we have on average 0.60 % of room to reduce rates before we would reach minimum guaranteed rates on our entire book of business . our investment spread in 2013 and 2012 ( see our business and profitability ) was impacted by shortfalls in investment income from excess liquidity resulting from a lag in the reinvestment of proceeds of government agency bonds called for redemption . the callable government agency securities have been a cornerstone of our investment portfolio since our formation . through the years they have provided acceptable yields that met our spread requirements without any risk-based capital charges . we went through several cycles of calls on these securities and each time we have reinvested a portion of the call redemption proceeds into new callable government agency securities . this kept cash balances low but perpetuated the call risk . in 2011 , we had $ 3.1 billion in such securities called and purchased $ 3.7 billion for a $ 600 million net purchase of callable government agency securities . however , in 2012 , we only purchased $ 948.9 million compared to $ 4.3 billion in calls . consequently , we managed excess cash and other short-term investments throughout 2012 and into the third quarter of 2013 when we became fully invested . see results of operations — net investment income for additional information regarding our excess liquidity . in 2013 , we issued $ 400 million of senior unsecured notes due 2021 ( the `` 2021 notes `` ) and retired $ 184 million aggregate principal amount of three convertible note issues . the total consideration paid to retire the convertible notes included $ 219 million of cash and 5.5 million shares of our common stock . in the short-term , these convertible debt retirements reduced net income and book value per share . however , these retirements are expected to provide long-term benefit by eliminating potential additional dilution from further increases in our stock price . at december 31 , 2013 , we had $ 206 million of net proceeds remaining from the 2021 notes offering which we intend to use to retire the $ 160 million aggregate principal amount of convertible notes that were outstanding at december 31 , 2013. the form and timing of additional convertible debt retirements will be dependent upon market conditions and other factors and there can be no assurance that any such transactions will be completed prior to the december 2014 call date for our 5.25 % contingent convertible senior notes due 2029 ( the `` 2029 notes `` ) or the september 2015 maturity date for our 3.50 % convertible senior notes due 2015 ( the `` 2015 notes `` ) . 19 our business and profitability we specialize in the sale of individual annuities ( primarily deferred annuities ) and , to a lesser extent , we also sell life insurance policies . under u.s. generally accepted accounting principles ( `` gaap `` ) , premium collections for deferred annuities are reported as deposit liabilities instead of as revenues . similarly , cash payments to policyholders are reported as decreases in the liabilities for policyholder account balances and not as expenses . sources of revenues for products accounted for as deposit liabilities are net investment income , surrender and other charges deducted from the account balances of policyholders , net realized gains ( losses ) on investments and changes in fair value of derivatives . components of expenses for products accounted for as deposit liabilities are interest sensitive and index product benefits ( primarily interest credited to account balances ) , changes in fair value of embedded derivatives , amortization of deferred sales inducements and deferred policy acquisition costs , other operating costs and expenses and income taxes . our business model contemplates continued growth in invested assets and operating income while maintaining a high quality investment portfolio that will not experience significant losses from impairments of invested assets . growth in invested assets is predicated on a continuation of our high sales achievements of the last five years while at the same time maintaining a high level of retention of the funds received . the economic and personal investing environments continue to be conducive for high sales levels as retirees and others look to put their money in instruments that will protect their principal and provide them with consistent cash flow sources in their retirement years . we are committed to maintaining a high quality investment portfolio with limited exposure to below investment grade securities and other riskier assets . earnings from products accounted for as deposit liabilities are primarily generated from the excess of net investment income earned over the interest credited or the cost of providing index credits to the policyholder , or the `` investment spread . `` our investment spread is summarized as follows : replace_table_token_6_th the cost of money for fixed index annuities and average crediting rates for fixed rate annuities are computed based upon policyholder account balances and do not include the impact of amortization of deferred sales inducements . see critical accounting policies—deferred policy acquisition costs and deferred sales inducements . with respect to our fixed index annuities , the