DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value and Notional Amount of Derivatives with Counterparty Credit Risk

The counterparties to these derivatives are financial institutions with the following credit ratings.



	September 30, 2013										December 31, 2012
(In millions)	Notional Amount of Derivatives			Asset Derivatives Fair Value			Liability Derivatives Fair Value				Notional Amount of Derivatives			Asset Derivatives Fair Value			Liability Derivatives Fair Value
Counterparties' credit rating:
AA		$	161		$	4		$	(4	)		$	161		$	6		$	(7	)
A		22,640			594			(431		)		13,209			339			(927		)
Total		$	22,801		$	598		$	(435	)		$	13,370		$	345		$	(934	)

Maximum Potential Risk, Fair Value, Weighted Average Years to Maturity, and Underlying Referenced Credit Obligation Type for Credit Derivatives

The following tables present the maximum potential risk, fair value, weighted-average years to maturity, and underlying referenced credit obligation type for credit default swaps within consolidated VIE structures.



September 30, 2013
		Less than one year				One to three years					Three to five years				Five to ten years						Total
(In millions)	Credit Rating	Maximum potential risk		Estimated fair value		Maximum potential risk			Estimated fair value		Maximum potential risk		Estimated fair value		Maximum potential risk			Estimated fair value			Maximum potential risk			Estimated fair value
Index exposure:
Corporate bonds:
	A	$	0	$	0	$	(120	)	$	2	$	0	$	0	$	0		$	0		$	(120	)	$	2
	BB or lower	0		0		0			0		0		0		(102		)	(9		)	(102		)	(9		)
Total		$	0	$	0	$	(120	)	$	2	$	0	$	0	$	(102	)	$	(9	)	$	(222	)	$	(7	)



December 31, 2012
		Less than one year				One to three years					Three to five years						Five to ten years						Total
(In millions)	Credit Rating	Maximum potential risk		Estimated fair value		Maximum potential risk			Estimated fair value		Maximum potential risk			Estimated fair value			Maximum potential risk			Estimated fair value			Maximum potential risk			Estimated fair value
Index exposure:
Corporate bonds:
	A	$	0	$	0	$	(133	)	$	2	$	0		$	0		$	0		$	0		$	(133	)	$	2
	BB or lower	0		0		0			0		(106		)	(47		)	(116		)	(20		)	(222		)	(67		)
Total		$	0	$	0	$	(133	)	$	2	$	(106	)	$	(47	)	$	(116	)	$	(20	)	$	(355	)	$	(65	)

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The tables below summarize the balance sheet classification of our derivative fair value amounts, as well as the gross asset and liability fair value amounts. The fair value amounts presented do not include income accruals. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated. Notional amounts are not reflective of credit risk.



		September 30, 2013
(In millions)	Net Derivatives							Asset Derivatives			Liability Derivatives
Hedge Designation/ Derivative Type	Notional Amount			Fair Value				Fair Value			Fair Value
Cash flow hedges:
Interest rate swaps		$	56		$	0			$	0		$	0
Foreign currency swaps		75			9				9			0
Total cash flow hedges		131			9				9			0
Fair value hedges:
Foreign currency forwards		11,266			125				129			(4		)
Interest rate swaptions		4,500			(70		)		38			(108		)
Total fair value hedges		15,766			55				167			(112		)
Net investment hedge:
Foreign currency swaps		1,950			201				264			(63		)
Foreign currency forwards		384			(9		)		0			(9		)
Foreign currency options		102			(2		)		2			(4		)
Total net investment hedge		2,436			190				266			(76		)
Non-qualifying strategies:
Interest rate swaps		222			0				1			(1		)
Foreign currency swaps		4,024			(84		)		153			(237		)
Credit default swaps		222			(7		)		2			(9		)
Total non-qualifying strategies		4,468			(91		)		156			(247		)
Total derivatives		$	22,801		$	163			$	598		$	(435	)
Balance Sheet Location
Other assets		$	15,334		$	598			$	598		$	0
Other liabilities		7,467			(435		)		0			(435		)
Total derivatives		$	22,801		$	163			$	598		$	(435	)



		December 31, 2012
(In millions)	Net Derivatives							Asset Derivatives			Liability Derivatives
Hedge Designation/ Derivative Type	Notional Amount			Fair Value				Fair Value			Fair Value
Cash flow hedges:
Interest rate swaps		$	64		$	0			$	0		$	0
Foreign currency swaps		75			14				14			0
Total cash flow hedges		139			14				14			0
Fair value hedges:
Foreign currency forwards		6,944			(535		)		0			(535		)
Total fair value hedges		6,944			(535		)		0			(535		)
Non-qualifying strategies:
Interest rate swaps		355			29				32			(3		)
Foreign currency swaps		5,577			(32		)		297			(329		)
Credit default swaps		355			(65		)		2			(67		)
Total non-qualifying strategies		6,287			(68		)		331			(399		)
Total derivatives		$	13,370		$	(589	)		$	345		$	(934	)
Balance Sheet Location
Other assets		$	2,585		$	345			$	345		$	0
Other liabilities		10,785			(934		)		0			(934		)
Total derivatives		$	13,370		$	(589	)		$	345		$	(934	)

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location

The following table presents the gains and losses on derivatives and the related hedged items in fair value hedges.

