10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2012

OR

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number:  1-6028

LINCOLN NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Indiana	35-1140070
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
150 N. Radnor Chester Road, Suite A305, Radnor, Pennsylvania	19087
(Address of principal executive offices)	(Zip Code)

(484) 583-1400

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer x   Accelerated filer ¨Non-accelerated filer ¨(Do not check if a smaller reporting company)

Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No x

As of April 30, 2012, there were 285,414,653 shares of the registrant’s common stock outstanding.

Lincoln National Corporation

Table of Contents

Item			Page
PART I
1.	Financial Statements		1
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		40
		Forward-Looking Statements – Cautionary Language	40
		Introduction	41
		Executive Summary	41
		Critical Accounting Policies and Estimates	42
		Acquisitions and Dispositions	44
		Results of Consolidated Operations	45
		Results of Annuities	46
		Results of Retirement Plan Services	51
		Results of Life Insurance	57
		Results of Group Protection	64
		Results of Other Operations	67
		Realized Gain (Loss) and Benefit Ratio Unlocking	69
		Consolidated Investments	71
		Review of Consolidated Financial Condition	85
		Liquidity and Capital Resources	85
		Other Matters	88
		Other Factors Affecting Our Business	88
		Recent Accounting Pronouncements	88
3.	Quantitative and Qualitative Disclosures About Market Risk		88
4.	Controls and Procedures		91
PART II
1.	Legal Proceedings		92
2.	Unregistered Sales of Equity Securities and Use of Proceeds		92
6.	Exhibits		92
	Signatures		93
	Exhibit Index for the Report on Form 10-Q		E-1

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

LINCOLN NATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

							As of			As of
							March 31,		December 31,
							2012			2011
						(Unaudited)
ASSETS
Investments:
	Available-for-sale securities, at fair value:
		Fixed maturity securities (amortized cost: 2012 - $69,889; 2011 - $68,988)					$	76,254		$	75,433
		Variable interest entities' fixed maturity securities (amortized cost: 2012 - $674; 2011 - $673)						702			700
		Equity securities (cost: 2012 - $114; 2011 - $135)						126			139
	Trading securities							2,650			2,675
	Mortgage loans on real estate							6,938			6,942
	Real estate							113			137
	Policy loans							2,842			2,884
	Derivative investments							2,244			3,151
	Other investments							1,043			1,069
			Total investments					92,912			93,130
Cash and invested cash								3,516			4,510
Deferred acquisition costs and value of business acquired								6,880			6,776
Premiums and fees receivable								437			408
Accrued investment income								1,026			981
Reinsurance recoverables								6,534			6,526
Funds withheld reinsurance assets								866			874
Goodwill								2,273			2,273
Other assets								2,486			2,536
Separate account assets								91,088			83,477
					Total assets		$	208,018		$	201,491
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Future contract benefits							$	18,784		$	19,813
Other contract holder funds								70,027			69,466
Short-term debt								300			300
Long-term debt								5,606			5,391
Reinsurance related embedded derivatives								158			168
Funds withheld reinsurance liabilities								1,043			1,045
Deferred gain on business sold through reinsurance								375			394
Payables for collateral on investments								2,875			3,733
Variable interest entities' liabilities								149			193
Other liabilities								4,352			4,273
Separate account liabilities								91,088			83,477
				Total liabilities				194,757			188,253
Contingencies and Commitments (See Note 8)
Stockholders' Equity
Preferred stock - 10,000,000 shares authorized; Series A - 9,632 and 10,072 shares
	issued and outstanding as of March 31, 2012, and December 31, 2011, respectively							-			-
Common stock - 800,000,000 shares authorized; 285,412,303 and 291,319,222 shares
	issued and outstanding as of March 31, 2012, and December 31, 2011, respectively							7,448			7,590
Retained earnings								3,191			2,969
Accumulated other comprehensive income (loss)								2,622			2,679
				Total stockholders' equity				13,261			13,238
					Total liabilities and stockholders' equity		$	208,018		$	201,491

See accompanying Notes to Consolidated Financial Statements

1

LINCOLN NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in millions, except per share data)

	For the Three
	Months Ended
	March 31,
	2012			2011
Revenues
Insurance premiums	$	589		$	568
Insurance fees		907			818
Net investment income		1,166			1,191
Realized gain (loss):
Total other-than-temporary impairment losses on securities		(97	)		(44	)
Portion of loss recognized in other comprehensive income		50			3
Net other-than-temporary impairment losses on securities
recognized in earnings		(47	)		(41	)
Realized gain (loss), excluding other-than-temporary
impairment losses on securities		(38	)		43
Total realized gain (loss)		(85	)		2
Amortization of deferred gain on business sold through reinsurance		19			19
Other revenues and fees		118			120
Total revenues		2,714			2,718
Benefits and Expenses
Interest credited		625			614
Benefits		858			835
Underwriting, acquisition, insurance and other expenses		856			768
Interest and debt expense		68			72
Total benefits and expenses		2,407			2,289
Income (loss) from continuing operations before taxes		307			429
Federal income tax expense (benefit)		61			115
Income (loss) from continuing operations		246			314
Income (loss) from discontinued operations, net of federal
income taxes		(1	)		-
Net income (loss)		245			314
Other comprehensive income (loss), net of tax		(57	)		22
Comprehensive income (loss)	$	188		$	336
Earnings (Loss) Per Common Share - Basic
Income (loss) from continuing operations	$	0.85		$	1.00
Income (loss) from discontinued operations		-			-
Net income (loss)	$	0.85		$	1.00
Earnings (Loss) Per Common Share - Diluted
Income (loss) from continuing operations	$	0.83		$	0.97
Income (loss) from discontinued operations		-			-
Net income (loss)	$	0.83		$	0.97

See accompanying Notes to Consolidated Financial Statements

2

LINCOLN NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in millions, except per share data)

	For the Three
	Months Ended
	March 31,
	2012			2011
Common Stock
Balance as of beginning-of-year	$	7,590		$	8,124
Stock compensation/issued for benefit plans		8			2
Retirement of common stock/cancellation of shares		(150	)		(62	)
Balance as of end-of-period		7,448			8,064
Retained Earnings
Balance as of beginning-of-year		2,969			3,933
Cumulative effect from adoption of new accounting standards		-			(1,095	)
Net income (loss)		245			314
Retirement of common stock		-			(13	)
Dividends declared:  Common (2012 - $0.080; 2011 - $0.050)		(23	)		(17	)
Balance as of end-of-period		3,191			3,122
Accumulated Other Comprehensive Income (Loss)
Balance as of beginning-of-year		2,679			748
Cumulative effect from adoption of new accounting standards		-			103
Other comprehensive income (loss), net of tax		(57	)		22
Balance as of end-of-period		2,622			873
Total stockholders' equity as of end-of-period	$	13,261		$	12,059

See accompanying Notes to Consolidated Financial Statements

3

	For the Three
	Months Ended
	March 31,
	2012			2011
Cash Flows from Operating Activities
Net income (loss)	$	245		$	314
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred acquisition costs, value of business acquired, deferred sales inducements
and deferred front-end loads deferrals and interest, net of amortization		(44	)		(31	)
Trading securities purchases, sales and maturities, net		15			5
Change in premiums and fees receivable		(29	)		(66	)
Change in accrued investment income		(45	)		(56	)
Change in future contract benefits and other contract holder funds		(144	)		124
Change in reinsurance related assets and liabilities		(2	)		(67	)
Change in federal income tax accruals		185			131
Realized (gain) loss		85			(2	)
Amortization of deferred gain on business sold through reinsurance		(19	)		(19	)
(Gain) loss on disposal of discontinued operations		1			-
Other		34			7
Net cash provided by (used in) operating activities		282			340
Cash Flows from Investing Activities
Purchases of available-for-sale securities		(2,497	)		(3,111	)
Sales of available-for-sale securities		185			556
Maturities of available-for-sale securities		1,341			1,431
Purchases of other investments		(830	)		(855	)
Sales or maturities of other investments		780			740
Increase (decrease) in payables for collateral on investments		(858	)		(105	)
Other		(34	)		(23	)
Net cash provided by (used in) investing activities		(1,913	)		(1,367	)
Cash Flows from Financing Activities
Issuance of long-term debt, net of issuance costs		298			-
Deposits of fixed account values, including the fixed portion of variable		2,391			2,570
Withdrawals of fixed account values, including the fixed portion of variable		(1,320	)		(1,200	)
Transfers to and from separate accounts, net		(556	)		(772	)
Common stock issued for benefit plans and excess tax benefits		(3	)		(5	)
Repurchase of common stock		(150	)		(75	)
Dividends paid to common and preferred stockholders		(23	)		(16	)
Net cash provided by (used in) financing activities		637			502
Net increase (decrease) in cash and invested cash, including discontinued operations		(994	)		(525	)
Cash and invested cash, including discontinued operations, as of beginning-of-year		4,510			2,741
Cash and invested cash, including discontinued operations, as of end-of-period	$	3,516		$	2,216

See accompanying Notes to Consolidated Financial Statements

4

LINCOLN NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.  Nature of Operations and Basis of Presentation

Nature of Operations

Lincoln National Corporation and its majority-owned subsidiaries (“LNC” or the “Company,” which also may be referred to as “we,” “our” or “us”) operate multiple insurance businesses through four business segments.  See Note 13 for additional details.  The collective group of businesses uses “Lincoln Financial Group” as its marketing identity.  Through our business segments, we sell a wide range of wealth protection, accumulation and retirement income products.  These products include institutional and/or retail fixed and indexed annuities, variable annuities, universal life insurance (“UL”), variable universal life insurance (“VUL”), linked-benefit UL, term life insurance, mutual funds and group life, disability and dental.

Basis of Presentation

The accompanying unaudited consolidated financial statements are prepared in accordance with United States of America generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for the Securities and Exchange Commission (“SEC”) Quarterly Report on Form 10-Q, including Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.  Therefore, the information contained in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”), should be read in connection with the reading of these interim unaudited consolidated financial statements.

Certain GAAP policies, which significantly affect the determination of financial position, results of operations and cash flows, are summarized in our 2011 Form 10-K.

In the opinion of management, these statements include all normal recurring adjustments necessary for a fair presentation of the Company’s results.  Operating results for the three month period ended March 31, 2012, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012.  All material intercompany accounts and transactions have been eliminated in consolidation.

See Note 2 “Financial Services – Insurance Industry Topic” below for information about the retrospective restatement of amounts due to the adoption of new accounting guidance.  In addition, certain amounts reported in prior years’ consolidated financial statements have been reclassified to conform to the presentation adopted in the current year.  These reclassifications had no effect on net income or stockholders’ equity of the prior years.

2.  New Accounting Standards

Adoption of New Accounting Standards

Comprehensive Income Topic

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”), with an objective of increasing the prominence of items reported in other comprehensive income (“OCI”); however, in December 2011, the FASB deferred a portion of the presentation requirements by issuing ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011- 12”).  For a more detailed description of ASU 2011-05 and ASU 2011-12, see “Future Adoption of New Accounting Standards – Comprehensive Income Topic” in Note 2 of our 2011 Form 10-K.  We adopted the provisions of ASU 2011-05 as of January 1, 2012, after considering the deferral in ASU 2011-12, and have included a single continuous statement of comprehensive income in Item 1 of this quarterly report on Form 10-Q for the quarterly period ended March 31, 2012.

Fair Value Measurements and Disclosures Topic

In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards” (“ASU 2011-04”), which was issued to create a consistent framework for the application of fair value measurement across jurisdictions. For a more detailed description of ASU 2011-04 see “Future Adoption of New Accounting Standards – Fair Value Measurements and Disclosures Topic” in Note 2 of our 2011 Form 10-K.  We adopted the provisions of ASU 2011-04 effective January 1, 2012, and have included the additional disclosures required for fair value measurements in Note 12 for the quarterly period ended March 31, 2012.

5

Financial Services – Insurance Industry Topic

In October 2010, the FASB issued ASU No. 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts” (“ASU 2010-26”), which clarifies the types of costs incurred by an insurance entity that can be capitalized in the acquisition of insurance contracts.  Only those costs incurred that result directly from and are essential to the successful acquisition of new or renewal insurance contracts may be capitalized as deferrable acquisition costs.  The determination of deferability must be made on a contract-level basis.

Prior to the adoption of ASU 2010-26, we defined deferred acquisition costs (“DAC”) as commissions and other costs of acquiring UL insurance, VUL insurance, traditional life insurance, annuities and other investments contracts that vary with and are related primarily to new or renewal business, regardless of whether the acquisition efforts were successful or unsuccessful.  Upon the adoption of ASU 2010-26, we revised our accounting policy to only defer acquisition costs directly related to successful contract acquisitions or renewals, and excluded from DAC those costs incurred for soliciting potential customers, market research, training, administration, management of distribution and underwriting functions, unsuccessful acquisition or renewal efforts and product development.  In addition, indirect acquisition costs including administrative costs, rent, depreciation, occupancy costs, equipment costs and other general overhead are excluded from DAC.  The costs that are considered non-deferrable acquisition costs under ASU 2010-26 are expensed in the period incurred.

We adopted the provisions of ASU 2010-26 as of January 1, 2012, and elected to retrospectively restate all prior periods.  The following summarizes the prior period increases (decreases) (in millions) reflected in our Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Equity related to the adoption:

	As of December 31,
	2011			2010
Assets
Deferred acquisition costs	$	(1,415	)	$	(1,516	)
Liabilities and Stockholders' Equity
Other liabilities - deferred income taxes	$	(490	)	$	(524	)
Stockholders' equity:
Retained earnings		(1,157	)		(1,095	)
Accumulated other comprehensive income (loss)		232			103
Total stockholders' equity		(925	)		(992	)
Total liabilities and stockholders' equity	$	(1,415	)	$	(1,516	)

The following summarizes the prior period increases (decreases) to income from continuing operations and earnings (loss) per share (“EPS”) (in millions, except per share data) reflected in our Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2011, related to the adoption:

Revenues
Realized gain (loss)	$	4
Expenses
Underwriting, acquisition, insurance and other expenses		(43	)
Income (loss) from continuing operations before taxes		(39	)
Federal income tax expense (benefit)		14
Income (loss) from continuing operations	$	(25	)
Earnings (Loss) Per Common Share - Basic	$	(0.08	)
Earnings (Loss) Per Common Share - Diluted	$	(0.08	)

6

Intangibles – Goodwill and Other Topic

In September 2011, the FASB issued ASU No. 2011-08, “Testing Goodwill for Impairment” (“ASU 2011-08”), which provides an option to first assess qualitative factors to determine if it is necessary to complete the two-step goodwill impairment test.  For a more detailed description of ASU 2011-08, see “Future Adoption of New Accounting Standards – Intangibles – Goodwill and Other Topic” in Note 2 of our 2011 Form 10-K.  We adopted the provisions of ASU 2011-08 effective January 1, 2012.  The adoption did not have a material effect on our consolidated financial condition and results of operations.

Transfers and Servicing Topic

In April 2011, the FASB issued ASU No. 2011-03, “Reconsideration of Effective Control for Repurchase Agreements” (“ASU 2011-03”), which revises the criteria for assessing effective control for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity.  For a more detailed description of ASU 2011-03, see “Future Adoption of New Accounting Standards – Transfers and Servicing Topic” in Note 2 of our 2011 Form 10-K.  We adopted the provisions of ASU 2011-03 effective January 1, 2012.  The adoption did not have a material effect on our consolidated financial condition and results of operations.

Future Adoption of New Accounting Standards

Balance Sheet Topic

In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”), to address certain comparability issues between financial statements prepared in accordance with GAAP and those prepared in accordance with International Financial Reporting Standards.  For a more detailed description of ASU 2011-11, see “Future Adoption of New Accounting Standards – Balance Sheet Topic” in Note 2 of our 2011 Form 10-K.  We will adopt the disclosure requirements in ASU 2011-11 beginning with our first quarter 2013 financial statements and are currently evaluating the appropriate location for these disclosures in the notes to our financial statements.

3.  Variable Interest Entities (“VIEs”)

Consolidated VIEs

See Note 4 in our 2011 Form 10-K for a detailed discussion of our consolidated VIEs, which information is incorporated herein by reference.

The following summarizes information regarding the credit-linked note (“CLN”) structures (dollars in millions) as of March 31, 2012:

	Amount and Date of Issuance
			$400		$200
			December		April
			2006		2007
Original attachment point (subordination)			5.50 %		2.05 %
Current attachment point (subordination)			4.17 %		1.48 %
Maturity	12/20/2016			3/20/2017
Current rating of tranche			B+	Ba2
Current rating of underlying collateral pool		Aa1-B3		Aaa-Caa1
Number of defaults in underlying collateral pool			2		2
Number of entities			123		99
Number of countries			19		22

7

The following summarizes the exposure of the CLN structures’ underlying collateral by industry and rating as of March 31, 2012:

	AAA		AA		A		BBB		BB		B		CCC		Total
Industry
Telecommunications	-	%	0.3	%	5.1	%	4.8	%	0.3	%	0.5	%	-	%	11.0	%
Financial intermediaries	0.3	%	2.8	%	6.9	%	0.5	%	-	%	-	%	-	%	10.5	%
Oil and gas	-	%	0.7	%	1.0	%	4.6	%	-	%	-	%	-	%	6.3	%
Utilities	-	%	-	%	2.6	%	2.0	%	-	%	-	%	-	%	4.6	%
Chemicals and plastics	-	%	-	%	2.3	%	1.2	%	0.3	%	-	%	-	%	3.8	%
Drugs	0.3	%	2.7	%	0.7	%	-	%	-	%	-	%	-	%	3.7	%
Retailers (except food and drug)	-	%	-	%	2.1	%	0.9	%	0.5	%	-	%	-	%	3.5	%
Industrial equipment	-	%	-	%	3.0	%	0.3	%	-	%	-	%	-	%	3.3	%
Sovereign	-	%	0.7	%	1.6	%	1.0	%	-	%	-	%	-	%	3.3	%
Food products	-	%	0.3	%	1.8	%	1.1	%	-	%	-	%	-	%	3.2	%
Conglomerates	-	%	2.6	%	0.5	%	-	%	-	%	-	%	-	%	3.1	%
Forest products	-	%	-	%	-	%	1.6	%	1.4	%	-	%	-	%	3.0	%
Other	-	%	2.5	%	15.5	%	17.8	%	3.2	%	1.4	%	0.3	%	40.7	%
Total	0.6	%	12.6	%	43.1	%	35.8	%	5.7	%	1.9	%	0.3	%	100.0	%

Asset and liability information (dollars in millions) for these consolidated VIEs included on our Consolidated Balance Sheets was as follows:

	As of March 31, 2012							As of December 31, 2011
	Number							Number
	of		Notional		Carrying			of		Notional		Carrying
	Instruments		Amounts		Value			Instruments		Amounts		Value
Assets
Fixed maturity securities:
Asset-backed credit card loan		N/A	$	-	$	596			N/A	$	-	$	592
U.S. Government bonds		N/A		-		106			N/A		-		108
Excess mortality swap		1		100		-			1		100		-
Total assets (1)		1	$	100	$	702			1	$	100	$	700
Liabilities
Non-qualifying hedges:
Credit default swaps		2	$	600	$	224			2	$	600	$	295
Contingent forwards		2		-		(3	)		2		-		(4	)
Total non-qualifying hedges		4		600		221			4		600		291
Federal income tax		N/A		-		(72	)		N/A		-		(98	)
Total liabilities (2)		4	$	600	$	149			4	$	600	$	193

(1)        Reported in VIEs’ fixed maturity securities on our Consolidated Balance Sheets.

(2)        Reported in VIEs’ liabilities on our Consolidated Balance Sheets.

For details related to the fixed maturity available-for-sale (“AFS”) securities for these VIEs, see Note 4.

As described more fully in Note 1 of our 2011 Form 10-K, we regularly review our investment holdings for other-than-temporary impairment (“OTTI”).  Based upon this review, we believe that the fixed maturity securities were not other-than-temporarily impaired as of March 31, 2012.

8

The gains (losses) for these consolidated VIEs (in millions) recorded on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Non-Qualifying Hedges
Credit default swaps	$	71		$	8
Contingent forwards		(2	)		(2	)
Total non-qualifying hedges (1)	$	69		$	6

(1)        Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

Unconsolidated VIEs

See Note 4 in our 2011 Form 10-K for a detailed discussion of our unconsolidated VIEs, which information is incorporated herein by reference.

4.  Investments

AFS Securities

Pursuant to the Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards CodificationTM (“ASC”), we have categorized AFS securities into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique.  The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3), as described in Note 1 in our 2011 Form 10-K, which also includes additional disclosures regarding our fair value measurements.

The amortized cost, gross unrealized gains, losses and OTTI and fair value of AFS securities (in millions) were as follows:

	As of March 31, 2012
	Amortized		Gross Unrealized						Fair
	Cost		Gains		Losses		OTTI		Value
Fixed maturity securities:
Corporate bonds	$	55,255	$	5,854	$	407	$	103	$	60,599
U.S. Government bonds		450		41		5		-		486
Foreign government bonds		585		65		-		-		650
Residential mortgage-backed securities ("RMBS")		7,196		524		48		100		7,572
Commercial mortgage-backed securities ("CMBS")		1,533		76		67		19		1,523
Collateralized debt obligations ("CDOs")		117		-		15		-		102
State and municipal bonds		3,497		637		8		-		4,126
Hybrid and redeemable preferred securities		1,256		62		122		-		1,196
VIEs' fixed maturity securities		674		28		-		-		702
Total fixed maturity securities		70,563		7,287		672		222		76,956
Equity securities		114		19		7		-		126
Total AFS securities	$	70,677	$	7,306	$	679	$	222	$	77,082

9

	As of December 31, 2011
	Amortized		Gross Unrealized						Fair
	Cost		Gains		Losses		OTTI		Value
Fixed maturity securities:
Corporate bonds	$	53,661	$	6,185	$	517	$	68	$	59,261
U.S. Government bonds		439		55		-		-		494
Foreign government bonds		668		65		-		-		733
RMBS		7,690		548		73		126		8,039
CMBS		1,642		73		106		9		1,600
CDOs		121		-		19		-		102
State and municipal bonds		3,490		566		9		-		4,047
Hybrid and redeemable preferred securities		1,277		50		170		-		1,157
VIEs' fixed maturity securities		673		27		-		-		700
Total fixed maturity securities		69,661		7,569		894		203		76,133
Equity securities		135		16		12		-		139
Total AFS securities	$	69,796	$	7,585	$	906	$	203	$	76,272

The amortized cost and fair value of fixed maturity AFS securities by contractual maturities (in millions) were as follows:

	As of March 31, 2012
	Amortized		Fair
	Cost		Value
Due in one year or less	$	2,854	$	2,914
Due after one year through five years		12,020		12,955
Due after five years through ten years		22,816		25,040
Due after ten years		24,027		26,850
Subtotal		61,717		67,759
Mortgage-backed securities ("MBS")		8,729		9,095
CDOs		117		102
Total fixed maturity AFS securities	$	70,563	$	76,956

Actual maturities may differ from contractual maturities because issuers may have the right to call or pre-pay obligations.

10

The fair value and gross unrealized losses, including the portion of OTTI recognized in OCI, of AFS securities (dollars in millions), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

	As of March 31, 2012
	Less Than or Equal					Greater Than
	to Twelve Months					Twelve Months				Total
				Gross				Gross				Gross
				Unrealized				Unrealized				Unrealized
	Fair			Losses and		Fair		Losses and		Fair		Losses and
	Value			OTTI		Value		OTTI		Value		OTTI
Fixed maturity securities:
Corporate bonds		$	3,186	$	194	$	1,335	$	316	$	4,521	$	510
U.S. Government bonds			213		5		1		-		214		5
RMBS			572		99		351		49		923		148
CMBS			119		22		130		64		249		86
CDOs			3		1		75		14		78		15
State and municipal bonds			2		-		26		8		28		8
Hybrid and redeemable preferred securities			159		6		370		116		529		122
Total fixed maturity securities			4,254		327		2,288		567		6,542		894
Equity securities			12		7		-		-		12		7
Total AFS securities		$	4,266	$	334	$	2,288	$	567	$	6,554	$	901
Total number of AFS securities in an unrealized loss position													828

	As of December 31, 2011
	Less Than or Equal				Greater Than
	to Twelve Months				Twelve Months				Total
			Gross				Gross				Gross
			Unrealized				Unrealized				Unrealized
	Fair		Losses and		Fair		Losses and		Fair		Losses and
	Value		OTTI		Value		OTTI		Value		OTTI
Fixed maturity securities:
Corporate bonds	$	2,848	$	162	$	1,452	$	423	$	4,300	$	585
RMBS		565		125		429		74		994		199
CMBS		178		15		146		100		324		115
CDOs		9		1		80		18		89		19
State and municipal bonds		31		-		30		9		61		9
Hybrid and redeemable preferred securities		324		23		353		147		677		170
Total fixed maturity securities		3,955		326		2,490		771		6,445		1,097
Equity securities		38		12		-		-		38		12
Total AFS securities	$	3,993	$	338	$	2,490	$	771	$	6,483	$	1,109
Total number of AFS securities in an unrealized loss position												897

For information regarding our investments in VIEs, see Note 3.

11

We perform detailed analysis on the AFS securities backed by pools of residential and commercial mortgages that are most at risk of impairment based on factors discussed in Note 1 in our 2011 Form 10-K.  Selected information for these securities in a gross unrealized loss position (in millions) was as follows:

	As of March 31, 2012
	Amortized		Fair		Unrealized
	Cost		Value		Loss
Total
AFS securities backed by pools of residential mortgages	$	1,875	$	1,480	$	395
AFS securities backed by pools of commercial mortgages		367		270		97
Total	$	2,242	$	1,750	$	492
Subject to Detailed Analysis
AFS securities backed by pools of residential mortgages	$	1,862	$	1,467	$	395
AFS securities backed by pools of commercial mortgages		109		59		50
Total	$	1,971	$	1,526	$	445

	As of December 31, 2011
	Amortized		Fair		Unrealized
	Cost		Value		Loss
Total
AFS securities backed by pools of residential mortgages	$	2,023	$	1,553	$	470
AFS securities backed by pools of commercial mortgages		472		344		128
Total	$	2,495	$	1,897	$	598
Subject to Detailed Analysis
AFS securities backed by pools of residential mortgages	$	2,015	$	1,545	$	470
AFS securities backed by pools of commercial mortgages		126		61		65
Total	$	2,141	$	1,606	$	535

For the three months ended March 31, 2012 and 2011, we recorded OTTI for AFS securities backed by pools of residential and commercial mortgages of $21 million, pre-tax, and before associated amortization expense for DAC, value of business acquired (“VOBA”), deferred sales inducements (“DSI”) and deferred front-end loads (“DFEL”), of which $(21) million and $(26) million, respectively, was recognized in OCI and $42 million and $47 million, respectively, was recognized in net income (loss).

The fair value, gross unrealized losses, the portion of OTTI recognized in OCI (in millions) and number of AFS securities where the fair value had declined and remained below amortized cost by greater than 20% were as follows:

	As of March 31, 2012
							Number
	Fair		Gross Unrealized				of
	Value		Losses		OTTI		Securities (1)
Less than six months	$	81	$	32	$	3		23
Six months or greater, but less than nine months		111		42		14		19
Nine months or greater, but less than twelve months		50		17		14		16
Twelve months or greater		579		343		151		166
Total	$	821	$	434	$	182		224

12

	As of December 31, 2011
							Number
	Fair		Gross Unrealized				of
	Value		Losses		OTTI		Securities (1)
Less than six months	$	385	$	125	$	31	56
Six months or greater, but less than nine months		53		30		12	18
Nine months or greater, but less than twelve months		2		-		1	7
Twelve months or greater		615		470		111	175
Total	$	1,055	$	625	$	155	256

(1)        We may reflect a security in more than one aging category based on various purchase dates.

We regularly review our investment holdings for OTTI.  Our gross unrealized losses on AFS securities decreased $208 million for the three months ended March 31, 2012.  As discussed further below, we believe the unrealized loss position as of March 31, 2012, did not represent OTTI as we did not intend to sell these fixed maturity AFS securities, it is not more likely than not that we will be required to sell the fixed maturity AFS securities before recovery of their amortized cost basis, the estimated future cash flows were equal to or greater than the amortized cost basis of the debt securities, or we had the ability and intent to hold the equity AFS securities for a period of time sufficient for recovery.

Based upon this evaluation as of March 31, 2012, management believed we had the ability to generate adequate amounts of cash from our normal operations (e.g., insurance premiums and fees and investment income) to meet cash requirements with a prudent margin of safety without requiring the sale of our temporarily-impaired securities.

As of March 31, 2012, the unrealized losses associated with our corporate bond securities were attributable primarily to securities that were backed by commercial loans and individual issuer companies.  For our corporate bond securities with commercial loans as the underlying collateral, we evaluated the projected credit losses in the underlying collateral and concluded that we had sufficient subordination or other credit enhancement when compared with our estimate of credit losses for the individual security and we expected to recover the entire amortized cost for each security.  For individual issuers, we performed detailed analysis of the financial performance of the issuer and determined that we expected to recover the entire amortized cost for each security.

As of March 31, 2012, the unrealized losses associated with our MBS and CDOs were attributable primarily to collateral losses and credit spreads.  We assessed for credit impairment using a cash flow model as discussed above.  The key assumptions included default rates, severities and prepayment rates.  We estimated losses for a security by forecasting the underlying loans in each transaction.  The forecasted loan performance was used to project cash flows to the various tranches in the structure, as applicable.  Our forecasted cash flows also considered, as applicable, independent industry analyst reports and forecasts, sector credit ratings and other independent market data.  Based upon our assessment of the expected credit losses of the security given the performance of the underlying collateral compared to our subordination or other credit enhancement, we expected to recover the entire amortized cost basis of each security.

As of March 31, 2012, the unrealized losses associated with our hybrid and redeemable preferred securities were attributable primarily to wider credit spreads caused by illiquidity in the market and subordination within the capital structure, as well as credit risk of specific issuers.  For our hybrid and redeemable preferred securities, we evaluated the financial performance of the issuer based upon credit performance and investment ratings and determined we expected to recover the entire amortized cost of each security.

13

Changes in the amount of credit loss of OTTI recognized in net income (loss) where the portion related to other factors was recognized in OCI (in millions) on fixed maturity AFS securities were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Balance as of beginning-of-period	$	390		$	319
Increases attributable to:
Credit losses on securities for which an OTTI was not previously recognized		34			25
Credit losses on securities for which an OTTI was previously recognized		23			22
Decreases attributable to:
Securities sold		(37	)		(14	)
Balance as of end-of-period	$	410		$	352

During the three months ended March 31, 2012 and 2011, we recorded credit losses on securities for which an OTTI was not previously recognized as we determined the cash flows expected to be collected would not be sufficient to recover the entire amortized cost basis of the debt security.  The credit losses we recorded on securities for which an OTTI was not previously recognized were attributable primarily to one or a combination of the following reasons:

·        Failure of the issuer of the security to make scheduled payments;

·        Deterioration of creditworthiness of the issuer;

·        Deterioration of conditions specifically related to the security;

·        Deterioration of fundamentals of the industry in which the issuer operates;

·        Deterioration of fundamentals in the economy including, but not limited to, higher unemployment and lower housing prices; and

·        Deterioration of the rating of the security by a rating agency.

We recognize the OTTI attributed to the noncredit portion as a separate component in OCI referred to as unrealized OTTI on AFS securities.

Details of the amount of credit loss of OTTI recognized in net income (loss) where the portion related to other factors was recognized in OCI (in millions), were as follows:

	As of March 31, 2012
			Gross Unrealized						OTTI in
	Amortized				Losses and		Fair		Credit
	Cost		Gains		OTTI		Value		Losses
Corporate bonds	$	242	$	1	$	100	$	143	$	63
RMBS		688		4		100		592		290
CMBS		39		-		19		20		57
Total	$	969	$	5	$	219	$	755	$	410

	As of December 31, 2011
			Gross Unrealized						OTTI in
	Amortized				Losses and		Fair		Credit
	Cost		Gains		OTTI		Value		Losses
Corporate bonds	$	169	$	1	$	67	$	103	$	51
RMBS		690		1		128		563		301
CMBS		17		-		10		7		38
Total	$	876	$	2	$	205	$	673	$	390

14

Mortgage Loans on Real Estate

Mortgage loans on real estate principally involve commercial real estate.  The commercial loans are geographically diversified throughout the U.S. with the largest concentrations in California and Texas, which accounted for approximately 32% of mortgage loans on real estate as of March 31, 2012, and December 31, 2011.

The following provides the current and past due composition of our mortgage loans on real estate (in millions):

	As of			As of
	March 31,			December 31,
	2012			2011
Current	$	6,853		$	6,858
60 to 90 days past due		-			26
Greater than 90 days past due		99			76
Valuation allowance associated with impaired mortgage loans on real estate		(27	)		(31	)
Unamortized premium (discount)		13			13
Total carrying value	$	6,938		$	6,942

The number of impaired mortgage loans on real estate, each of which had an associated specific valuation allowance, and the carrying value of impaired mortgage loans on real estate (dollars in millions) were as follows:

		As of			As of
	March 31,				December 31,
		2012			2011
Number of impaired mortgage loans on real estate		10			12
Principal balance of impaired mortgage loans on real estate		$	85		$	100
Valuation allowance associated with impaired mortgage loans on real estate			(27	)		(31	)
Carrying value of impaired mortgage loans on real estate		$	58		$	69

The average carrying value on the impaired mortgage loans on real estate (in millions) was as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011
Average carrying value for impaired mortgage loans on real estate	$	64	$	55
Interest income recognized on impaired mortgage loans on real estate		-		1
Interest income collected on impaired mortgage loans on real estate		-		1

15

As described in Note 1 in our 2011 Form 10-K, we use the loan-to-value and debt-service coverage ratios as credit quality indicators for our mortgage loans, which were as follows (dollars in millions):

	As of March 31, 2012							As of December 31, 2011
						Debt-						Debt-
						Service						Service
	Principal			% of		Coverage		Principal		% of		Coverage
Loan-to-Value	Amount			Total		Ratio		Amount		Total		Ratio
Less than 65%		$	5,419	77.9	%		1.62	$	5,338	76.7	%		1.61
65% to 74%			1,121	16.1	%		1.39		1,198	17.2	%		1.37
75% to 100%			311	4.5	%		0.90		308	4.4	%		0.92
Greater than 100%			101	1.5	%		0.37		116	1.7	%		0.36
Total mortgage loans on real estate		$	6,952	100.0	%			$	6,960	100.0	%

Alternative Investments 

As of March 31, 2012, and December 31, 2011, alternative investments included investments in approximately 97 and 96 different partnerships, respectively, and the portfolio represented less than 1% of our overall invested assets.

Realized Gain (Loss) Related to Certain Investments

The detail of the realized gain (loss) related to certain investments (in millions) was as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Fixed maturity AFS securities:
Gross gains	$	5		$	36
Gross losses		(63	)		(63	)
Equity AFS securities:
Gross gains		1			8
Gain (loss) on other investments		7			13
Associated amortization of DAC, VOBA, DSI and DFEL and changes in other contract holder funds		2			(9	)
Total realized gain (loss) related to certain investments	$	(48	)	$	(15	)

16

Details underlying write-downs taken as a result of OTTI (in millions) that were recognized in net income (loss) and included in realized gain (loss) on AFS securities above, and the portion of OTTI recognized in OCI (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
OTTI Recognized in Net Income (Loss)
Corporate bonds	$	(19	)	$	(3	)
RMBS		(18	)		(20	)
CMBS		(20	)		(24	)
CDOs		-			(1	)
Hybrid and redeemable preferred securities		-			(2	)
Gross OTTI recognized in net income (loss)		(57	)		(50	)
Associated amortization of DAC, VOBA, DSI and DFEL		10			9
Net OTTI recognized in net income (loss), pre-tax	$	(47	)	$	(41	)
Portion of OTTI Recognized in OCI
Gross OTTI recognized in OCI	$	58		$	8
Change in DAC, VOBA, DSI and DFEL		(8	)		(5	)
Net portion of OTTI recognized in OCI, pre-tax	$	50		$	3

Determination of Credit Losses on Corporate Bonds and CDOs

As of March 31, 2012, and December 31, 2011, we reviewed our corporate bond and CDO portfolios for potential shortfall in contractual principal and interest based on numerous subjective and objective inputs.  The factors used to determine the amount of credit loss for each individual security, include, but are not limited to, near term risk, substantial discrepancy between book and market value, sector or company-specific volatility, negative operating trends and trading levels wider than peers.

Credit ratings express opinions about the credit quality of a security.  Securities rated investment grade, that is those rated BBB- or higher by Standard & Poor’s (“S&P”) Rating Services or Baa3 or higher by Moody’s Investors Service (“Moody’s”), are generally considered by the rating agencies and market participants to be low credit risk.  As of March 31, 2012, and December 31, 2011, 96% of the fair value of our corporate bond portfolio was rated investment grade.  As of March 31, 2012, and December 31, 2011, the portion of our corporate bond portfolio rated below investment grade had an amortized cost of $2.8 billion and $2.6 billion and a fair value of $2.6 billion and $2.4 billion, respectively.  As of March 31, 2012, and December 31, 2011, 97% of the fair value of our CDO portfolio was rated investment grade.  As of March 31, 2012, and December 31, 2011, the portion of our CDO portfolio rated below investment grade had an amortized cost and fair value of $3 million.  Based upon the analysis discussed above, we believed as of March 31, 2012, and December 31, 2011, that we would recover the amortized cost of each investment grade corporate bond and CDO security.

For securities where we recorded an OTTI recognized in net income (loss) for the three months ended March 31, 2012 and 2011, the recovery as a percentage of amortized cost was 92% and 98%, respectively, for corporate bonds and 0% for CDOs.

Determination of Credit Losses on MBS

As of March 31, 2012, and December 31, 2011, default rates were projected by considering underlying MBS loan performance and collateral type.  Projected default rates on existing delinquencies vary between 25% to 100% depending on loan type and severity of delinquency status.  In addition, we estimate the potential contributions of currently performing loans that may become delinquent in the future based on the change in delinquencies and loan liquidations experienced in the recent history.  Finally, we develop a default rate timing curve by aggregating the defaults for all loans (delinquent loans, foreclosure and real estate owned and new delinquencies from currently performing loans) in the pool to project the future expected cash flows. 

We use certain available loan characteristics such as lien status, loan sizes and occupancy to estimate the loss severity of loans.  Second lien loans are assigned 100% severity, if defaulted.  For first lien loans, we assume a minimum of 30% severity with higher severity assumed for investor properties and further housing price depreciation.

17

Payables for Collateral on Investments

The carrying values of the payables for collateral on investments (in millions) included on our Consolidated Balance Sheets and the fair value of the related investments or collateral consisted of the following:

	As of March 31, 2012				As of December 31, 2011
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Collateral payable held for derivative investments (1)	$	2,132	$	2,132	$	2,980	$	2,980
Securities pledged under securities lending agreements (2)		200		192		200		193
Securities pledged under reverse repurchase agreements (3)		280		292		280		294
Securities pledged for Term Asset-Backed Securities
Loan Facility ("TALF") (4)		163		188		173		199
Securities pledged for Federal Home Loan Bank of
Indianapolis Securities ("FHLBI") (5)		100		153		100		142
Total payables for collateral on investments	$	2,875	$	2,957	$	3,733	$	3,808

(1)   We obtain collateral based upon contractual provisions with our counterparties.  These agreements take into consideration the counterparties’ credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that once exceeded result in the receipt of cash that is typically invested in cash and invested cash.  See Note 6 for details about maximum collateral potentially required to post on our credit default swaps.

(2)   Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively.  We value collateral daily and obtain additional collateral when deemed appropriate.  The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities.

(3)   Our pledged securities under reverse repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We obtain collateral in an amount equal to 95% of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary.  The cash received in our reverse repurchase program is typically invested in fixed maturity AFS securities.

(4)   Our pledged securities for TALF are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We obtain collateral in an amount that has typically averaged 90% of the fair value of the TALF securities.  The cash received in these transactions is invested in fixed maturity AFS securities.

(5)   Our pledged securities for FHLBI are included in fixed maturity AFS securities on our Consolidated Balance Sheets.  We generally obtain collateral in an amount equal to 85% to 95% of the fair value of the FHLBI securities.  The cash received in these transactions is typically invested in cash and invested cash or fixed maturity AFS securities.

Increase (decrease) in payables for collateral on investments (in millions) included on the Consolidated Statements of Cash Flows consisted of the following:

	For the Three
	Months Ended
	March 31,
	2012			2011
Collateral payable held for derivative investments	$	(848	)	$	(70	)
Securities pledged under securities lending agreements		-			1
Securities pledged for TALF		(10	)		(36	)
Total increase (decrease) in payables for collateral on investments	$	(858	)	$	(105	)

Investment Commitments

As of March 31, 2012, our investment commitments were $653 million, which included $186 million of limited partnerships (“LPs”), $399 million of private placements and $68 million of mortgage loans on real estate.

Concentrations of Financial Instruments

As of March 31, 2012, and December 31, 2011, our most significant investments in one issuer were our investments in securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $4.6 billion and $5.0 billion, respectively, or 5% of our

18

invested assets portfolio, and our investments in securities issued by Fannie Mae with a fair value of $2.6 billion, or 3% of our invested assets portfolio.  These investments are included in corporate bonds in the tables above.

As of March 31, 2012, and December 31, 2011, our most significant investments in one industry were our investment securities in the electric industry with a fair value of $7.7 billion, or 8% of our invested assets portfolio, and our investment securities in the collateralized mortgage and other obligations industry with a fair value of $5.3 billion and $5.6 billion, respectively, or 6% of our invested assets portfolio.  We utilized the industry classifications to obtain the concentration of financial instruments amount; as such, this amount will not agree to the AFS securities table above.

5.  Derivative Instruments

We maintain an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings that are caused by interest rate risk, foreign currency exchange risk, equity market risk, default risk, basis risk and credit risk.  See Note 1 in our 2011 Form 10-K for a detailed discussion of the accounting treatment for derivative instruments.  See Note 6 in our 2011 Form 10-K for a detailed discussion of our derivative instruments and use of them in our overall risk management strategy which information is incorporated herein by reference.  See Note 12 for additional disclosures related to the fair value of our derivative instruments and Note 3 for derivative instruments related to our consolidated VIEs.

We have derivative instruments with off-balance-sheet risks whose notional or contract amounts exceed the credit exposure.  Outstanding derivative instruments with off-balance-sheet risks (in millions) were as follows:

	As of March 31, 2012							As of December 31, 2011
	Notional		Fair Value					Notional		Fair Value
	Amounts		Asset			Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	2,205	$	101		$	-	$	2,512	$	130	$	-
Foreign currency contracts (1)		340		26			-		340		38		-
Total cash flow hedges		2,545		127			-		2,852		168		-
Fair value hedges:
Interest rate contracts (1)		1,175		215			-		1,675		319		-
Non-Qualifying Hedges
Interest rate contracts (1)		36,178		156			-		30,232		568		-
Foreign currency contracts (1)		94		-			-		4		-		-
Equity market contracts (1)		16,411		1,749			-		16,401		2,096		-
Credit contracts (1)		47		(3	)		-		48		-		-
Credit contracts (2)		148		-			10		148		-		16
Embedded derivatives:
Indexed annuity contracts (3)		-		-			480		-		-		399
Guaranteed living benefits ("GLB") reserves (3)		-		-			1,064		-		-		2,217
Reinsurance related (4)		-		-			158		-		-		168
Total derivative instruments	$	56,598	$	2,244		$	1,712	$	51,360	$	3,151	$	2,800

(1)        Reported in derivative investments on our Consolidated Balance Sheets.

(2)        Reported in other liabilities on our Consolidated Balance Sheets.

(3)        Reported in future contract benefits on our Consolidated Balance Sheets.

(4)        Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets.

19

The maturity of the notional amounts of derivative instruments (in millions) was as follows:

	Remaining Life as of March 31, 2012
	Less Than			1 – 5	6 – 10		11 – 30		Over 30
	1 Year			Years	Years		Years		Years		Total
Interest rate contracts (1)	$	3,060	$	9,774	$	11,595	$	15,122	$	7	$	39,558
Foreign currency contracts (2)		94		61		179		100		-		434
Equity market contracts		8,041		23		3,168		5,176		3		16,411
Credit contracts		40		-		108		47		-		195
Total derivative instruments with notional amounts	$	11,235	$	9,858	$	15,050	$	20,445	$	10	$	56,598

(1)        As of March 31, 2012, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was June 2042.

(2)        As of March 31, 2012, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was July 2022.

The change in our unrealized gain (loss) on derivative instruments in accumulated OCI (in millions) was as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	119		$	(15	)
Other comprehensive income (loss):
Cumulative effect from adoption of new accounting standards		-			3
Unrealized holding gains (losses) arising during the year:
Cash flow hedges:
Interest rate contracts		(40	)		(6	)
Foreign currency contracts		(3	)		2
Fair value hedges:
Interest rate contracts		1			1
Change in foreign currency exchange rate adjustment		(9	)		(9	)
Change in DAC, VOBA, DSI and DFEL		4			4
Income tax benefit (expense)		15			3
Less:
Reclassification adjustment for gains (losses) included in net income (loss):
Cash flow hedges:
Interest rate contracts (1)		(6	)		(1	)
Interest rate contracts (2)		-			1
Foreign currency contracts (1)		2			2
Fair value hedges:
Interest rate contracts (2)		1			1
Associated amortization of DAC, VOBA, DSI and DFEL		-			1
Income tax benefit (expense)		1			(1	)
Balance as of end-of-period	$	89		$	(20	)

(1)        The OCI offset is reported within net investment income on our Consolidated Statements of Comprehensive Income (Loss).

(2)        The OCI offset is reported within interest and debt expense on our Consolidated Statements of Comprehensive Income (Loss).

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The gains (losses) on derivative instruments (in millions) recorded within income (loss) from continuing operations on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	(7	)	$	(1	)
Foreign currency contracts (1)		2			1
Total cash flow hedges		(5	)		-
Fair value hedges:
Interest rate contracts (2)		12			13
Total fair value hedges		12			13
Non-Qualifying Hedges
Interest rate contracts (1)		(3	)		(6	)
Interest rate contracts (3)		(413	)		(61	)
Foreign currency contracts (3)		(4	)		(5	)
Equity market contracts (3)		(672	)		(199	)
Equity market contracts (4)		(135	)		(19	)
Credit contracts (3)		3			4
Embedded derivatives:
Indexed annuity contracts (3)		104			48
GLB reserves (3)		1,153			289
Reinsurance related (3)		10			11
AFS securities (1)		-			1
Total derivative instruments	$	50		$	76

(1)        Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

(2)        Reported in interest and debt expense on our Consolidated Statements of Comprehensive Income (Loss).

(3)        Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

(4)        Reported in underwriting, acquisition, insurance and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

Gains (losses) (in millions) on derivative instruments designated and qualifying as cash flow hedges were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Gain (loss) recognized as a component of OCI with
the offset to net investment income	$	(4	)	$	-

As of March 31, 2012, $20 million of the deferred net losses on derivative instruments in accumulated OCI were expected to be reclassified to earnings during the next 12 months.  This reclassification would be due primarily to the interest rate variances related to the interest rate swap agreements.

For the three months ended March 31, 2012 and 2011, there were no material reclassifications to earnings due to hedged firm commitments no longer deemed probable or due to hedged forecasted transactions that had not occurred by the end of the originally specified time period.

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Gains (losses) (in millions) on derivative instruments designated and qualifying as fair value hedges were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011
Gain (loss) recognized as a component of OCI with the offset to interest expense	$	1	$	1

Information related to our open credit default swap liabilities for which we are the seller (dollars in millions) was as follows:

As of March 31, 2012
			Credit
	Reason	Nature	Rating of	Number				Maximum
	for	of	Underlying	of	Fair			Potential
Maturity	Entering	Recourse	Obligation (1)	Instruments	Value (2)			Payout
12/20/2012 (3)	(5)	(6)	BBB+	4	$	-		$	40
12/20/2016 (4)	(5)	(6)	BBB+	3		(7	)		68
03/20/2017 (4)	(5)	(6)	BBB	2		(3	)		40
				9	$	(10	)	$	148

As of December 31, 2011
			Credit
	Reason	Nature	Rating of	Number				Maximum
	for	of	Underlying	of	Fair			Potential
Maturity	Entering	Recourse	Obligation (1)	Instruments	Value (2)			Payout
12/20/2012 (3)	(5)	(6)	BBB+	4	$	-		$	40
12/20/2016 (4)	(5)	(6)	BBB+	3		(12	)		68
03/20/2017 (4)	(5)	(6)	BBB	2		(4	)		40
				9	$	(16	)	$	148

(1)        Represents average credit ratings based on the midpoint of the applicable ratings among Moody’s, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings.

(2)        Broker quotes are used to determine the market value of credit default swaps.

(3)        These credit default swaps were sold to our contract holders prior to 2007, where we determined there was a spread versus premium mismatch.

(4)        These credit default swaps were sold to a counter-party of the consolidated VIEs as discussed in Note 4 in our 2011 Form 10-K.

(5)        Credit default swaps were entered into in order to generate income by providing default protection in return for a quarterly payment.

(6)        Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract.

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Details underlying the associated collateral of our open credit default swaps for which we are the seller, if credit risk related contingent features were triggered (in millions), are as follows:

		As of		As of
	March 31,			December 31,
		2012		2011
Maximum potential payout		$	148	$	148
Less:
Counterparty thresholds			-		-
Maximum collateral potentially required to post		$	148	$	148

Certain of our credit default swap agreements contain contractual provisions that allow for the netting of collateral with our counterparties related to all of our collateralized financing transactions that we have outstanding.  If these netting agreements were not in place, we would have been required to post approximately $10 million as of March 31, 2012, after considering the fair values of the associated investments counterparties’ credit ratings as compared to ours and specified thresholds that once exceeded result in the payment of cash.

