington | Our Unregistered Separate Account See section 11 | All of the assets backing the Index Precision Strategy, Index Guard Strategy and Index Performance Strategy Index Options are allocated to Separate Account IANA. We do not move assets between the general account and Separate Account IANA for Contracts issued in Washington. |
ISSUE STATE | FEATURE AND BENEFITS | VARIATION |
Wisconsin | Assignments, Changes of Ownership and Other Transfers of Contract Rights See section 2 | We cannot restrict assignments or changes of ownership. |
Part I |
Year ended December 31, | Year ended December 31, | |||||||||||||||||||||||||||||||
Selected income data | 2018 | 2017 | 2016 | 2015 | 2014 | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||
Premium and annuity considerations* | $ | 12,193 | 10,231 | 12,914 | 11,229 | 15,151 | $ | 13,029 | 12,193 | 10,231 | 12,914 | 11,229 | ||||||||||||||||||||
Net investment income | 4,593 | 4,504 | 4,361 | 4,738 | 4,118 | 4,839 | 4,593 | 4,504 | 4,361 | 4,738 | ||||||||||||||||||||||
Ceded reinsurance reserve and expense adjustments | 245 | 612 | 157 | 413 | 218 | 329 | 245 | 612 | 157 | 413 | ||||||||||||||||||||||
Fees from separate accounts | 676 | 719 | 726 | 691 | 690 | 613 | 676 | 719 | 726 | 691 | ||||||||||||||||||||||
Other income | (3 | ) | 150 | 179 | 28 | 26 | (13 | ) | (3 | ) | 150 | 179 | 28 | |||||||||||||||||||
Total income | 17,704 | 16,216 | 18,337 | 17,099 | 20,203 | 18,797 | 17,704 | 16,216 | 18,337 | 17,099 | ||||||||||||||||||||||
Policyholder benefits and surrenders | 9,436 | 8,649 | 8,111 | 8,280 | 8,014 | 10,368 | 9,436 | 8,649 | 8,111 | 8,280 | ||||||||||||||||||||||
Change in aggregate reserves | 7,299 | 10,628 | 7,755 | 5,660 | 10,730 | 1,034 | 7,299 | 10,628 | 7,755 | 5,660 | ||||||||||||||||||||||
General and administrative and commission | 1,770 | 1,616 | 1,824 | 1,582 | 2,043 | 1,878 | 1,770 | 1,616 | 1,824 | 1,582 | ||||||||||||||||||||||
Net transfers from separate accounts | (2,009 | ) | (1,851 | ) | (1,380 | ) | (1,147 | ) | (598 | ) | ||||||||||||||||||||||
Net transfers to (from) separate accounts | 5,254 | (2,009 | ) | (1,851 | ) | (1,380 | ) | (1,147 | ) | |||||||||||||||||||||||
Total benefits and other expenses | 16,496 | 19,042 | 16,310 | 14,375 | 20,189 | 18,534 | 16,496 | 19,042 | 16,310 | 14,375 | ||||||||||||||||||||||
Income tax expense (benefit) | (51 | ) | 24 | 530 | 620 | 207 | 773 | (51 | ) | 24 | 530 | 620 | ||||||||||||||||||||
Net realized capital gain (loss) | (490 | ) | 3,655 | (486 | ) | (631 | ) | 894 | 1,053 | (490 | ) | 3,655 | (486 | ) | (631 | ) | ||||||||||||||||
Net income (loss) | $ | 769 | 805 | 1,011 | 1,473 | 701 | ||||||||||||||||||||||||||
Net (loss) income | $ | 543 | 769 | 805 | 1,011 | 1,473 | ||||||||||||||||||||||||||
Capital and Surplus: | ||||||||||||||||||||||||||||||||
Change in unrealized capital gain (loss) | $ | 719 | (230 | ) | (78 | ) | 180 | (460 | ) | |||||||||||||||||||||||
Dividends to parent | (325 | ) | — | (780 | ) | (894 | ) | (570 | ) | |||||||||||||||||||||||
Other change in capital & surplus | 441 | 26 | (101 | ) | 46 | 124 | ||||||||||||||||||||||||||
Net change in capital & surplus | $ | 1,378 | 565 | (154 | ) | 343 | 567 | *Includes premiums and annuity and supplementary contract considerations. |
As of December 31, | As of December 31, | |||||||||||||||||||||||||||||||
Selected balance sheet data | 2018 | 2017 | 2016 | 2015 | 2014 | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||||
Total cash and invested assets | $ | 117,203 | 109,327 | 99,840 | 92,603 | 85,742 | $ | 121,870 | 117,203 | 109,327 | 99,840 | 92,603 | ||||||||||||||||||||
Investment income due and accrued | 1,047 | 1,004 | 962 | 934 | 890 | 1,031 | 1,047 | 1,004 | 962 | 934 | ||||||||||||||||||||||
Other admitted assets | 951 | 982 | 685 | 662 | 583 | 945 | 951 | 982 | 685 | 662 | ||||||||||||||||||||||
Separate account assets | 22,835 | 26,755 | 26,071 | 26,395 | 28,990 | 34,638 | 22,835 | 26,755 | 26,071 | 26,395 | ||||||||||||||||||||||
Total admitted assets | 142,036 | 138,068 | 127,558 | 120,594 | 116,205 | 158,484 | 142,036 | 138,068 | 127,558 | 120,594 | ||||||||||||||||||||||
Total policyholder liabilities | 107,118 | 100,433 | 90,504 | 83,320 | 78,075 | 107,098 | 107,118 | 100,433 | 90,504 | 83,320 | ||||||||||||||||||||||
Other liabilities | 5,507 | 4,869 | 4,818 | 5,057 | 3,885 | 8,794 | 5,507 | 4,869 | 4,818 | 5,057 | ||||||||||||||||||||||
Separate account liabilities | 22,835 | 26,755 | 26,071 | 26,395 | 28,990 | 34,638 | 22,835 | 26,755 | 26,071 | 26,395 | ||||||||||||||||||||||
Total liabilities | 135,460 | 132,057 | 121,393 | 114,772 | 110,950 | 150,530 | 135,460 | 132,057 | 121,393 | 114,772 | ||||||||||||||||||||||
Total capital and surplus | 6,576 | 6,011 | 6,165 | 5,822 | 5,255 | 7,954 | 6,576 | 6,011 | 6,165 | 5,822 |
Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | |||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | 2019 | 2018 | 2017 | 2019 - 2018 | 2018 - 2017 | |||||||||||||||||||||||||||||||||||||
Income: | ||||||||||||||||||||||||||||||||||||||||||||||
Premium and annuity considerations* | $ | 12,193 | 10,231 | 12,914 | $ | 1,962 | 19.2 | % | $ | (2,683 | ) | (20.8 | )% | $ | 13,029 | 12,193 | 10,231 | $ | 836 | 6.9 | % | $ | 1,962 | 19.2 | % | |||||||||||||||||||||
Net investment income | 4,593 | 4,504 | 4,361 | 89 | 2.0 | 143 | 3.3 | 4,839 | 4,593 | 4,504 | 246 | 5.4 | 89 | 2.0 | ||||||||||||||||||||||||||||||||
Ceded reinsurance reserve and expense adjustments | 245 | 612 | 157 | (367 | ) | (60.0 | ) | 455 | 289.8 | 329 | 245 | 612 | 84 | 34.3 | (367 | ) | (60.0 | ) | ||||||||||||||||||||||||||||
Fees from separate accounts | 676 | 719 | 726 | (43 | ) | (6.0 | ) | (7 | ) | (1.0 | ) | 613 | 676 | 719 | (63 | ) | (9.3 | ) | (43 | ) | (6.0 | ) | ||||||||||||||||||||||||
Other income | (3 | ) | 150 | 179 | (153 | ) | (102.0 | ) | (29 | ) | (16.2 | ) | (13 | ) | (3 | ) | 150 | (10 | ) | (333.3 | ) | (153 | ) | (102.0 | ) | |||||||||||||||||||||
Total income | 17,704 | 16,216 | 18,337 | 1,488 | 9.2 | (2,121 | ) | (11.6 | ) | 18,797 | 17,704 | 16,216 | 1,093 | 6.2 | 1,488 | 9.2 | ||||||||||||||||||||||||||||||
Benefits and other expenses: | ||||||||||||||||||||||||||||||||||||||||||||||
Policyholder benefits and surrenders | 9,436 | 8,649 | 8,111 | 787 | 9.1 | 538 | 6.6 | 10,368 | 9,436 | 8,649 | 932 | 9.9 | 787 | 9.1 | ||||||||||||||||||||||||||||||||
Change in aggregate reserves | 7,299 | 10,628 | 7,755 | (3,329 | ) | (31.3 | ) | 2,873 | 37.0 | 1,034 | 7,299 | 10,628 | (6,265 | ) | (85.8 | ) | (3,329 | ) | (31.3 | ) | ||||||||||||||||||||||||||
General and administrative and commission | 1,770 | 1,616 | 1,824 | 154 | 9.5 | (208 | ) | (11.4 | ) | 1,878 | 1,770 | 1,616 | 108 | 6.1 | 154 | 9.5 | ||||||||||||||||||||||||||||||
Net transfers from separate accounts | (2,009 | ) | (1,851 | ) | (1,380 | ) | (158 | ) | (8.5 | ) | (471 | ) | (34.1 | ) | ||||||||||||||||||||||||||||||||
Net transfers to (from) separate accounts | 5,254 | (2,009 | ) | (1,851 | ) | 7,263 | 361.5 | (158 | ) | (8.5 | ) | |||||||||||||||||||||||||||||||||||
Total benefits and other expenses | 16,496 | 19,042 | 16,310 | (2,546 | ) | (13.4 | ) | 2,732 | 16.8 | 18,534 | 16,496 | 19,042 | 2,038 | 12.4 | (2,546 | ) | (13.4 | ) | ||||||||||||||||||||||||||||
Pretax income (loss) | 1,208 | (2,826 | ) | 2,027 | 4,034 | 142.7 | (4,853 | ) | (239.4 | ) | 263 | 1,208 | (2,826 | ) | (945 | ) | (78.2 | ) | 4,034 | 142.7 | ||||||||||||||||||||||||||
Income tax expense (benefit) | (51 | ) | 24 | 530 | (75 | ) | (312.5 | ) | (506 | ) | (95.5 | ) | 773 | (51 | ) | 24 | 824 | NM● | (75 | ) | (312.5 | ) | ||||||||||||||||||||||||
Net realized capital gain (loss) | (490 | ) | 3,655 | (486 | ) | (4,145 | ) | (113.4 | ) | 4,141 | 852.1 | 1,053 | (490 | ) | 3,655 | 1,543 | 314.9 | (4,145 | ) | (113.4 | ) | |||||||||||||||||||||||||
Net income (loss) | $ | 769 | 805 | 1,011 | $ | (36 | ) | (4.5 | )% | $ | (206 | ) | (20.4 | )% | ||||||||||||||||||||||||||||||||
Net (loss) income | $ | 543 | 769 | 805 | $ | (226 | ) | (29.4 | )% | $ | (36 | ) | (4.5 | )% | ||||||||||||||||||||||||||||||||
Capital and Surplus: | ||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized capital gain (loss) | $ | (230 | ) | (78 | ) | 180 | $ | (152 | ) | (194.9 | )% | $ | (258 | ) | (143.3 | )% | $ | 719 | (230 | ) | (78 | ) | $ | 949 | 412.6 | % | $ | (152 | ) | (194.9 | )% | |||||||||||||||
Dividends to parent | — | (780 | ) | (894 | ) | 780 | 100.0 | 114 | 12.8 | (325 | ) | — | (780 | ) | (325 | ) | — | 780 | 100.0 | |||||||||||||||||||||||||||
Other change in capital & surplus | 26 | (101 | ) | 46 | 127 | 125.7 | (147 | ) | (319.6 | ) | 441 | 26 | (101 | ) | 415 | NM● | 127 | 125.7 | ||||||||||||||||||||||||||||
Net change in capital & surplus | $ | 565 | (154 | ) | 343 | $ | 719 | 466.9 | % | $ | (497 | ) | (144.9 | )% | $ | 1,378 | 565 | (154 | ) | $ | 813 | 143.9 | % | $ | 719 | 466.9 | % | *Includes premiums and annuity and supplementary contract considerations. | ||||||||||||||||||
ŸNot meaningful | ŸNot meaningful |
• | Premium and annuity considerations: Individual Annuities premium and annuity considerations increased primarily due to a variable-indexed annuity product sales promotion in 2019 and increased Life first year and renewal premiums due to the growing block of business. This was partially offset by lower fixed-indexed annuity sales due to product changes made in response to the continued low interest rate environment in 2019. |
• | Net investment income: Net investment income increased due to an increase in average invested assets and positive cash flows. |
• | Ceded reinsurance reserve and expense adjustments: Ceded reinsurance reserve and expense adjustments increased primarily due to new reinsurance agreements entered into in 2019 in the Individual Annuities segment. |
• | Fees from separate accounts: Fees from separate accounts decreased primarily due to lower average separate account assets as a result of outflows due to policyholder activity and negative equity market impacts in late 2018 in the Individual Annuities segment. The 2018 equity market downturn resulted in lower average assets under management throughout 2019. |
• | Other income:Other income decreased primarily due to lower derivative income on interest rate swaps that hedge changes in cash flows for variable annuities in the Individual Annuities segment. |
• | Policyholder benefits and surrenders: Policyholder benefits and surrenders increased primarily due to an increase in fixed-indexed annuity surrenders within the Individual Annuities segment driven by policyholder activity, and are impacted by the surrender period of the underlying annuity contract. Policyholder benefits and surrenders in the Life Segment also increased primarily due to policyholder activity and an increase in death claims. |
• | Change in aggregate reserves: Change in aggregate reserves decreased primarily due to a change in presentation of assets and liabilities relating to the variable-indexed product in 2019 in the Individual Annuities segment. The Company transferred assets from the general account to the separate account to align with state product filing requirements. The change is completely offset in Net transfers to (from) separate accounts. This decrease was partially offset by the growth of the fixed-index annuity reserves driven by higher index credits as a result of the year over year equity market increase in the Individual Annuities segment. |
• | General and administrative and commission: General, administrative and commission expense increased primarily due to an increase in commissions expense as a result of higher premium as discussed above. |
• | Net transfers to (from) separate accounts:Net transfers to (from) separate accounts increase is driven by afore mentioned 2019 presentation of assets and liabilities for variable-indexed annuities change referenced in the Change in aggregate reserves in the Individual Annuities segment. The increase in Net transfers to (from) separate accounts was partially offset by higher policyholder withdrawals. |
• | Income tax expense (benefit): There is a federal income tax expense due to impacts from hedging gains in the Company's Individual Annuity and Life segments. |
• | Net realized capital gain (loss):Net realized capital gains increased due to gains on derivatives used to economically hedge the Company's product liabilities as a result of an increase in equity markets in the Individual Annuities and Life segments. |
• | Change in unrealized capital gain (loss):Unrealized capital gains are primarily due to positive hedging results on fixed-indexed annuities in the Individual Annuities segment and the Life segment. |
• | Dividends to parent: Dividends of $325 were paid to the parent in 2019. |
• | Other change in capital and surplus:Other change in capital and surplus increased due to a new reinsurance agreement covering certain fixed-indexed annuities in the Individual Annuities segment and an increase in deferred income taxes. This was offset by an increase in AVR that decreased capital and surplus due to the growth of the Company's investment portfolio. |
• | Premium and annuity considerations: Individual Annuities premiums and annuity considerations increased primarily due to a fixed-indexed annuity product sales promotion in 2018 and the Life segment increased as a result of first year and renewal premiums due to the growing block of business. |
• | Net investment income: In line with prior year results. |
• | Ceded reinsurance reserve and expense adjustments: Ceded reinsurance reserve and expense adjustments decreased primarily due to the 2017 activity in which the Company began to cede certain fixed-indexed products on a modified coinsurance basis to an affiliated reinsurance company in the Individual Annuities segment. |
• | Fees from separate accounts: Fees from separate accounts decreased primarily due to the decline of equity market performance compared to increases in the prior year on variable annuities within the Individual Annuities segment. |
• | Other income:Other income decreased primarily due to a decrease in derivative income on interest rate swaps that hedge changes in cash flows for variable annuities with the Individual Annuity segment. |
• | Policyholder benefits and surrenders: Policyholder benefits and surrenders increased primarily due to an increase in fixed and variable annuity surrenders driven by policyholder activity, and are impacted by the surrender period of the underlying annuity contract in the Individual Annuities segment. Policyholder benefits and surrenders in the Life Segment also increased primarily due to policyholder activity and an increase in death claims. |
• | Change in aggregate reserves: Change in aggregate reserves decreased primarily due to the decline of the Company's fixed-index annuity reserves driven by lower index credits as a result of the year over year equity market decline partially offset by new fixed-indexed annuity premiums due to the increase in production and overall net growth in the variable-indexed annuity reserves. In addition, an additional premium deficiency reserve was added in 2018 based upon a gross premium valuation which is conducted annually. |
• | General and administrative and commission: General, administrative and commission expense increased primarily due to an increase in commissions expense as a result of higher fixed-indexed annuity production due to the 2018 sales promotion in the Individual Annuity segment. |
• | Net transfers |
• | Income tax expense (benefit): There is a Federal income tax benefit in 2018 due to impacts from hedging losses in the Company's Individual Annuity and Life segments. |
• | Net realized capital gain (loss):Net realized capital gains decreased due to losses on derivatives used to economically hedge the Company's product liabilities as a result of a decrease in equity markets primarily within the Individual Annuities segment. |
• | Change in unrealized capital gain (loss):Unrealized capital losses are primarily due to negative hedging results on fixed and fixed-indexed annuities in the Individual Annuities segment and Life segment, partially offset by variable and variable-indexed hedging gains in the Individual Annuities segment. |
• | Dividends to parent:No dividends were paid in 2018. |
• | Other change in capital and surplus:Other change in capital and surplus increased due to a change in reserves due to a change in valuation basis recorded in 2018 related to our Individual Annuities segment. This was partially offset by a change in deferred income taxes as a result of negative hedging impacts and net impacts due to changes in accounting principles related to reserve calculations within our Individual Annuities segment. We also experienced a change in asset valuation reserve (AVR) that decreased capital and surplus due to the growth of the Company's general account investment portfolio. |
Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | |||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | 2019 | 2018 | 2017 | 2019 - 2018 | 2018 - 2017 | |||||||||||||||||||||||||||||||||||||
Income: | ||||||||||||||||||||||||||||||||||||||||||||||
Premium and annuity considerations* | $ | 11,223 | 9,374 | 12,184 | $ | 1,849 | 19.7 | % | $ | (2,810 | ) | (23.1 | )% | $ | 11,969 | 11,223 | 9,374 | $ | 746 | 6.6 | % | $ | 1,849 | 19.7 | % | |||||||||||||||||||||
Net investment income | 4,346 | 4,293 | 4,176 | 53 | 1.2 | 117 | 2.8 | 4,551 | 4,346 | 4,293 | 205 | 4.7 | 53 | 1.2 | ||||||||||||||||||||||||||||||||
Ceded reinsurance reserve and expense adjustments | 254 | 600 | 142 | (346 | ) | (57.7 | ) | 458 | 322.5 | 321 | 254 | 600 | 67 | 26.4 | (346 | ) | (57.7 | ) | ||||||||||||||||||||||||||||
Fees from separate accounts | 676 | 719 | 726 | (43 | ) | (6.0 | ) | (7 | ) | (1.0 | ) | 613 | 676 | 719 | (63 | ) | (9.3 | ) | (43 | ) | (6.0 | ) | ||||||||||||||||||||||||
Other income | (3 | ) | 148 | 177 | (151 | ) | (102.0 | ) | (29 | ) | (16.4 | ) | (17 | ) | (3 | ) | 148 | (14 | ) | (466.7 | ) | (151 | ) | (102.0 | ) | |||||||||||||||||||||
Total income | 16,496 | 15,134 | 17,405 | 1,362 | 9.0 | (2,271 | ) | (13.0 | ) | 17,437 | 16,496 | 15,134 | 941 | 5.7 | 1,362 | 9.0 | ||||||||||||||||||||||||||||||
Benefits and other expenses: | ||||||||||||||||||||||||||||||||||||||||||||||
Policyholder benefits and surrenders | 9,264 | 8,492 | 7,959 | 772 | 9.1 | 533 | 6.7 | 10,078 | 9,264 | 8,492 | 814 | 8.8 | 772 | 9.1 | ||||||||||||||||||||||||||||||||
Change in aggregate reserves | 6,457 | 9,841 | 7,222 | (3,384 | ) | (34.4 | ) | 2,619 | 36.3 | 289 | 6,457 | 9,841 | (6,168 | ) | (95.5 | ) | (3,384 | ) | (34.4 | ) | ||||||||||||||||||||||||||
General and administrative and commission | 1,518 | 1,371 | 1,640 | 147 | 10.7 | (269 | ) | (16.4 | ) | 1,591 | 1,518 | 1,371 | 73 | 4.8 | 147 | 10.7 | ||||||||||||||||||||||||||||||
Net transfers from separate accounts | (2,006 | ) | (1,847 | ) | (1,376 | ) | (159 | ) | (8.6 | ) | (471 | ) | (34.2 | ) | ||||||||||||||||||||||||||||||||
Net transfers to (from) separate accounts | 5,258 | (2,006 | ) | (1,847 | ) | 7,264 | 362.1 | (159 | ) | (8.6 | ) | |||||||||||||||||||||||||||||||||||
Total benefits and other expenses | 15,233 | 17,857 | 15,445 | (2,624 | ) | (14.7 | ) | 2,412 | 15.6 | 17,216 | 15,233 | 17,857 | 1,983 | 13.0 | (2,624 | ) | (14.7 | ) | ||||||||||||||||||||||||||||
Pretax income (loss) | 1,263 | (2,723 | ) | 1,960 | 3,986 | 146.4 | (4,683 | ) | (238.9 | ) | 221 | 1,263 | (2,723 | ) | (1,042 | ) | (82.5 | ) | 3,986 | 146.4 | ||||||||||||||||||||||||||
Income tax expense (benefit) | (53 | ) | 23 | 513 | (76 | ) | (330.4 | ) | (490 | ) | (95.5 | ) | 649 | (53 | ) | 23 | 702 | NM● | (76 | ) | (330.4 | ) | ||||||||||||||||||||||||
Net realized capital gain (loss) | (489 | ) | 3,437 | (483 | ) | (3,926 | ) | (114.2 | ) | 3,920 | 811.6 | 922 | (489 | ) | 3,437 | 1,411 | 288.5 | (3,926 | ) | (114.2 | ) | |||||||||||||||||||||||||
Net income (loss) | $ | 827 | 691 | 964 | $ | 136 | 19.7 | % | $ | (273 | ) | (28.3 | )% | |||||||||||||||||||||||||||||||||
Net (loss) income | $ | 494 | 827 | 691 | $ | (333 | ) | (40.3 | )% | $ | 136 | 19.7 | % | |||||||||||||||||||||||||||||||||
Capital and Surplus: | ||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized capital gain (loss) | $ | (160 | ) | (100 | ) | 148 | $ | (60 | ) | (60.0 | )% | $ | (248 | ) | (167.6 | )% | $ | 588 | (160 | ) | (100 | ) | $ | 748 | 467.5 | % | $ | (60 | ) | (60.0 | )% | |||||||||||||||
Other change in capital & surplus | 36 | (91 | ) | 53 | 127 | 139.6 | (144 | ) | (271.7 | ) | 439 | 36 | (91 | ) | 403 | NM● | 127 | 139.6 | ||||||||||||||||||||||||||||
Net change in capital & surplus | $ | 703 | 500 | 1,165 | $ | 203 | 40.6 | % | $ | (665 | ) | (57.1 | )% | $ | 1,521 | 703 | 500 | $ | 818 | 116.4 | % | $ | 203 | 40.6 | % | *Includes premiums and annuity and supplementary contract considerations. | ||||||||||||||||||||
●Not meaningful | ●Not meaningful |
Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | |||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | 2019 | 2018 | 2017 | 2019 - 2018 | 2018 - 2017 | |||||||||||||||||||||||||||||||||||||
Individual Annuities | ||||||||||||||||||||||||||||||||||||||||||||||
Deposits | $ | 11,318 | 9,688 | 12,011 | $ | 1,630 | 16.8 | % | $ | (2,323 | ) | (19.3 | )% | $ | 12,135 | 11,318 | 9,688 | $ | 817 | 7.2 | % | $ | 1,630 | 16.8 | % | |||||||||||||||||||||
In-force | 118,602 | 115,189 | 106,778 | 3,413 | 3.0 | % | 8,411 | 7.9 | % | 126,936 | 118,602 | 115,189 | 8,334 | 7.0 | % | 3,413 | 3.0 | % |
Year ended December 31, | % change | Year ended December 31, | % change | |||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | 2019 | 2018 | 2017 | 2019 - 2018 | 2018 - 2017 | |||||||||
Stock Index | ||||||||||||||||||
S&P 500 | (6.24)% | 19.42% | 9.54% | (25.66)% | 9.88% | 28.88% | (6.24)% | 19.42% | 35.12% | (25.66)% | ||||||||
NASDAQ 100 | (1.04)% | 31.52% | 5.89% | (32.56)% | 25.63% | 37.96% | (1.04)% | 31.52% | 39.00% | (32.56)% | ||||||||
BUDBI | (0.88)% | 15.94% | 4.83% | (16.82)% | 11.11% | 13.23% | (0.88)% | 15.94% | 14.11% | (16.82)% | ||||||||
BUDBI II | 0.40% | 14.31% | 4.25% | (13.91)% | 10.06% | 14.05% | 0.40% | 14.31% | 13.65% | (13.91)% |
Year ended December 31, | Basis point (bps) change | Year ended December 31, | Basis point (bps) change | |||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | 2019 | 2018 | 2017 | 2019 - 2018 | 2018 - 2017 | |||||||||
Interest Rates | ||||||||||||||||||
LIBOR 10yr | 2.83% | 2.40% | 2.34% | 43bps | 6bps | 1.90% | 2.71% | 2.53% | (81bps) | 18bps | ||||||||
LIBOR 20yr | 2.71% | 2.53% | 2.56% | 18bps | -3bps | 2.07% | 2.83% | 2.40% | (76bps) | 43bps |
• | Premium and annuity considerations: Premium and annuity considerations increased primarily due to higher variable-indexed annuity premium driven by a 2019 sales promotion. This was partially offset by lower fixed-indexed annuity sales due to product changes made in response to the continued low interest rate environment and lower traditional variable annuity sales also driven by product changes. |
• | Net investment income:Net investment income increased due an increase in fixed-indexed average invested assets. |
• | Ceded reinsurance reserve and expense adjustments: Ceded reinsurance reserve and expense adjustments increased primarily due to new reinsurance agreements entered into in 2019. |
• | Fees from separate accounts: Fees from separate accounts decreased primarily due to lower average separate account assets as a result of outflows due to policyholder activity and negative equity market impacts in late 2018. The 2018 equity market downturn resulted in lower average assets under management throughout 2019. |
• | Other income:Other income decreased primarily due to a decrease in derivative income on interest rate swaps that hedge changes in cash flows for variable annuities. |
• | Policyholder benefits and surrenders: Policyholder benefits and surrenders increased primarily due to an increase in fixed-indexed annuity surrenders driven by policyholder activity, and are impacted by the surrender period of the underlying annuity contract. |
• | Change in aggregate reserves: Change in aggregate reserves decreased primarily due to a change in presentation of assets and liabilities relating to the variable-indexed product in 2019. The Company transferred assets from the general account to the separate account to align with state product filing requirements. The change is completely offset in Net transfers to (from) separate accounts. This was partially offset by the growth of the fixed-index annuity reserves driven by higher index credits as a result of the year over year equity market increase partially offset by lower fixed-indexed annuity premiums due to the decrease in production. |
• | General and administrative and commission: General, administrative and commission expense increased primarily due to an increase in commissions expense as a result of higher premium as discussed above. |
• | Net transfers to (from) separate accounts:Net transfers to (from) separate accounts increase is driven by afore mentioned 2019 presentation of assets and liabilities for variable-indexed annuities change referenced in the Change in aggregate reserves. The increase in Net transfers to (from) separate accounts was partially offset by higher policyholder withdrawals. |
• | Income tax expense (benefit): Income tax expense is driven by a federal income tax expense in 2019 due to impacts from hedging gains. |
• | Net realized capital gain (loss):Net realized capital gains increased due to gains on derivatives used to economically hedge the Company's product liabilities as a result of an increase in equity markets. |
• | Change in unrealized capital gain (loss):Unrealized capital gains are primarily due to positive hedging results on fixed-indexed annuities. |
• | Other change in capital and surplus: Other change in capital and surplus increased due to a new reinsurance agreement covering certain fixed-indexed annuities and an increase in deferred income taxes. This was offset by an increase in AVR that decreased capital and surplus due to the growth of the Company's investment portfolio. |
• | Premium and annuity considerations: Premium and annuity considerations increased primarily due to a fixed-indexed annuity product sales promotion in 2018; no such promotion occurred in the prior year. |
• | Ceded reinsurance reserve and expense adjustments: Ceded reinsurance reserve and expense adjustments decreased primarily due to 2017 activity in which the Company began to cede certain fixed-indexed products on a modified coinsurance basis to an affiliated reinsurance company. This agreement was terminated in Q1 2018. |
• | Fees from separate accounts: Fees from separate accounts decreased primarily due to lower separate account assets as a result of the negative equity market performance compared to positive performance in the prior year. |
• | Other income:Other income decreased primarily due to a decrease in derivative income on interest rate swaps that hedge changes in cash flows for variable annuities. |
• | Policyholder benefits and surrenders: Policyholder benefits and surrenders increased primarily due to an increase in fixed and variable annuity surrenders driven by policyholder activity, and are impacted by the surrender period of the underlying annuity contract. We also experienced an increase in death payments, which is generally consistent with the growth in the Company's inforce business. These impacts were partially offset by a decrease in interest and adjustments on deposit-type contracts and death benefits on supplementary contracts with life contingencies. |
• | Change in aggregate reserves: Change in aggregate reserves decreased primarily due to the Company's fixed-index annuity reserves driven by lower index credits as a result of the year over year equity market decline partially offset by new fixed-indexed annuity premiums due to the increase in production and overall net growth in the variable-indexed annuity reserves driven by the growth of the block of the business. |
• | General and administrative and commission: General, administrative and commission expense increased primarily due to an increase in commissions expense as a result of higher fixed-indexed annuity production due to the 2018 sales promotion. |
• | Net transfers |
• | Net realized capital gain (loss): Net realized capital gains decreased due to losses on derivatives used to economically hedge the Company's product liabilities as a result of a decrease in equity markets. |
• | Income tax expense (benefit): There is a Federal income tax benefit in 2018 due to impacts from hedging losses. |
• | Change in unrealized capital gain (loss): Unrealized capital losses are primarily due to negative hedging results on fixed-indexed annuities and tax expense on unrealized losses. |
• | Other change in capital and surplus: Other change in capital and surplus increased due to a change in reserve on account of change in valuation basis recorded in 2018 related to certain fixed-indexed annuities with guaranteed lifetime withdrawal benefit streams. This was partially offset by a change in deferred income taxes as a result of negative hedging impacts and net impacts due to changes in accounting principles related to fixed and variable-indexed annuity reserve calculations. We also experienced a change in AVR that decreased capital and surplus due to the growth of the Company's general account investment portfolio. |
Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | ||||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | 2019 | 2018 | 2017 | 2019 - 2018 | 2018 - 2017 | ||||||||||||||||||||||||||||||||||||||
Income: | |||||||||||||||||||||||||||||||||||||||||||||||
Premium and annuity considerations | $ | 816 | 708 | 587 | $ | 108 | 15.3 | % | $ | 121 | 20.6 | % | $ | 906 | 816 | 708 | $ | 90 | 11.0 | % | $ | 108 | 15.3 | % | |||||||||||||||||||||||
Net investment income | 158 | 129 | 108 | 29 | 22.5 | 21 | 19.4 | 177 | 158 | 129 | 19 | 12.0 | 29 | 22.5 | |||||||||||||||||||||||||||||||||
Ceded reinsurance reserve and expense adjustments | (16 | ) | 4 | 7 | (20 | ) | (500.0 | ) | (3 | ) | (42.9 | ) | 2 | (16 | ) | 4 | 18 | 112.5 | (20 | ) | (500.0 | ) | |||||||||||||||||||||||||
Other income | — | 1 | 1 | (1 | ) | (100.0 | ) | — | — | 3 | — | 1 | 3 | — | (1 | ) | (100.0 | ) | |||||||||||||||||||||||||||||
Total income | 958 | 842 | 703 | 116 | 13.8 | 139 | 19.8 | 1,088 | 958 | 842 | 130 | 13.6 | 116 | 13.8 | |||||||||||||||||||||||||||||||||
Benefits and other expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Policyholder benefits and surrenders | 96 | 80 | 88 | 16 | 20.0 | (8 | ) | (9.1 | ) | 199 | 96 | 80 | 103 | 107.3 | 16 | 20.0 | |||||||||||||||||||||||||||||||
Change in aggregate reserves | 658 | 680 | 386 | (22 | ) | (3.2 | ) | 294 | 76.2 | 611 | 658 | 680 | (47 | ) | (7.1 | ) | (22 | ) | (3.2 | ) | |||||||||||||||||||||||||||
General and administrative and commission | 212 | 217 | 158 | (5 | ) | (2.3 | ) | 59 | 37.3 | 258 | 212 | 217 | 46 | 21.7 | (5 | ) | (2.3 | ) | |||||||||||||||||||||||||||||
Total benefits and other expenses | 966 | 977 | 632 | (11 | ) | (1.1 | ) | 345 | 54.6 | 1,068 | 966 | 977 | 102 | 10.6 | (11 | ) | (1.1 | ) | |||||||||||||||||||||||||||||
Pretax income (loss) | (8 | ) | (135 | ) | 71 | 127 | 94.1 | (206 | ) | (290.1 | ) | 20 | (8 | ) | (135 | ) | 28 | 350.0 | 127 | 94.1 | |||||||||||||||||||||||||||
Income tax expense (benefit) | — | 1 | 18 | (1 | ) | — | (17 | ) | (94.4 | ) | 59 | — | 1 | 59 | — | (1 | ) | (100.0 | ) | ||||||||||||||||||||||||||||
Net realized capital gain (loss) | (1 | ) | 217 | $ | (1 | ) | (218 | ) | (100.5 | ) | 218 | NM* | 131 | (1 | ) | 217 | 132 | NM* | (218 | ) | NM* | ||||||||||||||||||||||||||
Net income (loss) | $ | (9 | ) | 81 | 52 | $ | (90 | ) | (111.1 | )% | $ | 29 | 55.8 | % | |||||||||||||||||||||||||||||||||
Net (loss) income | $ | 92 | (9 | ) | 81 | $ | 101 | NM* | $ | (90 | ) | (111.1 | )% | ||||||||||||||||||||||||||||||||||
Capital and Surplus: | |||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized capital gain (loss) | $ | (70 | ) | 15 | 31 | $ | (85 | ) | (566.7 | )% | $ | (16 | ) | (51.6 | )% | $ | 130 | (70 | ) | 15 | $ | 200 | 285.7 | % | $ | (85 | ) | (566.7 | )% | ||||||||||||||||||
Other change in capital & surplus | (6 | ) | (4 | ) | (5 | ) | (2 | ) | (50.0 | ) | 1 | 20.0 | 4 | (6 | ) | (4 | ) | 10 | 166.7 | (2 | ) | (50.0 | ) | ||||||||||||||||||||||||
Net change in capital & surplus | $ | (85 | ) | 92 | 78 | $ | (177 | ) | (192.4 | )% | $ | 14 | 17.9 | % | $ | 226 | (85 | ) | 92 | $ | 311 | 365.9 | % | $ | (177 | ) | (192.4 | )% | |||||||||||||||||||
*Not meaningful |
Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | |||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | 2019 | 2018 | 2017 | 2019 - 2018 | 2018 - 2017 | |||||||||||||||||||||||||||||||||||||
Life | ||||||||||||||||||||||||||||||||||||||||||||||
First year and renewal premiums | $ | 864 | 758 | 627 | $ | 106 | 14.0 | % | $ | 131 | 20.9 | % | $ | 960 | 864 | 758 | $ | 96 | 11.1 | % | $ | 106 | 14.0 | % | ||||||||||||||||||||||
In-force | 37,982 | 33,757 | 29,998 | 4,225 | 12.5 | 3,759 | 12.5 | 42,700 | 37,982 | 33,757 | 4,718 | 12.4 | 4,225 | 12.5 |
• | Premium and annuity considerations: Premiums and annuity considerations increased as a result of an increase in first year and renewal premiums as a result of a growing block of business. |
• | Net investment income: Net investment income increased primarily due to an increase in Life average invested assets. |
• | Ceded reinsurance reserve and expense adjustments:Ceded reinsurance reserve and expense adjustments increased as a result of prior year changes in ceded modified coinsurance reserves on certain Life products, with minimal changes in the current year. |
• | Policyholder benefits and surrenders: Policyholder benefits and surrenders increased primarily due to policyholder activity in addition to an increase in death claims. |
• | Change in aggregate reserves: Change in aggregate reserves decreased due to lower index credit levels as a result of the negative equity market performance in late 2018. This was partially offset by higher premiums and an increase in policy charges as a result of a growing block of business. |
• | General and administrative and commission: General and administrative and commission expense increased primarily due to an increase in first year and renewal commissions which is consistent with premium production. |
• | Income tax expense (benefit): Income tax expense is driven by a federal income tax expense in 2019 due to impacts from hedging gains. |
• | Net realized capital gain (loss):Net realized capital gain increased due to hedging gains as a result of positive equity market performance. |
• | Change in unrealized capital gain (loss): Change in unrealized capital gain is due to an increase in hedging gains as a result of positive equity markets. |
• | Other change in capital and surplus:Other change in capital and surplus increased as a result of change in net deferred income taxes as result of positive hedging impacts. |
• | Premium and annuity considerations: Premiums and annuity considerations increased as a result of an increase in first year and renewal premiums as a result of a growing block of business. |
• | Net investment income: Net investment income increased primarily due to an increase in Life average invested assets. |
• | Ceded reinsurance reserve and expense adjustments: Ceded reinsurance reserve and expense adjustments decreased as a result of changes in ceded modified coinsurance reserves on certain Life products. |
• | Policyholder benefits and surrenders: Policyholder benefits and surrenders increased primarily due to policyholder activity in addition to an increase in death claims. |
• | Change in aggregate reserves: Change in aggregate reserves decreased |
• | General and administrative and commission: General and administrative and commission expense decreased primarily due to lower product litigation expenses partially offset by an increase in first year and renewal commissions which is consistent with premium production. |
Net realized capital gain (loss):Net realized capital gain decreased due to hedging losses as a result of negative equity market performance. |
• | Change in unrealized capital gain (loss): Change in unrealized capital loss is due to an increase in hedging losses as a result of negative equity markets. |
|
Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | |||||||||||||||||||||
Income: | |||||||||||||||||||||||||
Premium and annuity considerations | $ | 154 | 149 | 143 | $ | 5 | 3.4 | % | $ | 6 | 4.2 | % | |||||||||||||
Net investment income | 89 | 82 | 77 | 7 | 8.5 | 5 | 6.5 | ||||||||||||||||||
Ceded reinsurance reserve and expense adjustments | 7 | 8 | 8 | (1 | ) | — | — | — | |||||||||||||||||
Other income | — | 1 | 1 | (1 | ) | — | — | — | |||||||||||||||||
Total income | 250 | 240 | 229 | 10 | 4.2 | 11 | 4.8 | ||||||||||||||||||
Benefits and other expenses: | |||||||||||||||||||||||||
Policyholder benefits and surrenders | 76 | 77 | 64 | (1 | ) | (1.3 | ) | 13 | 20.3 | ||||||||||||||||
Change in aggregate reserves | 184 | 107 | 147 | 77 | 72.0 | (40 | ) | (27.2 | ) | ||||||||||||||||
General and administrative and commission | 40 | 28 | 26 | 12 | 42.9 | 2 | 7.7 | ||||||||||||||||||
Net transfers from separate accounts | (3 | ) | (4 | ) | (4 | ) | 1 | — | — | — | |||||||||||||||
Total benefits and other expenses | 297 | 208 | 233 | 89 | 42.8 | (25 | ) | (10.7 | ) | ||||||||||||||||
Pretax income (loss) | (47 | ) | 32 | (4 | ) | (79 | ) | (246.9 | ) | 36 | 900.0 | ||||||||||||||
Income tax expense (benefit) | 2 | — | (1 | ) | 2 | NM* | 1 | 100.0 | |||||||||||||||||
Net realized capital gain (loss) | — | 1 | $ | (2 | ) | (1 | ) | (100.0 | ) | 3 | 150.0 | ||||||||||||||
Net income (loss) | $ | (49 | ) | $ | 33 | $ | (5 | ) | $ | (82 | ) | (248.5 | )% | $ | 38 | 760.0 | % | ||||||||
Capital and Surplus: | |||||||||||||||||||||||||
Change in unrealized capital gain (loss) | $ | 1 | 7 | 1 | $ | (6 | ) | (85.7 | )% | $ | 6 | 100.0 | % | ||||||||||||
Other change in capital & surplus | (4 | ) | (5 | ) | (1 | ) | 1 | 20.0 | (4 | ) | (400.0 | ) | |||||||||||||
Net change in capital & surplus | $ | (52 | ) | 35 | (5 | ) | $ | (87 | ) | (248.6 | )% | $ | 40 | 800.0 | % | ||||||||||
*Not meaningful |
Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | |||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | 2019 | 2018 | 2017 | 2019 - 2018 | 2018 - 2017 | |||||||||||||||||||||||||||||||||||||
Legacy Products | ||||||||||||||||||||||||||||||||||||||||||||||
Gross premiums written | $ | 258 | 257 | 256 | $ | 1 | 0.4 | % | $ | 1 | 0.4 | % | $ | 254 | 258 | 257 | $ | (4 | ) | (1.6 | )% | $ | 1 | 0.4 | % | |||||||||||||||||||||
In-force | 3,101 | 3,427 | 3,684 | (326 | ) | (9.5 | ) | (257 | ) | (7.0 | ) | 2,993 | 3,101 | 3,427 | (108 | ) | (3.5 | ) | (326 | ) | (9.5 | ) |
• | Net investment income: Net investment income increase driven by a LTC yield increase due to the growth in reserves on the aging block of business. |
• | Policyholder benefits and surrenders: Policyholder benefits and surrenders increased driven by higher paid claims on the the LTC block of business. |