Fair Value Hedging Relationships



(In millions)		Hedging Derivatives									Hedged Items
Hedging Derivatives	Hedged Items	Total Gains (Losses)			Gains (Losses) Excluded from Effectiveness Testing			Gains (Losses) Included in Effectiveness Testing			Gains (Losses)			Ineffectiveness Recognized for Fair Value Hedge
Three Months Ended September 30, 2013:
Foreign currency forwards	Fixed-maturity securities	$	102		$	(6	)	$	108		$	(104	)	$	4
Interest rate swaptions	Fixed-maturity securities	(41		)	(41		)	0			0			0
Nine Months Ended September 30, 2013:
Foreign currency forwards	Fixed-maturity securities	$	(891	)	$	(17	)	$	(874	)	$	870		$	(4	)
Interest rate swaptions	Fixed-maturity securities	(41		)	(41		)	0			0			0
Three and Nine Months Ended September 30, 2012:
Foreign currency forwards	Fixed-maturity securities	$	17		$	(3	)	$	20		$	(20	)	$	0

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

Impact of Derivatives and Hedging Instruments

The following table summarizes the impact to realized investment gains (losses) and other comprehensive income (loss) from all derivatives and hedging instruments.



	Three Months Ended September 30,																Nine Months Ended September 30,
	2013								2012								2013								2012
(In millions)	Realized Investment Gains (Losses)				Other Comprehensive Income (Loss)⁽¹⁾				Realized Investment Gains (Losses)				Other Comprehensive Income (Loss)⁽¹⁾				Realized Investment Gains (Losses)				Other Comprehensive Income (Loss)⁽¹⁾				Realized Investment Gains (Losses)				Other Comprehensive Income (Loss)⁽¹⁾
Qualifying hedges:
Cash flow hedges:
Foreign currency swaps		$	1			$	2			$	0			$	2			$	(1	)		$	(5	)		$	0			$	(6	)
Total cash flow hedges		1				2				0				2				(1		)		(5		)		0				(6		)
Fair value hedges:
Foreign currency forwards⁽²⁾		(2		)		0				(3		)		0				(21		)		0				(3		)		0
Interest rate swaptions		(41		)		0				0				0				(41		)		0				0				0
Total fair value hedges		(43		)		0				(3		)		0				(62		)		0				(3		)		0
Net investment hedge:
Non- derivative hedging instruments		0				(6		)		0				(21		)		0				100				0				(4		)
Foreign currency swaps		0				(22		)		0				0				0				(104		)		0				0
Foreign currency forwards		0				2				0				0				0				(2		)		0				0
Foreign currency options		0				(4		)		0				0				0				(1		)		0				0
Total net investment hedge		0				(30		)		0				(21		)		0				(7		)		0				(4		)
Non-qualifying strategies:
Interest rate swaps		(1		)		0				7				0				(9		)		0				4				0
Foreign currency swaps		34				0				66				0				229				0				59				0
Foreign currency options		0				0				0				0				11				0				0				0
Credit default swaps		4				0				25				0				25				0				48				0
Interest rate swaptions		(29		)		0				0				0				(29		)		0				0				0
Other		(7		)		0				0				0				(7		)		0				0				0
Total non- qualifying strategies		1				0				98				0				220				0				111				0
Total		$	(41	)		$	(28	)		$	95			$	(19	)		$	157			$	(12	)		$	108			$	(10	)

⁽¹⁾Cash flow hedge items are recorded as unrealized gains (losses) on derivatives and net investment hedge items are recorded in the unrealized

foreign currency translation gains (losses) line in the consolidated statement of comprehensive income (loss).

⁽²⁾ Impact shown net of effect of hedged items (see Fair Value Hedges section of this Note 4 for further detail)

Offsetting Assets

The tables below summarize our derivatives and securities lending transactions, and as reflected in the tables, in accordance with GAAP, our policy is to not offset these financial instruments in the Consolidated Balance Sheets.