Credit Risk

We are exposed to credit loss in the event of nonperformance by our counterparties on various derivative contracts and reflect assumptions regarding the credit or nonperformance risk.  The nonperformance risk is based upon assumptions for each counterparty’s credit spread over the estimated weighted average life of the counterparty exposure less collateral held. As of March 31, 2012, the nonperformance risk adjustment was $6 million. The credit risk associated with such agreements is minimized by purchasing such agreements from financial institutions with long-standing, superior performance records.  Additionally, we maintain a policy of requiring all derivative contracts to be governed by an International Swaps and Derivatives Association (“ISDA”) Master Agreement.  We are required to maintain minimum ratings as a matter of routine practice in negotiating ISDA agreements.  Under some ISDA agreements, our insurance subsidiaries have agreed to maintain certain financial strength or claims-paying ratings.  A downgrade below these levels could result in termination of the derivatives contract, at which time any amounts payable by us would be dependent on the market value of the underlying derivative contract.  In certain transactions, we and the counterparty have entered into a collateral support agreement requiring either party to post collateral when net exposures exceed pre-determined thresholds.  These thresholds vary by counterparty and credit rating.  The amount of such exposure is essentially the net replacement cost or market value less collateral held for such agreements with each counterparty if the net market value is in our favor.  As of March 31, 2012, the exposure was $61 million.

The amounts recognized (in millions) by S&P credit rating of counterparty, for which we had the right to reclaim cash collateral or were obligated to return cash collateral, were as follows:

	As of March 31, 2012					As of December 31, 2011
	Collateral		Collateral			Collateral		Collateral
	Posted by		Posted by			Posted by		Posted by
S&P	Counter-		LNC			Counter-		LNC
Credit	Party		(Held by			Party		(Held by
Rating of	(Held by		Counter-			(Held by		Counter-
Counterparty	LNC)		Party)			LNC)		Party)
AA	$	34	$	-		$	35	$	-
AA-		59		(3	)		219		-
A+		624		-			848		-
A		1,232		(82	)		1,681		(120	)
A-		335		(31	)		387		-
BBB		2		-			-		-
	$	2,286	$	(116	)	$	3,170	$	(120	)

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6.  Federal Income Taxes

The effective tax rate is a ratio of tax expense over pre-tax income (loss).  The effective tax rate was 20% and 27% for the three months ended March 31, 2012 and 2011, respectively.  The effective tax rate on pre-tax income from continuing operations was lower than the prevailing corporate federal income tax rate.  Differences in the effective rates and the U.S. statutory rate of 35% were the result of certain tax preferred investment income, separate account dividends-received deduction, foreign tax credits and other tax preference items.

7.  Guaranteed Benefit Features

Information on the guaranteed death benefit (“GDB”) features outstanding (dollars in millions) was as follows (our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive):

	As of				As of
	March 31,			December 31,
	2012				2011
Return of Net Deposits
Total account value	$	58,847			$	54,004
Net amount at risk (1)		528				1,379
Average attained age of contract holders		59 years				59 years
Minimum Return
Total account value	$	159			$	155
Net amount at risk (1)		41				48
Average attained age of contract holders		72 years				72 years
Guaranteed minimum return		5	%			5	%
Anniversary Contract Value
Total account value	$	23,223			$	21,648
Net amount at risk (1)		1,471				2,939
Average attained age of contract holders		67 years				67 years

(1)   Represents the amount of death benefit in excess of the account balance.  The decrease in net amount at risk when comparing March 31, 2012, to December 31, 2011, was attributable primarily to the increase in the equity markets during the first quarter of 2012.

The determination of GDB liabilities is based on models that involve a range of scenarios and assumptions, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience.  The following summarizes the balances of and changes in the liabilities for GDB (in millions), which were recorded in future contract benefits on our Consolidated Balance Sheets:

	For the Three
	Months Ended
	March 31,
	2012			2011
Balance as of beginning-of-year	$	84		$	44
Changes in reserves		(17	)		4
Benefits paid		(12	)		(10	)
Balance as of end-of-period	$	55		$	38

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Account balances of variable annuity contracts with guarantees (in millions) were invested in separate account investment options as follows:

		As of			As of
	March 31,				December 31,
		2012			2011
Asset Type
Domestic equity		$	36,577		$	34,286
International equity			14,045			13,095
Bonds			18,000			17,735
Money market			6,044			5,892
Total		$	74,666		$	71,008
Percent of total variable annuity separate account values			94	%		98	%

Future contract benefits also includes reserves for our products with secondary guarantees for our products sold through our Life Insurance segment.  These UL and VUL products with secondary guarantees represented approximately 38% of permanent life insurance in force as of March 31, 2012, and approximately 33% of total sales for these products for the three months ended March 31, 2012.

8.  Contingencies and Commitments

Regulatory bodies, such as state insurance departments, the SEC, Financial Industry Regulatory Authority and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, laws governing the activities of broker-dealers and unclaimed property laws.

LNC and its subsidiaries are involved in various pending or threatened legal proceedings, including purported class actions, arising from the conduct of business both in the ordinary course and otherwise.  In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought.  Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief.  Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court.  In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters.  This variability in pleadings, together with the actual experiences of LNC in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.

Due to the unpredictable nature of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time is normally difficult to ascertain.  Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal.  Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

We establish liabilities for litigation and regulatory loss contingencies when information related to the loss contingencies shows both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.  It is possible that some matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as of March 31, 2012.  While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on LNC’s financial position.

See Note 13 to the consolidated financial statements in our 2011 Form 10-K for a discussion of commitments and contingencies, which information is incorporated herein by reference.

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9.  Shares and Stockholders’ Equity

Common and Preferred Shares

The changes in our preferred and common stock (number of shares) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Series A Preferred Stock
Balance as of beginning-of-period		10,072			10,914
Conversion of convertible preferred stock (1)		(440	)		-
Balance as of end-of-period		9,632			10,914
Common Stock
Balance as of beginning-of-period		291,319,222			315,718,554
Conversion of convertible preferred stock (1)		7,040			-
Stock compensation/issued for benefit plans		104,197			152,134
Retirement/cancellation of shares		(6,018,156	)		(2,413,864	)
Balance as of end-of-period		285,412,303			313,456,824
Common Stock as of End-of-Period
Assuming conversion of preferred stock		285,566,415			313,631,448
Diluted basis		292,953,914			321,320,873

(1)      Represents the conversion of Series A preferred stock into common stock.

Our common and Series A preferred stocks are without par value.

Average Shares

A reconciliation of the denominator (number of shares) in the calculations of basic and diluted EPS was as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Weighted-average shares, as used in basic calculation		289,055,925			315,014,084
Shares to cover exercise of outstanding warrants		10,150,271			10,150,292
Shares to cover conversion of preferred stock		154,499			174,624
Shares to cover non-vested stock		1,010,689			771,357
Average stock options outstanding during the period		601,284			959,872
Assumed acquisition of shares with assumed proceeds from exercising outstanding warrants		(4,634,542	)		(3,669,994	)
Assumed acquisition of shares with assumed proceeds and benefits from exercising stock options (at average market price for the period)		(413,777	)		(654,934	)
Shares repurchaseable from measured but unrecognized stock option expense		(14,681	)		(152,416	)
Average deferred compensation shares		-			271,447
Weighted-average shares, as used in diluted calculation		295,909,668			322,864,332

In the event the average market price of LNC common stock exceeds the issue price of stock options and the options have a dilutive effect to our EPS, such options will be shown in the table above.

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The income used in the calculation of our diluted EPS is our net income (loss), reduced by preferred stock dividends and accretion of discount.  These amounts are presented on our Consolidated Statements of Comprehensive Income (Loss).

Accumulated OCI

The following summarizes the components and changes in accumulated OCI (in millions):

	For the Three
	Months Ended
	March 31,
	2012			2011
Unrealized Gain (Loss) on AFS Securities
Balance as of beginning-of-year	$	2,947		$	1,072
Cumulative effect from adoption of new accounting standards		-			105
Unrealized holding gains (losses) arising during the period		(109	)		(191	)
Change in foreign currency exchange rate adjustment		10			14
Change in DAC, VOBA, DSI and other contract holder funds		76			104
Income tax benefit (expense)		(27	)		63
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(57	)		(19	)
Associated amortization of DAC, VOBA, DSI and DFEL		2			(10	)
Income tax benefit (expense)		19			10
Balance as of end-of-period	$	2,933		$	1,186
Unrealized OTTI on AFS Securities
Balance as of beginning-of-year	$	(110	)	$	(129	)
(Increases) attributable to:
Cumulative effect from adoption of new accounting standards		-			(5	)
Gross OTTI recognized in OCI during the period		(58	)		(8	)
Change in DAC, VOBA, DSI and DFEL		8			5
Income tax benefit (expense)		18			1
Decreases attributable to:
Sales, maturities or other settlements of AFS securities		39			45
Change in DAC, VOBA, DSI and DFEL		(4	)		(9	)
Income tax benefit (expense)		(12	)		(13	)
Balance as of end-of-period	$	(119	)	$	(113	)
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	119		$	(15	)
Cumulative effect from adoption of new accounting standards		-			3
Unrealized holding gains (losses) arising during the period		(42	)		(3	)
Change in foreign currency exchange rate adjustment		(9	)		(9	)
Change in DAC, VOBA, DSI and DFEL		4			4
Income tax benefit (expense)		15			3
Less:
Reclassification adjustment for gains (losses) included in net income (loss)		(3	)		3
Associated amortization of DAC, VOBA, DSI and DFEL		-			1
Income tax benefit (expense)		1			(1	)
Balance as of end-of-period	$	89		$	(20	)
Foreign Currency Translation Adjustment
Balance as of beginning-of-year	$	1		$	1
Foreign currency translation adjustment arising during the period		(5	)		2
Income tax benefit (expense)		2			(1	)
Balance as of end-of-period	$	(2	)	$	2
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year	$	(278	)	$	(181	)
Adjustment arising during the period		(2	)		(1	)
Income tax benefit (expense)		1			-
Balance as of end-of-period	$	(279	)	$	(182	)

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10.  Realized Gain (Loss)

Details underlying realized gain (loss) (in millions) reported on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Total realized gain (loss) related to certain investments (1)	$	(48	)	$	(15	)
Realized gain (loss) on the mark-to-market on certain instruments (2)		58			10
Indexed annuity net derivative results: (3)
Gross gain (loss)		22			6
Associated amortization of DAC, VOBA, DSI and DFEL		(6	)		(2	)
Variable annuity net derivatives results: (4)
Gross gain (loss)		(133	)		10
Associated amortization of DAC, VOBA, DSI and DFEL		22			(7	)
Total realized gain (loss)	$	(85	)	$	2

(1)   See “Realized Gain (Loss) Related to Certain Investments” section in Note 4.

(2)   Represents changes in the fair values of certain derivative investments (including those associated with our consolidated VIEs), total return swaps (embedded derivatives that are theoretically included in our various modified coinsurance and coinsurance with funds withheld reinsurance arrangements that have contractual returns related to various assets and liabilities associated with these arrangements) and trading securities.

(3)   Represents the net difference between the change in the fair value of the S&P 500 call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity products along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products.

(4)   Includes the net difference in the change in embedded derivative reserves of our GLB products and the change in the fair value of the derivative instruments we own to hedge GDB and GLB products, including the cost of purchasing the hedging instruments.

11.  Stock-Based Incentive Compensation Plans

We sponsor various incentive plans for our employees and directors, and for the employees and agents of our subsidiaries that provide for the issuance of stock options, performance shares (performance-vested shares as opposed to time-vested shares), stock appreciation rights (“SARs”) and restricted stock units.  We have a policy of issuing new shares to satisfy option exercises.

LNC stock-based awards granted during the first quarter of 2012 were as follows:

Awards
10-year LNC stock options		828,674
Performance shares		278,943
SARs		80,225
Restricted stock units		604,226
Non-employee:
	Agent stock options	99,268
	Director stock options	51,140
	Director restricted stock units	10,128

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12.  Fair Value of Financial Instruments

The carrying values and estimated fair values of our financial instruments (in millions) were as follows:

	As of March 31, 2012						As of December 31, 2011
	Carrying			Fair			Carrying			Fair
	Value			Value			Value			Value
Assets
AFS securities:
Fixed maturity securities	$	76,254		$	76,254		$	75,433		$	75,433
VIEs' fixed maturity securities		702			702			700			700
Equity securities		126			126			139			139
Trading securities		2,650			2,650			2,675			2,675
Mortgage loans on real estate		6,938			7,542			6,942			7,608
Derivative investments		2,244			2,244			3,151			3,151
Other investments		1,043			1,043			1,069			1,069
Cash and invested cash		3,516			3,516			4,510			4,510
Separate account assets		91,088			91,088			83,477			83,477
Liabilities
Future contract benefits:
Indexed annuity contracts embedded derivatives		(480	)		(480	)		(399	)		(399	)
GLB reserves embedded derivatives		(1,064	)		(1,064	)		(2,217	)		(2,217	)
Other contract holder funds:
Remaining guaranteed interest and similar contracts		(1,100	)		(1,100	)		(1,114	)		(1,114	)
Account values of certain investment contracts		(27,707	)		(30,526	)		(27,468	)		(30,812	)
Short-term debt (1)		(300	)		(306	)		(300	)		(309	)
Long-term debt		(5,606	)		(5,543	)		(5,391	)		(5,345	)
Reinsurance related embedded derivatives		(158	)		(158	)		(168	)		(168	)
VIEs' liabilities - derivative instruments		(221	)		(221	)		(291	)		(291	)
Other liabilities:
Deferred compensation plans		(375	)		(375	)		(354	)		(354	)
Credit default swaps		(10	)		(10	)		(16	)		(16	)

(1)        The difference between the carrying value and fair value of short-term debt as of March 31, 2012, and December 31, 2011, related to current maturities of long-term debt

Valuation Methodologies and Associated Inputs for Financial Instruments Not Carried at Fair Value

The following discussion outlines the methodologies and assumptions used to determine the fair value of our financial instruments not carried at fair value on our Consolidated Balance Sheets.  Considerable judgment is required to develop these assumptions used to measure fair value.  Accordingly, the estimates shown are not necessarily indicative of the amounts that would be realized in a one-time, current market exchange of all of our financial instruments.

Mortgage Loans on Real Estate

The fair value of mortgage loans on real estate is established using a discounted cash flow method based on credit rating, maturity and future income.  The ratings for mortgages in good standing are based on property type, location, market conditions, occupancy, debt-service coverage, loan-to-value, quality of tenancy, borrower and payment record.  The fair value for impaired mortgage loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s market price or the fair value of the collateral if the loan is collateral dependent.  The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 2 within the fair value hierarchy.

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Other Investments

The carrying value of our assets classified as other investments approximates fair value.  Other investments include LPs and other privately held investments that are accounted for using the equity method of accounting and the carrying value is based on our proportional share of the net assets of the LPs.  The inputs used to measure the fair value of our other investments are classified as Level 3 within the fair value hierarchy.

Other Contract Holder Funds

Other contract holder funds include remaining guaranteed interest and similar contracts and account values of certain investment contracts.  The fair value for the remaining guaranteed interest and similar contracts is estimated using discounted cash flow calculations as of the balance sheet date.  These calculations are based on interest rates currently offered on similar contracts with maturities that are consistent with those remaining for the contracts being valued.  As of March 31, 2012, and December 31, 2011, the remaining guaranteed interest and similar contracts carrying value approximated fair value.  The fair value of the account values of certain investment contracts is based on their approximate surrender value as of the balance sheet date.  The inputs used to measure the fair value of our other contract holder funds are classified as Level 3 within the fair value hierarchy.

Short-Term and Long-Term Debt

The fair value of long-term debt is based on quoted market prices.  For short-term debt, excluding current maturities of long-term debt, the carrying value approximates fair value.  The inputs used to measure the fair value of our short-term and long-term debt are classified as Level 2 within the fair value hierarchy.

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Financial Instruments Carried at Fair Value

We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of March 31, 2012, or December 31, 2011, and we noted no changes in our valuation methodologies between these periods.

The following summarizes our financial instruments carried at fair value (in millions) on a recurring basis by the fair value hierarchy levels described  in “Summary of Significant Accounting Policies” in Note 1 of our 2011 Form 10-K:

	As of March 31, 2012
	Quoted
	Prices
	in Active
	Markets for		Significant			Significant
	Identical		Observable			Unobservable			Total
	Assets		Inputs			Inputs			Fair
	(Level 1)		(Level 2)			(Level 3)			Value
Assets
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	64	$	58,603		$	1,932		$	60,599
U.S. Government bonds		452		33			1			486
Foreign government bonds		-		551			99			650
RMBS		-		7,474			98			7,572
CMBS		-		1,491			32			1,523
CDOs		-		-			102			102
State and municipal bonds		-		4,126			-			4,126
Hybrid and redeemable preferred securities		20		1,060			116			1,196
VIEs' fixed maturity securities		106		596			-			702
Equity AFS securities		36		29			61			126
Trading securities		2		2,580			68			2,650
Derivative investments		-		207			2,037			2,244
Cash and invested cash		-		3,516			-			3,516
Separate account assets		-		91,088			-			91,088
Total assets	$	680	$	171,354		$	4,546		$	176,580
Liabilities
Future contract benefits:
Indexed annuity contracts embedded derivatives	$	-	$	-		$	(480	)	$	(480	)
GLB reserves embedded derivatives		-		-			(1,064	)		(1,064	)
Long-term debt		-		(1,088	)		-			(1,088	)
Reinsurance related embedded derivatives		-		(158	)		-			(158	)
VIEs' liabilities - derivative instruments		-		-			(221	)		(221	)
Other liabilities:
Deferred compensation plans		-		-			(375	)		(375	)
Credit default swaps		-		-			(10	)		(10	)
Total liabilities	$	-	$	(1,246	)	$	(2,150	)	$	(3,396	)

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	As of December 31, 2011
	Quoted
	Prices
	in Active
	Markets for		Significant			Significant
	Identical		Observable			Unobservable			Total
	Assets		Inputs			Inputs			Fair
	(Level 1)		(Level 2)			(Level 3)			Value
Assets
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	63	$	57,310		$	1,888		$	59,261
U.S. Government bonds		475		18			1			494
Foreign government bonds		-		636			97			733
RMBS		-		7,881			158			8,039
CMBS		-		1,566			34			1,600
CDOs		-		-			102			102
State and municipal bonds		-		4,047			-			4,047
Hybrid and redeemable preferred securities		15		1,042			100			1,157
VIEs' fixed maturity securities		108		592			-			700
Equity AFS securities		37		46			56			139
Trading securities		2		2,605			68			2,675
Derivative investments		-		681			2,470			3,151
Cash and invested cash		-		4,510			-			4,510
Separate account assets		-		83,477			-			83,477
Total assets	$	700	$	164,411		$	4,974		$	170,085
Liabilities
Future contract benefits:
Indexed annuity contracts embedded derivatives	$	-	$	-		$	(399	)	$	(399	)
GLB reserves embedded derivatives		-		-			(2,217	)		(2,217	)
Long-term debt		-		(1,688	)		-			(1,688	)
Reinsurance related embedded derivatives		-		(168	)		-			(168	)
VIEs' liabilities - derivative instruments		-		-			(291	)		(291	)
Other liabilities:
Deferred compensation plans		-		-			(354	)		(354	)
Credit default swaps		-		-			(16	)		(16	)
Total liabilities	$	-	$	(1,856	)	$	(3,277	)	$	(5,133	)

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The following summarizes changes to our financial instruments carried at fair value (in millions) and classified within Level 3 of the fair value hierarchy.  This summary excludes any effect of amortization of DAC, VOBA, DSI and DFEL.  The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.

	For the Three Months Ended March 31, 2012
							Gains			Issuances,			Transfers
				Items			(Losses)			Sales,			In or
				Included			in			Maturities,			Out
	Beginning			in			OCI			Settlements,			of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (2)			Value
Investments: (3)
Fixed maturity AFS securities:
Corporate bonds	$	1,888		$	(14	)	$	-		$	174		$	(116	)	$	1,932
U.S. Government bonds		1			-			-			-			-			1
Foreign government bonds		97			-			2			-			-			99
RMBS		158			(3	)		3			(5	)		(55	)		98
CMBS		34			(3	)		8			(7	)		-			32
CDOs		102			-			4			(4	)		-			102
Hybrid and redeemable preferred securities		100			-			5			-			11			116
Equity AFS securities		56			-			5			-			-			61
Trading securities		68			1			-			(1	)		-			68
Derivative investments		2,470			(520	)		(88	)		175			-			2,037
Future contract benefits: (4)
Indexed annuity contracts embedded derivatives		(399	)		(104	)		-			23			-			(480	)
GLB reserves embedded derivatives		(2,217	)		1,153			-			-			-			(1,064	)
VIEs' liabilities - derivative instruments (5)		(291	)		70			-			-			-			(221	)
Other liabilities:
Deferred compensation plans (6)		(354	)		(28	)		-			7			-			(375	)
Credit default swaps (7)		(16	)		6			-			-			-			(10	)
Total, net	$	1,697		$	558		$	(61	)	$	362		$	(160	)	$	2,396

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	For the Three Months Ended March 31, 2011
							Gains			Issuances,			Transfers
				Items			(Losses)			Sales,			In or
				Included			in			Maturities,			Out
	Beginning			in			OCI			Settlements,			of			Ending
	Fair			Net			and			Calls,			Level 3,			Fair
	Value			Income			Other (1)			Net			Net (2)			Value
Investments: (3)
Fixed maturity AFS securities:
Corporate bonds	$	1,816		$	(1	)	$	10		$	54		$	(73	)	$	1,806
U.S. Government bonds		2			-			-			-			-			2
Foreign government bonds		113			-			7			(3	)		(17	)		100
RMBS		119			(2	)		2			(4	)		-			115
CMBS		109			(23	)		30			(52	)		-			64
CDOs		172			14			(12	)		(38	)		-			136
Hybrid and redeemable preferred securities		119			-			1			-			4			124
Equity AFS securities:		92			8			3			(9	)		2			96
Trading securities		76			1			(2	)		(2	)		(2	)		71
Derivative investments		1,495			(145	)		(18	)		107			-			1,439
Future contract benefits: (4)
Indexed annuity contracts embedded derivatives		(497	)		48			-			(79	)		-			(528	)
GLB reserves embedded derivatives		(408	)		290			-			-			-			(118	)
VIEs' liabilities - derivative instruments (5)		(209	)		6			-			-			-			(203	)
Other liabilities:
Deferred compensation plans (6)		(363	)		(8	)		-			14			-			(357	)
Credit default swaps (7)		(16	)		4			-			6			-			(6	)
Total, net	$	2,620		$	192		$	21		$	(6	)	$	(86	)	$	2,741

(1)   The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 5).

(2)   Transfers in or out of Level 3 for AFS and trading securities are displayed at amortized cost as of the beginning-of-period.  For AFS and trading securities, the difference between beginning-of-period amortized cost and beginning-of-period fair value was included in OCI and earnings, respectively, in prior periods.

(3)   Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss).  Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

(4)   Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

(5)   The changes in fair value of the credit default swaps and contingency forwards are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

(6)   Deferrals and subsequent changes in fair value for the participants’ investment options are reported in underwriting, acquisition, insurance and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

(7)   Gains (losses) from sales, maturities, settlements and calls are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

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The following provides the components of the items included in issuances, sales, maturities, settlements, calls, net, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, (in millions) as reported above:

	For the Three Months Ended March 31, 2012
	Issuances			Sales			Maturities			Settlements			Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	231		$	(26	)	$	-		$	(29	)	$	(2	)	$	174
RMBS		-			-			-			(5	)		-			(5	)
CMBS		-			-			-			(7	)		-			(7	)
CDOs		-			-			-			(4	)		-			(4	)
Trading securities		-			-			-			(1	)		-			(1	)
Derivative investments		209			15			(49	)		-			-			175
Future contract benefits:
Indexed annuity contracts embedded derivatives		(9	)		-			-			32			-			23
Other liabilities:
Deferred compensation plans		-			-			-			7			-			7
Total, net	$	431		$	(11	)	$	(49	)	$	(7	)	$	(2	)	$	362

	For the Three Months Ended March 31, 2011
	Issuances			Sales			Maturities			Settlements			Calls			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	101		$	(8	)	$	(1	)	$	(37	)	$	(1	)	$	54
Foreign government bonds		-			(3	)		-			-			-			(3	)
RMBS		-			-			-			(4	)		-			(4	)
CMBS		1			(44	)		-			(9	)		-			(52	)
CDOs		-			(33	)		-			(5	)		-			(38	)
Equity AFS securities		6			(15	)		-			-			-			(9	)
Trading securities		-			-			-			(2	)		-			(2	)
Derivative investments		167			(2	)		(58	)		-			-			107
Future contract benefits:
Indexed annuity contracts embedded derivatives		(17	)		-			-			(62	)		-			(79	)
Other liabilities:
Deferred compensation plans		-			-			-			14			-			14
Credit default swaps		-			6			-			-			-			6
Total, net	$	258		$	(99	)	$	(59	)	$	(105	)	$	(1	)	$	(6	)

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The following summarizes changes in unrealized gains (losses) included in net income, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, related to financial instruments carried at fair value classified within Level 3 that we still held (in millions):

	For the Three
	Months Ended
	March 31,
	2012			2011
Investments: (1)
Derivative investments	$	(520	)	$	(140	)
Future contract benefits: (1)
Indexed annuity contracts embedded derivatives		21			(4	)
GLB reserves embedded derivatives		1,183			338
VIEs' liabilities - derivative instruments (1)		70			2
Other liabilities:
Deferred compensation plans (2)		(28	)		(8	)
Credit default swaps (3)		6			6
Total, net	$	732		$	194

(1)   Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

(2)   Included in underwriting, acquisition, insurance and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

(3)   Included in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

The following provides the components of the transfers in and out of Level 3 (in millions) as reported above:

	For the Three Months									For the Three Months
	Ended March 31, 2012									Ended March 31, 2011
	Transfers		Transfers							Transfers		Transfers
	In to		Out of							In to		Out of
	Level 3			Level 3			Total			Level 3		Level 3			Total
Investments:
Fixed maturity AFS securities:
Corporate bonds	$	150		$	(266	)	$	(116	)	$	32	$	(105	)	$	(73	)
Foreign government bonds		-			-			-			-		(17	)		(17	)
RMBS		-			(55	)		(55	)		-		-			-
Hybrid and redeemable preferred securities		20			(9	)		11			4		-			4
Equity AFS securities		-			-			-			2		-			2
Trading securities		-			-			-			-		(2	)		(2	)
Total, net	$	170		$	(330	)	$	(160	)	$	38	$	(124	)	$	(86	)

Transfers in and out of Level 3 are generally the result of observable market information on a security no longer being available or becoming available to our pricing vendors.  For the three months ended March 31, 2012 and 2011, our corporate bonds transfers in and out were attributable primarily to the securities’ observable market information being available or no longer being available, respectively.  Transfers in and out of Levels 1 and 2 are generally the result of a change in the type of input used to measure the fair value of an asset or liability at the end of the reporting period.  When quoted prices in active markets become available or when these prices become unavailable, but we are able to employ a valuation methodology using significant observable inputs, transfers between Levels 1 and 2 will result.  For the quarterly periods ended March 31, 2012 and 2011, the transfers between Levels 1 and 2 of the fair value hierarchy were less than $1 million for our financial instruments carried at fair value.

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The following summarizes the fair value (in millions), valuation techniques and significant unobservable inputs of the Level 3 fair value measurements that were developed as of March 31, 2012:

			Fair		Valuation	Significant
			Value		Technique	Unobservable Inputs		Range
Assets
Investments:
	Fixed maturity AFS and trading securities:
		Corporate bonds	$	1,119	Discounted cash flow	Liquidity/duration adjustment (1)		0.5% - 9.0%
		Foreign government bonds		52	Discounted cash flow	Liquidity/duration adjustment (1)		2.5% - 6.0%
	Equity AFS and trading securities			12	Discounted cash flow	Liquidity/duration adjustment (1)		4.0% - 4.5%
Liabilities
Future contract benefits:
	Indexed annuity contracts embedded derivatives			(480)	Discounted cash flow	Lapse rate (2)		1.0% - 15.0%
						Mortality rate (3)		(7)
	GLB reserves embedded derivatives			(1,064)	Monte Carlo simulation	Long-term lapse rate (2)		0.5% - 13.0%
						Wait period (4)		0 - 25 years (or years until the eligible age)
						Percent of maximum
							withdrawal amount (5)	95.0% - 100.0%
						Non-performance risk ("NPR") (6)		0.05% - 0.35%
						Mortality rate (3)		(7)

(1)   The liquidity/duration adjustment input represents an estimated market participant composite of adjustments attributable to liquidity premiums, expected durations, structures and credit quality that would be applied to the market observable information of an investment.

(2)   The lapse rate input represents the estimated probability of a contract surrendering during a year, and thereby forgoing any future benefits.  The range represents the lapse rates during the surrender charge period for indexed annuity contracts.

(3)   The mortality rate input represents the estimated probability of when an individual belonging to a particular group, categorized according to age or some other factor such as occupation, will die.

(4)   The wait period input represents the estimated period a contract holder would wait to withdraw after becoming eligible.

(5)   The percent of maximum withdrawal amount input represents the estimated ratio of contract withdrawal amount to the maximum withdrawal amount specified.

(6)   The NPR input represents the estimated additional credit spread that market participants would apply to the market observable discount rate when pricing a contract.

(7)   Based on the “Annuity 2000 Mortality Table” developed by the Society of Actuaries Committee on Life Insurance Research that was adopted by the National Association of Insurance Commissioners in 1996 for our mortality input.

From the table above, we have excluded Level 3 fair value measurements obtained from independent, third-party pricing sources.  We do not develop the significant inputs used to measure the fair value of these assets and liabilities, and the information regarding the significant inputs is not readily available to us.  Independent broker-quoted fair values are non-binding quotes developed by market makers or broker-dealers obtained from third-party sources recognized as market participants.  The fair value of a broker-quoted asset or liability is based solely on the receipt of an updated quote from a single market maker or a broker-dealer recognized as a market participant as we do not adjust broker quotes when used as the fair value measurement for an asset or liability.  Significant increases or decreases in any of the quotes received from a third-party broker-dealer may result in a significantly higher or lower fair value measurement.

Changes in any of the significant inputs presented in the table above may result in a significant change in the fair value measurement of the asset or liability as follows:

37

·   Investments – An increase in the liquidity/duration input would result in a decrease in the fair value measurement.

·   Indexed annuity contracts embedded derivatives – An increase in the lapse rate or mortality rate inputs would result in a decrease in the fair value measurement.

·   GLB reserves embedded derivatives – An increase in our lapse rate, wait period, NPR or mortality rate inputs would result in a decrease in the fair value measurement.  An increase in the percent of maximum withdrawal amount input would result in an increase in the fair value measurement.

For each category discussed above, the unobservable inputs are not inter-related; therefore, a directional change in one input will not affect the other inputs.

As part of our on-going valuation process, we assess the reasonableness of our valuation techniques or models and make adjustments as necessary.  For more information, see “Summary of Significant Accounting Policies” in Note 1 of our 2011 Form 10-K.

13.  Segment Information

We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments.  We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments.  Our reporting segments reflect the manner by which our chief operating decision makers view and manage the business.  See Note 22 of our 2011 Form 10-K for a brief description of these segments and Other Operations.

Segment operating revenues and income (loss) from operations are internal measures used by our management and Board of Directors to evaluate and assess the results of our segments.  Income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:

·   Realized gains and losses associated with the following (“excluded realized gain (loss)”):

§   Sale or disposal of securities;

§   Impairments of securities;

§   Change in the fair value of derivative instruments, embedded derivatives within certain reinsurance arrangements and our trading securities;

§   Change in the fair value of the derivatives we own to hedge our GDB riders within our variable annuities;

§   Change in the GLB embedded derivative reserves, net of the change in the fair value of the derivatives we own to hedge the changes in the embedded derivative reserves; and

§   Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for under the Derivatives and Hedging and the Fair Value Measurements and Disclosures Topics of the FASB ASC;

·   Change in reserves accounted for under the Financial Services – Insurance – Claim Costs and Liabilities for Future Policy Benefits Subtopic of the FASB ASC resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”);

·   Income (loss) from the initial adoption of new accounting standards;

·   Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance;

·   Gain (loss) on early extinguishment of debt;

·   Losses from the impairment of intangible assets; and

·   Income (loss) from discontinued operations.

Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:

·   Excluded realized gain (loss);

·   Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking;

·   Amortization of deferred gains arising from the reserve changes on business sold through reinsurance; and

·   Revenue adjustments from the initial adoption of new accounting standards.

We use our prevailing corporate federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.  Operating revenues and income (loss) from operations do not replace revenues and net income as the GAAP measures of our consolidated results of operations.

38

Segment information (in millions) was as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011
Revenues
Operating revenues:
Annuities	$	731		$	733
Retirement Plan Services		252			263
Life Insurance		1,232			1,146
Group Protection		504			478
Other Operations		107			118
Excluded realized gain (loss), pre-tax		(114	)		(21	)
Amortization of deferred gain arising from reserve changes on business sold through reinsurance, pre-tax		1			1
Amortization of DFEL associated with benefit ratio unlocking, pre-tax		1			-
Total revenues	$	2,714		$	2,718

	For the Three
	Months Ended
	March 31,
	2012			2011
Net Income (Loss)
Income (loss) from operations:
Annuities	$	137		$	144
Retirement Plan Services		35			48
Life Insurance		142			142
Group Protection		16			24
Other Operations		(34	)		(35	)
Excluded realized gain (loss), after-tax		(73	)		(14	)
Benefit ratio unlocking, after-tax		23			5
Income (loss) from continuing operations, after-tax		246			314
Income (loss) from discontinued operations, after-tax		(1	)		-
Net income (loss)	$	245		$	314

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the financial condition as of March 31, 2012, compared with December 31, 2011, and the results of operations for the three months ended March 31, 2012, compared with the corresponding period in 2011 of Lincoln National Corporation and its consolidated subsidiaries.  Unless otherwise stated or the context otherwise requires, “LNC,” “Lincoln,” “Company,” “we,” “our” or “us” refers to Lincoln National Corporation and its consolidated subsidiaries.  The MD&A is provided as a supplement to, and should be read in conjunction with our consolidated financial statements and the accompanying notes to the consolidated financial statements (“Notes”) presented in “Part I – Item 1. Financial Statements”; our Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”), including the sections entitled “Part I – Item 1A. Risk Factors,” “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II – Item 8. Financial Statements and Supplementary Data”; and our current reports on Form 8-K filed in 2012.

In this report, in addition to providing consolidated revenues and net income (loss), we also provide segment operating revenues and income (loss) from operations because we believe they are meaningful measures of revenues and the profitability of our operating segments.  Financial information that follows is presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”), unless otherwise indicated.  See Note 1 in our 2011 Form 10-K for a discussion of GAAP.

Operating revenues and income (loss) from operations are the financial performance measures we use to evaluate and assess the results of our segments.  Accordingly, we define and report operating revenues and income (loss) from operations by segment in Note 13.  Our management believes that operating revenues and income (loss) from operations explain the results of our ongoing businesses in a manner that allows for a better understanding of the underlying trends in our current businesses because the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in many instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.  In addition, we believe that our definitions of operating revenues and income (loss) from operations will provide investors with a more valuable measure of our performance because it better reveals trends in our business.

Certain reclassifications have been made to prior periods’ financial information.

FORWARD-LOOKING STATEMENTS – CAUTIONARY LANGUAGE

Certain statements made in this report and in other written or oral statements made by us or on our behalf are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”).  A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like:  “believe,” “anticipate,” “expect,” “estimate,” “project,” “will,” “shall” and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance.  In particular, these include statements relating to future actions, trends in our businesses, prospective services or products, future performance or financial results and the outcome of contingencies, such as legal proceedings.  We claim the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the results contained in the forward-looking statements.  Risks and uncertainties that may cause actual results to vary materially, some of which are described within the forward-looking statements, include, among others:

·   Deterioration in general economic and business conditions that may affect account values, investment results, guaranteed benefit liabilities, premium levels, claims experience and the level of pension benefit costs, funding and investment results;

·   Adverse global capital and credit market conditions could affect our ability to raise capital, if necessary, and may cause us to realize impairments on investments and certain intangible assets, including goodwill and a valuation allowance against deferred tax assets, which may reduce future earnings and/or affect our financial condition and ability to raise additional capital or refinance existing debt as it matures;

·   Because of our holding company structure, the inability of our subsidiaries to pay dividends to the holding company in sufficient amounts could harm the holding company’s ability to meet its obligations;

·   Legislative, regulatory or tax changes, both domestic and foreign, that affect the cost of, or demand for, our subsidiaries’ products, the required amount of reserves and/or surplus, or otherwise affect our ability to conduct business, including changes to statutory reserve requirements related to secondary guarantees under universal life, such as a change to reserve calculations under Actuarial Guideline 38 (also known as The Application of the Valuation of Life Insurance Policies Model Regulation, or “AG38”), and variable annuity products under Actuarial Guideline 43 (also known as Commissioners Annuity Reserve Valuation Method for Variable Annuities, or “AG43”); restrictions on revenue sharing and 12b-1 payments; and the potential for U.S. federal tax reform;

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·   Uncertainty about the effect of rules and regulations to be promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act on us and the economy and the financial services sector in particular;

·   The initiation of legal or regulatory proceedings against us, and the outcome of any legal or regulatory proceedings, such as:  adverse actions related to present or past business practices common in businesses in which we compete; adverse decisions in significant actions including, but not limited to, actions brought by federal and state authorities and class action cases; new decisions that result in changes in law; and unexpected trial court rulings;

·   Declines in or sustained low interest rates causing a reduction in investment income, the interest margins of our businesses, estimated gross profits and demand for our products;

·   A decline in the equity markets causing a reduction in the sales of our subsidiaries’ products, a reduction of asset-based fees that our subsidiaries charge on various investment and insurance products, an acceleration of the net amortization of deferred acquisition costs (“DAC”), value of business acquired (“VOBA”), deferred sales inducements (“DSI”) and deferred front-end loads (“DFEL”) and an increase in liabilities related to guaranteed benefit features of our subsidiaries’ variable annuity products;

·   Ineffectiveness of our risk management policies and procedures, including various hedging strategies used to offset the effect of changes in the value of liabilities due to changes in the level and volatility of the equity markets and interest rates;

·   A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market returns from the assumptions used in pricing our subsidiaries’ products, in establishing related insurance reserves and in the net amortization of DAC, VOBA, DSI and DFEL, which may reduce future earnings;

·   Changes in GAAP, including the potential incorporation of International Financial Reporting Standards (“IFRS”) into the U.S. financial reporting system, that may result in unanticipated changes to our net income;

·   Lowering of one or more of our debt ratings issued by nationally recognized statistical rating organizations and the adverse effect such action may have on our ability to raise capital and on our liquidity and financial condition;

·   Lowering of one or more of the insurer financial strength ratings of our insurance subsidiaries and the adverse effect such action may have on the premium writings, policy retention, profitability of our insurance subsidiaries and liquidity;

·   Significant credit, accounting, fraud, corporate governance or other issues that may adversely affect the value of certain investments in our portfolios, as well as counterparties to which we are exposed to credit risk, requiring that we realize losses on investments;

·   The effect of acquisitions and divestitures, restructurings, product withdrawals and other unusual items;

·   The adequacy and collectibility of reinsurance that we have purchased;

·   Acts of terrorism, a pandemic, war or other man-made and natural catastrophes that may adversely affect our businesses and the cost and availability of reinsurance;

·   Competitive conditions, including pricing pressures, new product offerings and the emergence of new competitors, that may affect the level of premiums and fees that our subsidiaries can charge for their products;

·   The unknown effect on our subsidiaries’ businesses resulting from changes in the demographics of their client base, as aging baby-boomers move from the asset-accumulation stage to the asset-distribution stage of life; and

·   Loss of key management, financial planners or wholesalers.

The risks included here are not exhaustive.  Our annual report on Form 10-K, current reports on Form 8-K and other documents filed with the Securities and Exchange Commission (“SEC”) include additional factors that could affect our businesses and financial performance.  Moreover, we operate in a rapidly changing and competitive environment.  New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.

Further, it is not possible to assess the effect of all risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.  In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this report.

INTRODUCTION

Executive Summary

We are a holding company that operates multiple insurance and retirement businesses through subsidiary companies.  Through our business segments, we sell a wide range of wealth protection, accumulation and retirement income products and solutions.  These products include fixed and indexed annuities, variable annuities, universal life insurance (“UL”), variable universal life insurance (“VUL”), linked-benefit UL, term life insurance, employer-sponsored defined contribution retirement plans, mutual funds and group life, disability and dental.

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We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments.  We also have Other Operations.  These segments and Other Operations are described in “Part I – Item 1. Business” of our 2011 Form 10-K.

For information on how we derive our revenues, see the discussion in results of operations by segment below.

Our current market conditions, significant operational matters, industry trends, issues and outlook are described in “Introduction – Executive Summary” of our 2011 Form 10-K.

For factors that could cause actual results to differ materially from those set forth in this section, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K.

Critical Accounting Policies and Estimates

The MD&A included in our 2011 Form 10-K contains a detailed discussion of our critical accounting policies and estimates.  The following information updates the “Critical Accounting Policies and Estimates” provided in our 2011 Form 10-K and, accordingly, should be read in conjunction with the “Critical Accounting Policies and Estimates” discussed in our 2011 Form 10-K.

DAC, VOBA, DSI and DFEL

New DAC Methodology

In October 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts” (referred to herein as the “new DAC methodology”), which clarifies the types of costs incurred by an insurance entity that can be capitalized in the acquisition of insurance contracts.  Only those costs incurred that result directly from and are essential to the successful acquisition of new or renewal insurance contracts may be capitalized as deferrable acquisition costs.  This determination of deferability must be made on a contract-level basis.  This new DAC methodology contrasts to the prior guidance we followed that defined deferrable acquisition costs as costs that vary with and are related primarily to new or renewal business, regardless of whether the acquisition efforts were successful or unsuccessful.

Some examples of acquisition costs that remain subject to deferral as part of the new DAC methodology include the following:

·   Employee, agent or broker commissions for successful contract acquisitions;

·   Wholesaler production bonuses for successful contract acquisitions;

·   Renewal commissions and bonuses to agents or brokers;

·   Medical and inspection fees for successful contract acquisitions;

·   Premium-related taxes and assessments; and

·   A portion of the salaries and benefits of certain employees involved in the underwriting, contract issuance and processing, medical and inspection and sales force contract selling functions related to the successful issuance or renewal of an insurance contract.

All other acquisition-related costs, including costs incurred by the insurer for soliciting potential customers, market research, training, administration, management of distribution and underwriting functions, unsuccessful acquisition or renewal efforts and product development, are considered non-deferrable acquisition costs and must be expensed in the period incurred.

In addition, the following indirect costs are considered non-deferrable acquisition costs as part of the new DAC methodology and must be charged to expense in the period incurred:

·   Administrative costs;

·   Rent;

·   Depreciation;

·   Occupancy costs;

·   Equipment costs (including data processing equipment dedicated to acquiring insurance contracts); and

·   Other general overhead.

We adopted the new DAC methodology as of January 1, 2012, and elected to apply the guidance retrospectively.  The retrospective adoption resulted in the restatement of all periods presented with a cumulative effect adjustment to the opening balance of retained earnings and accumulated other comprehensive income (loss) (“AOCI”) for the earliest period presented.  Further, our adoption of

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the new DAC methodology resulted in an overall reduction in deferrable acquisition costs, partially offset by lower DAC amortization, in each of our business segments.  See Note 2 for more discussion of the effect of adoption.

Reversion to the Mean (“RTM”)

As equity markets do not move in a systematic manner, we reset the baseline of account values from which estimated gross profits (“EGPs) are projected, which we refer to as our RTM process, as discussed in our 2011 Form 10-K.

Our long-term variable fund growth rate assumption, which is used in the determination of DAC, VOBA, DSI and DFEL amortization for our variable annuity and VUL products, is an immediate drop of approximately 14% followed by growth going forward of 8% to 9% depending on the block of business and reflecting differences in contract holder fund allocations between fixed income and equity-type investments.  If we were to have unlocked our RTM assumption in the corridor as of March 31, 2012, we would have recorded a favorable prospective unlocking of approximately $240 million, pre-tax, for Annuities, approximately $20 million, pre-tax, for Retirement Plan Services, and approximately $20 million, pre-tax, for Life Insurance.

Investments

Investment Valuation

The following summarizes our available-for-sale (“AFS”) and trading securities and derivative investments carried at fair value by pricing source and fair value hierarchy level (in millions):

	As of March 31, 2012
	Quoted
	Prices
	in Active
	Markets for		Significant		Significant
	Identical		Observable		Unobservable		Total
	Assets		Inputs		Inputs		Fair
	(Level 1)		(Level 2)		(Level 3)		Value
Priced by third party pricing services	$	680	$	67,534	$	-	$	68,214
Priced by independent broker quotations		-		-		3,363		3,363
Priced by matrices		-		9,216		-		9,216
Priced by other methods (1)		-		-		1,183		1,183
Total	$	680	$	76,750	$	4,546	$	81,976
Percent of total		1%		93%		6%		100%

(1)        Represents primarily securities for which pricing models were used to compute fair value.

For more information about the valuation of our financial instruments carried at fair value, see “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Introduction – Critical Accounting Policies and Estimates – Investments – Investment Valuation” in our 2011 Form 10-K and Note 12.

As of March 31, 2012, we evaluated the markets that our securities trade in and concluded that none were inactive.  We will continue to re-evaluate this conclusion, as needed, based on market conditions.  We use unobservable inputs to measure the fair value of securities trading in less liquid or illiquid markets with limited or no pricing information.  We obtain broker quotes for securities such as synthetic convertibles, index-linked certificates of deposit and collateralized debt obligations (“CDOs”) when sufficient security structure or other market information is not available to produce an evaluation.  For broker-quoted only securities, non-binding quotes from market makers or broker-dealers are obtained from sources recognized as market participants.  Broker-quoted securities are based solely on receipt of updated quotes from a single market maker or a broker-dealer recognized as a market participant.  Our broker-quoted only securities are generally classified as Level 3 of the fair value hierarchy.  As of March 31, 2012, we used broker quotes for 89 securities as our final price source, representing less than 2% of total securities owned.

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Derivatives

Our accounting policies for derivatives and the potential effect on interest spreads in a falling rate environment are discussed in Note 5 of this report and “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our 2011 Form 10-K.

Guaranteed Living Benefits

Approximately 48% of our variable annuity account values contained a guaranteed withdrawal benefit (“GWB”) rider as of March 31, 2012.  Declines in the equity markets increase our exposure to potential benefits under the GWB contracts, leading to an increase in our existing liability for those benefits.  For example, a GWB contract is “in the money” if the contract holder’s account balance falls below the guaranteed amount.  As of March 31, 2012 and 2011, 39% and 29%, respectively, of all GWB in-force contracts were “in the money,” and our exposure to the guaranteed amounts, after reinsurance, as of March 31, 2012 and 2011, was $1.0 billion and $796 million, respectively.  Our exposure before reinsurance for these same periods was $1.1 billion and $911 million, respectively.  However, the only way the GWB contract holder can monetize the excess of the guaranteed amount over the account value of the contract is upon death or through a series of withdrawals that do not exceed a specific percentage per year of the guaranteed amount.  If, after the series of withdrawals, the account value is exhausted, the contract holder will receive a series of annuity payments equal to the remaining guaranteed amount, and, for our lifetime GWB products, the annuity payments can continue beyond the guaranteed amount.  The account value can also fluctuate with equity market returns on a daily basis resulting in increases or decreases in the excess of the guaranteed amount over account value.

For information on our variable annuity hedge program performance, see our discussion in “Realized Gain (Loss) and Benefit Ratio Unlocking – Variable Annuity Net Derivatives Results” below.

Acquisitions and Dispositions

The loss from discontinued operations for the three months ended March 31, 2012, related to a purchase price adjustment associated with the termination of a portion of the investment advisory agreement with Delaware Management Holdings, Inc., our former subsidiary.

For information about acquisitions and divestitures, see “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Acquisitions and Dispositions” and Note 3 in our 2011 Form 10-K.

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RESULTS OF CONSOLIDATED OPERATIONS

Details underlying the consolidated results, deposits, net flows and account values (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Net Income (Loss)
Income (loss) from operations:
Annuities	$	137		$	144			-5%
Retirement Plan Services		35			48			-27%
Life Insurance		142			142			0%
Group Protection		16			24			-33%
Other Operations		(34	)		(35	)		3%
Excluded realized gain (loss), after-tax		(73	)		(14	)	NM
Benefit ratio unlocking, after-tax		23			5		NM
Income (loss) from continuing operations, after-tax		246			314			-22%
Income (loss) from discontinued operations, after-tax		(1	)		-		NM
Net income (loss)	$	245		$	314			-22%

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Deposits
Annuities	$	2,480	$	2,639		-6%
Retirement Plan Services		1,511		1,341		13%
Life Insurance		1,159		1,270		-9%
Total deposits	$	5,150	$	5,250		-2%
Net Flows
Annuities	$	293	$	483		-39%
Retirement Plan Services		212		134		58%
Life Insurance		751		821		-9%
Total net flows	$	1,256	$	1,438		-13%

	As of March 31,
	2012		2011		Change
Account Values
Annuities	$	91,668	$	87,785		4%
Retirement Plan Services		42,020		40,308		4%
Life Insurance		36,008		34,149		5%
Total account values	$	169,696	$	162,242		5%

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Comparison of the Three Months Ended March 31, 2012 to 2011

Net income decreased due primarily to the following:

·   Narrowing of our credit spreads during 2012 leading to realized losses related to our non-performance risk (“NPR”) on guaranteed living benefit (“GLB”) liabilities;

·   New money rates averaging below portfolio yields and lower prepayment and bond makewhole premiums driving lower net investment income, partially offset by growth in business and interest crediting rate actions; and

·   Investments in strategic initiatives related to updating information technology and expanding distribution and support during 2012.

The decrease in net income was partially offset primarily by the following:

· Growth in insurance in force;

· Positive net flows and more favorable average equity markets driving higher average daily variable account values; and

· More favorable tax items recorded in 2012 than in 2011 driven by tax preferred investments and other items.

RESULTS OF ANNUITIES

Income (Loss) from Operations

Details underlying the results for Annuities (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Operating Revenues
Insurance premiums (1)	$	17	$	23		-26%
Insurance fees		325		310		5%
Net investment income		272		288		-6%
Operating realized gain (loss)		27		23		17%
Other revenues and fees (2)		90		89		1%
Total operating revenues		731		733		0%
Operating Expenses
Interest credited		171		174		-2%
Benefits		45		35		29%
Underwriting, acquisition, insurance and other expenses		353		340		4%
Total operating expenses		569		549		4%
Income (loss) from operations before taxes		162		184		-12%
Federal income tax expense (benefit)		25		40		-38%
Income (loss) from operations	$	137	$	144		-5%

(1)        Includes primarily our single-premium immediate annuities (“SPIA”), which have a corresponding offset in benefits for changes in reserves.