cost of money includes the average crediting rate on amounts allocated to the fixed rate strategy , expenses we incur to fund the annual index credits and where applicable , minimum guaranteed interest credited . proceeds received upon expiration or early termination of call options purchased to fund annual index credits are recorded as part of the change in fair value of derivatives , and are largely offset by an expense for interest credited to annuity policyholder account balances . see critical accounting policies—policy liabilities for fixed index annuities and financial condition—derivative instruments . story_separator_special_tag due to the partial unwind agreements we entered into , the amount of the change in fair value of the 2015 notes hedges was $ 3.8 million more than the amount of the change in the related embedded derivative liability for the year ended december 31 , 2013. see notes 5 and 9 to our audited consolidated financial statements for a discussion of the unwind agreements , the 2015 notes hedges and the 2015 notes embedded derivative liability . the 2015 warrants were to be settled in shares of our common stock and accordingly were classified as equity in our consolidated balance sheets , and the changes in fair value of the 2015 warrants were not recognized in the consolidated financial statements . in conjunction with the retirement of a portion of the 2015 notes and related early termination of a corresponding portion of the 2015 notes hedges , a corresponding amount of the 2015 warrants were also terminated prior to maturity and settled in cash rather than shares of our common stock . accordingly , changes in the fair value of the 2015 warrants that were terminated in 2013 prior to maturity from the dates the early termination agreements were executed through the dates of settlement are included in the consolidated statement of operations for the year ended december 31 , 2013. see notes 5 and 9 to our audited consolidated financial statements for a discussion of the 2015 warrants . 24 net realized gains ( losses ) on investments , excluding otti losses include gains and losses on the sale of securities and impairment losses on mortgage loans on real estate which fluctuate from year to year due to changes in the interest rate and economic environment and the timing of the sale of investments , as well as gains ( losses ) recognized on real estate owned due to any sales and impairments on long-lived assets . the components of net realized gains ( losses ) on investments are set forth in the table that follows : replace_table_token_13_th losses in 2013 were realized primarily due to strategies to reposition the fixed maturity security portfolio that resulted in improved net investment income , risk or duration profiles as they pertain to our asset liability management . two corporate issues were sold at a loss in 2013 due to our fundamental , long-term concern with the issuer 's ability to meet its future financial obligations . see note 4 to our audited consolidated financial statements for additional discussion of allowance for credit losses recognized on mortgage loans on real estate . net otti losses recognized in operations decreased to $ 6.2 million in 2013 and decreased to $ 14.9 million in 2012 from $ 34.0 million in 2011 . the impairments recognized in 2012 and 2011 were primarily on residential mortgage backed securities and were principally due to changes of assumptions regarding loss severity of a number of securities we hold which affected our ongoing analysis of expected cash flow projections . see financial condition—investments and note 3 to our audited consolidated financial statements for additional discussion of write downs of securities for other than temporary impairments . insurance policy benefits and changes in future policy benefits decreased 35 % to $ 53.1 million in 2013 and 29 % to $ 81.5 million in 2012 from $ 115.3 million in 2011 . these expenses include amounts for life insurance policies and life contingent single premium immediate annuities including life contingent supplemental contracts issued upon annuitization of deferred annuities . amounts for life insurance policies have remained consistent throughout the periods presented while amounts related to life contingent single premium immediate annuities ( $ 46.1 million , $ 73.4 million and $ 107.4 million in 2013 , 2012 and 2011 , respectively ) have decreased over the periods primarily because the related premiums have decreased as discussed above under premiums and other considerations . interest sensitive and index product benefits increased 57 % to $ 1.3 billion in 2013 and 4 % to $ 808.5 million in 2012 from $ 775.1 million in 2011 . the components of interest sensitive and index product benefits are summarized as follows : replace_table_token_14_th the amount of index credits were attributable to changes in the appreciation of the underlying indices ( see discussion above under change in fair value of derivatives ) and the amount of funds allocated by policyholders to the respective index options . total proceeds received upon expiration of the call options purchased to fund the annual index credits were $ 910.4 million , $ 447.2 million and $ 454.2 million for the years ended december 31 , 2013 , 2012 and 