We monitor the financial condition and operations of the issuers of securities rated below investment grade and of the issuers of certain investment grade securities on which we have concerns regarding credit quality. If we determine that an unrealized loss is other than temporary, the security is written down to its fair value. Beginning in 2009, a portion of the write down attributable to non-credit factors is recognized in accumulated other comprehensive income (loss). See additional details regarding the non-credit portion of the write downs and our methodology for evaluating investments for other-than-temporary impairment in Notes 1 and 2 to our consolidated financial statements.
The decrease in amortization of deferred sales inducements in 2010 is primarily due to decreased surrender activity from the EquiTrust Life independent distribution channel and unlocking. The increase in amortization of deferred sales inducements in 2009 was primarily due to the impact of operating adjustments, unlocking and the impact of increased surrender activity from the EquiTrust Life independent distribution channel. Amortization of deferred sales inducements on interest sensitive and index products, excluding the impact of operating adjustments and unlocking, totaled $37.0 million in 2010, $46.1 million in 2009 and $34.7 million in 2008. See the "Impact of Operating Adjustments on FBL Net Income (Loss)" and "Impact of Unlocking" sections above for additional details on these items.
The changes in the individual deferred annuity weighted average yield on cash and invested assets are primarily attributable to the cost of our interest rate swap program which totaled $2.6 million in 2010, $4.8 million in 2009 and $2.5 million in 2008 and fees from bond calls, tender offers, mortgage loan prepayments and the change of net discount accretion on mortgage and asset-backed securities totaling $0.6 million in 2010, $1.4 million in 2009 and $0.9 million in 2008. See "Market Risks of Financial Instruments" and Note 3 to our consolidated financial statements for additional details on our interest rate swaps. The decreases in the weighted average interest crediting rate are due to decreases in the interest crediting rates on a significant portion of our annuity portfolio during 2010 and 2009.
General expenses decreased $6.1 million in 2010 due to cost saving initiatives in 2009 and changes in expense allocations between segments. Death benefits in excess of related account values on variable policies decreased 17.7% to $13.2 million in 2010 and decreased 1.7% to $16.0 million in 2009. Excluding the impact of unlocking, amortization of deferred policy acquisition costs increased $7.1 million in 2010 and decreased $12.7 million in 2009 primarily due to the impact of separate account performance. This was partially offset by a decrease in amortization from unlocking of $1.2 million in 2010 and an increase of $1.9 million in 2009 due to updating the assumptions for mortality and volume of business in force.
We held one collateralized debt obligation at December 31, 2010, which is backed by credit default swaps with no home equity exposure. As discussed in Note 1, we began reporting this security at fair value with changes in market value reflected as derivative income or loss within the consolidated statements of operations in accordance with an accounting change adopted in the third quarter of 2010.
Deferred policy acquisition costs decreased 26.3% to $812.0 million and deferred sales inducements decreased 28.0% to $259.1 million at December 31, 2010, primarily due to the impact of the change in unrealized appreciation/depreciation on fixed maturity securities. The impact of unrealized appreciation/depreciation on fixed maturity securities decreased deferred policy acquisition costs $90.7 million at December 31, 2010 and increased deferred policy acquisition costs $196.1 million at December 31, 2009; and increased deferred sales inducements $1.3 million at December 31, 2010 and $96.0 million at December 31, 2009. Assets held in separate accounts increased 7.3% to $753.1 million primarily due to market appreciation on the underlying investment portfolios, partially offset by excess withdrawals over deposits. Other assets increased 15.6% to $72.2 million primarily due to increases in receivables for certain reinsurance contracts and property and equipment.
Much of the historical surrender activity was driven by independent agents to transfer the business to another company for an additional commission. Many of the agents inclined to use such sales techniques already transferred the business of customers willing to exchange their contracts.
The Life Companies' cash inflows primarily consist of premium income, deposits to policyholder account balances, income from investments, sales, maturities and calls of investments, repayments of investment principal and proceeds from call option exercises. In addition, EquiTrust Life historically had received capital contributions from FBL Financial Group, Inc. to help fund its growth or replenish capital. The Life Companies' cash outflows are primarily related to withdrawals of policyholder account balances, investment purchases, payment of policy acquisition costs, policyholder benefits, income taxes, dividends and current operating expenses. In addition, in 2009 EquiTrust Life had a net cash payment of $121.6 million for the reinsurance recapture transaction discussed above in "Net Income (Loss) Attributable to FBL Financial Group, Inc." Life insurance companies generally produce a positive cash flow which may be measured by the degree to which cash inflows are adequate to meet benefit obligations to policyholders and normal operating expenses as they are incurred. The remaining cash flow is generally used to increase the asset base to provide funds to meet the need for future policy benefit payments and for writing new business. The Life Companies' continuing operations and financing activities relating to interest sensitive and index products provided (used) funds totaling $654.0 million in 2010, ($56.0) million in 2009 and $1,370.5 million in 2008.
The ability of the Life Companies to pay dividends to FBL Financial Group, Inc. is limited by law to earned profits (statutory unassigned surplus) as of the date the dividend is paid, as determined in accordance with accounting practices prescribed by insurance regulatory authorities of the State of Iowa. During 2011, the maximum amount legally available for distribution to FBL Financial Group, Inc., without further regulatory approval, is $65.1 million from Farm Bureau Life and $43.8 million from EquiTrust Life.
