Ryan Krueger: Okay, got it. Thank you.
Operator: And thank you. And one moment for our next question. And our next question comes from Elyse Greenspan from Wells Fargo. Your line is now open.
Elyse Greenspan: Thanks, Tom. Good morning. My first question was on, I guess, sales — Shield sales trended up in the quarter and then within annuities — fixed annuity sales did trend down after growing in the first part of this year. So just looking for some incremental color on what you’re seeing in the sales side within annuities?
Myles J. Lambert: Hey, good morning Elyse, its Myles. I’m happy to take that one. So first off I will start with Shield, what I would say is it’s a much better environment for our Shield sales than it was, this time last year. Consumers are looking to get back into the market with some level of protection. So Shield obviously plays very well in that market. Look, we have a competitive product, we have a very strong distribution franchise, and we continue to evolve our product portfolio. Last year, we introduced Shield Level Pay Plus. And this year, we introduced a new strategy on our Shield product called [indiscernible]. And all those factors are helping us drive sales. As it relates to FRA sales. We’re very pleased with our level of FRA sales right now.
Again, we have a competitive product with a strong distribution franchise for that product category, as well. And we gave guidance earlier this year, we expected FRA sales to be down after a record year last year. And frankly, what we’re starting to see is some of those flows shifting back to our Shield product and we’re quite pleased with that.
Elyse Greenspan: Thank you and then add — do you have a sense just on VII, where Q4 could trend relative to normal levels?
John L. Rosenthal: Elyse, this is John. I don’t think we want to get in the habit of predicting near-term alternative returns. It’s generally a losing proposition. But having said that, if you think about the negative equity returns in Q3, and the lag nature of reporting, it would not be unreasonable to suggest that next quarters return is going to be below the midpoint of our long-term expectations.
Elyse Greenspan: Okay, thank you.
Operator: And thank you. And one moment for our next question. And our next question comes from Tom Gallagher from Evercore ISI. Your line is now open.
Tom Gallagher: Good morning. Hey Ed, just a question on DTA that you mentioned there was a write down and there’s only 100 million on the balance sheet. That’s an admitted asset. Now, how much is the off balance sheet unadmitted DTA at this point? And can you help us think through the scenario under which you would be able to put that back on the balance sheet, I assume very positive earnings over time would do it but any color on that?
Edward Spehar: Hey, good morning, Tom. So the tax benefit is, I believe it’s around $1.5 billion right now. So it’s a very large number relative to what gets reflected on our balance sheet. I think the important point is when you look at the cash flows that we put out, the 10-year view, we are assuming that we are using those tax attributes. So the fact that they’re not on the balance sheet today, does not mean that we don’t expect that over this long-term period of time that we will use those attributes.
Tom Gallagher: Got you. Yeah, I was thinking more from an overall RBC perspective, how big of a negative adjustment that is right now and how that could like replenish or build excess capital over time, but I hear you on — so essentially, the net present value of it is a much higher number than $100 million, is that fair based on what you were just describing?
Edward Spehar: I would say absolutely.
Tom Gallagher: Okay. And then second question just on, I know, you guys have had a bunch of reinsurance rate increases that were either pushed through or you did a recapture. Is that pretty much over or do you have any more in the pipeline?
Eric T. Steigerwalt: I think it would be difficult to say that it’s over. But we have had recaptures over time. You’re right and I would think that it’s possible that could happen in the future, but I don’t see anything to give you a preview of at this point.
Tom Gallagher: Okay. And then if I could slip in one final one, can you on the balance sheet review, I think we can all agree that a modest positive under the new accounting framework is a relief for anyone, can you give some quantification for what the gross benefit was for the 25 basis point interest rate change, was that a big number or is that all so fairly modest, if you were to just isolate that part of it?
Edward Spehar: Right, sorry Tom, can you repeat isolate the part — shaded with.
Tom Gallagher: Sure the 25 basis point increase in long-term interest rate assumptions, if you were to isolate — because you mentioned there were some offsetting negatives for policyholder behavior on Life and annuities. I just want to get a sense for the quantum of the 25 basis point favorable item and how much that had no other adjustments been taken, are you able to give some dementia [Multiple Speakers]? Okay, yeah, thanks.
Edward Spehar: That was — that impact was in the runoff segment and it was more than the over the total benefit that you saw on runoff. So the runoff was, I think it was $94 million after tax. So you can assume that the rate impact was more than that. Now, the other thing I would just point out, because I think this has come up in the past, there was no change of any substance in our laps assumptions for ULSG, which resides in the runoff segment. And when I say no change, I’m considering like $20 million on a $9 billion block of business. So it was insignificant.
Tom Gallagher: Got you, that’s helpful. Thanks.
Operator: And thank you. And one moment for our next question. And our next question comes from Suneet Kamath from Jeffries. Your line is now open.
Suneet Kamath: Thanks. Good morning. So just to come back to RBC just to make sure I have the numbers, right. So we should be thinking about $200 million sort of good guided attack in 4Q from reinsurance. And then I think you mentioned 300 million assuming a reversal for 1Q from the mean reversion parameter, so I just want to make sure that’s right? And then relatedly is that mean reversion parameter interest rate assumption sort of locked in at this point, like do you guys know what that is or is it still being calculated?
Edward Spehar: Hey, good morning Suneet. So a few questions in there. So it is not locked in because we have to wait to see what the month end rates are for November and December. But I can tell you that we would get it based on where rates are today, even after having come down from where they were at the end of the third quarter. So there’s a reasonable amount of cushion between rates, where rates are today for the 20 year, and where they would need to go to in the last two months for us to still get it. I would point out that if for some reason rates dropped a lot, and we did not get that incremental, we would also have some meaningful hedge gains in our portfolio. So what you saw happened in the third quarter, you’d see kind of the opposite occur in the fourth quarter.