(2)        Consists primarily of fees attributable to broker-dealer services that are subject to market volatility.

Comparison of the Three Months Ended March 31, 2012 to 2011

Income from operations for this segment decreased due primarily to the following:

·   Higher benefits attributable to unfavorable mortality experience on SPIA during 2012 as compared to favorable experience during 2011;

·   Lower net investment income and relatively flat interest credited driven by:

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§   Lower prepayment and bond makewhole premiums (See “Consolidated Investments – Commercial Mortgage Loan Prepayment and Bond Makewhole Premiums” below for more information); and

§   New money rates averaging below our portfolio yields;

partially offset by:

§   Positive net flows, and actions implemented to reduce interest crediting rates; and

·   Higher underwriting, acquisition, insurance and other expenses due to higher trail commissions and investments in strategic initiatives related to updating information technology and expanding distribution and support during 2012.

The decrease in income from operations was partially offset primarily by the following:

·   Higher insurance fees attributable to more favorable average equity markets driving higher average daily variable account values; and

·   More favorable tax items recorded in 2012 than in 2011 driven by tax preferred investments and other items.

Additional Information

New deposits are an important component of net flows and key to our efforts to grow our business.  Although deposits do not significantly affect current period income from operations, they are an important indicator of future profitability.

The other component of net flows relates to the retention of the business.  An important measure of retention is the lapse rate, which compares the amount of withdrawals to the average account values.  The overall lapse rate for our annuity products was 8% for the first quarter of 2012 and 2011.

Our fixed annuity business includes products with discretionary crediting rates that are reset on an annual basis and are not subject to surrender charges.  Our ability to retain annual reset annuities will be subject to current competitive conditions at the time interest rates for these products reset.  We expect to manage the effects of spreads on near-term income from operations through portfolio management and, to a lesser extent, crediting rate actions, which assumes no significant changes in net flows into or out of our fixed accounts or other changes that may cause interest rate spreads to differ from our expectations.  For information on interest rate spreads, see “Part I – Item 3. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” herein.  For information on the interest rate risk due to falling interest rates, see “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” and “Part I – Item 1A. Risk Factors – Market Conditions – Changes in interest rates and sustained low interest rates may cause interest rate spreads to decrease and changes in interest rates may also result in increased contract withdrawals” in our 2011 Form 10-K.

We provide information about this segment’s operating revenue and operating expense line items, the period in which amounts are recognized, key drivers of changes and historical details underlying the line items and their associated drivers below.  For detail on the operating realized gain (loss), see “Realized Gain (Loss) and Benefit Ratio Unlocking” below.

For factors that could cause actual results to differ materially from those set forth in this section, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K.

Insurance Fees

Details underlying insurance fees, account values and net flows (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Insurance Fees
Mortality, expense and other assessments	$	319		$	310			3%
Surrender charges		6			11			-45%
DFEL:
Deferrals		(6	)		(17	)		65%
Amortization, net of interest, excluding unlocking		6			6			0%
Total insurance fees	$	325		$	310			5%

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	As of or For the Three
	Months Ended
	March 31,
	2012			2011			Change
Account Value Information
Variable annuity deposits, excluding the fixed portion of variable	$	1,472		$	1,523			-3%
Net flows for variable annuities, excluding the fixed portion of variable		(166	)		(120	)		-38%
Change in market value on variable, excluding the fixed portion of variable		5,544			2,217			150%
Transfers to the variable portion of variable annuity products from the fixed portion of variable annuity products		671			832			-19%
Average daily variable annuity account values, excluding the fixed portion of variable		69,003			66,459			4%
Average daily S&P 500		1,346.25			1,302.22			3%
Variable annuity account values, excluding the fixed portion of variable		71,059			67,787			5%

We charge contract holders mortality and expense assessments on variable annuity accounts to cover insurance and administrative expenses.  These assessments are a function of the rates priced into the product and the average daily variable account values.  Average daily account values are driven by net flows and the equity markets.  In addition, for our fixed annuity contracts and for some variable contracts, we collect surrender charges when contract holders surrender their contracts during their surrender charge periods to protect us from premature withdrawals.  Insurance fees include charges on both our variable and fixed annuity products, but exclude the attributed fees on our GLB products; see “Realized Gain (Loss) and Benefit Ratio Unlocking – Operating Realized Gain (Loss)” below for discussion of these attributed fees.

Net Investment Income and Interest Credited

Details underlying net investment income, interest credited (in millions) and our interest rate spread were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Net Investment Income
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses	$	240		$	248			-3%
Commercial mortgage loan prepayment and bond makewhole premiums (1)		2			12			-83%
Surplus investments (2)		30			28			7%
Total net investment income	$	272		$	288			-6%
Interest Credited
Amount provided to contract holders	$	168		$	171			-2%
DSI deferrals		(9	)		(10	)		10%
Interest credited before DSI amortization		159			161			-1%
DSI amortization, excluding unlocking		12			13			-8%
Total interest credited	$	171		$	174			-2%

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(1)   See “Consolidated Investments – Commercial Mortgage Loan Prepayment and Bond Makewhole Premiums” below for additional information.

(2)   Represents net investment income on the required statutory surplus for this segment and includes the effect of investment income on alternative investments for such assets that are held in the portfolios supporting statutory surplus versus the portfolios supporting product liabilities.

	For the Three
	Months Ended		Basis
	March 31,		Point
	2012	2011	Change
Interest Rate Spread
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses	4.93%	5.28%		(35	)
Commercial mortgage loan prepayment and bond makewhole premiums	0.04%	0.26%		(22	)
Net investment income yield on reserves	4.97%	5.54%		(57	)
Interest rate credited to contract holders	3.15%	3.31%		(16	)
Interest rate spread	1.82%	2.23%		(41	)

	As of or For the Three
	Months Ended
	March 31,
	2012			2011			Change
Other Information
Fixed annuity deposits, including the fixed portion of variable	$	1,008		$	1,116			-10%
Net flows for fixed annuities, including the fixed portion of variable		459			603			-24%
Transfers from the fixed portion of variable annuity products to the variable portion of variable annuity products		(671	)		(832	)		19%
Average invested assets on reserves		19,522			18,790			4%
Average fixed account values, including the fixed portion of variable		21,030			20,479			3%
Fixed annuity account values, including the fixed portion of variable		20,609			19,998			3%

A portion of our investment income earned is credited to the contract holders of our fixed annuity products, including the fixed portion of variable annuity contracts.  We expect to earn a spread between what we earn on the underlying general account investments supporting the fixed annuity product line, including the fixed portion of variable annuity contracts, and what we credit to our fixed annuity contract holders’ accounts, including the fixed portion of variable annuity contracts.  Changes in commercial mortgage loan prepayments and bond makewhole premiums, investment income on alternative investments and surplus investment income can vary significantly from period to period due to a number of factors and, therefore, may contribute to investment income results that are not indicative of the underlying trends.

Benefits

Benefits for this segment include changes in reserves of immediate annuity account values driven by premiums, changes in benefit reserves and our expected costs associated with purchases of derivatives used to hedge our benefit ratio unlocking.

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Underwriting, Acquisition, Insurance and Other Expenses

Details underlying underwriting, acquisition, insurance and other expenses (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Underwriting, Acquisition, Insurance
and Other Expenses
Commissions:
Deferrable	$	110		$	111			-1%
Non-deferrable		73			66			11%
General and administrative expenses		98			87			13%
Taxes, licenses and fees		8			8			0%
Total expenses incurred, excluding broker-dealer		289			272			6%
DAC deferrals		(124	)		(127	)		2%
Total pre-broker-dealer expenses incurred, excluding amortization, net of interest		165			145			14%
DAC and VOBA amortization, net of interest, excluding unlocking		98			103			-5%
Broker-dealer expenses incurred		90			92			-2%
Total underwriting, acquisition, insurance and other expenses	$	353		$	340			4%
DAC Deferrals
As a percentage of sales/deposits		5.0%			4.8%

Commissions and other costs that result directly from and are essential to the successful acquisition of new or renewal business are deferred to the extent recoverable and are amortized over the lives of the contracts in relation to EGPs.  Certain of our commissions, such as trail commissions that are based on account values, are expensed as incurred rather than deferred and amortized.

Broker-dealer expenses that vary with and are related to sales are expensed as incurred and not deferred and amortized.  Fluctuations in these expenses correspond with fluctuations in other revenues and fees.

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RESULTS OF RETIREMENT PLAN SERVICES

Income (Loss) from Operations

Details underlying the results for Retirement Plan Services (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Operating Revenues
Insurance fees	$	52	$	55		-5%
Net investment income		197		205		-4%
Other revenues and fees (1)		3		3		0%
Total operating revenues		252		263		-4%
Operating Expenses
Interest credited		111		108		3%
Underwriting, acquisition, insurance and other expenses		94		86		9%
Total operating expenses		205		194		6%
Income (loss) from operations before taxes		47		69		-32%
Federal income tax expense (benefit)		12		21		-43%
Income (loss) from operations	$	35	$	48		-27%

(1) Consists primarily of mutual fund account program fees for mid to large employers.

Comparison of the Three Months Ended March 31, 2012 to 2011

Income from operations for this segment decreased due primarily to the following:

·   Lower net investment income and relatively flat interest credited driven by:

§   Lower prepayment and bond makewhole premiums (see “Consolidated Investments – Commercial Mortgage Loan Prepayment and Bond Makewhole Premiums” below for more information); and

§   New money rates averaging below our portfolio yields;

partially offset by:

§   Transfers from variable to fixed, and actions implemented to reduce interest crediting rates; and

·   Higher underwriting, acquisition, insurance and other expenses due to investments in strategic initiatives related to updating information technology and expanding distribution and support during 2012.

Additional Information

Net flows in this business fluctuate based on the timing of larger plans rolling onto our platform and rolling off over the course of the year, and we expect this trend will continue during 2012.

New deposits are an important component of net flows and key to our efforts to grow our business.  Although deposits do not significantly affect current period income from operations, they are an important indicator of future profitability.  The other component of net flows relates to the retention of the business.  An important measure of retention is the lapse rate, which compares the amount of withdrawals to the average account values.  The overall lapse rate for our annuity andmutualfund products was 13% for the first quarter of 2012 compared to 12% for the corresponding period in 2011. 

Our lapse rate is negatively affected by the continued net outflows from our oldest blocks of annuities business (as presented on our Account Value Roll Forward table below as “Total Multi-Fund® and Other Variable Annuities”), which are also our higher margin product lines in this segment, due to the fact that they are mature blocks with much of the account values out of their surrender charge period.  The proportion of these products to our total account values was 39% and 41% as of March 31, 2012, and 2011, respectively.  Due to this expected overall shift in business mix toward products with lower returns, a significant increase in new deposit production will be necessary to maintain earnings at current levels.

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Our fixed annuity business includes products with discretionary and index-based crediting rates that are reset on a quarterly basis.  Our ability to retain quarterly reset annuities will be subject to current competitive conditions at the time interest rates for these products reset.  We expect to manage the effects of spreads on near-term income from operations through portfolio management and, to a lesser extent, crediting rate actions, which assumes no significant changes in net flows into or out of our fixed accounts or other changes that may cause interest rate spreads to differ from our expectations.  For information on interest rate spreads, see “Part I – Item 3. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” herein.  For information on the interest rate risk due to falling interest rates, see “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” and “Part I – Item 1A. Risk Factors – Market Conditions – Changes in interest rates and sustained low interest rates may cause interest rate spreads to decrease and changes in interest rates may also result in increased contract withdrawals” in our 2011 Form 10-K.

We provide information about this segment’s operating revenue and operating expense line items, the period in which amounts are recognized, key drivers of changes and historical details underlying the line items and their associated drivers below.

For factors that could cause actual results to differ materially from those set forth in this section, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K.

Insurance Fees

Details underlying insurance fees, account values and net flows (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Insurance Fees
Annuity expense assessments	$	45	$	46		-2%
Mutual fund fees		7		8		-13%
Total expense assessments		52		54		-4%
Surrender charges		-		1		-100%
Total insurance fees	$	52	$	55		-5%

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	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Account Value Roll Forward – By Product
Total Micro – Small Segment:
Balance as of beginning-of-period	$	6,167		$	6,396			-4%
Gross deposits		418			326			28%
Withdrawals and deaths		(412	)		(384	)		-7%
Net flows		6			(58	)		110%
Transfers between fixed and variable accounts		(11	)		(6	)		-83%
Investment increase and change in market value		479			262			83%
Balance as of end-of-period	$	6,641		$	6,594			1%
Total Mid – Large Segment:
Balance as of beginning-of-period	$	17,435		$	16,207			8%
Gross deposits		920			831			11%
Withdrawals and deaths		(505	)		(398	)		-27%
Net flows		415			433			-4%
Transfers between fixed and variable accounts		(2	)		(21	)		90%
Investment increase and change in market value		1,351			605			123%
Balance as of end-of-period	$	19,199		$	17,224			11%
Total Multi-Fund® and Other Variable Annuities:
Balance as of beginning-of-period	$	15,531		$	16,221			-4%
Gross deposits		173			184			-6%
Withdrawals and deaths		(382	)		(425	)		10%
Net flows		(209	)		(241	)		13%
Investment increase and change in market value		858			510			68%
Balance as of end-of-period	$	16,180		$	16,490			-2%
Total Annuities and Mutual Funds:
Balance as of beginning-of-period	$	39,133		$	38,824			1%
Gross deposits		1,511			1,341			13%
Withdrawals and deaths		(1,299	)		(1,207	)		-8%
Net flows		212			134			58%
Transfers between fixed and variable accounts		(13	)		(27	)		52%
Investment increase and change in market value		2,688			1,377			95%
Balance as of end-of-period (1)	$	42,020		$	40,308			4%

(1)   Includes mutual fund account values and other third-party trustee-held assets.  These items are not included in the separate accounts reported on our Consolidated Balance Sheets as we do not have any ownership interest in them.

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	As of or For the Three
	Months Ended
	March 31,
	2012			2011			Change
Account Value Information
Variable annuity deposits, excluding the fixed portion of variable	$	468		$	415			13%
Net flows for variable annuities, excluding the fixed portion of variable		(104	)		(172	)		40%
Change in market value on variable, excluding the fixed portion of variable		1,258			695			81%
Transfers from the variable portion of variable annuity products to the fixed portion of variable annuity products		(62	)		(50	)		-24%
Average daily variable annuity account values, excluding the fixed portion of variable		13,589			14,178			-4%
Average daily S&P 500		1,346.25			1,302.22			3%
Variable annuity account values, excluding the fixed portion of variable		13,959			14,400			-3%

We charge expense assessments to cover insurance and administrative expenses.  Expense assessments are generally equal to a percentage of the daily variable account values.  Average daily account values are driven by net flows and the equity markets.  Our expense assessments include fees we earn for the services that we provide to our mutual fund programs.  In addition, for both our fixed and variable annuity contracts, we collect surrender charges when contract holders surrender their contracts during the surrender charge periods to protect us from premature withdrawals.

Net Investment Income and Interest Credited

Details underlying net investment income, interest credited (in millions) and our interest rate spread were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Net Investment Income
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses	$	182	$	177		3%
Commercial mortgage loan prepayment and bond makewhole premiums (1)		1		11		-91%
Alternative investments (2)		-		1		-100%
Surplus investments (3)		14		16		-13%
Total net investment income	$	197	$	205		-4%
Interest Credited	$	111	$	108		3%

(1)   See “Consolidated Investments – Commercial Mortgage Loan Prepayment and Bond Makewhole Premiums” below for additional information.

(2)   See “Consolidated Investments – Alternative Investments” below for additional information.

(3)   Represents net investment income on the required statutory surplus for this segment and includes the effect of investment income on alternative investments for such assets that are held in the portfolios supporting statutory surplus versus the portfolios supporting product liabilities.

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	For the Three
	Months Ended				Basis
	March 31,				Point
	2012		2011		Change
Interest Rate Spread
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses		5.34%		5.61%		(27	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.04%		0.35%		(31	)
Alternative investments		0.01%		0.03%		(2	)
Net investment income yield on reserves		5.39%		5.99%		(60	)
Interest rate credited to contract holders		3.22%		3.36%		(14	)
Interest rate spread		2.17%		2.63%		(46	)

	As of or For the Three
	Months Ended
	March 31,
	2012			2011		Change
Other Information
Fixed annuity deposits, including the fixed portion of variable	$	370		$	346		7%
Net flows for fixed annuities, including the fixed portion of variable		(35	)		10	NM
Transfers to the fixed portion of variable annuity products from the variable portion of variable annuity products		62			50		24%
Average invested assets on reserves		13,591			12,647		7%
Average fixed account values, including the fixed portion of variable		13,723			12,872		7%
Fixed annuity account values, including the fixed portion of variable		13,820			12,956		7%

A portion of our investment income earned is credited to the contract holders of our fixed annuity products, including the fixed portion of variable annuity contracts.  We expect to earn a spread between what we earn on the underlying general account investments supporting the fixed annuity product line, including the fixed portion of variable annuity contracts, and what we credit to our fixed annuity contract holders’ accounts, including the fixed portion of variable annuity contracts.  Commercial mortgage loan prepayments and bond makewhole premiums, investment income on alternative investments and surplus investment income can vary significantly from period to period due to a number of factors and, therefore, may contribute to investment income results that are not indicative of the underlying trends.

Benefits

Benefits for this segment include changes in benefit reserves and our expected costs associated with purchases of derivatives used to hedge our benefit ratio unlocking.

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Underwriting, Acquisition, Insurance and Other Expenses

Details underlying underwriting, acquisition, insurance and other expenses (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Underwriting, Acquisition, Insurance and Other Expenses
Commissions:
Deferrable	$	5		$	5			0%
Non-deferrable		13			12			8%
General and administrative expenses		71			63			13%
Taxes, licenses and fees		5			5			0%
Total expenses incurred		94			85			11%
DAC deferrals		(10	)		(8	)		-25%
Total expenses recognized before amortization		84			77			9%
DAC and VOBA amortization, net of interest, excluding unlocking		10			9			11%
Total underwriting, acquisition, insurance and other expenses	$	94		$	86			9%
DAC Deferrals
As a percentage of annuity sales/deposits		1.2%			1.1%

Commissions and other costs that result directly from and are essential to the successful acquisition of new or renewal business are deferred to the extent recoverable and are amortized over the lives of the contracts in relation to EGPs.  Certain of our commissions, such as trail commissions that are based on account values, are expensed as incurred rather than deferred and amortized.  We do not pay commissions on sales of our mutual fund products, and distribution expenses associated with the sale of these mutual fund products are expensed as incurred.

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RESULTS OF LIFE INSURANCE

Income (Loss) from Operations

Details underlying the results for Life Insurance (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Operating Revenues
Insurance premiums	$	109	$	108		1%
Insurance fees		529		452		17%
Net investment income		588		579		2%
Other revenues and fees		6		7		-14%
Total operating revenues		1,232		1,146		8%
Operating Expenses
Interest credited		311		302		3%
Benefits		475		447		6%
Underwriting, acquisition, insurance and other expenses		239		187		28%
Total operating expenses		1,025		936		10%
Income (loss) from operations before taxes		207		210		-1%
Federal income tax expense (benefit)		65		68		-4%
Income (loss) from operations	$	142	$	142		0%

Comparison of the Three Months Ended March 31, 2012 to 2011

Income from operations for this segment remained flat due primarily to the following:

·   Higher insurance fees due to growth in insurance in force; and

·   Higher net investment income and higher interest credited driven by growth in business in force offset by new money rates averaging below our portfolio yields;

entirely offset by:

·   Higher underwriting, acquisition, insurance and other expenses attributable to the effect of prospective unlocking during 2012 as compared to 2011; and

·   Higher benefits attributable to higher death claims and surrender benefits and continued growth in our secondary guarantee life insurance business.

Strategies to Address Statutory Reserve Strain

Our insurance subsidiaries have statutory surplus and risk-based capital (“RBC”) levels above current regulatory required levels.  Products containing secondary guarantees require reserves calculated under AG38.  Our insurance subsidiaries are employing strategies to reduce the strain of increasing AG38 and Valuation of Life Insurance Policies Model Regulation (“XXX”) statutory reserves associated with secondary guarantee UL and term products.  As discussed below, we have been successful in executing reinsurance solutions to release capital to Other Operations.  We expect to regularly execute transactions designed to release capital as we continue to sell products that are subject to these reserving requirements.  We also plan to refinance prior transactions with long-term structured solutions.

Included in the letters of credit (“LOCs”) issued as of March 31, 2012, was approximately $1.9 billion of long-dated LOCs issued to support inter-company reinsurance arrangements, of which approximately $100 million and $1.0 billion was issued for UL business with secondary guarantees through 2015 and 2031, respectively, and approximately $800 million was issued for term business through 2023.  We have also used the proceeds from senior note issuances of approximately $1.1 billion to execute long-term structured solutions supporting secondary guarantee UL and term business.  LOCs and related capital market alternatives lower the capital effect of secondary guarantee UL products.  An inability to obtain the necessary LOC capacity or other capital

57

market alternatives could affect our returns on our in-force secondary guarantee UL business.  However, we believe that our insurance subsidiaries have sufficient capital to support the increase in statutory reserves, based on our current reserve projections, if such structures are not available.  See “Part I – Item 1A. Risk Factors – Legislative, Regulatory and Tax – Changes to the calculation of reserves and attempts to mitigate the impact of Regulation XXX and Actuarial Guideline 38 may fail in whole or in part resulting in an adverse effect on our financial condition and results of operations” in our 2011 Form 10-K for further information on XXX and AG38 reserves.  See the table in “Underwriting, Acquisition, Insurance and Other Expenses” below for the presentation of our expenses associated with reserve financing.

Additional Information

We expect to manage the effects of spreads on near-term income from operations through portfolio management, which assumes no significant changes in net flows into or out of our fixed accounts or other changes that may cause interest rate spreads to differ from our expectations.

For information on interest rate spreads, see “Part I – Item 3. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” herein.  For information on the interest rate risk due to falling interest rates, see “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” and “Part I – Item 1A. Risk Factors – Market Conditions – Changes in interest rates and sustained low interest rates may cause interest rate spreads to decrease and changes in interest rates may also result in increased contract withdrawals” in our 2011 Form 10-K.

Sales are not recorded as a component of revenues (other than for traditional products) and do not have a significant effect on current quarter income from operations but are indicators of future profitability.  Generally, we have higher sales during the second half of the year with the fourth quarter being our strongest.  However, we face conditions in the marketplace as discussed in “Introduction – Executive Summary – Current Market Conditions” above that may challenge our sales volume for the remainder of 2012.  For example, we are implementing pricing changes to our products that reflect the current low interest rate environment that we believe will lower our sales volumes and could potentially reduce our market share until competitive conditions change.

We provide information about this segment’s operating revenue and operating expense line items, the period in which amounts are recognized, key drivers of changes and historical details underlying the line items and their associated drivers below.

For factors that could cause actual results to differ materially from those set forth in this section, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K.

Insurance Premiums

Insurance premiums relate to traditional products and are a function of the rates priced into the product and the level of insurance in force.  Insurance in force, in turn, is driven by sales, persistency and mortality experience.

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Insurance Fees

Details underlying insurance fees, sales, net flows, account values and in-force face amount (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Insurance Fees
Mortality assessments	$	337		$	325			4%
Expense assessments		207			230			-10%
Surrender charges		23			23			0%
DFEL:
Deferrals		(83	)		(126	)		34%
Amortization, net of interest:
Prospective unlocking - assumption changes		-			(2	)		100%
Prospective unlocking - model refinements		(6	)		(18	)		67%
Amortization, net of interest, excluding unlocking		51			20			155%
Total insurance fees	$	529		$	452			17%

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Sales by Product
UL:
Excluding MoneyGuard®	$	47		$	85			-45%
MoneyGuard®		41			34			21%
Total UL		88			119			-26%
VUL		10			10			0%
COLI and BOLI		11			17			-35%
Term		13			13			0%
Total sales	$	122		$	159			-23%
Net Flows
Deposits	$	1,159		$	1,270			-9%
Withdrawals and deaths		(408	)		(449	)		9%
Net flows	$	751		$	821			-9%
Contract holder assessments	$	805		$	806			0%

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	As of March 31,
	2012		2011		Change
Account Values
UL	$	28,341	$	26,585		7%
VUL		5,376		5,294		2%
Interest-sensitive whole life		2,291		2,270		1%
Total account values	$	36,008	$	34,149		5%
In-Force Face Amount
UL and other	$	307,957	$	299,920		3%
Term insurance		272,006		266,764		2%
Total in-force face amount	$	579,963	$	566,684		2%

Insurance fees relate only to interest-sensitive products and include mortality assessments, expense assessments (net of deferrals and amortization related to DFEL) and surrender charges.  Mortality and expense assessments are deducted from our contract holders’ account values.  These amounts are a function of the rates priced into the product and premiums received, face amount in force and account values.  Insurance in force, in turn, is driven by sales, persistency and mortality experience.  In-force growth should be considered independently with respect to term products versus UL and other products, as term products have a lower profitability relative to face amount compared to interest-sensitive and other products.

Sales in the table above and as discussed above were reported as follows:

·   UL (excluding linked-benefit products) and VUL (including corporate-owned UL and VUL (“COLI”) and bank-owned UL and VUL (“BOLI”)) – first year commissionable premiums plus 5% of excess premiums received, including an adjustment for internal replacements of approximately 50% of commissionable premiums;

·   MoneyGuard® (our linked-benefit product) – 15% of premium deposits; and

·   Term – 100% of first year paid premiums.

UL and VUL products with secondary guarantees represented approximately 38% of interest-sensitive life insurance in force as of March 31, 2012, and approximately 33% of sales for the three months ended March 31, 2012, as compared to approximately 50% of sales for the corresponding period in 2011.  Changes in the marketplace and product focuses are resulting in a shift in our business mix away from products with secondary guarantees to accumulation products like Indexed UL, VUL and COLI.  Actuarial Guideline 37, or Variable Life Reserves for Guaranteed Minimum Death Benefits, and AG38 impose additional statutory reserve requirements for these products.

Net Investment Income and Interest Credited

Details underlying net investment income, interest credited (in millions) and our interest rate spread were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Net Investment Income
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses	$	540	$	517		4%
Commercial mortgage loan prepayment and bond makewhole premiums (1)		2		4		-50%
Alternative investments (2)		15		25		-40%
Surplus investments (3)		31		33		-6%
Total net investment income	$	588	$	579		2%
Interest Credited	$	311	$	302		3%

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(1)   See “Consolidated Investments – Commercial Mortgage Loan Prepayment and Bond Makewhole Premiums” below for additional information.

(2)   See “Consolidated Investments – Alternative Investments” below for additional information.

(3)   Represents net investment income on the required statutory surplus for this segment and includes the effect of investment income on alternative investments for such assets that are held in the portfolios supporting statutory surplus versus the portfolios supporting product liabilities.

	For the Three
	Months Ended				Basis
	March 31,				Point
	2012		2011		Change
Interest Rate Yields and Spread
Attributable to interest-sensitive products:
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses		5.77%		5.91%		(14	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.02%		0.04%		(2	)
Alternative investments		0.17%		0.32%		(15	)
Net investment income yield on reserves		5.96%		6.27%		(31	)
Interest rate credited to contract holders		3.95%		4.09%		(14	)
Interest rate spread		2.01%		2.18%		(17	)
Attributable to traditional products:
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses		5.73%		5.89%		(16	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.00%		0.10%		(10	)
Alternative investments		0.01%		0.02%		(1	)
Net investment income yield on reserves		5.74%		6.01%		(27	)

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Averages
Attributable to interest-sensitive products:
Invested assets on reserves	$	33,271	$	30,793		8%
Account values - universal and whole life		31,210		29,440		6%
Attributable to traditional products:
Invested assets on reserves		4,283		4,273		0%

A portion of the investment income earned for this segment is credited to contract holder accounts.  Invested assets will typically grow at a faster rate than account values because of the AG38 reserve requirements, which cause statutory reserves to grow at a faster rate than account values.  Invested assets are based upon the statutory reserve liabilities and are, therefore, affected by various reserve adjustments, including capital transactions providing relief from AG38 reserve requirements, which leads to a transfer of invested assets from this segment to Other Operations for use in other corporate purposes.  We expect to earn a spread

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between what we earn on the underlying general account investments and what we credit to our contract holders’ accounts.  We use our investment income to offset the earnings effect of the associated build of our policy reserves for traditional products.  Commercial mortgage loan prepayments and bond makewhole premiums and investment income on alternative investments can vary significantly from period to period due to a number of factors, and, therefore, may contribute to investment income results that are not indicative of the underlying trends.

Benefits

Details underlying benefits (dollars in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Benefits
Death claims direct and assumed	$	803		$	699			15%
Death claims ceded		(415	)		(318	)		-31%
Reserves released on death		(106	)		(132	)		20%
Net death benefits		282			249			13%
Change in secondary guarantee life insurance product reserves:
Prospective unlocking - assumption changes		-			10			-100%
Prospective unlocking - model refinements		9			33			-73%
Change in reserves, excluding unlocking		119			109			9%
Other benefits (1)		65			46			41%
Total benefits	$	475		$	447			6%
Death claims per $1,000 of in-force		1.95			1.76			11%

(1)        Includes primarily traditional product changes in reserves and dividends.

Benefits for this segment includes claims incurred during the period in excess of the associated reserves for its interest-sensitive and traditional products.  In addition, benefits includes the change in secondary guarantee life insurance product reserves.  The reserve for secondary guarantees is affected by changes in expected future trends of expense assessments causing prospective unlocking adjustments to this liability similar to DAC, VOBA and DFEL.

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Underwriting, Acquisition, Insurance and Other Expenses

Details underlying underwriting, acquisition, insurance and other expenses (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	130		$	173			-25%
General and administrative expenses		123			112			10%
Expenses associated with reserve financing		16			14			14%
Taxes, licenses and fees		34			36			-6%
Total expenses incurred		303			335			-10%
DAC and VOBA deferrals		(145	)		(194	)		25%
Total expenses recognized before amortization		158			141			12%
DAC and VOBA amortization, net of interest:
Prospective unlocking - assumption changes		-			(7	)		100%
Prospective unlocking - model refinements		(33	)		(68	)		51%
Amortization, net of interest, excluding unlocking		113			120			-6%
Other intangible amortization		1			1			0%
Total underwriting, acquisition, insurance and other expenses	$	239		$	187			28%
DAC and VOBA Deferrals
As a percentage of sales		118.9%			122.0%

Commissions and costs that result directly from and are essential to successful acquisition of new or renewal business are deferred to the extent recoverable and for our interest-sensitive products are generally amortized over the lives of the contracts in relation to EGPs.  For our traditional products, DAC and VOBA are amortized on either a straight-line basis or as a level percent of premium of the related contracts, depending on the block of business.

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RESULTS OF GROUP PROTECTION

Income (Loss) from Operations

Details underlying the results for Group Protection (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Operating Revenues
Insurance premiums	$	463	$	437		6%
Net investment income		38		39		-3%
Other revenues and fees		3		2		50%
Total operating revenues		504		478		5%
Operating Expenses
Interest credited		1		-	NM
Benefits		350		328		7%
Underwriting, acquisition, insurance and other expenses		128		113		13%
Total operating expenses		479		441		9%
Income (loss) from operations before taxes		25		37		-32%
Federal income tax expense (benefit)		9		13		-31%
Income (loss) from operations	$	16	$	24		-33%

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Income (Loss) from Operations by Product Line
Life	$	2		$	8			-75%
Disability		14			17			-18%
Dental		(1	)		(2	)		50%
Total non-medical		15			23			-35%
Medical		1			1			0%
Income (loss) from operations	$	16		$	24			-33%

Comparison of the Three Months Ended March 31, 2012 to 2011

Income from operations for this segment decreased due primarily to the following:

·   Less favorable non-medical loss ratio experience attributable to fluctuations in mortality experience within our life business; and

·   Higher underwriting, acquisition, insurance and other expenses attributable to an increase in business and investments in strategic initiatives associated with enhancements to sales and distribution processes and improvements to technology platforms.

The decrease in income from operations was partially offset primarily by growth in insurance premiums driven by normal, organic business growth in our non-medical products.

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Additional Information

Management compares trends in actual loss ratios to pricing expectations because group-underwriting risks change over time.  We expect normal fluctuations in our composite non-medical loss ratios of this segment, as claims experience is inherently uncertain.  Non-medical loss ratios in general are likely to remain within our long-term expectation of 71% to 74% during 2012.  For every one percent increase in the loss ratio above our expectation, we would expect an approximate annual $10 million to $12 million decrease to income from operations.

We are evaluating the potential effects that health care reform may have on the value and profitability of this segment’s products and income from operations, including, but not limited to, potential changes to traditional sources of income for our brokers who may seek additional portfolio options and/or modification to compensation structures.

For information on the effects of current interest rates on our long-term disability claim reserves, see “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” in our 2011 Form 10-K.

Sales relate to long-duration contracts sold to new contract holders and new programs sold to existing contract holders.  We believe that the trend in sales is an important indicator of development of business in force over time.

We provide information about this segment’s operating revenue and operating expense line items, the period in which amounts are recognized, key drivers of changes and historical details underlying the line items and their associated drivers below.

For factors that could cause actual results to differ materially from those set forth in this section, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K.

Insurance Premiums

Details underlying insurance premiums (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Insurance Premiums by Product Line
Life	$	186	$	171		9%
Disability		199		186		7%
Dental		46		46		0%
Total non-medical		431		403		7%
Medical		32		34		-6%
Total insurance premiums	$	463	$	437		6%
Sales	$	67	$	45		49%

Our cost of insurance and policy administration charges are embedded in the premiums charged to our customers.  The premiums are a function of the rates priced into the product and our business in force.  Business in force, in turn, is driven by sales and persistency experience.  Sales in the table above are the combined annualized premiums for our life, disability and dental products.

Net Investment Income

We use our investment income to offset the earnings effect of the associated build of our policy reserves, which are a function of our insurance premiums and the yields on our invested assets.

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Benefits and Interest Credited

Details underlying benefits and interest credited (in millions) and loss ratios by product line were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Benefits and Interest Credited by Product Line
Life	$	146		$	129			13%
Disability		139			131			6%
Dental		38			39			-3%
Total non-medical		323			299			8%
Medical		28			29			-3%
Total benefits and interest credited	$	351		$	328			7%
Loss Ratios by Product Line
Life		78.2	%		75.9	%
Disability		70.1	%		70.1	%
Dental		82.1	%		83.7	%
Total non-medical		74.9	%		74.1	%
Medical		87.6	%		86.1	%

Underwriting, Acquisition, Insurance and Other Expenses

Details underlying underwriting, acquisition, insurance and other expenses (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Underwriting, Acquisition, Insurance and Other Expenses
Commissions	$	54		$	50			8%
General and administrative expenses		61			51			20%
Taxes, licenses and fees		12			11			9%
Total expenses incurred		127			112			13%
DAC deferrals		(11	)		(9	)		-22%
Total expenses recognized before amortization		116			103			13%
DAC and VOBA amortization, net of interest		12			10			20%
Total underwriting, acquisition, insurance and other expenses	$	128		$	113			13%
DAC Deferrals
As a percentage of insurance premiums		2.4%			2.1%

Expenses, excluding broker commissions, that result directly from and are essential to the successful acquisition of new or renewal business are deferred to the extent recoverable and are amortized on either a straight-line basis or as a level percent of premium of the related contracts depending on the block of business.  Broker commissions, which vary with and are related to paid premiums, are expensed as incurred.  The level of expenses is an important driver of profitability for this segment as group insurance contracts are offered within an environment that competes on the basis of price and service.

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RESULTS OF OTHER OPERATIONS

Income (Loss) from Operations

Details underlying the results for Other Operations (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Operating Revenues
Net investment income	$	70		$	80			-13%
Amortization of deferred gain on business sold through reinsurance		18			18			0%
Media revenues (net)		17			16			6%
Other revenues and fees		2			4			-50%
Total operating revenues		107			118			-9%
Operating Expenses
Interest credited		31			29			7%
Benefits		28			32			-13%
Media expenses		16			17			-6%
Other expenses		21			25			-16%
Interest and debt expense		68			72			-6%
Total operating expenses		164			175			-6%
Income (loss) from operations before taxes		(57	)		(57	)		0%
Federal income tax expense (benefit)		(23	)		(22	)		-5%
Income (loss) from operations	$	(34	)	$	(35	)		3%

Comparison of the Three Months Ended March 31, 2012 to 2011

Loss from operations for Other Operations decreased due primarily to the following:

·   Lower other expenses due to higher legal expenses during the first quarter of 2011; and

·   Lower interest and debt expense attributable to lower average balances of and a decline in the rate on outstanding debt during 2012.

The decrease in loss from operations was partially offset primarily by lower net investment income, net of interest credited, attributable to the following:

·   Repurchases of common stock, net cash used in operating activities due to interest payments and transfers to other segments for other-than-temporary impairment (“OTTI”), partially offset by distributable earnings received from our insurance segments, resulting in lower average invested assets; and

·   New money rates averaging below our portfolio yields.

Additional Information

We provide information about Other Operations’ operating revenue and operating expense line items, the period in which amounts are recognized, key drivers of changes and historical details underlying the line items and their associated drivers below.

For factors that could cause actual results to differ materially from those set forth in this section, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K.

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Net Investment Income and Interest Credited

We utilize an internal formula to determine the amount of capital that is allocated to our business segments.  Investment income on capital in excess of the calculated amounts is reported in Other Operations.  If regulations require increases in our insurance segments’ statutory reserves and surplus, the amount of capital retained by Other Operations would decrease and net investment income would be negatively affected.

Write-downs for OTTI decrease the recorded value of our invested assets owned by our business segments.  These write-downs are not included in the income from operations of our operating segments.  When impairment occurs, assets are transferred to the business segments’ portfolios and will reduce the future net investment income for Other Operations, but should not have an effect on a consolidated basis unless the impairments are related to defaulted securities.  Statutory reserve adjustments for our business segments can also cause allocations of invested assets between the affected segments and Other Operations.

The majority of our interest credited relates to our reinsurance operations sold to Swiss Re in 2001.  A substantial amount of the business was sold through indemnity reinsurance transactions, which is still recorded in our consolidated financial statements.  The interest credited corresponds to investment income earnings on the assets we continue to hold for this business.  There is no effect to income or loss in Other Operations or on a consolidated basis for these amounts because interest earned on the blocks that continue to be reinsured is passed through to Swiss Re in the form of interest credited.

Benefits

Benefits are recognized when incurred for Institutional Pension products and disability income business.

Other Expenses

Details underlying other expenses (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Other Expenses
General and administrative expenses:
Legal	$	1		$	8			-88%
Branding		9			5			80%
Other (1)		13			13			0%
Total general and administrative expenses		23			26			-12%
Taxes, licenses and fees		1			1			0%
Inter-segment reimbursement associated with reserve financing and LOC expenses (2)		(3	)		(2	)		-50%
Total other expenses	$	21		$	25			-16%

(1)   Includes expenses that are corporate in nature including charitable contributions, amortization of media intangible assets with a definite life, other expenses not allocated to our business segments and inter-segment expense eliminations.

(2)   Consists of reimbursements to Other Operations from the Life Insurance segment for the use of proceeds from certain issuances of senior notes that were used as long-term structured solutions, net of expenses incurred by Other Operations for its use of LOCs.

Interest and Debt Expense

Our current level of interest expense may not be indicative of the future due to, among other things, the timing of the use of cash, the availability of funds from our inter-company cash management program and the future cost of capital.  For additional information on our financing activities, see “Review of Consolidated Financial Condition – Liquidity and Capital Resources – Sources of Liquidity and Cash Flow – Financing Activities” below.

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REALIZED GAIN (LOSS) AND BENEFIT RATIO UNLOCKING

Details underlying realized gain (loss), after-DAC (1) and benefit ratio unlocking (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Components of Realized Gain (Loss), Pre-Tax
Total operating realized gain (loss)	$	27		$	23			17%
Total excluded realized gain (loss)		(112	)		(21	)	NM
Total realized gain (loss), pre-tax	$	(85	)	$	2		NM
Reconciliation of Excluded Realized Gain (Loss) Net of Benefit Ratio Unlocking, After-Tax
Total excluded realized gain (loss)	$	(73	)	$	(14	)	NM
Benefit ratio unlocking		23			5		NM
Excluded realized gain (loss) net of benefit ratio unlocking, after-tax	$	(50	)	$	(9	)	NM
Components of Excluded Realized Gain (Loss) Net of Benefit Ratio Unlocking, After-Tax
Realized gain (loss) related to certain investments	$	(32	)	$	(10	)	NM
Gain (loss) on the mark-to-market on certain instruments		38			7		NM
Variable annuity net derivatives results:
Hedge program performance		19			(18	)		206%
GLB NPR component		(85	)		11		NM
Total variable annuity net derivatives results		(66	)		(7	)	NM
Indexed annuity forward-starting option		10			1		NM
Excluded realized gain (loss) net of benefit ratio unlocking, after-tax	$	(50	)	$	(9	)	NM

(1)   DAC refers to the associated amortization of DAC, VOBA, DSI and DFEL and changes in other contract holder funds and funds withheld reinsurance liabilities.

For factors that could cause actual results to differ materially from those set forth in this section, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K.

For information on our counterparty exposure, see “Part I – Item 3. Quantitative and Qualitative Disclosures About Market Risk.”

Comparison of the Three Months Ended March 31, 2012 to 2011

We had realized losses in the first quarter of 2012 as compared to gains for the corresponding period of 2011 due primarily to the following:

·   Higher losses on variable annuity net derivatives results attributable to:

§   Narrowing of our credit spreads during the first quarter of 2012 resulting in an unfavorable GLB NPR component (see “Variable Annuity Net Derivatives Results” below for a discussion of how our NPR adjustment is determined);

partially offset by:

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§   Less volatile capital markets during the first quarter of 2012 resulting in more favorable hedge program performance; and

·   Higher gross realized gains during the first quarter of 2011 originating from asset sales to reposition the portfolio (see “Consolidated Investments – Realized Gain (Loss) Related to Certain Investments” below for more information).

The realized losses in the first quarter of 2012 were partially offset by higher gains on the mark-to-market on certain instruments attributable to spreads narrowing on corporate credit default swaps, partially offset by increases in interest rates leading to a decrease in the value of our trading securities.

Operating Realized Gain (Loss)

See “Realized Gain (Loss) and Benefit Ratio Unlocking – Operating Realized Gain (Loss)” in our 2011 Form 10-K for a discussion of our operating realized gain (loss).

Realized Gain (Loss) Related to Certain Investments

See “Consolidated Investments – Realized Gain (Loss) Related to Certain Investments” below.

Gain (Loss) on the Mark-to-Market on Certain Instruments

See “Realized Gain (Loss) and Benefit Ratio Unlocking – Gain (Loss) on the Mark-to-Market on Certain Instruments” in our 2011 Form 10-K for a discussion on the mark-to-market on certain instruments and Note 3 for information about consolidated variable interest entities.

Variable Annuity Net Derivatives Results

See “Realized Gain (Loss) and Benefit Ratio Unlocking – Variable Annuity Net Derivatives Results” in our 2011 Form 10-K for a discussion of our variable annuity net derivatives results.

As of March 31, 2012, the net effect of the NPR resulted in a $29 million decrease in the liability for our GLB embedded derivative reserves.

Details underlying the NPR component and associated effect to our GLB embedded derivative reserves (dollars in millions) were as follows:

	As of		As of		As of		As of		As of
	March 31,		December 31,		September 30,		June 30,		March 31,
	2012		2011		2011		2011		2011
10-year CDS spread		2.40%		3.65%		4.42%		2.02%		1.78%
NPR factor related to 10-year CDS spread		0.25%		0.43%		0.51%		0.24%		0.17%
Unadjusted embedded derivative liability	$	1,083	$	2,418		2,642		306	$	112

Estimating what the absolute amount of the NPR effect will be period to period is difficult due to the utilization of all cash flows and the shape of the spread curve.  Currently, we estimate that if the NPR factors as of March 31, 2012, were to have been zero along all points on the spread curve, then the NPR offset to the unadjusted liability would have resulted in an unfavorable effect to net income of approximately $150 million, pre-DAC and pre-tax.Under this scenario, the effect of the NPR would result in an increase rather than a decrease to the unadjusted embedded derivative liability.Alternatively, if the NPR factors were 20 basis points higher along all points on the spread curve as of March 31, 2012, then there would have been a favorable effect to net income of approximately $85 million, pre-DAC and pre-tax.  In the preceding two sentences, “DAC” refers to the associated amortization of DAC, VOBA, DSI and DFEL.  Changing market conditions could cause this relationship to deviate significantly in future periods.  Sensitivity within this range is primarily a result of volatility in our credit default swap (“CDS”) spreads and the slope of the CDS spread term structure.

For additional information on our guaranteed benefits, see “Critical Accounting Policies and Estimates – Derivatives – Guaranteed Living Benefits” above.

Indexed Annuity Forward-Starting Option

See “Realized Gain (Loss) and Benefit Ratio Unlocking – Indexed Annuity Forward-Starting Option” in our 2011 Form 10-K for a discussion of our indexed annuity forward-starting option.

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CONSOLIDATED INVESTMENTS

Details underlying our consolidated investment balances (in millions) were as follows:

							Percentage of
							Total Investments
		As of		As of			As of		As of
	March 31,			December 31,			March 31,	December 31,
		2012			2011		2012		2011
Investments
AFS securities:
Fixed maturity		$	76,254		$	75,433	82.0%		81.0%
VIEs' fixed maturity			702			700	0.8%		0.8%
Total fixed maturity			76,956			76,133	82.8%		81.8%
Equity			126			139	0.1%		0.1%
Trading securities			2,650			2,675	2.9%		2.9%
Mortgage loans on real estate			6,938			6,942	7.5%		7.4%
Real estate			113			137	0.1%		0.1%
Policy loans			2,842			2,884	3.1%		3.1%
Derivative investments			2,244			3,151	2.4%		3.4%
Alternative investments			820			807	0.9%		0.9%
Other investments			223			262	0.2%		0.3%
Total investments		$	92,912		$	93,130	100.0%		100.0%

Investment Objective

Invested assets are an integral part of our operations.  We follow a balanced approach to investing for both current income and prudent risk management, with an emphasis on generating sufficient current income, net of income tax, to meet our obligations to customers, as well as other general liabilities.  This balanced approach requires the evaluation of expected return and risk of each asset class utilized, while still meeting our income objectives.  This approach is important to our asset-liability management because decisions can be made based upon both the economic and current investment income considerations affecting assets and liabilities.  For a discussion on our risk management process, see “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our 2011 Form 10-K.

Investment Portfolio Composition and Diversification

Fundamental to our investment policy is diversification across asset classes.  Our investment portfolio, excluding cash and invested cash, is composed of fixed maturity securities, mortgage loans on real estate, real estate (either wholly-owned or in joint ventures) and other long-term investments.  We purchase investments for our segmented portfolios that have yield, duration and other characteristics that take into account the liabilities of the products being supported.

We have the ability to maintain our investment holdings throughout credit cycles because of our capital position, the long-term nature of our liabilities and the matching of our portfolios of investment assets with the liabilities of our various products.

Fixed Maturity and Equity Securities Portfolios

Fixed maturity securities and equity securities consist of portfolios classified as AFS and trading.  Mortgage-backed and private securities are included in both of the AFS and trading portfolios.

Details underlying our fixed maturity and equity securities portfolios by industry classification (in millions) are presented in the tables below.  These tables agree in total with the presentation of AFS securities in Note 4; however, the categories below represent a more detailed breakout of the AFS portfolio.  Therefore, the investment classifications listed below do not agree to the investment categories provided in Note 4.

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	As of March 31, 2012
			Gross Unrealized						%
	Amortized				Losses		Fair		Fair
	Cost		Gains		and OTTI		Value		Value
Fixed Maturity AFS Securities
Industry corporate bonds:
Financial services	$	8,912	$	700	$	101	$	9,511		12.3%
Basic industry		3,545		315		20		3,840		5.0%
Capital goods		4,146		424		27		4,543		5.9%
Communications		3,388		388		29		3,747		4.9%
Consumer cyclical		3,287		333		29		3,591		4.7%
Consumer non-cyclical		8,227		1,083		2		9,308		12.1%
Energy		5,194		639		9		5,824		7.6%
Technology		1,869		173		8		2,034		2.6%
Transportation		1,413		148		2		1,559		2.0%
Industrial other		887		71		1		957		1.2%
Utilities		10,857		1,282		30		12,109		15.7%
Collateralized mortgage and other obligations ("CMOs"):
Agency backed		3,005		340		-		3,345		4.3%
Non-agency backed		1,421		19		148		1,292		1.7%
Mortgage pass through securities ("MPTS"):
Agency backed		2,769		165		-		2,934		3.8%
Non-agency backed		1		-		-		1		0.0%
Commercial mortgage-backed securities ("CMBS"):
Non-agency backed		1,533		76		86		1,523		2.0%
Corporate asset-backed securities ("ABS"):
CDOs		85		-		4		81		0.1%
Commercial real estate ("CRE") CDOs		32		-		11		21		0.0%
Credit card		779		44		-		823		1.1%
Home equity		883		3		247		639		0.8%
Manufactured housing		81		4		1		84		0.1%
Auto loan		41		1		-		42		0.1%
Other		283		28		2		309		0.4%
Municipals:
Taxable		3,460		635		8		4,087		5.3%
Tax-exempt		37		2		-		39		0.1%
Government and government agencies:
United States		1,511		194		5		1,700		2.2%
Foreign		1,661		158		2		1,817		2.4%
Hybrid and redeemable preferred securities		1,256		62		122		1,196		1.6%
Total fixed maturity AFS securities		70,563		7,287		894		76,956		100.0%
Equity AFS Securities		114		19		7		126
Total AFS securities		70,677		7,306		901		77,082
Trading Securities (1)		2,297		381		28		2,650
Total AFS and trading securities	$	72,974	$	7,687	$	929	$	79,732

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	As of December 31, 2011
			Gross Unrealized						%
	Amortized				Losses		Fair		Fair
	Cost		Gains		and OTTI		Value		Value
Fixed Maturity AFS Securities
Industry corporate bonds:
Financial services	$	8,926	$	607	$	158	$	9,375		12.3%
Basic industry		3,394		323		27		3,690		4.8%
Capital goods		3,933		455		9		4,379		5.8%
Communications		3,247		364		37		3,574		4.7%
Consumer cyclical		3,226		345		36		3,535		4.6%
Consumer non-cyclical		7,956		1,190		1		9,145		12.0%
Energy		5,026		690		6		5,710		7.5%
Technology		1,682		192		3		1,871		2.5%
Transportation		1,360		166		1		1,525		2.0%
Industrial other		755		74		3		826		1.1%
Utilities		10,644		1,457		27		12,074		15.8%
CMOs:
Agency backed		3,226		357		-		3,583		4.7%
Non-agency backed		1,481		12		199		1,294		1.7%
MPTS:
Agency backed		2,982		179		-		3,161		4.2%
Non-agency backed		1		-		-		1		0.0%
CMBS:
Non-agency backed		1,642		73		115		1,600		2.1%
ABS:
CDOs		88		-		6		82		0.1%
CRE CDOs		33		-		13		20		0.0%
Credit card		790		47		-		837		1.1%
Home equity		905		3		271		637		0.8%
Manufactured housing		85		5		1		89		0.1%
Auto loan		52		1		-		53		0.1%
Other		246		29		1		274		0.4%
Municipals:
Taxable		3,452		565		9		4,008		5.3%
Tax-exempt		38		1		-		39		0.1%
Government and government agencies:
United States		1,468		232		-		1,700		2.2%
Foreign		1,746		152		4		1,894		2.5%
Hybrid and redeemable preferred securities		1,277		50		170		1,157		1.5%
Total fixed maturity AFS securities		69,661		7,569		1,097		76,133		100.0%
Equity AFS Securities		135		16		12		139
Total AFS securities		69,796		7,585		1,109		76,272
Trading Securities (1)		2,301		408		34		2,675
Total AFS and trading securities	$	72,097	$	7,993	$	1,143	$	78,947

(1)   Certain of our trading securities support our modified coinsurance arrangements (“Modco”), and the investment results are passed directly to the reinsurers.  Refer to “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Consolidated Investments – Fixed Maturity and Equity Securities Portfolios – Trading Securities” in our 2011 Form 10-K for further details.

