Fair Value (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis are summarized below.

June 30, 2012								Total Assets/(Liabilities) at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate and other bonds	$	—	$	21,004	$	488		$	21,492
States, municipalities and political subdivisions	—		10,327		89			10,416
Asset-backed:
Residential mortgage-backed	—		5,448		443			5,891
Commercial mortgage-backed	—		1,403		166			1,569
Other asset-backed	—		631		434			1,065
Total asset-backed	—		7,482		1,043			8,525
U.S. Treasury and obligations of government-sponsored enterprises	142		42		—			184
Foreign government	120		519		—			639
Redeemable preferred stock	28		56		27			111
Total fixed maturity securities	290		39,430		1,647			41,367
Equity securities	106		91		93			290
Derivative and other financial instruments, included in Other invested assets	—		—		11			11
Short term investments	1,225		271		4			1,500
Life settlement contracts, included in Other assets	—		—		116			116
Separate account business	12		355		3			370
Total assets	$	1,633	$	40,147	$	1,874		$	43,654
Liabilities
Derivative financial instruments, included in Other liabilities	$	—	$	—	$	(1	)	$	(1	)
Total liabilities	$	—	$	—	$	(1	)	$	(1	)

December 31, 2011								Total Assets/(Liabilities) at Fair Value
(In millions)	Level 1		Level 2		Level 3
Assets
Fixed maturity securities:
Corporate and other bonds	$	—	$	20,402	$	482		$	20,884
States, municipalities and political subdivisions	—		9,611		171			9,782
Asset-backed:
Residential mortgage-backed	—		5,323		452			5,775
Commercial mortgage-backed	—		1,295		59			1,354
Other asset-backed	—		612		343			955
Total asset-backed	—		7,230		854			8,084
U.S. Treasury and obligations of government-sponsored enterprises	451		42		—			493
Foreign government	92		544		—			636
Redeemable preferred stock	5		53		—			58
Total fixed maturity securities	548		37,882		1,507			39,937
Equity securities	124		113		67			304
Derivative and other financial instruments, included in Other invested assets	—		1		11			12
Short term investments	1,106		508		27			1,641
Life settlement contracts, included in Other assets	—		—		117			117
Separate account business	21		373		23			417
Total assets	$	1,799	$	38,877	$	1,752		$	42,428
Liabilities
Derivative financial instruments, included in Other liabilities	$	—	$	—	$	(1	)	$	(1	)
Total liabilities	$	—	$	—	$	(1	)	$	(1	)

Table of reconciliation for assets and liablities measured at fair value on a recurring basis using significant unobservable inputs

The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2012 and 2011.

Level 3 (In millions)	Balance at April 1, 2012		Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in net income (loss)*		Net change in unrealized appreciation (depreciation) included in other comprehensive income (loss)			Purchases		Sales			Settlements			Transfers into Level 3		Transfers out of Level 3			Balance at June 30, 2012		Unrealized gains (losses) on Level 3 assets and liabilities held at June 30, 2012 recognized in net income (loss)*
Fixed maturity securities:
Corporate and other bonds	$	486	$	3	$	2		$	68	$	(27	)	$	(13	)	$	9	$	(40	)	$	488	$	—
States, municipalities and political subdivisions	173		—		1			—		—			(85		)	—		—			89		—
Asset-backed:
Residential mortgage-backed	447		1		(18		)	22		—			(9		)	—		—			443		—
Commercial mortgage-backed	105		2		4			87		(12		)	(4		)	—		(16		)	166		—
Other asset-backed	384		2		(1		)	182		(99		)	(34		)	—		—			434		—
Total asset-backed	936		5		(15		)	291		(111		)	(47		)	—		(16		)	1,043		—
Redeemable preferred stock	53		—		—			—		(26		)	—			—		—			27		—
Total fixed maturity securities	1,648		8		(12		)	359		(164		)	(145		)	9		(56		)	1,647		—
Equity securities	74		—		19			15		(15		)	—			—		—			93		(1		)
Derivative and other financial instruments, net	10		—		—			—		—			—			—		—			10		—
Short term investments	—		—		—			4		—			—			—		—			4		—
Life settlement contracts	115		20		—			—		—			(19		)	—		—			116		3
Separate account business	4		—		—			—		(1		)	—			—		—			3		—
Total	$	1,851	$	28	$	7		$	378	$	(180	)	$	(164	)	$	9	$	(56	)	$	1,873	$	2

Level 3 (In millions)	Balance at April 1, 2011		Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in net income (loss)*			Net change in unrealized appreciation (depreciation) included in other comprehensive income (loss)			Purchases		Sales			Settlements			Transfers into Level 3		Transfers out of Level 3			Balance at June 30, 2011		Unrealized gains (losses) on Level 3 assets and liabilities held at June 30, 2011 recognized in net income (loss)*
Fixed maturity securities:
Corporate and other bonds	$	577	$	(2	)	$	2		$	304	$	(30	)	$	(70	)	$	31	$	—		$	812	$	(3	)
States, municipalities and political subdivisions	188		—			(1		)	—		—			(8		)	—		—			179		—
Asset-backed:
Residential mortgage-backed	738		(13		)	12			50		(57		)	(19		)	—		(24		)	687		(15		)
Commercial mortgage-backed	88		—			2			5		—			—			—		—			95		—
Other asset-backed	445		1			—			127		(44		)	(24		)	—		(14		)	491		—
Total asset-backed	1,271		(12		)	14			182		(101		)	(43		)	—		(38		)	1,273		(15		)
Total fixed maturity securities	2,036		(14		)	15			486		(131		)	(121		)	31		(38		)	2,264		(18		)
Equity securities	30		(1		)	—			4		(2		)	—			5		—			36		(1		)
Derivative and other financial instruments, net	8		1			—			—		—			—			—		—			9		1
Short term investments	27		—			—			—		—			(21		)	—		—			6		—
Life settlement contracts	127		6			—			—		—			(4		)	—		—			129		3
Separate account business	39		—			—			—		(2		)	—			—		—			37		—
Total	$	2,267	$	(8	)	$	15		$	490	$	(135	)	$	(146	)	$	36	$	(38	)	$	2,481	$	(15	)

The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2012 and 2011.

