Glossary of Terms Note:Referto“Non-GAAPandOtherFinancialMeasures”in ImpairedAssets:Mortgages, debt securities and other Section13oftheManagement’sDiscussionandAnalysisfor investment securities in default where there is no longer additional terms. reasonable assurance of collection. AccumulatedOtherComprehensiveIncome(AOCI):A In-Force:Refers to the policies that are currently active. separate component of shareholders’ equity which includes net InsuranceandInvestmentContractLiabilities:The amount unrealized gains and losses on available-for-sale (AFS) securities, of money set aside today, together with the expected future net unrealized gains and losses on derivative instruments premiums and investment income, that will be sufficient to designated within an effective cash flow hedge, and unrealized provide for future expected policyholder obligations and expenses foreign currency translation gains and losses. These items have while also providing some conservatism in the assumptions. been recognized in other comprehensive income and may be Expected assumptions are reviewed and updated annually. subsequently reclassified to net income. AOCI also includes LongTermCare(LTC)Insurance:Insurance coverage available remeasurement of pension and other post-employment plans and on an individual or group basis to provide reimbursement for real estate revaluation reserve. These items are recognized in medical and other services to the chronically ill, disabled, or other comprehensive income and will never be reclassified to net mentally challenged. income. NewBusinessStrain:The initial expense of writing an insurance Available-For-SaleFinancialAssets:Non-derivative financial policy that is incurred when the policy is written, and has an assets that are designated as available-for-sale or that are not immediate negative impact on the Company’s financial position. classified as loans and receivables, held-to-maturity investments, Over the life of the contract, future income (premiums, investment or held for trading. income, etc.) is expected to repay this initial outlay. BookValueperShare:Ratio obtained by dividing common PolicyholderExperience:The actual cost in a reporting period shareholders’ equity by the number of common shares from contingent events such as mortality, lapse and morbidity outstanding at the end of the period. compared to the expected cost in that same reporting period. CashFlowHedges:A hedge of the exposure to variability in cash ProvisionsforAdverseDeviation(PfAD):The amounts flows associated with a recognized asset or liability, a forecasted contained in the insurance and investment contract liabilities that transaction or a foreign currency risk in an unrecognized firm represent conservatism against potential future deterioration of commitment that is attributable to a particular risk and could best estimate assumptions. These PfADs are released into income affect reported net income. over time, and the release of these margins represents the future expected earnings stream. DeferredAcquisitionCosts(DAC):Costs directly attributable ReturnonCommonShareholders’Equity:A profitability to the acquisition of new business, principally agents’ measure that presents the net income available to common compensation, which are capitalized on the Company’s shareholders as a percentage of the average capital deployed to Consolidated Statements of Financial Position and amortized into earn the income. income over a specified period. GuaranteeValue:Typically within variable annuity products, the UniversalLifeInsurance:A form of permanent life insurance guarantee value refers to the level of the policyholder’s protected with flexible premiums. The customer may vary the premium account balance which is unaffected by market fluctuations. payment and death benefit within certain restrictions. The contract is credited with a rate of interest based on the return of a Hedging:The practice of making an investment in a market or portfolio of assets held by the Company, possibly with a minimum financial instrument for the purpose of offsetting or limiting rate guarantee, which may be reset periodically at the discretion potential losses from other investments or financial exposures. of the Company. DynamicHedging:A hedging technique which seeks to VariableAnnuity:Funds are invested in segregated funds (also limit an investment’s market exposure by adjusting the called separate accounts in the U.S.) and the return to the hedge as the underlying security changes (hence, contract holder fluctuates according to the earnings of the “dynamic”). underlying investments. In some instances, guarantees are provided. MacroHedging:An investment technique used to offset VariableUniversalLifeInsurance:A form of permanent life the risk of an entire portfolio of assets. A macro hedge insurance with flexible premiums in which the cash value and reflects a more broad-brush approach which is not possibly the death benefit of the policy fluctuate according to the frequently adjusted to reflect market changes. investment performance of segregated funds (or separate accounts). 236 | 2022AnnualReport | GlossaryofTerms