2011 , respectively . the decrease in interest credited for 2013 was due to a decrease in the average rate credited to the annuity liabilities outstanding receiving a fixed rate of interest . the increase in interest credited for 2012 was due to an increase in the average amount of annuity liabilities outstanding receiving a fixed rate of interest . the average amount of annuity liabilities outstanding 25 ( net of annuity liabilities ceded under coinsurance agreements ) increased 14 % to $ 29.5 billion in 2013 and 16 % to $ 26.0 billion in 2012 from $ 22.4 billion in 2011 . the increases in benefits recognized for lifetime income benefit riders were due to increases in the number of policies with lifetime income benefit riders and correlates to the increase in fees discussed in annuity product charges . amortization of deferred sales inducements increased 190 % to $ 253.1 million in 2013 and 21 % to $ 87.2 million in 2012 from $ 71.8 million in 2011 . in general , amortization of deferred sales inducements has been increasing each year due to growth in our annuity business and the deferral of sales inducements incurred with respect to sales of premium bonus annuity products . bonus products represented 97 % , 97 % and 95 % of

liquidity of parent company we , as the parent company , are a legal entity separate and distinct from our subsidiaries , and have no business operations . we need liquidity primarily to service our debt , including the senior notes , convertible senior notes and subordinated debentures issued to subsidiary trusts , pay operating expenses and pay dividends to stockholders . our assets consist primarily of the capital stock and surplus notes of our subsidiaries . accordingly , our future cash flows depend upon the availability of dividends , surplus note interest payments and other statutorily permissible payments from our subsidiaries , such as payments under our investment advisory agreements and tax allocation agreement with our subsidiaries . these sources provide adequate cash flow to us to meet our current and reasonably foreseeable future obligations and we expect they will be adequate to fund our parent company cash flow requirements in 2014. the ability of our life insurance subsidiaries to pay dividends or distributions , including surplus note payments , will be limited by applicable laws and regulations of the states in which our life insurance subsidiaries are domiciled , which subject our life insurance subsidiaries to significant regulatory restrictions . these laws and regulations require , among other things , our insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay . currently , american equity life may pay dividends or make other distributions without the prior approval of the iowa insurance commissioner , unless such payments , together with all other such payments within the preceding twelve months , exceed the greater of ( 1 ) american equity life 's net gain from operations for the preceding calendar year , or ( 2 ) 10 % of american equity life 's statutory capital and surplus at the preceding december 31. for 2014 , up to $ 195.0 million can be distributed as dividends by american equity life without prior approval of the iowa insurance commissioner .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity of parent company we , as the parent company , are a legal entity separate and distinct from our subsidiaries , and have no business operations . we need liquidity primarily to service our debt , including the senior notes , convertible senior notes and subordinated debentures issued to subsidiary trusts , pay operating expenses and pay dividends to stockholders . our assets consist primarily of the capital stock and surplus notes of our subsidiaries . accordingly , our future cash flows depend upon the availability of dividends , surplus note interest payments and other statutorily permissible payments from our subsidiaries , such as payments under our investment advisory agreements and tax allocation agreement with our subsidiaries . these sources provide adequate cash flow to us to meet our current and reasonably foreseeable future obligations and we expect they will be adequate to fund our parent company cash flow requirements in 2014. the ability of our life insurance subsidiaries to pay dividends or distributions , including surplus note payments , will be limited by applicable laws and regulations of the states in which our life insurance subsidiaries are domiciled , which subject our life insurance subsidiaries to significant regulatory restrictions . these laws and regulations require , among other things , our insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay . currently , american equity life may pay dividends or make other distributions without the prior approval of the iowa insurance commissioner , unless such payments , together with all other such payments within the preceding twelve months , exceed the greater of ( 1 ) american equity life 's net gain from operations for the preceding calendar year , or ( 2 ) 10 % of american equity life 's statutory capital and surplus at the preceding december 31. for 2014 , up to $ 195.0 million can be distributed as dividends by american equity life without prior approval of the iowa insurance commissioner .
