Costs that vary with, and are related primarily to, the production of new business have been deferred to the extent that they are deemed recoverable. Such costs include commissions, certain costs of policy issue and underwriting, and certain agency expenses. Similarly, any amounts assessed as initiation fees or front-end loads are recorded as unearned revenue. The Company tests the recoverability of its deferred policy acquisition costs, or DAC, quarterly with a model that uses data such as market performance, lapse rates and expense levels. We amortize DAC on term life and long-term care insurance ratably with premiums. We amortize DAC on our annuity products and retail life insurance, other than term life insurance policies, based on a percentage of the estimated gross profits over the life of the policies, which are generally twenty years for annuities and thirty years for life policies. Our estimated gross profits are computed based on assumptions related to the underlying policies including mortality, lapse, expenses, and asset growth rates. We amortize DAC and unearned revenue on these policies such that the percentage of gross profits to the amount of DAC and unearned revenue amortized is constant over the life of the policies.
process, a quarterly review is made of the entire fixed maturity portfolio to assess credit quality, including a review of all impairments with the Life Company's Committee of Finance. See "Management's Discussion and Analysis of Financial Condition and Analysis of Financial Condition and Results of Operations--General Account Investments" section of this document for a more detailed discussion of this process and the judgments used therein.
Other revenue increased 30.0%, or $55.7 million, from the prior year. The increase in other revenue is due to the Signature Fruit transaction in 2001, and is offset by Signature Fruit's expenses in other operating costs and expenses. The increase in revenues is due to the inclusion of the results of Signature Fruit for the nine months subsequent to the transaction in 2001. Signature Fruit is included in other revenue for all of 2002. Signature Fruit, a subsidiary of the Company as of April 2, 2001, acquired certain assets and assumed certain liabilities out of bankruptcy proceedings of Tri Valley Growers, Inc., a cooperative association. The revenues and expenses of Signature Fruit are included in the Company's income statement in other revenue and other operating costs and expenses, respectively. Signature Fruit generated $235.9 million and $177.8 million in revenue in the years ended December 31, 2002 and 2001, respectively.
Benefits and expenses decreased 3.6%, or $48.9 million, from the prior year, driven by lower benefits to policyholders and partially offset by higher operating costs and expenses. Benefits to policyholders declined 8.7%, or $102.8 million, in the current year primarily due to lower interest credited on account balances for spread-based products. Spread-based interest credited decreased 5.9%, or $60.5 million, from the prior year. This decrease resulted from the decline in the average interest credited rate on account balances for spread-based products as liabilities with floating rates reset and new business is added at current market rates. The average interest credited rate fell to 4.22% from 4.85% in the prior year. Partially offsetting the decrease in benefits to policyholders was an increase in other operating costs and expenses of 44.5%, or $59.8 million, from the prior year. This increase was primarily due to increased investment income transferred on reinsurance ceded combined with higher pension and compensation costs. Dividends to policyholders decreased 13.6%, or $6.0 million, from the prior year. The Segment's effective tax rate was 31.8% compared to 33.0% in the prior year.
The Company receives Federal income tax benefits from certain investments made through variable interest entities.