Offsetting of Financial Assets and Derivative Assets



September 30, 2013
										Gross Amounts Not Offset in Balance Sheet
(in millions)	Gross Amount of Recognized Assets			Gross Amount Offset in Balance Sheet			Net Amount of Assets Presented in Balance Sheet			Carrying Value of Financial Instruments			Collateral Received					Net Amount
Derivative assets:
Interest rate swaps		$	1		$	0		$	1		$	0		$	0				$	1
Foreign currency swaps		426			0			426			0			(104		)			322
Foreign currency forwards		129			0			129			0			0					129
Foreign currency options		2			0			2			0			0					2
Credit default swaps		2			0			2			0			0					2
Interest rate swaptions		38			0			38			0			0					38
Total derivative assets, subject to a master netting arrangement or offsetting arrangement		598			0			598			0			(104		)	⁽¹⁾		494
Securities lending and similar arrangements		613			0			613			0			(613		)			0
Total		$	1,211		$	0		$	1,211		$	0		$	(717	)			$	494

⁽¹⁾ Consists entirely of cash.



December 31, 2012
										Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Assets			Gross Amount Offset in Balance Sheet			Net Amount of Assets Presented in Balance Sheet			Carrying Value of Financial Instruments			Collateral Received				Net Amount
Derivative assets:
Interest rate swaps		$	32		$	0		$	32		$	0		$	0			$	32
Foreign currency swaps		311			0			311			0			0				311
Credit default swaps		2			0			2			0			0				2
Total derivative assets, subject to a master netting arrangement or offsetting arrangement		345			0			345			0			0				345
Securities lending and similar arrangements		6,122			0			6,122			0			(6,122		)		0
Total		$	6,467		$	0		$	6,467		$	0		$	(6,122	)		$	345

Offsetting Liabilities

Offsetting of Financial Liabilities and Derivative Liabilities



September 30, 2013
												Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Liabilities				Gross Amount Offset in Balance Sheet			Net Amount of Liabilities Presented in Balance Sheet				Carrying Value of Financial Instruments			Collateral Pledged				Net Amount
Derivative liabilities:
Interest rate swaps		$	(1	)		$	0		$	(1	)		$	0		$	0			$	(1	)
Foreign currency swaps		(300		)		0			(300		)		0			7				(293		)
Foreign currency forwards		(13		)		0			(13		)		0			9				(4		)
Foreign currency options		(4		)		0			(4		)		0			2				(2		)
Credit default swaps		(9		)		0			(9		)		0			0				(9		)
Interest rate swaptions		(108		)		0			(108		)		0			70				(38		)
Total derivative liabilities, subject to a master netting arrangement or offsetting arrangement		(435		)		0			(435		)		0			88		⁽¹⁾		(347		)
Securities lending and similar arrangements		(628		)		0			(628		)		613			0				(15		)
Total		$	(1,063	)		$	0		$	(1,063	)		$	613		$	88			$	(362	)

⁽¹⁾ Consists of $70 of pledged JGBs and $18 of cash.



December 31, 2012
												Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Liabilities				Gross Amount Offset in Balance Sheet			Net Amount of Liabilities Presented in Balance Sheet				Carrying Value of Financial Instruments			Collateral Pledged			Net Amount
Derivative liabilities:
Interest rate swaps		$	(3	)		$	0		$	(3	)		$	0		$	0		$	(3	)
Foreign currency swaps		(329		)		0			(329		)		0			0			(329		)
Foreign currency forwards		(535		)		0			(535		)		0			0			(535		)
Credit default swaps		(67		)		0			(67		)		0			0			(67		)
Total derivative liabilities, subject to a master netting arrangement or offsetting arrangement		(934		)		0			(934		)		0			0			(934		)
Securities lending and similar arrangements		(6,277		)		0			(6,277		)		6,122			0			(155		)
Total		$	(7,211	)		$	0		$	(7,211	)		$	6,122		$	0		$	(1,089	)

- Definition

Tabular disclosure of credit derivatives which includes information by sellers of credit derivatives, about each credit derivative, or each group of similar credit derivatives, including (a) the nature of the credit derivative - its term, how it arose, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative; (b) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative; (c) the current fair value of the credit derivative; and (d) the nature of any recourse provisions under the credit derivative, and any assets held either as collateral or by third parties. A credit derivative is a derivative instrument (1) in which one or more of its underlyings are related to the credit risk of a specified entity (or a group of entities) or an index based on the credit risk of a group of entities and (2) that exposes the seller to potential loss from credit-risk-related events specified in the contract. Examples of credit derivatives within the scope of this paragraph include, but are not limited to, credit default swaps, credit spread options, and credit index products; also includes a hybrid instrument that has an embedded credit derivative (for example, but not limited to, a credit-linked note).

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