8. Separate Accounts, Death Benefits and Other Insurance Benefit Features and Embedded Product Derivatives (Tables)

9 Months Ended

Sep. 30, 2012

Separate Accounts Death Benefits And Other Insurance Benefit Features And Embedded Product Derivatives Tables

Separate Account Investments of Account Balances of Variable Annuity Contracts with Guarantees

Separate Account Investments of Account Balances of Variable Annuity Contracts with Guarantees:	Sept 30,		Dec 31,
($ in millions)	2012		2011
			As restated and amended
Debt securities	$	377.6		$	395.5
Equity funds		1,553.9			1,537.7
Other		52.5			58.3
Total	$	1,984.0		$	1,991.5

Changes in Guaranteed Insurance Benefit Liability Balances:

Changes in Guaranteed Insurance Benefit Liability Balances:	As of
($ in millions)	September 30, 2012
	Annuity GMDB			Annuity GMIB
Liability balance as of January 1, 2012	$	10.8		$	17.2
Incurred		—			3.6
Paid		(0.9	)		—
Assumption unlocking		—			(0.2	)
Liability balance as of September 30, 2012	$	9.9		$	20.6

Changes in Guaranteed Insurance Benefit Liability Balances:	Year Ended
($ in millions)	December 31, 2011
	As restated and amended
	Annuity GMDB				Annuity GMIB
Liability balance as of January 1, 2011		$	11.2			$	17.5
Incurred			1.5				(0.7	)
Paid			(1.9	)			—
Assumption unlocking			—				0.4
Liability balance as of December 31, 2011		$	10.8			$	17.2

GMDB Benefits by Type

GMDB and GMIB Benefits by Type:			NAR		Average
($ in millions)	Account		after		Attained Age
	Value		Reinsurance		of Annuitant
September 30, 2012
GMDB return of premium	$	776.0	$	7.1		62
GMDB step up		1,444.5		26.0		62
GMDB earnings enhancement benefit (“EEB”)		38.9		0.1		63
GMDB greater of annual step up and roll up		27.5		7.5		66
Total GMDB at September 30, 2012		2,286.9	$	40.7
Less: General account value with GMDB		318.2
Subtotal separate account liabilities with GMDB		1,968.7
Separate account liabilities without GMDB		142.0
Total separate account liabilities	$	2,110.7
GMIB (1) at September 30, 2012	$	413.4				63
December 31, 2011 as restated and amended
GMDB return of premium	$	795.6	$	20.7		61
GMDB step up		1,450.6		91.2		62
GMDB earnings enhancement benefit (“EEB”)		39.7		0.4		62
GMDB greater of annual step up and roll up		27.1		8.8		66
Total GMDB at December 31, 2011		2,313.0	$	121.1
Less: General account value with GMDB		336.9
Subtotal separate account liabilities with GMDB		1,976.1
Separate account liabilities without GMDB		570.7
Total separate account liabilities	$	2,546.8
GMIB (1) at December 31, 2011	$	428.1				63

———————

(1) Policies with a GMIB also have a GMDB. The NAR for each benefit is shown in the table above, however these benefits are not additive. When a policy terminates due to death, any NAR related or GMIB is released. Similarly, when a policy goes into benefit status on a GMIB, its GMDB NAR is released.

Changes in Guaranteed Liability Balances

The GMWB, GMDB and chronic care guarantees are recorded in policy liabilities and accruals on our balance sheets. Changes in the liability are recorded in policy benefits on our statements of comprehensive income. We regularly evaluate estimates used and adjust the additional liability balances, with a related charge or credit to benefit expense if actual experience or other evidence suggests that earlier assumptions should be revised.

Changes in Guaranteed Liability Balances:	Fixed Indexed Annuity
($ in millions)	GMWB & GMDB
	Sept 30,			Dec 31,
	2012			2011
				As restated and amended
Liability balance, beginning of period		$	5.6		$	0.5
Incurred			32.3			5.1
Paid			—			—
Liability balance, end of period		$	37.9		$	5.6

Universal life

Liabilities for universal life contracts, some of which contain secondary guarantees, are generally determined by estimating the expected value of benefits and expenses when claims are triggered and recognizing those benefits and expenses over the accumulation period based on total expected assessments. The assumptions used in estimating these liabilities are consistent with those used for amortizing deferred policy acquisition costs.

Changes in Guaranteed Liability Balances:	Universal Life
($ in millions)	Secondary Guarantees
	Sept 30,				Dec 31,
	2012				2011
					As restated and amended
Liability balance, beginning of period		$	98.2			$	88.5
Incurred			12.4				16.0
Paid			(7.2	)			(6.3	)
Assumption unlocking			—				—
Liability balance, end of period		$	103.4			$	98.2

Non-Insurance Guaranteed Product Features

Certain separate account variable products contain a GMWB, GMAB and/or COMBO rider as defined in the 2012 Form 10-K. These features are accounted for as embedded derivatives as described below.

Non-Insurance Guaranteed Product Features:			Average
($ in millions)	Account		Attained Age
	Value		of Annuitant
September 30, 2012
GMWB	$	559.7		63
GMAB		386.1		58
COMBO		9.8		61
Total at September 30, 2012	$	955.6
December 31, 2011 as restated and amended
GMWB	$	541.9		62
GMAB		374.4		57
COMBO		9.8		60
Total at December 31, 2011	$	926.1

Variable Annuity Embedded Derivative Liabilities

Variable Annuity Embedded Derivative Liabilities:	Sept 30,			Dec 31,
($ in millions)	2012			2011
				As restated and amended
GMWB	$	18.0			$	22.0
GMAB		16.8				24.7
COMBO		(0.4	)			(0.3	)
Total variable annuity embedded derivative liabilities	$	34.4			$	46.4