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 Suspicious Activity Report : we have on average 0.60 % of room to reduce rates before we would reach minimum guaranteed rates on our entire book of business . our investment spread in 2013 and 2012 ( see our business and profitability ) was impacted by shortfalls in investment income from excess liquidity resulting from a lag in the reinvestment of proceeds of government agency bonds called for redemption . the callable government agency securities have been a cornerstone of our investment portfolio since our formation . through the years they have provided acceptable yields that met our spread requirements without any risk-based capital charges . we went through several cycles of calls on these securities and each time we have reinvested a portion of the call redemption proceeds into new callable government agency securities . this kept cash balances low but perpetuated the call risk . in 2011 , we had $ 3.1 billion in such securities called and purchased $ 3.7 billion for a $ 600 million net purchase of callable government agency securities . however , in 2012 , we only purchased $ 948.9 million compared to $ 4.3 billion in calls . consequently , we managed excess cash and other short-term investments throughout 2012 and into the third quarter of 2013 when we became fully invested . see results of operations — net investment income for additional information regarding our excess liquidity . in 2013 , we issued $ 400 million of senior unsecured notes due 2021 ( the `` 2021 notes `` ) and retired $ 184 million aggregate principal amount of three convertible note issues . the total consideration paid to retire the convertible notes included $ 219 million of cash and 5.5 million shares of our common stock . in the short-term , these convertible debt retirements reduced net income and book value per share . however , these retirements are expected to provide long-term benefit by eliminating potential additional dilution from further increases in our stock price . at december 31 , 2013 , we had $ 206 million of net proceeds remaining from the 2021 notes offering which we intend to use to retire the $ 160 million aggregate principal amount of convertible notes that were outstanding at december 31 , 2013. the form and timing of additional convertible debt retirements will be dependent upon market conditions and other factors and there can be no assurance that any such transactions will be completed prior to the december 2014 call date for our 5.25 % contingent convertible senior notes due 2029 ( the `` 2029 notes `` ) or the september 2015 maturity date for our 3.50 % convertible senior notes due 2015 ( the `` 2015 notes `` ) . 19 our business and profitability we specialize in the sale of individual annuities ( primarily deferred annuities ) and , to a lesser extent , we also sell life insurance policies . under u.s. generally accepted accounting principles ( `` gaap `` ) , premium collections for deferred annuities are reported as deposit liabilities instead of as revenues . similarly , cash payments to policyholders are reported as decreases in the liabilities for policyholder account balances and not as expenses . sources of revenues for products accounted for as deposit liabilities are net investment income , surrender and other charges deducted from the account balances of policyholders , net realized gains ( losses ) on investments and changes in fair value of derivatives . components of expenses for products accounted for as deposit liabilities are interest sensitive and index product benefits ( primarily interest credited to account balances ) , changes in fair value of embedded derivatives , amortization of deferred sales inducements and deferred policy acquisition costs , other operating costs and expenses and income taxes . our business model contemplates continued growth in invested assets and operating income while maintaining a high quality investment portfolio that will not experience significant losses from impairments of invested assets . growth in invested assets is predicated on a continuation of our high sales achievements of the last five years while at the same time maintaining a high level of retention of the funds received . the economic and personal investing environments continue to be conducive for high sales levels as retirees and others look to put their money in instruments that will protect their principal and provide them with consistent cash flow sources in their retirement years . we are committed to maintaining a high quality investment portfolio with limited exposure to below investment grade securities and other riskier assets . earnings from products accounted for as deposit liabilities are primarily generated from the excess of net investment income earned over the interest credited or the cost of providing index credits to the policyholder , or the `` investment spread . `` our investment spread is summarized as follows : replace_table_token_6_th the cost of money for fixed index annuities and average crediting rates for fixed rate annuities are computed based upon policyholder account balances and do not include the impact of amortization of deferred sales inducements . see critical accounting policies—deferred policy acquisition costs and deferred sales inducements . with respect to our fixed index annuities , the cost of money includes the average crediting rate on amounts allocated to the fixed rate strategy , expenses we incur to fund the annual index credits and where applicable , minimum guaranteed interest credited . proceeds received upon expiration or early termination of call options purchased to fund annual index credits are recorded as part of the change in fair value of derivatives , and are largely offset by an expense for interest credited to annuity policyholder account balances . see critical accounting policies—policy liabilities for fixed index annuities and financial