Deferred Policy Acquisition Costs
 12 Months Ended
Dec. 31, 2013
DeferredPolicyAcquisitionCostsDisclosures[Abstract]  
DeferredPolicyAcquisitionCostsTextBlock

4. DEFERRED POLICY ACQUISITION COSTS

The balances of and changes in deferred policy acquisition costs as of and for the years ended December 31, are as follows:

 

     2013 2012 2011
  (in thousands)
Balance, beginning of year $ 3,679,061 $ 2,545,600 $ 2,693,689
Capitalization of commissions, sales and issue expenses   822,075   1,171,759   1,096,301
Amortization- Impact of assumption and experience unlocking and true-ups   (9,167)   60,313   (25,242)
Amortization- All other   533,478   (21,345)   (947,961)
Change in unrealized investment gains and losses   167,880   (53,651)   9,973
Ceded DAC upon Coinsurance Treaty with PAR U and PURC (See Note 13)   (159,028)   (23,616)   (281,160)
Balance, end of year $ 5,034,299 $ 3,679,061 $ 2,545,600

Deferred acquisition costs include reductions in capitalization and amortization related to reinsurance expense allowances resulting from the coinsurance treaties with PARCC, PAR TERM, PAR U and PURC, reductions for the initial balance transferred to PAR U and PURC at inception of the coinsurance agreements and the pass through of the GUL business related to the acquisition of The Hartford Life company assumed from Prudential Insurance and subsequently retroceded to PAR U as discussed in Note 13.

Capitalization balances related to reinsurance amounted to $285 million, $249 million, and $208 million in 2013, 2012, and 2011, respectively. Amortization balances related to reinsurance amounted to $89 million, $180 million and $70 million in 2013, 2012, and 2011, respectively. Reinsurance impacts to the change in unrealized gains/(losses) resulted in a decrease in the deferred acquisition cost asset of $161 million in 2013 and increased the deferred acquisition cost asset $44 million and $147 million in 2012 and 2011, respectively.