• | Change in aggregate reserves:Change in aggregate reserves decreased driven by the favorable impact due to the additional premium deficiency reserve added in 2018 and favorable impacts of net change in claims reserves. This was partially offset by negative impact of higher change in active life reserves. |
• | General and administrative and commission: The favorable change in general and administrative and commission is primarily due to the establishment of a claim administrative expense reserve added in 2018 to the claim reserves. |
• | Income tax expense (benefit): Income tax expense is driven by a federal income tax expense in 2019 due to impacts from hedging gains. |
• | Premium and annuity considerations: Premium and annuity considerations increased primarily due to continued effects of LTC rate increases implemented in 2016. |
• | Net investment income:LTC reflects higher investment income due to growth in reserves driven by an aging block of business. |
• | Change in aggregate reserves:Change in aggregate reserves increased driven by an additional premium deficiency reserve added in 2018 and higher claims experience. |
• | General and administrative and commission: The unfavorable change in general and administrative and commission is primarily due to the establishment of a claim administrative expense reserve added in 2018 to the claim reserves. |
Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | Year ended December 31, | Increase (decrease) and % change | Increase (decrease) and % change | |||||||||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 - 2017 | 2017 - 2016 | 2019 | 2018 | 2017 | 2019 - 2018 | 2018 - 2017 | |||||||||||||||||||||||||||||||||||||
Capital and Surplus: | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends to parent | $ | — | (780 | ) | (894 | ) | $ | 780 | 100.0 | % | $ | 114 | 12.8 | % | $ | (325 | ) | — | (780 | ) | $ | (325 | ) | — | % | $ | 780 | 100.0 | % |
2018 | 2017 | 2019 | 2018 | |||||||||||||||||||||||
Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | Carrying value | % of total | |||||||||||||||||||
Bonds | $ | 97,281 | 83.0 | % | $ | 90,727 | 83.0 | % | $ | 97,269 | 79.8 | % | $ | 97,281 | 83.0 | % | ||||||||||
Stocks | 137 | 0.1 | 150 | 0.1 | 181 | 0.1 | 137 | 0.1 | ||||||||||||||||||
Investment in subsidiaries | 1,339 | 1.1 | 1,267 | 1.2 | 1,347 | 1.1 | 1,339 | 1.1 | ||||||||||||||||||
Mortgage loans on real estate | 13,292 | 11.3 | 11,799 | 10.8 | 14,217 | 11.7 | 13,292 | 11.3 | ||||||||||||||||||
Real estate | 58 | — | 54 | — | 64 | 0.1 | 58 | — | ||||||||||||||||||
Cash and cash equivalents | 926 | 0.8 | 1,333 | 1.2 | 1,868 | 1.5 | 926 | 0.8 | ||||||||||||||||||
Policy loans | 214 | 0.2 | 184 | 0.2 | 234 | 0.2 | 214 | 0.2 | ||||||||||||||||||
Derivative assets | 573 | 0.5 | 676 | 0.6 | 2,391 | 2.0 | 573 | 0.5 | ||||||||||||||||||
Other invested assets | 3,383 | 3.0 | 3,137 | 2.9 | 4,299 | 3.5 | 3,383 | 3.0 | ||||||||||||||||||
Total cash and invested assets | $ | 117,203 | 100.0 | % | $ | 109,327 | 100.0 | % | $ | 121,870 | 100.0 | % | $ | 117,203 | 100.0 | % |
2018 | |||||||||||||
NAIC Classes | Fair Value | % of Total | Amortized Cost | % of Total | |||||||||
1 | $ | 58,538 | 60.0 | % | $ | 57,848 | 59.5 | % | |||||
2 | 37,620 | 38.6 | 38,005 | 39.1 | |||||||||
Investment grade | 96,158 | 98.6 | 95,853 | 98.6 | |||||||||
3 | 1,249 | 1.3 | 1,295 | 1.3 | |||||||||
4 | 81 | 0.1 | 86 | 0.1 | |||||||||
5 | 39 | — | 39 | — | |||||||||
6 | 7 | — | 7 | — | |||||||||
Below investment grade | 1,376 | 1.4 | 1,428 | 1.4 | |||||||||
Total | $ | 97,534 | 100.0 | % | $ | 97,281 | 100.0 | % |
2017 | 2019 | |||||||||||||||||||||||||
NAIC Classes | Fair Value | % of Total | Amortized Cost | % of Total | Fair Value | % of Total | Amortized Cost | % of Total | ||||||||||||||||||
1 | $ | 58,200 | 60.2 | % | $ | 54,527 | 60.0 | % | $ | 65,546 | 61.3 | % | $ | 59,711 | 61.4 | % | ||||||||||
2 | 36,733 | 37.9 | 34,438 | 38.0 | 40,028 | 37.5 | 36,349 | 37.4 | ||||||||||||||||||
Investment grade | 94,933 | 98.1 | 88,965 | 98.0 | 105,574 | 98.8 | 96,060 | 98.8 | ||||||||||||||||||
3 | 1,635 | 1.7 | 1,530 | 1.7 | 1,049 | 1.0 | 992 | 1.0 | ||||||||||||||||||
4 | 136 | 0.1 | 138 | 0.2 | 71 | 0.1 | 69 | 0.1 | ||||||||||||||||||
5 | 100 | 0.1 | 93 | 0.1 | 150 | 0.1 | 145 | 0.1 | ||||||||||||||||||
6 | — | — | — | — | 4 | — | 3 | — | ||||||||||||||||||
Below investment grade | 1,871 | 1.9 | 1,761 | 2.0 | 1,274 | 1.2 | 1,209 | 1.2 | ||||||||||||||||||
Total | $ | 96,804 | 100.0 | % | $ | 90,726 | 100.0 | % | $ | 106,848 | 100.0 | % | $ | 97,269 | 100.0 | % |
2018 | |||||||||||||
NAIC Classes | Fair Value | % of Total | Amortized Cost | % of Total | |||||||||
1 | $ | 58,538 | 60.0 | % | $ | 57,848 | 59.5 | % | |||||
2 | 37,620 | 38.6 | 38,005 | 39.1 | |||||||||
Investment grade | 96,158 | 98.6 | 95,853 | 98.6 | |||||||||
3 | 1,249 | 1.3 | 1,296 | 1.3 | |||||||||
4 | 81 | 0.1 | 86 | 0.1 | |||||||||
5 | 39 | — | 39 | — | |||||||||
6 | 7 | — | 7 | — | |||||||||
Below investment grade | 1,376 | 1.4 | 1,428 | 1.4 | |||||||||
Total | $ | 97,534 | 100.0 | % | $ | 97,281 | 100.0 | % |
2018 | 2019 | |||||||||||||||||||||||||||
NAIC Classes | % of total CMBS | Vintage | % of total CMBS | Vintage | ||||||||||||||||||||||||
1 | $ | 10,398 | 99.9 | % | 2018 | $ | 1,810 | 17.3 | % | $ | 11,351 | 100.0 | % | 2019 | $ | 1,519 | 13.4 | % | ||||||||||
2 | 1 | — | 2017 | 2,024 | 19.5 | 1 | — | 2018 | 1,806 | 15.9 | ||||||||||||||||||
3 | 1 | — | 2016 | 2,007 | 19.3 | 1 | — | 2017 | 1,752 | 15.4 | ||||||||||||||||||
4 | 1 | — | 2015 | 2,185 | 21.0 | 1 | — | 2016 | 1,832 | 16.1 | ||||||||||||||||||
5 | 3 | 0.1 | 2014 and prior | 2,378 | 22.9 | 2 | — | 2015 and prior | 4,447 | 39.2 | ||||||||||||||||||
6 | — | — | $ | 10,404 | 100.0 | % | — | — | $ | 11,356 | 100.0 | % | ||||||||||||||||
$ | 10,404 | 100.0 | % | $ | 11,356 | 100.0 | % |
2017 | 2018 | |||||||||||||||||||||||||||
NAIC Classes | % of total CMBS | Vintage | % of total CMBS | Vintage | ||||||||||||||||||||||||
1 | $ | 8,301 | 98.7 | % | 2017 | $ | 1,901 | 22.7 | % | $ | 10,398 | 99.9 | % | 2018 | $ | 1,810 | 17.3 | % | ||||||||||
2 | 99 | 1.2 | 2016 | 1,910 | 22.7 | 1 | — | 2017 | 2,024 | 19.5 | ||||||||||||||||||
3 | — | — | 2015 | 2,088 | 24.8 | 1 | — | 2016 | 2,007 | 19.3 | ||||||||||||||||||
4 | 4 | 0.1 | 2014 | 1,606 | 19.1 | 1 | — | 2015 | 2,185 | 21.0 | ||||||||||||||||||
5 | — | — | 2013 and prior | 899 | 10.7 | 3 | 0.1 | 2014 and prior | 2,378 | 22.9 | ||||||||||||||||||
6 | — | — | $ | 8,404 | 100.0 | % | — | — | $ | 10,404 | 100.0 | % | ||||||||||||||||
$ | 8,404 | 100.0 | % | $ | 10,404 | 100.0 | % |
2018 | 2019 | |||||||||||||||||||||||||||
NAIC Classes | % of total other ABS | Vintage | % of total other ABS | Vintage | ||||||||||||||||||||||||
1 | $ | 1,535 | 78.2 | % | 2018 | $ | 938 | 47.8 | % | $ | 2,460 | 81.1 | % | 2019 | $ | 1,189 | 39.2 | % | ||||||||||
2 | 378 | 19.2 | 2017 | 254 | 12.9 | 529 | 17.4 | 2018 | 926 | 30.5 | ||||||||||||||||||
3 | 51 | 2.6 | 2016 | 197 | 10.0 | 45 | 1.5 | 2017 | 251 | 8.3 | ||||||||||||||||||
4 | — | — | 2015 | 236 | 12.0 | — | — | 2016 | 179 | 5.9 | ||||||||||||||||||
5 | — | — | 2014 and prior | 339 | 17.3 | — | — | 2015 and prior | 489 | 16.1 | ||||||||||||||||||
6 | — | — | $ | 1,964 | 100.0 | % | — | — | $ | 3,034 | 100.0 | % | ||||||||||||||||
$ | 1,964 | 100.0 | % | $ | 3,034 | 100.0 | % |
2017 | 2018 | |||||||||||||||||||||||||||
NAIC Classes | % of total other ABS | Vintage | % of total other ABS | Vintage | ||||||||||||||||||||||||
1 | $ | 707 | 67.5 | % | 2017 | $ | 171 | 16.3 | % | $ | 1,535 | 78.2 | % | 2018 | $ | 938 | 47.8 | % | ||||||||||
2 | 232 | 22.1 | 2016 | 211 | 20.2 | 378 | 19.2 | 2017 | 254 | 12.9 | ||||||||||||||||||
3 | 75 | 7.2 | 2015 | 244 | 23.3 | 51 | 2.6 | 2016 | 197 | 10.0 | ||||||||||||||||||
4 | 28 | 2.7 | 2014 | 35 | 3.4 | — | — | 2015 | 236 | 12.0 | ||||||||||||||||||
5 | 5 | 0.5 | 2013 and prior | 386 | 36.8 | — | — | 2014 and prior | 339 | 17.3 | ||||||||||||||||||
6 | — | — | $ | 1,047 | 100.0 | % | — | — | $ | 1,964 | 100.0 | % | ||||||||||||||||
$ | 1,047 | 100.0 | % | $ | 1,964 | 100.0 | % |
2018 | ||||||||||||||
NAIC Classes | % of total NA RMBS | Vintage | ||||||||||||
1 | $ | 4,944 | 99.5 | % | 2018 | $ | 331 | 6.6 | % | |||||
2 | 4 | 0.1 | 2017 | 1,305 | 26.3 | |||||||||
3 | 6 | 0.1 | 2016 | 1,573 | 31.7 | |||||||||
4 | 4 | 0.1 | 2015 | 458 | 9.2 | |||||||||
5 | 9 | 0.2 | 2014 and prior | 1,300 | 26.2 | |||||||||
6 | — | — | $ | 4,967 | 100.0 | % | ||||||||
$ | 4,967 | 100.0 | % |
2017 | 2019 | |||||||||||||||||||||||||||
NAIC Classes | % of total NA RMBS | Vintage | % of total NA RMBS | Vintage | ||||||||||||||||||||||||
1 | $ | 5,552 | 100.0 | % | 2017 | $ | 1,211 | 21.7 | % | $ | 291 | 95.8 | % | 2019 | $ | 1 | 0.3 | % | ||||||||||
2 | — | — | 2016 | 1,700 | 30.6 | 1 | 0.3 | 2018 | 1 | 0.3 | ||||||||||||||||||
3 | — | — | 2015 | 509 | 9.2 | 3 | 1.0 | 2017 | — | — | ||||||||||||||||||
4 | 1 | — | 2014 | 148 | 2.7 | 4 | 1.3 | 2016 | — | — | ||||||||||||||||||
5 | — | — | 2013 and prior | 1,985 | 35.8 | 1 | 0.3 | 2015 and prior | 302 | 99.4 | ||||||||||||||||||
6 | — | — | $ | 5,553 | 100.0 | % | 4 | 1.3 | $ | 304 | 100.0 | % | ||||||||||||||||
$ | 5,553 | 100.0 | % | $ | 304 | 100.0 | % |
2018 | ||||||||||||||
NAIC Classes | % of total NA RMBS | Vintage | ||||||||||||
1 | $ | 296 | 92.8 | % | 2018 | $ | — | — | % | |||||
2 | 4 | 1.2 | 2017 | — | — | |||||||||
3 | 6 | 1.8 | 2016 | — | — | |||||||||
4 | 4 | 1.4 | 2015 | 8 | 2.5 | |||||||||
5 | 9 | 2.8 | 2014 and prior | 311 | 97.5 | |||||||||
6 | — | — | $ | 319 | 100.0 | % | ||||||||
$ | 319 | 100.0 | % |
2018 | 2019 | |||||||||||||||||||||||||
Investment Grade | % of Total | Below Investment Grade | % of Total | Investment Grade | % of Total | Below Investment Grade | % of Total | |||||||||||||||||||
Twelve months or less below carrying value | $ | 1,539 | 62.0 | % | $ | 39 | 1.6 | % | $ | 42 | 44.2 | % | $ | 7 | 7.1 | % | ||||||||||
More than twelve months below carrying value | 870 | 35.0 | 36 | 1.4 | 38 | 40.0 | 8 | 8.7 | ||||||||||||||||||
Total | $ | 2,409 | 97.0 | % | $ | 75 | 3.0 | % | $ | 80 | 84.2 | % | $ | 15 | 15.8 | % |
2017 | 2018 | |||||||||||||||||||||||||
Investment Grade | % of Total | Below Investment Grade | % of Total | Investment Grade | % of Total | Below Investment Grade | % of Total | |||||||||||||||||||
Twelve months or less below carrying value | $ | 78 | 24.4 | % | $ | 2 | 0.6 | % | $ | 1,539 | 62.0 | % | $ | 39 | 1.6 | % | ||||||||||
More than twelve months below carrying value | 221 | 68.8 | 20 | 6.2 | 870 | 35.0 | 36 | 1.4 | ||||||||||||||||||
Total | $ | 299 | 93.2 | % | $ | 22 | 6.8 | % | $ | 2,409 | 97 | % | $ | 75 | 3 | % |
2018 | 2017 | 2019 | 2018 | |||||||||||||||||||||||
Impairment | No. of Securities | Impairment | No. of Securities | Impairment | No. of Securities | Impairment | No. of Securities | |||||||||||||||||||
U.S. government | $ | 3 | 3 | $ | — | — | $ | — | — | $ | 3 | 3 | ||||||||||||||
States and political subdivisions | — | 1 | — | — | — | — | — | 1 | ||||||||||||||||||
Corporate securities | 108 | 35 | 48 | 13 | 28 | 14 | 108 | 35 | ||||||||||||||||||
Total | $ | 111 | 39 | $ | 48 | 13 | $ | 28 | 14 | $ | 111 | 39 |
2018 | 2017 | 2019 | 2018 | |||||||||||||||||||||||
Gross Carry Value | % of Total | Gross Carry Value | % of Total | Gross Carry Value | % of Total | Gross Carry Value | % of Total | |||||||||||||||||||
Mortgage loans by region | ||||||||||||||||||||||||||
East North Central | $ | 1,467 | 11.0 | % | $ | 1,588 | 13.5 | % | $ | 1,323 | 9.3 | % | $ | 1,467 | 11.0 | % | ||||||||||
East South Central | 281 | 2.1 | 167 | 1.4 | 323 | 2.3 | 281 | 2.1 | ||||||||||||||||||
Middle Atlantic | 1,075 | 8.1 | 922 | 7.8 | 1,174 | 8.3 | 1,075 | 8.1 | ||||||||||||||||||
Mountain | 920 | 6.9 | 771 | 6.5 | 1,122 | 7.9 | 920 | 6.9 | ||||||||||||||||||
New England | 939 | 7.1 | 848 | 7.2 | 721 | 5.1 | 939 | 7.1 | ||||||||||||||||||
Pacific | 3,950 | 29.7 | 3,435 | 29.1 | 4,143 | 29.1 | 3,950 | 29.7 | ||||||||||||||||||
South Atlantic | 3,041 | 22.9 | 2,709 | 23.0 | 3,188 | 22.4 | 3,041 | 22.9 | ||||||||||||||||||
West North Central | 727 | 5.5 | 661 | 5.6 | 676 | 4.8 | 727 | 5.5 | ||||||||||||||||||
West South Central | 891 | 6.7 | 698 | 5.9 | 1,058 | 7.4 | 891 | 6.7 | ||||||||||||||||||
Total | $ | 13,291 | 100.0 | % | $ | 11,799 | 100.0 | % | ||||||||||||||||||
Total commercial mortgage loans | 13,728 | 96.6 | % | 13,291 | 100.0 | % | ||||||||||||||||||||
Total residential mortgage loans | 489 | 3.4 | % | — | — | % | ||||||||||||||||||||
Total mortgage loans | $ | 14,217 | 100.0 | % | $ | 13,291 | 100.0 | % |
2018 | 2017 | 2019 | 2018 | |||||||||||||||||||||||
Gross Carry Value | % of Total | Gross Carry Value | % of Total | Gross Carry Value | % of Total | Gross Carry Value | % of Total | |||||||||||||||||||
Mortgage loans by property type | ||||||||||||||||||||||||||
Industrial | $ | 2,882 | 21.7 | % | $ | 2,597 | 22.0 | % | $ | 2,733 | 19.9 | % | $ | 2,882 | 21.7 | % | ||||||||||
Retail | 2,815 | 21.2 | 2,581 | 21.9 | 2,749 | 20.0 | 2,815 | 21.2 | ||||||||||||||||||
Office | 4,337 | 32.6 | 3,623 | 30.7 | 4,657 | 33.9 | 4,337 | 32.6 | ||||||||||||||||||
Apartments | 3,257 | 24.5 | 2,998 | 25.4 | 3,589 | 26.2 | 3,257 | 24.5 | ||||||||||||||||||
Total | $ | 13,291 | 100.0 | % | $ | 11,799 | 100.0 | % | $ | 13,728 | 100.0 | % | $ | 13,291 | 100.0 | % |
• | Standard & Poor’s AA (Very Strong) |
• | Moody’s A1 (Good) |
• | AM Best A+ (Superior) |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||
Net cash provided by operating activities | $ | 9,951,161 | 8,354,757 | 9,840,148 | $ | 1,511 | 9,951 | 8,355 | ||||||||||||
Net cash used in investing activities | (9,143,772 | ) | (5,923,303 | ) | (7,113,928 | ) | ||||||||||||||
Net cash provided by (used in) investing activities | 955 | (9,144 | ) | (5,923 | ) | |||||||||||||||
Net cash used in financing and miscellaneous activities | (1,213,917 | ) | (2,045,665 | ) | (2,569,260 | ) | (1,524 | ) | (1,214 | ) | (2,046 | ) | ||||||||
Net change in cash, cash equivalents, and short-term investments | $ | (406,528 | ) | 385,789 | 156,960 | $ | 942 | (407 | ) | 386 |
In 1 year | After 1 year | After 3 years | After | In 1 year | After 1 year | After 3 years | After | |||||||||||||||||||||||
Total | or less | up to 3 years | up to 5 years | 5 Years | Total | or less | up to 3 years | up to 5 years | 5 Years | |||||||||||||||||||||
Payments due | ||||||||||||||||||||||||||||||
Policyholder liabilities | $ | 135,227 | 9,148 | 19,067 | 18,926 | 88,086 | $ | 145,322 | 8,438 | 17,326 | 17,323 | 102,235 | ||||||||||||||||||
Mortgage notes payable | 60 | 9 | 20 | 23 | 8 | 51 | 10 | 21 | 20 | — | ||||||||||||||||||||
Operating leases | 2 | — | 1 | 1 | — | 3 | 1 | 2 | 1 | — | ||||||||||||||||||||
Total payments due | $ | 135,289 | 9,157 | 19,088 | 18,950 | 88,094 | $ | 145,376 | 8,449 | 17,349 | 17,344 | 102,235 |
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Admitted Assets | Admitted Assets | 2018 | 2017 | Admitted Assets | 2019 | 2018 | ||||||||
Cash and invested assets: | ||||||||||||||
Bonds | $ | 97,281 | 90,727 | $ | 97,269 | 97,281 | ||||||||
Stocks | 137 | 150 | 181 | 137 | ||||||||||
Investment in subsidiaries | 1,339 | 1,267 | 1,347 | 1,339 | ||||||||||
Mortgage loans on real estate | 13,292 | 11,799 | 14,217 | 13,292 | ||||||||||
Real estate | 58 | 54 | 64 | 58 | ||||||||||
Cash and cash equivalents | 926 | 1,333 | ||||||||||||
Cash, cash equivalents and short-term investments | 1,868 | 926 | ||||||||||||
Policy loans | 214 | 184 | 234 | 214 | ||||||||||
Derivative assets | 573 | 676 | 2,391 | 573 | ||||||||||
Other invested assets | 3,383 | 3,137 | 4,299 | 3,383 | ||||||||||
Total cash and invested assets | 117,203 | 109,327 | 121,870 | 117,203 | ||||||||||
Investment income due and accrued | 1,047 | 1,004 | 1,031 | 1,047 | ||||||||||
Amounts due from reinsurers: | ||||||||||||||
Amounts recoverable from reinsurers | 18 | 9 | ||||||||||||
Other amounts receivable under reinsurance contracts | 10 | 15 | ||||||||||||
Current federal and foreign income tax recoverable | 305 | 321 | — | 305 | ||||||||||
Deferred tax asset, net | — | 10 | 224 | — | ||||||||||
Receivable from affiliates | 22 | 11 | ||||||||||||
Other assets | 596 | 616 | 721 | 646 | ||||||||||
Admitted assets, exclusive of separate account assets | 119,201 | 111,313 | 123,846 | 119,201 | ||||||||||
Separate account assets | 22,835 | 26,755 | 34,638 | 22,835 | ||||||||||
Total admitted assets | $ | 142,036 | 138,068 | $ | 158,484 | 142,036 |
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Liabilities and Capital and Surplus | Liabilities and Capital and Surplus | 2018 | 2017 | Liabilities and Capital and Surplus | 2019 | 2018 | ||||||||
Policyholder liabilities: | ||||||||||||||
Life policies and annuity contracts | $ | 100,176 | 93,604 | $ | 100,278 | 100,176 | ||||||||
Accident and health policies | 1,605 | 1,419 | 1,743 | 1,605 | ||||||||||
Deposit-type contracts | 5,125 | 5,272 | 4,936 | 5,125 | ||||||||||
Life policy and contract claims | 8 | 6 | 10 | 8 | ||||||||||
Accident and health policy and contract claims | 17 | 18 | 17 | 17 | ||||||||||
Other policyholder funds | 187 | 114 | 114 | 187 | ||||||||||
Total policyholder liabilities | 107,118 | 100,433 | 107,098 | 107,118 | ||||||||||
Interest maintenance reserve | 161 | 274 | 148 | 161 | ||||||||||
Commissions due and accrued | 30 | 20 | ||||||||||||
General expenses due and accrued | 138 | 185 | 143 | 138 | ||||||||||
Due from separate accounts | (346 | ) | (642 | ) | (626 | ) | (346 | ) | ||||||
Current income taxes payable | 2 | 2 | 118 | 2 | ||||||||||
Deferred tax liability, net | 134 | — | — | 134 | ||||||||||
Borrowed money | 501 | 500 | 1,002 | 501 | ||||||||||
Asset valuation reserve | 764 | 725 | 895 | 764 | ||||||||||
Derivative liabilities | 492 | 676 | 2,049 | 492 | ||||||||||
Payable to affiliates | 29 | 31 | ||||||||||||
Other liabilities | 3,602 | 3,098 | 5,065 | 3,661 | ||||||||||
Liabilities, exclusive of separate account liabilities | 112,625 | 105,302 | 115,892 | 112,625 | ||||||||||
Separate account liabilities | 22,835 | 26,755 | 34,638 | 22,835 | ||||||||||
Total liabilities | 135,460 | 132,057 | 150,530 | 135,460 | ||||||||||
Capital and surplus: | ||||||||||||||
Class A, Series A preferred stock, $1 par value. Authorized, issued, and outstanding, 8,909,195 shares; liquidation preference of $14 and $2 at December 31, 2018 and 2017, respectively | 20 | 20 | ||||||||||||
Class A, Series B preferred stock, $1 par value. Authorized, 10,000,000 shares; issued and outstanding, 9,994,289 shares; liquidation preference of $33 and $4 at December 31, 2018 and 2017, respectively | 9 | 9 | ||||||||||||
Common stock, $1 par value. Authorized, 40,000,000 shares; issued and outstanding, 20,000,001 shares at December 31, 2018 and 2017, respectively | 10 | 10 | ||||||||||||
Class A, Series A preferred stock, $1 par value. Authorized, issued, and outstanding, 8,909,195 shares; liquidation preference of $2 and $14 at December 31, 2019 and 2018, respectively | 9 | 9 | ||||||||||||
Class A, Series B preferred stock, $1 par value. Authorized, 10,000,000 shares; issued and outstanding, 9,994,289 shares; liquidation preference of $10 and $33 at December 31, 2019 and 2018, respectively | 10 | 10 | ||||||||||||
Common stock, $1 par value. Authorized, 40,000,000 shares; issued and outstanding, 20,000,001 shares at December 31, 2019 and 2018, respectively | 20 | 20 | ||||||||||||
Additional paid-in capital | 3,676 | 3,676 | 3,676 | 3,676 | ||||||||||
Unassigned surplus | 2,861 | 2,296 | 4,239 | 2,861 | ||||||||||
Total capital and surplus | 6,576 | 6,011 | 7,954 | 6,576 | ||||||||||
Total liabilities and capital and surplus | $ | 142,036 | 138,068 | $ | 158,484 | 142,036 | ||||||||