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AFS Securities

In accordance with the AFS accounting guidance, we reflect stockholders’ equity as if unrealized gains and losses were actually recognized and consider all related accounting adjustments that would occur upon such a hypothetical recognition of unrealized gains and losses.  Such related balance sheet effects include adjustments to the balances of DAC, VOBA, DFEL, other contract holder funds and deferred income taxes.  Adjustments to each of these balances are charged or credited to AOCI.  For instance, DAC is adjusted upon the recognition of unrealized gains or losses because the amortization of DAC is based upon an assumed emergence of gross profits on certain insurance business.  Deferred income tax balances are also adjusted because unrealized gains or losses do not affect actual taxes currently paid.

The quality of our AFS fixed maturity securities portfolio, as measured at estimated fair value and by the percentage of fixed maturity securities invested in various ratings categories, relative to the entire fixed maturity AFS security portfolio (in millions) was as follows:

			Rating Agency	As of March 31, 2012					As of December 31, 2011
NAIC			Equivalent	Amortized		Fair		% of	Amortized		Fair		% of
Designation (1)			Designation (1)	Cost		Value		Total	Cost		Value		Total
Investment Grade Securities
1			Aaa / Aa / A	$	42,126	$	46,926	61.0%	$	42,436	$	47,490	62.4%
2			Baa		24,407		26,402	34.3%		23,323		25,237	33.1%
	Total investment grade securities				66,533		73,328	95.3%		65,759		72,727	95.5%
Below Investment Grade Securities
3			Ba		2,647		2,577	3.3%		2,466		2,350	3.1%
4			B		942		766	1.0%		960		750	1.0%
5			Caa and lower		307		200	0.3%		318		218	0.3%
6			In or near default		134		85	0.1%		158		88	0.1%
	Total below investment grade securities				4,030		3,628	4.7%		3,902		3,406	4.5%
		Total fixed maturity AFS securities		$	70,563	$	76,956	100.0%	$	69,661	$	76,133	100.0%
Total securities below investment
	grade as a percentage of total
	fixed maturity AFS securities				5.7%		4.7%			5.6%		4.5%

(1)   Based upon the rating designations determined and provided by the National Association of Insurance Commissioners (“NAIC”) or the major credit rating agencies (Fitch Ratings (“Fitch”), Moody’s Investors Service (“Moody’s”) and Standard & Poor’s (“S&P”)).  For securities where the ratings assigned by the major credit agencies are not equivalent, the second highest rating assigned is used.  For those securities where ratings by the major credit rating agencies are not available, which does not represent a significant amount of our total fixed maturity AFS securities, we base the ratings disclosed upon internal ratings.

Comparisons between the NAIC ratings and rating agency designations are published by the NAIC.  The NAIC assigns securities quality ratings and uniform valuations, which are used by insurers when preparing their annual statements.  The NAIC ratings are similar to the rating agency designations of the Nationally Recognized Statistical Rating Organizations for marketable bonds.  NAIC ratings 1 and 2 include bonds generally considered investment grade (rated Baa3 or higher by Moody’s, or rated BBB- or higher by S&P and Fitch), by such ratings organizations.  However, securities rated NAIC 1 and NAIC 2 could be deemed below investment grade by the rating agencies as a result of the current RBC rules for residential mortgage-backed securities (“RMBS”) and CMBS for statutory reporting.  NAIC ratings 3 through 6 include bonds generally considered below investment grade (rated Ba1 or lower by Moody’s, or rated BB+ or lower by S&P and Fitch).

We have identified direct and indirect exposure to select countries in Europe that are currently experiencing stress in the credit markets, notably Greece, Ireland, Italy, Portugal, Spain, Hungary and Cyprus.  These countries were identified due to high credit spreads and political and economic uncertainty in these countries.  The exposure was determined by country of domicile, provided that a meaningful portion of revenues is generated from the country of domicile.  As of March 31, 2012, we had direct sovereign exposure only to Italy with an amortized cost and fair value of $3 million.  We had no exposure to any issuers, sovereign or non-sovereign, located in Greece, Hungary or Cyprus.  Our exposure to banks in Greece, Ireland, Italy, Portugal, Spain, Hungary and Cyprus is limited to two large Spanish banks where our investments are in subsidiaries located outside of Spain with an amortized cost of $63 million and fair value of $64 million.

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Our total non-banking and non-sovereign AFS securities exposure to Ireland, Italy, Portugal and Spain had an amortized cost of $770 million and a fair value of $794 million as of March 31, 2012, of which approximately 50% was related to large multinational companies domiciled in those countries.  The detailed breakout by country was as follows (in millions):

	Amortized		Fair
	Cost		Value
Spain	$	367	$	397
Ireland		215		205
Italy		148		160
Portugal		40		32
Total	$	770	$	794

We purchased a European subordinated investment grade financial index hedge in the amount of €35 million with a maturity of June 20, 2017, to provide some protection on possible defaults on our European investments.

We manage European and other investment risks through our internal investment department and outside asset managers.  The risk management is focused on monitoring spreads, pricing and monitoring of global economic developments.  We have incorporated these risks into our stress testing.

As of March 31, 2012, and December 31, 2011, 69.9% and 67.4%, respectively, of the total publicly traded and private securities in an unrealized loss status were rated as investment grade.  See Note 4 for maturity date information for our fixed maturity investment portfolio.  Our gross unrealized losses on AFS securities as of March 31, 2012, decreased $208 million.  As more fully described in Note 1 in our 2011 Form 10-K, we regularly review our investment holdings for OTTI.  We believe the unrealized loss position as of March 31, 2012, does not represent OTTI as we do not intend to sell these debt securities, it is not more likely than not that we will be required to sell the debt securities before recovery of their amortized cost basis, the estimated future cash flows are equal to or greater than the amortized cost basis of the debt securities, or we have the ability and intent to hold the equity securities for a period of time sufficient for recovery.  For further information on our unrealized losses on AFS securities see “Composition by Industry Categories of our Unrealized Losses on AFS Securities” below.

Selected information for certain AFS securities in a gross unrealized loss position (dollars in millions) was as follows:

	As of March 31, 2012
			Gross		Estimated	Estimated
			Unrealized		Years	Average
			Losses		until Call	Years
	Fair		and		or	Until	Subordination Level
	Value		OTTI		Maturity	Recovery	Current		Origination
CMBS	$	249	$	86	1 to 41	28		24.0%		15.8%
Hybrid and redeemable preferred securities		529		122	1 to 55	31		N/A		N/A

As provided in the table above, many of the securities in these categories are long-dated with some of the preferred securities being perpetual.  This is purposeful as it matches the long-term nature of our liabilities associated with our life insurance and annuity products.  See “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our 2011 Form 10-K where we present information related to maturities of securities and the expected cash flows for rate sensitive liabilities and maturities of our holding company debt, which also demonstrates the long-term nature of the cash flows associated with these items.  Because of this relationship, we do not believe it will be necessary to sell these securities before they recover or mature.  For these securities, the estimated range and average period until recovery is the call or maturity period.  It is difficult to predict or project when the securities will recover as it is dependent upon a number of factors including the overall economic climate.  We do not believe it is necessary to impair these securities as long as the expected future cash flows are projected to be sufficient to recover the amortized cost of these securities.

The actual range and period until recovery could vary significantly depending on a variety of factors, many of which are out of our control.  There are several items that could affect the length of the period until recovery, such as the pace of economic recovery, level of delinquencies, performance of the underlying collateral, changes in market interest rates, exposures to various industry or geographic conditions, market behavior and other market conditions.

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We concluded that it is not more likely than not that we will be required to sell the fixed maturity AFS securities before recovery of their amortized cost basis, that the estimated future cash flows are equal to or greater than the amortized cost basis of the debt securities, and that we have the ability to hold the equity AFS securities for a period of time sufficient for recovery.  This conclusion is consistent with our asset-liability management process.  Management considers the following as part of the evaluation:

·   The current economic environment and market conditions;

·   Our business strategy and current business plans;

·   The nature and type of security, including expected maturities and exposure to general credit, liquidity, market and interest rate risk;

·   Our analysis of data from financial models and other internal and industry sources to evaluate the current effectiveness of our hedging and overall risk management strategies;

·   The current and expected timing of contractual maturities of our assets and liabilities, expectations of prepayments on investments and expectations for surrenders and withdrawals of life insurance policies and annuity contracts;

·   The capital risk limits approved by management; and

·   Our current financial condition and liquidity demands.

To determine the recoverability of a debt security, we consider the facts and circumstances surrounding the underlying issuer including, but not limited to, the following:

·   Historical and implied volatility of the security;

·   Length of time and extent to which the fair value has been less than amortized cost;

·   Adverse conditions specifically related to the security or to specific conditions in an industry or geographic area;

·   Failure, if any, of the issuer of the security to make scheduled payments; and

·   Recoveries or additional declines in fair value subsequent to the balance sheet date.

As reported on our Consolidated Balance Sheets, we had $96.4 billion of investments and cash, which exceeded the liabilities for our future obligations under insurance policies and contracts, net of amounts recoverable from reinsurers, which totaled $82.3 billion as of March 31, 2012.  If it were necessary to liquidate securities prior to maturity or call to meet cash flow needs, we would first look to those securities that are in an unrealized gain position, which had a fair value of $69.8 billion, excluding consolidated variable interest entities (“VIEs”) in the amount of $702 million, as of March 31, 2012, rather than selling securities in an unrealized loss position.  The amount of cash that we have on hand at any point of time takes into account our liquidity needs in the future, other sources of cash, such as the maturities of investments, interest and dividends we earn on our investments and the on-going cash flows from new and existing business.

See “AFS Securities – Evaluation for Recovery of Amortized Cost” in Note 1 in our 2011 Form 10-K and Note 4 for additional discussion.

As of March 31, 2012, and December 31, 2011, the estimated fair value for all private securities was $9.9 billion and $9.3 billion, respectively, representing approximately 11% and 10%, respectively, of total invested assets.

For information regarding our VIEs’ fixed maturity securities, see Note 3 in this report and Note 4 in our 2011 Form 10-K.

Mortgage-Backed Securities (“MBS”) (Included in AFS and Trading Securities)

See “Consolidated Investments – Mortgage-Backed Securities” in our 2011 Form 10-K for a discussion of our MBS.

Our RMBS had a market value of $7.8 billion and an unrealized gain of $390 million, or 5%, as of March 31, 2012.

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The market value of AFS securities and trading securities backed by subprime loans was $444 million and represented less than 1% of our total investment portfolio as of March 31, 2012.  AFS securities represented $430 million, or 97%, and trading securities represented $14 million, or 3%, of the subprime exposure as of March 31, 2012.  AFS securities and trading securities rated A or above represented 43% of the subprime investments and $231 million in market value of our subprime investments was backed by loans originating in 2005 and forward.  The table below summarizes our investments in AFS securities backed by pools of residential mortgages (in millions):

		As of March 31, 2012
		Prime Agency					Prime/ Non-Agency					Alt-A					Subprime					Total
		Fair		Amortized			Fair		Amortized			Fair		Amortized			Fair		Amortized			Fair		Amortized
		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost
Type
RMBS		$	6,279		$	5,774	$	832		$	873	$	461		$	549	$	-		$	-	$	7,572		$	7,196
ABS home equity			4			4		-			-		205			271		430			608		639			883
	Total by type (1)(2)	$	6,283		$	5,778	$	832		$	873	$	666		$	820	$	430		$	608	$	8,211		$	8,079
Rating
AAA		$	6,212		$	5,713	$	60		$	58	$	12		$	12	$	50		$	53	$	6,334		$	5,836
AA			56			52		47			46		9			9		62			68		174			175
A			15			13		53			52		49			49		69			73		186			187
BBB			-			-		50			50		55			56		22			23		127			129
BB and below			-			-		622			667		541			694		227			391		1,390			1,752
	Total by rating (1)(2)(3)	$	6,283		$	5,778	$	832		$	873	$	666		$	820	$	430		$	608	$	8,211		$	8,079
Origination Year
2004 and prior		$	1,354		$	1,240	$	211		$	209	$	221		$	247	$	203		$	252	$	1,989		$	1,948
2005			817			732		117			134		246			293		161			227		1,341			1,386
2006			236			211		161			167		163			227		65			127		625			732
2007			1,070			945		343			363		36			53		-			-		1,449			1,361
2008			227			205		-			-		-			-		-			-		227			205
2009			1,108			1,038		-			-		-			-		1			2		1,109			1,040
2010			992			942		-			-		-			-		-			-		992			942
2011			453			440		-			-		-			-		-			-		453			440
2012			26			25		-			-		-			-		-			-		26			25
	Total by origination year (1)(2)	$	6,283		$	5,778	$	832		$	873	$	666		$	820	$	430		$	608	$	8,211		$	8,079
Total AFS RMBS as a percentage of total AFS securities																							10.7%			11.4%
Total prime/non-agency, Alt-A and subprime as a percentage of total AFS securities																							2.5%			3.3%

(1)   Does not include the fair value of trading securities totaling $251 million, which support our Modco reinsurance agreements because investment results for these agreements are passed directly to the reinsurers.  The $251 million in trading securities consisted of $227 million prime, $10 million Alt-A and $14 million subprime.

(2)   Does not include the amortized cost of trading securities totaling $241 million, which support our Modco reinsurance agreements because investment results for these agreements are passed directly to the reinsurers.  The $241 million in trading securities consisted of $213 million prime, $12 million Alt-A and $16 million subprime.

(3)   Based upon the rating designations determined and provided by the major credit rating agencies (Fitch, Moody’s and S&P).  For securities where the ratings assigned by the major credit agencies are not equivalent, the second highest rating assigned is used.  For those securities where ratings by the major credit rating agencies are not available, which does not represent a significant amount of our total fixed maturity AFS securities, we base the ratings disclosed upon internal ratings.

None of these investments included any direct investments in subprime lenders or mortgages.  We are not aware of material exposure to subprime loans in our alternative asset portfolio.

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The following summarizes our investments in AFS securities backed by pools of commercial mortgages (in millions):

		As of March 31, 2012
		Multiple Property				Single Property				CRE CDOs				Total
		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized
		Value		Cost		Value		Cost		Value		Cost		Value		Cost
Type
CMBS		$	1,479	$	1,461	$	44	$	72	$	-	$	-	$	1,523	$	1,533
CRE CDOs			-		-		-		-		21		32		21		32
	Total by type (1)(2)	$	1,479	$	1,461	$	44	$	72	$	21	$	32	$	1,544	$	1,565
Rating
AAA		$	968	$	904	$	13	$	13	$	-	$	-	$	981	$	917
AA			203		200		10		10		-		-		213		210
A			132		131		5		6		1		1		138		138
BBB			104		108		5		6		6		7		115		121
BB and below			72		118		11		37		14		24		97		179
	Total by rating (1)(2)(3)	$	1,479	$	1,461	$	44	$	72	$	21	$	32	$	1,544	$	1,565
Origination Year
2004 and prior		$	828	$	818	$	22	$	23	$	3	$	4	$	853	$	845
2005			318		301		21		45		6		7		345		353
2006			138		145		1		4		12		21		151		170
2007			139		143		-		-		-		-		139		143
2010			56		54		-		-		-		-		56		54
	Total by origination year (1)(2)	$	1,479	$	1,461	$	44	$	72	$	21	$	32	$	1,544	$	1,565
Total AFS securities backed  by pools of commercial mortgages as a percentage of total AFS securities															2.0%		2.2%

(1)   Does not include the fair value of trading securities totaling $26 million, which support our Modco reinsurance agreements because investment results for these agreements are passed directly to the reinsurers.  The $26 million in trading securities consisted of $23 million CMBS and $3 million CRE CDOs.

(2)   Does not include the amortized cost of trading securities totaling $30 million, which support our Modco reinsurance agreements because investment results for these agreements are passed directly to the reinsurers.  The $30 million in trading securities consisted of $27 million CMBS and $3 million CRE CDOs.

(3)   Based upon the rating designations determined and provided by the major credit rating agencies (Fitch, Moody’s and S&P).  For securities where the ratings assigned by the major credit agencies are not equivalent, the second highest rating assigned is used.  For those securities where ratings by the major credit rating agencies are not available, which does not represent a significant amount of our total fixed maturity AFS securities, we base the ratings disclosed upon internal ratings.

As of March 31, 2012, the amortized cost and fair value of our AFS exposure to Monoline insurers was $563 million and $509 million, respectively.

Composition by Industry Categories of our Unrealized Losses on AFS Securities

When considering unrealized gain and loss information, it is important to recognize that the information relates to the status of securities at a particular point in time and may not be indicative of the status of our investment portfolios subsequent to the balance sheet date.  Further, because the timing of the recognition of realized investment gains and losses through the selection of which securities are sold is largely at management’s discretion, it is important to consider the information provided below within the context of the overall unrealized gain or loss position of our investment portfolios.  These are important considerations that should be included in any evaluation of the potential effect of unrealized loss securities on our future earnings.

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The composition by industry categories of all securities in unrealized loss status (in millions), was as follows:

	As of March 31, 2012
									%
							Gross		Gross
			%			%	Unrealized		Unrealized
	Fair		Fair	Amortized		Amortized	Losses		Losses
	Value		Value	Cost		Cost	and OTTI		and OTTI
ABS	$	703	10.7%	$	968	13.0%	$	265	29.4%
Banking		881	13.4%		1,059	14.2%		178	19.8%
CMOs		905	13.8%		1,053	14.1%		148	16.4%
CMBS		249	3.8%		335	4.5%		86	9.5%
Electric		461	7.0%		486	6.5%		25	2.8%
Property and casualty insurers		112	1.7%		136	1.8%		24	2.7%
Diversified manufacturing		228	3.5%		252	3.4%		24	2.7%
Media - non-cable		146	2.2%		168	2.3%		22	2.4%
Retailers		86	1.3%		102	1.4%		16	1.8%
Paper		118	1.8%		132	1.8%		14	1.6%
Local authorities		30	0.5%		41	0.5%		11	1.2%
Industries with unrealized losses less than $10 million		2,642	40.3%		2,730	36.5%		88	9.7%
Total by industry	$	6,561	100.0%	$	7,462	100.0%	$	901	100.0%
Total by industry as a percentage of total AFS securities		8.5%			10.6%			100.0%

As of March 31, 2012, the amortized cost and fair value of securities subject to enhanced analysis and monitoring for potential changes in unrealized loss status was $1.1 billion and $740 million, respectively.

Mortgage Loans on Real Estate

The following tables summarize key information on mortgage loans on real estate (in millions):

	As of March 31, 2012				As of December 31, 2011
	Carrying				Carrying
	Value		%		Value		%
Credit Quality Indicator
Current	$	6,861		98.9%	$	6,854		98.7%
Delinquent and in foreclosure (1)		77		1.1%		88		1.3%
Total mortgage loans on real estate	$	6,938		100.0%	$	6,942		100.0%

(1)   As of March 31, 2012, and December 31, 2011, there were 14 and 16 mortgage loans on real estate, respectively, that were delinquent and in foreclosure.

	As of		As of
	March 31,		December 31,
	2012		2011
By Segment
Annuities	$	1,342	$	1,341
Retirement Plan Services		1,083		1,080
Life Insurance		3,745		3,731
Group Protection		274		278
Other Operations		494		512
Total mortgage loans on real estate	$	6,938	$	6,942

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		As of
	March 31,
		2012
Allowance for Losses
Balance as of beginning-of-year		$	31
Charge-offs, net of recoveries			(4	)
Balance as of end-of-period		$	27

		As of March 31, 2012					As of March 31, 2012
		Carrying					Carrying
		Value		%			Value		%
Property Type					State Exposure
Office building		$	2,194	31.6%	CA		$	1,558	22.4%
Industrial			1,760	25.4%	TX			630	9.1%
Retail			1,570	22.6%	MD			466	6.7%
Apartment			1,028	14.8%	VA			347	5.0%
Mixed use			151	2.2%	TN			284	4.1%
Hotel/Motel			129	1.9%	NC			281	4.0%
Other commercial			106	1.5%	FL			264	3.8%
	Total	$	6,938	100.0%	WA			261	3.8%
					GA			225	3.2%
Geographic Region					AZ			219	3.2%
Pacific		$	1,941	27.9%	IN			206	3.0%
South Atlantic			1,716	24.7%	NY			192	2.8%
East North Central			657	9.5%	IL			191	2.8%
West South Central			649	9.4%	NV			183	2.6%
Mountain			554	8.0%	PA			171	2.5%
Middle Atlantic			477	6.9%	OH			162	2.3%
East South Central			459	6.6%	MN			147	2.1%
West North Central			344	5.0%	Other states under 2%			1,151	16.6%
New England			141	2.0%		Total	$	6,938	100.0%
	Total	$	6,938	100.0%

		As of March 31, 2012					As of March 31, 2012
		Principal					Principal
		Amount		%			Amount		%
Origination Year					Future Principal Payments
2004 and prior		$	2,399	34.5%	2012		$	231	3.3%
2005			754	10.9%	2013			373	5.4%
2006			634	9.1%	2014			395	5.7%
2007			872	12.5%	2015			604	8.7%
2008			792	11.4%	2016			513	7.4%
2009			147	2.1%	2017 and thereafter			4,836	69.5%
2010			278	4.0%		Total	$	6,952	100.0%
2011			905	13.0%
2012			171	2.5%
	Total	$	6,952	100.0%

The global financial markets and credit market conditions experienced a period of extreme volatility and disruption that began in the second half of 2007 and continued and substantially increased throughout 2008 that led to a decrease in the overall liquidity and

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availability of capital in the mortgage loan market, and in particular a decrease in activity by securitization lenders.  These conditions and the overall economic downturn put pressure on the fundamentals of mortgage loans through rising vacancies, falling rents and falling property values.

See Note 4 for information regarding our loan-to-value and debt-service coverage ratios.

There were 10 and 12 impaired mortgage loans on real estate, or less than 1% and 1% of the total dollar amount of mortgage loans on real estate as of March 31, 2012, and December 31, 2011, respectively.  The carrying value on the mortgage loans on real estate that were two or more payments delinquent as of March 31, 2012, was $77 million, or 1% of total mortgage loans on real estate.  The total principal and interest past due on the mortgage loans on real estate that were two or more payments delinquent as of March 31, 2012, was $48 million.  The carrying value on the mortgage loans on real estate that were two or more payments delinquent as of December 31, 2011, was $76 million, or 1% of total mortgage loans on real estate.  The total principal and interest past due on the mortgage loans on real estate that were two or more payments delinquent as of December 31, 2011, was $41 million.  See Note 1 in our 2011 Form 10-K for more information regarding our accounting policy relating to the impairment of mortgage loans on real estate.

Alternative Investments

Investment income (loss) on alternative investments by business segment (in millions) was as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Annuities	$	6	$	6		0%
Retirement Plan Services		3		4		-25%
Life Insurance		20		31		-35%
Group Protection		2		2		0%
Total (1)	$	31	$	43		-28%

(1)   Includes net investment income on the alternative investments supporting the required statutory surplus of our insurance businesses.

As of March 31, 2012, and December 31, 2011, alternative investments included investments in approximately 97 and 96 different partnerships, respectively, and the portfolio represented less than 1% of our overall invested assets.  The partnerships do not represent off-balance sheet financing and generally involve several third-party partners.  Some of our partnerships contain capital calls, which require us to contribute capital upon notification by the general partner.  These capital calls are contemplated during the initial investment decision and are planned for well in advance of the call date.  The capital calls are not material in size and are not material to our liquidity.  Alternative investments are accounted for using the equity method of accounting and are included in other investments on our Consolidated Balance Sheets.

As discussed in “Critical Accounting Policies and Estimates – Investments – Valuation of Alternative Investments” in our 2011 Form 10-K, we update the carrying value of our alternative investment portfolio whenever audited financial statements of the investees for the preceding year become available.  Net investment income (loss) derived from our consolidated alternative investments by segment (in millions) related to the effect of preceding year audit adjustments recorded during the indicated year at the investee was as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Annuities	$	4	$	3		33%
Retirement Plan Services		2		2		0%
Life Insurance		13		21		-38%
Group Protection		2		2		0%
Total	$	21	$	28		-25%

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Non-Income Producing Investments

As of March 31, 2012, and December 31, 2011, the carrying amount of fixed maturity securities, mortgage loans on real estate and real estate that were non-income producing was $16 million and $14 million, respectively.

Net Investment Income

Details underlying net investment income (in millions) and our investment yield were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Net Investment Income
Fixed maturity AFS securities	$	969		$	951			2%
VIEs' fixed maturity AFS securities		4			3			33%
Equity AFS securities		1			1			0%
Trading securities		37			39			-5%
Mortgage loans on real estate		101			103			-2%
Real estate		4			7			-43%
Standby real estate equity commitments		-			1			-100%
Policy loans		46			41			12%
Invested cash		1			1			0%
Commercial mortgage loan prepayment and bond makewhole premiums (1)		6			34			-82%
Alternative investments (2)		31			43			-28%
Other investments		(8	)		(5	)		-60%
Investment income		1,192			1,219			-2%
Investment expense		(26	)		(28	)		7%
Net investment income	$	1,166		$	1,191			-2%

(1)   See “Commercial Mortgage Loan Prepayment and Bond Makewhole Premiums” below for additional information.

(2)   See “Alternative Investments” above for additional information.

	For the Three
	Months Ended				Basis
	March 31,				Point
	2012		2011		Change
Interest Rate Yield
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses		5.38%		5.56%		(18	)
Standby real estate equity commitments		0.00%		0.01%		(1	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.03%		0.17%		(14	)
Alternative investments		0.15%		0.22%		(7	)
Net investment income yield on invested assets		5.56%		5.96%		(40	)

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	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Average invested assets at amortized cost	$	83,883	$	79,996		5%

We earn investment income on our general account assets supporting fixed annuity, term life, whole life, UL, interest-sensitive whole life and fixed portion of retirement plan and VUL products.  The profitability of our fixed annuity and life insurance products is affected by our ability to achieve target spreads, or margins, between the interest income earned on the general account assets and the interest credited to the contract holder on our average fixed account values, including the fixed portion of variable.  Net investment income and the interest rate yield table each include commercial mortgage loan prepayments and bond makewhole premiums, alternative investments and contingent interest and standby real estate equity commitments.  These items can vary significantly from period to period due to a number of factors and, therefore, can provide results that are not indicative of the underlying trends.

The decrease in net investment income when comparing the three months ended March 31, 2012, to the same period of 2011 was attributable primarily to new money rates averaging below our portfolio yields, lower prepayment and bond makewhole premiums (see “Commercial Mortgage Loan Prepayment and Bond Makewhole Premiums” below for more information) and less favorable investment income on alternative investments (see “Alternative Investments” above), partially offset by higher invested assets driven primarily by favorable net flows on fixed account values, including the fixed portion of variable.

Commercial Mortgage Loan Prepayment and Bond Makewhole Premiums

Prepayment and makewhole premiums are collected when borrowers elect to call or prepay their debt prior to the stated maturity.  A prepayment or makewhole premium allows investors to attain the same yield as if the borrower made all scheduled interest payments until maturity.  These premiums are designed to make investors indifferent to prepayment.

The decrease in prepayment and makewhole premiums when comparing 2012 to 2011 was attributable primarily to abnormally high prepayments and makewhole premiums during 2011 due to a rapid decline in interest rates leading to increased refinancing activity.

Realized Gain (Loss) Related to Certain Investments

The detail of the realized gain (loss) related to certain investments (in millions) was as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Fixed maturity AFS securities:
Gross gains	$	5		$	36			-86%
Gross losses		(63	)		(63	)		0%
Equity AFS securities:
Gross gains		1			8			-88%
Gain (loss) on other investments		7			13			-46%
Associated amortization of DAC, VOBA, DSI, and DFEL and changes in other contract holder funds		2			(9	)		122%
Total realized gain (loss) related to certain investments, pre-tax	$	(48	)	$	(15	)	NM

Amortization of DAC, VOBA, DSI and DFEL and changes in other contract holder funds reflect an assumption for an expected level of credit-related investment losses.  When actual credit-related investment losses are realized, we recognize a true-up to our DAC, VOBA, DSI and DFEL amortization and changes in other contract holder funds within realized loss reflecting the incremental effect of actual versus expected credit-related investment losses.  These actual to expected amortization adjustments could create volatility in net realized gains and losses.  The write-down for impairments includes both credit-related and interest-rate related impairments.

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Realized gains and losses generally originate from asset sales to reposition the portfolio or to respond to product experience.  During the first three months of 2012 and 2011, we sold securities for gains and losses.  In the process of evaluating whether a security with an unrealized loss reflects declines that are other-than-temporary, we consider our ability and intent to sell the security prior to a recovery of value.  However, subsequent decisions on securities sales are made within the context of overall risk monitoring, assessing value relative to other comparable securities and overall portfolio maintenance.  Although our portfolio managers may, at a given point in time, believe that the preferred course of action is to hold securities with unrealized losses that are considered temporary until such losses are recovered, the dynamic nature of portfolio management may result in a subsequent decision to sell.  These subsequent decisions are consistent with the classification of our investment portfolio as AFS.  We expect to continue to manage all non-trading invested assets within our portfolios in a manner that is consistent with the AFS classification.

We consider economic factors and circumstances within countries and industries where recent write-downs have occurred in our assessment of the status of securities we own of similarly situated issuers.  While it is possible for realized or unrealized losses on a particular investment to affect other investments, our risk management has been designed to identify correlation risks and other risks inherent in managing an investment portfolio.  Once identified, strategies and procedures are developed to effectively monitor and manage these risks.  The areas of risk correlation that we pay particular attention to are risks that may be correlated within specific financial and business markets, risks within specific industries and risks associated with related parties.

When the detailed analysis by our credit analysts and investment portfolio managers leads us to the conclusion that a security’s decline in fair value is other-than-temporary, the security is written down to estimated recovery value.  In instances where declines are considered temporary, the security will continue to be carefully monitored.  See “Critical Accounting Policies and Estimates” in our 2011 Form 10-K for additional information on our portfolio management strategy.

Details underlying write-downs taken as a result of OTTI (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Corporate bonds	$	(19	)	$	(3	)	NM
RMBS		(18	)		(20	)		10%
CMBS		(20	)		(24	)		17%
CDOs		-			(1	)		100%
Hybrid and redeemable preferred securities		-			(2	)		100%
Gross OTTI recognized in net income (loss)		(57	)		(50	)		-14%
Associated amortization of DAC, VOBA, DSI and DFEL		10			9			11%
Net OTTI recognized in net income (loss), pre-tax	$	(47	)	$	(41	)		-15%
Portion of OTTI Recognized in OCI
Gross OTTI recognized in OCI	$	58		$	8		NM
Change in DAC, VOBA, DSI and DFEL		(8	)		(5	)		-60%
Net portion of OTTI recognized in OCI, pre-tax	$	50		$	3		NM

The increase in write-downs for OTTI when comparing the first three months of 2012 to the same period in 2011 was primarily due to structured interest only corporate bonds with floating rate coupons where the projected cash flows were less than expected based on current and expected future Libor rates.  The $115 million of impairments taken during the first three months of 2012 were split between $57 million of credit-related impairments and $58 million of noncredit-related impairments.  The credit-related impairments were largely attributable to our RMBS and CMBS holdings primarily as a result of continued weakness within the commercial and residential real estate market that affected select RMBS and CMBS holdings.  The noncredit-related impairments were incurred due to declines in values of securities for which we do not have an intent to sell or it is not more likely than not that we will be required to sell the securities before recovery.

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REVIEW OF CONSOLIDATED FINANCIAL CONDITION

Liquidity and Capital Resources

Sources of Liquidity and Cash Flow

Liquidity refers to the ability of an enterprise to generate adequate amounts of cash from its normal operations to meet cash requirements with a prudent margin of safety.  Our principal sources of cash flow from operating activities are insurance premiums and fees and investment income, while sources of cash flows from investing activities result from maturities and sales of invested assets.  Our operating activities provided cash of $282 million and $340 million for the first three months of 2012 and 2011, respectively.  When considering our liquidity and cash flow, it is important to distinguish between the needs of our insurance subsidiaries and the needs of the holding company, LNC.  As a holding company with no operations of its own, LNC derives its cash primarily from its operating subsidiaries.

The sources of liquidity of the holding company are principally comprised of dividends and interest payments from subsidiaries, augmented by holding company short-term investments, bank lines of credit and the ongoing availability of long-term public financing under an SEC-filed shelf registration statement.  These sources of liquidity and cash flow support the general corporate needs of the holding company, including its common and preferred stock dividends, interest and debt service, funding of callable securities, securities repurchases, acquisitions and investment in core businesses.  Our cash flows associated with collateral received from and posted with counterparties change as the market value of the underlying derivative contract changes.  As the value of a derivative asset declines (or increases), the collateral required to be posted by our counterparties would also decline (or increase).  Likewise, when the value of a derivative liability declines (or increases), the collateral we are required to post for our counterparties’ benefit would also decline (or increase).  During the first three months of 2012, our payables for collateral on derivative investments decreased by $849 million as steadily rising equity markets and less volatility lowered the fair values of the associated derivative investments.  For additional information, see “Credit Risk” in Note 5.

Details underlying the primary sources of our holding company cash flows (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012			2011			Change
Dividends from Subsidiaries
The Lincoln National Life Insurance Company	$	150		$	150			0%
Other		-			6			-100%
Loan Repayments and Interest from Subsidiaries
Interest on inter-company notes		33			32			3%
	$	183		$	188			-3%
Other Cash Flow and Liquidity Items
Net capital received from (paid for taxes on) stock option exercises and restricted stock	$	(1	)	$	(1	)		0%
	$	(1	)	$	(1	)		0%

The table above focuses on significant and recurring cash flow items and excludes the effects of certain financing activities, namely the periodic issuance and retirement of debt and cash flows related to our inter-company cash management program (discussed below).  Taxes have been eliminated from the analysis due to a tax sharing agreement among our primary subsidiaries resulting in a modest effect on net cash flows at the holding company.  Also excluded from this analysis is the modest amount of investment income on short-term investments of the holding company.

Subsidiaries’ Statutory Reserving and Surplus

For discussion of our strategies to lessen the burden of increased AG38 and XXX statutory reserves associated with certain UL products and other products with secondary guarantees on our insurance subsidiaries, see “Results of Life Insurance – Income (Loss) from Operations – Strategies to Address Statutory Reserve Strain.”

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Financing Activities

Although our subsidiaries currently generate adequate cash flow to meet the needs of our normal operations, periodically we may issue debt or equity securities to maintain ratings and increase liquidity, as well as to fund internal growth, acquisitions and the retirement of our debt and equity securities.

We currently have an effective shelf registration statement, which allows us to issue, in unlimited amounts, securities, including debt securities, preferred stock, common stock, warrants, stock purchase contracts, stock purchase units, depository shares and trust preferred securities of our affiliated trusts.

Details underlying debt and financing activities (in millions) were as follows:

	For the Three Months Ended March 31, 2012
							Change
					Maturities		in Fair
	Beginning				and		Value			Other		Ending
	Balance		Issuance		Repayments		Hedges			Changes (1)		Balance
Short-Term Debt
Current maturities of long-term debt (2)	$	300	$	-	$	-	$	-		$	-	$	300
Total short-term debt	$	300	$	-	$	-	$	-		$	-	$	300
Long-Term Debt
Senior notes	$	3,730	$	300	$	-	$	(86	)	$	1	$	3,945
Bank borrowing		200		-		-		-			-		200
Federal Home Loan Bank of Indianapolis advance		250		-		-		-			-		250
Capital securities		1,211		-		-		-			-		1,211
Total long-term debt	$	5,391	$	300	$	-	$	(86	)	$	1	$	5,606

(1)        Includes the net increase (decrease) in commercial paper, non-cash reclassification of long-term debt to current maturities of long-term debt, accretion of discounts and (amortization) of premiums, as applicable.

(2)        Consisted of a $300 million 5.65% fixed rate senior note that matures in less than one year.

On March 29, 2012, we completed the issuance and sale of $300 million aggregate principal amount of our 4.20% senior notes due 2022.  We expect to repay the $300 million 5.65% fixed rate senior note maturing on August 27, 2012, with these proceeds.  In addition to the maturing note discussed above, within the next two years, we have a $200 million floating rate senior note maturing on July 18, 2013; a $300 million 4.75% senior note maturing on January 30, 2014; and a $200 million 4.75% senior note maturing on February 14, 2014.  The specific resources or combination of resources that we will use to meet these maturities will depend upon, among other things, the financial market conditions present at the time of maturity.  As of March 31, 2012, the holding company had approximately $800 million in cash and cash equivalents and $25 million invested in fixed maturity corporate bonds; however, as discussed below, it had a $19 million receivable under the inter-company cash management program.

For information about our short-term and long-term debt and our credit facilities and LOCs, see Note 12 in our 2011 Form 10-K.

We have not accounted for repurchase agreements, securities lending transactions, or other transactions involving the transfer of financial assets with an obligation to repurchase the transferred assets as sales and do have any other transactions involving the transfer of financial assets with an obligation to repurchase the transferred assets.  For information about our collateralized financing transactions on our investments, see “Payables for Collateral on Investments” in Note 4.

If current credit ratings and claims-paying ratings were downgraded in the future, terms in our derivative agreements may be triggered, which could negatively affect overall liquidity.  For the majority of our counterparties, there is a termination event should the long-term senior debt ratings of LNC drop below BBB-/Baa3 (S&P/Moody’s).  Our long-term senior debt held a rating of A-/Baa2 (S&P/Moody’s) as of March 31, 2012.  In addition, contractual selling agreements with intermediaries could be negatively affected, which could have an adverse effect on overall sales of annuities, life insurance and investment products.  See “Part I – Item 1A. Risk Factors – Liquidity and Capital Position – A decrease in the capital and surplus of our insurance subsidiaries may result in a downgrade to our credit and insurer financial strength ratings” and “Part I – Item 1A. Risk Factors –Covenants and Ratings – A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors” in our 2011 Form 10-K for more information.

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See “Part I – Item 1. Business – Financial Strength Ratings” in our 2011 Form 10-K for additional information on our current financial strength ratings.

See “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Review of Consolidated Financial Condition – Liquidity and Capital Resources – Financing Activities” in our 2011 Form 10-K for information on our credit ratings.

Alternative Sources of Liquidity

In order to manage our capital more efficiently, we have an inter-company cash management program where certain subsidiaries can lend to or borrow from the holding company to meet short-term borrowing needs.  The cash management program is essentially a series of demand loans, which are permitted under applicable insurance laws, among LNC and its affiliates that reduces overall borrowing costs by allowing LNC and its subsidiaries to access internal resources instead of incurring third-party transaction costs.  For our Indiana-domiciled insurance subsidiaries, the borrowing and lending limit is currently the lesser of 3% of the insurance company’s admitted assets and 25% of its surplus, in both cases, as of its most recent year end.  The holding company did not borrow from the cash management program during the first quarter of 2012; however, it had an outstanding receivable of $19 million from certain subsidiaries resulting from funds borrowed by the subsidiaries in excess of amounts placed by those subsidiaries in the inter-company cash management account as of March 31, 2012.  Any increase (decrease) in either of these holding company cash management program payable balances results in an immediate and equal increase (decrease) to holding company cash and cash equivalents.

Our insurance subsidiaries, by virtue of their general account fixed income investment holdings, can access liquidity through securities lending programs and repurchase agreements.  As of March 31, 2012, our insurance subsidiaries had securities with a carrying value of $200 million out on loan under the securities lending program and $280 million carrying value subject to reverse-repurchase agreements.  The cash received in our securities lending program is typically invested in cash equivalents, short-term investments or fixed maturity securities.

For factors that could cause actual results to differ materially from those set forth in this section, see “Forward-Looking Statements – Cautionary Language” above and “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K.

Divestitures

For a discussion of our divestitures, see Note 3 in our 2011 Form 10-K.

Uses of Capital

Our principal uses of cash are to pay policy claims and benefits, operating expenses, commissions and taxes, to purchase new investments, to purchase reinsurance, to fund policy surrenders and withdrawals, to pay dividends to our stockholders and to repurchase our stock and debt securities.

Return of Capital to Common Stockholders

One of the Company’s primary goals is to provide a return to our common stockholders through share price accretion, dividends and stock repurchases.  In determining dividends, the Board takes into consideration items such as current and expected earnings, capital needs, rating agency considerations and requirements for financial flexibility.  The amount and timing of share repurchase depends on key capital ratios, rating agency expectations, the generation of free cash flow and an evaluation of the costs and benefits associated with alternative uses of capital.

Details underlying this activity (in millions, except per share data), were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Common dividends to stockholders	$	23	$	16		44%
Repurchase of common stock		150		75		100%
Total cash returned to stockholders	$	173	$	91		90%
Number of shares repurchased		6.018		2.414		149%
Average price per share	$	24.90	$	31.09		-20%

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On November 10, 2011, our Board of Directors approved an increase of the dividend on our common stock from $0.05 to $0.08 per share.  Additionally, we expect to repurchase additional shares of common stock during 2012 depending on market conditions and alternative uses of capital.  For more information regarding share repurchases, see “Part II – Item 2(c)” below.

Other Uses of Capital

In addition to the amounts in the table above in “Return of Capital to Common Stockholders,” other uses of holding company cash flow (in millions) were as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011		Change
Debt service (interest paid)	$	59	$	63		-6%
Capital contribution to subsidiaries		-		8		-100%
Total	$	59	$	71		-17%

The above table focuses on significant and recurring cash flow items and excludes the effects of certain financing activities, namely the periodic retirement of debt and cash flows related to our inter-company cash management account.  Taxes have been eliminated from the analysis due to a tax sharing agreement among our primary subsidiaries resulting in a modest effect on net cash flows at the holding company.

Significant Trends in Sources and Uses of Cash Flow

As stated above, LNC’s cash flow, as a holding company, is largely dependent upon the dividend capacity of its insurance company subsidiaries as well as their ability to advance funds to it through inter-company borrowing arrangements, which may be affected by factors influencing the insurance subsidiaries’ RBC and statutory earnings performance.  We currently expect to be able to meet the holding company’s ongoing cash needs and to have sufficient capital to offer downside protection in the event that the capital and credit markets experience another period of extreme volatility and disruption.  A decline in capital market conditions, which reduces our insurance subsidiaries’ statutory surplus and RBC, may require them to retain more capital and may pressure our subsidiaries’ dividends to the holding company, which may lead us to take steps to preserve or raise additional capital.  For factors that could affect our expectations for liquidity and capital, see “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K.

OTHER MATTERS

Other Factors Affecting Our Business

In general, our businesses are subject to a changing social, economic, legal, legislative and regulatory environment.  Some of the changes include initiatives to require more reserves to be carried by our insurance subsidiaries.  Although the eventual effect on us of the changing environment in which we operate remains uncertain, these factors and others could have a material effect on our results of operations, liquidity and capital resources.  For factors that could cause actual results to differ materially from those set forth in this section, see “Part I – Item 1A. Risk Factors” in our 2011 Form 10-K and “Forward-Looking Statements – Cautionary Language” above.

Recent Accounting Pronouncements

See Note 2 for a discussion of recent accounting pronouncements that have been implemented during the periods presented or that have been issued and are to be implemented in the future.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We analyze and manage the risks arising from market exposures of financial instruments, as well as other risks, in an integrated asset-liability management process that takes diversification into account.  By aggregating the potential effect of market and other risks on the entire enterprise, we estimate, review and in some cases manage the risk to our earnings and shareholder value.  We have exposures to several market risks including interest rate risk, equity market risk, default risk, basis risk, credit risk and, to a lesser extent, foreign currency exchange risk.  The exposures of financial instruments to market risks, and the related risk management processes, are most important to our business where most of the invested assets support accumulation and investment-oriented insurance products.  As an important element of our integrated asset-liability management processes, we use derivatives to minimize the effects of changes in interest levels, the shape of the yield curve, currency movements and volatility.  In this context, derivatives are designated as a hedge and serve to minimize interest rate risk by mitigating the effect of significant

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increases in interest rates on our earnings.  Additional market exposures exist in our other general account insurance products and in our debt structure and derivatives positions.  Our primary sources of market risk are:  substantial, relatively rapid and sustained increases or decreases in interest rates or a sharp drop in equity market values.  These market risks are discussed in detail in the following pages and should be read in conjunction with our consolidated financial statements and the accompanying notes to the consolidated financial statements (“Notes”) presented in “Item 1. Financial Statements,” as well as “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”).”

Interest Rate Risk

Interest Rate Risk on Fixed Insurance Businesses – Falling Rates

There were no material changes to our earnings sensitivity analysis disclosed in “Part II – Item 7A. – Quantitative and Qualitative Disclosures About Market Risk – Interest Rate Risk – Interest Rate Risk on Fixed Insurance Businesses – Falling Rates” of our 2011 Form 10-K.

The following provides detail on the percentage differences between the March 31, 2012, interest rates being credited to contract holders based on the first quarter of 2012 declared rates and the respective minimum guaranteed policy rate (in millions), broken out by contract holder account values reported within our segments:

	Account Values
			Retirement						%
			Plan		Life				Account
	Annuities		Services		Insurance (1)		Total		Values
Excess of Crediting Rates over Contract Minimums
Discretionary rate setting products (2)(3)
No difference	$	6,863	$	9,579	$	25,667	$	42,109	68.2%
Up to 0.10%		77		2		-		79	0.1%
0.11% to 0.20%		75		-		-		75	0.1%
0.21% to 0.30%		100		1		335		436	0.7%
0.31% to 0.40%		98		1		-		99	0.2%
0.41% to 0.50%		96		11		112		219	0.4%
0.51% to 0.60%		88		-		-		88	0.1%
0.61% to 0.70%		74		81		-		155	0.3%
0.71% to 0.80%		70		-		-		70	0.1%
0.81% to 0.90%		54		-		-		54	0.1%
0.91% to 1.00%		33		94		103		230	0.4%
1.01% to 1.50%		153		19		-		172	0.3%
1.51% to 2.00%		15		162		125		302	0.5%
2.01% to 2.50%		1		63		-		64	0.1%
2.51% to 3.00%		8		-		-		8	0.0%
3.01% and above		-		1		-		1	0.0%
Multi-year guarantee and indexed annuity products (4)		11,543		-		-		11,543	18.7%
Total discretionary rate setting products		19,348		10,014		26,342		55,704	90.3%
Other contracts (5)		2,145		3,806		-		5,951	9.7%
Total account values	$	21,493	$	13,820	$	26,342	$	61,655	100.0%
Percentage of discretionary rate setting product account values at minimum guaranteed rates		35.5%		95.7%		97.4%		75.6%

(1)   Excludes policy loans.

(2)   Contracts currently within new money rate bands are grouped according to the corresponding portfolio rate band in which they will fall upon their first anniversary.

(3)   The average crediting rates for discretionary rate setting products were 67 basis points, 6 basis points and 2 basis points in excess of average minimum guaranteed rates for our Annuities, Retirement Plan Services and Life Insurance segments, respectively.

(4)   The average crediting rates were 171 basis points in excess of average minimum guaranteed rates for multi-year guarantee

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products; 19%, 10% and 71% of our total multi-year guarantee account values are scheduled to reset in 2012, 2013 and 2014 and beyond, respectively.  Our indexed renewal business resets either annually or bi-annually.  Upon reset, we are able to adjust product features to reflect changes in option prices.

(5)   For Annuities, this amount relates primarily to immediate annuity and short-term dollar cost averaging business.  For Retirement Plan Services, this amount relates to indexed-based rate setting products in which the average crediting rates were 4 basis points in excess of average minimum guaranteed rates and 84% of account values were already at their minimum guaranteed rates.

The maturity structure and call provisions of the related portfolios are structured to afford protection against erosion of investment portfolio yields during periods of declining interest rates.  We devote extensive effort to evaluating the risks associated with falling interest rates by simulating asset and liability cash flows for a wide range of interest rate scenarios.  We seek to manage these exposures by maintaining a suitable maturity structure and by limiting our exposure to call risk in each respective investment portfolio.

Derivatives

See Note 5 for information on our derivatives used to hedge our exposure to changes in interest rates.

Equity Market Risk

Our revenues, assets, liabilities and derivatives are exposed to equity market risk.  Due to the use of our reversion to the mean (“RTM”) process and our hedging strategies, we expect that, in general, short-term fluctuations in the equity markets should not have a significant effect on our quarterly earnings from unlocking of assumptions for deferred acquisition costs, value of business acquired, deferred sales inducements and deferred front-end loads.  However, earnings are affected by equity market movements on account values and assets under management and the related fees we earn on those assets.  Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Introduction – Critical Accounting Policies and Estimates – DAC, VOBA, DSI and DFEL”  in our 2011 Form 10-K for further discussion on the effects of equity markets on our RTM.

Effect of Equity Market Sensitivity

The following presents our estimate of the effect on income (loss) from operations (in millions), from the change in asset-based fees and related expenses, if the level of the Standard & Poor’s (“S&P”) 500 Index® (“S&P 500”), which ended at 1408 as of March 31, 2012, were to decrease to 1126 over six months after March 31, 2012, and remain at that level through the next six months or increase to 1690 over six months after March 31, 2012, and remain at that level through the next six months, excluding any effect related to sales, prospective unlocking, persistency, hedge program performance or customer behavior caused by the equity market change:

	S&P 500			S&P 500
	at 1126 (1)			at 1690 (1)
Segment
Annuities	$	(82	)	$	44
Retirement Plan Services		(9	)		10

(1)   The baseline for these effects assumes a 4% annual equity market growth rate, depending on the block of business, beginning on April 1, 2012.  The baseline is then compared to scenarios of the S&P 500 at the 1126 and 1690 levels, which assume the index moves to those levels over six months, remains at those levels through the next six months and grows at 4% annually, depending on the block of business, thereafter.  The difference between the baseline and the S&P 500 at the 1126 and 1690 level scenarios is presented in the table.

Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Introduction – Critical Accounting Policies and Estimates – DAC, VOBA, DSI and DFEL – Reversion to the Mean” in our 2011 Form 10-K for discussion of the effects of equity markets on our RTM.

The effect on earnings summarized above is a hypothetical scenario for the next 12 months.  The effect of quarterly equity market changes upon fee revenues and asset-based expenses is generally not fully recognized in the first quarter of the change because fee revenues are earned and related expenses are incurred based upon daily variable account values.  The difference between the current period average daily variable account values compared to the end of period variable account values affects fee revenues in subsequent periods.  Additionally, the effect on earnings may not necessarily be symmetrical with comparable increases in the equity markets.  This discussion concerning the estimated effects of ongoing equity market volatility on the fees we earn from

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account values and assets under management is intended to be illustrative.  Actual effects may vary depending on a variety of factors, many of which are outside of our control, such as changing customer behaviors that might result in changes in the mix of our business between variable and fixed annuity contracts, switching among investment alternatives available within variable products, changes in sales production levels or changes in policy persistency.  For purposes of this guidance, the change in account values is assumed to correlate with the change in the relevant index.

Credit-Related Derivatives

We use credit-related derivatives to minimize our exposure to credit-related events and we also sell credit default swaps to offer credit protection to our contract holders and investors.  See Note 5 for additional information.

Credit Risk

See Note 5 for information on our credit risk.

In addition to the information provided about our counterparty exposure in Note 5, the fair value of our exposure by rating (in millions) was as follows:

			As of		As of
		March 31,			December 31,
			2012		2011
Rating
AA			$	22	$	23
A				38		56
BBB				1		2
	Total		$	61	$	81

Item 4.  Controls and Procedures

Conclusions Regarding Disclosure Controls and Procedures

We maintain disclosure controls and procedures, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of the end of the period required by this report, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act).  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us and our consolidated subsidiaries required to be disclosed in our periodic reports under the Exchange Act.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

A control system, no matter how well designed and operated, can provide only reasonable assurance that the control system’s objectives will be met.  Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected.  Projections of any evaluation of controls effectiveness to future periods are subject to risks.  Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

91

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

Information regarding reportable legal proceedings is contained in Note 8 to the consolidated financial statements in “Part I – Item 1.”

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

(c)  The following table summarizes purchases of equity securities by the issuer during the quarter ended March 31, 2012 (dollars in millions, except per share data):

	(a) Total				(c) Total Number		(d) Approximate Dollar
	Number		(b) Average		of Shares (or Units)		Value of Shares (or
	of Shares		Price Paid		Purchased as Part of		Units) that May Yet Be
	(or Units)		per Share		Publicly Announced		Purchased Under the
Period	Purchased (1)		(or Unit)		Plans or Programs (2)		Plans or Programs (3)
1/1/12 - 1/31/12		1,466	$	20.03		-	$	540
2/1/12 - 2/29/12		3,920,073		24.80		3,900,000		443
3/1/12 - 3/31/12		2,118,529		25.10		2,118,156		390

(1) Of the total number of shares purchased, no shares were received in connection with the exercise of stock options and related taxes and 21,912 shares were withheld for taxes on the vesting of restricted stock.  For the quarter ended March 31, 2012, there were 6,018,156 shares purchased as part of publicly announced plans or programs.

(2) On February 23, 2007, our Board approved a $2.0 billion increase to our securities repurchase authorization, bringing the total authorization at that time to $2.6 billion.  As of March 31, 2012, our remaining security repurchase authorization was $390 million.  The security repurchase authorization does not have an expiration date.  The amount and timing of share repurchase depends on key capital ratios, rating agency expectations, the generation of free cash flow and an evaluation of the costs and benefits associated with alternative uses of capital.  The shares repurchased in connection with the awards described in Note 20 to the consolidated financial statements of our 2011 Form 10-K are not included in our security repurchase.

(3) As of the last day of the applicable month.

Item 6.  Exhibits

The Exhibits included in this report are listed in the Exhibit Index beginning on page E-1, which is incorporated herein by reference.

92

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LINCOLN NATIONAL CORPORATION
	By:	/s/  RANDAL J. FREITAG
		Randal J. Freitag Executive Vice President and Chief Financial Officer
	By:	/s/  DOUGLAS N. MILLER
		Douglas N. Miller Senior Vice President and Chief Accounting Officer
Dated:  May 3, 2012

93

LINCOLN NATIONAL CORPORATION

Exhibit Index for the Report on Form 10-Q

For the Quarter Ended March 31, 2012

12	Historical Ratio of Earnings to Fixed Charges.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Attached as Exhibit 101 to this report are the following Interactive Data Files formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2012, and  December 31, 2011; (ii) Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2012 and 2011; (iii) Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2012 and 2011; (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011; and (v) Notes to the Consolidated Financial Statements.  Users of this data are advised pursuant to Rule 401 of Regulation S-T that the information contained in the XBRL documents is unaudited and these are not the official publicly filed financial statements of Lincoln National Corporation.

In accordance with Rule 402 of Regulation S-T, the XBRL related information in this report shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

E-1

EX-12.0

Exhibit 12

LINCOLN NATIONAL CORPORATION AND SUBSIDIARIES

HISTORICAL RATIO OF EARNINGS TO FIXED CHARGES

(dollars in millions)

	For the Three
	Months Ended
	March 31,
	2012			2011
Income (loss) from continuing operations before taxes	$	307		$	429
Sub-total of fixed charges		67			77
Sub-total of adjusted income (loss)		374			506
Interest on annuities and financial products		621			612
Adjusted income (loss) base	$	995		$	1,118
Fixed Charges
Interest and debt expense	$	67		$	72
Interest expense related to uncertain tax positions		(3	)		2
Portion of rent expense representing interest		3			3
Sub-total of fixed charges excluding interest on annuities and financial products		67			77
Interest on annuities and financial products		621			612
Total fixed charges	$	688		$	689
Ratio of sub-total of adjusted income (loss) to sub-total of fixed charges excluding interest on annuities and financial products		5.58			6.57
Ratio of adjusted income (loss) base to total fixed charges		1.45			1.62

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

________________

I, Dennis R. Glass, President and Chief Executive Officer, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Lincoln National Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)             Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)             Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)             Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)             Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)             All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)             Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  May 3, 2012                                                             /s/ Dennis R. Glass                                             

Name:  Dennis R. Glass

Title:  President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

________________

I, Randal J. Freitag, Executive Vice President and Chief Financial Officer, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Lincoln National Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)             Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)             Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)             Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)             Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)             All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)             Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  May 3, 2012                                                             /s/ Randal J. Freitag                                            

Name:  Randal J. Fretag

Title:  Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906

Of the Sarbanes-Oxley Act of 2002

______________

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Lincoln National Corporation (the “Company”), hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  May 3, 2012                                                                /s/ Dennis R. Glass

   Name:  Dennis R. Glass

   Title:  President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required under Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906

Of the Sarbanes-Oxley Act of 2002

______________

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Lincoln National Corporation (the “Company”), hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  May 3, 2012                                                                /s/ Randal J. Freitag

   Name:  Randal J. Freitag

   Title:  Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required under Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Stock-Based Incentive Compensation Plans (Details)	3 Months Ended
	Mar. 31, 2012
Stock options [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Shares granted	828,674
Performance Shares [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Shares granted	278,943
Stock Appreciation Rights [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Shares granted	80,225
Restricted Stock Units [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Shares granted	604,226
Non-employee Agent Stock Options [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Shares granted	99,268
Non-employee Director Stock Options [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Shares granted	51,140
Non-employee Director Restricted Stock Units [Member]
Share-based compensation arrangement by share-based payment award [Line Items]
Shares granted	10,128

XML

Investments (Details) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	$ 70,677,000,000		$ 69,796,000,000
Gross unrealized gains	7,306,000,000		7,585,000,000
Gross unrealized losses	(679,000,000)		(906,000,000)
Gross unrealized OTTI	(222,000,000)		(203,000,000)
Fair Value	77,082,000,000		76,272,000,000
Available-for-sale Securities, Debt Maturities, Amortized Cost
Due in one year or less	2,854,000,000
Due after one year through five years	12,020,000,000
Due after five years through ten years	22,816,000,000
Due after ten years	24,027,000,000
Subtotal - Amortized Cost	61,717,000,000
Available-for-sale Securities, Debt Maturities, Fair Value
Due in one year or less	2,914,000,000
Due after one year through five years	12,955,000,000
Due after five years through ten years	25,040,000,000
Due after ten years	26,850,000,000
Subtotal - Fair Value	67,759,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	4,266,000,000		3,993,000,000
Greater Than Twelve Months	2,288,000,000		2,490,000,000
Continuous Unrealized Loss Position, Total	6,554,000,000		6,483,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	334,000,000		338,000,000
Greater Than Twelve Months	567,000,000		771,000,000
Gross Unrealized Losses and OTTI, Total	901,000,000		1,109,000,000
Available For Sale Securities In Unrealized Loss Position Qualitative Disclosure Number Of Positions	828		897
Schedule Of Available For Sale Securities Residential And Commercial Mortgage At Risk [Line Items]
Total OTTI for AFS securities backed by pools of residential and commercial mortgages	21,000,000	21,000,000
OTTI for AFS securities backed by pools of residential and commercial mortgages recognized in OCI	(21,000,000)	(26,000,000)
OTTI for AFS securities backed by pools of residential and commercial mortgages recognized in net income (loss)	42,000,000	47,000,000
Available For Sale Securities In Unrealized Loss Position With Loss Severity Greater Than 20 Percent [Line Items]
Fair Value	821,000,000		1,055,000,000
Gross Unrealized Losses	434,000,000		625,000,000
Gross Unrealized OTTI	182,000,000		155,000,000
Number of securities	224		256
Decrease in gross AFS securities unrealized losses	208,000,000
Balance as of beginning of year	390,000,000	319,000,000
Increases attributable to:
Credit losses on securities for which an OTTI was not previously recognized	34,000,000	25,000,000
Credit losses on securities for which an OTTI was previously recognized	23,000,000	22,000,000
Decreases attributable to:
Securities sold	(37,000,000)	(14,000,000)
Balance as of end of year	410,000,000	352,000,000
Other Than Temporary Impairments Credit Losses [Line Items]
Amortized Cost	969,000,000		876,000,000
Gross Unrealized Gains	5,000,000		2,000,000
Gross Unrealized Losses and OTTI	(219,000,000)		(205,000,000)
Fair Value	755,000,000		673,000,000
OTTI in Credit Losses	410,000,000	352,000,000
Mortgage Loans On Real Estate Aging [Abstract]
Current	6,853,000,000		6,858,000,000
Sixty to ninety days past due	0		26,000,000
Greater than ninety days past due	99,000,000		76,000,000
Valuation allowance associated with impaired mortgage loans on real estate	27,000,000
Unamortized premium (discount)	13,000,000		13,000,000
Total carrying value	6,938,000,000		6,942,000,000
Information about impaired mortgage loans on real estate
Number of impaired mortgage loans on real estate	10		12
Principal balance of impaired mortgage loans on real estate	85,000,000		100,000,000
Valuation allowance associated with impaired mortgage loans on real estate	27,000,000
Carrying value of impaired mortgage loans on real estate	58,000,000		69,000,000
Average carrying value for impaired loans on real estate	64,000,000	55,000,000
Interest income recognized on impaired mortgage loans on real estate	0	1,000,000
Amount of interest income collected on impaired mortgage loans on real estate	0	1,000,000
Largest mortgage loan concentration in geographic region	32.00%		32.00%
Balance as of beginning-of-year	(31,000,000)
Balance as of end-of-period	(27,000,000)
Mortgage Loans Credit Quality [Line Items]
Principal amount of mortgage loans on real estate	6,952,000,000		6,960,000,000
Percentage of total mortgage loans on real estate	100.00%		100.00%
Alternative investments [Abstract]
Number of partnerships in alternative investment portfolio	97,000,000		96,000,000
Realized gain (loss) related to certain investments
Fixed maturity AFS securities, Gross gains	5,000,000	36,000,000
Fixed maturity AFS securities, Gross losses	(63,000,000)	(63,000,000)
Equity AFS securities, Gross gains	1,000,000	8,000,000
Gain (loss) on other investments	7,000,000	13,000,000
Associated amortization expense of DAC, VOBA, DSI and DFEL and changes in other contract holder funds	2,000,000	(9,000,000)
Total realized gain (loss) related to certain investments	(48,000,000)	(15,000,000)
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)	(57,000,000)	(50,000,000)
Associated amortization expense of DAC, VOBA, DSI and DFEL	10,000,000	9,000,000
Net OTTI recognized in net income (loss), pre-tax	(47,000,000)	(41,000,000)
Portion of OTTI Recognized in OCI
Gross OTTI recognized in OCI	58,000,000	8,000,000
Change in DAC, VOBA, DSI and DFEL	(8,000,000)	(5,000,000)
Net portion of OTTI recognized in OCI, pre-tax	50,000,000	3,000,000
Evaluation Of Credit Losses [Line Items]
Projected default rate on existing delinquencies on MBS (low end of range)	25.00%
Projected default rate on existing delinquencies on MBS (high end of range)	100.00%
Severity of second lien loans	100.00%
Severity of first lien loans	30.00%
Carrying Value Of Payables For Collateral On Investments [Abstract]
Collateral payable held for derivative investments	2,132,000,000		2,980,000,000
Securities pledged under securities lending agreements	200,000,000		200,000,000
Securities pledged under reverse repurchase agreements	280,000,000		280,000,000
Securities pledged for Treasury Asset-Backed Securities Loan Facility ('TALF')	163,000,000		173,000,000
Securities pledged for Federal Home Loan Bank of Indianapolis Securities ('FHLBI')	100,000,000		100,000,000
Total payables for collateral on investments	2,875,000,000		3,733,000,000
Fair Value Of Related Investments Or Collateral [Abstract]
Collateral payable held for derivative investments	2,132,000,000		2,980,000,000
Securities pledged under securities lending agreements	192,000,000		193,000,000
Securities pledged under reverse repurchase agreements	292,000,000		294,000,000
Securities pledged for Treasury Asset-Backed Securities Loan Facility ('TALF')	188,000,000		199,000,000
Securities pledged for Federal Home Loan Bank of Indianapolis Securities ('FHLBI')	153,000,000		142,000,000
Total payables for collateral on investments	2,957,000,000		3,808,000,000
Percentage of the fair value of domestic securities obtained as collateral under securities lending agreements	102.00%
Percentage of the fair value of foreign securities obtained as collateral under securities lending agreements	105.00%
Percentage of the fair value of securities obtained as collateral under reverse repurchase agreements	95.00%
Percentage of the fair value of TALF securities obtained as collateral under securities pledged for TALF	90.00%
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI (low end of range)	85.00%
Percentage of the fair value of FHLBI securities obtained as collateral under securities pledged for FHLBI (high end of range)	95.00%
Increase (decrease) in payables for collateral on investments
Collateral payable held for derivative investments	(848,000,000)	(70,000,000)
Securities pledged under securities lending agreements	0	1,000,000
Securities pledged for TALF	(10,000,000)	(36,000,000)
Total increase (decrease) in payables for collateral on investments	(858,000,000)	(105,000,000)
Investment commitments	653,000,000
Investment commitments for limited partnerships	186,000,000
Investment commitments for private placements	399,000,000
Investment commitments for mortgage loans on real estate	68,000,000
Federal Home Loan Mortgage Corporation [Member]
Concentration Risk [Line Items]
Fair value	4,600,000,000		5,000,000,000
Concentration risk, percentage	5.00%		5.00%
Fannie Mae [Member]
Concentration Risk [Line Items]
Fair value	2,600,000,000		2,600,000,000
Concentration risk, percentage	3.00%		3.00%
Cmo Industry [Member]
Concentration Risk [Line Items]
Fair value	5,300,000,000		5,600,000,000
Concentration risk, percentage	6.00%		6.00%
Electric Industry [Member]
Concentration Risk [Line Items]
Fair value	7,700,000,000		7,700,000,000
Concentration risk, percentage	8.00%		8.00%
Corporate bonds [Member]
Evaluation Of Credit Losses [Line Items]
Percentage of fair value rated as investment grade	96.00%		96.00%
Amortized cost of portfolio rated below investment grade	2,800,000,000		2,600,000,000
Fair value of portfolio rated below investment grade	2,600,000,000		2,400,000,000
OTTI securities recognized in net income (loss), Recovery percentage of amortized cost	92.00%		98.00%
CDOs [Member]
Evaluation Of Credit Losses [Line Items]
Percentage of fair value rated as investment grade	97.00%		97.00%
Amortized cost of portfolio rated below investment grade	3,000,000		3,000,000
Fair value of portfolio rated below investment grade	3,000,000		3,000,000
OTTI securities recognized in net income (loss), Recovery percentage of amortized cost	0.00%		0.00%
Fixed maturity securities [Member] | Corporate bonds [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)	(19,000,000)	(3,000,000)
Fixed maturity securities [Member] | CDOs [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)	0	(1,000,000)
Fixed maturity securities [Member] | Hybrid and redeemable preferred securities [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)	0	(2,000,000)
Fixed maturity securities [Member] | CMBS [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)	(20,000,000)	(24,000,000)
Fixed maturity securities [Member] | RMBS [Member]
OTTI Recognized in Net Income (Loss)
Gross OTTI recognized in net income (loss)	(18,000,000)	(20,000,000)
Loan to value ratio less than sixty five [Member]
Mortgage Loans Credit Quality [Line Items]
Principal amount of mortgage loans on real estate	5,419,000,000		5,338,000,000
Percentage of total mortgage loans on real estate	77.90%		76.70%
Debt-service coverage ratio	1.62		1.61
Loan to value ratio sixty five to seventy four [Member]
Mortgage Loans Credit Quality [Line Items]
Principal amount of mortgage loans on real estate	1,121,000,000		1,198,000,000
Percentage of total mortgage loans on real estate	16.10%		17.20%
Debt-service coverage ratio	1.39		1.37
Loan to value ratio seventy five to one hundred [Member]
Mortgage Loans Credit Quality [Line Items]
Principal amount of mortgage loans on real estate	311,000,000		308,000,000
Percentage of total mortgage loans on real estate	4.50%		4.40%
Debt-service coverage ratio	0.90		0.92
Loan to value ratio, greater than one hundred [Member]
Mortgage Loans Credit Quality [Line Items]
Principal amount of mortgage loans on real estate	101,000,000		116,000,000
Percentage of total mortgage loans on real estate	1.50%		1.70%
Debt-service coverage ratio	0.37		0.36
Corporate bonds [Member]
Available For Sale Securities In Unrealized Loss Position With Loss Severity Greater Than 20 Percent [Line Items]
Balance as of beginning of year			51,000,000
Decreases attributable to:
Balance as of end of year	63,000,000		51,000,000
Other Than Temporary Impairments Credit Losses [Line Items]
Amortized Cost	242,000,000		169,000,000
Gross Unrealized Gains	1,000,000		1,000,000
Gross Unrealized Losses and OTTI	(100,000,000)		(67,000,000)
Fair Value	143,000,000		103,000,000
OTTI in Credit Losses	63,000,000		51,000,000
RMBS [Member]
Available For Sale Securities In Unrealized Loss Position With Loss Severity Greater Than 20 Percent [Line Items]
Balance as of beginning of year			301,000,000
Decreases attributable to:
Balance as of end of year	290,000,000		301,000,000
Other Than Temporary Impairments Credit Losses [Line Items]
Amortized Cost	688,000,000		690,000,000
Gross Unrealized Gains	4,000,000		1,000,000
Gross Unrealized Losses and OTTI	(100,000,000)		(128,000,000)
Fair Value	592,000,000		563,000,000
OTTI in Credit Losses	290,000,000		301,000,000
CMBS [Member]
Available For Sale Securities In Unrealized Loss Position With Loss Severity Greater Than 20 Percent [Line Items]
Balance as of beginning of year			38,000,000
Decreases attributable to:
Balance as of end of year	57,000,000		38,000,000
Other Than Temporary Impairments Credit Losses [Line Items]
Amortized Cost	39,000,000		17,000,000
Gross Unrealized Gains	0		0
Gross Unrealized Losses and OTTI	(19,000,000)		(10,000,000)
Fair Value	20,000,000		7,000,000
OTTI in Credit Losses	57,000,000		38,000,000
Available For Sale Securities Continuous Unrealized Loss Position Less Than 6 Months [Member]
Available For Sale Securities In Unrealized Loss Position With Loss Severity Greater Than 20 Percent [Line Items]
Fair Value	81,000,000		385,000,000
Gross Unrealized Losses	32,000,000		125,000,000
Gross Unrealized OTTI	3,000,000		31,000,000
Number of securities	23		56
Available For Sale Securities Continuous Unrealized Loss Position More Than 6 Months And Less Than 9 Months [Member]
Available For Sale Securities In Unrealized Loss Position With Loss Severity Greater Than 20 Percent [Line Items]
Fair Value	111,000,000		53,000,000
Gross Unrealized Losses	42,000,000		30,000,000
Gross Unrealized OTTI	14,000,000		12,000,000
Number of securities	19		18
Available For Sale Securities Continuous Unrealized Loss Position More Than 9 Months And Less Than 12 Months [Member]
Available For Sale Securities In Unrealized Loss Position With Loss Severity Greater Than 20 Percent [Line Items]
Fair Value	50,000,000		2,000,000
Gross Unrealized Losses	17,000,000		0
Gross Unrealized OTTI	14,000,000		1,000,000
Number of securities	16		7
Available For Sale Securities Continuous Unrealized Loss Position 12 Months Or Longer [Member]
Available For Sale Securities In Unrealized Loss Position With Loss Severity Greater Than 20 Percent [Line Items]
Fair Value	579,000,000		615,000,000
Gross Unrealized Losses	343,000,000		470,000,000
Gross Unrealized OTTI	151,000,000		111,000,000
Number of securities	166		175
Total Available For Sale Securities Backed By Pools Of Residential Mortgages At Risk [Member]
Schedule Of Available For Sale Securities Residential And Commercial Mortgage At Risk [Line Items]
Amortized Cost	1,875,000,000		2,023,000,000
Fair Value	1,480,000,000		1,553,000,000
Unrealized Loss	(395,000,000)		(470,000,000)
Total Available For Sale Securities Backed By Pools Of Commercial Mortgages At Risk [Member]
Schedule Of Available For Sale Securities Residential And Commercial Mortgage At Risk [Line Items]
Amortized Cost	367,000,000		472,000,000
Fair Value	270,000,000		344,000,000
Unrealized Loss	(97,000,000)		(128,000,000)
Total Available For Sale Securities Backed By Pools Of Residential And Commercial Mortgages At Risk [Member]
Schedule Of Available For Sale Securities Residential And Commercial Mortgage At Risk [Line Items]
Amortized Cost	2,242,000,000		2,495,000,000
Fair Value	1,750,000,000		1,897,000,000
Unrealized Loss	(492,000,000)		(598,000,000)
Available For Sale Securities Backed By Pools Of Residential Mortgages Subject To Detailed Analysis [Member]
Schedule Of Available For Sale Securities Residential And Commercial Mortgage At Risk [Line Items]
Amortized Cost	1,862,000,000		2,015,000,000
Fair Value	1,467,000,000		1,545,000,000
Unrealized Loss	(395,000,000)		(470,000,000)
Available For Sale Securities Backed By Pools Of Commercial Mortgages Subject To Detailed Analysis [Member]
Schedule Of Available For Sale Securities Residential And Commercial Mortgage At Risk [Line Items]
Amortized Cost	109,000,000		126,000,000
Fair Value	59,000,000		61,000,000
Unrealized Loss	(50,000,000)		(65,000,000)
Available For Sale Securities Backed By Pools Of Residential And Commercial Mortgages Subject To Detailed Analysis [Member]
Schedule Of Available For Sale Securities Residential And Commercial Mortgage At Risk [Line Items]
Amortized Cost	1,971,000,000		2,141,000,000
Fair Value	1,526,000,000		1,606,000,000
Unrealized Loss	(445,000,000)		(535,000,000)
Fixed maturity securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	70,563,000,000		69,661,000,000
Gross unrealized gains	7,287,000,000		7,569,000,000
Gross unrealized losses	(672,000,000)		(894,000,000)
Gross unrealized OTTI	(222,000,000)		(203,000,000)
Fair Value	76,956,000,000		76,133,000,000
Available-for-sale Securities, Debt Maturities, Amortized Cost
Subtotal - Amortized Cost	70,563,000,000
Available-for-sale Securities, Debt Maturities, Fair Value
Subtotal - Fair Value	76,956,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	4,254,000,000		3,955,000,000
Greater Than Twelve Months	2,288,000,000		2,490,000,000
Continuous Unrealized Loss Position, Total	6,542,000,000		6,445,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	327,000,000		326,000,000
Greater Than Twelve Months	567,000,000		771,000,000
Gross Unrealized Losses and OTTI, Total	894,000,000		1,097,000,000
Fixed maturity securities [Member] | Corporate bonds [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	55,255,000,000		53,661,000,000
Gross unrealized gains	5,854,000,000		6,185,000,000
Gross unrealized losses	(407,000,000)		(517,000,000)
Gross unrealized OTTI	(103,000,000)		(68,000,000)
Fair Value	60,599,000,000		59,261,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	3,186,000,000		2,848,000,000
Greater Than Twelve Months	1,335,000,000		1,452,000,000
Continuous Unrealized Loss Position, Total	4,521,000,000		4,300,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	194,000,000		162,000,000
Greater Than Twelve Months	316,000,000		423,000,000
Gross Unrealized Losses and OTTI, Total	510,000,000		585,000,000
Fixed maturity securities [Member] | U.S. government bonds [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	450,000,000		439,000,000
Gross unrealized gains	41,000,000		55,000,000
Gross unrealized losses	(5,000,000)		0
Gross unrealized OTTI	0		0
Fair Value	486,000,000		494,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	213,000,000
Greater Than Twelve Months	1,000,000
Continuous Unrealized Loss Position, Total	214,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	5,000,000
Greater Than Twelve Months	0
Gross Unrealized Losses and OTTI, Total	5,000,000
Fixed maturity securities [Member] | Foreign government bonds [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	585,000,000		668,000,000
Gross unrealized gains	65,000,000		65,000,000
Gross unrealized losses	0		0
Gross unrealized OTTI	0		0
Fair Value	650,000,000		733,000,000
Fixed maturity securities [Member] | MBS [Member]
Available-for-sale Securities, Debt Maturities, Amortized Cost
Subtotal - Amortized Cost	8,729,000,000
Available-for-sale Securities, Debt Maturities, Fair Value
Subtotal - Fair Value	9,095,000,000
Fixed maturity securities [Member] | RMBS [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	7,196,000,000		7,690,000,000
Gross unrealized gains	524,000,000		548,000,000
Gross unrealized losses	(48,000,000)		(73,000,000)
Gross unrealized OTTI	(100,000,000)		(126,000,000)
Fair Value	7,572,000,000		8,039,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	572,000,000		565,000,000
Greater Than Twelve Months	351,000,000		429,000,000
Continuous Unrealized Loss Position, Total	923,000,000		994,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	99,000,000		125,000,000
Greater Than Twelve Months	49,000,000		74,000,000
Gross Unrealized Losses and OTTI, Total	148,000,000		199,000,000
Fixed maturity securities [Member] | CMBS [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	1,533,000,000		1,642,000,000
Gross unrealized gains	76,000,000		73,000,000
Gross unrealized losses	(67,000,000)		(106,000,000)
Gross unrealized OTTI	(19,000,000)		(9,000,000)
Fair Value	1,523,000,000		1,600,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	119,000,000		178,000,000
Greater Than Twelve Months	130,000,000		146,000,000
Continuous Unrealized Loss Position, Total	249,000,000		324,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	22,000,000		15,000,000
Greater Than Twelve Months	64,000,000		100,000,000
Gross Unrealized Losses and OTTI, Total	86,000,000		115,000,000
Fixed maturity securities [Member] | CDOs [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	117,000,000		121,000,000
Gross unrealized gains	0		0
Gross unrealized losses	(15,000,000)		(19,000,000)
Gross unrealized OTTI	0		0
Fair Value	102,000,000		102,000,000
Available-for-sale Securities, Debt Maturities, Amortized Cost
Subtotal - Amortized Cost	117,000,000
Available-for-sale Securities, Debt Maturities, Fair Value
Subtotal - Fair Value	102,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	3,000,000		9,000,000
Greater Than Twelve Months	75,000,000		80,000,000
Continuous Unrealized Loss Position, Total	78,000,000		89,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	1,000,000		1,000,000
Greater Than Twelve Months	14,000,000		18,000,000
Gross Unrealized Losses and OTTI, Total	15,000,000		19,000,000
Fixed maturity securities [Member] | State and municipal bonds [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	3,497,000,000		3,490,000,000
Gross unrealized gains	637,000,000		566,000,000
Gross unrealized losses	(8,000,000)		(9,000,000)
Gross unrealized OTTI	0		0
Fair Value	4,126,000,000		4,047,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	2,000,000		31,000,000
Greater Than Twelve Months	26,000,000		30,000,000
Continuous Unrealized Loss Position, Total	28,000,000		61,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	0		0
Greater Than Twelve Months	8,000,000		9,000,000
Gross Unrealized Losses and OTTI, Total	8,000,000		9,000,000
Fixed maturity securities [Member] | Hybrid and redeemable preferred securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	1,256,000,000		1,277,000,000
Gross unrealized gains	62,000,000		50,000,000
Gross unrealized losses	(122,000,000)		(170,000,000)
Gross unrealized OTTI	0		0
Fair Value	1,196,000,000		1,157,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	159,000,000		324,000,000
Greater Than Twelve Months	370,000,000		353,000,000
Continuous Unrealized Loss Position, Total	529,000,000		677,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	6,000,000		23,000,000
Greater Than Twelve Months	116,000,000		147,000,000
Gross Unrealized Losses and OTTI, Total	122,000,000		170,000,000
Fixed maturity securities [Member] | VIEs' fixed maturity securities
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	674,000,000		673,000,000
Gross unrealized gains	28,000,000		27,000,000
Gross unrealized losses	0		0
Gross unrealized OTTI	0		0
Fair Value	702,000,000		700,000,000
Equity securities [Member]
Amortized cost, gross unrealized gains, losses, OTTI and fair value of AFS securities
Amortized cost	114,000,000		135,000,000
Gross unrealized gains	19,000,000		16,000,000
Gross unrealized losses	(7,000,000)		(12,000,000)
Gross unrealized OTTI	0		0
Fair Value	126,000,000		139,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
Less Than or Equal to Twelve Months	12,000,000		38,000,000
Greater Than Twelve Months	0		0
Continuous Unrealized Loss Position, Total	12,000,000		38,000,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses and OTTI
Less Than or Equal to Twelve Months	7,000,000		12,000,000
Greater Than Twelve Months	0		0
Gross Unrealized Losses and OTTI, Total	$ 7,000,000		$ 12,000,000

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Shares and Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Changes in preferred and common stock (number of shares)

		For the Three
		Months Ended
		March 31,
		2012	2011
Series A Preferred Stock
Balance as of beginning-of-period		10,072	10,914
Conversion of convertible preferred stock (1)		(440)	-
	Balance as of end-of-period	9,632	10,914
Common Stock
Balance as of beginning-of-period		291,319,222	315,718,554
Conversion of convertible preferred stock (1)		7,040	-
Stock compensation/issued for benefit plans		104,197	152,134
Retirement/cancellation of shares		(6,018,156)	(2,413,864)
	Balance as of end-of-period	285,412,303	313,456,824
Common Stock as of End-of-Period
Assuming conversion of preferred stock		285,566,415	313,631,448
Diluted basis		292,953,914	321,320,873

Reconciliation of the denominator (number of shares) in the calculations of basic and diluted earnings (loss) per common share

			For the Three
			Months Ended
			March 31,
			2012	2011
Weighted-average shares, as used in basic calculation			289,055,925	315,014,084
Shares to cover exercise of outstanding warrants			10,150,271	10,150,292
Shares to cover conversion of preferred stock			154,499	174,624
Shares to cover non-vested stock			1,010,689	771,357
Average stock options outstanding during the period			601,284	959,872
Assumed acquisition of shares with assumed
	proceeds from exercising outstanding warrants		(4,634,542)	(3,669,994)
Assumed acquisition of shares with assumed
	proceeds and benefits from exercising stock
	options (at average market price for the period)		(413,777)	(654,934)
Shares repurchaseable from measured but
	unrecognized stock option expense		(14,681)	(152,416)
Average deferred compensation shares			-	271,447
		Weighted-average shares, as used in diluted calculation	295,909,668	322,864,332

Components and changes in accumulated OCI

				For the Three
				Months Ended
				March 31,
				2012		2011
Unrealized Gain (Loss) on AFS Securities
Balance as of beginning-of-year				$	2,947	$	1,072
	Cumulative effect from adoption of new accounting standards				-		105
	Unrealized holding gains (losses) arising during the period				(109)		(191)
	Change in foreign currency exchange rate adjustment				10		14
	Change in DAC, VOBA, DSI and other contract holder funds				76		104
	Income tax benefit (expense)				(27)		63
	Less:
		Reclassification adjustment for gains (losses) included in net income (loss)			(57)		(19)
		Associated amortization of DAC, VOBA, DSI and DFEL			2		(10)
		Income tax benefit (expense)			19		10
			Balance as of end-of-period	$	2,933	$	1,186
Unrealized OTTI on AFS Securities
Balance as of beginning-of-year				$	(110)	$	(129)
	(Increases) attributable to:
		Cumulative effect from adoption of new accounting standards			-		(5)
		Gross OTTI recognized in OCI during the period			(58)		(8)
		Change in DAC, VOBA, DSI and DFEL			8		5
		Income tax benefit (expense)			18		1
	Decreases attributable to:
		Sales, maturities or other settlements of AFS securities			39		45
		Change in DAC, VOBA, DSI and DFEL			(4)		(9)
		Income tax benefit (expense)			(12)		(13)
			Balance as of end-of-period	$	(119)	$	(113)
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year				$	119	$	(15)
	Cumulative effect from adoption of new accounting standards				-		3
	Unrealized holding gains (losses) arising during the period				(42)		(3)
	Change in foreign currency exchange rate adjustment				(9)		(9)
	Change in DAC, VOBA, DSI and DFEL				4		4
	Income tax benefit (expense)				15		3
	Less:
		Reclassification adjustment for gains (losses) included in net income (loss)			(3)		3
		Associated amortization of DAC, VOBA, DSI and DFEL			-		1
		Income tax benefit (expense)			1		(1)
			Balance as of end-of-period	$	89	$	(20)
Foreign Currency Translation Adjustment
Balance as of beginning-of-year				$	1	$	1
	Foreign currency translation adjustment arising during the period				(5)		2
	Income tax benefit (expense)				2		(1)
		Balance as of end-of-period		$	(2)	$	2
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year				$	(278)	$	(181)
	Adjustment arising during the period				(2)		(1)
	Income tax benefit (expense)				1		-
		Balance as of end-of-period		$	(279)	$	(182)

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Document Information	3 Months Ended
	Mar. 31, 2012
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false

XML

Shares and Stockholders' Equity (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Reconciliation of the denominator (number of shares) in the calculations of basic and diluted earnings (loss) per common share Table
Weighted-average shares, as used in basic calculation (in shares)	289,055,925	315,014,084
Shares to cover exercise of outstanding warrants (in shares)	10,150,271	10,150,292
Shares to cover conversion of preferred stock (in shares)	154,499	174,624
Shares to cover non-vested stock (in shares)	1,010,689	771,357
Average stock options outstanding during the period (in shares)	601,284	959,872
Assumed acquisition of shares with assumed proceeds from exercising outstanding warrants (in shares)	(4,634,542)	(3,669,994)
Assumed acquisition of shares with assumed proceeds and benefits from exercising stock options (at average market price for the year) (in shares)	(413,777)	(654,934)
Shares repurchaseable from measured but unrecognized stock option expense (in shares)	(14,681)	(152,416)
Average deferred compensation shares (in shares)	0	271,447
Weighted-average shares, as used in diluted calculation (in shares)	295,909,668	322,864,332
Unrealized Gain (Loss) on AFS Securities [Member]
Components and changes in accumulated Other Comprehensive Income [Line Items]
Balance as of beginning-of-year	2,947	1,072
Cumulative effect from adoption of new accounting standards	0	105
Unrealized holding gains (losses) arising during the period	(109)	(191)
Change in foreign currency exchange rate adjustment	10	14
Change in DAC, VOBA, DSI and other contract holder funds	76	104
Income tax benefit (expense)	(27)	63
Less: Reclassification adjustment for gains (losses) included in net income (loss)	(57)	(19)
Less: Associated amortization of DAC, VOBA, DSI, and DFEL	2	(10)
Less: Income tax benefit (expense)	19	10
Balance as of end-of-period	2,933	1,186
Unrealized Other Than Temporary Impairment on Available For Sale Securities [Member]
Components and changes in accumulated Other Comprehensive Income [Line Items]
Balance as of beginning-of-year	(110)	(129)
Cumulative effect from adoption of new accounting standards	0	(5)
Increases attributable to: Gross OTTI recognized in OCI during the period	(58)	(8)
Increases attributable to: Change in DAC, VOBA, DSI and DFEL	8	5
Increases attributable to: Income tax benefit (expense)	18	1
Decreases attributable to: Sales, maturities or other settlements of AFS Securities	39	45
Decreases attributable to: Change in DAC, VOBA, DSI, and DFEL	(4)	(9)
Decreases attributable to: Income tax benefit (expense)	(12)	(13)
Balance as of end-of-period	(119)	(113)
Unrealized Gain (Loss) on Derivative Instruments [Member]
Components and changes in accumulated Other Comprehensive Income [Line Items]
Balance as of beginning-of-year	119	(15)
Cumulative effect from adoption of new accounting standards	0	3
Unrealized holding gains (losses) arising during the period	(42)	(3)
Change in foreign currency exchange rate adjustment	(9)	(9)
Change in DAC, VOBA, DSI and other contract holder funds	4	4
Income tax benefit (expense)	15	3
Less: Reclassification adjustment for gains (losses) included in net income (loss)	(3)	3
Less: Associated amortization of DAC, VOBA, DSI, and DFEL	0	1
Less: Income tax benefit (expense)	1	(1)
Change in DAC, VOBA, DSI and DFEL	4	4
Income tax benefit (expense)	15	3
Less: Associated amortization of DAC, VOBA, DSI and DFEL	0	1
Less: Income tax benefit (expense)	1	(1)
Balance as of end-of-period	89	(20)
Foreign Currency Translation Adjustment [Member]
Components and changes in accumulated Other Comprehensive Income [Line Items]
Balance as of beginning-of-year	1	1
Foreign currency translation adjustment arising during the period	(5)	2
Income tax benefit (expense)	2	(1)
Balance as of end-of-period	(2)	2
Funded Status of Employee Benefit Plans [Member]
Components and changes in accumulated Other Comprehensive Income [Line Items]
Balance as of beginning-of-year	(278)	(181)
Adjustment arising during the period	(2)	(1)
Income tax benefit (expense)	1	0
Balance as of end-of-period	(279)	(182)
Series A Preferred Stock [Member]
Changes in preferred and common stock (number of shares) [Line Items]
Balance as of beginning-of-period	10,072	10,914
Conversion of convertible preferred stock (in shares)	(440)	0
Balance as of end-of-period (in shares)	9,632	10,914
Common stock [Member]
Changes in preferred and common stock (number of shares) [Line Items]
Balance as of beginning-of-period	291,319,222	315,718,554
Conversion of convertible preferred stock (in shares)	7,040	0
Stock compensation/issued for benefit plans (in shares)	104,197	152,134
Retirement/cancellation of shares (in shares)	(6,018,156)	(2,413,864)
Balance as of end-of-period (in shares)	285,412,303	313,456,824
Common stock as of end-of-year:
Assuming conversion of preferred stock (in shares)	285,566,415	313,631,448
Diluted basis (in shares)	292,953,914	321,320,873

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Variable Interest Entities

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Consolidated Variable Interest Entities

3. Variable Interest Entities (“VIEs”)

Consolidated VIEs

See Note 4 in our 2011 Form 10-K for a detailed discussion of our consolidated VIEs, which information is incorporated herein by reference.

The following summarizes information regarding the credit-linked note (“CLN”) structures (dollars in millions) as of March 31, 2012:

	Amount and Date of Issuance
		$400		$200
		December		April
		2006		2007
Original attachment point (subordination)		5.50	%	2.05	%
Current attachment point (subordination)		4.17	%	1.48	%
Maturity	12/20/2016			3/20/2017
Current rating of tranche		B+		Ba2
Current rating of underlying collateral pool		Aa1-B3		Aaa-Caa1
Number of defaults in underlying collateral pool		2		2
Number of entities		123		99
Number of countries		19		22

The following summarizes the exposure of the CLN structures' underlying collateral by industry and rating as of March 31, 2012:

			AAA		AA		A		BBB		BB		B		CCC		Total
Industry
Telecommunications			0.0	%	0.3	%	5.1	%	4.8	%	0.3	%	0.5	%	0.0	%	11.0	%
Financial intermediaries			0.3	%	2.8	%	6.9	%	0.5	%	0.0	%	0.0	%	0.0	%	10.5	%
Oil and gas			0.0	%	0.7	%	1.0	%	4.6	%	0.0	%	0.0	%	0.0	%	6.3	%
Utilities			0.0	%	0.0	%	2.6	%	2.0	%	0.0	%	0.0	%	0.0	%	4.6	%
Chemicals and plastics			0.0	%	0.0	%	2.3	%	1.2	%	0.3	%	0.0	%	0.0	%	3.8	%
Drugs			0.3	%	2.7	%	0.7	%	0.0	%	0.0	%	0.0	%	0.0	%	3.7	%
Retailers (except food
	and drug)		0.0	%	0.0	%	2.1	%	0.9	%	0.5	%	0.0	%	0.0	%	3.5	%
Industrial equipment			0.0	%	0.0	%	3.0	%	0.3	%	0.0	%	0.0	%	0.0	%	3.3	%
Sovereign			0.0	%	0.7	%	1.6	%	1.0	%	0.0	%	0.0	%	0.0	%	3.3	%
Food products			0.0	%	0.3	%	1.8	%	1.1	%	0.0	%	0.0	%	0.0	%	3.2	%
Conglomerates			0.0	%	2.6	%	0.5	%	0.0	%	0.0	%	0.0	%	0.0	%	3.1	%
Forest products			0.0	%	0.0	%	0.0	%	1.6	%	1.4	%	0.0	%	0.0	%	3.0	%
Other			0.0	%	2.5	%	15.5	%	17.8	%	3.2	%	1.4	%	0.3	%	40.7	%
		Total	0.6	%	12.6	%	43.1	%	35.8	%	5.7	%	1.9	%	0.3	%	100.0	%

Asset and liability information (dollars in millions) for these consolidated VIEs included on our Consolidated Balance Sheets was as follows:

					As of March 31, 2012							As of December 31, 2011
					Number							Number
					of		Notional		Carrying			of		Notional		Carrying
				Instruments			Amounts		Value		Instruments			Amounts		Value
Assets
Fixed maturity securities:
	Asset-backed credit card loan					N/A	$	-	$	596			N/A	$	-	$	592
	U.S. Government bonds					N/A		-		106			N/A		-		108
Excess mortality swap						1		100		-			1		100		-
			Total assets (1)			1	$	100	$	702			1	$	100	$	700
Liabilities
Non-qualifying hedges:
	Credit default swaps					2	$	600	$	224			2	$	600	$	295
	Contingent forwards					2		-		(3)			2		-		(4)
		Total non-qualifying hedges				4		600		221			4		600		291
Federal income tax						N/A		-		(72)			N/A		-		(98)
			Total liabilities (2)			4	$	600	$	149			4	$	600	$	193

• Reported in VIEs'fixed maturity securities on our Consolidated Balance Sheets.
• Reported in VIEs' liabilities on our Consolidated Balance Sheets.

For details related to the fixed maturity available-for-sale (“AFS”)securities for these VIEs, see Note 4.

As described more fully in Note 1 of our2011 Form 10-K, we regularly review our investment holdings for other-than-temporary impairment (“OTTI”). Based upon this review, we believe that the fixed maturity securities were not other-than-temporarily impaired as of March 31, 2012.

