Fair Value (Tables)

9 Months Ended

Sep. 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.

September 30, 2012									Total Assets/(Liabilities) at Fair Value
(In millions)	Level 1		Level 2			Level 3
Assets
Fixed maturity securities:
Corporate and other bonds	$	—	$	21,569		$	259		$	21,828
States, municipalities and political subdivisions	—		10,723			89			10,812
Asset-backed:
Residential mortgage-backed	—		5,653			437			6,090
Commercial mortgage-backed	—		1,571			117			1,688
Other asset-backed	—		595			371			966
Total asset-backed	—		7,819			925			8,744
U.S. Treasury and obligations of government-sponsored enterprises	168		24			—			192
Foreign government	139		475			—			614
Redeemable preferred stock	29		60			26			115
Total fixed maturity securities	336		40,670			1,299			42,305
Equity securities	98		112			50			260
Derivative and other financial instruments, included in Other invested assets	—		—			11			11
Short term investments	1,209		1,223			8			2,440
Life settlement contracts, included in Other assets	—		—			113			113
Separate account business	4		338			3			345
Total assets	$	1,647	$	42,343		$	1,484		$	45,474
Liabilities
Derivative financial instruments, included in Other liabilities	$	—	$	(2	)	$	(1	)	$	(3	)
Total liabilities	$	—	$	(2	)	$	(1	)	$	(3	)

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 September 30, 2012 and 2011.

Level 3 (In millions)	Balance at July 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 September 30, 2012		Unrealized gains (losses) on Level 3 assets and liabilities held at September 30, 2012 recognized in net income (loss)*
Fixed maturity securities:
Corporate and other bonds	$	488	$	1		$	(4	)	$	50	$	(5	)	$	(11	)	$	—	$	(260	)	$	259	$	(1	)
States, municipalities and political subdivisions	89		—			—			—		—			—			—		—			89		—
Asset-backed:
Residential mortgage-backed	443		(17		)	20			21		—			(8		)	—		(22		)	437		(18		)
Commercial mortgage-backed	166		4			6			12		—			(17		)	11		(65		)	117		—
Other asset-backed	434		2			5			143		(117		)	(34		)	—		(62		)	371		—
Total asset-backed	1,043		(11		)	31			176		(117		)	(59		)	11		(149		)	925		(18		)
Redeemable preferred stock	27		—			(1		)	—		—			—			—		—			26		—
Total fixed maturity securities	1,647		(10		)	26			226		(122		)	(70		)	11		(409		)	1,299		(19		)
Equity securities	93		(19		)	(10		)	—		—			—			—		(14		)	50		(19		)
Derivative and other financial instruments, net	10		—			—			—		—			—			—		—			10		—
Short term investments	4		—			—			7		(4		)	—			1		—			8		—
Life settlement contracts	116		7			—			—		—			(10		)	—		—			113		—
Separate account business	3		—			—			—		—			—			—		—			3		—
Total	$	1,873	$	(22	)	$	16		$	233	$	(126	)	$	(80	)	$	12	$	(423	)	$	1,483	$	(38	)