See accompanying notes to statutory financial statements. |
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2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||
Income: | ||||||||||||||||||||
Premiums and annuity considerations | $ | 11,925 | 9,983 | 12,643 | $ | 12,805 | 11,925 | 9,983 | ||||||||||||
Consideration for supplementary contracts | 268 | 248 | 271 | 224 | 268 | 248 | ||||||||||||||
Net investment income | 4,593 | 4,504 | 4,361 | 4,839 | 4,593 | 4,504 | ||||||||||||||
Commissions and expense allowances on reinsurance ceded | 163 | 223 | 162 | 338 | 163 | 223 | ||||||||||||||
Reserve adjustments related to reinsurance ceded | 82 | 389 | (5 | ) | (9 | ) | 82 | 389 | ||||||||||||
Fees from separate accounts | 676 | 719 | 726 | 613 | 676 | 719 | ||||||||||||||
Other | (3 | ) | 150 | 179 | (13 | ) | (3 | ) | 150 | |||||||||||
Total income | 17,704 | 16,216 | 18,337 | 18,797 | 17,704 | 16,216 | ||||||||||||||
Benefits and other expenses: | ||||||||||||||||||||
Policyholder benefits | 1,822 | 1,625 | 1,558 | 1,809 | 1,822 | 1,625 | ||||||||||||||
Surrenders | 7,614 | 7,024 | 6,553 | 8,559 | 7,614 | 7,024 | ||||||||||||||
Change in aggregate reserves and deposit funds | 7,299 | 10,628 | 7,755 | 1,034 | 7,299 | 10,628 | ||||||||||||||
Commissions and other agent compensation | 1,223 | 1,071 | 1,308 | 1,284 | 1,223 | 1,071 | ||||||||||||||
General and administrative expenses | 547 | 545 | 516 | 594 | 547 | 545 | ||||||||||||||
Net transfers from separate accounts | (2,009 | ) | (1,851 | ) | (1,380 | ) | ||||||||||||||
Net transfers to (from) separate accounts | 5,254 | (2,009 | ) | (1,851 | ) | |||||||||||||||
Total benefits and other expenses | 16,496 | 19,042 | 16,310 | 18,534 | 16,496 | 19,042 | ||||||||||||||
Income (loss) from operations before federal income taxes and net realized capital gain (loss) | 1,208 | (2,826 | ) | 2,027 | 263 | 1,208 | (2,826 | ) | ||||||||||||
Income tax (benefit) expense | (51 | ) | 24 | 530 | ||||||||||||||||
Net income (loss) from operations before net realized capital gain (loss) | 1,259 | (2,850 | ) | 1,497 | ||||||||||||||||
Net realized capital (loss) gain, net of taxes and interest maintenance reserve | (490 | ) | 3,655 | (486 | ) | |||||||||||||||
Income tax expense (benefit) | 773 | (51 | ) | 24 | ||||||||||||||||
Net (loss) income from operations before net realized capital gain (loss) | (510 | ) | 1,259 | (2,850 | ) | |||||||||||||||
Net realized capital gain (loss), net of taxes and interest maintenance reserve | 1,053 | (490 | ) | 3,655 | ||||||||||||||||
Net income | $ | 769 | 805 | 1,011 | $ | 543 | 769 | 805 | ||||||||||||
See accompanying notes to statutory financial statements. |
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2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||
Capital and surplus at beginning of year | $ | 6,011 | 6,165 | 5,822 | $ | 6,576 | 6,011 | 6,165 | ||||||||||||
Change in accounting principle, net of tax (Note 3) | (86 | ) | 21 | — | — | (86 | ) | 21 | ||||||||||||
Change in reserve on account of change in valuation basis (Note 3) | 342 | — | — | — | 342 | — | ||||||||||||||
Adjusted balance at beginning of year | 6,267 | 6,186 | 5,822 | 6,576 | 6,267 | 6,186 | ||||||||||||||
Net income | 769 | 805 | 1,011 | 543 | 769 | 805 | ||||||||||||||
Change in unrealized capital (loss) gain | (230 | ) | (78 | ) | 180 | |||||||||||||||
Change in unrealized capital gain (loss) | 719 | (230 | ) | (78 | ) | |||||||||||||||
Change in net deferred income tax | (121 | ) | (122 | ) | (32 | ) | 330 | (121 | ) | (122 | ) | |||||||||
Change in nonadmitted assets | 7 | 15 | 51 | |||||||||||||||||
Change in asset valuation reserve | (38 | ) | (107 | ) | (70 | ) | (131 | ) | (38 | ) | (107 | ) | ||||||||
Dividends paid to parent | — | (780 | ) | (894 | ) | (325 | ) | — | (780 | ) | ||||||||||
Change in unamortized gain on reinsurance transactions | (76 | ) | 76 | 98 | 248 | (76 | ) | 76 | ||||||||||||
Other changes in capital and surplus | (2 | ) | 16 | (1 | ) | (6 | ) | 5 | 31 | |||||||||||
Capital and surplus at end of year | $ | 6,576 | 6,011 | 6,165 | $ | 7,954 | 6,576 | 6,011 | ||||||||||||
See accompanying notes to statutory financial statements. |
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2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||
Cash flow from operating activities: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Premiums and annuity considerations, net | $ | 12,194 | 10,229 | 12,915 | $ | 13,030 | 12,194 | 10,229 | ||||||||||||
Net investment income | 4,652 | 4,542 | 4,312 | 5,000 | 4,652 | 4,542 | ||||||||||||||
Commissions and expense allowances on reinsurance ceded | 86 | 49 | 10 | 86 | 86 | 49 | ||||||||||||||
Fees from separate accounts | 676 | 719 | 726 | 613 | 676 | 719 | ||||||||||||||
Other | 96 | 135 | 218 | 71 | 96 | 135 | ||||||||||||||
Cash provided by operating activities | 17,704 | 15,674 | 18,181 | 18,800 | 17,704 | 15,674 | ||||||||||||||
Benefits and expenses paid: | ||||||||||||||||||||
Benefit and loss-related payments | 8,404 | 7,327 | 7,064 | 9,469 | 8,404 | 7,327 | ||||||||||||||
Net transfers to separate accounts | (2,305 | ) | (2,061 | ) | (1,543 | ) | ||||||||||||||
Net transfers to (from) separate accounts | 5,534 | (2,305 | ) | (2,061 | ) | |||||||||||||||
Commissions, expenses paid, and aggregate write-ins for deductions | 1,800 | 1,838 | 1,817 | 1,881 | 1,800 | 1,838 | ||||||||||||||
Income tax (benefit received) paid, net | (79 | ) | 268 | 914 | ||||||||||||||||
Income tax paid (benefit received), net | 338 | (79 | ) | 268 | ||||||||||||||||
Change in unallocated remittances and items | (67 | ) | (52 | ) | 89 | 67 | (67 | ) | (52 | ) | ||||||||||
Cash used in operating activities | 7,753 | 7,320 | 8,341 | 17,289 | 7,753 | 7,320 | ||||||||||||||
Net cash provided by operating activities | 9,951 | 8,354 | 9,840 | 1,511 | 9,951 | 8,354 | ||||||||||||||
Cash flow from investing activities: | ||||||||||||||||||||
Proceeds from investments sold, matured or repaid: | ||||||||||||||||||||
Bonds | 9,476 | 7,826 | 9,831 | 15,892 | 9,476 | 7,826 | ||||||||||||||
Stocks | 172 | 80 | 87 | 113 | 172 | 80 | ||||||||||||||
Mortgage loans | 617 | 893 | 674 | 1,356 | 617 | 893 | ||||||||||||||
Other invested assets | 13 | 11 | 12 | 32 | 13 | 11 | ||||||||||||||
Derivatives | — | 3,660 | — | 1,429 | — | 3,660 | ||||||||||||||
Miscellaneous proceeds | 559 | 126 | 221 | 1,572 | 559 | 126 | ||||||||||||||
Cash provided by investing activities | 10,837 | 12,596 | 10,825 | 20,394 | 10,837 | 12,596 | ||||||||||||||
Cost of investments acquired: | ||||||||||||||||||||
Bonds | 16,310 | 15,605 | 15,062 | 15,976 | 16,310 | 15,605 | ||||||||||||||
Stocks | 175 | 104 | 71 | 145 | 175 | 104 | ||||||||||||||
Mortgage loans | 2,111 | 2,292 | 2,249 | 2,283 | 2,111 | 2,292 | ||||||||||||||
Real estate | 9 | 8 | 8 | 11 | 9 | 8 | ||||||||||||||
Other invested assets | 189 | 109 | 107 | 192 | 189 | 109 | ||||||||||||||
Derivatives | 547 | — | 216 | — | 547 | — | ||||||||||||||
Miscellaneous applications | 611 | 387 | 217 | 812 | 611 | 387 | ||||||||||||||
Cash used in investing activities | 19,952 | 18,505 | 17,930 | 19,419 | 19,952 | 18,505 | ||||||||||||||
Net increase in policy loans and premium notes | 30 | 13 | 8 | 20 | 30 | 13 | ||||||||||||||
Net cash used in investing activities | (9,145 | ) | (5,922 | ) | (7,113 | ) | ||||||||||||||
Net cash provided by (used in) investing activities | 955 | (9,145 | ) | (5,922 | ) | |||||||||||||||
Cash flow from financing and miscellaneous activities: | ||||||||||||||||||||
Change in borrowed money | — | — | (500 | ) | 500 | — | — | |||||||||||||
Payments on deposit-type contracts and other insurance liabilities, net of deposits | (1,250 | ) | (1,336 | ) | (1,303 | ) | (1,333 | ) | (1,250 | ) | (1,336 | ) | ||||||||
Dividends paid to parent | — | (780 | ) | (861 | ) | (325 | ) | — | (780 | ) | ||||||||||
Other cash provided | 37 | 70 | 94 | |||||||||||||||||
Other cash (used) provided | (366 | ) | 37 | 70 | ||||||||||||||||
Net cash used in financing and miscellaneous activities | (1,213 | ) | (2,046 | ) | (2,570 | ) | (1,524 | ) | (1,213 | ) | (2,046 | ) | ||||||||
Net change in cash, cash equivalents, and short-term investments | (407 | ) | 386 | 157 | 942 | (407 | ) | 386 | ||||||||||||
Cash, cash equivalents, and short-term investments: | ||||||||||||||||||||
Beginning of year | 1,333 | 947 | 790 | 926 | 1,333 | 947 | ||||||||||||||
End of year | $ | 926 | 1,333 | 947 | $ | 1,868 | 926 | 1,333 | ||||||||||||
Supplemental disclosures of cash flow information for non-cash transactions: | ||||||||||||||||||||
Non-cash dividend payment | $ | — | — | 33 | ||||||||||||||||
See accompanying notes to statutory financial statements. |
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(1) | Acquisition costs, such as commissions and other costs incurred in connection with acquiring new and renewal business, are charged to current operations as incurred. Under U.S. GAAP, acquisition costs that are directly related to the successful acquisition of insurance contracts are capitalized and charged to operations as the corresponding revenues or future profits are recognized. |
(2) | Aggregate reserves for life policies and annuity contracts, excluding variable annuities, are based on statutory mortality and interest assumptions without consideration for lapses or withdrawals. Under U.S. GAAP, aggregate reserves consider lapses and withdrawals. |
(3) | Certain reinsurance transactions, primarily used for annuity business, are recognized as reinsurance for statutory purposes only. |
(4) | Ceded reinsurance recoverable are netted against their related reserves within Policyholder liabilities, Life policies and annuity contracts and Life policy and contract claims, on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. Under U.S. GAAP, these ceded reserves are presented on a gross basis as an asset. |
(5) | The Company reinsures a portion of its in-force block of business through several reinsurance agreements. Under NAIC SAP, the after-tax gains associated with these indemnity reinsurance transactions are recorded |
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(6) | Bonds are carried at values prescribed by the NAIC, generally amortized cost, except for those with an NAIC rating of 6, which are reported at the lower of amortized cost or fair value. Under U.S. GAAP, bonds classified as “available-for-sale” are carried at fair value, with unrealized gains and losses recorded in stockholder’s equity. |
(7) | Changes in deferred income taxes are recorded directly to Unassigned surplus. Under U.S. GAAP, these items are recorded as an item of income tax benefit or expense in operations. Moreover, under NAIC SAP, a valuation allowance may be recorded against the deferred tax asset (DTA) and admittance testing may result in an additional charge to capital and surplus for nonadmitted portions of DTAs. Under U.S. GAAP, a valuation allowance may be recorded against the DTA and reflected as an expense. |
(8) | Investments in subsidiaries are carried at net equity values as prescribed by the NAIC. Changes in equity values are reflected in Unassigned surplus within the Statutory Statements of Capital and Surplus as credits or charges to Unassigned surplus. Under U.S. GAAP, wholly owned subsidiary results are consolidated. |
(9) | The Company is required to establish an asset valuation reserve (AVR) liability and an interest maintenance reserve (IMR) liability. The AVR provides for a standardized statutory investment valuation reserve for certain invested assets. Changes in this reserve are recorded as direct charges or credits to Unassigned surplus. The IMR is designed to defer net realized capital gains and losses resulting from changes in the level of prevailing market interest rates and amortize them into income within the Statutory Statements of Operations over the remaining life of the investment sold. The IMR represents the unamortized portion of applicable investment gains and losses as of the balance sheet date. There is no such concept under U.S. GAAP. |
(10) | Canadian asset and liability amounts are expressed in Canadian dollars without foreign exchange translation into U.S. dollars. A net foreign currency translation adjustment is recorded within the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus with an offset to |
(11) | Certain assets designated as “nonadmitted assets” are not recognized and are charged directly to Unassigned surplus within the Statutory Statements of Capital and Surplus. These include, but are not limited to, investments in unaudited subsidiary, controlled, and affiliated (SCA) entities, electronic data processing (EDP) software, portions of goodwill, furniture and fixtures, prepaid expenses, receivables outstanding greater than 90 days, and portions of DTAs. There is no such concept under U.S. GAAP. |
(12) | A provision is made for amounts ceded to unauthorized reinsurers in excess of collateral in the form of a trust or letter of credit through a direct charge to Unassigned surplus within the Statutory Statements of Capital and Surplus. There is no such requirement under U.S. GAAP. |
(13) | Revenues for universal life policies and annuity contracts, excluding deposit-type contracts, are recognized as revenue when received within the Statutory Statements of Operations. Under U.S. GAAP, policy and contract fees charged for the cost of insurance, policy administrative charges, amortization of policy initiation fees, and surrender contract charges are recorded as revenues when earned. |
(14) | Benefits for universal life policies and annuity contracts within the Statutory Statements of Operations, excluding deposit-type contracts, consist of payments made to policyholders. Under U.S. GAAP, benefits represent interest credited, and claims and benefits incurred in excess of the policyholder’s contract balance. |
(15) | Changes in the fair value of derivatives are recorded as direct adjustments to Unassigned surplus as a component of Change in unrealized capital gains (losses) within the Statutory Statements of Capital and Surplus. Derivatives that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability, which is at amortized cost in accordance with hedge accounting |
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(16) | Commissions allowed by reinsurers on business ceded are reported as income when received within the Statutory Statements of Operations. Under U.S. GAAP, such commissions are deferred and amortized as a component of deferred acquisition costs. |
(17) | The Statutory Financial Statements do not include a statement of comprehensive income as required under U.S. GAAP. |
(18) | The Statutory Statements of Cash Flow do not classify cash flows consistent with U.S. GAAP and a reconciliation of net income to net cash provided from operating activities is not provided. |
(19) | The calculation of reserves and transfers in the separate account statement requires the use of a Commissioners Annuity Reserve Valuation Method (CARVM) allowance on annuities for NAIC SAP. There is no such requirement under U.S. GAAP. |
(20) | Sales inducements and premium bonuses are included in Life policies and annuity contracts in the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus, and are charged to current operations as incurred. Under U.S. GAAP, deferred sales inducements and premium bonuses are similarly reserved; however, the costs are capitalized as assets and charged to operations as future profits are recognized in a manner similar to acquisition costs. |
(21) | Negative cash balances are presented as a negative asset within the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. These balances are presented as a liability under U.S. GAAP. |
(22) | Embedded derivatives are not separated from the host contract and accounted for separately as a derivative instrument. Under U.S. GAAP, entities must separate the embedded derivative from the host contracts and separately account for those embedded derivatives at fair value. |
(23) | For certain annuity products with a market value adjustment feature sold to Minnesota residents (MN MVA) and variable-indexed annuities, the Department requires the Company to maintain a separate asset portfolio to back related reserves. These assets and liabilities are required to be included as part of the Separate account assets and Separate account liabilities presented on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. Under U.S. GAAP, there is no such requirement. |
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2018 | 2019 | 2018 | ||||||
Initial book value of the IRS created from inception until the designation of hedge accounting | $ | 287 | $ | 287 | 287 | |||
Amounts offsetting changes in the AG43 reserve for the hedged item due to interest rate movements | (3 | ) | (62 | ) | (3 | ) | ||
Net losses from cumulative IRS sales after designation of hedge accounting (1) | 608 | 608 | 608 | |||||
Net receivable/payable interest accrued | (4 | ) | (2 | ) | (4 | ) | ||
Cumulative amortization | (160 | ) | (249 | ) | (160 | ) | ||
Carrying value of IRS hedge adjustment (2) | $ | 728 | $ | 582 | 728 | |||
(1) See Note 5(g) for further information regarding this transaction. | ||||||||
(1) In 2017, the Company restruck a portion of its IRS portfolio that hedges variable annuity liabilities. The restrike transaction included selling a portion of the Company's IRS portfolio to consolidate its net positions. As a result of the transaction, the net losses disclosed here were recorded within the IRS hedge adjustment in line with hedge accounting treatment as discussed above. | (1) In 2017, the Company restruck a portion of its IRS portfolio that hedges variable annuity liabilities. The restrike transaction included selling a portion of the Company's IRS portfolio to consolidate its net positions. As a result of the transaction, the net losses disclosed here were recorded within the IRS hedge adjustment in line with hedge accounting treatment as discussed above. | |||||||
(2) The carrying value of the IRS hedge adjustment differs from that disclosed in Note 6 as the amount disclosed in Note 6 has been adjusted for IRS positions no longer held by the Company. | (2) The carrying value of the IRS hedge adjustment differs from that disclosed in Note 6 as the amount disclosed in Note 6 has been adjusted for IRS positions no longer held by the Company. | (2) The carrying value of the IRS hedge adjustment differs from that disclosed in Note 6 as the amount disclosed in Note 6 has been adjusted for IRS positions no longer held by the Company. |
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2018 | 2019 | |||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||
U.S. government | $ | 2,483 | 25 | 33 | 2,475 | $ | 3,014 | 123 | 8 | 3,129 | ||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 3 | — | — | 3 | 3 | — | — | 3 | ||||||||||||||||||
States and political subdivisions | 10,037 | 701 | 105 | 10,633 | 9,722 | 1,486 | 3 | 11,205 | ||||||||||||||||||
Foreign governments | 572 | 10 | 15 | 567 | 777 | 54 | 1 | 830 | ||||||||||||||||||
Corporate securities | 69,577 | 1,870 | 1,979 | 69,468 | 70,048 | 7,385 | 68 | 77,365 | ||||||||||||||||||
Mortgage-backed securities | 15,371 | 118 | 352 | 15,137 | 15,313 | 612 | 16 | 15,909 | ||||||||||||||||||
Collateralized debt obligations | 16 | 13 | — | 29 | 16 | 13 | — | 29 | ||||||||||||||||||
Total bonds | 98,059 | 2,737 | 2,484 | 98,312 | 98,893 | 9,673 | 96 | 108,470 | ||||||||||||||||||
Common stocks | 130 | 2 | 8 | 124 | 144 | 10 | 1 | 153 | ||||||||||||||||||
Preferred stocks | 13 | — | — | 13 | 29 | 2 | — | 31 | ||||||||||||||||||
