XML 91 R15.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

POLICY LIABILITIES | 12 Months Ended
--- | ---
Dec. 31, 2019
Insurance Loss Reserves [Abstract] |
POLICY LIABILITIES | POLICY LIABILITIES Policy liabilities consist of future policy benefits, unpaid policy claims, unearned premiums, and other policyholders' funds, which accounted for 85%, 4%, 4% and 7% of total policy liabilities at December 31, 2019, respectively. The Company regularly reviews the adequacy of its policy liabilities in total and by component. The liability for future policy benefits as of December 31 consisted of the following:
|  | Liability Amounts |  |  | Interest Rate Assumptions |  |
(In millions) |  | 2019 |  | 2018 |  |  |  |
Health insurance |  |  |  |  |  |  |  |  |
Japan |  | $ | 50,941 |  |  | $ | 49,496 |  |  |  | 0.6 - 6.75 | % |
U.S. |  | 8,646 |  |  | 8,442 |  |  |  | 3.0 - 7.0 |  |
Intercompany eliminations |  | (532 | ) | (1) | (583 | ) | (1) |  | 2.0 |  |
Life insurance |  |  |  |  |  |  |  |  |
Japan |  | 30,520 |  |  | 28,318 |  |  |  | 1.0 - 4.5 |  |
U.S. |  | 760 |  |  | 695 |  |  |  | 2.5 - 6.0 |  |
Total |  | $ | 90,335 |  |  | $ | 86,368 |  |  |  |  |  |
(1) Elimination entry necessary due to recapture of a portion of policy liabilities ceded externally, as a result of the reinsurance retrocession transaction as described in Note 8 of the Notes to the Consolidated Financial Statements The weighted-average interest rates reflected in the consolidated statements of earnings for future policy benefits for Japanese policies were 3.2% in 2019, compared with 3.3% in 2018 and 3.4% in 2017; and for U.S. policies, 5.3% in 2019, compared with 5.3% in 2018 and 5.4% in 2017. Changes in the liability for unpaid policy claims were as follows for the years ended December 31:
(In millions) | 2019 |  | 2018 |  | 2017
Unpaid supplemental health claims, beginning of period |  | $ | 3,952 |  |  |  |  | $ | 3,884 |  |  |  |  | $ | 3,707 |  |
Less reinsurance recoverables |  | 27 |  |  |  |  | 30 |  |  |  |  | 27 |  |
Net balance, beginning of period |  | 3,925 |  |  |  |  | 3,854 |  |  |  |  | 3,680 |  |
Add claims incurred during the period related to: |  |  |  |  |  |  |  |  |  |  |
Current year |  | 7,216 |  |  |  |  | 7,101 |  |  |  |  | 6,979 |  |
Prior years |  | (552 | ) |  |  |  | (563 | ) |  |  |  | (518 | ) |
Total incurred |  | 6,664 |  |  |  |  | 6,538 |  |  |  |  | 6,461 |  |
Less claims paid during the period on claims incurred during: |  |  |  |  |  |  |  |  |  |  |
Current year |  | 4,715 |  |  |  |  | 4,612 |  |  |  |  | 4,530 |  |
Prior years |  | 1,965 |  |  |  |  | 1,898 |  |  |  |  | 1,822 |  |
Total paid |  | 6,680 |  |  |  |  | 6,510 |  |  |  |  | 6,352 |  |
Effect of foreign exchange rate changes on unpaid claims |  | 29 |  |  |  |  | 43 |  |  |  |  | 65 |  |
Net balance, end of period |  | 3,938 |  |  |  |  | 3,925 |  |  |  |  | 3,854 |  |
Add reinsurance recoverables |  | 30 |  |  |  |  | 27 |  |  |  |  | 30 |  |
Unpaid supplemental health claims, end of period |  | 3,968 |  |  |  |  | 3,952 |  |  |  |  | 3,884 |  |
Unpaid life claims, end of period |  | 691 |  |  |  |  | 632 |  |  |  |  | 508 |  |
Total liability for unpaid policy claims |  | $ | 4,659 |  |  |  |  | $ | 4,584 |  |  |  |  | $ | 4,392 |  |
The incurred claims development related to prior years reflects favorable claims experience compared to previous estimates. The favorable claims development of $552 million for 2019 comprises approximately $395 million from Japan, which represents approximately 72% of the total. Excluding the impact of foreign exchange of a gain of approximately $5 million from December 31, 2018 to December 31, 2019, the favorable claims development in Japan would have been approximately $390 million, representing approximately 71% of the total. The Company has experienced continued favorable claim trends in 2019 for its core health products in Japan. The Company's experience in Japan related to the average length of stay in the hospital for cancer treatment has shown continued decline in the current period. In addition, cancer treatment patterns in Japan are continuing to be influenced by significant advances in early-detection techniques and by the increased use of pathological diagnosis rather than clinical exams. Additionally, follow-up radiation and chemotherapy treatments are occurring more often on an outpatient basis. Such changes in treatment not only increase the quality of life and initial outcomes for the patients, but also decrease the average length of each hospital stay, resulting in favorable claims development. As of December 31, 2019 and 2018, unearned premiums consisted primarily of discounted advance premiums on deposit. Discounted advance premiums are premiums on deposit from policyholders in conjunction with their purchase of certain Aflac Japan limited-pay insurance products. These advanced premiums are deferred upon collection and recognized as premium revenue over the contractual premium payment period. These advanced premiums represented 64% of the December 31, 2019 and 69% of the December 31, 2018 unearned premiums balances. As of December 31, 2019 and 2018, the largest component of the other policyholders' funds liability was the Company's annuity line of business in Aflac Japan. The Company's annuities have fixed benefits and premiums. These annuities represented 97% of other policyholders' funds liability at December 31, 2019 and 2018.

X
- References No definition available. + Details
Name: | us-gaap_InsuranceLossReservesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for liabilities related to future policy benefits and unpaid claims and claim adjustments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 40 -URI http://asc.fasb.org/subtopic&trid=2560295 + Details
Name: | us-gaap_LiabilityForFuturePolicyBenefitsAndUnpaidClaimsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration