Harbinger Group Inc. -SEC Filings

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SEC Filings

10-K

HRG GROUP, INC. filed this Form 10-K on 11/23/2016

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The following table summarizes FGL’s deferred annuity account values and surrender charge protection as of September 30, 2016 (dollars in millions):



SURRENDER CHARGE EXPIRATION BY YEAR:	Fixed and Fixed-Index Annuities Account Value		Percent of Total		Weighted Average Surrender Charge
Out of surrender charge	$	2,393.8	15.7	%	—	%
2016	202.6		1.3	%	3.3	%
2017 - 2018	2,441.0		16.0	%	5.0	%
2019 - 2020	1,769.4		11.6	%	7.2	%
2021 - 2022	1,963.8		12.9	%	8.5	%
Thereafter	6,479.1		42.5	%	10.6	%
	$	15,249.7	100.0	%

The policyholder may elect to take the proceeds of the surrender either in a single payment or in a series of payments over the life of the policyholder or for a fixed number of years (or a combination of these payment options). In addition to the foregoing withdrawal rights, policyholders may also elect to have additional withdrawal rights by purchasing a GMWB. These riders provide a GMWB, regardless of index performance, for the life of the contract. However, the benefit may vary based on performance.

Immediate Annuities

FGL also sells single premium immediate annuities (or “SPIAs”), which provide a series of periodic payments for a fixed period of time or for the life of the policyholder, according to the policyholder’s choice at the time of issue. The amounts, frequency and length of time of the payments are fixed at the outset of the annuity contract. SPIAs are often purchased by persons at or near retirement age who desire a steady stream of payments over a future period of years.

The following table presents the deposits (also known as “sales”) on annuity policies issued by FGL for the fiscal years ended September 30, 2016, 2015, and 2014 as well as reserves required by accounting principles generally accepted in the United States of America (“U.S. GAAP Reserves”) as of September 30, 2016, 2015 and 2014 (dollars in millions):



	September 30, 2016				September 30, 2015				September 30, 2014
Products	Deposits on Annuity Policies		U.S. GAAP Reserves		Deposits on Annuity Policies		U.S. GAAP Reserves		Deposits on Annuity Policies		U.S. GAAP Reserves
Fixed Indexed Annuities	$	1,860.5	$	13,148.3	$	2,184.7	$	12,093.5	$	1,451.4	$	10,766.6
Fixed Rate Annuities	539.1		3,565.6		210.5		3,248.7		707.9		3,192.3
Single Premium Immediate Annuities	28.4		2,917.4		15.5		2,956.4		9.7		3,201.6
Total	$	2,428.0	$	19,631.3	$	2,410.7	$	18,298.6	$	2,169.0	$	17,160.5

Life Insurance

FGL currently offers IUL insurance policies and has previously sold term and whole life insurance products. Holders of universal life insurance policies earn returns on their policies which are credited to the policyholder’s cash value account. The insurer periodically deducts its expenses and the cost of life insurance protection from the cash value account. The balance of the cash value account is credited interest at a fixed rate or returns based on the performance of a market index, or both, at the option of the policyholder, using a method similar to that described above for FIAs.

Almost all of the life insurance policies in force, except for the return of premium benefits on term life insurance products, are subject to an arrangement with Wilton Reassurance Company (“Wilton Re”).

As of September 30, 2016, the distribution of the retained IUL account values by cap rate and by strategy was as follows (dollars in millions):



Cap rate	2.5% - 5%		5% - 7.5%		7.5% - 10%		10% - 12.5%		12.5% +		Total
1 year annual point-to-point, Gold Index	$	—	$	—	$	—	$	—	$	23.3	$	23.3
1 year monthly point-to-point, S&P Index	32.2		—		—		—		—		32.2
1 year annual point-to-point with 100% par rate, S&P Index	12.9		6.4		25.5		104.0		71.5		220.3
1 year annual point-to-point with 140% par rate, S&P Index	2.5		3.2		15.0		—		—		20.7
Total	$	47.6	$	9.6	$	40.5	$	104.0	$	94.8	$	296.5

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