Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Value Hierarchy for Assets Measured at Fair Value on a Recurring Basis

The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at September 30, 2013, and December 31, 2012. We do not have any material liabilities carried at fair value. There were no transfers between Level 1 and Level 2.



(In millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2013			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Fixed maturities, available for sale:
States, municipalities and political subdivisions	$	—	$	3,175	$	—	$	3,175
Convertibles and bonds with warrants attached	—		16		—		16
United States government	7		—		—		7
Government-sponsored enterprises	—		190		—		190
Foreign government	—		10		—		10
Commercial mortgage-backed securities	—		76		—		76
Corporate securities	—		5,561		3		5,564
Subtotal	7		9,028		3		9,038
Common equities, available for sale	3,873		—		—		3,873
Preferred equities, available for sale	—		109		2		111
Taxable fixed maturities separate accounts	—		689		—		689
Top Hat Savings Plan (included in Other assets)	12		—		—		12
Total	$	3,892	$	9,826	$	5	$	13,723
At December 31, 2012
Fixed maturities, available for sale:
States, municipalities and political subdivisions	$	—	$	3,288	$	1	$	3,289
Convertibles and bonds with warrants attached	—		31		—		31
United States government	8		—		—		8
Government-sponsored enterprises	—		164		—		164
Foreign government	—		3		—		3
Commercial mortgage-backed securities	—		28		—		28
Corporate securities	—		5,567		3		5,570
Subtotal	8		9,081		4		9,093
Common equities, available for sale	3,238		—		—		3,238
Preferred equities, available for sale	—		134		1		135
Taxable fixed-maturities separate accounts	—		689		—		689
Top Hat Savings Plan (included in Other assets)	9		—		—		9
Total	$	3,255	$	9,904	$	5	$	13,164

Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

The following tables provide the change in Level 3 assets for the three months ended September 30:




(In millions)	Corporate fixed maturities		States, municipalities and political subdivisions fixed maturities			Preferred equities		Total
Beginning balance, June 30, 2013	$	3	$	1		$	2	$	6
Total gains or losses (realized/unrealized):
Included in earnings	—		—			—		—
Included in other comprehensive income	—		—			—		—
Purchases	—		—			—		—
Sales	—		(1		)	—		(1		)
Transfers into Level 3	—		—			—		—
Transfers out of Level 3	—		—			—		—
Ending balance, September 30, 2013	$	3	$	—		$	2	$	5

Beginning balance, June 30, 2012	$	4	$	2		$	7	$	13
Total gains or losses (realized/unrealized):
Included in earnings	—		—			—		—
Included in other comprehensive income	—		—			—		—
Purchases	—		—			—		—
Sales	—		(1		)	—		(1		)
Transfers into Level 3	—		—			—		—
Transfers out of Level 3	—		—			—		—
Ending balance, September 30, 2012	$	4	$	1		$	7	$	12

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

This table summarizes the book value and principal amounts of our long-term debt:



(In millions)				Book value				Principal amount
				September 30,		December 31,		September 30,		December 31,
Interest rate		Year of issue		2013		2012		2013		2012
6.900	%	1998	Senior debentures, due 2028	$	28	$	28	$	28	$	28
6.920	%	2005	Senior debentures, due 2028	391		391		391		391
6.125	%	2004	Senior notes, due 2034	371		371		374		374
			Total	$	790	$	790	$	793	$	793

Fair Value of Life Policy Loans

The following table shows the fair value of our life policy loans, included in other invested assets, subject to fair value disclosure requirements:



(In millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2013			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Life policy loans	$	—	$	—	$	44	$	44

At December 31, 2012
Life policy loans	$	—	$	—	$	50	$	50

Debt

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair values of our note payable and long-term debt subject to fair value disclosure requirements:



(In millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2013			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Note payable	$	—	$	104	$	—	$	104
6.900% senior debentures, due 2028	—		32		—		32
6.920% senior debentures, due 2028	—		470		—		470
6.125% senior notes, due 2034	—		398		—		398
Total	$	—	$	1,004	$	—	$	1,004

At December 31, 2012
Note payable	$	—	$	104	$	—	$	104
6.900% senior debentures, due 2028	—		31		—		31
6.920% senior debentures, due 2028	—		479		—		479
6.125% senior notes, due 2034	—		431		—		431
Total	$	—	$	1,045	$	—	$	1,045

Deferred Annuities, Structured Settlements, And Other

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair values of our deferred annuities and structured settlements, included in life policy and investment contract reserves, subject to fair value disclosure requirements:



(In millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2013			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Deferred annuities	$	—	$	—	$	881	$	881
Structured settlements	—		218		—		218
Total	$	—	$	218	$	881	$	1,099

At December 31, 2012
Deferred annuities	$	—	$	—	$	898	$	898
Structured settlements	—		240		—		240
Total	$	—	$	240	$	898	$	1,138

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring and/or nonrecurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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