Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2012

Fair Value Measurements [Abstract]

Assets and liabilities measured at fair value

	Level 1		Level 2		Level 3		Total
March 31, 2012
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. Government and government agencies	$	235	$	155	$	—	$	390
States, municipalities and political subdivisions		—		3,844		72		3,916
Foreign government		—		260		—		260
Residential MBS		—		3,804		314		4,118
Commercial MBS		—		2,880		20		2,900
All other corporate		8		10,264		515		10,787
Total AFS fixed maturities		243		21,207		921		22,371
Trading fixed maturities		—		456		1		457
Equity securities		955		75		24		1,054
Assets of managed investment entities (“MIE”)		245		2,643		64		2,952
Variable annuity assets (separate accounts) (a)		—		601		—		601
Other investments		—		142		—		142
Total assets accounted for at fair value	$	1,443	$	25,124	$	1,010	$	27,577
Liabilities:
Liabilities of managed investment entities	$	118	$	—	$	2,554	$	2,672
Derivatives in annuity benefits accumulated		—		—		483		483
Other liabilities – derivatives		—		22		—		22
Total liabilities accounted for at fair value	$	118	$	22	$	3,037	$	3,177
December 31, 2011
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. Government and government agencies	$	248	$	134	$	—	$	382
States, municipalities and political subdivisions		—		3,794		83		3,877
Foreign government		—		254		—		254
Residential MBS		—		3,487		361		3,848
Commercial MBS		—		2,821		19		2,840
All other corporate		9		10,078		519		10,606
Total AFS fixed maturities		257		20,568		982		21,807
Trading fixed maturities		—		439		1		440
Equity securities		888		29		11		928
Assets of managed investment entities (“MIE”)		290		2,724		44		3,058
Variable annuity assets (separate accounts) (a)		—		548		—		548
Other investments		—		71		—		71
Total assets accounted for at fair value	$	1,435	$	24,379	$	1,038	$	26,852
Liabilities:
Liabilities of managed investment entities	$	194	$	—	$	2,593	$	2,787
Derivatives in annuity benefits accumulated		—		—		395		395
Other liabilities – derivatives		—		23		—		23
Total liabilities accounted for at fair value	$	194	$	23	$	2,988	$	3,205

(a) Variable annuity liabilities equal the fair value of variable annuity assets.

Unobservable inputs used by management in determining fair value of embedded derivatives

Unobservable Input	Range
Adjustment for insurance subsidiary’s credit risk	0.5% - 2.1% over the risk free rate
Risk margin for uncertainty in cash flows	0.3% reduction in the discount rate
Surrenders	4% - 25% of indexed account value
Partial surrenders	3% - 5% of indexed account value
Annuitizations	1% - 2% of indexed account value
Deaths	1% - 2.5% of indexed account value
Budgeted option costs	2.5% - 4.0% of indexed account value

Changes in balances of Level 3 financial assets and liabilities

				Total realized/unrealized gains  (losses) included in
	Balance at December  31, 2011			Net income			Other comp. income (loss)		Purchases and issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at March 31, 2012
AFS fixed maturities:
State and municipal	$	83		$	—		$	—	$	10		$	—		$	—	($	21	)	$	72
Residential MBS		361			1			—		8			(10	)		60		(106	)		314
Commercial MBS		19			—			1		—			—			—		—			20
All other corporate		519			2			3		26			(16	)		21		(40	)		515
Trading fixed maturities		1			—			—		—			—			—		—			1
Equity securities		11			—			—		9			—			4		—			24
Assets of MIE		44			—			—		12			(3	)		14		(3	)		64
Liabilities of MIE (*)		(2,593	)		(84	)		—		(366	)		489			—		—			(2,554	)
Embedded derivatives		(395	)		(62	)		—		(34	)		8			—		—			(483	)

(*) Total realized/unrealized loss included in net income includes losses of $39 million related to liabilities outstanding as of March 31, 2012. See Note G – “Managed Investment Entities.”

				Total realized/unrealized gains (losses) included in
	Balance at December  31, 2010			Net income			Other comp. income (loss)		Purchases and Issuances			Sales and Settlements			Transfer into Level 3		Transfer out of Level 3			Balance at March  31, 2011
AFS fixed maturities:
State and municipal	$	20		$	—		$	1	$	—		$	—		$	—	$	—		$	21
Residential MBS		312			1			—		—			(13	)		7		(36	)		271
Commercial MBS		6			—			—		—			—			3		—			9
All other corporate		436			(2	)		—		45			(11	)		22		(66	)		424
Trading fixed maturities		3			—			—		—			—			—		(2	)		1
Equity securities		21			—			2		—			(2	)		—		—			21
Assets of MIE		48			(1	)		—		7			(4	)		6		(2	)		54
Liabilities of MIE (*)		(2,258	)		(62	)		—		—			4			—		—			(2,316	)
Embedded derivatives		(190	)		(19	)		—		(30	)		5			—		—			(234	)

(*) Total realized/unrealized loss included in net income includes losses of $61 million related to liabilities outstanding as of March 31, 2011. See Note G – “Managed Investment Entities.”

Fair value of financial instruments

March 31, 2012	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	1,422	$	1,422	$	1,422	$	—	$	—
Mortgage loans		438		441		—		—		441
Policy loans		249		249		—		—		249
Total financial assets not accounted for at fair value	$	2,109	$	2,112	$	1,422	$	—	$	690
Financial liabilities:
Annuity benefits accumulated (*)	$	15,864	$	15,788	$	—	$	—	$	15,788
Long-term debt		931		1,033		—		918		115
Total financial liabilities not accounted for at fair value	$	16,795	$	16,821	$	—	$	918	$	15,903

(*) Excludes life contingent annuities in the payout phase.