The Prudential Series Fund
The Prudential Series Fund
The Prudential Series Fund
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Pruco Life Insurance Company<br />
Notes to Consolidated Financial Statements<br />
3. INVESTMENTS (continued)<br />
Activity in the allowance for losses for all commercial loans, for the years ended December 31, is as follows:<br />
2008 2007 2006<br />
(in thousands)<br />
Allowance for losses, beginning of year $ 4,517 $ 3,438 $ 2,270<br />
Addition of allowance for losses 3,656 1,079 1,168<br />
Allowance for losses, end of year $ 8,173 $ 4,517 $ 3,438<br />
Net Unrealized Investment Gains (Losses)<br />
Net unrealized investment gains (losses) on securities available for sale are included in the Consolidated Statements of Financial Position as a<br />
component of ―Accumulated other comprehensive income (loss), net of tax.‖ Changes in these amounts include reclassification adjustments to<br />
exclude from ―Accumulated other comprehensive income (loss), net of tax‖ those items that are included as part of ―Net income‖ for a period<br />
that also had been part of ―Accumulated other comprehensive income (loss), net of tax‖ in earlier periods. <strong>The</strong> amounts for the years ended<br />
December 31, net of taxes, are as follows:<br />
Net Unrealized<br />
Gains (Losses)<br />
on Investments<br />
Deferred<br />
Policy<br />
Acquisition<br />
Costs<br />
Policyholders’<br />
Account<br />
Balances<br />
Deferred<br />
Income Tax<br />
(Liability)<br />
Benefit<br />
Accumulated<br />
Other<br />
Comprehensive<br />
Income (Loss)<br />
Related to Net<br />
Unrealized<br />
Investment<br />
Gains (Losses)<br />
(in thousands)<br />
$ 10,105 $ (11,010) $ 18,600<br />
Balance, January 1, 2006 $ 47,049 $ (27,544)<br />
Net investment gains on investments arising<br />
during the period 76,107 - - (27,198) 48,909<br />
Reclassification adjustment for gains included<br />
in net income (59,142) - - 20,700 (38,442)<br />
Impact of net unrealized investment (losses) on<br />
deferred policy acquisition costs - (10,546) - 3,691 (6,855)<br />
Impact of net unrealized investment losses on<br />
Policyholders’ account balances - - 4,435 (1,552) 2,883<br />
Balance, December 31, 2006 $ 64,014 $ (38,090) $ 14,540 $ (15,369) $ 25,095<br />
Net investment (losses) on investments arising<br />
during the period (25,373) - - 8,279 (17,094)<br />
Reclassification adjustment for (losses)<br />
included in net income 5,319 - - (1,862) 3,457<br />
Impact of net unrealized investment gains on<br />
deferred policy acquisition costs<br />
- 13,071 - (4,575) 8,496<br />
Impact of net unrealized investment gains on<br />
Policyholders’ account balances<br />
- - (4,182) 1,464 (2,718)<br />
Balance, December 31, 2007 $ 43,960 $ (25,019) $ 10,358 $ (12,063) $ 17,236<br />
B-17
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