Total | $ | 98,202 | 2,739 | 2,492 | 98,449 | $ | 99,066 | 9,685 | 97 | 108,654 |
2017 | 2018 | |||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||
U.S. government | $ | 2,073 | 14 | 21 | 2,066 | $ | 2,483 | 25 | 33 | 2,475 | ||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 3 | — | — | 3 | 3 | — | — | 3 | ||||||||||||||||||
States and political subdivisions | 9,762 | 1,138 | 13 | 10,887 | 10,037 | 701 | 105 | 10,633 | ||||||||||||||||||
Foreign governments | 525 | 20 | 3 | 542 | 572 | 10 | 15 | 567 | ||||||||||||||||||
Corporate securities | 64,392 | 4,970 | 170 | 69,192 | 69,577 | 1,870 | 1,979 | 69,468 | ||||||||||||||||||
Mortgage-backed securities | 13,957 | 244 | 114 | 14,087 | 15,371 | 118 | 352 | 15,137 | ||||||||||||||||||
Collateralized debt obligations | 15 | 13 | — | 28 | 16 | 13 | — | 29 | ||||||||||||||||||
Total bonds | 90,727 | 6,399 | 321 | 96,805 | 98,059 | 2,737 | 2,484 | 98,312 | ||||||||||||||||||
Common stocks | 139 | 10 | 1 | 148 | 130 | 2 | 8 | 124 | ||||||||||||||||||
Preferred stocks | 2 | — | — | 2 | 13 | — | — | 13 | ||||||||||||||||||
Total | $ | 90,868 | 6,409 | 322 | 96,955 | $ | 98,202 | 2,739 | 2,492 | 98,449 |
26 of |
Carrying value | Fair value | Carrying value | Fair value | |||||||||||
Due in 1 year or less | $ | 2,856 | $ | 2,851 | $ | 4,146 | $ | 4,177 | ||||||
Due after 1 year through 5 years | 12,427 | 12,565 | 11,166 | 11,675 | ||||||||||
Due after 5 years through 10 years | 22,162 | 21,789 | 20,719 | 22,292 | ||||||||||
Due after 10 years | 44,309 | 45,063 | 46,740 | 53,553 | ||||||||||
No maturity date | 918 | 879 | 793 | 835 | ||||||||||
Loan-backed and other structured securities | 15,387 | 15,165 | ||||||||||||
Mortgage-backed and other structured securities | 15,329 | 15,938 | ||||||||||||
Total bonds and other assets receiving bond treatment | $ | 98,059 | $ | 98,312 | $ | 98,893 | $ | 108,470 |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||
Proceeds from sales | $ | 9,476 | 7,826 | 10,417 | $ | 15,892 | 9,476 | 7,826 | ||||||||||||
Gross gains | 94 | 186 | 204 | 75 | 94 | 186 | ||||||||||||||
Gross losses | 63 | 84 | 72 | 34 | 63 | 84 |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||
Proceeds from sales | $ | 172 | 80 | 87 | $ | 111 | 172 | 80 | ||||||||||||
Gross gains | 5 | 11 | 1 | 2 | 5 | 11 | ||||||||||||||
Gross losses | — | — | 1 | 2 | — | — |
2019 | 2018 | 2017 | ||||||||
Proceeds from sales | $ | 2 | — | — | ||||||
Gross gains | — | — | — | |||||||
Gross losses | — | — | — |
27 of |
2018 | 2019 | |||||||||||||||||||||||||||||||||||||||||
12 months or less | Greater than 12 months | Total | 12 months or less | Greater than 12 months | Total | |||||||||||||||||||||||||||||||||||||
Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | |||||||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||||||||||||||||||
U.S. government | $ | 344 | — | 5 | 1,094 | 28 | 1,438 | 33 | $ | 292 | — | 6 | 292 | 2 | 584 | 8 | ||||||||||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 1 | — | — | 1 | — | 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Foreign government | 182 | 8 | 99 | 7 | 281 | — | 15 | 123 | 1 | — | — | 123 | — | 1 | ||||||||||||||||||||||||||||
States and political subdivisions | 2,295 | 82 | 386 | 23 | 2,681 | — | 105 | 87 | 3 | — | — | 87 | — | 3 | ||||||||||||||||||||||||||||
Corporate securities | 31,419 | 1,389 | 6,326 | 590 | 37,745 | — | 1,979 | 2,089 | 27 | 1,250 | 41 | 3,339 | — | 68 | ||||||||||||||||||||||||||||
Mortgage-backed securities | 5,501 | 94 | 5,581 | 258 | 11,082 | — | 352 | 1,241 | 12 | 140 | 4 | 1,381 | — | 16 | ||||||||||||||||||||||||||||
Total bonds | 39,742 | 1,578 | 13,487 | 906 | 53,229 | 2,484 | 3,832 | 49 | 1,682 | 47 | 5,514 | 96 | ||||||||||||||||||||||||||||||
Common stock | 71 | 6 | 10 | 2 | 81 | 8 | 18 | 1 | 6 | — | 24 | 1 | ||||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | 39,813 | 1,584 | 13,497 | 908 | 53,310 | 2,492 | $ | 3,850 | 50 | 1,688 | 47 | 5,538 | 97 |
2017 | 2018 | |||||||||||||||||||||||||||||||||||||
12 months or less | Greater than 12 months | Total | 12 months or less | Greater than 12 months | Total | |||||||||||||||||||||||||||||||||
Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | |||||||||||||||||||||||||||
Bonds: | ||||||||||||||||||||||||||||||||||||||
U.S. government | $ | 1,358 | 9 | 439 | 13 | 1,797 | 22 | $ | 344 | 5 | 1,094 | 28 | 1,438 | 33 | ||||||||||||||||||||||||
Agencies not backed by the full faith and credit of the U.S. government | 1 | — | — | — | 1 | — | 1 | — | 1 | — | 2 | — | ||||||||||||||||||||||||||
Foreign government | 82 | 1 | 36 | 1 | 118 | 3 | 182 | 8 | 99 | 7 | 281 | 15 | ||||||||||||||||||||||||||
States and political subdivisions | 217 | 3 | 214 | 10 | 431 | 13 | 2,295 | 82 | 386 | 23 | 2,681 | 105 | ||||||||||||||||||||||||||
Corporate securities | 4,174 | 45 | 3,366 | 125 | 7,540 | 170 | 31,419 | 1,389 | 6,326 | 590 | 37,745 | 1,979 | ||||||||||||||||||||||||||
Mortgage-backed securities | 3,326 | 24 | 2,720 | 90 | 6,046 | 114 | 5,501 | 94 | 5,581 | 258 | 11,082 | 352 | ||||||||||||||||||||||||||
Total bonds | 9,158 | 82 | 6,775 | 239 | 15,933 | 321 | 39,742 | 1,578 | 13,487 | 906 | 53,229 | 2,484 | ||||||||||||||||||||||||||
Common stock | 17 | 1 | 6 | — | 22 | 1 | 71 | 6 | 10 | 2 | 81 | 8 | ||||||||||||||||||||||||||
Total temporarily impaired securities | $ | 9,175 | 83 | 6,781 | 239 | 15,956 | 322 | $ | 39,813 | 1,584 | 13,497 | 908 | 53,310 | 2,492 |
28 of |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||
Bonds | $ | (81 | ) | 90 | (43 | ) | $ | 13 | (81 | ) | 90 | |||||||
Stocks | 5 | 10 | — | — | 5 | 10 | ||||||||||||
Derivatives | (469 | ) | 3,599 | (417 | ) | 1,062 | (469 | ) | 3,599 | |||||||||
Other | (1 | ) | 5 | 1 | (2 | ) | (1 | ) | 5 | |||||||||
Total realized capital gains (losses) | (546 | ) | 3,704 | (459 | ) | 1,073 | (546 | ) | 3,704 | |||||||||
Income tax expense on net realized gains (losses) | (4 | ) | (11 | ) | (7 | ) | ||||||||||||
Income tax benefit (expense) on net realized gains (losses) | 11 | (4 | ) | (11 | ) | |||||||||||||
Total realized capital gains (losses), net of taxes | (550 | ) | 3,693 | (465 | ) | 1,084 | (550 | ) | 3,693 | |||||||||
Net gains transferred to IMR, net of taxes | (60 | ) | 38 | 21 | ||||||||||||||
Net gains (losses) transferred to IMR, net of taxes | 31 | (60 | ) | 38 | ||||||||||||||
Net realized gains (losses), net of taxes and IMR | $ | (490 | ) | 3,655 | (486 | ) | $ | 1,053 | (490 | ) | 3,655 |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||
Interest: | ||||||||||||||||||
Bonds | $ | 4,090 | 3,902 | 3,824 | $ | 4,319 | 4,090 | 3,902 | ||||||||||
Mortgage loans on real estate | 561 | 559 | 471 | 617 | 561 | 559 | ||||||||||||
Policy loans | 11 | 10 | 10 | 11 | 11 | 10 | ||||||||||||
Cash and cash equivalents | 25 | 12 | 4 | |||||||||||||||
Cash, cash equivalents, and short-term investments | 23 | 25 | 12 | |||||||||||||||
Dividends: | ||||||||||||||||||
Stocks | 7 | 6 | 3 | 7 | 7 | 6 | ||||||||||||
Investment in subsidiaries | 70 | 62 | 58 | 67 | 70 | 62 | ||||||||||||
Rental income on real estate | 12 | 12 | 11 | 13 | 12 | 12 | ||||||||||||
Derivatives | (102 | ) | (22 | ) | 3 | (109 | ) | (102 | ) | (22 | ) | |||||||
Other | (8 | ) | 1 | 5 | (7 | ) | (8 | ) | 1 | |||||||||
Gross investment income | 4,666 | 4,542 | 4,389 | 4,941 | 4,666 | 4,542 | ||||||||||||
Investment expenses | (126 | ) | (98 | ) | (92 | ) | (146 | ) | (126 | ) | (98 | ) | ||||||
Net investment income before amortization of IMR | 4,540 | 4,444 | 4,297 | 4,795 | 4,540 | 4,444 | ||||||||||||
Amortization of IMR | 53 | 60 | 64 | 44 | 53 | 60 | ||||||||||||
Net investment income | $ | 4,593 | 4,504 | 4,361 | $ | 4,839 | 4,593 | 4,504 |
2018 | 2017 | ||||||||||
Concentration Amount | Concentration % | Concentration Amount | Concentration % | ||||||||
California | $ | 3,294 | 24.8 | % | $ | 2,952 | 25.0 | % |
29 of |
2019 | 2018 | ||||||||||
Concentration Amount | Concentration % | Concentration Amount | Concentration % | ||||||||
California | $ | 3,364 | 24.5 | % | $ | 3,294 | 24.8 | % |
(1) | Age Analysis of Mortgage Loans |
2019 | 2018 | |||||||||
Residential | Commercial | Residential | Commercial | |||||||
Current | $ | 481 | 13,728 | — | 13,292 | |||||
30-59 Days Past Due | — | — | — | — | ||||||
60-89 Days Past Due | 1 | — | — | — | ||||||
90-179 Days Past Due | 7 | — | — | — | ||||||
180+ Days Past Due | — | — | — | — | ||||||
Total | $ | 489 | 13,728 | — | 13,292 |
2019 | 2018 | |||||||||
Residential | Commercial | Residential | Commercial | |||||||
Accruing Interest 90-179 Days Past Due | ||||||||||
Recorded Investment | $ | 7 | — | — | — | |||||
Interest Accrued | — | — | — | — | ||||||
Accruing Interest 180+ Days Past Due | ||||||||||
Recorded Investment | — | — | — | — | ||||||
Interest Accrued | — | — | — | — |
30 of 62 |
Credit Quality Indicators |
Debt Service Coverage Ratios | Debt Service Coverage Ratios | |||||||||||||||||||||||||||||||||||
2018: | Greater than 1.4x | 1.2x – 1.4x | 1.0x – 1.2x | Less than 1.0x | Total | Percent of Total | ||||||||||||||||||||||||||||||
2019: | Greater than 1.4x | 1.2x – 1.4x | 1.0x – 1.2x | Less than 1.0x | Total | Percent of Total | ||||||||||||||||||||||||||||||
Loan-to-value ratios: | ||||||||||||||||||||||||||||||||||||
Less than 50% | $ | 4,887 | 84 | 89 | 106 | 5,166 | 38.9 | % | $ | 4,805 | 146 | 39 | 30 | 5,020 | 36.6 | % | ||||||||||||||||||||
50% – 60% | 3,941 | 409 | 7 | — | 4,357 | 32.7 | % | 3,805 | 651 | 2 | 142 | 4,600 | 33.5 | % | ||||||||||||||||||||||
60% – 70% | 2,525 | 846 | 119 | — | 3,490 | 26.3 | % | 2,536 | 1,016 | 113 | 33 | 3,698 | 26.9 | % | ||||||||||||||||||||||
70% – 80% | 98 | 129 | 46 | 7 | 280 | 2.1 | % | 157 | 107 | 16 | 36 | 316 | 2.3 | % | ||||||||||||||||||||||
80% – 90% | — | — | — | — | — | — | % | 54 | 8 | — | 29 | 91 | 0.7 | % | ||||||||||||||||||||||
90% – 100% | — | — | — | — | — | — | % | — | — | — | — | — | — | % | ||||||||||||||||||||||
Greater than 100% | — | — | — | — | — | — | % | 3 | — | — | — | 3 | — | % | ||||||||||||||||||||||
Total | $ | 11,451 | 1,468 | 261 | 113 | 13,293 | 100.0 | % | $ | 11,360 | 1,928 | 170 | 270 | 13,728 | 100.0 | % |
Debt Service Coverage Ratios | ||||||||||||||||||
2017: | Greater than 1.4x | 1.2x – 1.4x | 1.0x – 1.2x | Less than 1.0x | Total | Percent of Total | ||||||||||||
Loan-to-value ratios: | ||||||||||||||||||
Less than 50% | $ | 3,743 | 53 | 65 | 66 | 3,927 | 33.3 | % | ||||||||||
50% – 60% | 4,206 | 225 | 63 | 14 | 4,508 | 38.2 | % | |||||||||||
60% – 70% | 2,450 | 597 | 73 | — | 3,120 | 26.4 | % | |||||||||||
70% – 80% | 75 | 169 | — | — | 244 | 2.1 | % | |||||||||||
80% – 90% | — | — | — | — | — | — | % | |||||||||||
90% – 100% | — | — | — | — | — | — | % | |||||||||||
Greater than 100% | — | — | — | — | — | — | % | |||||||||||
Total | $ | 10,474 | 1,044 | 201 | 80 | 11,799 | 100.0 | % |
Debt Service Coverage Ratios | ||||||||||||||||||
2018: | Greater than 1.4x | 1.2x – 1.4x | 1.0x – 1.2x | Less than 1.0x | Total | Percent of Total | ||||||||||||
Loan-to-value ratios: | ||||||||||||||||||
Less than 50% | $ | 4,887 | 84 | 89 | 106 | 5,166 | 38.9 | % | ||||||||||
50% – 60% | 3,941 | 409 | 7 | — | 4,357 | 32.7 | % | |||||||||||
60% – 70% | 2,525 | 846 | 119 | — | 3,490 | 26.3 | % | |||||||||||
70% – 80% | 98 | 129 | 46 | 7 | 280 | 2.1 | % | |||||||||||
80% – 90% | — | — | — | — | — | — | % | |||||||||||
90% – 100% | — | — | — | — | — | — | % | |||||||||||
Greater than 100% | — | — | — | — | — | — | % | |||||||||||
Total | $ | 11,451 | 1,468 | 261 | 113 | 13,293 | 100.0 | % |
Fiscal Year | Derivative Premium Payments Due | ||
2020 | $ | 8 | |
2021 | — | ||
2022 | — | ||
2023 | — | ||
Thereafter | — | ||
Total Future Settled Premiums | $ | 8 |
Undiscounted Future Premium Commitments | Derivative FV with Premium Commitments | Derivative FV Excluding Impact of Future Settled Premiums | |||||
Prior Year | $ | — | — | — | |||
Current Year | (8 | ) | — | 9 |
32 of 62 |
33 of 62 |
2018 | 2017 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||
Gross Fair Value | Gross Fair Value | Gross Fair Value | Gross Fair Value | |||||||||||||||||||||||||||||||||||||
Notional (1) | Assets | Liabilities | Notional (1) | Assets | Liabilities | Notional (1) | Assets | Liabilities | Notional (1) | Assets | Liabilities | |||||||||||||||||||||||||||||
Cash flow hedging instruments | ||||||||||||||||||||||||||||||||||||||||
Foreign currency swaps | $ | 1,175 | 111 | (11 | ) | 899 | 64 | (34 | ) | $ | 1,271 | 92 | (16 | ) | 1,175 | 111 | (11 | ) | ||||||||||||||||||||||
IRS | 3,491 | — | — | 3,490 | — | — | 3,491 | — | — | 3,491 | — | — | ||||||||||||||||||||||||||||
Total cash flow hedging instruments | $ | 111 | (11 | ) | 64 | (34 | ) | $ | 92 | (16 | ) | 111 | (11 | ) | ||||||||||||||||||||||||||
Nonqualifying hedging instruments | ||||||||||||||||||||||||||||||||||||||||
OTC options | $ | 43,850 | 300 | (399 | ) | 105,500 | 542 | (482 | ) | $ | 87,987 | 2,257 | (1,958 | ) | 43,850 | 300 | (399 | ) | ||||||||||||||||||||||
ETO | 3,630 | 49 | (34 | ) | 17,034 | 48 | (28 | ) | 8,151 | 31 | (41 | ) | 3,630 | 49 | (34 | ) | ||||||||||||||||||||||||
TBA securities | 2,443 | 7 | (3 | ) | 1,474 | — | (1 | ) | 1,331 | — | (1 | ) | 2,443 | 7 | (3 | ) | ||||||||||||||||||||||||
IRS | 2,724 | 10 | (22 | ) | 1,511 | 6 | (23 | ) | 1,049 | 10 | (20 | ) | 2,724 | 10 | (22 | ) | ||||||||||||||||||||||||
Futures | 4,679 | — | — | 27,269 | 4 | (108 | ) | 26,776 | — | — | 4,679 | — | — | |||||||||||||||||||||||||||
TRS | 6,792 | 96 | (23 | ) | 2,944 | 12 | — | 8,148 | 1 | (13 | ) | 6,792 | 96 | (23 | ) | |||||||||||||||||||||||||
Total nonqualifying hedging instruments | 462 | (481 | ) | 612 | (642 | ) | 2,299 | (2,033 | ) | 462 | (481 | ) | ||||||||||||||||||||||||||||
Total derivative instruments | $ | 573 | (492 | ) | 676 | (676 | ) | $ | 2,391 | (2,049 | ) | 573 | (492 | ) | ||||||||||||||||||||||||||
(1) Notional amounts are presented on an absolute basis. | (1) Notional amounts are presented on an absolute basis. | (1) Notional amounts are presented on an absolute basis. | ||||||||||||||||||||||||||||||||||||||
(2) The IRS amounts subject to hedge accounting represent amounts that existed when hedge accounting was designated and still exist as of the end of the reporting period. The fair values for such instruments are not included herein as they are not recorded on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. | (2) The IRS amounts subject to hedge accounting represent amounts that existed when hedge accounting was designated and still exist as of the end of the reporting period. The fair values for such instruments are not included herein as they are not recorded on the Statutory Statements of Admitted Assets, Liabilities, and Capital and Surplus. |
34 of 62 |
Fair Value | Fair Value | |||||||||||||
2018 | 2017 | 2019 | 2018 | |||||||||||
Cash | ||||||||||||||
Open | $ | 2,683 | 2,657 | $ | 2,337 | 2,683 | ||||||||
30 days or less | — | — | — | — | ||||||||||
31 to 60 days | — | — | — | — | ||||||||||
61 to 90 days | — | — | — | — | ||||||||||
Greater than 90 days | — | — | — | — | ||||||||||
Subtotal | 2,683 | 2,657 | 2,337 | 2,683 | ||||||||||
Securities received | 17 | 19 | 328 | 17 | ||||||||||
Total collateral received | $ | 2,700 | 2,676 | $ | 2,665 | 2,700 |
2018 | 2017 | 2019 | 2018 | ||||||||||||||||||||||||
Amortized cost | Fair value | Amortized cost | Fair value | Amortized cost | Fair value | Amortized cost | Fair value | ||||||||||||||||||||
Open | $ | — | — | — | — | $ | — | — | — | — | — | ||||||||||||||||
30 days or less | 556 | 556 | 1,071 | 1,071 | 1,070 | — | 1,070 | 556 | 556 | ||||||||||||||||||
31 to 60 days | 697 | 697 | 686 | 686 | 548 | — | 548 | 697 | 697 | ||||||||||||||||||
61 to 90 days | 151 | 151 | 304 | 304 | — | — | — | 151 | 151 | ||||||||||||||||||
91 to 120 days | 296 | 296 | 192 | 192 | 66 | — | 66 | 296 | 296 | ||||||||||||||||||
121 to 180 days | 272 | 272 | 216 | 216 | 344 | — | 344 | 272 | 272 | ||||||||||||||||||
181 to 365 days | 211 | 211 | 188 | 188 | 309 | — | 309 | 211 | 211 | ||||||||||||||||||
1 to 2 years | — | — | — | — | |||||||||||||||||||||||
2 to 3 years | — | — | — | — | |||||||||||||||||||||||
Greater than 3 years | — | — | — | — | |||||||||||||||||||||||
Greater than 1 year | — | — | — | — | |||||||||||||||||||||||
Total collateral reinvested | $ | 2,183 | 2,183 | 2,657 | 2,657 | $ | 2,337 | 2,337 | 2,183 | 2,183 |
2018 | 2017 | 2019 | 2018 | |||||||||
Cash and cash equivalents | $ | 1,195 | 1,669 | $ | 1,339 | 1,195 | ||||||
Short-term investments | 988 | 988 | 998 | 988 | ||||||||
Total | $ | 2,183 | 2,657 | $ | 2,337 | 2,183 |
(j) | Reverse Repurchase Agreements |
Year ended December 31, 2018 | |||||||||
Minimum | Maximum | Average Daily Balance | Ending Balance | ||||||
a. Open - No Maturity | $ | — | — | — | — | ||||
b. Overnight | 50 | 1,511 | 818 | 553 | |||||
c. 2 Days to 1 Week | — | 400 | 9 | — | |||||
d. >1 Week to 1 Month | — | — | — | — | |||||
e. >1 Month to 3 Months | — | — | — | — | |||||
f. >3 Months to 1 Year | — | — | — | — | |||||
g. >1 Year | — | — | — | — |
Year ended December 31, 2018 | |||||||||
Minimum | Maximum | Average Daily Balance | Ending Balance | ||||||
Fair Value of Securities Acquired Under Repo - Secured Borrowing | $ | 164 | 1,550 | 843 | 564 |
Year ended December 31, 2018 | |||||||||
Minimum | Maximum | Average Daily Balance | Ending Balance | ||||||
a. Cash | $ | 164 | 1,550 | 827 | 553 | ||||
b. Securities (FV) | — | — | — | — | |||||
c. Securities (BACV) | — | — | — | — | |||||
d. Nonadmitted Subset (BACV) | — | — | — | — |
Fair Value as of | ||||
December 31, 2018 | ||||
a. Overnight and Continuous | $ | 553 | ||
b. 30 Days or Less | — | |||
c. 31 to 90 Days | — | |||
d. > 90 Days | — |
Year ended December 31, 2018 | |||||||||
Minimum | Maximum | Average Daily Balance | Ending Balance | ||||||
a. Cash | $ | 164 | 1,550 | 827 | 553 | ||||
b. Securities (FV) | — | — | — | — |
As of year end | 2019 | 2018 | |||||||
1. Maturity | |||||||||
a. Overnight | $ | 1,482 | 553 | ||||||
b. 2 Days to 1 Week | — | — | |||||||
2. Collateral Pledged and Securities Acquired Under Repo | |||||||||
a. Cash Collateral Pledged - Secured Borrowing | $ | 1,482 | 553 | ||||||
b. Fair Value of Securities Acquired Under Repo - Secured Borrowing | 1,494 | 564 |
Maximum Amount | 2019 | 2018 | |||||||
1. Maturity | |||||||||
a. Overnight | $ | 1,482 | 1,511 | ||||||
b. 2 Days to 1 Week | — | 400 | |||||||
2. Collateral Pledged and Securities Acquired Under Repo | |||||||||
a. Cash Collateral Pledged - Secured Borrowing | $ | 1,482 | 1,550 | ||||||
b. Fair Value of Securities Acquired Under Repo - Secured Borrowing | 1,494 | 1,550 |
SCA Name | Gross Asset | Non-Admitted Asset | Net Admitted Assets | NAIC Filing Date | NAIC Filing Type | NAIC Filing Balance | Re-submission Required? | Gross Asset | Non-Admitted Asset | Net Admitted Assets | NAIC Filing Date | NAIC Filing Type | NAIC Filing Balance | Re-submission Required? | ||||||||||||||||||||||||
AZLPF | $ | 735 | — | 735 | 5/16/2018 | S2 | 735 | N | $ | 792 | — | 792 | 5/16/2019 | S2 | 735 | N | ||||||||||||||||||||||
Yorktown Financial Companies Inc. (Yorktown) | 9 | 7 | 2 | 5/16/2018 | S2 | 11 | N | 1 | 1 | — | 5/16/2019 | S2 | 9 | N | ||||||||||||||||||||||||
Total | $ | 744 | 7 | 737 | XXX | XXX | 746 | XXX | $ | 793 | 1 | 792 | XXX | XXX | 744 | XXX |
2018 | 2017 | 2019 | 2018 | |||||||||||
Carrying value | $ | 383 | 567 | $ | 875 | 383 | ||||||||
Fair value | 572 | 576 | 1,118 | 572 |
2019 | 2018 | ||||||
Carrying value | $ | 1,745 | 2,762 | ||||
Fair value | 2,244 | 2,644 |
2018 | 2017 | ||||||
Carrying value | $ | 2,762 | 642 | ||||
Fair value | 2,644 | 657 |