condition—derivative instruments . story_separator_special_tag due to the partial unwind agreements we entered into , the amount of the change in fair value of the 2015 notes hedges was $ 3.8 million more than the amount of the change in the related embedded derivative liability for the year ended december 31 , 2013. see notes 5 and 9 to our audited consolidated financial statements for a discussion of the unwind agreements , the 2015 notes hedges and the 2015 notes embedded derivative liability . the 2015 warrants were to be settled in shares of our common stock and accordingly were classified as equity in our consolidated balance sheets , and the changes in fair value of the 2015 warrants were not recognized in the consolidated financial statements . in conjunction with the retirement of a portion of the 2015 notes and related early termination of a corresponding portion of the 2015 notes hedges , a corresponding amount of the 2015 warrants were also terminated prior to maturity and settled in cash rather than shares of our common stock . accordingly , changes in the fair value of the 2015 warrants that were terminated in 2013 prior to maturity from the dates the early termination agreements were executed through the dates of settlement are included in the consolidated statement of operations for the year ended december 31 , 2013. see notes 5 and 9 to our audited consolidated financial statements for a discussion of the 2015 warrants . 24 net realized gains ( losses ) on investments , excluding otti losses include gains and losses on the sale of securities and impairment losses on mortgage loans on real estate which fluctuate from year to year due to changes in the interest rate and economic environment and the timing of the sale of investments , as well as gains ( losses ) recognized on real estate owned due to any sales and impairments on long-lived assets . the components of net realized gains ( losses ) on investments are set forth in the table that follows : replace_table_token_13_th losses in 2013 were realized primarily due to strategies to reposition the fixed maturity security portfolio that resulted in improved net investment income , risk or duration profiles as they pertain to our asset liability management . two corporate issues were sold at a loss in 2013 due to our fundamental , long-term concern with the issuer 's ability to meet its future financial obligations . see note 4 to our audited consolidated financial statements for additional discussion of allowance for credit losses recognized on mortgage loans on real estate . net otti losses recognized in operations decreased to $ 6.2 million in 2013 and decreased to $ 14.9 million in 2012 from $ 34.0 million in 2011 . the impairments recognized in 2012 and 2011 were primarily on residential mortgage backed securities and were principally due to changes of assumptions regarding loss severity of a number of securities we hold which affected our ongoing analysis of expected cash flow projections . see financial condition—investments and note 3 to our audited consolidated financial statements for additional discussion of write downs of securities for other than temporary impairments . insurance policy benefits and changes in future policy benefits decreased 35 % to $ 53.1 million in 2013 and 29 % to $ 81.5 million in 2012 from $ 115.3 million in 2011 . these expenses include amounts for life insurance policies and life contingent single premium immediate annuities including life contingent supplemental contracts issued upon annuitization of deferred annuities . amounts for life insurance policies have remained consistent throughout the periods presented while amounts related to life contingent single premium immediate annuities ( $ 46.1 million , $ 73.4 million and $ 107.4 million in 2013 , 2012 and 2011 , respectively ) have decreased over the periods primarily because the related premiums have decreased as discussed above under premiums and other considerations . interest sensitive and index product benefits increased 57 % to $ 1.3 billion in 2013 and 4 % to $ 808.5 million in 2012 from $ 775.1 million in 2011 . the components of interest sensitive and index product benefits are summarized as follows : replace_table_token_14_th the amount of index credits were attributable to changes in the appreciation of the underlying indices ( see discussion above under change in fair value of derivatives ) and the amount of funds allocated by policyholders to the respective index options . total proceeds received upon expiration of the call options purchased to fund the annual index credits were $ 910.4 million , $ 447.2 million and $ 454.2 million for the years ended december 31 , 2013 , 2012 and 2011 , respectively . the decrease in interest credited for 2013 was due to a decrease in the average rate credited to the annuity liabilities outstanding receiving a fixed rate of interest . the increase in interest credited for 2012 was due to an increase in the average amount of annuity liabilities outstanding receiving a fixed rate of interest . the average amount of annuity liabilities outstanding 25 ( net of annuity liabilities ceded under coinsurance agreements ) increased 14 % to $ 29.5 billion in 2013 and 16 % to $ 26.0 billion in 2012 from $ 22.4 billion in 2011 . the increases in benefits recognized for lifetime income benefit riders were due to increases in the number of policies with lifetime income benefit riders and correlates to the increase in fees discussed in annuity product charges . amortization of deferred sales inducements increased 190 % to $ 253.1 million in 2013 and 21 % to $ 87.2 million in 2012 from $ 71.8 million in 2011 . in general , amortization of deferred sales inducements has been increasing each year due to growth in our annuity business and the deferral of sales inducements incurred with respect to sales of premium bonus annuity products . bonus products represented 97 % , 97 % and 95 % of