The gains (losses) for these consolidated VIEs (in millions) recorded on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

		For the Three
		Months Ended
		March 31,
		2012		2011
Non-Qualifying Hedges
Credit default swaps		$	71	$	8
Contingent forwards			(2)		(2)
	Total non-qualifying hedges (1)	$	69	$	6

• Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

Unconsolidated VIEs

See Note 4 in our 2011 Form 10-K for a detailed discussion of our unconsolidated VIEs

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Entity Information (USD $)	3 Months Ended
	Mar. 31, 2012	Apr. 30, 2012	Jun. 30, 2011
Entity Registrant Name	LINCOLN NATIONAL CORP
Entity Central Index Key	0000059558
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 8,800,000,000
Entity Common Stock, Shares Outstanding		285,414,653
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Reconciliation Of Revenue From Segments To Consolidated

			For the Three
			Months Ended
			March 31,
			2012		2011
Revenues
Operating revenues:
	Annuities		$	731	$	733
	Retirement Plan Services			252		263
	Life Insurance			1,232		1,146
	Group Protection			504		478
	Other Operations			107		118
Excluded realized gain (loss), pre-tax				(114)		(21)
Amortization of deferred gain arising from reserve
	changes on business sold through reinsurance, pre-tax			1		1
Amortization of DFEL associated with
	benefit ratio unlocking, pre-tax			1		-
		Total revenues	$	2,714	$	2,718

Reconciliation of income (loss) from operations by segment to consolidated net income (loss)

				For the Three
				Months Ended
				March 31,
				2012		2011
Net Income (Loss)
Income (loss) from operations:
	Annuities			$	137	$	144
	Retirement Plan Services				35		48
	Life Insurance				142		142
	Group Protection				16		24
	Other Operations				(34)		(35)
Excluded realized gain (loss), after-tax					(73)		(14)
Benefit ratio unlocking, after-tax					23		5
		Income (loss) from continuing operations, after-tax			246		314
		Income (loss) from discontinued operations, after-tax			(1)		-
			Net income (loss)	$	245	$	314

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Carrying and Estimated Fair Values of Financial Instruments

		As of March 31, 2012				As of December 31, 2011
		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value
Assets
AFS securities:
	Fixed maturity securities	$	76,254	$	76,254	$	75,433	$	75,433
	VIEs' fixed maturity securities		702		702		700		700
	Equity securities		126		126		139		139
Trading securities			2,650		2,650		2,675		2,675
Mortgage loans on real estate			6,938		7,542		6,942		7,608
Derivative investments			2,244		2,244		3,151		3,151
Other investments			1,043		1,043		1,069		1,069
Cash and invested cash			3,516		3,516		4,510		4,510
Separate account assets			91,088		91,088		83,477		83,477
Liabilities
Future contract benefits:
	Indexed annuity contracts embedded derivatives		(480)		(480)		(399)		(399)
	GLB reserves embedded derivatives		(1,064)		(1,064)		(2,217)		(2,217)
Other contract holder funds:
	Remaining guaranteed interest and similar contracts		(1,100)		(1,100)		(1,114)		(1,114)
	Account values of certain investment contracts		(27,707)		(30,526)		(27,468)		(30,812)
Short-term debt (1)			(300)		(306)		(300)		(309)
Long-term debt			(5,606)		(5,543)		(5,391)		(5,345)
Reinsurance related embedded derivatives			(158)		(158)		(168)		(168)
VIEs' liabilities - derivative instruments			(221)		(221)		(291)		(291)
Other liabilities:
	Deferred compensation plans		(375)		(375)		(354)		(354)
	Credit default swaps		(10)		(10)		(16)		(16)

Fair Value of Assets and Liabilities on a Recurring Basis

					As of March 31, 2012
					Quoted
					Prices
					in Active
				Markets for				Significant			Significant
					Identical		Observable			Unobservable			Total
					Assets			Inputs			Inputs		Fair
					(Level 1)			(Level 2)			(Level 3)		Value
Assets
Investments:
	Fixed maturity AFS securities:
		Corporate bonds			$	64		$	58,603		$	1,932	$	60,599
		U.S. Government bonds				452			33			1		486
		Foreign government bonds				-			551			99		650
		RMBS				-			7,474			98		7,572
		CMBS				-			1,491			32		1,523
		CDOs				-			-			102		102
		State and municipal bonds				-			4,126			-		4,126
		Hybrid and redeemable preferred securities				20			1,060			116		1,196
	VIEs' fixed maturity securities					106			596			-		702
	Equity AFS securities					36			29			61		126
	Trading securities					2			2,580			68		2,650
	Derivative investments					-			207			2,037		2,244
Cash and invested cash						-			3,516			-		3,516
Separate account assets						-			91,088			-		91,088
			Total assets		$	680		$	171,354		$	4,546	$	176,580
Liabilities
Future contract benefits:
	Indexed annuity contracts embedded derivatives				$	-		$	-		$	(480)	$	(480)
	GLB reserves embedded derivatives					-			-			(1,064)		(1,064)
Long-term debt						-			(1,088)			-		(1,088)
Reinsurance related embedded derivatives						-			(158)			-		(158)
VIEs' liabilities - derivative instruments						-			-			(221)		(221)
Other liabilities:
	Deferred compensation plans					-			-			(375)		(375)
	Credit default swaps					-			-			(10)		(10)
			Total liabilities		$	-		$	(1,246)		$	(2,150)	$	(3,396)

					As of December 31, 2011
					Quoted
					Prices
					in Active
				Markets for				Significant			Significant
					Identical		Observable			Unobservable			Total
					Assets			Inputs			Inputs		Fair
					(Level 1)			(Level 2)			(Level 3)		Value
Assets
Investments:
	Fixed maturity AFS securities:
		Corporate bonds			$	63		$	57,310		$	1,888	$	59,261
		U.S. Government bonds				475			18			1		494
		Foreign government bonds				-			636			97		733
		RMBS				-			7,881			158		8,039
		CMBS				-			1,566			34		1,600
		CDOs				-			-			102		102
		State and municipal bonds				-			4,047			-		4,047
		Hybrid and redeemable preferred securities				15			1,042			100		1,157
	VIEs' fixed maturity securities					108			592			-		700
	Equity AFS securities					37			46			56		139
	Trading securities					2			2,605			68		2,675
	Derivative investments					-			681			2,470		3,151
Cash and invested cash						-			4,510			-		4,510
Separate account assets						-			83,477			-		83,477
			Total assets		$	700		$	164,411		$	4,974	$	170,085
Liabilities
Future contract benefits:
	Indexed annuity contracts embedded derivatives				$	-		$	-		$	(399)	$	(399)
	GLB reserves embedded derivatives					-			-			(2,217)		(2,217)
Long-term debt						-			(1,688)			-		(1,688)
Reinsurance related embedded derivatives						-			(168)			-		(168)
VIEs' liabilities - derivative instruments						-			-			(291)		(291)
Other liabilities:
	Deferred compensation plans					-			-			(354)		(354)
	Credit default swaps					-			-			(16)		(16)
			Total liabilities		$	-		$	(1,856)		$	(3,277)	$	(5,133)

Level 3 Unobservable Input Reconciliation

					For the Three Months Ended March 31, 2012
									Gains		Issuances,			Transfers
							Items		(Losses)			Sales,		In or
							Included		in		Maturities,			Out
					Beginning		in		OCI		Settlements,			of		Ending
					Fair		Net		and			Calls,		Level 3,		Fair
					Value		Income		Other (1)			Net		Net (2)		Value
Investments: (3)
	Fixed maturity AFS securities:
		Corporate bonds			$	1,888	$	(14)	$	-		$	174	$	(116)	$	1,932
		U.S. Government bonds				1		-		-			-		-		1
		Foreign government bonds				97		-		2			-		-		99
		RMBS				158		(3)		3			(5)		(55)		98
		CMBS				34		(3)		8			(7)		-		32
		CDOs				102		-		4			(4)		-		102
		Hybrid and redeemable
			preferred securities			100		-		5			-		11		116
	Equity AFS securities					56		-		5			-		-		61
	Trading securities					68		1		-			(1)		-		68
	Derivative investments					2,470		(520)		(88)			175		-		2,037
Future contract benefits: (4)
	Indexed annuity contracts embedded
		derivatives				(399)		(104)		-			23		-		(480)
	GLB reserves embedded derivatives					(2,217)		1,153		-			-		-		(1,064)
VIEs' liabilities - derivative
	instruments (5)					(291)		70		-			-		-		(221)
Other liabilities:
	Deferred compensation plans (6)					(354)		(28)		-			7		-		(375)
	Credit default swaps (7)					(16)		6		-			-		-		(10)
				Total, net	$	1,697	$	558	$	(61)		$	362	$	(160)	$	2,396

					For the Three Months Ended March 31, 2011
									Gains		Issuances,			Transfers
							Items		(Losses)			Sales		In or
							Included		in		Maturities,			Out
					Beginning		in		OCI		Settlements,			of		Ending
					Fair		Net		and			Calls,		Level 3,		Fair
					Value		Income		Other (1)			Net		Net (2)		Value
Investments: (3)
	Fixed maturity AFS securities:
		Corporate bonds			$	1,816	$	(1)	$	10		$	54	$	(73)	$	1,806
		U.S. Government bonds				2		-		-			-		-		2
		Foreign government bonds				113		-		7			(3)		(17)		100
		RMBS				119		(2)		2			(4)		-		115
		CMBS				109		(23)		30			(52)		-		64
		CDOs				172		14		(12)			(38)		-		136
		Hybrid and redeemable
			preferred securities			119		-		1			-		4		124
	Equity AFS securities:					92		8		3			(9)		2		96
	Trading securities					76		1		(2)			(2)		(2)		71
	Derivative investments					1,495		(145)		(18)			107		-		1,439
Future contract benefits: (4)
	Indexed annuity contracts embedded
		derivatives				(497)		48		-			(79)		-		(528)
	GLB reserves embedded derivatives					(408)		290		-			-		-		(118)
VIEs' liabilities - derivative
	instruments (5)					(209)		6		-			-		-		(203)
Other liabilities:
	Deferred compensation plans (6)					(363)		(8)		-			14		-		(357)
	Credit default swaps (7)					(16)		4		-			6		-		(6)
				Total, net	$	2,620	$	192	$	21		$	(6)	$	(86)	$	2,741

				For the Three Months Ended March 31, 2012
				Issuances		Sales		Maturities		Settlements			Calls		Total
Investments:
	Fixed maturity AFS securities:
		Corporate bonds		$	231	$	(26)	$	-		$	(29)	$	(2)	$	174
		RMBS			-		-		-			(5)		-		(5)
		CMBS			-		-		-			(7)		-		(7)
		CDOs			-		-		-			(4)		-		(4)
	Trading securities				-		-		-			(1)		-		(1)
	Derivative investments				209		15		(49)			-		-		175
Future contract benefits:
	Indexed annuity contracts embedded
		derivatives			(9)		-		-			32		-		23
Other liabilities:
	Deferred compensation plans				-		-		-			7		-		7
			Total, net	$	431	$	(11)	$	(49)		$	(7)	$	(2)	$	362

				For the Three Months Ended March 31, 2011
				Issuances		Sales		Maturities		Settlements			Calls		Total
Investments:
	Fixed maturity AFS securities:
		Corporate bonds		$	101	$	(8)	$	(1)		$	(37)	$	(1)	$	54
		Foreign government bonds			-		(3)		-			-		-		(3)
		RMBS			-		-		-			(4)		-		(4)
		CMBS			1		(44)		-			(9)		-		(52)
		CDOs			-		(33)		-			(5)		-		(38)
	Equity AFS securities				6		(15)		-			-		-		(9)
	Trading securities				-		-		-			(2)		-		(2)
	Derivative investments				167		(2)		(58)			-		-		107
Future contract benefits:
	Indexed annuity contracts embedded
		derivatives			(17)		-		-			(62)		-		(79)
Other liabilities:
	Deferred compensation plans				-		-		-			14		-		14
	Credit default swaps				-		6		-			-		-		6
			Total, net	$	258	$	(99)	$	(59)		$	(105)	$	(1)	$	(6)

Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held

			For the Three
			Months Ended
			March 31,
			2012		2011
Investments: (1)
	Derivative investments		$	(520)	$	(140)
Future contract benefits: (1)
	Indexed annuity contracts embedded derivatives			21		(4)
	GLB reserves embedded derivatives			1,183		338
VIEs' liabilities - derivative instruments (1)				70		2
Other liabilities:
	Deferred compensation plans (2)			(28)		(8)
	Credit default swaps (3)			6		6
		Total, net	$	732	$	194

Fair Value Assets And Liabilities Transfers In And Out Of Level 3 [Text Block]

				For the Three Months						For the Three Months
				Ended March 31, 2012						Ended March 31, 2011
				Transfers		Transfers				Transfers		Transfers
				In to		Out of				In to		Out of
				Level 3		Level 3		Total		Level 3		Level 3		Total
Investments:
	Fixed maturity AFS securities:
		Corporate bonds		$	150		(266)	$	(116)	$	32	$	(105)	$	(73)
		Foreign government bonds			-		-		-		-		(17)		(17)
		RMBS			-		(55)		(55)		-		-		-
		Hybrid and redeemable preferred securities			20		(9)		11		4		-		4
	Equity AFS securities				-		-		-		2		-		2
	Trading securities				-		-		-		-		(2)		(2)
			Total, net	$	170	$	(330)	$	(160)	$	38	$	(124)	$	(86)

Fair Value Inputs Assets Quantitative Information Table [Text Block]

				Fair		Valuation	Significant
				Value		Technique	Unobservable Inputs	Range
Assets
Investments:
	Fixed maturity AFS and trading
		securities
			Corporate bonds	$	1,119	Discounted cash flow	Liquidity/duration adjustment (1)	0.5% - 9.0%
			Foreign government bonds		52	Discounted cash flow	Liquidity/duration adjustment (1)	2.5% - 6.0%
	Equity AFS and trading
		securities			12	Discounted cash flow	Liquidity/duration adjustment (1)	4.0% - 4.5%

Fair Value Inputs Liabilities Quantitative Information Table [Text Block]

			Fair		Valuation	Significant
			Value		Technique	Unobservable Inputs		Range
Liabilities
Future contract benefits:
	Indexed annuity contracts
		embedded derivatives		(480)	Discounted cash flow	Lapse rate (2)		1.0% - 15.0%
						Mortality rate (3)		(7)
	GLB reserves embedded
		derivatives		(1,064)	Monte Carlo simulation	Long-term lapse rate (2)		0.5% - 13.0%
						Wait period (4)		0 - 25 years (or
								years until the
								eligible age)
						Percent of maximum
							withdrawal amount (5)	95.0% - 100.0%
						Non-performance risk ("NPR") (6)		0.05% - 0.35%
						Mortality rate (3)		(7)

XML

New Accounting Standards (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012 Accounting for costs associated with acquiring or renewing insurance contracts [Member]	Dec. 31, 2011 Accounting for costs associated with acquiring or renewing insurance contracts [Member]	Dec. 31, 2010 Accounting for costs associated with acquiring or renewing insurance contracts [Member]
Assets
Deferred acquisition cost				$ (1,415)	$ (1,516)
Liabilities
Other liabilities - deferred income taxes				(490)	(524)
Stockholders Equity
Retained earnings				(1,157)	(1,095)
Accumulated other comprehensive income (loss)				232	103
Total stockholders' equity				(925)	(992)
Total liabilities and stockholders' equity				(1,415)	(1,516)
Revenues	2,714	2,718
Realized gain (loss)			4
Benefits and Expenses
Underwriting , acquisition, insurance and other expenses			(43)
Income (loss) from continuing operations			(25)
Income (loss) from continuing operations before taxes			(39)
Federal income tax expense (benefit)			$ 14
Earnings (Loss) Per Common Share - Basic			$ (0.08)
Earnings (Loss) Per Common Share - Diluted			$ (0.08)

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Dispositions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Disposal
Gain (loss) on disposal, before federal income taxes	$ (1)	$ 0

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New Accounting Standards

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

New Accounting Standards

2.  New Accounting Standards

Adoption of New Accounting Standards

Comprehensive Income Topic

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”), with an objective of increasing the prominence of items reported in other comprehensive income (“OCI”); however, in December 2011, the FASB deferred a portion of the presentation requirements by issuing ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011- 12”). For a more detailed description of ASU 2011-05 and ASU 2011-12, see “Future Adoption of New Accounting Standards – Comprehensive Income Topic” in Note 2 of our 2011 Form 10-K. We adopted the provisions of ASU 2011-05 as of January 1, 2012, after considering the deferral in ASU 2011-12, and have included a single continuous statement of comprehensive income in Item 1 of this quarterly report on Form 10-Q for the quarterly period ended March 31, 2012.

Fair Value Measurements and Disclosures Topic

In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards” (“ASU 2011-04”), which was issued to create a consistent framework for the application of fair value measurement across jurisdictions. For a more detailed description of ASU 2011-04 see “Future Adoption of New Accounting Standards – Fair Value Measurements and Disclosures Topic” in Note 2 of our 2011 Form 10-K. We adopted the provisions of ASU 2011-04 effective January 1, 2012, and have included the additional disclosures required for fair value measurements in Note 12 for the quarterly period ended March 31, 2012.

Financial Services – Insurance Industry Topic

In October 2010, the FASB issued ASU No. 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts” (“ASU 2010-26”), which clarifies the types of costs incurred by an insurance entity that can be capitalized in the acquisition of insurance contracts. Only those costs incurred that result directly from and are essential to the successful acquisition of new or renewal insurance contracts may be capitalized as deferrable acquisition costs. The determination of deferability must be made on a contract-level basis.

Prior to the adoption of ASU 2010-26, we defined deferred acquisition costs (“DAC”) as commissions and other costs of acquiring UL insurance, VUL insurance, traditional life insurance, annuities and other investments contracts that vary with and are related primarily to new or renewal business, regardless of whether the acquisition efforts were successful or unsuccessful. Upon the adoption of ASU 2010-26, we revised our accounting policy to only defer acquisition costs directly related to successful contract acquisitions or renewals, and excluded from DAC those costs incurred for soliciting potential customers, market research, training, administration, management of distribution and underwriting functions, unsuccessful acquisition or renewal efforts and product development. In addition, indirect acquisition costs including administrative costs, rent, depreciation, occupancy costs, equipment costs and other general overhead are excluded from DAC. The costs that are considered non-deferrable acquisition costs under ASU 2010-26 are expensed in the period incurred.

We adopted the provisions of ASU 2010-26 as of January 1, 2012, and elected to retrospectively restate all prior periods. The following summarizes the prior period increases (decreases) (in millions) reflected in our Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity related to the adoption:

				As of December 31,
				2011		2010
Assets
Deferred acquisition costs				$	(1,415)	$	(1,516)
Liabilities and Stockholders' Equity
Other liabilities - deferred income taxes				$	(490)	$	(524)
Stockholders' equity:
	Retained earnings				(1,157)		(1,095)
	Accumulated other comprehensive income (loss)				232		103
		Total stockholders' equity			(925)		(992)
			Total liabilities and stockholders' equity	$	(1,415)	$	(1,516)

The following summarizes the prior period increases (decreases) to income from continuing operations and earnings (loss) per share (“EPS”) (in millions, except per share data) reflected in our Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2011, related to the adoption:

Revenues
Realized gain (loss)			$	4
Expenses
Underwriting, acquisition, insurance and other expenses				(43)
	Income (loss) from continuing operations before taxes			(39)
	Federal income tax expense (benefit)			14
		Income (loss) from continuing operations	$	(25)
Earnings (Loss) Per Common Share - Basic			$	(0.08)
Earnings (Loss) Per Common Share - Diluted			$	(0.08)

Intangibles – Goodwill and Other Topic

In September 2011, the FASB issued ASU No. 2011-08, “Testing Goodwill for Impairment” (“ASU 2011-08”), which provides an option to first assess qualitative factors to determine if it is necessary to complete the two-step goodwill impairment test. For a more detailed description of ASU 2011-08, see “Future Adoption of New Accounting Standards – Intangibles – Goodwill and Other Topic” in Note 2 of our 2011 Form 10-K. We adopted the provisions of ASU 2011-08 effective January 1, 2012. The adoption did not have a material effect on our consolidated financial condition and results of operations.

Transfers and Servicing Topic

In April 2011, the FASB issued ASU No. 2011-03, “Reconsideration of Effective Control for Repurchase Agreements” (“ASU 2011-03”), which revises the criteria for assessing effective control for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. For a more detailed description of ASU 2011-03, see “Future Adoption of New Accounting Standards – Transfers and Servicing Topic” in Note 2 of our 2011 Form 10-K. We adopted the provisions of ASU 2011-03 effective January 1, 2012. The adoption did not have a material effect on our consolidated financial condition and results of operations.

Future Adoption of New Accounting Standards

Balance Sheet Topic

In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”), to address certain comparability issues between financial statements prepared in accordance with GAAP and those prepared in accordance with International Financial Reporting Standards. For a more detailed description of ASU 2011-11, see “Future Adoption of New Accounting Standards – Balance Sheet Topic” in Note 2 of our 2011 Form 10-K. We will adopt the disclosure requirements in ASU 2011-11 beginning with our first quarter 2013 financial statements and are currently evaluating the appropriate location for these disclosures in the notes to our financial statements.

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Variable Interest Entities (Details) (USD $) In Millions, unless otherwise specified									3 Months Ended
	Mar. 31, 2012	Mar. 31, 2012 External Credit Rating AAA [Member]	Mar. 31, 2012 External Credit Rating AA [Member]	Mar. 31, 2012 External Credit Rating A [Member]	Mar. 31, 2012 External Credit Rating BBB [Member]	Mar. 31, 2012 External Credit Rating BB [Member]	Mar. 31, 2012 External Credit Rating B [Member]	Mar. 31, 2012 External Credit Rating CCC [Member]	Mar. 31, 2012 Credit Linked Note Structure December 2006 [Member]	Mar. 31, 2012 Credit Linked Note Structure April 2007 [Member]	Mar. 31, 2012 Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]	Mar. 31, 2011 Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]	Mar. 31, 2012 Credit default swaps [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]	Mar. 31, 2011 Credit default swaps [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]	Mar. 31, 2012 Contingent Forwards [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]	Mar. 31, 2011 Contingent Forwards [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]	Mar. 31, 2012 Federal Income Tax Liability [Member]	Dec. 31, 2011 Federal Income Tax Liability [Member]	Mar. 31, 2012 Assets	Dec. 31, 2011 Assets	Mar. 31, 2012 Assets Fixed maturity corporate asset-backed credit card loan securities [Member]	Dec. 31, 2011 Assets Fixed maturity corporate asset-backed credit card loan securities [Member]	Mar. 31, 2012 Assets U.S. government bonds [Member]	Dec. 31, 2011 Assets U.S. government bonds [Member]	Mar. 31, 2012 Assets Excess mortality swap [Member]	Dec. 31, 2011 Assets Excess mortality swap [Member]	Mar. 31, 2012 Liabilities	Dec. 31, 2011 Liabilities	Mar. 31, 2012 Liabilities Credit default swaps [Member]	Dec. 31, 2011 Liabilities Credit default swaps [Member]	Mar. 31, 2012 Liabilities Contingent Forwards [Member]	Dec. 31, 2011 Liabilities Contingent Forwards [Member]	Mar. 31, 2012 Liabilities Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]	Dec. 31, 2011 Liabilities Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member]
Consolidated Variable Interest Entity Asset and Liability information [Line Items]
Number of Instruments																			1	1					1	1	4	4	2	2	2	2	4	4
Notional Amounts																	$ 0	$ 0	$ 100	$ 100	$ 0	$ 0	$ 0	$ 0	$ 100	$ 100	$ 600	$ 600	$ 600	$ 600	$ 0	$ 0	$ 600	$ 600
Carrying Value																	(72)	(98)	702	700	596	592	106	108	0	0	149	193	224	295	(3)	(4)	221	291
Consolidated Variable Interest Entity Gains (Losses) [Line Items]
Gains (losses) for consolidated variable interest entities											69	6	71	8	(2)	(2)
Credit Linked Notes Structures Summary Information [Line Items]
Amount of Issuance									$ 400	$ 200
Date of Issuance									December 2006	April 2007
Original attachment point (subordination)									5.50%	2.05%
Current attachment point (subordination)									4.17%	1.48%
Maturity									12/20/2016	3/20/2017
Current rating of tranche									B+	Ba2
Current rating of underlying collateral pool, high end of range									Aa1	Aaa
Current rating of underlying collateral pool, low end of range									B3	Caa1
Number of defaults in underlying collateral pool									2	2
Number of entities									123	99
Number of countries									19	22
Credit Linked Notes By Industry And Ratings [Line Items]
Telecommunications	11.00%	0.00%	0.30%	5.10%	4.80%	0.30%	0.50%	0.00%
Financial intermediaries	10.50%	0.30%	2.80%	6.90%	0.50%	0.00%	0.00%	0.00%
Oil and gas	6.30%	0.00%	0.70%	1.00%	4.60%	0.00%	0.00%	0.00%
Utilities	4.60%	0.00%	0.00%	2.60%	2.00%	0.00%	0.00%	0.00%
Chemicals and plastics	3.80%	0.00%	0.00%	2.30%	1.20%	0.30%	0.00%	0.00%
Drugs	3.70%	0.30%	2.70%	0.70%	0.00%	0.00%	0.00%	0.00%
Retailers (except food and drug)	3.50%	0.00%	0.00%	2.10%	0.90%	0.50%	0.00%	0.00%
Industrial equipment	3.30%	0.00%	0.00%	3.00%	0.30%	0.00%	0.00%	0.00%
Sovereign	3.30%	0.00%	0.70%	1.60%	1.00%	0.00%	0.00%	0.00%
Food products	3.20%	0.00%	0.30%	1.80%	1.10%	0.00%	0.00%	0.00%
Conglomerates	3.10%	0.00%	2.60%	0.50%	0.00%	0.00%	0.00%	0.00%
Forest products	3.00%	0.00%	0.00%	0.00%	1.60%	1.40%	0.00%	0.00%
Other	40.70%	0.00%	2.50%	15.50%	17.80%	3.20%	1.40%	0.30%
Total by Industry	100.00%	0.60%	12.60%	43.10%	35.80%	5.70%	1.90%	0.30%

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Fair Value of Financial Instruments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Fixed maturity AFS securities:
Corporate bonds	$ 60,599		$ 59,261
U.S. Government bonds	486		494
Foreign government bonds	650		733
RMBS	7,572		8,039
CMBS	1,523		1,600
CDOs	102		102
State and municipal bonds	4,126		4,047
Hybrid and redeemable preferred securities	1,196		1,157
VIEs' fixed maturity AFS securities	702		700
Equity AFS securities	126		139
Trading securities	2,650		2,675
Derivative investments	2,244		3,151
Cash and invested cash	3,516		4,510
Separate account assets	91,088		83,477
Total assets	176,580		170,085
Future contract benefits:
Indexed annuity contracts embedded derivatives	(480)		(399)
GLB reserves embedded derivatives	(1,064)		(2,217)
Long-term debt - interest rate swap agreements	(1,088)		(1,688)
Reinsurance related embedded derivatives	(158)		(168)
Variable interest entities' liabilities - derivatives instruments	(221)		(291)
Other liabilities:
Deferred compensation plans embedded derivatives	(375)		(354)
Credit default swaps	(10)		(16)
Total liabilities	(3,396)		(5,133)
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	1,697	2,620
Items Included in Net Income	558	192
Gains (Losses) in OCI and other	(61)	21
Sales, Issuances, Maturities, Settlements, Calls, Net	362	(6)
Transfers In or Out of Level 3, Net	(160)	(86)
Ending Fair Value	2,396	2,741
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	431	258
Sales	(11)	(99)
Maturities	(49)	(59)
Settlements	(7)	(105)
Calls	(2)	(1)
Sales, Issuances, Maturities, Settlements, Calls, Net	362	(6)
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held	732	194
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In to Level 3	170	38
Transfers Out of Level 3	(330)	(124)
Transfers In or Out of Level 3, Net	(160)	(86)
Indexed Annuity Contracts [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Liabilities Fair Value Disclosure [Abstract]
Liabilities Fair Value Disclosure	(480)
Indexed Annuity Contracts [Member] | Maximum [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Liabilities Fair Value Disclosure [Abstract]
Lapse Rate	15.00%
Indexed Annuity Contracts [Member] | Minimum [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Liabilities Fair Value Disclosure [Abstract]
Lapse Rate	1.00%
Guaranteed Living Benefits Embedded Derivative Reserves [Member] | Monte Carlo Simulation Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Liabilities Fair Value Disclosure [Abstract]
Liabilities Fair Value Disclosure	(1,064)
Guaranteed Living Benefits Embedded Derivative Reserves [Member] | Maximum [Member] | Monte Carlo Simulation Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Liabilities Fair Value Disclosure [Abstract]
Lapse Rate	25.00%
Wait Period	25
Percent of maximum withdrawal amount	100.00%
NPR	0.40%
Guaranteed Living Benefits Embedded Derivative Reserves [Member] | Minimum [Member] | Monte Carlo Simulation Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Liabilities Fair Value Disclosure [Abstract]
Lapse Rate	0.00%
Wait Period	0
Percent of maximum withdrawal amount	95.00%
NPR	0.05%
Corporate bonds [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	1,119
Corporate bonds [Member] | Maximum [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets Fair Value Disclosure [Abstract]
Liquidity Duration Adjustment	9.00%
Corporate bonds [Member] | Minimum [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets Fair Value Disclosure [Abstract]
Liquidity Duration Adjustment	0.50%
Foreign government bonds [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	52
Foreign government bonds [Member] | Maximum [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets Fair Value Disclosure [Abstract]
Liquidity Duration Adjustment	6.00%
Foreign government bonds [Member] | Minimum [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets Fair Value Disclosure [Abstract]
Liquidity Duration Adjustment	2.50%
Equity securities [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets Fair Value Disclosure [Abstract]
Assets Fair Value Disclosure	12
Equity securities [Member] | Maximum [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets Fair Value Disclosure [Abstract]
Liquidity Duration Adjustment	4.50%
Equity securities [Member] | Minimum [Member] | Discounted Cash Flow Valuation Technique [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets Fair Value Disclosure [Abstract]
Liquidity Duration Adjustment	4.00%
Corporate bonds [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	1,888	1,816
Items Included in Net Income	(14)	(1)
Gains (Losses) in OCI and other	0	10
Sales, Issuances, Maturities, Settlements, Calls, Net	174	54
Transfers In or Out of Level 3, Net	(116)	(73)
Ending Fair Value	1,932	1,806
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	231	101
Sales	(26)	(8)
Maturities	0	(1)
Settlements	(29)	(37)
Calls	(2)	(1)
Sales, Issuances, Maturities, Settlements, Calls, Net	174	54
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In to Level 3	150	32
Transfers Out of Level 3	(266)	(105)
Transfers In or Out of Level 3, Net	(116)	(73)
U.S. government bonds [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	1	2
Items Included in Net Income	0	0
Gains (Losses) in OCI and other	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	0	0
Transfers In or Out of Level 3, Net	0	0
Ending Fair Value	1	2
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Sales, Issuances, Maturities, Settlements, Calls, Net	0	0
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In or Out of Level 3, Net	0	0
Foreign government bonds [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	97	113
Items Included in Net Income	0	0
Gains (Losses) in OCI and other	2	7
Sales, Issuances, Maturities, Settlements, Calls, Net	0	(3)
Transfers In or Out of Level 3, Net	0	(17)
Ending Fair Value	99	100
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances		0
Sales		(3)
Maturities		0
Settlements		0
Calls		0
Sales, Issuances, Maturities, Settlements, Calls, Net	0	(3)
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In to Level 3	0	0
Transfers Out of Level 3	0	(17)
Transfers In or Out of Level 3, Net	0	(17)
RMBS [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	158	119
Items Included in Net Income	(3)	(2)
Gains (Losses) in OCI and other	3	2
Sales, Issuances, Maturities, Settlements, Calls, Net	(5)	(4)
Transfers In or Out of Level 3, Net	(55)	0
Ending Fair Value	98	115
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	0	0
Sales	0	0
Maturities	0	0
Settlements	(5)	(4)
Calls	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	(5)	(4)
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In to Level 3	0	0
Transfers Out of Level 3	(55)	0
Transfers In or Out of Level 3, Net	(55)	0
CMBS [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	34	109
Items Included in Net Income	(3)	(23)
Gains (Losses) in OCI and other	8	30
Sales, Issuances, Maturities, Settlements, Calls, Net	(7)	(52)
Transfers In or Out of Level 3, Net	0	0
Ending Fair Value	32	64
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	0	1
Sales	0	(44)
Maturities	0	0
Settlements	(7)	(9)
Calls	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	(7)	(52)
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In or Out of Level 3, Net	0	0
CDOs [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	102	172
Items Included in Net Income	0	14
Gains (Losses) in OCI and other	4	(12)
Sales, Issuances, Maturities, Settlements, Calls, Net	(4)	(38)
Transfers In or Out of Level 3, Net	0	0
Ending Fair Value	102	136
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	0	0
Sales	0	(33)
Maturities	0	0
Settlements	(4)	(5)
Calls	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	(4)	(38)
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In or Out of Level 3, Net	0	0
Hybrid and redeemable preferred securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	100	119
Items Included in Net Income	0	0
Gains (Losses) in OCI and other	5	1
Sales, Issuances, Maturities, Settlements, Calls, Net	0	0
Transfers In or Out of Level 3, Net	11	4
Ending Fair Value	116	124
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Sales, Issuances, Maturities, Settlements, Calls, Net	0	0
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In to Level 3	20	4
Transfers Out of Level 3	(9)	0
Transfers In or Out of Level 3, Net	11	4
Variable Interest Entities Fixed Maturity Securities [Member]
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held	70	2
Trading securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	68	76
Items Included in Net Income	1	1
Gains (Losses) in OCI and other	0	(2)
Sales, Issuances, Maturities, Settlements, Calls, Net	(1)	(2)
Transfers In or Out of Level 3, Net	0	(2)
Ending Fair Value	68	71
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	0	0
Sales	0	0
Maturities	0	0
Settlements	(1)	(2)
Calls	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	(1)	(2)
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In to Level 3	0	0
Transfers Out of Level 3	0	(2)
Transfers In or Out of Level 3, Net	0	(2)
Derivative Financial Instruments, Assets [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	2,470	1,495
Items Included in Net Income	(520)	(145)
Gains (Losses) in OCI and other	(88)	(18)
Sales, Issuances, Maturities, Settlements, Calls, Net	175	107
Transfers In or Out of Level 3, Net	0	0
Ending Fair Value	2,037	1,439
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	209	167
Sales	15	(2)
Maturities	(49)	(58)
Settlements	0	0
Calls	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	175	107
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held	(520)	(140)
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In or Out of Level 3, Net	0	0
Indexed Annuity Contracts Embedded Derivatives [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	(399)	(497)
Items Included in Net Income	(104)	48
Gains (Losses) in OCI and other	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	23	(79)
Transfers In or Out of Level 3, Net	0	0
Ending Fair Value	(480)	(528)
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	(9)	(17)
Sales	0	0
Maturities	0	0
Settlements	32	(62)
Calls	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	23	(79)
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held	21	(4)
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In or Out of Level 3, Net	0	0
Guaranteed Living Benefits Embedded Derivative Reserves [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	(2,217)	(408)
Items Included in Net Income	1,153	290
Gains (Losses) in OCI and other	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	0	0
Transfers In or Out of Level 3, Net	0	0
Ending Fair Value	(1,064)	(118)
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Sales, Issuances, Maturities, Settlements, Calls, Net	0	0
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held	1,183	338
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In or Out of Level 3, Net	0	0
Variable Interest Entities Liabilities - Derivative Instruments [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	(291)	(209)
Items Included in Net Income	70	6
Gains (Losses) in OCI and other	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	0	0
Transfers In or Out of Level 3, Net	0	0
Ending Fair Value	(221)	(203)
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Sales, Issuances, Maturities, Settlements, Calls, Net	0	0
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In or Out of Level 3, Net	0	0
Deferred Compensation Plans Embedded Derivatives [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	(354)	(363)
Items Included in Net Income	(28)	(8)
Gains (Losses) in OCI and other	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	7	14
Transfers In or Out of Level 3, Net	0	0
Ending Fair Value	(375)	(357)
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances	0	0
Sales	0	0
Maturities	0	0
Settlements	7	14
Calls	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	7	14
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held	(28)	(8)
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In or Out of Level 3, Net	0	0
Credit default swaps [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	(16)	(16)
Items Included in Net Income	6	4
Gains (Losses) in OCI and other	0	0
Sales, Issuances, Maturities, Settlements, Calls, Net	0	6
Transfers In or Out of Level 3, Net	0	0
Ending Fair Value	(10)	(6)
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances		0
Sales		6
Maturities		0
Settlements		0
Calls		0
Sales, Issuances, Maturities, Settlements, Calls, Net	0	6
Changes in unrealized gains (losses) within Level 3 financial instruments carried at fair value and still held
Changes In Unrealized Gains (Losses) Within Level 3 Financial Instruments Carried At Fair Value And Still Held	6	6
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In or Out of Level 3, Net	0	0
Equity AFS securities [Member]
Level 3 Unobservable Input Reconciliation
Beginning Fair Value	56	92
Items Included in Net Income	0	8
Gains (Losses) in OCI and other	5	3
Sales, Issuances, Maturities, Settlements, Calls, Net	0	(9)
Transfers In or Out of Level 3, Net	0	2
Ending Fair Value	61	96
Fair Value Investments Entities That Calculate Net Asset Value Per Share Unobservable Input Investment Holdings Movements [Abstract]
Issuances		6
Sales		(15)
Maturities		0
Settlements		0
Calls		0
Sales, Issuances, Maturities, Settlements, Calls, Net	0	(9)
Fair Value Assets And Liabilities Measured On Recurring Basis Transfers Into And Out Of Level 3 [Abstract]
Transfers In to Level 3	0	2
Transfers Out of Level 3	0	0
Transfers In or Out of Level 3, Net	0	2
Quoted Price in Active Markets for Identical Assets (Level 1) [Member]
Fixed maturity AFS securities:
Corporate bonds	64		63
U.S. Government bonds	452		475
Foreign government bonds	0		0
RMBS	0		0
CMBS	0		0
CDOs	0		0
State and municipal bonds	0		0
Hybrid and redeemable preferred securities	20		15
VIEs' fixed maturity AFS securities	106		108
Equity AFS securities	36		37
Trading securities	2		2
Derivative investments	0		0
Cash and invested cash	0		0
Separate account assets	0		0
Total assets	680		700
Future contract benefits:
Indexed annuity contracts embedded derivatives	0		0
GLB reserves embedded derivatives	0		0
Long-term debt - interest rate swap agreements	0		0
Reinsurance related embedded derivatives	0		0
Variable interest entities' liabilities - derivatives instruments	0		0
Other liabilities:
Deferred compensation plans embedded derivatives	0		0
Credit default swaps	0		0
Total liabilities	0		0
Significant Observable Inputs (Level 2) [Member]
Fixed maturity AFS securities:
Corporate bonds	58,603		57,310
U.S. Government bonds	33		18
Foreign government bonds	551		636
RMBS	7,474		7,881
CMBS	1,491		1,566
CDOs	0		0
State and municipal bonds	4,126		4,047
Hybrid and redeemable preferred securities	1,060		1,042
VIEs' fixed maturity AFS securities	596		592
Equity AFS securities	29		46
Trading securities	2,580		2,605
Derivative investments	207		681
Cash and invested cash	3,516		4,510
Separate account assets	91,088		83,477
Total assets	171,354		164,411
Future contract benefits:
Indexed annuity contracts embedded derivatives	0		0
GLB reserves embedded derivatives	0		0
Long-term debt - interest rate swap agreements	(1,088)		(1,688)
Reinsurance related embedded derivatives	(158)		(168)
Variable interest entities' liabilities - derivatives instruments	0		0
Other liabilities:
Deferred compensation plans embedded derivatives	0		0
Credit default swaps	0		0
Total liabilities	(1,246)		(1,856)
Significant Unobservable Inputs (Level 3) [Member]
Fixed maturity AFS securities:
Corporate bonds	1,932		1,888
U.S. Government bonds	1		1
Foreign government bonds	99		97
RMBS	98		158
CMBS	32		34
CDOs	102		102
State and municipal bonds	0		0
Hybrid and redeemable preferred securities	116		100
VIEs' fixed maturity AFS securities	0		0
Equity AFS securities	61		56
Trading securities	68		68
Derivative investments	2,037		2,470
Cash and invested cash	0		0
Separate account assets	0		0
Total assets	4,546		4,974
Future contract benefits:
Indexed annuity contracts embedded derivatives	(480)		(399)
GLB reserves embedded derivatives	(1,064)		(2,217)
Long-term debt - interest rate swap agreements	0		0
Reinsurance related embedded derivatives	0		0
Variable interest entities' liabilities - derivatives instruments	(221)		(291)
Other liabilities:
Deferred compensation plans embedded derivatives	(375)		(354)
Credit default swaps	(10)		(16)
Total liabilities	(2,150)		(3,277)
Carrying Value [Member]
AFS securities:
Fixed maturity securities	76,254		75,433
VIEs' fixed maturity securities	702		700
Equity securities	126		139
Trading Securities, Fair Value Disclosure	2,650		2,675
Mortgage loans on real estate	6,938		6,942
Derivative investments	2,244		3,151
Other investments	1,043		1,069
Cash and invested cash	3,516		4,510
Separate account assets	91,088		83,477
Future contract benefits:
Indexed annuity contracts embedded derivatives	(480)		(399)
GLB reserves embedded derivatives	(1,064)		(2,217)
Other contract holder funds:
Remaining guaranteed interest and similar contracts	(1,100)		(1,114)
Account value of certain investment contracts	(27,707)		(27,468)
Short-term debt	(300)		(300)
Long-term debt	(5,606)		(5,391)
Reinsurance related embedded derivatives	(158)		(168)
Variable interest entities' liabilities - derivative instruments	(221)		(291)
Other liabilities:
Deferred compensation plans embedded derivatives	(375)		(354)
Credit default swaps	(10)		(16)
Fair Value [Member]
AFS securities:
Fixed maturity securities	76,254		75,433
VIEs' fixed maturity securities	702		700
Equity securities	126		139
Trading Securities, Fair Value Disclosure	2,650		2,675
Mortgage loans on real estate	7,542		7,608
Derivative investments	2,244		3,151
Other investments	1,043		1,069
Cash and invested cash	3,516		4,510
Separate account assets	91,088		83,477
Future contract benefits:
Indexed annuity contracts embedded derivatives	(480)		(399)
GLB reserves embedded derivatives	(1,064)		(2,217)
Other contract holder funds:
Remaining guaranteed interest and similar contracts	(1,100)		(1,114)
Account value of certain investment contracts	(30,526)		(30,812)
Short-term debt	(306)		(309)
Long-term debt	(5,543)		(5,345)
Reinsurance related embedded derivatives	(158)		(168)
Variable interest entities' liabilities - derivative instruments	(221)		(291)
Other liabilities:
Deferred compensation plans embedded derivatives	(375)		(354)
Credit default swaps	$ (10)		$ (16)

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Available-for-sale securities, at fair value:
Fixed maturity securities (amortized cost)	$ 69,889	$ 68,988
Variable interest entities' fixed maturity securities (amortized cost)	674	673
Equity securities (cost)	$ 114	$ 135
Stockholders Equity
Preferred stock - shares authorized (in shares)	10,000,000	10,000,000
Series A preferred stock - shares issued (in shares)	9,632	10,072
Series A preferred stock - shares outstanding (in shares)	9,632	10,072
Common stock - shares authorized (in shares)	800,000,000	800,000,000
Common stock - shares issued (in shares)	285,412,303	291,319,222
Common stock - shares outstanding (in shares)	285,412,303	291,319,222

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash Flows from Operating Activities
Net income (loss)	$ 245	$ 314
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Deferred acquisition costs, value of business acquired, deferred sales inducements and deferred front-end loads deferrals and interest, net of amortization	(44)	(31)
Trading securities purchases, sales and maturities, net	15	5
Change in premiums and fees receivable	(29)	(66)
Change in accrued investment income	(45)	(56)
Change in future contract benefits and other contract holder funds	(144)	124
Change in reinsurance related assets and liabilities	(2)	(67)
Change in federal income tax accruals	185	131
Realized gain (loss)	85	(2)
Amortization of deferred gain on business sold through reinsurance	(19)	(19)
(Gain) loss on disposal of discontinued operations	1	0
Other	34	7
Net cash provided by (used in) operating activities	282	340
Cash Flows from Investing Activities
Purchases of available-for-sale securities	(2,497)	(3,111)
Sales of available-for-sale securities	185	556
Maturities of available-for-sale securities	1,341	1,431
Purchases of other investments	(830)	(855)
Sales or maturities of other investments	780	740
Increase (decrease) in payables for collateral on investments	(858)	(105)
Other	(34)	(23)
Net cash provided by (used in) investing activities	(1,913)	(1,367)
Cash Flows from Financing Activities
Issuance of long-term debt, net of issuance costs	298	0
Deposits of fixed account values, including the fixed portion of variable	2,391	2,570
Withdrawals of fixed account values, including the fixed portion of variable	(1,320)	(1,200)
Transfers to and from separate accounts, net	(556)	(772)
Common stock issued for benefit plans and excess tax benefits	(3)	(5)
Repurchase of common stock	(150)	(75)
Dividends paid to common and preferred stockholders	(23)	(16)
Net cash provided by (used in) financing activities	637	502
Net increase (decrease) in cash and invested cash, including discontinued operations	(994)	(525)
Cash and invested cash, including discontinued operations, as of beginning-of-year	4,510	2,741
Cash and invested cash, including discontinued operations, as of end-of-period	$ 3,516	$ 2,216

XML

Federal Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Reconciliation of effective tax rate differences [Abstract]
Effective tax rate	20.00%	27.00%
U.S. Statutory rate	35.00%	35.00%
Federal income tax expense (benefit)	$ 61	$ 115
Pre-tax income (loss)	$ 307	$ 429

XML

Investments (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Available for Sale Securities

				As of March 31, 2012
				Amortized		Gross Unrealized						Fair
				Cost		Gains		Losses		OTTI		Value
Fixed maturity securities:
	Corporate bonds			$	55,255	$	5,854	$	407	$	103	$	60,599
	U.S. Government bonds				450		41		5		-		486
	Foreign government bonds				585		65		-		-		650
	Residential mortgage-backed securities ("RMBS")				7,196		524		48		100		7,572
	Commercial mortgage-backed securities ("CMBS")				1,533		76		67		19		1,523
	Collateralized debt obligations ("CDOs")				117		-		15		-		102
	State and municipal bonds				3,497		637		8		-		4,126
	Hybrid and redeemable preferred securities				1,256		62		122		-		1,196
	VIEs' fixed maturity securities				674		28		-		-		702
		Total fixed maturity securities			70,563		7,287		672		222		76,956
Equity securities					114		19		7		-		126
			Total AFS securities	$	70,677	$	7,306	$	679	$	222	$	77,082

				As of December 31, 2011
				Amortized		Gross Unrealized						Fair
				Cost		Gains		Losses		OTTI		Value
Fixed maturity securities:
	Corporate bonds			$	53,661	$	6,185	$	517	$	68	$	59,261
	U.S. Government bonds				439		55		-		-		494
	Foreign government bonds				668		65		-		-		733
	RMBS				7,690		548		73		126		8,039
	CMBS				1,642		73		106		9		1,600
	CDOs				121		-		19		-		102
	State and municipal bonds				3,490		566		9		-		4,047
	Hybrid and redeemable preferred securities				1,277		50		170		-		1,157
	VIEs' fixed maturity securities				673		27		-		-		700
		Total fixed maturity securities			69,661		7,569		894		203		76,133
Equity securities					135		16		12		-		139
			Total AFS securities	$	69,796	$	7,585	$	906	$	203	$	76,272

			As of March 31, 2012
			Amortized		Fair
			Cost		Value
Due in one year or less			$	2,854	$	2,914
Due after one year through five years				12,020		12,955
Due after five years through ten years				22,816		25,040
Due after ten years				24,027		26,850
	Subtotal			61,717		67,759
Mortgage-backed securities ("MBS")				8,729		9,095
CDOs				117		102
		Total fixed maturity AFS securities	$	70,563	$	76,956

					As of March 31, 2012
					Less Than or Equal				Greater Than
					to Twelve Months				Twelve Months				Total
							Gross				Gross				Gross
							Unrealized				Unrealized				Unrealized
					Fair		Losses and		Fair		Losses and		Fair		Losses and
					Value		OTTI		Value		OTTI		Value		OTTI
Fixed maturity securities:
	Corporate bonds				$	3,186	$	194	$	1,335	$	316	$	4,521	$	510
	U.S. Government bonds					213		5		1		-		214		5
	RMBS					572		99		351		49		923		148
	CMBS					119		22		130		64		249		86
	CDOs					3		1		75		14		78		15
	State and municipal bonds					2		-		26		8		28		8
	Hybrid and redeemable
		preferred securities				159		6		370		116		529		122
			Total fixed maturity securities			4,254		327		2,288		567		6,542		894
Equity securities						12		7		-		-		12		7
				Total AFS securities	$	4,266	$	334	$	2,288	$	567	$	6,554	$	901
Total number of AFS securities in an unrealized loss position																828

					As of December 31, 2011
					Less Than or Equal				Greater Than
					to Twelve Months				Twelve Months				Total
							Gross				Gross				Gross
							Unrealized				Unrealized				Unrealized
					Fair		Losses and		Fair		Losses and		Fair		Losses and
					Value		OTTI		Value		OTTI		Value		OTTI
Fixed maturity securities:
	Corporate bonds				$	2,848	$	162	$	1,452	$	423	$	4,300	$	585
	RMBS					565		125		429		74		994		199
	CMBS					178		15		146		100		324		115
	CDOs					9		1		80		18		89		19
	State and municipal bonds					31		-		30		9		61		9
	Hybrid and redeemable
		preferred securities				324		23		353		147		677		170
			Total fixed maturity securities			3,955		326		2,490		771		6,445		1,097
Equity securities						38		12		-		-		38		12
				Total AFS securities	$	3,993	$	338	$	2,490	$	771	$	6,483	$	1,109
Total number of AFS securities in an unrealized loss position																897

		As of March 31, 2012
		Amortized		Fair		Unrealized
		Cost		Value		Loss
Total
AFS securities backed by pools of residential mortgages		$	1,875	$	1,480	$	395
AFS securities backed by pools of commercial mortgages			367		270		97
	Total	$	2,242	$	1,750	$	492
Subject to Detailed Analysis
AFS securities backed by pools of residential mortgages		$	1,862	$	1,467	$	395
AFS securities backed by pools of commercial mortgages			109		59		50
	Total	$	1,971	$	1,526	$	445

		As of December 31, 2011
		Amortized		Fair		Unrealized
		Cost		Value		Loss
Total
AFS securities backed by pools of residential mortgages		$	2,023	$	1,553	$	470
AFS securities backed by pools of commercial mortgages			472		344		128
	Total	$	2,495	$	1,897	$	598
Subject to Detailed Analysis
AFS securities backed by pools of residential mortgages		$	2,015	$	1,545	$	470
AFS securities backed by pools of commercial mortgages			126		61		65
	Total	$	2,141	$	1,606	$	535

		As of March 31, 2012
								Number
		Fair		Gross Unrealized				of
		Value		Losses		OTTI		Securities (1)
Less than six months		$	81	$	32	$	3		23
Six months or greater, but less than nine months			111		42		14		19
Nine months or greater, but less than twelve months			50		17		14		16
Twelve months or greater			579		343		151		166
	Total	$	821	$	434	$	182		224

		As of December 31, 2011
								Number
		Fair		Gross Unrealized				of
		Value		Losses		OTTI		Securities (1)
Less than six months		$	385	$	125	$	31		56
Six months or greater, but less than nine months			53		30		12		18
Nine months or greater, but less than twelve months			2		-		1		7
Twelve months or greater			615		470		111		175
	Total	$	1,055	$	625	$	155		256

				For the Three
				Months Ended
				March 31,
				2012		2011
Balance as of beginning-of-period				$	390	$	319
	Increases attributable to:
		Credit losses on securities for which an OTTI was not previously recognized			34		25
		Credit losses on securities for which an OTTI was previously recognized			23		22
	Decreases attributable to:
		Securities sold			(37)		(14)
			Balance as of end-of-period	$	410	$	352

		As of March 31, 2012
				Gross Unrealized						OTTI in
		Amortized				Losses and		Fair		Credit
		Cost		Gains		OTTI		Value		Losses
Corporate bonds		$	242	$	1	$	100	$	143	$	63
RMBS			688		4		100		592		290
CMBS			39		-		19		20		57
	Total	$	969	$	5	$	219	$	755	$	410

		As of December 31, 2011
				Gross Unrealized						OTTI in
		Amortized				Losses and		Fair		Credit
		Cost		Gains		OTTI		Value		Losses
Corporate bonds		$	169	$	1	$	67	$	103	$	51
RMBS			690		1		128		563		301
CMBS			17		-		10		7		38
	Total	$	876	$	2	$	205	$	673	$	390

Schedule of impaired mortgage loans

			As of			As of
		March 31,			December 31,
			2012			2011
Current			$	6,853		$	6,858
60 to 90 days past due				-			26
Greater than 90 days past due				99			76
Valuation allowance associated with impaired mortgage loans on real estate				(27)			(31)
Unamortized premium (discount)				13			13
	Total carrying value		$	6,938		$	6,942

			As of			As of
		March 31,			December 31,
			2012			2011
Number of impaired mortgage loans on real estate			10			12
Principal balance of impaired mortgage loans on real estate			$	85		$	100
Valuation allowance associated with impaired mortgage loans on real estate				(27)			(31)
	Carrying value of impaired mortgage loans on real estate		$	58		$	69

	For the Three
	Months Ended
	March 31,
	2012		2011
Average carrying value for impaired mortgage loans on real estate	$	64	$	55
Interest income recognized on impaired mortgage loans on real estate		-		1
Interest income collected on impaired mortgage loans on real estate		-		1

Credit quality indicators for mortgage loans

		As of March 31, 2012					As of December 31, 2011
						Debt-					Debt-
						Service					Service
		Principal		% of		Coverage	Principal		% of		Coverage
Loan-to-Value		Amount		Total		Ratio	Amount		Total		Ratio
Less than 65%		$	5,419	77.9	%	1.62	$	5,338	76.7	%	1.61
65% to 74%			1,121	16.1	%	1.39		1,198	17.2	%	1.37
75% to 100%			311	4.5	%	0.90		308	4.4	%	0.92
Greater than 100%			101	1.5	%	0.37		116	1.7	%	0.36
	Total mortgage loans on real estate	$	6,952	100.0	%		$	6,960	100.0	%

Realized gain (loss) related to certain investments

			For the Three
			Months Ended
			March 31,
			2012		2011
Fixed maturity AFS securities:
	Gross gains		$	5	$	36
	Gross losses			(63)		(63)
Equity AFS securities:
	Gross gains			1		8
Gain (loss) on other investments				7		13
Associated amortization of DAC, VOBA, DSI and DFEL
	and changes in other contract holder funds			2		(9)
		Total realized gain (loss) related to certain investments	$	(48)	$	(15)

OTTI Recognized in Net Income (Loss) and OCI

			For the Three
			Months Ended
			March 31,
			2012		2011
OTTI Recognized in Net Income (Loss)
Corporate bonds			$	(19)	$	(3)
RMBS				(18)		(20)
CMBS				(20)		(24)
CDOs				-		(1)
Hybrid and redeemable preferred securities				-		(2)
	Gross OTTI recognized in net income (loss)			(57)		(50)
	Associated amortization of DAC, VOBA, DSI and DFEL			10		9
		Net OTTI recognized in net income (loss), pre-tax	$	(47)	$	(41)
Portion of OTTI Recognized in OCI
Gross OTTI recognized in OCI			$	58	$	8
Change in DAC, VOBA, DSI and DFEL				(8)		(5)
	Net portion of OTTI recognized in OCI, pre-tax		$	50	$	3

Payables for collateral on investments

			As of March 31, 2012				As of December 31, 2011
			Carrying		Fair		Carrying		Fair
			Value		Value		Value		Value
Collateral payable held for derivative investments (1)			$	2,132	$	2,132	$	2,980	$	2,980
Securities pledged under securities lending agreements (2)				200		192		200		193
Securities pledged under reverse repurchase agreements (3)				280		292		280		294
Securities pledged for Term Asset-Backed Securities
	Loan Facility ("TALF") (4)			163		188		173		199
Securities pledged for Federal Home Loan Bank of
	Indianapolis Securities ("FHLBI") (5)			100		153		100		142
		Total payables for collateral on investments	$	2,875	$	2,957	$	3,733	$	3,808

		For the Three
		Months Ended
		March 31,
		2012		2011
Collateral payable held for derivative investments		$	(848)	$	(70)
Securities pledged under securities lending agreements			-		1
Securities pledged for TALF			(10)		(36)
	Total increase (decrease) in payables for collateral on investments	$	(858)	$	(105)

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Guaranteed Benefit Features (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011
Net Amount at Risk by Product and Guarantee [Line Items]
Average attained age of contract holders	72		72
Summary of guaranteed death benefit liabilities
Balance as of beginning-of-year	$ 84	$ 44	$ 44
Changes in reserves	(17)	4
Benefits paid	(12)	(10)
Balance as of end-of-period	55	38	84
Asset type
Total	74,666		71,008
Percent of total variable annuity separate account values	94.00%		98.00%
Percent of permanent life insurance in force	38.00%
Percent of permanent life insurance sales	33.00%
Domestic Equity [Member]
Asset type
Total	36,577		34,286
International Equity [Member]
Asset type
Total	14,045		13,095
Bonds [Member]
Asset type
Total	18,000		17,735
Money Market [Member]
Asset type
Total	6,044		5,892
Return of Net Deposits [Member]
Net Amount at Risk by Product and Guarantee [Line Items]
Total Account Value	58,847		54,004
Net amount at risk	528		1,379
Average attained age of contract holders	59		59
Minimum Return [Member]
Net Amount at Risk by Product and Guarantee [Line Items]
Total Account Value	159		155
Net amount at risk	41		48
Guaranteed minimum return	5.00%		5.00%
Anniversary Contract Value [Member]
Net Amount at Risk by Product and Guarantee [Line Items]
Total Account Value	23,223		21,648
Net amount at risk	$ 1,471		$ 2,939
Average attained age of contract holders	67		67

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Guaranteed Benefit Features (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Information on guaranteed death benefit features

	As of				As of
	March 31,			December 31,
	2012				2011
Return of Net Deposits
Total account value	$	58,847			$	54,004
Net amount at risk (1)		528				1,379
Average attained age of contract holders		59 years				59 years
Minimum Return
Total account value	$	159			$	155
Net amount at risk (1)		41				48
Average attained age of contract holders		72 years				72 years
Guaranteed minimum return		5	%			5	%
Anniversary Contract Value
Total account value	$	23,223			$	21,648
Net amount at risk (1)		1,471				2,939
Average attained age of contract holders		67 years				67 years

Summary of guaranteed death benefit liabilities

			For the Three
			Months Ended
			March 31,
			2012		2011
Balance as of beginning-of-year			$	84	$	44
	Changes in reserves			(17)		4
	Benefits paid			(12)		(10)
		Balance as of end-of-period	$	55	$	38

Account balances of variable annuity contracts with guarantees invested in separate accounts

			As of				As of
		March 31,				December 31,
			2012				2011
Asset Type
Domestic equity			$	36,577			$	34,286
International equity				14,045				13,095
Bonds				18,000				17,735
Money market				6,044				5,892
	Total		$	74,666			$	71,008
Percent of total variable annuity separate account values				94	%			98	%

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Nature of Operations and Basis of Presentation

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

1. Nature of Operations and Basis of Presentation

Nature of Operations

Lincoln National Corporation and its majority-owned subsidiaries (“LNC” or the “Company,” which also may be referred to as “we,” “our” or “us”) operate multiple insurance businesses through four business segments. See Note 13 for additional details. The collective group of businesses uses “Lincoln Financial Group” as its marketing identity. Through our business segments, we sell a wide range of wealth protection, accumulation and retirement income products. These products include institutional and/or retail fixed and indexed annuities, variable annuities, universal life insurance (“UL”), variable universal life insurance (“VUL”), linked-benefit UL, term life insurance, mutual funds and group life, disability and dental.

Basis of Presentation

The accompanying unaudited consolidated financial statements are prepared in accordance with United States of America generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for the Securities and Exchange Commission (“SEC”) Quarterly Report on Form 10-Q, including Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Therefore, the information contained in the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”), should be read in connection with the reading of these interim unaudited consolidated financial statements.

Certain GAAP policies, which significantly affect the determination of financial position, results of operations and cash flows, are summarized in our2011 Form 10-K.

In the opinion of management, these statements include all normal recurring adjustments necessary for a fair presentation of the Company's results. Operating results for the three month period ended March 31, 2012, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012. All material intercompany accounts and transactions have been eliminated in consolidation.

See Note 2 “Financial Services – Insurance Industry Topic” below for information aboutthe retrospective restatement of amounts due to the adoption of new accounting guidance. In addition, certain amounts reported in prior years' consolidated financial statements have been reclassified to conform to the presentation adopted in the current year. These reclassifications had no effect on net income or stockholders' equity of the prior years.

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CONSOLIDATED STATEMENTS OF INCOME (LOSS) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenues:
Insurance premiums	$ 589	$ 568
Insurance fees	907	818
Net investment income	1,166	1,191
Realized gain (loss):
Total other-than-temporary impairment losses on securities	(97)	(44)
Portion of loss recognized in other comprehensive income	50	3
Net other-than-temporary impairment losses on securities recognized in earnings	(47)	(41)
Realized gain (loss), excluding other-than-temporary impairment losses on securities	(38)	43
Total realized gain (loss)	(85)	2
Amortization of deferred gain on business sold through reinsurance	19	19
Other revenues and fees	118	120
Total revenues	2,714	2,718
Benefits and Expenses
Interest credited	625	614
Benefits	858	835
Underwriting, acquisition, insurance and other expenses	856	768
Interest and debt expense	68	72
Total benefits and expenses	2,407	2,289
Income (loss) from continuing operations before taxes	307	429
Federal income tax expense (benefit)	61	115
Income (loss) from continuing operations	246	314
Income (loss) from discontinued operations, net of federal income taxes	(1)	0
Net income (loss)	245	314
Other comprehensive income, net of tax	(57)	22
Comprehensive income	$ 188	$ 336
Earnings (Loss) Per Common Share - Basic
Income (loss) from continuing operations (in dollars per share)	$ 0.85	$ 1.00
Income (loss) from discontinued operations (in dollars per share)	$ 0	$ 0
Net income (loss) (in dollars per share)	$ 0.85	$ 1.00
Earnings (Loss) Per Common Share - Diluted
Income (loss) from continuing operations (in dollars per share)	$ 0.83	$ 0.97
Income (loss) from discontinued operations (in dollars per share)	$ 0	$ 0
Net income (loss) (in dollars per share)	$ 0.83	$ 0.97

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Stock-Based Incentive Compensation Plans

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Stock based incentive compensation plans

11. Stock-Based Incentive Compensation Plans

We sponsor various incentive plans for our employees and directors, and for the employees and agents of our subsidiaries that provide for the issuance of stock options, performance shares (performance-vested shares as opposed to time-vested shares), stock appreciation rights (“SARs”) and restricted stock units. We have a policy of issuing new shares to satisfy option exercises.

LNC stock-based awards granted during the first quarter of 2012 were as follows:

Awards
10-year LNC stock options		828,674
Performance shares		278,943
SARs		80,225
Restricted stock units		604,226
Non-employee:
	Agent stock options	99,268
	Director stock options	51,140
	Director restricted stock units	10,128

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CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2012	Dec. 31, 2011
Available-for-sale securities, at fair value:
Fixed maturity securities (amortized cost: 2012 - $69,889; 2011 - $68,988)	$ 76,254	$ 75,433
Variable interest entities' fixed maturity securities (amortized cost: 2012 - $674; 2011 - $673)	702	700
Equity securities (cost: 2012 - $114; 2011 - $135)	126	139
Trading securities	2,650	2,675
Mortgage loans on real estate	6,938	6,942
Real estate	113	137
Policy loans	2,842	2,884
Derivative investments	2,244	3,151
Other investments	1,043	1,069
Total investments	92,912	93,130
Cash and invested cash	3,516	4,510
Deferred acquisition costs and value of business acquired	6,880	6,776
Premiums and fees receivable	437	408
Accrued investment income	1,026	981
Reinsurance recoverables	6,534	6,526
Funds withheld reinsurance assets	866	874
Goodwill	2,273	2,273
Other assets	2,486	2,536
Separate account assets	91,088	83,477
Total assets	208,018	201,491
Liabilities
Future contract benefits	18,784	19,813
Other contract holder funds	70,027	69,466
Short-term debt	300	300
Long-term debt	5,606	5,391
Reinsurance related embedded derivatives	158	168
Funds withheld reinsurance liabilities	1,043	1,045
Deferred gain on business sold through reinsurance	375	394
Payables for collateral on investments	2,875	3,733
Variable interest entities' liabilities	149	193
Other liabilities	4,352	4,273
Separate account liabilities	91,088	83,477
Total liabilities	194,757	188,253
Contingencies and Commitments (See Note 8)
Stockholders Equity
Preferred stock - 10,000,000 shares authorized; Series A - 9,632 and 10,072 shares issued and outstanding as of March 31, 2012, and December 31, 2011, respectively	0	0
Common stock - 800,000,000 shares authorized; 285,412,303 and 291,319,222 shares issued and outstanding as of March 31, 2012, and December 31, 2011, respectively	7,448	7,590
Retained earnings	3,191	2,969
Accumulated other comprehensive income (loss)	2,622	2,679
Total stockholders' equity	13,261	13,238
Total liabilities and stockholders' equity	$ 208,018	$ 201,491

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Fair Value of Financial Instruments

12. Fair Value of Financial Instruments

The carrying values and estimated fair values of our financial instruments (in millions) were as follows:

		As of March 31, 2012				As of December 31, 2011
		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value
Assets
AFS securities:
	Fixed maturity securities	$	76,254	$	76,254	$	75,433	$	75,433
	VIEs' fixed maturity securities		702		702		700		700
	Equity securities		126		126		139		139
Trading securities			2,650		2,650		2,675		2,675
Mortgage loans on real estate			6,938		7,542		6,942		7,608
Derivative investments			2,244		2,244		3,151		3,151
Other investments			1,043		1,043		1,069		1,069
Cash and invested cash			3,516		3,516		4,510		4,510
Separate account assets			91,088		91,088		83,477		83,477
Liabilities
Future contract benefits:
	Indexed annuity contracts embedded derivatives		(480)		(480)		(399)		(399)
	GLB reserves embedded derivatives		(1,064)		(1,064)		(2,217)		(2,217)
Other contract holder funds:
	Remaining guaranteed interest and similar contracts		(1,100)		(1,100)		(1,114)		(1,114)
	Account values of certain investment contracts		(27,707)		(30,526)		(27,468)		(30,812)
Short-term debt (1)			(300)		(306)		(300)		(309)
Long-term debt			(5,606)		(5,543)		(5,391)		(5,345)
Reinsurance related embedded derivatives			(158)		(158)		(168)		(168)
VIEs' liabilities - derivative instruments			(221)		(221)		(291)		(291)
Other liabilities:
	Deferred compensation plans		(375)		(375)		(354)		(354)
	Credit default swaps		(10)		(10)		(16)		(16)

• The difference between the carrying value and fair value of short-term debt as of March 31, 2012, and December 31, 2011, related to current maturities of long-term debt

Valuation Methodologies and Associated Inputs for Financial Instruments Not Carried at Fair Value

The following discussion outlines the methodologies and assumptions used to determine the fair value of our financial instruments not carried at fair value on our Consolidated Balance Sheets. Considerable judgment is required to develop these assumptions used to measure fair value. Accordingly, the estimates shown are not necessarily indicative of the amounts that would be realized in a one-time, current market exchange of all of our financial instruments.

Mortgage Loans on Real Estate

The fair value of mortgage loans on real estate is established using a discounted cash flow method based on credit rating, maturity and future income. The ratings for mortgages in good standing are based on property type, location, market conditions, occupancy, debt-service coverage, loan-to-value, quality of tenancy, borrower and payment record. The fair value for impaired mortgage loans is based on the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's market price or the fair value of the collateral if the loan is collateral dependent. The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 2 within the fair value hierarchy.

Other Investments

The carrying value of our assets classified as other investments approximates fair value. Other investments include LPs and other privately held investments that are accounted for using the equity method of accounting and the carrying value is based on our proportional share of the net assets of the LPs. The inputs used to measure the fair value of our other investments are classified as Level 3 within the fair value hierarchy.

Other Contract Holder Funds

Other contract holder funds include remaining guaranteed interest and similar contracts and account values of certain investment contracts. The fair value for the remaining guaranteed interest and similar contracts is estimated using discounted cash flow calculations as of the balance sheet date. These calculations are based on interest rates currently offered on similar contracts with maturities that are consistent with those remaining for the contracts being valued. As of March 31, 2012, and December 31, 2011, the remaining guaranteed interest and similar contracts carrying value approximated fair value. The fair value of the account values of certain investment contracts is based on their approximate surrender value as of the balance sheet date. The inputs used to measure the fair value of our other contract holder funds are classified as Level 3 within the fair value hierarchy.

Short-Term and Long-Term Debt

The fair value of long-term debt is based on quoted market prices. For short-term debt, excluding current maturities of long-term debt, the carrying value approximates fair value. The inputs used to measure the fair value of our short-term and long-term debt are classified as Level 2 within the fair value hierarchy.

Financial Instruments Carried at Fair Value

We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of March 31, 2012, or December 31, 2011, and we noted no changes in our valuation methodologies between these periods.

The following summarizes our financial instruments carried at fair value (in millions) on a recurring basis by the fair value hierarchy levels described in “Summary of Significant Accounting Policies” in Note 1 of our2011 Form 10-K:

					As of March 31, 2012
					Quoted
					Prices
					in Active
				Markets for				Significant			Significant
					Identical		Observable			Unobservable			Total
					Assets			Inputs			Inputs		Fair
					(Level 1)			(Level 2)			(Level 3)		Value
Assets
Investments:
	Fixed maturity AFS securities:
		Corporate bonds			$	64		$	58,603		$	1,932	$	60,599
		U.S. Government bonds				452			33			1		486
		Foreign government bonds				-			551			99		650
		RMBS				-			7,474			98		7,572
		CMBS				-			1,491			32		1,523
		CDOs				-			-			102		102
		State and municipal bonds				-			4,126			-		4,126
		Hybrid and redeemable preferred securities				20			1,060			116		1,196
	VIEs' fixed maturity securities					106			596			-		702
	Equity AFS securities					36			29			61		126
	Trading securities					2			2,580			68		2,650
	Derivative investments					-			207			2,037		2,244
Cash and invested cash						-			3,516			-		3,516
Separate account assets						-			91,088			-		91,088
			Total assets		$	680		$	171,354		$	4,546	$	176,580
Liabilities
Future contract benefits:
	Indexed annuity contracts embedded derivatives				$	-		$	-		$	(480)	$	(480)
	GLB reserves embedded derivatives					-			-			(1,064)		(1,064)
Long-term debt						-			(1,088)			-		(1,088)
Reinsurance related embedded derivatives						-			(158)			-		(158)
VIEs' liabilities - derivative instruments						-			-			(221)		(221)
Other liabilities:
	Deferred compensation plans					-			-			(375)		(375)
	Credit default swaps					-			-			(10)		(10)
			Total liabilities		$	-		$	(1,246)		$	(2,150)	$	(3,396)

					As of December 31, 2011
					Quoted
					Prices
					in Active
				Markets for				Significant			Significant
					Identical		Observable			Unobservable			Total
					Assets			Inputs			Inputs		Fair
					(Level 1)			(Level 2)			(Level 3)		Value
Assets
Investments:
	Fixed maturity AFS securities:
		Corporate bonds			$	63		$	57,310		$	1,888	$	59,261
		U.S. Government bonds				475			18			1		494
		Foreign government bonds				-			636			97		733
		RMBS				-			7,881			158		8,039
		CMBS				-			1,566			34		1,600
		CDOs				-			-			102		102
		State and municipal bonds				-			4,047			-		4,047
		Hybrid and redeemable preferred securities				15			1,042			100		1,157
	VIEs' fixed maturity securities					108			592			-		700
	Equity AFS securities					37			46			56		139
	Trading securities					2			2,605			68		2,675
	Derivative investments					-			681			2,470		3,151
Cash and invested cash						-			4,510			-		4,510
Separate account assets						-			83,477			-		83,477
			Total assets		$	700		$	164,411		$	4,974	$	170,085
Liabilities
Future contract benefits:
	Indexed annuity contracts embedded derivatives				$	-		$	-		$	(399)	$	(399)
	GLB reserves embedded derivatives					-			-			(2,217)		(2,217)
Long-term debt						-			(1,688)			-		(1,688)
Reinsurance related embedded derivatives						-			(168)			-		(168)
VIEs' liabilities - derivative instruments						-			-			(291)		(291)
Other liabilities:
	Deferred compensation plans					-			-			(354)		(354)
	Credit default swaps					-			-			(16)		(16)
			Total liabilities		$	-		$	(1,856)		$	(3,277)	$	(5,133)

The following summarizes changes to our financial instruments carried at fair value (in millions) and classified within Level 3 of the fair value hierarchy. This summary excludes any effect of amortization of DAC, VOBA, DSI and DFEL. The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.

					For the Three Months Ended March 31, 2012
									Gains		Issuances,			Transfers
							Items		(Losses)			Sales,		In or
							Included		in		Maturities,			Out
					Beginning		in		OCI		Settlements,			of		Ending
					Fair		Net		and			Calls,		Level 3,		Fair
					Value		Income		Other (1)			Net		Net (2)		Value
Investments: (3)
	Fixed maturity AFS securities:
		Corporate bonds			$	1,888	$	(14)	$	-		$	174	$	(116)	$	1,932
		U.S. Government bonds				1		-		-			-		-		1
		Foreign government bonds				97		-		2			-		-		99
		RMBS				158		(3)		3			(5)		(55)		98
		CMBS				34		(3)		8			(7)		-		32
		CDOs				102		-		4			(4)		-		102
		Hybrid and redeemable
			preferred securities			100		-		5			-		11		116
	Equity AFS securities					56		-		5			-		-		61
	Trading securities					68		1		-			(1)		-		68
	Derivative investments					2,470		(520)		(88)			175		-		2,037
Future contract benefits: (4)
	Indexed annuity contracts embedded
		derivatives				(399)		(104)		-			23		-		(480)
	GLB reserves embedded derivatives					(2,217)		1,153		-			-		-		(1,064)
VIEs' liabilities - derivative
	instruments (5)					(291)		70		-			-		-		(221)
Other liabilities:
	Deferred compensation plans (6)					(354)		(28)		-			7		-		(375)
	Credit default swaps (7)					(16)		6		-			-		-		(10)
				Total, net	$	1,697	$	558	$	(61)		$	362	$	(160)	$	2,396

					For the Three Months Ended March 31, 2011
									Gains		Issuances,			Transfers
							Items		(Losses)			Sales		In or
							Included		in		Maturities,			Out
					Beginning		in		OCI		Settlements,			of		Ending
					Fair		Net		and			Calls,		Level 3,		Fair
					Value		Income		Other (1)			Net		Net (2)		Value
Investments: (3)
	Fixed maturity AFS securities:
		Corporate bonds			$	1,816	$	(1)	$	10		$	54	$	(73)	$	1,806
		U.S. Government bonds				2		-		-			-		-		2
		Foreign government bonds				113		-		7			(3)		(17)		100
		RMBS				119		(2)		2			(4)		-		115
		CMBS				109		(23)		30			(52)		-		64
		CDOs				172		14		(12)			(38)		-		136
		Hybrid and redeemable
			preferred securities			119		-		1			-		4		124
	Equity AFS securities:					92		8		3			(9)		2		96
	Trading securities					76		1		(2)			(2)		(2)		71
	Derivative investments					1,495		(145)		(18)			107		-		1,439
Future contract benefits: (4)
	Indexed annuity contracts embedded
		derivatives				(497)		48		-			(79)		-		(528)
	GLB reserves embedded derivatives					(408)		290		-			-		-		(118)
VIEs' liabilities - derivative
	instruments (5)					(209)		6		-			-		-		(203)
Other liabilities:
	Deferred compensation plans (6)					(363)		(8)		-			14		-		(357)
	Credit default swaps (7)					(16)		4		-			6		-		(6)
				Total, net	$	2,620	$	192	$	21		$	(6)	$	(86)	$	2,741

• The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 5).
• Transfers in or out of Level 3 for AFS and trading securities are displayed at amortized cost as of the beginning-of-period. For AFS and trading securities, the difference between beginning-of-period amortized cost and beginning-of-period fair value was included in OCI and earnings, respectively, in prior periods.
• Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss). Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).
• Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).
• The changes in fair value of the credit default swaps andcontingency forwards are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).
• Deferrals and subsequent changes in fair value for the participants' investment options are reported in underwriting, acquisition, insurance and other expenses on our Consolidated Statements of Comprehensive Income (Loss).
• Gains (losses) from sales, maturities, settlements and calls are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

The following provides the components of the items included in issuances, sales, maturities, settlements, calls, net, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, (in millions) as reported above:

				For the Three Months Ended March 31, 2012
				Issuances		Sales		Maturities		Settlements			Calls		Total
Investments:
	Fixed maturity AFS securities:
		Corporate bonds		$	231	$	(26)	$	-		$	(29)	$	(2)	$	174
		RMBS			-		-		-			(5)		-		(5)
		CMBS			-		-		-			(7)		-		(7)
		CDOs			-		-		-			(4)		-		(4)
	Trading securities				-		-		-			(1)		-		(1)
	Derivative investments				209		15		(49)			-		-		175
Future contract benefits:
	Indexed annuity contracts embedded
		derivatives			(9)		-		-			32		-		23
Other liabilities:
	Deferred compensation plans				-		-		-			7		-		7
			Total, net	$	431	$	(11)	$	(49)		$	(7)	$	(2)	$	362

				For the Three Months Ended March 31, 2011
				Issuances		Sales		Maturities		Settlements			Calls		Total
Investments:
	Fixed maturity AFS securities:
		Corporate bonds		$	101	$	(8)	$	(1)		$	(37)	$	(1)	$	54
		Foreign government bonds			-		(3)		-			-		-		(3)
		RMBS			-		-		-			(4)		-		(4)
		CMBS			1		(44)		-			(9)		-		(52)
		CDOs			-		(33)		-			(5)		-		(38)
	Equity AFS securities				6		(15)		-			-		-		(9)
	Trading securities				-		-		-			(2)		-		(2)
	Derivative investments				167		(2)		(58)			-		-		107
Future contract benefits:
	Indexed annuity contracts embedded
		derivatives			(17)		-		-			(62)		-		(79)
Other liabilities:
	Deferred compensation plans				-		-		-			14		-		14
	Credit default swaps				-		6		-			-		-		6
			Total, net	$	258	$	(99)	$	(59)		$	(105)	$	(1)	$	(6)

The following summarizes changes in unrealized gains (losses) included in net income, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, related to financial instruments carried at fair value classified within Level 3 that we still held (in millions):

			For the Three
			Months Ended
			March 31,
			2012		2011
Investments: (1)
	Derivative investments		$	(520)	$	(140)
Future contract benefits: (1)
	Indexed annuity contracts embedded derivatives			21		(4)
	GLB reserves embedded derivatives			1,183		338
VIEs' liabilities - derivative instruments (1)				70		2
Other liabilities:
	Deferred compensation plans (2)			(28)		(8)
	Credit default swaps (3)			6		6
		Total, net	$	732	$	194

• Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).
• Included in underwriting, acquisition, insurance and other expenses on our Consolidated Statements of Comprehensive Income (Loss).
• Included in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

The following provides the components of the transfers in and out of Level 3 (in millions) as reported above:

				For the Three Months						For the Three Months
				Ended March 31, 2012						Ended March 31, 2011
				Transfers		Transfers				Transfers		Transfers
				In to		Out of				In to		Out of
				Level 3		Level 3		Total		Level 3		Level 3		Total
Investments:
	Fixed maturity AFS securities:
		Corporate bonds		$	150		(266)	$	(116)	$	32	$	(105)	$	(73)
		Foreign government bonds			-		-		-		-		(17)		(17)
		RMBS			-		(55)		(55)		-		-		-
		Hybrid and redeemable preferred securities			20		(9)		11		4		-		4
	Equity AFS securities				-		-		-		2		-		2
	Trading securities				-		-		-		-		(2)		(2)
			Total, net	$	170	$	(330)	$	(160)	$	38	$	(124)	$	(86)

Transfers in and out of Level 3 are generally the result of observable market information on a security no longer being available or becoming available to our pricing vendors. For the three months ended March 31, 2012 and 2011, our corporate bonds transfers in and out were attributable primarily to the securities' observable market information being available or no longer being available, respectively. Transfers in and out of Levels 1 and 2 are generally the result of a change in the type of input used to measure the fair value of an asset or liability at the end of the reporting period. When quoted prices in active markets become available or when these prices become unavailable, but we are able to employ a valuation methodology using significant observable inputs, transfers between Levels 1 and 2 will result. For the quarterly periods ended March 31, 2012 and 2011, the transfers between Levels 1 and 2 of the fair value hierarchy were less than $1 million for our financial instruments carried at fair value.

The following summarizes the fair value (in millions), valuation techniques and significant unobservable inputs of the Level 3 fair value measurements that were developed as of March 31, 2012:

				Fair		Valuation	Significant
				Value		Technique	Unobservable Inputs	Range
Assets
Investments:
	Fixed maturity AFS and trading
		securities
			Corporate bonds	$	1,119	Discounted cash flow	Liquidity/duration adjustment (1)	0.5% - 9.0%
			Foreign government bonds		52	Discounted cash flow	Liquidity/duration adjustment (1)	2.5% - 6.0%
	Equity AFS and trading
		securities			12	Discounted cash flow	Liquidity/duration adjustment (1)	4.0% - 4.5%

			Fair		Valuation	Significant
			Value		Technique	Unobservable Inputs		Range
Liabilities
Future contract benefits:
	Indexed annuity contracts
		embedded derivatives		(480)	Discounted cash flow	Lapse rate (2)		1.0% - 15.0%
						Mortality rate (3)		(7)
	GLB reserves embedded
		derivatives		(1,064)	Monte Carlo simulation	Long-term lapse rate (2)		0.5% - 13.0%
						Wait period (4)		0 - 25 years (or
								years until the
								eligible age)
						Percent of maximum
							withdrawal amount (5)	95.0% - 100.0%
						Non-performance risk ("NPR") (6)		0.05% - 0.35%
						Mortality rate (3)		(7)

• The liquidity/duration adjustment input represents an estimated market participant composite of adjustments attributable to liquidity premiums, expected durations, structures and credit quality that would be applied to the market observable information of an investment.
• The lapse rate input represents the estimated probability of a contract surrendering during a year, and thereby forgoing any future benefits. The range represents the lapse rates during the surrender charge period for indexed annuity contracts.
• The mortality rate input represents the estimated probability of when an individual belonging to a particular group, categorized according to age or some other factor such as occupation, will die.
• The wait period input represents the estimated period a contract holder would wait to withdraw after becoming eligible.
• The percent of maximum withdrawal amount input represents the estimated ratio of contract withdrawal amount to the maximum withdrawal amount specified.
• The NPR input represents the estimated additional credit spread that market participants would apply to the market observable discount rate when pricing a contract.
• Based on the “Annuity 2000 Mortality Table” developed by the Society of Actuaries Committee on Life Insurance Research that was adopted by the National Association of Insurance Commissioners in 1996 for our mortality input.

From the table above, we have excluded Level 3 fair value measurements obtained from independent, third-party pricing sources. We do not develop the significant inputs used to measure the fair value of these assets and liabilities, and the information regarding the significant inputs is not readily available to us. Independent broker-quoted fair values are non-binding quotes developed by market makers or broker-dealers obtained from third-party sources recognized as market participants. The fair value of a broker-quoted asset or liability is based solely on the receipt of an updated quote from a single market maker or a broker-dealer recognized as a market participant as we do not adjust broker quotes when used as the fair value measurement for an asset or liability. Significant increases or decreases in any of the quotes received from a third-party broker-dealer may result in a significantly higher or lower fair value measurement.

Changes in any of the significant inputs presented in the table above may result in a significant change in the fair value measurement of the asset or liability as follows:

• Investments – An increase in the liquidity/duration input would result in a decrease in the fair value measurement.

• Indexed annuity contracts embedded derivatives – An increase in the lapse rate or mortality rate inputs would result in a decrease in the fair value measurement.
• GLB reserves embedded derivatives– An increase in our lapse rate, wait period, NPR or mortality rate inputs would result in a decrease in the fair value measurement. An increase in the percent of maximum withdrawal amountinput would result in an increase in the fair value measurement.

For each category discussed above, the unobservable inputs are not inter-related; therefore, a directional change in one input will not affect the other inputs.

As part of our on-going valuation process, we assess the reasonableness of our valuation techniques or models and make adjustments as necessary. For more information, see “Summary of Significant Accounting Policies” in Note 1 of our 2011 Form 10-K.

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) In Millions	Total	Common stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance as of beginning-of-year at Dec. 31, 2010		$ 8,124	$ 3,933	$ 748
Stock compensation/issued for benefit plans		2
Retirement of common stock/cancellation of shares		(62)
Cumulative effect from adoption of new accounting standards			(1,095)	103
Comprehensive income (loss)	336
Other comprehensive income (loss), net of tax	22			22
Net income (loss)	314		314
Retirement of common stock			(13)
Dividends declared: Common (2012 - $0.080; 2011 - $0.050)			(17)
Balance as of end-of-period at Mar. 31, 2011	12,059	8,064	3,122	873
Balance as of beginning-of-year at Dec. 31, 2011	13,238	7,590	2,969	2,679
Stock compensation/issued for benefit plans		8
Retirement of common stock/cancellation of shares		(150)
Cumulative effect from adoption of new accounting standards			0	0
Comprehensive income (loss)	188
Other comprehensive income (loss), net of tax	(57)			(57)
Net income (loss)	245		245
Retirement of common stock			0
Dividends declared: Common (2012 - $0.080; 2011 - $0.050)			(23)
Balance as of end-of-period at Mar. 31, 2012	$ 13,261	$ 7,448	$ 3,191	$ 2,622

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Federal Income Taxes

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Federal Income Taxes

6. Federal Income Taxes

The effective tax rate is a ratio of tax expense over pre-tax income (loss). The effective tax rate was 20% and 27% for the three months ended March 31, 2012 and 2011, respectively. The effective tax rate on pre-tax income from continuing operations was lower than the prevailing corporate federal income tax rate. Differences in the effective rates and the U.S. statutory rate of 35% were the result of certain tax preferred investment income, separate account dividends-received deduction, foreign tax credits and other tax preference items.

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Derivative Instruments

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Derivative Instruments

5. Derivative Instruments

We maintain an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings that are caused by interest rate risk, foreign currency exchange risk, equity market risk, default risk, basis risk and credit risk. See Note 1 in our 2011 Form 10-K for a detailed discussion of the accounting treatment for derivative instruments. See Note 6 in our 2011 Form 10-K for a detailed discussion of our derivative instruments and use of them in our overall risk management strategy which information is incorporated herein by reference. See Note 12 for additional disclosures related to the fair value of our derivative instruments and Note 3 for derivative instruments related to our consolidated VIEs.

We have derivative instruments with off-balance-sheet risks whose notional or contract amounts exceed the credit exposure. Outstanding derivative instruments with off-balance-sheet risks (in millions) were as follows:

				As of March 31, 2012						As of December 31, 2011
				Notional		Fair Value				Notional		Fair Value
				Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
	Interest rate contracts (1)			$	2,205	$	101	$	-	$	2,512	$	130	$	-
	Foreign currency contracts (1)				340		26		-		340		38		-
		Total cash flow hedges			2,545		127		-		2,852		168		-
Fair value hedges:
	Interest rate contracts (1)				1,175		215		-		1,675		319		-
Non-Qualifying Hedges
Interest rate contracts (1)					36,178		156		-		30,232		568		-
Foreign currency contracts (1)					94		-		-		4		-		-
Equity market contracts (1)					16,411		1,749		-		16,401		2,096		-
Credit contracts (1)					47		(3)		-		48		-		-
Credit contracts (2)					148		-		10		148		-		16
Embedded derivatives:
	Indexed annuity contracts (3)				-		-		480		-		-		399
	Guaranteed living benefits ("GLB")
		reserves (3)			-		-		1,064		-		-		2,217
	Reinsurance related (4)				-		-		158		-		-		168
			Total derivative instruments	$	56,598	$	2,244	$	1,712	$	51,360	$	3,151	$	2,800

• Reported in derivative investments on our Consolidated Balance Sheets.
• Reported in other liabilities on our Consolidated Balance Sheets.
• Reported in future contract benefits on our Consolidated Balance Sheets.
• Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets.

The maturity of the notional amounts of derivative instruments (in millions) was as follows:

			Remaining Life as of March 31, 2012
			Less Than		1 – 5		6 – 10		11 – 30		Over 30
			1 Year		Years		Years		Years		Years		Total
Interest rate contracts (1)			$	3,060	$	9,774	$	11,595	$	15,122	$	7	$	39,558
Foreign currency contracts (2)				94		61		179		100		-		434
Equity market contracts				8,041		23		3,168		5,176		3		16,411
Credit contracts				40		-		108		47		-		195
	Total derivative instruments
		with notional amounts	$	11,235	$	9,858	$	15,050	$	20,445	$	10	$	56,598

• As of March 31, 2012, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was June 2042.
• As of March 31, 2012, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was July 2022.

The change in our unrealized gain (loss) on derivative instruments in accumulated OCI (in millions) was as follows:

						For the Three
						Months Ended
						March 31,
						2012		2011
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year						$	119	$	(15)
Other comprehensive income (loss):
Cumulative effect from adoption of new accounting standards							-		3
	Unrealized holding gains (losses) arising during the year:
		Cash flow hedges:
			Interest rate contracts				(40)		(6)
			Foreign currency contracts				(3)		2
		Fair value hedges:
			Interest rate contracts				1		1
	Change in foreign currency exchange rate adjustment						(9)		(9)
	Change in DAC, VOBA, DSI and DFEL						4		4
	Income tax benefit (expense)						15		3
	Less:
		Reclassification adjustment for gains (losses) included in net income (loss):
			Cash flow hedges:
				Interest rate contracts (1)			(6)		(1)
				Interest rate contracts (2)			-		1
				Foreign currency contracts (1)			2		2
			Fair value hedges:
				Interest rate contracts (2)			1		1
		Associated amortization of DAC, VOBA, DSI and DFEL					-		1
		Income tax benefit (expense)					1		(1)
					Balance as of end-of-period	$	89	$	(20)

• The OCI offset is reported within net investment income on our Consolidated Statements of Comprehensive Income (Loss).
• The OCI offset is reported within interest and debt expense on our Consolidated Statements of Comprehensive Income (Loss).

The gains (losses) on derivative instruments (in millions) recorded within income (loss) from continuing operations on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

				For the Three
				Months Ended
				March 31,
				2012		2011
Qualifying Hedges
Cash flow hedges:
	Interest rate contracts (1)			$	(7)	$	(1)
	Foreign currency contracts (1)				2		1
		Total cash flow hedges			(5)		-
Fair value hedges:
	Interest rate contracts (2)				12		13
		Total fair value hedges			12		13
Non-Qualifying Hedges
Interest rate contracts (1)					(3)		(6)
Interest rate contracts (3)					(413)		(61)
Foreign currency contracts (3)					(4)		(5)
Equity market contracts (3)					(672)		(199)
Equity market contracts (4)					(135)		(19)
Credit contracts (3)					3		4
Embedded derivatives:
	Indexed annuity contracts (3)				104		48
	GLB reserves (3)				1,153		289
	Reinsurance related (3)				10		11
	AFS securities (1)				-		1
			Total derivative instruments	$	50	$	76

• Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss).
• Reported in interest and debt expense on our Consolidated Statements of Comprehensive Income (Loss).
• Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).
• Reported in underwriting, acquisition, insurance and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

Gains (losses) (in millions) on derivative instruments designated and qualifying as cash flow hedges were as follows:

		For the Three
		Months Ended
		March 31,
		2012		2011
Gain (loss) recognized as a component of OCI with
	the offset to net investment income	$	(4)	$	-

As of March 31, 2012, $20 million of the deferred net losses on derivative instruments in accumulated OCI were expected to be reclassified to earnings during the next 12 months. This reclassification would be due primarily to the interest rate variances related to the interest rate swap agreements.

For thethree months ended March 31, 2012and 2011, there were no material reclassifications to earnings due to hedged firm commitments no longer deemed probable or due to hedged forecasted transactions that had not occurred by the end of the originally specified time period.

Gains (losses) (in millions) on derivative instruments designated and qualifying as fair value hedges were as follows:

		For the Three
		Months Ended
		March 31,
		2012		2011
Gain (loss) recognized as a component of OCI with
	the offset to interest expense	$	1	$	1

Information related to our open credit default swap liabilities for which we are the seller (dollars in millions) was as follows:

As of March 31, 2012
				Credit
	Reason	Nature		Rating of		Number			Maximum
	for	of	Underlying			of	Fair		Potential
Maturity	Entering	Recourse	Obligation (1)		Instruments		Value (2)		Payout
12/20/2012 (3)	(5)	(6)		BBB+		4	$	-	$	40
12/20/2016 (4)	(5)	(6)		BBB+		3		(7)		68
03/20/2017 (4)	(5)	(6)		BBB		2		(3)		40
						9	$	(10)	$	148

As of December 31, 2011
				Credit
	Reason	Nature		Rating of		Number			Maximum
	for	of	Underlying			of	Fair		Potential
Maturity	Entering	Recourse	Obligation (1)		Instruments		Value (2)		Payout
12/20/2012 (3)	(5)	(6)		BBB+		4	$	-	$	40
12/20/2016 (4)	(5)	(6)		BBB+		3		(12)		68
03/20/2017 (4)	(5)	(6)		BBB		2		(4)		40
						9	$	(16)	$	148

• Represents average credit ratings based on the midpoint of the applicable ratings among Moody's, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings.
• Broker quotes are used to determine the market value of credit default swaps.
• These credit default swaps were sold to our contract holders prior to 2007, where we determined there was a spread versus premium mismatch.
• These credit default swaps were sold to a counter-party of the consolidated VIEs as discussed in Note 4 in our 2011 Form 10-K.
• Credit default swapswere entered into in order to generate income by providing default protection in return for a quarterly payment.
• Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract.

Details underlying the associated collateral of our open credit default swaps for which we are the seller, if credit risk related contingent features were triggered (in millions), are as follows:

				As of			As of
			March 31,			December 31,
				2012			2011
Maximum potential payout				$	148		$	148
Less:
	Counterparty thresholds				-			-
		Maximum collateral potentially required to post		$	148		$	148

Certain of our credit default swap agreements contain contractual provisions that allow for the netting of collateral with our counterparties related to all of our collateralized financing transactions that we have outstanding. If these netting agreements were not in place, we would have been required to post approximately $10 million as of March 31, 2012, after considering the fair values of the associated investments counterparties' credit ratings as compared to ours and specified thresholds that once exceeded result in the payment of cash.

Credit Risk

We are exposed to credit loss in the event of nonperformance by our counterparties on various derivative contracts and reflect assumptions regarding the credit or nonperformance risk. The nonperformance risk is based upon assumptions for each counterparty's credit spread over the estimated weighted average life of the counterparty exposure less collateral held. As of March 31, 2012, the nonperformance risk adjustment was $6 million.The credit risk associated with such agreements is minimized by purchasing such agreements from financial institutions with long-standing, superior performance records. Additionally, we maintain a policy of requiring all derivative contracts to be governed by an International Swaps and Derivatives Association (“ISDA”) Master Agreement. We are required to maintain minimum ratings as a matter of routine practice in negotiating ISDA agreements. Under some ISDA agreements, our insurance subsidiaries have agreed to maintain certain financial strength or claims-paying ratings. A downgrade below these levels could result in termination of the derivatives contract, at which time any amounts payable by us would be dependent on the market value of the underlying derivative contract. In certain transactions, we and the counterparty have entered into a collateral support agreement requiring either party to post collateral when net exposures exceed pre-determined thresholds. These thresholds vary by counterparty and credit rating. The amount of such exposure is essentially the net replacement cost or market value less collateral held for such agreements with each counterparty if the net market value is in our favor. As of March 31, 2012, the exposure was $61 million.

The amounts recognized (in millions) by S&P credit rating of counterparty, for which we had the right to reclaim cash collateral or were obligated to return cash collateral, were as follows:

	As of March 31, 2012				As of December 31, 2011
	Collateral		Collateral		Collateral		Collateral
	Posted by		Posted by		Posted by		Posted by
S&P	Counter-		LNC		Counter-		LNC
Credit	Party		(Held by		Party		(Held by
Rating of	(Held by		Counter-		(Held by		Counter-
Counterparty	LNC)		Party)		LNC)		Party)
AA	$	34	$	-	$	35	$	-
AA-		59		(3)		219		-
A+		624		-		848		-
A		1,232		(82)		1,681		(120)
A-		335		(31)		387		-
BBB		2		-		-		-
	$	2,286	$	(116)	$	3,170	$	(120)

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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Outstanding derivative instruments with off-balance-sheet risks

				As of March 31, 2012						As of December 31, 2011
				Notional		Fair Value				Notional		Fair Value
				Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
	Interest rate contracts (1)			$	2,205	$	101	$	-	$	2,512	$	130	$	-
	Foreign currency contracts (1)				340		26		-		340		38		-
		Total cash flow hedges			2,545		127		-		2,852		168		-
Fair value hedges:
	Interest rate contracts (1)				1,175		215		-		1,675		319		-
Non-Qualifying Hedges
Interest rate contracts (1)					36,178		156		-		30,232		568		-
Foreign currency contracts (1)					94		-		-		4		-		-
Equity market contracts (1)					16,411		1,749		-		16,401		2,096		-
Credit contracts (1)					47		(3)		-		48		-		-
Credit contracts (2)					148		-		10		148		-		16
Embedded derivatives:
	Indexed annuity contracts (3)				-		-		480		-		-		399
	Guaranteed living benefits ("GLB")
		reserves (3)			-		-		1,064		-		-		2,217
	Reinsurance related (4)				-		-		158		-		-		168
			Total derivative instruments	$	56,598	$	2,244	$	1,712	$	51,360	$	3,151	$	2,800

Maturity of the notional amounts of derivative financial instruments

			Remaining Life as of March 31, 2012
			Less Than		1 – 5		6 – 10		11 – 30		Over 30
			1 Year		Years		Years		Years		Years		Total
Interest rate contracts (1)			$	3,060	$	9,774	$	11,595	$	15,122	$	7	$	39,558
Foreign currency contracts (2)				94		61		179		100		-		434
Equity market contracts				8,041		23		3,168		5,176		3		16,411
Credit contracts				40		-		108		47		-		195
	Total derivative instruments
		with notional amounts	$	11,235	$	9,858	$	15,050	$	20,445	$	10	$	56,598

Change in our unrealized gain on derivative instruments in accumulated OCI

						For the Three
						Months Ended
						March 31,
						2012		2011
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year						$	119	$	(15)
Other comprehensive income (loss):
Cumulative effect from adoption of new accounting standards							-		3
	Unrealized holding gains (losses) arising during the year:
		Cash flow hedges:
			Interest rate contracts				(40)		(6)
			Foreign currency contracts				(3)		2
		Fair value hedges:
			Interest rate contracts				1		1
	Change in foreign currency exchange rate adjustment						(9)		(9)
	Change in DAC, VOBA, DSI and DFEL						4		4
	Income tax benefit (expense)						15		3
	Less:
		Reclassification adjustment for gains (losses) included in net income (loss):
			Cash flow hedges:
				Interest rate contracts (1)			(6)		(1)
				Interest rate contracts (2)			-		1
				Foreign currency contracts (1)			2		2
			Fair value hedges:
				Interest rate contracts (2)			1		1
		Associated amortization of DAC, VOBA, DSI and DFEL					-		1
		Income tax benefit (expense)					1		(1)
					Balance as of end-of-period	$	89	$	(20)

Gains (losses) on derivative instruments recorded within income (loss) from continuing operations

				For the Three
				Months Ended
				March 31,
				2012		2011
Qualifying Hedges
Cash flow hedges:
	Interest rate contracts (1)			$	(7)	$	(1)
	Foreign currency contracts (1)				2		1
		Total cash flow hedges			(5)		-
Fair value hedges:
	Interest rate contracts (2)				12		13
		Total fair value hedges			12		13
Non-Qualifying Hedges
Interest rate contracts (1)					(3)		(6)
Interest rate contracts (3)					(413)		(61)
Foreign currency contracts (3)					(4)		(5)
Equity market contracts (3)					(672)		(199)
Equity market contracts (4)					(135)		(19)
Credit contracts (3)					3		4
Embedded derivatives:
	Indexed annuity contracts (3)				104		48
	GLB reserves (3)				1,153		289
	Reinsurance related (3)				10		11
	AFS securities (1)				-		1
			Total derivative instruments	$	50	$	76

Gains (losses) on derivative instruments designated as cash flow hedges

		For the Three
		Months Ended
		March 31,
		2012		2011
Gain (loss) recognized as a component of OCI with
	the offset to net investment income	$	(4)	$	-

Gains (losses) on derivative instruments designated as fair value hedges

		For the Three
		Months Ended
		March 31,
		2012		2011
Gain (loss) recognized as a component of OCI with
	the offset to interest expense	$	1	$	1

Open credit default swap liabilities

As of March 31, 2012
				Credit
	Reason	Nature		Rating of		Number			Maximum
	for	of	Underlying			of	Fair		Potential
Maturity	Entering	Recourse	Obligation (1)		Instruments		Value (2)		Payout
12/20/2012 (3)	(5)	(6)		BBB+		4	$	-	$	40
12/20/2016 (4)	(5)	(6)		BBB+		3		(7)		68
03/20/2017 (4)	(5)	(6)		BBB		2		(3)		40
						9	$	(10)	$	148

As of December 31, 2011
				Credit
	Reason	Nature		Rating of		Number			Maximum
	for	of	Underlying			of	Fair		Potential
Maturity	Entering	Recourse	Obligation (1)		Instruments		Value (2)		Payout
12/20/2012 (3)	(5)	(6)		BBB+		4	$	-	$	40
12/20/2016 (4)	(5)	(6)		BBB+		3		(12)		68
03/20/2017 (4)	(5)	(6)		BBB		2		(4)		40
						9	$	(16)	$	148

Collateral support agreements

				As of			As of
			March 31,			December 31,
				2012			2011
Maximum potential payout				$	148		$	148
Less:
	Counterparty thresholds				-			-
		Maximum collateral potentially required to post		$	148		$	148

	As of March 31, 2012				As of December 31, 2011
	Collateral		Collateral		Collateral		Collateral
	Posted by		Posted by		Posted by		Posted by
S&P	Counter-		LNC		Counter-		LNC
Credit	Party		(Held by		Party		(Held by
Rating of	(Held by		Counter-		(Held by		Counter-
Counterparty	LNC)		Party)		LNC)		Party)
AA	$	34	$	-	$	35	$	-
AA-		59		(3)		219		-
A+		624		-		848		-
A		1,232		(82)		1,681		(120)
A-		335		(31)		387		-
BBB		2		-		-		-
	$	2,286	$	(116)	$	3,170	$	(120)

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Segment Information

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Segment Information

13. Segment Information

We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments. We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments. Our reporting segments reflect the manner by which our chief operating decision makers view and manage the business. See Note 22 of our 2011 Form 10-K for a brief description of these segments and Other Operations.

Segment operating revenues and income (loss) from operations are internal measures used by our management and Board of Directors to evaluate and assess the results of our segments. Income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:

• Realized gains and losses associated with the following (“excluded realized gain (loss)”):

• Sale or disposal of securities;
• Impairments of securities;
• Change in the fair value of derivative instruments, embedded derivatives within certain reinsurance arrangements and our trading securities;
• Change in the fair value of the derivatives we own to hedge our GDB riders within our variable annuities;
• Change in the GLB embedded derivative reserves, net of the change in the fair value of the derivatives we own to hedge the changes in the embedded derivative reserves; and
• Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for under the Derivatives and Hedging and the Fair Value Measurements and Disclosures Topics of the FASB ASC;

• Change in reserves accounted for under the Financial Services – Insurance – Claim Costs and Liabilities for Future Policy Benefits Subtopic of the FASB ASC resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”);
• Income (loss) from the initial adoption of new accounting standards;
• Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance;
• Gain (loss) on early extinguishment of debt;
• Losses from the impairment of intangible assets; and
• Income (loss) from discontinued operations.

Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:

• Excluded realized gain (loss);
• Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking;
• Amortization of deferred gains arising from the reserve changes on business sold through reinsurance; and
• Revenue adjustments from the initial adoption of new accounting standards.

We use our prevailing corporate federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure. Operating revenues and income (loss) from operations do not replace revenues and net income as the GAAP measures of our consolidated results of operations.