Gross Restricted | Percentage | Gross Restricted | Percentage | |||||||||||||||||||||||||||||||||||
Total general account | Total from prior year | Increase (decrease) | Total current year admitted restricted | Gross restricted to total assets | Admitted restricted to total admitted assets | Total general account | Total from prior year | Increase (decrease) | Total current year admitted restricted | Gross restricted to total assets | Admitted restricted to total admitted assets | |||||||||||||||||||||||||||
Collateral held under security lending arrangements | $ | 2,683 | 2,657 | 26 | 2,683 | 1.9 | % | 1.9 | % | $ | 2,665 | 2,683 | (18 | ) | 2,665 | 1.7 | % | 1.7 | % | |||||||||||||||||||
FHLB Capital Stock | 30 | 30 | — | 30 | 50 | 30 | 20 | 50 | ||||||||||||||||||||||||||||||
On deposit with states | 4 | 4 | — | 4 | — | — | 4 | 4 | — | 4 | — | — | ||||||||||||||||||||||||||
On deposit with other regulatory bodies | 26 | 21 | 5 | 26 | — | — | 26 | 26 | — | 26 | — | — | ||||||||||||||||||||||||||
Pledged as collateral to FHLB (including assets backing funding agreements) | 383 | 567 | (184 | ) | 383 | 0.3 | 0.3 | 875 | 383 | 492 | 875 | 0.6 | 0.6 | |||||||||||||||||||||||||
Derivative collateral | 2,104 | 2,094 | 10 | 2,104 | 1.5 | 1.5 | 2,063 | 2,104 | (41 | ) | 2,063 | 1.3 | 1.3 | |||||||||||||||||||||||||
Total restricted assets | $ | 5,230 | 5,373 | (143 | ) | 5,230 | 3.7 | % | 3.7 | % | $ | 5,683 | 5,230 | 453 | 5,683 | 3.6 | % | 3.6 | % |
2019 | 2018 | ||||||||||||||
Number of Securities | Aggregate Book Adjusted Carrying Value | Aggregate Fair Value | Number of Securities | Aggregate Book Adjusted Carrying Value | Aggregate Fair Value | ||||||||||
Bonds | 1 | $ | 40 | 44 | — | $ | — | — | |||||||
Loan-backed and structured securities | — | — | — | 2 | 8 | 8 | |||||||||
Total | 1 | $ | 40 | 44 | 2 | $ | 8 | 8 |
2018 | |||||||||||||
Level 1 | Level 2 (a) | Level 3 | Total | ||||||||||
Assets at fair value: | |||||||||||||
Bonds | $ | — | — | 3 | 3 | ||||||||
Common stocks | 92 | — | 2 | 94 | |||||||||
Derivative assets | 49 | 444 | 96 | 589 | |||||||||
Separate account assets | 22,464 | 371 | — | 22,835 | |||||||||
Total assets reported at fair value | 22,605 | 815 | 101 | 23,521 | |||||||||
Liabilities at fair value: | |||||||||||||
Derivative liabilities | 34 | 468 | 23 | 525 | |||||||||
Separate account derivative liabilities | — | 529 | — | 529 | |||||||||
Total liabilities reported at fair value | $ | 34 | 997 | 23 | 1,054 | ||||||||
(a) The Company does not have any assets or liabilities measured at net asset value (NAV) that are included in Level 2 within this table. |
2017 | 2019 | |||||||||||||||||||||||||
Level 1 | Level 2 (a) | Level 3 | Total | Level 1 | Level 2 (a) | Level 3 | Total | |||||||||||||||||||
Assets at fair value: | ||||||||||||||||||||||||||
Common stocks | $ | 106 | — | 42 | 148 | $ | 101 | — | 1 | 102 | ||||||||||||||||
Derivative assets | 52 | 615 | 12 | 679 | 31 | 2,394 | 1 | 2,426 | ||||||||||||||||||
Separate account assets | 26,384 | 371 | — | 26,755 | 22,766 | 3,265 | — | 26,031 | ||||||||||||||||||
Total assets reported at fair value | 26,542 | 986 | 54 | 27,582 | 22,898 | 5,659 | 2 | 28,559 | ||||||||||||||||||
Liabilities at fair value: | ||||||||||||||||||||||||||
Derivative liabilities | 136 | 585 | — | 721 | 41 | 2,014 | 13 | 2,068 | ||||||||||||||||||
Separate account derivative liabilities | — | 2,531 | — | 2,531 | ||||||||||||||||||||||
Total liabilities reported at fair value | $ | 136 | 585 | — | 721 | $ | 41 | 4,545 | 13 | 4,599 | ||||||||||||||||
(a) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 within this table. | ||||||||||||||||||||||||||
(a) The Company does not have any assets or liabilities measured at net asset value (NAV) that are included in Level 2 within this table. | (a) The Company does not have any assets or liabilities measured at net asset value (NAV) that are included in Level 2 within this table. |
2018 | |||||||||||||
Level 1 | Level 2 (a) | Level 3 | Total | ||||||||||
Assets at fair value: | |||||||||||||
Bonds | $ | — | — | 3 | 3 | ||||||||
Common stocks | 92 | — | 2 | 94 | |||||||||
Derivative assets | 49 | 444 | 96 | 589 | |||||||||
Separate account assets | 22,464 | 371 | — | 22,835 | |||||||||
Total assets reported at fair value | 22,605 | 815 | 101 | 23,521 | |||||||||
Liabilities at fair value: | |||||||||||||
Derivative liabilities | 34 | 468 | 23 | 525 | |||||||||
Separate account derivative liabilities | — | 529 | — | 529 | |||||||||
Total liabilities reported at fair value | $ | 34 | 997 | 23 | 1,054 | ||||||||
(a) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 within this table. |
39 of 62 |
January 1, 2019 | Transfers into Level 3 | Transfers out of Level 3 | Total gains and (losses) included in Net Income | Total gains and (losses) included in Surplus | Purchases, issuances, sales and settlements | December 31, 2019 | |||||||||
Bonds | $ | 3 | — | — | (3 | ) | — | — | — | ||||||
Common stocks | 2 | — | — | — | — | (1 | ) | 1 | |||||||
TRS assets | 96 | — | — | 633 | (95 | ) | (633 | ) | 1 | ||||||
Total Level 3 Assets | 101 | — | — | 630 | (95 | ) | (634 | ) | 2 | ||||||
TRS liabilities | (23 | ) | — | — | (129 | ) | 10 | 129 | (13 | ) | |||||
Total Level 3 Liabilities | $ | (23 | ) | — | — | (129 | ) | 10 | 129 | (13 | ) |
January 1, 2018 | Transfers into Level 3 | Transfers out of Level 3 | Total gains and (losses) included in Net Income | Total gains and (losses) included in Surplus | Purchases, issuances, sales and settlements | December 31, 2018 | |||||||||
Bonds | $ | — | 3 | — | — | — | — | 3 | |||||||
Common stocks | 42 | — | (30 | ) | — | (2 | ) | (8 | ) | 2 | |||||
TRS assets | 12 | — | — | 291 | 84 | (291 | ) | 96 | |||||||
Total Level 3 Assets | 54 | 3 | (30 | ) | 291 | 82 | (299 | ) | 101 | ||||||
TRS liabilities | — | — | — | (302 | ) | (23 | ) | 302 | (23 | ) | |||||
Total Level 3 Liabilities | $ | — | — | — | (302 | ) | (23 | ) | 302 | (23 | ) |
January 1, 2018 | Transfers into Level 3 | Transfers out of Level 3 | Total gains and (losses) included in Net Income | Total gains and (losses) included in Surplus | Purchases, issuances, sales and settlements | December 31, 2018 | |||||||||
Bonds | $ | — | 3 | — | — | — | — | 3 | |||||||
Common stocks | 42 | — | (30 | ) | — | (2 | ) | (8 | ) | 2 | |||||
TRS assets | 12 | — | — | 291 | 84 | (291 | ) | 96 | |||||||
Total Level 3 Assets | 54 | 3 | (30 | ) | 291 | 82 | (299 | ) | 101 | ||||||
TRS liabilities | — | — | — | (302 | ) | (23 | ) | 302 | (23 | ) | |||||
Total Level 3 Liabilities | $ | — | — | — | (302 | ) | (23 | ) | 302 | (23 | ) |
January 1, 2017 | Transfers into Level 3 | Transfers out of Level 3 | Total gains and (losses) included in Net Income | Total gains and (losses) included in Surplus | Purchases, issuances, sales and settlements | December 31, 2017 | |||||||||
Common stocks | $ | 30 | — | — | — | 1 | 11 | 42 | |||||||
TRS assets | 6 | — | — | 181 | 6 | (181 | ) | 12 | |||||||
Total Level 3 Assets | 36 | — | — | 181 | 7 | (170 | ) | 54 | |||||||
TRS liabilities | (4 | ) | — | — | (104 | ) | 4 | 104 | — | ||||||
Total Level 3 Liabilities | $ | (4 | ) | — | — | (104 | ) | 4 | 104 | — |
41 of 62 |
2018 | 2019 | |||||||||||||||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||||||||||||||
Aggregate Fair Value | Admitted Assets/ Carrying Value | Level 1 | Level 2 | Level 3 | Aggregate Fair Value | Admitted Assets/ Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Bonds | $ | 97,535 | 97,281 | 3,150 | 81,794 | 12,591 | $ | 106,848 | 97,269 | 3,864 | 87,898 | 15,086 | ||||||||||||||||||||
Preferred stocks, unaffiliated | 13 | 13 | — | — | 13 | 31 | 29 | — | — | 31 | ||||||||||||||||||||||
Common stocks, unaffiliated | 124 | 124 | 92 | — | 32 | 152 | 152 | 101 | — | 51 | ||||||||||||||||||||||
Mortgage loans on real estate | 13,271 | 13,292 | — | — | 13,271 | 15,241 | 14,217 | — | — | 15,241 | ||||||||||||||||||||||
Cash equivalents | 1,057 | 1,057 | 484 | 573 | — | 1,863 | 1,863 | 361 | 1,502 | — | ||||||||||||||||||||||
Short-term investments | 22 | 22 | — | 22 | — | |||||||||||||||||||||||||||
Derivative assets | 589 | 573 | 49 | 444 | 96 | 2,426 | 2,391 | 31 | 2,394 | 1 | ||||||||||||||||||||||
Securities lending reinvested collateral assets | 2,183 | 2,183 | — | 2,183 | — | 2,337 | 2,337 | — | 2,337 | — | ||||||||||||||||||||||
Other invested assets | 511 | 511 | — | 22 | 489 | 655 | 655 | — | 25 | 630 | ||||||||||||||||||||||
COLI | 562 | 562 | — | 562 | — | 625 | 625 | — | 625 | — | ||||||||||||||||||||||
Separate account assets | 22,835 | 22,835 | 22,464 | 371 | — | 34,959 | 34,638 | 23,090 | 11,869 | — | ||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Deposit-type contracts | $ | 5,445 | 5,125 | — | — | 5,445 | $ | 5,380 | 4,936 | — | — | 5,380 | ||||||||||||||||||||
Other investment contracts | 101,790 | 94,214 | — | — | 101,790 | 102,903 | 93,649 | — | — | 102,903 | ||||||||||||||||||||||
Borrowed money | 490 | 501 | — | — | 490 | 1,006 | 1,002 | — | — | 1,006 | ||||||||||||||||||||||
Derivative liabilities | 525 | 492 | 34 | 468 | 23 | 2,068 | 2,049 | 41 | 2,014 | 13 | ||||||||||||||||||||||
Payable for securities lending | 2,683 | 2,683 | — | 2,683 | — | 2,337 | 2,337 | — | 2,337 | — | ||||||||||||||||||||||
Payable for securities | 142 | 142 | — | — | 142 | 147 | 147 | — | — | 147 | ||||||||||||||||||||||
Other liabilities | (565 | ) | (526 | ) | — | (565 | ) | — | (1,436 | ) | (241 | ) | — | (1,436 | ) | — | ||||||||||||||||
Separate account liabilities | 22,835 | 22,835 | 22,464 | 371 | — | 34,959 | 34,638 | 23,090 | 11,869 | — | ||||||||||||||||||||||
(b) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 in this table. In addition, the Company has no assets or liabilities for which it is not practicable to measure at fair value. | (b) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 in this table. In addition, the Company has no assets or liabilities for which it is not practicable to measure at fair value. | (b) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 in this table. In addition, the Company has no assets or liabilities for which it is not practicable to measure at fair value. |
2017 | 2018 | |||||||||||||||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||||||||||||||
Aggregate Fair Value | Admitted Assets/ Carrying Value | Level 1 | Level 2 | Level 3 | Aggregate Fair Value | Admitted Assets/ Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Financial Assets | ||||||||||||||||||||||||||||||||
Bonds | $ | 96,805 | 90,727 | 2,203 | 83,553 | 11,049 | $ | 97,535 | 97,281 | 3,150 | 81,794 | 12,591 | ||||||||||||||||||||
Preferred stocks, unaffiliated | 2 | 2 | — | — | 2 | 13 | 13 | — | — | 13 | ||||||||||||||||||||||
Common stocks, unaffiliated | 148 | 148 | 106 | — | 42 | 124 | 124 | 92 | — | 32 | ||||||||||||||||||||||
Mortgage loans on real estate | 12,373 | 11,799 | — | — | 12,373 | 13,271 | 13,292 | — | — | 13,271 | ||||||||||||||||||||||
Cash equivalents | 1,368 | 1,368 | 419 | 949 | — | 1,057 | 1,057 | 484 | 573 | — | ||||||||||||||||||||||
Derivative assets | 679 | 676 | 52 | 615 | 12 | 589 | 573 | 49 | 444 | 96 | ||||||||||||||||||||||
Securities lending reinvested collateral assets | 2,657 | 2,657 | — | 2,657 | — | 2,183 | 2,183 | — | 2,183 | — | ||||||||||||||||||||||
Receivable for securities | 123 | 123 | — | — | 123 | |||||||||||||||||||||||||||
Other invested assets | 224 | 224 | — | 26 | 198 | 511 | 511 | — | 22 | 489 | ||||||||||||||||||||||
COLI | 579 | 579 | — | 579 | — | 562 | 562 | — | 562 | — | ||||||||||||||||||||||
Separate account assets | 26,755 | 26,755 | 26,384 | 371 | — | 22,835 | 22,835 | 22,464 | 371 | — | ||||||||||||||||||||||
Financial Liabilities | ||||||||||||||||||||||||||||||||
Deposit-type contracts | $ | 5,735 | 5,272 | — | — | 5,735 | $ | 5,445 | 5,125 | — | — | 5,445 | ||||||||||||||||||||
Other investment contracts | 96,929 | 88,434 | — | — | 96,929 | 101,790 | 94,214 | — | — | 101,790 | ||||||||||||||||||||||
Borrowed money | 493 | 500 | — | — | 493 | 490 | 501 | — | — | 490 | ||||||||||||||||||||||
Derivative liabilities | 721 | 676 | 136 | 585 | — | 525 | 492 | 34 | 468 | 23 | ||||||||||||||||||||||
Payable for securities lending | 2,657 | 2,657 | — | 2,657 | — | 2,683 | 2,683 | — | 2,683 | — | ||||||||||||||||||||||
Payable for securities | 123 | 123 | — | — | 123 | 142 | 142 | — | — | 142 | ||||||||||||||||||||||
Other liabilities | (125 | ) | (557 | ) | — | (125 | ) | — | (565 | ) | (526 | ) | — | (565 | ) | — | ||||||||||||||||
Separate account liabilities | 26,755 | 26,755 | 26,384 | 371 | — | 22,835 | 22,835 | 22,464 | 371 | — | ||||||||||||||||||||||
(b) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 in this table. In addition, the Company has no assets or liabilities for which it is not practicable to measure at fair value. | (b) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 in this table. In addition, the Company has no assets or liabilities for which it is not practicable to measure at fair value. | (b) The Company does not have any assets or liabilities measured at NAV that are included in Level 2 in this table. In addition, the Company has no assets or liabilities for which it is not practicable to measure at fair value. |
2019 | 2018 | |||
Bonds | 64.0 | % | 67.4 | % |
Stocks | 36.0 | % | 32.6 | % |
2019 | $ | 9 | ||||
2020 | 10 | $ | 10 | |||
2021 | 10 | 10 | ||||
2022 | 11 | 11 | ||||
2023 | 12 | 12 | ||||
2024 and beyond | 8 | |||||
2024 | 8 | |||||
2025 and beyond | — | |||||
Total | $ | 60 | $ | 51 |
2018 | 2017 | 2019 | 2018 | |||||||||
Servers, computers and peripherals depreciation | 2 | 3 | 1 | 2 | ||||||||
Software amortization | 9 | 15 | 8 | 9 | ||||||||
Net EDP balance, by major classes of assets: | ||||||||||||
Servers, computers and peripherals | 1 | 2 | 1 | 1 | ||||||||
Software | 25 | 27 | 31 | 25 | ||||||||
Net EDP balance | 26 | 29 | 32 | 26 | ||||||||
Nonadmitted | (25 | ) | (27 | ) | (31 | ) | (25 | ) | ||||
Net admitted EDP balance | $ | 1 | 2 | $ | 1 | 1 |
December 31, 2018 | December 31, 2019 | |||||||||||||||||
Ordinary | Capital | Total | Ordinary | Capital | Total | |||||||||||||
Total gross deferred tax assets | $ | 744 | 31 | 775 | $ | 922 | 21 | 943 | ||||||||||
Statutory valuation allowance adjustments | — | — | — | — | — | — | ||||||||||||
Adjusted gross deferred tax assets | 744 | 31 | 775 | 922 | 21 | 943 | ||||||||||||
Deferred tax assets nonadmitted | — | — | — | — | — | — | ||||||||||||
Subtotal net admitted deferred tax assets | 744 | 31 | 775 | 922 | 21 | 943 | ||||||||||||
Deferred tax liabilities | (904 | ) | (5 | ) | (909 | ) | (713 | ) | (6 | ) | (719 | ) | ||||||
Net admitted deferred tax assets (liabilities) | $ | (160 | ) | 26 | (134 | ) | $ | 209 | 15 | 224 |
December 31, 2017 | December 31, 2018 | |||||||||||||||||
Ordinary | Capital | Total | Ordinary | Capital | Total | |||||||||||||
Total gross deferred tax assets | $ | 1,020 | 12 | 1,032 | $ | 744 | 31 | 775 | ||||||||||
Statutory valuation allowance adjustments | — | — | — | — | — | — | ||||||||||||
Adjusted gross deferred tax assets | 1,020 | 12 | 1,032 | 744 | 31 | 775 | ||||||||||||
Deferred tax assets nonadmitted | — | — | — | — | — | — | ||||||||||||
Subtotal net admitted deferred tax assets | 1,020 | 12 | 1,032 | 744 | 31 | 775 | ||||||||||||
Deferred tax liabilities | (1,017 | ) | (5 | ) | (1,022 | ) | (904 | ) | (5 | ) | (909 | ) | ||||||
Net admitted deferred tax assets (liabilities) | $ | 3 | 7 | 10 | $ | (160 | ) | 26 | (134 | ) |
Change | Change | |||||||||||||||||
Ordinary | Capital | Total | Ordinary | Capital | Total | |||||||||||||
Total gross deferred tax assets | $ | (276 | ) | 19 | (257 | ) | $ | 178 | (10 | ) | 168 | |||||||
Statutory valuation allowance adjustments | — | — | — | — | — | — | ||||||||||||
Adjusted gross deferred tax assets | (276 | ) | 19 | (257 | ) | 178 | (10 | ) | 168 | |||||||||
Deferred tax assets nonadmitted | — | — | — | — | — | — | ||||||||||||
Subtotal net admitted deferred tax assets | (276 | ) | 19 | (257 | ) | 178 | (10 | ) | 168 | |||||||||
Deferred tax liabilities | 113 | — | 113 | 192 | (1 | ) | 191 | |||||||||||
Net admitted deferred tax assets (liabilities) | $ | (163 | ) | 19 | (144 | ) | $ | 370 | (11 | ) | 359 |
December 31, 2018 | December 31, 2019 | |||||||||||||||||
Ordinary | Capital | Total | Ordinary | Capital | Total | |||||||||||||
Federal income taxes paid in prior years recoverable through loss carrybacks (11.a) | $ | — | 14 | 14 | $ | — | 5 | 5 | ||||||||||
Adjusted gross DTAs expected to be realized after application of the threshold limitations | ||||||||||||||||||
Lesser of 11.b.i or 11.b.ii: | ||||||||||||||||||
Adjusted gross DTAs expected to be realized following the balance sheet date (11.b.i.) | 213 | 16 | 229 | 473 | 16 | 489 | ||||||||||||
Adjusted gross DTAs allowed per limitation threshold (11.b.ii) | N/A | N/A | 1,006 | N/A | N/A | 1,159 | ||||||||||||
Lesser of 11.b.i or 11.b.ii | 213 | 16 | 229 | 473 | 16 | 489 | ||||||||||||
Adjusted gross DTAs offset by gross DTLs (11.c) | 531 | 1 | 532 | 449 | — | 449 | ||||||||||||
Deferred tax assets admitted | $ | 744 | 31 | 775 | $ | 922 | 21 | 943 |
December 31, 2017 | December 31, 2018 | |||||||||||||||||
Ordinary | Capital | Total | Ordinary | Capital | Total | |||||||||||||
Federal income taxes paid in prior years recoverable through loss carrybacks (11.a) | $ | — | — | — | $ | — | 14 | 14 | ||||||||||
Adjusted gross DTAs expected to be realized after application of the threshold limitations | ||||||||||||||||||
Lesser of 11.b.i or 11.b.ii: | ||||||||||||||||||
Adjusted gross DTAs expected to be realized following the balance sheet date (11.b.i.) | 311 | 12 | 323 | 213 | 16 | 229 | ||||||||||||
Adjusted gross DTAs allowed per limitation threshold (11.b.ii) | N/A | N/A | 900 | N/A | N/A | 1,006 | ||||||||||||
Lesser of 11.b.i or 11.b.ii | 311 | 12 | 323 | 213 | 16 | 229 | ||||||||||||
Adjusted gross DTAs offset by gross DTLs (11.c) | 709 | — | 709 | 531 | 1 | 532 | ||||||||||||
Deferred tax assets admitted | $ | 1,020 | 12 | 1,032 | $ | 744 | 31 | 775 |
Change | Change | |||||||||||||||||
Ordinary | Capital | Total | Ordinary | Capital | Total | |||||||||||||
Federal income taxes paid in prior years recoverable through loss carrybacks (11.a) | $ | — | 14 | 14 | $ | — | (9 | ) | (9 | ) | ||||||||
Adjusted gross DTAs expected to be realized after application of the threshold limitations | ||||||||||||||||||
Lesser of 11.b.i or 11.b.ii: | ||||||||||||||||||
Adjusted gross DTAs expected to be realized following the balance sheet date (11.b.i.) | (98 | ) | 4 | (94 | ) | 260 | — | 260 | ||||||||||
Adjusted gross DTAs allowed per limitation threshold (11.b.ii) | N/A | N/A | 106 | N/A | N/A | 153 | ||||||||||||
Lesser of 11.b.i or 11.b.ii | (98 | ) | 4 | (94 | ) | 260 | — | 260 | ||||||||||
Adjusted gross DTAs offset by gross DTLs (11.c) | (178 | ) | 1 | (177 | ) | (82 | ) | (1 | ) | (83 | ) | |||||||
Deferred tax assets admitted | $ | (276 | ) | 19 | (257 | ) | $ | 178 | (10 | ) | 168 |
December 31 | December 31 | |||||||||||||||||||||||
2018 | 2017 | Change | 2019 | 2018 | Change | |||||||||||||||||||
Ratio percentage used to determine recovery period and threshold limitation amount | Ratio percentage used to determine recovery period and threshold limitation amount | 634 | % | 672 | % | (38 | )% | Ratio percentage used to determine recovery period and threshold limitation amount | 756 | % | 634 | % | 122 | % | ||||||||||
Amount of adjusted capital and surplus used to determine recovery period threshold limitation | Amount of adjusted capital and surplus used to determine recovery period threshold limitation | $ | 6,708 | 5,999 | 709 | Amount of adjusted capital and surplus used to determine recovery period threshold limitation | $ | 7,729 | 6,708 | 1,021 |