Level 3 (In millions)	Balance at July 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 September 30, 2011		Unrealized gains (losses) on Level 3 assets and liabilities held at September 30, 2011 recognized in net income (loss)*
Fixed maturity securities:
Corporate and other bonds	$	812	$	(7	)	$	(3	)	$	113	$	(107	)	$	(47	)	$	12	$	(154	)	$	619	$	(10	)
States, municipalities and political subdivisions	179		—			—			3		—			—			—		—			182		—
Asset-backed:
Residential mortgage-backed	687		1			(5		)	73		(81		)	(13		)	—		(31		)	631		—
Commercial mortgage-backed	95		—			(7		)	76		—			—			—		(5		)	159		—
Other asset-backed	491		(5		)	(6		)	114		(105		)	(25		)	2		(37		)	429		(4		)
Total asset-backed	1,273		(4		)	(18		)	263		(186		)	(38		)	2		(73		)	1,219		(4		)
Total fixed maturity securities	2,264		(11		)	(21		)	379		(293		)	(85		)	14		(227		)	2,020		(14		)
Equity securities	36		—			—			—		(1		)	—			—		(3		)	32		—
Derivative and other financial instruments, net	9		(1		)	—			1		—			—			—		—			9		—
Short term investments	6		—			—			—		—			—			—		—			6		—
Life settlement contracts	129		11			—			—		—			(15		)	—		—			125		(1		)
Separate account business	37		—			—			—		(2		)	—			—		—			35		—
Total	$	2,481	$	(1	)	$	(21	)	$	380	$	(296	)	$	(100	)	$	14	$	(230	)	$	2,227	$	(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 nine months ended September 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 September 30, 2012		Unrealized gains (losses) on Level 3 assets and liabilities held at September 30, 2012 recognized in net income (loss)*
Fixed maturity securities:
Corporate and other bonds	$	482	$	7		$	2		$	197	$	(118	)	$	(43	)	$	42	$	(310	)	$	259	$	(1	)
States, municipalities and political subdivisions	171		—			3			—		—			(85		)	—		—			89		—
Asset-backed:
Residential mortgage-backed	452		(15		)	(2		)	81		—			(24		)	—		(55		)	437		(18		)
Commercial mortgage-backed	59		6			14			141		(12		)	(21		)	11		(81		)	117		—
Other asset-backed	343		8			8			501		(293		)	(93		)	—		(103		)	371		—
Total asset-backed	854		(1		)	20			723		(305		)	(138		)	11		(239		)	925		(18		)
Redeemable preferred stock	—		—			(1		)	53		(26		)	—			—		—			26		—
Total fixed maturity securities	1,507		6			24			973		(449		)	(266		)	53		(549		)	1,299		(19		)
Equity securities	67		(19		)	6			26		(16		)	—			—		(14		)	50		(21		)
Derivative and other financial instruments, net	10		—			—			—		—			—			—		—			10		—
Short term investments	27		—			—			23		(4		)	(39		)	1		—			8		—
Life settlement contracts	117		30			—			—		—			(34		)	—		—			113		3
Separate account business	23		—			—			—		(20		)	—			—		—			3		—
Total	$	1,751	$	17		$	30		$	1,022	$	(489	)	$	(339	)	$	54	$	(563	)	$	1,483	$	(37	)

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 September 30, 2011		Unrealized gains (losses) on Level 3 assets and liabilities held at September 30, 2011 recognized in net income (loss)*
Fixed maturity securities:
Corporate and other bonds	$	624	$	(5	)	$	(6	)	$	459	$	(157	)	$	(144	)	$	52	$	(204	)	$	619	$	(11	)
States, municipalities and political subdivisions	266		—			—			3		—			(87		)	—		—			182		—
Asset-backed:
Residential mortgage-backed	767		(11		)	9			170		(164		)	(54		)	—		(86		)	631		(15		)
Commercial mortgage-backed	73		3			11			81		(4		)	—			—		(5		)	159		—
Other asset-backed	359		—			(6		)	441		(236		)	(80		)	2		(51		)	429		(4		)
Total asset-backed	1,199		(8		)	14			692		(404		)	(134		)	2		(142		)	1,219		(19		)
Redeemable preferred stock	3		3			(3		)	—		(3		)	—			—		—			—		—
Total fixed maturity securities	2,092		(10		)	5			1,154		(564		)	(365		)	54		(346		)	2,020		(30		)
Equity securities	26		(2		)	(1		)	19		(12		)	—			5		(3		)	32		(3		)
Derivative and other financial instruments, net	25		2			—			1		(19		)	—			—		—			9		1
Short term investments	27		—			—			12		—			(23		)	—		(10		)	6		—
Life settlement contracts	129		20			—			—		—			(24		)	—		—			125		2
Separate account business	41		—			—			—		(6		)	—			—		—			35		—
Total	$	2,340	$	10		$	4		$	1,186	$	(601	)	$	(412	)	$	59	$	(359	)	$	2,227	$	(30	)

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

	Fair Value at September 30, 2012		Valuation Technique(s)	Unobservable Input(s)	Range  (Weighted Average)
Assets
(In millions)
Fixed maturity securities	$	98	Discounted cash flow	Expected call date	3.6 - 5.6 years (4.6 years)
	$	61	Market approach	Private offering price	$60.00 - $105.00 ($101.49)
Equity securities	$	33	Market approach	Private offering price	$0.10 - $3,842.00 per share ($583.95 per share)
	$	17	Income approach	EBITDA projection (1)	$80 million
				EBITDA multiple (1)	1.82
Life settlement contracts	$	113	Discounted cash flow	Discount rate risk premium	9%
				Mortality assumption	65% - 928% (185%)

_{(1) Earnings before interest, tax, depreciation and amortization}

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.

September 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	358		—		—		374		374
Financial liabilities
Premium deposits and annuity contracts	$	103	$	—	$	—	$	108	$	108
Short term debt	13		—		13		—		13
Long term debt	2,557		—		2,986		—		2,986

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