Level 3 (In millions)	Balance at January 1, 2012		Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in net income (loss)*		Net change in unrealized appreciation (depreciation) included in other comprehensive income (loss)			Purchases		Sales			Settlements			Transfers into Level 3		Transfers out of Level 3			Balance at June 30, 2012		Unrealized gains (losses) on Level 3 assets and liabilities held at June 30, 2012 recognized in net income (loss)*
Fixed maturity securities:
Corporate and other bonds	$	482	$	6	$	6		$	147	$	(113	)	$	(32	)	$	42	$	(50	)	$	488	$	—
States, municipalities and political subdivisions	171		—		3			—		—			(85		)	—		—			89		—
Asset-backed:
Residential mortgage-backed	452		2		(22		)	60		—			(16		)	—		(33		)	443		—
Commercial mortgage-backed	59		2		8			129		(12		)	(4		)	—		(16		)	166		—
Other asset-backed	343		6		3			358		(176		)	(59		)	—		(41		)	434		—
Total asset-backed	854		10		(11		)	547		(188		)	(79		)	—		(90		)	1,043		—
Redeemable preferred stock	—		—		—			53		(26		)	—			—		—			27		—
Total fixed maturity securities	1,507		16		(2		)	747		(327		)	(196		)	42		(140		)	1,647		—
Equity securities	67		—		16			26		(16		)	—			—		—			93		(3		)
Derivative and other financial instruments, net	10		—		—			—		—			—			—		—			10		—
Short term investments	27		—		—			16		—			(39		)	—		—			4		—
Life settlement contracts	117		23		—			—		—			(24		)	—		—			116		3
Separate account business	23		—		—			—		(20		)	—			—		—			3		—
Total	$	1,751	$	39	$	14		$	789	$	(363	)	$	(259	)	$	42	$	(140	)	$	1,873	$	—

Level 3 (In millions)	Balance at January 1, 2011		Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in net income (loss)*			Net change in unrealized appreciation (depreciation) included in other comprehensive income (loss)			Purchases		Sales			Settlements			Transfers into Level 3		Transfers out of Level 3			Balance at June 30, 2011		Unrealized gains (losses) on Level 3 assets and liabilities held at June 30, 2011 recognized in net income (loss)*
Fixed maturity securities:
Corporate and other bonds	$	624	$	2		$	(3	)	$	346	$	(50	)	$	(97	)	$	40	$	(50	)	$	812	$	(3	)
States, municipalities and political subdivisions	266		—			—			—		—			(87		)	—		—			179		—
Asset-backed:
Residential mortgage-backed	767		(12		)	14			97		(83		)	(41		)	—		(55		)	687		(15		)
Commercial mortgage-backed	73		3			18			5		(4		)	—			—		—			95		—
Other asset-backed	359		5			—			327		(131		)	(55		)	—		(14		)	491		—
Total asset-backed	1,199		(4		)	32			429		(218		)	(96		)	—		(69		)	1,273		(15		)
Redeemable preferred stock	3		3			(3		)	—		(3		)	—			—		—			—		—
Total fixed maturity securities	2,092		1			26			775		(271		)	(280		)	40		(119		)	2,264		(18		)
Equity securities	26		(2		)	(1		)	19		(11		)	—			5		—			36		(4		)
Derivative and other financial instruments, net	25		3			—			—		(19		)	—			—		—			9		1
Short term investments	27		—			—			12		—			(23		)	—		(10		)	6		—
Life settlement contracts	129		9			—			—		—			(9		)	—		—			129		3
Separate account business	41		—			—			—		(4		)	—			—		—			37		—
Total	$	2,340	$	11		$	25		$	806	$	(305	)	$	(312	)	$	45	$	(129	)	$	2,481	$	(18	)

Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets

	Fair Value at June 30, 2012		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Assets
(In millions)
Fixed maturity securities	$	122	Discounted cash flow	Expected call date	0.3 - 4.7 years (3.5 years)
				Spreads off benchmark yields	225-325 bps (269 bps)
	$	34	Market approach	Private offering price	$97.25 - $100.08 ($99.16)
Equity securities	$	93	Market approach	Private offering price	$0.10 - $4,023 per share ($268.85 per share)
Life settlement contracts	$	116	Discounted cash flow	Discount rate risk premium	9%
				Mortality assumption	65% - 928% (185%)

Carrying amount and estimated fair value of financial instrument assets and liabilities not measured at fair value

The carrying amount and estimated fair value of the Company's financial instrument assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are listed in the tables below.

June 30, 2012	Carrying Amount		Estimated Fair Value
(In millions)			Level 1		Level 2		Level 3		Total
Financial assets
Notes receivable for the issuance of common stock	$	21	$	—	$	—	$	21	$	21
Mortgage loans	339		—		—		352		352
Financial liabilities
Premium deposits and annuity contracts	$	105	$	—	$	—	$	109	$	109
Short term debt	83		—		83		—		83
Long term debt	2,526		—		2,835		—		2,835

December 31, 2011	Carrying Amount		Estimated Fair Value
(In millions)
Financial assets
Notes receivable for the issuance of common stock	$	22	$	22
Mortgage loans	234		247
Financial liabilities
Premium deposits and annuity contracts	$	109	$	114
Short term debt	83		84
Long term debt	2,525		2,679