December 31, 2019 | ||||||||
Ordinary | Capital | Total | ||||||
Net admitted adjusted gross DTAs - (percentage of total net admitted adjusted gross DTAs) | — | % | 77.6 | % | 77.6 | % |
December 31, 2018 | ||||||||
Ordinary | Capital | Total | ||||||
Net admitted adjusted gross DTAs - (percentage of total net admitted adjusted gross DTAs) | — | % | 52.0 | % | 52.0 | % |
December 31, 2017 | ||||||||
Ordinary | Capital | Total | ||||||
Net admitted adjusted gross DTAs - (percentage of total net admitted adjusted gross DTAs) | — | % | 100.0 | % | 100.0 | % |
Change | ||||||||
Ordinary | Capital | Total | ||||||
Net admitted adjusted gross DTAs - (percentage of total net admitted adjusted gross DTAs) | — | % | (48.0 | )% | (48.0 | )% |
Change | ||||||||
Ordinary | Capital | Total | ||||||
Net admitted adjusted gross DTAs - (percentage of total net admitted adjusted gross DTAs) | — | % | 25.6 | % | 25.6 | % |
December 31 | 2018-2017 Change | 2017-2016 Change | December 31 | 2019-2018 Change | 2018-2017 Change | |||||||||||||||||||||||||
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||
Current year federal tax expense (benefit) - ordinary income | $ | (51 | ) | 24 | 530 | (75 | ) | (506 | ) | $ | 773 | (51 | ) | 24 | 824 | (75 | ) | |||||||||||||
Current year foreign tax expense (benefit) - ordinary income | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Subtotal | (51 | ) | 24 | 530 | (75 | ) | (506 | ) | 773 | (51 | ) | 24 | 824 | (75 | ) | |||||||||||||||
Current year tax expense - net realized capital gains (losses) | 4 | 11 | 7 | (7 | ) | 4 | (11 | ) | 4 | 11 | (15 | ) | (7 | ) | ||||||||||||||||
Federal and foreign income taxes incurred | $ | (47 | ) | 35 | 537 | (82 | ) | (502 | ) | $ | 762 | (47 | ) | 35 | 809 | (82 | ) |
December 31 | December 31 | |||||||||||||||||||
Deferred tax assets | 2018 | 2017 | Change | 2019 | 2018 | Change | ||||||||||||||
Ordinary: | ||||||||||||||||||||
Unrealized losses | $ | 11 | — | 11 | ||||||||||||||||
Deferred acquisition costs | $ | 138 | 125 | 13 | 153 | 138 | 15 | |||||||||||||
Expense accruals | 47 | 69 | (22 | ) | 72 | 47 | 25 | |||||||||||||
Policyholder reserves | 374 | 817 | (443 | ) | 676 | 374 | 302 | |||||||||||||
Fixed assets | 177 | — | 177 | — | 177 | (177 | ) | |||||||||||||
Nonadmitted assets | 8 | 9 | (1 | ) | 10 | 8 | 2 | |||||||||||||
Subtotal | 744 | 1,020 | (276 | ) | 922 | 744 | 178 | |||||||||||||
Statutory valuation allowance adjustment | — | — | — | — | — | — | ||||||||||||||
Nonadmitted ordinary deferred tax assets | — | — | — | — | — | — | ||||||||||||||
Admitted ordinary tax assets | 744 | 1,020 | (276 | ) | 922 | 744 | 178 | |||||||||||||
Capital: | ||||||||||||||||||||
Impaired assets | 31 | 12 | 19 | 20 | 31 | (11 | ) | |||||||||||||
Unrealized losses | 1 | — | 1 | |||||||||||||||||
Subtotal | 31 | 12 | 19 | 21 | 31 | (10 | ) | |||||||||||||
Statutory valuation allowance adjustment | — | — | — | — | — | — | ||||||||||||||
Nonadmitted capital deferred tax assets | — | — | — | — | — | — | ||||||||||||||
Admitted capital deferred tax assets | 31 | 12 | 19 | 21 | 31 | (10 | ) | |||||||||||||
Admitted deferred tax assets | $ | 775 | 1,032 | (257 | ) | $ | 943 | 775 | 168 |
December 31 | December 31 | |||||||||||||||||||
Deferred tax liabilities | 2018 | 2017 | Change | 2019 | 2018 | Change | ||||||||||||||
Ordinary: | ||||||||||||||||||||
Investments | $ | (50 | ) | (49 | ) | (1 | ) | $ | (56 | ) | (50 | ) | (6 | ) | ||||||
Fixed assets | (76 | ) | (5 | ) | (71 | ) | (5 | ) | (76 | ) | 71 | |||||||||
Policyholder reserves | (623 | ) | (793 | ) | 170 | (534 | ) | (623 | ) | 89 | ||||||||||
Software capitalization | (5 | ) | (5 | ) | — | (5 | ) | (5 | ) | — | ||||||||||
Unrealized gains | (150 | ) | (160 | ) | 10 | (113 | ) | (150 | ) | 37 | ||||||||||
Other | — | (5 | ) | 5 | ||||||||||||||||
Subtotal | (904 | ) | (1,017 | ) | 113 | (713 | ) | (904 | ) | 191 | ||||||||||
Capital: | ||||||||||||||||||||
Unrealized gains | (5 | ) | (5 | ) | — | (6 | ) | (5 | ) | (1 | ) | |||||||||
Subtotal | (5 | ) | (5 | ) | — | (6 | ) | (5 | ) | (1 | ) | |||||||||
Deferred tax liabilities | $ | (909 | ) | (1,022 | ) | 113 | $ | (719 | ) | (909 | ) | 190 | ||||||||
Net deferred tax (liabilities) assets | $ | (134 | ) | 10 | (144 | ) | ||||||||||||||
Net deferred tax assets (liabilities) | $ | 224 | (134 | ) | 358 |
December 31 | December 31 | |||||||||||||||||||
2018 | 2017 | Change | 2019 | 2018 | Change | |||||||||||||||
Net deferred tax (liabilities) assets | $ | (134 | ) | 10 | (144 | ) | ||||||||||||||
Net deferred tax assets (liabilities) | $ | 224 | (134 | ) | 358 | |||||||||||||||
Statutory valuation allowance adjustment | — | — | — | — | — | — | ||||||||||||||
Net deferred tax (liabilities) assets after statutory valuation allowance | (134 | ) | 10 | (144 | ) | |||||||||||||||
Net deferred tax assets (liabilities) after statutory valuation allowance | 224 | (134 | ) | 358 | ||||||||||||||||
Tax effect of unrealized gains (losses) | 187 | 164 | 23 | 159 | 187 | (28 | ) | |||||||||||||
Statutory valuation allowance adjustment allocated to unrealized gains (losses) | — | — | — | — | — | — | ||||||||||||||
Change in net deferred income tax | $ | (121 | ) | $ | 330 |
December 31, 2018 | December 31, 2017 | December 31, 2016 | December 31, 2019 | December 31, 2018 | December 31, 2017 | |||||||||||
Effective tax rate | Effective tax rate | Effective tax rate | ||||||||||||||
Income before taxes | 21.0 | % | 35.0 | % | 35.0 | % | ||||||||||
Federal income tax rate | 21.0 | % | 21.0 | % | 35.0 | % | ||||||||||
Amortization of IMR | (0.9 | ) | 0.7 | (1.1 | ) | (3.6 | ) | (0.9 | ) | 0.7 | ||||||
Dividends received deduction | (0.8 | ) | 0.9 | (1.5 | ) | (4.2 | ) | (0.8 | ) | 0.9 | ||||||
Nondeductible expenses | 0.2 | (0.1 | ) | 0.1 | 0.9 | 0.2 | (0.1 | ) | ||||||||
COLI | 0.3 | 0.5 | (0.4 | ) | (5.5 | ) | 0.3 | 0.5 | ||||||||
Tax hedges | (6.5 | ) | 0.1 | 3 | 65.8 | (6.5 | ) | 0.1 | ||||||||
Tax hedge reclassification (2) | (8.2 | ) | (37.0 | ) | (7.2 | ) | 84.7 | (8.2 | ) | (37.0 | ) | |||||
Tax credits | (2.1 | ) | 0.7 | (0.6 | ) | (13.6 | ) | (2.1 | ) | 0.7 | ||||||
Prior period adjustments | (0.4 | ) | 0.3 | (0.3 | ) | (0.4 | ) | (0.4 | ) | 0.3 | ||||||
Change in deferred taxes on impairments | (1.5 | ) | (0.9 | ) | (1 | ) | 3.6 | (1.5 | ) | (0.9 | ) | |||||
Change in deferred taxes on nonadmitted assets | 0.1 | (0.2 | ) | — | (0.7 | ) | 0.1 | (0.2 | ) | |||||||
Reinsurance | (1.3 | ) | (0.9 | ) | 1.7 | 19.8 | (1.3 | ) | (0.9 | ) | ||||||
Change in valuation | 5.9 | — | — | — | 5.9 | — | ||||||||||
Tax reform revaluation (1) | — | (4.1 | ) | — | — | — | (4.1 | ) | ||||||||
Other | (0.1 | ) | (0.1 | ) | — | 0.6 | (0.1 | ) | (0.1 | ) | ||||||
Total | 5.7 | % | (5.1 | )% | 27.7 | % | ||||||||||
Effective tax rate | 168.4 | % | 5.7 | % | (5.1 | )% | ||||||||||
Federal and foreign income taxes incurred | (4.3 | )% | (0.8 | )% | 26.2 | % | ||||||||||
Federal and foreign income taxes incurred (3) | 293.7 | % | (4.3 | )% | (0.8 | )% | ||||||||||
Change in net deferred tax | 10.0 | (4.3 | ) | 1.5 | (125.3 | ) | 10 | (4.3 | ) | |||||||
Total statutory taxes | 5.7 | % | (5.1 | )% | 27.7 | % | ||||||||||
Effective tax rate | 168.4 | % | 5.7 | % | (5.1 | )% | ||||||||||
(1) On December 22, 2017, the United States passed the Tax Act of 2017, which reduced the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017. As a result, the deferred taxes recorded on the Statutory Statements of Assets, Liabilities, and Capital and Surplus were revalued to reflect the reduction in the future corporate tax rate. | (1) On December 22, 2017, the United States passed the Tax Act of 2017, which reduced the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017. As a result, the deferred taxes recorded on the Statutory Statements of Assets, Liabilities, and Capital and Surplus were revalued to reflect the reduction in the future corporate tax rate. | (1) On December 22, 2017, the United States passed the Tax Act of 2017, which reduced the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017. As a result, the deferred taxes recorded on the Statutory Statements of Assets, Liabilities, and Capital and Surplus were revalued to reflect the reduction in the future corporate tax rate. | ||||||||||||||
(2) The IRS hedge portfolio restrike in December 2017 (see Note 5) had a significant impact on current period tax hedge reclassification. | ||||||||||||||||
(2) The IRS hedge portfolio restrike in December 2017 (see Note 5) had a significant impact on 2017 tax hedge reclassification. | (2) The IRS hedge portfolio restrike in December 2017 (see Note 5) had a significant impact on 2017 tax hedge reclassification. | |||||||||||||||
(3) Tax on capital gains (losses) is excluded from federal and foreign income taxes incurred and detailed in Note 5(c). | (3) Tax on capital gains (losses) is excluded from federal and foreign income taxes incurred and detailed in Note 5(c). |
51 of 62 |
Members of Consolidated Tax Group | |
Allianz Life Insurance Company of North America | Allianz Life Insurance Company of Missouri |
Allianz Life Insurance Company of New York | Allianz Annuity Company of Missouri |
AZOA Services Corporation | Allianz Underwriters Insurance Company |
Allianz Global Risks US Insurance Company | AGCS Marine Insurance Company |
Allianz Reinsurance of America, Inc. | William H. McGee & Co., Inc. |
Allianz Technology of America, Inc. | Fireman’s Fund Insurance Company |
Allianz Renewable Energy Partners of America LLC | Fireman’s Fund Indemnity Corporation |
Allianz Renewable Energy Partners of America 2 LLC | National Surety Corporation |
PFP Holdings, Inc. | Chicago Insurance Company |
AZL PF Investments, Inc. | Interstate Fire & Casualty Company |
Dresdner Kleinwort Pfandbriefe Investments II, Inc. | Associated Indemnity Corporation |
Allianz Fund Investments, Inc. | American Automobile Insurance Company |
Yorktown Financial Companies, Inc. | The American Insurance Company |
Questar Capital Corporation | Allianz Risk Transfer, Inc. |
Questar Asset Management, Inc. | Allianz Risk Transfer (Bermuda), Ltd. |
Questar Agency, Inc. |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||
Balance at January 1, net of reinsurance recoverables of $447, $396, and $340, respectively | $ | 224 | 193 | 154 | ||||||||||||||||
Balance at January 1, net of reinsurance recoverables of $574, $447, and $396, respectively | $ | 299 | 224 | 193 | ||||||||||||||||
Incurred related to: | ||||||||||||||||||||
Current year | 129 | 104 | 92 | 143 | 129 | 104 | ||||||||||||||
Prior years | 16 | (6 | ) | 1 | (24 | ) | 16 | (6 | ) | |||||||||||
Total incurred | 145 | 98 | 93 | 119 | 145 | 98 | ||||||||||||||
Paid related to: | ||||||||||||||||||||
Current year | 4 | 6 | 5 | 7 | 4 | 6 | ||||||||||||||
Prior years | 66 | 61 | 49 | 76 | 66 | 61 | ||||||||||||||
Total paid | 70 | 67 | 54 | 83 | 70 | 67 | ||||||||||||||
Balance at December 31, net of reinsurance recoverables of $574, $447, and $396, respectively | $ | 299 | 224 | 193 | ||||||||||||||||
Balance at December 31, net of reinsurance recoverables of $654, $574, and $447, respectively | $ | 335 | 299 | 224 |
For the years ended December 31, | |||||||
Reduction in: | 2019 | 2018 | |||||
Aggregate reserves | $ | 6,620 | 5,824 | ||||
Deposit-type contracts | 107 | 115 | |||||
Policy and contract claims | 24 | 22 |
For the years ended December 31, | |||||||
Reduction in: | 2018 | 2017 | |||||
Aggregate reserves | $ | 5,824 | 5,609 | ||||
Deposit-type contracts | 115 | 123 | |||||
Policy and contract claims | 22 | 23 |
Year ended | Direct amount | Ceded to other companies | Assumed from other companies | Net amount | Direct amount | Ceded to other companies | Assumed from other companies | Net amount | ||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||
Life insurance in-force | $ | 45,817 | 30,060 | 58 | 15,815 | |||||||||||||||||||||
Premiums: | ||||||||||||||||||||||||||
Life | 989 | 88 | 1 | 902 | ||||||||||||||||||||||
Annuities | 12,135 | 387 | — | 11,748 | ||||||||||||||||||||||
Accident and health | 172 | 70 | 53 | 155 | ||||||||||||||||||||||
Total premiums | $ | 13,296 | 545 | 54 | 12,805 | |||||||||||||||||||||
December 31, 2018 | ||||||||||||||||||||||||||
Life insurance in force | $ | 41,321 | 27,914 | 65 | 13,472 | |||||||||||||||||||||
Life insurance in-force | $ | 41,321 | 27,914 | 65 | 13,472 | |||||||||||||||||||||
Premiums: | ||||||||||||||||||||||||||
Life | 895 | 84 | 1 | 812 | 895 | 84 | 1 | 812 | ||||||||||||||||||
Annuities | 11,318 | 358 | — | 10,960 | 11,318 | 358 | — | 10,960 | ||||||||||||||||||
Accident and health | 176 | 73 | 50 | 153 | 176 | 73 | 50 | 153 | ||||||||||||||||||
Total premiums | $ | 12,389 | 515 | 51 | 11,925 | $ | 12,389 | 515 | 51 | 11,925 | ||||||||||||||||
December 31, 2017 | ||||||||||||||||||||||||||
Life insurance in force | $ | 37,306 | 26,140 | 71 | 11,237 | |||||||||||||||||||||
Life insurance in-force | $ | 37,306 | 26,140 | 71 | 11,237 | |||||||||||||||||||||
Premiums: | ||||||||||||||||||||||||||
Life | 791 | 88 | 1 | 704 | 791 | 88 | 1 | 704 | ||||||||||||||||||
Annuities | 9,688 | 558 | — | 9,130 | 9,688 | 558 | — | 9,130 | ||||||||||||||||||
Accident and health | 179 | 75 | 45 | 149 | 179 | 75 | 45 | 149 | ||||||||||||||||||
Total premiums | $ | 10,658 | 721 | 46 | 9,983 | $ | 10,658 | 721 | 46 | 9,983 | ||||||||||||||||
December 31, 2016 | ||||||||||||||||||||||||||
Life insurance in force | $ | 33,863 | 24,744 | 77 | 9,196 | |||||||||||||||||||||
Premiums: | ||||||||||||||||||||||||||
Life | 662 | 79 | 1 | 584 | ||||||||||||||||||||||
Annuities | 12,012 | 95 | — | 11,917 | ||||||||||||||||||||||
Accident and health | 181 | 78 | 39 | 142 | ||||||||||||||||||||||
Total premiums | $ | 12,855 | 252 | 40 | 12,643 |
53 of 62 |
2018 | Percentage of total | 2017 | Percentage of total | 2019 | Percentage of total | 2018 | Percentage of total | |||||||||||||||||||||
Subject to discretionary withdrawal: | ||||||||||||||||||||||||||||
With market value adjustment | $ | 32,656 | 26 | % | $ | 25,991 | 21 | % | $ | 39,602 | 29 | % | $ | 32,656 | 26 | % | ||||||||||||
At book value less current surrender charges of 5% or more | 37,470 | 30 | 47,640 | 39 | 37,347 | 28 | 37,470 | 30 | ||||||||||||||||||||
At market value | 21,142 | 17 | 25,341 | 20 | 22,389 | 16 | 21,142 | 17 | ||||||||||||||||||||
Total with adjustment or at market value | 91,268 | 73 | 98,972 | 80 | 99,338 | 73 | 91,268 | 73 | ||||||||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) | 25,979 | 21 | 17,057 | 14 | 27,684 | 21 | 25,979 | 21 | ||||||||||||||||||||
Not subject to discretionary withdrawal | 7,995 | 6 | 7,642 | 6 | 7,692 | 6 | 7,995 | 6 | ||||||||||||||||||||
Total gross | 125,242 | 100 | % | 123,671 | 100 | % | 134,714 | 100 | % | 125,242 | 100 | % | ||||||||||||||||
Reinsurance ceded | 1,914 | 1,906 | 2,578 | 1,914 | ||||||||||||||||||||||||
Total net | $ | 123,328 | $ | 121,765 | $ | 132,136 | $ | 123,328 | ||||||||||||||||||||
Amount included in At book value less current charges of 5% or more that will move to At book value without adjustment in the year after the statement date: | $ | 9,149 |
2018 | 2017 | |||||||||||||
Reconciliation of total annuity actuarial reserves and deposit fund liabilities: | 2019 | 2018 | ||||||||||||
Life, Accident, and Health Annual Statement Annuities, net (excluding supplementary contracts with life contingencies) | $ | 94,258 | 88,533 | |||||||||||
Life, Accident and Health Annual Statement: | ||||||||||||||
Annuities, net (excluding supplementary contracts with life contingencies) | $ | 93,752 | 94,258 | |||||||||||
Supplemental contracts with life contingencies, net | 2,010 | 1,872 | 2,070 | 2,010 | ||||||||||
Deposit-type contracts | 5,125 | 5,272 | 4,936 | 5,125 | ||||||||||
Subtotal | 101,393 | 95,677 | 100,758 | 101,393 | ||||||||||
Separate Accounts Annual Statement: | ||||||||||||||
Annuities, net (excluding supplementary contracts with life contingencies) | 21,906 | 26,078 | 31,348 | 21,906 | ||||||||||
Supplemental contracts with life contingencies, net | 29 | 10 | 30 | 29 | ||||||||||
Subtotal | 21,935 | 26,088 | 31,378 | 21,935 | ||||||||||
Total annuity actuarial reserves and deposit fund liability | $ | 123,328 | 121,765 | |||||||||||
Total annuity actuarial reserves and deposit fund liabilities | $ | 132,136 | 123,328 |
54 of 62 |
2019 | ||||||||||||||
General Account | Separate Account - Guaranteed & Nonguaranteed | |||||||||||||
Account value | Cash value | Reserve | Account value | Cash value | Reserve | |||||||||
Subject to discretionary withdrawal, surrender values, or policy loans: | ||||||||||||||
Universal life | $ | 875 | 874 | 882 | — | — | — | |||||||
Universal life with secondary guarantees | 62 | 54 | 161 | — | — | — | ||||||||
Indexed life | 4,496 | 3,872 | 3,913 | — | — | — | ||||||||
Other permanent cash value life insurance | 122 | 122 | 122 | — | — | — | ||||||||
Variable universal life | 3 | 3 | 3 | 18 | 17 | 17 | ||||||||
Not subject to discretionary withdrawal or no cash values: | ||||||||||||||
Term policies without cash value | XXX | XXX | 209 | XXX | XXX | — | ||||||||
Disability, active lives | XXX | XXX | 49 | XXX | XXX | — | ||||||||
Disability, disabled lives | XXX | XXX | 6 | XXX | XXX | — | ||||||||
Miscellaneous reserves | XXX | XXX | 56 | XXX | XXX | — | ||||||||
Total gross | 5,558 | 4,925 | 5,401 | 18 | 17 | 17 | ||||||||
Reinsurance ceded | 671 | 671 | 945 | — | — | — | ||||||||
Total net | $ | 4,887 | 4,254 | 4,456 | 18 | 17 | 17 |
Reconciliation of total life actuarial reserves: | 2019 | ||
Life, Accident, and Health Annual Statement: | |||
Life insurance, net | $ | 4,392 | |
Disability, active lives, net | 48 | ||
Disability, disabled lives, net | 2 | ||
Miscellaneous reserves, net | 14 | ||
Subtotal | 4,456 | ||
Separate Accounts Annual Statement: | |||
Life insurance, net | 17 | ||
Subtotal | 17 | ||
Total life actuarial reserves | $ | 4,473 |
2018 | 2017 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||
Indexed | Nonindexed guaranteed reserve interest less than or equal to 4% | Non guaranteed separate accounts | Total | Indexed | Nonindexed guaranteed reserve interest less than or equal to 4% | Non guaranteed separate accounts | Total | Indexed | Nonindexed guaranteed reserve interest less than or equal to 4% | Non guaranteed separate accounts | Total | Indexed | Nonindexed guaranteed reserve interest less than or equal to 4% | Non guaranteed separate accounts | Total | |||||||||||||||||||||||
Premiums, considerations, or deposits | $ | — | — | 638 | 638 | $ | — | — | 720 | 720 | $ | — | — | 1,277 | 1,277 | $ | — | — | 638 | 638 | ||||||||||||||||||
Reserves for account, with assets at fair value | 1 | 5 | 21,945 | 21,951 | 7 | 8 | 26,093 | 26,108 | — | 2 | 22,457 | 22,459 | 1 | 5 | 21,945 | 21,951 | ||||||||||||||||||||||
Reserves for account, with assets at amortized cost | — | — | 8,936 | 8,936 | — | — | — | — | ||||||||||||||||||||||||||||||
Total reserves | 1 | 5 | 21,945 | 21,951 | 7 | 8 | 26,093 | 26,108 | — | 2 | 31,393 | 31,395 | 1 | 5 | 21,945 | 21,951 | ||||||||||||||||||||||
By withdrawal characteristics: | ||||||||||||||||||||||||||||||||||||||
At book value without MV adjustment and with current surrender charge of 5% or more | — | — | 13 | 13 | — | — | 18 | 18 | — | — | 8,535 | 8,535 | — | — | 13 | 13 | ||||||||||||||||||||||
At fair value | 1 | 5 | 21,903 | 21,909 | 7 | 8 | 26,066 | 26,081 | — | 2 | 22,427 | 22,429 | 1 | 5 | 21,903 | 21,909 | ||||||||||||||||||||||
At book value without MV adjustment and with current surrender charge of less than 5% | — | — | 401 | 401 | — | — | — | — | ||||||||||||||||||||||||||||||