FBL Financial Group, Inc. expects to rely on available cash resources, management fee income and dividends from Farm Bureau Life to make dividend payments to its stockholders and interest payments on its debt. The parent company had available cash and investments totaling $28.5 million at December 31, 2010. We anticipate that FBL Financial Group, Inc. will receive dividends totaling $20.0 million from Farm Bureau Life and $3.5 million from other non-life insurance subsidiaries in 2011. As discussed in Note 7 to our consolidated financial statements, we have $100.0 million of Senior Notes with affiliates that mature in November 2011. We are evaluating various alternatives to satisfy this obligation, including refinancing with affiliates and/or third parties. As of December 31, 2010, we had no material commitments for capital expenditures.
In accordance with GAAP, premiums and considerations received for interest sensitive and index products, such as ordinary annuities and universal life insurance, are reflected as increases in liabilities for policyholder account balances and not as revenues. Revenues reported for these products consist of policy charges for the cost of insurance, administration charges, amortization of policy initiation fees and surrender charges assessed against policyholder account balances. Surrender benefits paid relating to these products are reflected as decreases in liabilities for policyholder account balances and not as expenses. The Life Companies receive investment income earned from the funds deposited into account balances, a portion of which is passed through to the policyholders in the form of interest credited. For index annuities, proceeds from call options are earned from a portion of the funds deposited, which are passed through to the contract holders in the form of index credits. Index credits and interest credited to policyholder account balances and benefit claims in excess of policyholder account balances are reported as expenses in our consolidated financial statements.
Effective January 1, 2010, we adopted guidance issued by the FASB that seeks to improve financial reporting by enterprises involved with variable interest entities (VIEs) by changing the accounting standards for consolidation. This guidance addresses (1) the effects on certain provisions of U.S. generally accepted accounting principles (GAAP) as a result of the elimination of the qualifying special-purpose entity concept, and (2) constituent concerns about the accounting and disclosures that do not always provide timely and useful information about an enterprise's involvement in a VIE. This guidance identifies the primary beneficiary of a VIE as the enterprise with the power to direct the VIE's operations and the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. This guidance requires an ongoing assessment of whether an enterprise is the primary beneficiary of the VIE. The adoption of this guidance did not have any impact on our consolidated financial statements.
We monitor the financial condition and operations of the issuers of fixed maturities and equity securities that could potentially have a credit impairment that is other than temporary. In determining whether or not an unrealized loss is other than temporary, we review factors such as:
After an other-than-temporary write down of all equity securities and any fixed maturity securities with a credit-only impairment, the cost basis is not adjusted for subsequent recoveries in fair value. For fixed maturity securities for which we can reasonably estimate future cash flows after a write down, the discount or reduced premium recorded, based on the new cost
Future policy benefit reserves for interest sensitive products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Future policy benefit reserves for index annuities are equal to the sum of the fair value of the embedded index options, accumulated index credits and the host contract reserve computed using a method similar to that used for interest sensitive products. Fair value of the index options are calculated using discounted cash flow valuation techniques based on current interest rates adjusted to reflect our credit risk and an additional provision for adverse deviation. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policy account balances.
We have agreed that we will not pay dividends on the Class A or Class B Common Stock, nor on the Series B Preferred Stock, if we are in default of the Subordinated Deferrable Interest Note Agreement Dated May 30, 1997 with FBL Financial Group Capital Trust. We are compliant with all terms of this agreement at December 31, 2010. See Note 7, "Credit Arrangements," for additional information regarding these agreements.
Corporate securities include certain hybrid preferred securities with a carrying value of $239.8 million at December 31, 2010 and $208.9 million at December 31, 2009. Corporate securities also include redeemable preferred stock with a carrying value of $5.2 million at December 31, 2010 and $4.7 million at December 31, 2009.
payments with a carrying value of $1.9 million at December 31, 2010 and one with a carrying value of $1.5 million at December 31, 2009. We discontinued the accrual of interest on both of these 90 day past due loans.
We have entered into interest rate swaps to manage interest rate risk associated with a portion of our flexible premium deferred annuity contracts. Under the interest rate swaps, we pay a fixed rate of interest and receive a floating rate of interest on a notional amount which totaled $50.0 million at December 31, 2010 and $100.0 million at December 31, 2009. These interest rate swaps effectively fix the interest crediting rate on a portion of our flexible premium deferred annuity contract liabilities, thereby hedging our exposure to increases in market interest rates, but are not accounted for as effective hedges as the only permitted benchmarks for cash flow hedges are the risk-free rate and rates based on the LIBOR swap curve. The interest rate settlements decreased derivative income $2.6 million in 2010, $4.8 million in 2009 and $2.5 million in 2008. The change in unrealized loss on these swaps increased derivative income $1.9 million in 2010, $3.3 million in 2009, and decreased derivative income $1.4 million in 2008. In 2008, we experienced nonperformance by a counterparty on an interest rate swap agreement that was originally scheduled to mature on December 1, 2010. We terminated this agreement and realized a loss totaling $0.5 million.
Level 1 - Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments included in Level 1 are listed equities, mutual funds, money market funds, non-interest bearing cash and U.S. Treasury securities.
Level 3 - Pricing inputs are unobservable for the financial instrument and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments in this category include non-binding broker and internally priced mortgage or other asset-backed securities and other publicly traded issues, private corporate securities and index annuity embedded derivatives.
We participate with several affiliates and an unaffiliated organization in various multiemployer defined benefit plans. These plans cover substantially all our employees and the employees of the other participating companies who have attained age 21 and one year of service. Benefits are based on years of service and the employee's compensation. One of these plans provides supplemental pension benefits to employees with salaries and/or pension benefits in excess of the qualified plan limits imposed by federal law. Net periodic pension cost of the plans is allocated between participants on a basis of time incurred by the respective employees for each employer. Such allocations are reviewed annually.