Subtotal | 1 | 5 | 21,916 | 21,922 | 7 | 8 | 26,084 | 26,099 | — | 2 | 31,363 | 31,365 | 1 | 5 | 21,916 | 21,922 | ||||||||||||||||||||||
Not subject to discretionary withdrawal | — | — | 29 | 29 | — | — | 9 | 9 | — | — | 30 | 30 | — | — | 29 | 29 | ||||||||||||||||||||||
Total | $ | 1 | 5 | 21,945 | 21,951 | $ | 7 | 8 | 26,093 | 26,108 | $ | — | 2 | 31,393 | 31,395 | $ | 1 | 5 | 21,945 | 21,951 |
2018 | 2017 | 2019 | 2018 | |||||||||||||||||||
Product/transaction | Legally insulated | Not legally insulated | Legally insulated | Not legally insulated | Legally insulated | Not legally insulated | Legally insulated | Not legally insulated | ||||||||||||||
Variable Annuities | $ | 21,596 | — | 25,946 | — | $ | 22,607 | — | 21,596 | — | ||||||||||||
Variable Life | 17 | — | 21 | — | 18 | — | 17 | — | ||||||||||||||
Variable Indexed Annuities (Non-Unitized Insulated) | 84 | — | 54 | — | ||||||||||||||||||
Variable Indexed Annuities (Non-Unitized Non-Insulated) | — | 1,031 | — | 617 | ||||||||||||||||||
Variable Annuities (MN Market Value Adjustment (MVA)) | — | 90 | — | 78 | ||||||||||||||||||
Variable Annuities (Non-Unitized Insulated) | 387 | — | 84 | — | ||||||||||||||||||
Variable Annuities (Non-Unitized Non-Insulated) | — | 11,586 | — | 1,031 | ||||||||||||||||||
Variable Annuities (MN MVA) | — | 37 | — | 90 | ||||||||||||||||||
Fixed Annuities (MN MVA) | — | 17 | — | 39 | — | 3 | — | 17 | ||||||||||||||
Total | $ | 21,697 | 1,138 | 26,021 | 734 | $ | 23,012 | 11,626 | 21,697 | 1,138 |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||
Transfers as reported in the Summary of Operations of the Separate Accounts Annual Statement: | ||||||||||||||||||
Transfers to separate accounts | $ | 638 | 720 | 588 | $ | 1,277 | 638 | 720 | ||||||||||
Transfers from separate accounts | (2,649 | ) | (2,574 | ) | (1,964 | ) | 3,975 | (2,649 | ) | (2,574 | ) | |||||||
Net transfers from separate accounts | (2,011 | ) | (1,854 | ) | (1,376 | ) | ||||||||||||
Net transfers to (from) separate accounts | 5,252 | (2,011 | ) | (1,854 | ) | |||||||||||||
Reconciling adjustments: | ||||||||||||||||||
Other adjustments | 2 | 3 | (4 | ) | 2 | 2 | 3 | |||||||||||
Transfers as reported in the Statutory Statements of Operations | $ | (2,009 | ) | (1,851 | ) | (1,380 | ) | $ | 5,254 | (2,009 | ) | (1,851 | ) |
Related-Party Transactions |
(a) | Organization Changes |
(b) | Related-Party Invested Assets |
(c) | Service Fees |
(d) | Dividends to Parent |
(e) | Capital Contributions and Dividends with Subsidiaries |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||
Allianz Investment Management, LLC | $ | 60 | 62 | 57 | $ | 56 | 60 | 62 | ||||||||||||
ALFS | 10 | — | — | 2 | 10 | — | ||||||||||||||
AAMO | — | — | 1 | |||||||||||||||||
Yorktown | 9 | — | — | |||||||||||||||||
$ | 70 | 62 | 58 | $ | 67 | 70 | 62 |
2018 | 2017 | 2016 | 2019 | 2018 | 2017 | |||||||||||||||
Yorktown | $ | 6 | 5 | 8 | $ | 1 | 6 | 5 | ||||||||||||
InForce Solutions, LLC (1) | 3 | — | — | — | 3 | — | ||||||||||||||
ALAC | — | — | 2 | |||||||||||||||||
ALFS | 8 | — | — | |||||||||||||||||
$ | 9 | 5 | 10 | $ | 9 | 9 | 5 | |||||||||||||
(1) InForce Solutions, LLC is a wholly owned subsidiary of AIIG, which is a wholly owned subsidiary of the Company; this capital contribution took the form of intercompany debt forgiveness. | (1) InForce Solutions, LLC is a wholly owned subsidiary of AIIG, which is a wholly owned subsidiary of the Company; this capital contribution took the form of intercompany debt forgiveness. | (1) InForce Solutions, LLC is a wholly owned subsidiary of AIIG, which is a wholly owned subsidiary of the Company; this capital contribution took the form of intercompany debt forgiveness. |
(f) | Reinsurance |
(g) | Line of Credit Agreement |
Authorized, issued, and outstanding | Par value, per share | Redemption rights | Voluntary or involuntary liquidation rights | Authorized | Issued and outstanding | Par value, per share | Redemption and liquidation rights | ||||||||||||||||
Common stock | 40,000,000 | $ | 1.00 | None | None | 40,000,000 | 20,000,001 | $ | 1.00 | None | |||||||||||||
20,000,001 | |||||||||||||||||||||||
20,000,001 | |||||||||||||||||||||||
Preferred stock: | |||||||||||||||||||||||
Class A | 200,000,000 | $ | 1.00 | Designated by Board for each series issued | Designated by Board for each series issued | ||||||||||||||||||
18,903,484 | |||||||||||||||||||||||
18,903,484 | |||||||||||||||||||||||
Class A (consisting of Series A and B below) | 200,000,000 | 18,903,484 | $ | 1.00 | Designated by Board for each series issued | ||||||||||||||||||
Class A, Series A | 8,909,195 | $ | 1.00 | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | 8,909,195 | 8,909,195 | $ | 1.00 | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | |||||||||||||
8,909,195 | |||||||||||||||||||||||
8,909,195 | |||||||||||||||||||||||
Class A, Series B | 10,000,000 | $ | 1.00 | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | 10,000,000 | 9,994,289 | $ | 1.00 | $35.02 per share plus an amount to yield a compounded annual return of 6%, after actual dividends paid | |||||||||||||
9,994,289 | |||||||||||||||||||||||
9,994,289 | |||||||||||||||||||||||
Class B | 400,000,000 | $ | 1.00 | Designated by Board for each series issued | Designated by Board for each series issued | 400,000,000 | — | $ | 1.00 | Designated by Board for each series issued |
61 of 62 |
Year ended December 31, 2018 | ||||||||||||
Individual Annuities | Life | Legacy | Consolidated | |||||||||
Income: | ||||||||||||
Premium and annuity considerations* | $ | 11,223 | 816 | 154 | 12,193 | |||||||
Net investment income | 4,346 | 158 | 89 | 4,593 | ||||||||
Ceded reinsurance reserve and expense adjustments | 254 | (16 | ) | 7 | 245 | |||||||
Fees from separate accounts | 676 | — | — | 676 | ||||||||
Other income | (3 | ) | — | — | (3 | ) | ||||||
Total income | 16,496 | 958 | 250 | 17,704 | ||||||||
Benefits and other expenses: | ||||||||||||
Policyholder benefits and surrenders | 9,264 | 96 | 76 | 9,436 | ||||||||
Change in aggregate reserves | 6,457 | 658 | 184 | 7,299 | ||||||||
General and administrative and commission | 1,518 | 212 | 40 | 1,770 | ||||||||
Net transfers from separate accounts | (2,006 | ) | — | (3 | ) | (2,009 | ) | |||||
Total benefits and other expenses | 15,233 | 966 | 297 | 16,496 | ||||||||
Pretax income (loss) | 1,263 | (8 | ) | (47 | ) | 1,208 | ||||||
Net realized capital gain (loss) | (489 | ) | (1 | ) | — | (490 | ) | |||||
Income tax expense (benefit) | (53 | ) | — | 2 | (51 | ) | ||||||
Net income (loss) | $ | 827 | (9 | ) | (49 | ) | 769 | |||||
*Includes premiums and annuity and supplementary contract considerations. |
Send an application or additional Purchase Payment with a check: | Send an application or general customer service without a check: | ||
REGULAR MAIL | REGULAR MAIL | ||
Allianz Life Insurance Company of North America NW5989 P.O. Box 1450 Minneapolis, MN 55485-5989 | Allianz Life Insurance Company of North America | ||
P. O. Box 561 | |||
Minneapolis, MN 55440-0561 | |||
OVERNIGHT, CERTIFIED, OR REGISTERED MAIL | OVERNIGHT, CERTIFIED, OR REGISTERED MAIL | ||
Allianz Life Insurance Company of North America NW5989 1801 Parkview Drive Shoreview, MN 55126 | Allianz Life Insurance Company of North America | ||
5701 Golden Hills Drive | |||
Golden Valley, MN 55416-1297 |
Checks sent to the wrong address for applications or additional Purchase Payments are forwarded to the 1801 Parkview Drive address listed above, which may delay processing. |
Securities and Exchange Commission Registration Fee | $ |
-------------- | |
Estimated Printing and Filing Costs: | $ 30,000 |
-------------- | |
Estimated Accounting Fees: | $ 75,000 |
--------------- | |
Estimated Legal Fees: | $ N/A |
--------------- | |
Estimated Miscellaneous Fees: | $ N/A |
--------------- |
The Bylaws of the Insurance Company provide: | ||
ARTICLE XI. INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES | ||
SECTION 1. RIGHT TO INDEMNIFICATION: | ||
(a) | Subject to the conditions of this Article and any conditions or limitations imposed by applicable law, the Corporation shall indemnify any employee, director or officer of the Corporation (an "Indemnified Person") who was, is, or in the sole opinion of the Corporation, may reasonably become a party to or otherwise involved in any Proceeding by reason of the fact that such Indemnified Person is or was: | |
(i) | a director of the Corporation; or | |
(ii) | acting in the course and scope of his or her duties as an officer or employee of the Corporation; or | |
(iii) | rendering Professional Services at the request of and for the benefit of the Corporation; or | |
(iv) | serving at the request of the Corporation as an officer, director, fiduciary or member of another corporation, association, committee, partnership, joint venture, trust, employee benefit plan or other enterprise (an "Outside Organization"). | |
(b) | Notwithstanding the foregoing, no officer, director or employee shall be indemnified pursuant to these bylaws under the following circumstances: | |
(i) | in connection with a Proceeding initiated by such person, in his or her own personal capacity, unless such initiation was authorized by the Board of Directors; | |
(ii) | if a court of competent jurisdiction finally determines that any indemnification hereunder is unlawful; | |
(iii) | for acts or omissions involving intentional misconduct or knowing and culpable violation of law; | |
(iv) | for acts or omissions that the Indemnified Person believes to be contrary to the best interests of the Corporation or its shareholders or that involve the absence of good faith on the part of the Indemnified Person; | |
(v) | for any transaction for which the Indemnified Person derived an improper personal benefit; | |
(vi) | for acts or omissions that show a reckless disregard for the Indemnified Person's duty to the Corporation or its shareholders in circumstances in which the Indemnified Person was aware or should have been aware, in the ordinary course of performing the Indemnified Person's duties, of the risk of serious injury to the Corporation or its shareholders; | |
(vii) | for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the Indemnified Person's duties to the Corporation or its shareholders; | |
(viii) | in circumstances where indemnification is prohibited by applicable law; | |
(ix) | in the case of service as an officer, director, fiduciary or member of an Outside Organization, where the Indemnified Person was aware or should have been aware that the conduct in question was outside the scope of the assignment as contemplated by the Corporation. |
SECTION 2. SCOPE OF INDEMNIFICATION: | |
(a) | Indemnification provided pursuant to Section 1(a)(iv) shall be secondary and subordinate to indemnification or insurance provided to an Indemnified Person by an Outside Organization or other source, if any. |
(b) | Indemnification shall apply to all reasonable expenses, liability and losses, actually incurred or suffered by an Indemnified Person in connection with a Proceeding, including without limitation, attorneys' fees and any expenses of establishing a right to indemnification or advancement under this article, judgments, fines, ERISA excise taxes or penalties, amounts paid or to be paid in settlement and all interest, assessments and other charges paid or payable in connection with or in respect of such expense, liability and loss. |
(c) | Such indemnification shall continue as to any Indemnified Person who has ceased to be an employee, director or officer of the Corporation and shall inure to the benefit of his or her heirs, estate, executors and administrators. |
SECTION 3. DEFINITIONS: | |
(a) | "Corporation" for the purpose of Article XI shall mean Allianz Life Insurance Company of North America and all of its subsidiaries. |
(b) | "Proceeding" shall mean any threatened, pending, or completed action, suit or proceeding whether civil, criminal, administrative, investigative or otherwise, including actions by or in the right of the Corporation to procure a judgment in its favor. |
(c) | "Professional Services" shall mean services rendered pursuant to (i) a professional actuarial designation, (ii) a license to engage in the practice of law issued by a State Bar Institution or (iii) a Certified Public Accountant designation issued by the American Institute of Certified Public Accountants. |
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted for directors and officers or controlling persons of the Insurance Company pursuant to the foregoing, or otherwise, the Insurance Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Insurance Company of expenses incurred or paid by a director, officer or controlling person of the Insurance Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
1.(a) | Principal Underwriter Agreement by and between North American Life and Casualty Company on behalf of NALAC Financial Plans, Inc. dated September 14, 1988 incorporated by reference as exhibit EX-99.B3.a. from Pre-Effective Amendment No.1 to Form N-4 (File Nos. 333-06709 and 811-05618), electronically filed on December 13, 1996. (North American Life and Casualty Company is the predecessor to Allianz Life Insurance Company of North America. NALAC Financial Plans, Inc., is the predecessor to USAllianz Investor Services, LLC, which is the predecessor to Allianz Life Financial Services, LLC.) |
(b) | Broker-Dealer Agreement (amended and restated) between Allianz Life Insurance Company of North America and Allianz Life Financial Services, LLC, dated June 1, 2010 incorporated by reference as exhibit EX-99B3b. from Pre-Effective Amendment No. 1 to Form N-4 (File Nos. 333-166408 and 811-05618), electronically filed on September 24, 2010. |
(c) | The current specimen of the selling agreement between Allianz Life Financial Services, LLC, the principal underwriter for the Contracts, and retail brokers which offer and sell the Contracts to the public is incorporated by reference as exhibit EX-99.B3.b. from the initial filing on Form N-4 (File Nos. 333-134267 and 811-05618), electronically filed on May 19, 2006.The underwriter has executed versions of the agreement with approximately 2,100 retail brokers. |
3. (a) | Articles of Incorporation, as amended and restated August 1, 2006, of Allianz Life Insurance Company of North America, filed on January 3, 2013 as Exhibit 3(a) to Registrant's initial registration on Form S-1 (File No. 333-185864), is incorporated by reference. |
(b) | Bylaws, as amended and restated August 1, 2006, of Allianz Life Insurance Company of North America, filed on January 3, 2013 as Exhibit 3(b) to Registrant's initial registration on Form S-1 (File No. 333-185864), is incorporated by reference. |
4.(a) | Individual Variable Annuity Contract, |
| |
(b) | Contract Schedule Pages, |
| Index Options Contract Schedule Page, |
| Index Options Contract Schedule Page S40877-NF-04, incorporated by reference as Exhibit 4(c)(ii) from Post-Effective Amendment No. 6 to Registrant’s Form S-1 (File No. 333-215103), electronically filed on January 22, 2020. |
(iii) | Index Options Contract Schedule Page Addendum, S40877-ADD, incorporated by reference as Exhibit 4(c)(iv) from Post-Effective Amendment No. 1 to Registrant's Form S-1 (File No. 333-230899), electronically filed on January 21, 2020. |
(d) | Application for Individual Variable Annuity Contract – |
| Index Performance Strategy Crediting |
(e)(ii) | Index Performance Strategy Rider II – S40903, incorporated by reference as Exhibit 4(e)(ii) from Post-Effective Amendment No. 1 to Registrant's Form S-1 (File No. 333-230899), electronically filed on January 21, 2020. |
(e)(iii) | Inforce Index Performance Strategy Rider II – S40903-INFORCE, incorporated by reference as Exhibit 4(e)(iii) from Post-Effective Amendment No. 1 to Registrant's Form S-1 (File No. 333-230899), electronically filed on January 21, 2020. |
(f) | Index Protection Strategy Crediting |
(g) | |
Traditional Death Benefit Rider-S40880 incorporated by reference as Exhibit 4(f) from Pre-Effective Amendment No. 1 to Registrant's Form S-1 (File No. 333-185864), electronically filed on April 17, 2013. | |
| |
(i) | Index Precision Strategy Crediting Rider, S40891, incorporated by reference as Exhibit 4(h) from Post-Effective Amendment No. 1 to Registrant's Form S-1 (File No. 333-213125), electronically filed on January 17, 2017. |
(j) | Waiver of Withdrawal Charge Rider-S40749 incorporated by reference as exhibit EX-99.B4.f. from Pre-Effective Amendment No. 1 to Registrant's Form N-4 (File Nos. 333-139701 and 811-05618), electronically filed on April 9, 2007. |
(k) | Inherited IRA/Roth IRA Endorsement-S40713 incorporated by reference as exhibit EX-99.B4.q. from Pre-Effective Amendment No. 1 to Registrant's Form N-4 (File Nos. 333-134267 and 811-05618), electronically filed on September 25, 2006. |
(l) | Roth IRA Endorsement-S40342 incorporated by reference as exhibit EX-99.B4.l. from Pre-Effective Amendment No. 1 to Registrant's Form N-4 (File Nos. 333-134267 and 811-05618), electronically filed on September 25, 2006. |
(m) | IRA Endorsement-S40014 incorporated by reference as exhibit EX-99.B4.g. from Pre-Effective Amendment No.1 to Registrant's Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999. |
(n) | Unisex Endorsement-(S20146) incorporated by reference as exhibit EX-99.B4.h. from Pre-Effective Amendment No.1 to Registrant's Form N-4 (File Nos. 333-82329 and 811-05618), electronically filed on December 30, 1999. |
(o) | Maximum Anniversary Death Benefit Rider- S40897-NF and S40898-NF, incorporated by reference as Exhibit 4(n) from Post-Effective Amendment No. 1 to Registrant’s form S-1 (File No. 333-215103), electronically filed on December 15, 2017. |
24. | (a) | Board Resolution, effective December 11, 2012, of the Board of Directors of Allianz Life Insurance Company of North America, filed on January 3, 2013 as Exhibit 24(b) to Registrant's initial registration on Form S-1 (File No. 333-185864), is incorporated by reference. |
(c)* | Powers of Attorney, filed herewith. |
99. | (a)* | Alternative Minimum Value Exhibit - IXA-032 (05/2020), |
(b)* | Appendix B Exhibit – Daily Adjustment Calculation herewith. |
(c) | Transition Representation Letter - Independent Registered Public Accounting Firm, pursuant to S-K, item 304, incorporated by reference as Exhibit |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: | |
(i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; | |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. | |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | |
(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. | |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: | |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; | |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. | |
(6) | Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
Title | ||
Jacqueline Hunt(1) | Director and Chairman of the Board | |
Walter R. White(1) | Director, President & Chief Executive Officer | |
Ronald M. Clark(1) | Director | |
Udo Frank(1) | Director | |
William E. Gaumond(1) | Director, Senior Vice President, Chief Financial Officer and Treasurer | |
Kevin E. Walker(1) | Director | |
Anna Sophie Herken(1) | Director |
(1) | By Power of Attorney, filed as Exhibit 24(c) to this Registration Statement. |
Exhibit | Description of Exhibit | ||
23(a) | Consent of Independent Registered Public Accounting Firms | ||
23(b) | Consent of Counsel | ||
24(c) | Powers of Attorney | ||
99(a) | Alternative Minimum Value Exhibit - IXA-032 (05/2020) | ||
99(b) | Appendix B Exhibit – Daily Adjustment Calculation - IXA-010b (05/2020) |