Segment information (in millions) was as follows:

			For the Three
			Months Ended
			March 31,
			2012		2011
Revenues
Operating revenues:
	Annuities		$	731	$	733
	Retirement Plan Services			252		263
	Life Insurance			1,232		1,146
	Group Protection			504		478
	Other Operations			107		118
Excluded realized gain (loss), pre-tax				(114)		(21)
Amortization of deferred gain arising from reserve
	changes on business sold through reinsurance, pre-tax			1		1
Amortization of DFEL associated with
	benefit ratio unlocking, pre-tax			1		-
		Total revenues	$	2,714	$	2,718

				For the Three
				Months Ended
				March 31,
				2012		2011
Net Income (Loss)
Income (loss) from operations:
	Annuities			$	137	$	144
	Retirement Plan Services				35		48
	Life Insurance				142		142
	Group Protection				16		24
	Other Operations				(34)		(35)
Excluded realized gain (loss), after-tax					(73)		(14)
Benefit ratio unlocking, after-tax					23		5
		Income (loss) from continuing operations, after-tax			246		314
		Income (loss) from discontinued operations, after-tax			(1)		-
			Net income (loss)	$	245	$	314

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Shares and Stockholders' Equity

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Shares and Stockholders' Equity

9. Shares and Stockholders' Equity

Common and Preferred Shares

The changes in our preferred and common stock (number of shares) were as follows:

		For the Three
		Months Ended
		March 31,
		2012	2011
Series A Preferred Stock
Balance as of beginning-of-period		10,072	10,914
Conversion of convertible preferred stock (1)		(440)	-
	Balance as of end-of-period	9,632	10,914
Common Stock
Balance as of beginning-of-period		291,319,222	315,718,554
Conversion of convertible preferred stock (1)		7,040	-
Stock compensation/issued for benefit plans		104,197	152,134
Retirement/cancellation of shares		(6,018,156)	(2,413,864)
	Balance as of end-of-period	285,412,303	313,456,824
Common Stock as of End-of-Period
Assuming conversion of preferred stock		285,566,415	313,631,448
Diluted basis		292,953,914	321,320,873

(1)        Represents the conversion of Series A preferred stock into common stock.

Our common and Series A preferred stocks are without par value.

Average Shares

A reconciliation of the denominator (number of shares) in the calculations of basic and diluted EPS was as follows:

			For the Three
			Months Ended
			March 31,
			2012	2011
Weighted-average shares, as used in basic calculation			289,055,925	315,014,084
Shares to cover exercise of outstanding warrants			10,150,271	10,150,292
Shares to cover conversion of preferred stock			154,499	174,624
Shares to cover non-vested stock			1,010,689	771,357
Average stock options outstanding during the period			601,284	959,872
Assumed acquisition of shares with assumed
	proceeds from exercising outstanding warrants		(4,634,542)	(3,669,994)
Assumed acquisition of shares with assumed
	proceeds and benefits from exercising stock
	options (at average market price for the period)		(413,777)	(654,934)
Shares repurchaseable from measured but
	unrecognized stock option expense		(14,681)	(152,416)
Average deferred compensation shares			-	271,447
		Weighted-average shares, as used in diluted calculation	295,909,668	322,864,332

In the event the average market price of LNC common stock exceeds the issue price of stock options and the options have a dilutive effect to our EPS, such options will be shown in the table above.

The income used in the calculation of our diluted EPS is our net income (loss), reduced by preferred stock dividends and accretion of discount. These amounts are presented on our Consolidated Statements of Comprehensive Income (Loss).

Accumulated OCI

The following summarizes the components and changes in accumulated OCI (in millions):

				For the Three
				Months Ended
				March 31,
				2012		2011
Unrealized Gain (Loss) on AFS Securities
Balance as of beginning-of-year				$	2,947	$	1,072
	Cumulative effect from adoption of new accounting standards				-		105
	Unrealized holding gains (losses) arising during the period				(109)		(191)
	Change in foreign currency exchange rate adjustment				10		14
	Change in DAC, VOBA, DSI and other contract holder funds				76		104
	Income tax benefit (expense)				(27)		63
	Less:
		Reclassification adjustment for gains (losses) included in net income (loss)			(57)		(19)
		Associated amortization of DAC, VOBA, DSI and DFEL			2		(10)
		Income tax benefit (expense)			19		10
			Balance as of end-of-period	$	2,933	$	1,186
Unrealized OTTI on AFS Securities
Balance as of beginning-of-year				$	(110)	$	(129)
	(Increases) attributable to:
		Cumulative effect from adoption of new accounting standards			-		(5)
		Gross OTTI recognized in OCI during the period			(58)		(8)
		Change in DAC, VOBA, DSI and DFEL			8		5
		Income tax benefit (expense)			18		1
	Decreases attributable to:
		Sales, maturities or other settlements of AFS securities			39		45
		Change in DAC, VOBA, DSI and DFEL			(4)		(9)
		Income tax benefit (expense)			(12)		(13)
			Balance as of end-of-period	$	(119)	$	(113)
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year				$	119	$	(15)
	Cumulative effect from adoption of new accounting standards				-		3
	Unrealized holding gains (losses) arising during the period				(42)		(3)
	Change in foreign currency exchange rate adjustment				(9)		(9)
	Change in DAC, VOBA, DSI and DFEL				4		4
	Income tax benefit (expense)				15		3
	Less:
		Reclassification adjustment for gains (losses) included in net income (loss)			(3)		3
		Associated amortization of DAC, VOBA, DSI and DFEL			-		1
		Income tax benefit (expense)			1		(1)
			Balance as of end-of-period	$	89	$	(20)
Foreign Currency Translation Adjustment
Balance as of beginning-of-year				$	1	$	1
	Foreign currency translation adjustment arising during the period				(5)		2
	Income tax benefit (expense)				2		(1)
		Balance as of end-of-period		$	(2)	$	2
Funded Status of Employee Benefit Plans
Balance as of beginning-of-year				$	(278)	$	(181)
	Adjustment arising during the period				(2)		(1)
	Income tax benefit (expense)				1		-
		Balance as of end-of-period		$	(279)	$	(182)

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Guaranteed Benefit Features

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Guaranteed Benefit Features

7. Guaranteed Benefit Features

Information on the guaranteed death benefit (“GDB”) features outstanding (dollars in millions) was as follows (our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive):

	As of				As of
	March 31,			December 31,
	2012				2011
Return of Net Deposits
Total account value	$	58,847			$	54,004
Net amount at risk (1)		528				1,379
Average attained age of contract holders		59 years				59 years
Minimum Return
Total account value	$	159			$	155
Net amount at risk (1)		41				48
Average attained age of contract holders		72 years				72 years
Guaranteed minimum return		5	%			5	%
Anniversary Contract Value
Total account value	$	23,223			$	21,648
Net amount at risk (1)		1,471				2,939
Average attained age of contract holders		67 years				67 years

• Represents the amount of death benefit in excess of the account balance.  The decrease in net amount at risk when comparing March 31, 2012, to December 31, 2011, was attributable primarily to the increase in the equity markets during the first quarter of 2012.

The determination of GDB liabilities is based on models that involve a range of scenarios and assumptions, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience. The following summarizes the balances of and changes in the liabilities for GDB (in millions), which were recorded in future contract benefits on our Consolidated Balance Sheets:

			For the Three
			Months Ended
			March 31,
			2012		2011
Balance as of beginning-of-year			$	84	$	44
	Changes in reserves			(17)		4
	Benefits paid			(12)		(10)
		Balance as of end-of-period	$	55	$	38

Account balances of variable annuity contracts with guarantees (in millions) were invested in separate account investment options as follows:

			As of				As of
		March 31,				December 31,
			2012				2011
Asset Type
Domestic equity			$	36,577			$	34,286
International equity				14,045				13,095
Bonds				18,000				17,735
Money market				6,044				5,892
	Total		$	74,666			$	71,008
Percent of total variable annuity separate account values				94	%			98	%

Future contract benefits also includes reserves for our products with secondary guarantees for our products sold through our Life Insurance segment. These UL and VUL products with secondary guarantees represented approximately 38% of permanent life insurance in force as ofMarch 31, 2012,and approximately 33% of total sales for these products for the three months ended March 31, 2012.

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Contingencies and Commitments

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Contingencies and Commitments

8. Contingencies and Commitments

Regulatory bodies, such as state insurance departments, the SEC, Financial Industry Regulatory Authority and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, laws governing the activities of broker-dealers and unclaimed property laws.

LNC and its subsidiaries are involved in various pending or threatened legal proceedings, including purported class actions, arising from the conduct of business both in the ordinary course and otherwise. In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experiences of LNC in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.

Due to the unpredictable nature of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time is normally difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

We establish liabilities for litigation and regulatory loss contingencies when information related to the loss contingencies shows both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as ofMarch 31, 2012. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on LNC's financial position.

See Note 13 to the consolidated financial statements in our 2011 Form 10-K for a discussion of commitments and contingencies, which information is incorporated herein by reference.

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Realized (Gain) Loss

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Realized (Gain) Loss

10. Realized Gain (Loss)

Details underlying realized gain (loss) (in millions) reported on our Consolidated Statements of Comprehensive Income (Loss) were as follows:

			For the Three
			Months Ended
			March 31,
			2012		2011
Total realized gain (loss) related to certain investments (1)			$	(48)	$	(15)
Realized gain (loss) on the mark-to-market on certain instruments (2)				58		10
Indexed annuity net derivative results: (3)
	Gross gain (loss)			22		6
	Associated amortization of DAC, VOBA, DSI and DFEL			(6)		(2)
Variable annuity net derivatives results: (4)
	Gross gain (loss)			(133)		10
	Associated amortization of DAC, VOBA, DSI and DFEL			22		(7)
		Total realized gain (loss)	$	(85)	$	2

• See “Realized Gain (Loss) Related to Certain Investments” section in Note 4.
• Represents changes in the fair values of certain derivative investments (including those associated with our consolidatedVIEs), total return swaps (embedded derivatives that are theoretically included in our various modified coinsurance and coinsurance with funds withheld reinsurance arrangements that have contractual returns related to various assets and liabilities associated with these arrangements) and trading securities.
• Represents the net difference between the change in the fair value of the S&P 500 call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity products along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products.
• Includes the net difference in the change in embedded derivative reserves of our GLB products and the change in the fair value of the derivative instruments we own to hedge GDB and GLB products, including the cost of purchasing the hedging instruments.

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Derivatives (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended													3 Months Ended						3 Months Ended												3 Months Ended				3 Months Ended			3 Months Ended				3 Months Ended										3 Months Ended											3 Months Ended				3 Months Ended							3 Months Ended							3 Months Ended						3 Months Ended				3 Months Ended				3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011	Mar. 31, 2012 Maturity 12 20 2012 [Member]	Dec. 31, 2011 Maturity 12 20 2012 [Member]	Mar. 31, 2012 Maturity 12 20 2016 [Member]	Dec. 31, 2011 Maturity 12 20 2016 [Member]	Mar. 31, 2012 Maturity 3 20 2017 [Member]	Dec. 31, 2011 Maturity 3 20 2017 [Member]	Mar. 31, 2012 AA [Member]	Dec. 31, 2011 AA [Member]	Mar. 31, 2012 AA- [Member]	Dec. 31, 2011 AA- [Member]	Mar. 31, 2012 A plus [Member]	Dec. 31, 2011 A plus [Member]	Mar. 31, 2012 A [Member]	Dec. 31, 2011 A [Member]	Mar. 31, 2012 A- [Member]	Dec. 31, 2011 A- [Member]	Mar. 31, 2012 BBB [Member]	Dec. 31, 2011 BBB [Member]	Mar. 31, 2012 Unrealized Gain (Loss) on AFS Securities [Member]	Mar. 31, 2011 Unrealized Gain (Loss) on AFS Securities [Member]	Mar. 31, 2012 Unrealized Other Than Temporary Impairment on Available For Sale Securities [Member]	Dec. 31, 2011 Unrealized Other Than Temporary Impairment on Available For Sale Securities [Member]	Mar. 31, 2011 Unrealized Other Than Temporary Impairment on Available For Sale Securities [Member]	Dec. 31, 2010 Unrealized Other Than Temporary Impairment on Available For Sale Securities [Member]	Mar. 31, 2012 Unrealized Gain (Loss) on Derivative Instruments [Member]	Mar. 31, 2011 Unrealized Gain (Loss) on Derivative Instruments [Member]	Mar. 31, 2012 Unrealized Gain (Loss) on Derivative Instruments [Member] Net investment income [Member]	Mar. 31, 2011 Unrealized Gain (Loss) on Derivative Instruments [Member] Net investment income [Member]	Mar. 31, 2012 Foreign Currency Translation Adjustment [Member]	Dec. 31, 2011 Foreign Currency Translation Adjustment [Member]	Mar. 31, 2011 Foreign Currency Translation Adjustment [Member]	Dec. 31, 2010 Foreign Currency Translation Adjustment [Member]	Mar. 31, 2012 Funded Status of Employee Benefit Plans [Member]	Dec. 31, 2011 Funded Status of Employee Benefit Plans [Member]	Mar. 31, 2011 Funded Status of Employee Benefit Plans [Member]	Dec. 31, 2010 Funded Status of Employee Benefit Plans [Member]	Mar. 31, 2012 Cash flow hedges [Member]	Mar. 31, 2011 Cash flow hedges [Member]	Mar. 31, 2012 Cash flow hedges [Member] Derivative investments [Member]	Dec. 31, 2011 Cash flow hedges [Member] Derivative investments [Member]	Mar. 31, 2012 Fair value hedges [Member]	Mar. 31, 2011 Fair value hedges [Member]	Mar. 31, 2012 Interest Rate Contract [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Cash flow hedges [Member] Net investment income [Member]	Mar. 31, 2011 Interest Rate Contract [Member] Cash flow hedges [Member] Net investment income [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Cash flow hedges [Member] Derivative investments [Member]	Dec. 31, 2011 Interest Rate Contract [Member] Cash flow hedges [Member] Derivative investments [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Cash flow hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member]	Mar. 31, 2011 Interest Rate Contract [Member] Cash flow hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Cash flow hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member] Interest Expense [Member]	Mar. 31, 2011 Interest Rate Contract [Member] Cash flow hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member] Interest Expense [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Cash flow hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member] Net investment income [Member]	Mar. 31, 2011 Interest Rate Contract [Member] Cash flow hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member] Net investment income [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Fair value hedges [Member] Interest Expense [Member]	Mar. 31, 2011 Interest Rate Contract [Member] Fair value hedges [Member] Interest Expense [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Fair value hedges [Member] Derivative investments [Member]	Dec. 31, 2011 Interest Rate Contract [Member] Fair value hedges [Member] Derivative investments [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Fair value hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member]	Mar. 31, 2011 Interest Rate Contract [Member] Fair value hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Fair value hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member] Interest Expense [Member]	Mar. 31, 2011 Interest Rate Contract [Member] Fair value hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member] Interest Expense [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Net investment income [Member]	Mar. 31, 2011 Interest Rate Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Net investment income [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2011 Interest Rate Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2012 Interest Rate Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Derivative investments [Member]	Dec. 31, 2011 Interest Rate Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Derivative investments [Member]	Mar. 31, 2012 Foreign Exchange Contract [Member]	Mar. 31, 2012 Foreign Exchange Contract [Member] Cash flow hedges [Member] Net investment income [Member]	Mar. 31, 2011 Foreign Exchange Contract [Member] Cash flow hedges [Member] Net investment income [Member]	Mar. 31, 2012 Foreign Exchange Contract [Member] Cash flow hedges [Member] Derivative investments [Member]	Dec. 31, 2011 Foreign Exchange Contract [Member] Cash flow hedges [Member] Derivative investments [Member]	Mar. 31, 2012 Foreign Exchange Contract [Member] Cash flow hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member]	Mar. 31, 2011 Foreign Exchange Contract [Member] Cash flow hedges [Member] Unrealized Gain (Loss) on Derivative Instruments [Member]	Mar. 31, 2012 Foreign Exchange Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2011 Foreign Exchange Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2012 Foreign Exchange Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Derivative investments [Member]	Dec. 31, 2011 Foreign Exchange Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Derivative investments [Member]	Mar. 31, 2012 Equity Market Contract [Member]	Mar. 31, 2012 Equity Market Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2011 Equity Market Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2012 Equity Market Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Underwriting, acquisition, insurance and other expenses [Member]	Mar. 31, 2011 Equity Market Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Underwriting, acquisition, insurance and other expenses [Member]	Mar. 31, 2012 Equity Market Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Derivative investments [Member]	Dec. 31, 2011 Equity Market Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Derivative investments [Member]	Mar. 31, 2012 Credit Risk Contract [Member]	Mar. 31, 2012 Credit Risk Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2011 Credit Risk Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2012 Credit Risk Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Derivative investments [Member]	Dec. 31, 2011 Credit Risk Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Derivative investments [Member]	Mar. 31, 2012 Credit Risk Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Other Liabilities [Member]	Dec. 31, 2011 Credit Risk Contract [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Other Liabilities [Member]	Mar. 31, 2012 Indexed Annuity Contracts Embedded Derivatives [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2011 Indexed Annuity Contracts Embedded Derivatives [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2012 Indexed Annuity Contracts Embedded Derivatives [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Future contract benefits [Member]	Dec. 31, 2011 Indexed Annuity Contracts Embedded Derivatives [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Future contract benefits [Member]	Mar. 31, 2012 GLB Embedded Derivative Reserves [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2011 GLB Embedded Derivative Reserves [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2012 GLB Embedded Derivative Reserves [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Future contract benefits [Member]	Dec. 31, 2011 GLB Embedded Derivative Reserves [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Future contract benefits [Member]	Mar. 31, 2012 Available For Sale Securities Embedded Derivatives [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Net investment income [Member]	Mar. 31, 2011 Available For Sale Securities Embedded Derivatives [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Net investment income [Member]	Mar. 31, 2012 Reinsurance Related [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2011 Reinsurance Related [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Realized gain (loss) [Member]	Mar. 31, 2012 Reinsurance Related [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Reinsurance Related Embedded Derivatives [Member]	Dec. 31, 2011 Reinsurance Related [Member] Derivative Instruments Not Designated and Not Qualifying as Hedging Instruments [Member] Reinsurance Related Embedded Derivatives [Member]
Outstanding derivative instruments with off-balance-sheet risks
Notional Amounts	$ 56,598		$ 51,360																																							$ 2,545	$ 2,852						$ 2,205	$ 2,512									$ 1,175	$ 1,675									$ 36,178	$ 30,232				$ 340	$ 340					$ 94	$ 4						$ 16,411	$ 16,401				$ 47	$ 48	$ 148	$ 148			$ 0	$ 0			$ 0	$ 0					$ 0	$ 0
Asset Carrying or Fair Value	2,244		3,151																																							127	168						101	130									215	319									156	568				26	38					0	0						1,749	2,096				(3)	0	0	0			0	0			0	0					0	0
Liability Carrying or Fair Value Loss	1,712		2,800																																							0	0						0	0									0	0									0	0				0	0					0	0						0	0				0	0	10	16			480	399			1,064	2,217					158	168
Maturity of the notional amounts of derivative financial instruments
Remaining Life Less Than 1 Year	11,235																																													3,060																									94											8,041							40
Remaining Life - 1 - 5 Years	9,858																																													9,774																									61											23							0
Remaining Life - 6 - 10 Years	15,050																																													11,595																									179											3,168							108
Remaining Life - 11 - 30 Years	20,445																																													15,122																									100											5,176							47
Remaining Life Over - 30 Years	10																																													7																									0											3							0
Remaining Life - Total Years	56,598																																													39,558																									434											16,411							195
Change in our unrealized gain on derivative instruments in accumulated OCI
Balance as of beginning-of-year																						2,947	1,072	(119)	(110)	(113)	(129)	119	(15)			(2)	1	2	1	(279)	(278)	(182)	(181)
Cumulative effect from adoption of new accounting standard																												0	3
Unrealized holding gains (losses) arising during the period																																																			(40)	(6)									1	1														(3)	2
Change in foreign currency exchange rate adjustment																						10	14					(9)	(9)
Change in DAC, VOBA, DSI and DFEL																												4	4
Income tax benefit (expense)																												15	3
Less: Reclassification adjustment for gains (losses) included in net income (loss)																														2	2																						0	1	(6)	(1)							1	1
Less: Associated amortization of DAC, VOBA, DSI and DFEL																												0	1
Less: Income tax benefit (expense)																												1	(1)
Balance as of end-of-period																						2,933	1,186	(119)	(110)	(113)	(129)	89	(20)			(2)	1	2	1	(279)	(278)	(182)	(181)
Gains (losses)
Gains (losses)	50	76																																						(5)	0			12	13		(7)	(1)									12	13							(3)	(6)	(413)	(61)				2	1					(4)	(5)				(672)	(199)	(135)	(19)				3	4					104	48			1,153	289			0	1	10	11
Gains (losses) on derivative instruments designated as cash flow hedges
Gain (loss) recognized as a component of other comprehensive income with the offset to net investment income	(4)	0
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months	20
Information related to fair value hedges
Gain (loss) recognized as a component of OCI with the offset to interest expense	1	1
Open credit default swap liabilities
Credit rating of underlying obligation				BBB+	BBB+	BBB+	BBB+	BBB	BBB
Maturity date of open credit default swap liabilities				Dec. 20, 2012	Dec. 20, 2012	Dec. 20, 2016	Dec. 20, 2016	Mar. 20, 2017	Mar. 20, 2017
Credit default swaps, number of instruments	9		9	4	4	3	3	2	2
Fair Value of open credit default swap liabilities	(10)		(16)	0	0	(7)	(12)	(3)	(4)
Maximum potential payout of open credit default swap liabilities	148		148	40	40	68	68	40	40
Credit risk related contingent features collateral
Maximum potential payout	148		148	40	40	68	68	40	40
Less: Counterparty thresholds	0		0
Collateral requirement if netting agreements not in place	10
Nonperformance risk adjustment	6
Exposure associated with collateralization events	61
Collateral support agreements
Collateral Posted by Counterparty (Held by Entity)	2,286		3,170							34	35	59	219	624	848	1,232	1,681	335	387	2	0
Collateral Posted by LNC (Held by Counterparty)	$ (116)		$ (120)							$ 0	$ 0	$ (3)	$ 0	$ 0	$ 0	$ (82)	$ (120)	$ (31)	$ 0	$ 0	$ 0

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Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Consolidated Variable Interest Entity Asset and Liability information

					As of March 31, 2012							As of December 31, 2011
					Number							Number
					of		Notional		Carrying			of		Notional		Carrying
				Instruments			Amounts		Value		Instruments			Amounts		Value
Assets
Fixed maturity securities:
	Asset-backed credit card loan					N/A	$	-	$	596			N/A	$	-	$	592
	U.S. Government bonds					N/A		-		106			N/A		-		108
Excess mortality swap						1		100		-			1		100		-
			Total assets (1)			1	$	100	$	702			1	$	100	$	700
Liabilities
Non-qualifying hedges:
	Credit default swaps					2	$	600	$	224			2	$	600	$	295
	Contingent forwards					2		-		(3)			2		-		(4)
		Total non-qualifying hedges				4		600		221			4		600		291
Federal income tax						N/A		-		(72)			N/A		-		(98)
			Total liabilities (2)			4	$	600	$	149			4	$	600	$	193

Consolidated Variable Interest Entity Settlement Payments and Mark-to-Market Adjustments

		For the Three
		Months Ended
		March 31,
		2012		2011
Non-Qualifying Hedges
Credit default swaps		$	71	$	8
Contingent forwards			(2)		(2)
	Total non-qualifying hedges (1)	$	69	$	6

CLN structures summary information

	Amount and Date of Issuance
		$400		$200
		December		April
		2006		2007
Original attachment point (subordination)		5.50	%	2.05	%
Current attachment point (subordination)		4.17	%	1.48	%
Maturity	12/20/2016			3/20/2017
Current rating of tranche		B+		Ba2
Current rating of underlying collateral pool		Aa1-B3		Aaa-Caa1
Number of defaults in underlying collateral pool		2		2
Number of entities		123		99
Number of countries		19		22

CLN structures' underlying collateral by industry and rating

			AAA		AA		A		BBB		BB		B		CCC		Total
Industry
Telecommunications			0.0	%	0.3	%	5.1	%	4.8	%	0.3	%	0.5	%	0.0	%	11.0	%
Financial intermediaries			0.3	%	2.8	%	6.9	%	0.5	%	0.0	%	0.0	%	0.0	%	10.5	%
Oil and gas			0.0	%	0.7	%	1.0	%	4.6	%	0.0	%	0.0	%	0.0	%	6.3	%
Utilities			0.0	%	0.0	%	2.6	%	2.0	%	0.0	%	0.0	%	0.0	%	4.6	%
Chemicals and plastics			0.0	%	0.0	%	2.3	%	1.2	%	0.3	%	0.0	%	0.0	%	3.8	%
Drugs			0.3	%	2.7	%	0.7	%	0.0	%	0.0	%	0.0	%	0.0	%	3.7	%
Retailers (except food
	and drug)		0.0	%	0.0	%	2.1	%	0.9	%	0.5	%	0.0	%	0.0	%	3.5	%
Industrial equipment			0.0	%	0.0	%	3.0	%	0.3	%	0.0	%	0.0	%	0.0	%	3.3	%
Sovereign			0.0	%	0.7	%	1.6	%	1.0	%	0.0	%	0.0	%	0.0	%	3.3	%
Food products			0.0	%	0.3	%	1.8	%	1.1	%	0.0	%	0.0	%	0.0	%	3.2	%
Conglomerates			0.0	%	2.6	%	0.5	%	0.0	%	0.0	%	0.0	%	0.0	%	3.1	%
Forest products			0.0	%	0.0	%	0.0	%	1.6	%	1.4	%	0.0	%	0.0	%	3.0	%
Other			0.0	%	2.5	%	15.5	%	17.8	%	3.2	%	1.4	%	0.3	%	40.7	%
		Total	0.6	%	12.6	%	43.1	%	35.8	%	5.7	%	1.9	%	0.3	%	100.0	%

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Realized Gain (Loss) (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Details underlying realized (gain) loss

			For the Three
			Months Ended
			March 31,
			2012		2011
Total realized gain (loss) related to certain investments (1)			$	(48)	$	(15)
Realized gain (loss) on the mark-to-market on certain instruments (2)				58		10
Indexed annuity net derivative results: (3)
	Gross gain (loss)			22		6
	Associated amortization of DAC, VOBA, DSI and DFEL			(6)		(2)
Variable annuity net derivatives results: (4)
	Gross gain (loss)			(133)		10
	Associated amortization of DAC, VOBA, DSI and DFEL			22		(7)
		Total realized gain (loss)	$	(85)	$	2

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Segment Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Notes to Financial Statements [Abstract]
Federal income tax rate	35.00%	35.00%
Reconciliation of Revenue from Segments to Consolidated [Abstract]
Total revenues	$ 2,714	$ 2,718
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Income (loss) from continuing operations	246	314
Income (loss) from discontinued operations, after-tax	(1)	0
Net income (loss)	245	314
Excluded Realized Gain (Loss), After Tax, Reconciling Item [Member]
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Income (loss) from continuing operations	(73)	(14)
Benefit ratio unlocking, After Tax, Reconciling Item [Member]
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Income (loss) from continuing operations	23	5
Excluded Realized Gain (Loss), Pre Tax, Reconciling Item [Member]
Reconciliation of Revenue from Segments to Consolidated [Abstract]
Total revenues	(114)	(21)
Amortization of Deferred Gains From Reserve Changes On Business Sold Through Reinsurance, Pre Tax, Reconciling Item [Member]
Reconciliation of Revenue from Segments to Consolidated [Abstract]
Total revenues	1	1
Amortization Income of DFEL Associated With Benefit Ratio Unlocking, Pre Tax, Reconciling Item [Member]
Reconciliation of Revenue from Segments to Consolidated [Abstract]
Total revenues	1	0
Annuities Segment [Member]
Reconciliation of Revenue from Segments to Consolidated [Abstract]
Total revenues	731	733
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Income (loss) from continuing operations	137	144
Retirement Plan Services Segment [Member]
Reconciliation of Revenue from Segments to Consolidated [Abstract]
Total revenues	252	263
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Income (loss) from continuing operations	35	48
Life Segment [Member]
Reconciliation of Revenue from Segments to Consolidated [Abstract]
Total revenues	1,232	1,146
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Income (loss) from continuing operations	142	142
Group Protection Segment [Member]
Reconciliation of Revenue from Segments to Consolidated [Abstract]
Total revenues	504	478
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Income (loss) from continuing operations	16	24
Other Operations [Member]
Reconciliation of Revenue from Segments to Consolidated [Abstract]
Total revenues	107	118
Reconciliation of Net Income (Loss) from Segments to Consolidated [Abstract]
Income (loss) from continuing operations	$ (34)	$ (35)

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Statement of Stockholders' Equity [Abstract]
Common dividends declared per share (in dollars per share)	$ 0.080	$ 0.050

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Investments

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Investments

4. Investments

AFS Securities

Pursuant to the Fair Value Measurements and Disclosures Topic of the FASB Accounting Standards CodificationTM (“ASC”), we have categorized AFS securities into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3), as described in Note 1 in our 2011 Form 10-K, which also includes additional disclosures regarding our fair value measurements.

The amortized cost, gross unrealized gains, losses and OTTI and fair value of AFS securities (in millions) were as follows:

				As of March 31, 2012
				Amortized		Gross Unrealized						Fair
				Cost		Gains		Losses		OTTI		Value
Fixed maturity securities:
	Corporate bonds			$	55,255	$	5,854	$	407	$	103	$	60,599
	U.S. Government bonds				450		41		5		-		486
	Foreign government bonds				585		65		-		-		650
	Residential mortgage-backed securities ("RMBS")				7,196		524		48		100		7,572
	Commercial mortgage-backed securities ("CMBS")				1,533		76		67		19		1,523
	Collateralized debt obligations ("CDOs")				117		-		15		-		102
	State and municipal bonds				3,497		637		8		-		4,126
	Hybrid and redeemable preferred securities				1,256		62		122		-		1,196
	VIEs' fixed maturity securities				674		28		-		-		702
		Total fixed maturity securities			70,563		7,287		672		222		76,956
Equity securities					114		19		7		-		126
			Total AFS securities	$	70,677	$	7,306	$	679	$	222	$	77,082

				As of December 31, 2011
				Amortized		Gross Unrealized						Fair
				Cost		Gains		Losses		OTTI		Value
Fixed maturity securities:
	Corporate bonds			$	53,661	$	6,185	$	517	$	68	$	59,261
	U.S. Government bonds				439		55		-		-		494
	Foreign government bonds				668		65		-		-		733
	RMBS				7,690		548		73		126		8,039
	CMBS				1,642		73		106		9		1,600
	CDOs				121		-		19		-		102
	State and municipal bonds				3,490		566		9		-		4,047
	Hybrid and redeemable preferred securities				1,277		50		170		-		1,157
	VIEs' fixed maturity securities				673		27		-		-		700
		Total fixed maturity securities			69,661		7,569		894		203		76,133
Equity securities					135		16		12		-		139
			Total AFS securities	$	69,796	$	7,585	$	906	$	203	$	76,272

The amortized cost and fair value of fixed maturity AFS securities by contractual maturities (in millions) were as follows:

			As of March 31, 2012
			Amortized		Fair
			Cost		Value
Due in one year or less			$	2,854	$	2,914
Due after one year through five years				12,020		12,955
Due after five years through ten years				22,816		25,040
Due after ten years				24,027		26,850
	Subtotal			61,717		67,759
Mortgage-backed securities ("MBS")				8,729		9,095
CDOs				117		102
		Total fixed maturity AFS securities	$	70,563	$	76,956

Actual maturities may differ from contractual maturities because issuers may have the right to call or pre-pay obligations.

The fair value and gross unrealized losses, including the portion of OTTI recognized in OCI, of AFS securities (dollars in millions), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:

					As of March 31, 2012
					Less Than or Equal				Greater Than
					to Twelve Months				Twelve Months				Total
							Gross				Gross				Gross
							Unrealized				Unrealized				Unrealized
					Fair		Losses and		Fair		Losses and		Fair		Losses and
					Value		OTTI		Value		OTTI		Value		OTTI
Fixed maturity securities:
	Corporate bonds				$	3,186	$	194	$	1,335	$	316	$	4,521	$	510
	U.S. Government bonds					213		5		1		-		214		5
	RMBS					572		99		351		49		923		148
	CMBS					119		22		130		64		249		86
	CDOs					3		1		75		14		78		15
	State and municipal bonds					2		-		26		8		28		8
	Hybrid and redeemable
		preferred securities				159		6		370		116		529		122
			Total fixed maturity securities			4,254		327		2,288		567		6,542		894
Equity securities						12		7		-		-		12		7
				Total AFS securities	$	4,266	$	334	$	2,288	$	567	$	6,554	$	901
Total number of AFS securities in an unrealized loss position																828

					As of December 31, 2011
					Less Than or Equal				Greater Than
					to Twelve Months				Twelve Months				Total
							Gross				Gross				Gross
							Unrealized				Unrealized				Unrealized
					Fair		Losses and		Fair		Losses and		Fair		Losses and
					Value		OTTI		Value		OTTI		Value		OTTI
Fixed maturity securities:
	Corporate bonds				$	2,848	$	162	$	1,452	$	423	$	4,300	$	585
	RMBS					565		125		429		74		994		199
	CMBS					178		15		146		100		324		115
	CDOs					9		1		80		18		89		19
	State and municipal bonds					31		-		30		9		61		9
	Hybrid and redeemable
		preferred securities				324		23		353		147		677		170
			Total fixed maturity securities			3,955		326		2,490		771		6,445		1,097
Equity securities						38		12		-		-		38		12
				Total AFS securities	$	3,993	$	338	$	2,490	$	771	$	6,483	$	1,109
Total number of AFS securities in an unrealized loss position																897

For information regarding our investments in VIEs, see Note 3.

We perform detailed analysis on the AFS securities backed by pools of residential and commercial mortgages that are most at risk of impairment based on factors discussed in Note 1 in our 2011 Form 10-K. Selected information for these securities in a gross unrealized loss position (in millions) was as follows:

		As of March 31, 2012
		Amortized		Fair		Unrealized
		Cost		Value		Loss
Total
AFS securities backed by pools of residential mortgages		$	1,875	$	1,480	$	395
AFS securities backed by pools of commercial mortgages			367		270		97
	Total	$	2,242	$	1,750	$	492
Subject to Detailed Analysis
AFS securities backed by pools of residential mortgages		$	1,862	$	1,467	$	395
AFS securities backed by pools of commercial mortgages			109		59		50
	Total	$	1,971	$	1,526	$	445

		As of December 31, 2011
		Amortized		Fair		Unrealized
		Cost		Value		Loss
Total
AFS securities backed by pools of residential mortgages		$	2,023	$	1,553	$	470
AFS securities backed by pools of commercial mortgages			472		344		128
	Total	$	2,495	$	1,897	$	598
Subject to Detailed Analysis
AFS securities backed by pools of residential mortgages		$	2,015	$	1,545	$	470
AFS securities backed by pools of commercial mortgages			126		61		65
	Total	$	2,141	$	1,606	$	535

For the three months ended March 31, 2012 and 2011, we recorded OTTI for AFS securities backed by pools of residential and commercial mortgages of $21 million, pre-tax,and before associated amortization expense for DAC, value of business acquired (“VOBA”), deferred sales inducements (“DSI”) and deferred front-end loads (“DFEL”), of which $(21) million and $(26) million, respectively, was recognized in OCI and $42 millionand $47 million, respectively, was recognized in net income (loss).

The fair value, gross unrealized losses, the portion of OTTI recognized in OCI (in millions) and number of AFS securities where the fair value had declined and remained below amortized cost by greater than 20% were as follows:

		As of March 31, 2012
								Number
		Fair		Gross Unrealized				of
		Value		Losses		OTTI		Securities (1)
Less than six months		$	81	$	32	$	3		23
Six months or greater, but less than nine months			111		42		14		19
Nine months or greater, but less than twelve months			50		17		14		16
Twelve months or greater			579		343		151		166
	Total	$	821	$	434	$	182		224

		As of December 31, 2011
								Number
		Fair		Gross Unrealized				of
		Value		Losses		OTTI		Securities (1)
Less than six months		$	385	$	125	$	31		56
Six months or greater, but less than nine months			53		30		12		18
Nine months or greater, but less than twelve months			2		-		1		7
Twelve months or greater			615		470		111		175
	Total	$	1,055	$	625	$	155		256

• We may reflect a security in more than one aging category based on various purchase dates.

We regularly review our investment holdings for OTTI. Our gross unrealized losses on AFS securities decreased $208millionfor the three months ended March 31, 2012. As discussed further below, we believe the unrealized loss position as of March 31, 2012,did not represent OTTI as we did not intend to sell these fixed maturity AFS securities, it is not more likely than not that we will be required to sell the fixed maturity AFS securities before recovery of their amortized cost basis, the estimated future cash flows were equal to or greater than the amortized cost basis of the debt securities, or we had the ability and intent to hold the equity AFS securities for a period of time sufficient for recovery.

Based upon this evaluation as of March 31, 2012, management believed we had the ability to generate adequate amounts of cash from our normal operations (e.g., insurance premiums and fees and investment income) to meet cash requirements with a prudent margin of safety without requiring the sale of our temporarily-impaired securities.

As of March 31, 2012, the unrealized losses associated with our corporate bond securities were attributable primarily to securities that were backed by commercial loans and individual issuer companies. For our corporate bond securities with commercial loans as the underlying collateral, we evaluated the projected credit losses in the underlying collateral and concluded that we had sufficient subordination or other credit enhancement when compared with our estimate of credit losses for the individual security and we expected to recover the entire amortized cost for each security. For individual issuers, we performed detailed analysis of the financial performance of the issuer and determined that we expected to recover the entire amortized cost for each security.

As of March 31, 2012, the unrealized losses associated with our MBS and CDOs were attributable primarily to collateral losses and credit spreads. We assessed for credit impairment using a cash flow model as discussed above. The key assumptions included default rates, severities and prepayment rates. We estimated losses for a security by forecasting the underlying loans in each transaction. The forecasted loan performance was used to project cash flows to the various tranches in the structure, as applicable. Our forecasted cash flows also considered, as applicable, independent industry analyst reports and forecasts, sector credit ratings and other independent market data. Based upon our assessment of the expected credit losses of the security given the performance of the underlying collateral compared to our subordination or other credit enhancement, we expected to recover the entire amortized cost basis of each security.

As of March 31, 2012, the unrealized losses associated with our hybrid and redeemable preferred securities were attributable primarily to wider credit spreads caused by illiquidity in the market and subordination within the capital structure, as well as credit risk of specific issuers. For our hybrid and redeemable preferred securities, we evaluated the financial performance of the issuer based upon credit performance and investment ratings and determined we expected to recover the entire amortized cost of each security.

Changes in the amount of credit loss of OTTI recognized in net income (loss) where the portion related to other factors was recognized in OCI (in millions) on fixed maturity AFS securities were as follows:

				For the Three
				Months Ended
				March 31,
				2012		2011
Balance as of beginning-of-period				$	390	$	319
	Increases attributable to:
		Credit losses on securities for which an OTTI was not previously recognized			34		25
		Credit losses on securities for which an OTTI was previously recognized			23		22
	Decreases attributable to:
		Securities sold			(37)		(14)
			Balance as of end-of-period	$	410	$	352

During the three months ended March 31, 2012 and 2011, we recorded credit losses on securities for which an OTTI was not previously recognized as we determined the cash flows expected to be collected would not be sufficient to recover the entire amortized cost basis of the debt security. The credit losses we recorded on securities for which an OTTI was not previously recognized were attributable primarily to one or a combination of the following reasons:

• Failure of the issuer of the security to make scheduled payments;
• Deterioration of creditworthiness of the issuer;
• Deterioration of conditions specifically related to the security;
• Deterioration of fundamentals of the industry in which the issuer operates;
• Deterioration of fundamentals in the economy including, but not limited to, higher unemployment and lower housing prices; and
• Deterioration of the rating of the security by a rating agency.

We recognize the OTTI attributed to the noncredit portion as a separate component in OCI referred to as unrealized OTTI on AFS securities.

Details of the amount of credit loss of OTTI recognized in net income (loss) where the portion related to other factors was recognized in OCI (in millions), were as follows:

		As of March 31, 2012
				Gross Unrealized						OTTI in
		Amortized				Losses and		Fair		Credit
		Cost		Gains		OTTI		Value		Losses
Corporate bonds		$	242	$	1	$	100	$	143	$	63
RMBS			688		4		100		592		290
CMBS			39		-		19		20		57
	Total	$	969	$	5	$	219	$	755	$	410

		As of December 31, 2011
				Gross Unrealized						OTTI in
		Amortized				Losses and		Fair		Credit
		Cost		Gains		OTTI		Value		Losses
Corporate bonds		$	169	$	1	$	67	$	103	$	51
RMBS			690		1		128		563		301
CMBS			17		-		10		7		38
	Total	$	876	$	2	$	205	$	673	$	390

Mortgage Loans on Real Estate

Mortgage loans on real estate principally involve commercial real estate. The commercial loans are geographically diversified throughout the U.S. with the largest concentrations in California and Texas, which accounted for approximately 32% of mortgage loans on real estate as of March 31, 2012, and December 31, 2011.

The following provides the current and past due composition of our mortgage loans on real estate (in millions):

			As of			As of
		March 31,			December 31,
			2012			2011
Current			$	6,853		$	6,858
60 to 90 days past due				-			26
Greater than 90 days past due				99			76
Valuation allowance associated with impaired mortgage loans on real estate				(27)			(31)
Unamortized premium (discount)				13			13
	Total carrying value		$	6,938		$	6,942

The number of impaired mortgage loans on real estate, each of which had an associated specific valuation allowance, and the carrying value of impaired mortgage loans on real estate (dollars in millions) were as follows:

			As of			As of
		March 31,			December 31,
			2012			2011
Number of impaired mortgage loans on real estate			10			12
Principal balance of impaired mortgage loans on real estate			$	85		$	100
Valuation allowance associated with impaired mortgage loans on real estate				(27)			(31)
	Carrying value of impaired mortgage loans on real estate		$	58		$	69

The average carrying value on the impaired mortgage loans on real estate (in millions) was as follows:

	For the Three
	Months Ended
	March 31,
	2012		2011
Average carrying value for impaired mortgage loans on real estate	$	64	$	55
Interest income recognized on impaired mortgage loans on real estate		-		1
Interest income collected on impaired mortgage loans on real estate		-		1

As described in Note 1 in our 2011 Form 10-K, we use the loan-to-value and debt-service coverage ratios as credit quality indicators for our mortgage loans, which were as follows (dollars in millions):

		As of March 31, 2012					As of December 31, 2011
						Debt-					Debt-
						Service					Service
		Principal		% of		Coverage	Principal		% of		Coverage
Loan-to-Value		Amount		Total		Ratio	Amount		Total		Ratio
Less than 65%		$	5,419	77.9	%	1.62	$	5,338	76.7	%	1.61
65% to 74%			1,121	16.1	%	1.39		1,198	17.2	%	1.37
75% to 100%			311	4.5	%	0.90		308	4.4	%	0.92
Greater than 100%			101	1.5	%	0.37		116	1.7	%	0.36
	Total mortgage loans on real estate	$	6,952	100.0	%		$	6,960	100.0	%

Alternative Investments 

As of March 31, 2012, and December 31, 2011, alternative investments included investments in approximately 97 and 96 different partnerships, respectively, and the portfolio represented less than 1% of our overall invested assets.

Realized Gain (Loss) Related to Certain Investments

The detail of the realized gain (loss) related to certain investments (in millions) was as follows:

			For the Three
			Months Ended
			March 31,
			2012		2011
Fixed maturity AFS securities:
	Gross gains		$	5	$	36
	Gross losses			(63)		(63)
Equity AFS securities:
	Gross gains			1		8
Gain (loss) on other investments				7		13
Associated amortization of DAC, VOBA, DSI and DFEL
	and changes in other contract holder funds			2		(9)
		Total realized gain (loss) related to certain investments	$	(48)	$	(15)

Details underlying write-downs taken as a result of OTTI (in millions) that were recognized in net income (loss) and included in realized gain (loss) on AFS securities above, and the portion of OTTI recognized in OCI (in millions) were as follows:

			For the Three
			Months Ended
			March 31,
			2012		2011
OTTI Recognized in Net Income (Loss)
Corporate bonds			$	(19)	$	(3)
RMBS				(18)		(20)
CMBS				(20)		(24)
CDOs				-		(1)
Hybrid and redeemable preferred securities				-		(2)
	Gross OTTI recognized in net income (loss)			(57)		(50)
	Associated amortization of DAC, VOBA, DSI and DFEL			10		9
		Net OTTI recognized in net income (loss), pre-tax	$	(47)	$	(41)
Portion of OTTI Recognized in OCI
Gross OTTI recognized in OCI			$	58	$	8
Change in DAC, VOBA, DSI and DFEL				(8)		(5)
	Net portion of OTTI recognized in OCI, pre-tax		$	50	$	3

Determination of Credit Losses on Corporate Bonds and CDOs

As of March 31, 2012, and December 31, 2011, we reviewed our corporate bond and CDO portfolios for potential shortfall in contractual principal and interest based on numerous subjective and objective inputs. The factors used to determine the amount of credit loss for each individual security, include, but are not limited to, near term risk, substantial discrepancy between book and market value, sector or company-specific volatility, negative operating trends and trading levels wider than peers.

Credit ratings express opinions about the credit quality of a security. Securities rated investment grade, that is those rated BBB- or higher by Standard & Poor's (“S&P”) Rating Services or Baa3 or higher by Moody's Investors Service (“Moody's”), are generally considered by the rating agencies and market participants to be low credit risk. As of March 31, 2012, and December 31, 2011, 96%of the fair value of our corporate bond portfolio was rated investment grade. As of March 31, 2012, and December 31, 2011, the portion of our corporate bond portfolio rated below investment grade had an amortized cost of $2.8billionand $2.6 billionand a fair value of $2.6 billion and $2.4billion, respectively. As of March 31, 2012, and December 31, 2011,97%of the fair value of our CDO portfolio was rated investment grade. As of March 31, 2012, and December 31, 2011, the portion of our CDO portfolio rated below investment grade had an amortized cost and fair value of $3 million. Based upon the analysis discussed above, we believed as of March 31, 2012, and December 31, 2011, that we would recover the amortized cost of each investment grade corporate bond and CDO security.

For securities where we recorded an OTTI recognized in net income (loss) for the three months ended March 31, 2012 and 2011, the recovery as a percentage of amortized cost was 92% and 98%, respectively, for corporate bondsand 0%for CDOs.

Determination of Credit Losses on MBS

As of March 31, 2012, and December 31, 2011, default rates were projected by considering underlying MBS loan performance and collateral type. Projected default rates on existing delinquencies vary between 25% to 100% depending on loan type and severity of delinquency status.  In addition, we estimate the potential contributions of currently performing loans that may become delinquent in the future based on the change in delinquencies and loan liquidations experienced in the recent history. Finally, we develop a default rate timing curve by aggregating the defaults for all loans (delinquent loans, foreclosure and real estate owned and new delinquencies from currently performing loans) in the pool to project the future expected cash flows. 

We use certain available loan characteristics such as lien status, loan sizes and occupancy to estimate the loss severity of loans. Second lien loans are assigned 100% severity, if defaulted.  For first lien loans, we assume a minimum of 30% severity with higher severity assumed for investor properties and further housing price depreciation.

Payables for Collateral on Investments

The carrying values of the payables for collateral on investments (in millions) included on our Consolidated Balance Sheets and the fair value of the related investments or collateral consisted of the following:

			As of March 31, 2012				As of December 31, 2011
			Carrying		Fair		Carrying		Fair
			Value		Value		Value		Value
Collateral payable held for derivative investments (1)			$	2,132	$	2,132	$	2,980	$	2,980
Securities pledged under securities lending agreements (2)				200		192		200		193
Securities pledged under reverse repurchase agreements (3)				280		292		280		294
Securities pledged for Term Asset-Backed Securities
	Loan Facility ("TALF") (4)			163		188		173		199
Securities pledged for Federal Home Loan Bank of
	Indianapolis Securities ("FHLBI") (5)			100		153		100		142
		Total payables for collateral on investments	$	2,875	$	2,957	$	3,733	$	3,808

• We obtain collateral based upon contractual provisions with our counterparties. These agreements take into consideration the counterparties' credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that once exceeded result in the receipt of cash that is typically invested in cash and invested cash. See Note 6 for details about maximum collateral potentially required to post on our credit default swaps.
• Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. We value collateral daily and obtain additional collateral when deemed appropriate. The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities.
• Our pledged securities under reverse repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We obtain collateral in an amount equal to 95% of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary. The cash received in our reverse repurchase program is typically invested in fixed maturity AFS securities.
• Our pledged securities for TALF are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We obtain collateral in an amount that has typically averaged 90% of the fair value of the TALF securities. The cash received in these transactions is invested in fixed maturity AFS securities.
• Our pledged securities for FHLBI are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We generally obtain collateral in an amount equal to 85% to 95% of the fair value of the FHLBI securities. The cash received in these transactions is typically invested in cash and invested cash or fixed maturity AFS securities.

Increase (decrease) in payables for collateral on investments (in millions) included on the Consolidated Statements of Cash Flows consisted of the following:

		For the Three
		Months Ended
		March 31,
		2012		2011
Collateral payable held for derivative investments		$	(848)	$	(70)
Securities pledged under securities lending agreements			-		1
Securities pledged for TALF			(10)		(36)
	Total increase (decrease) in payables for collateral on investments	$	(858)	$	(105)

Investment Commitments

As of March 31, 2012, our investment commitments were $653 million, which included $186 million of limited partnerships (“LPs”), $399 million of private placements and $68 million of mortgage loans on real estate.

Concentrations of Financial Instruments

As of March 31, 2012, and December 31, 2011, our most significant investments in one issuer were our investments in securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $4.6 billion and $5.0 billion, respectively, or 5%of our invested assets portfolio, and our investments in securities issued by Fannie Mae with a fair value of $2.6 billion, or 3% of our invested assets portfolio. These investments are included in corporate bonds in the tables above.

As of March 31, 2012, and December 31, 2011, our most significant investments in one industry were our investment securities in the electric industry with a fair value of $7.7 billion, or 8% of our invested assets portfolio, and our investment securities in the collateralized mortgage and other obligations industry with a fair value of $5.3 billion and $5.6 billion, respectively,or 6%of our invested assets portfolio.We utilized the industry classifications to obtain the concentration of financial instruments amount; as such, this amount will not agree to the AFS securities table above.

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Stock-Based Incentive Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Stock Based Awards Granted Table [Text Block]

Awards
10-year LNC stock options		828,674
Performance shares		278,943
SARs		80,225
Restricted stock units		604,226
Non-employee:
	Agent stock options	99,268
	Director stock options	51,140
	Director restricted stock units	10,128

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Realized (Gain) Loss (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Details underlying realized gain (loss)
Total realized gain (loss) related to certain investments	$ (48)	$ (15)
Realized gain (loss) on the mark-to-market on certain instruments	58	10
Indexed annuity net derivative results
Gross gain (loss)	22	6
Associated amortization of DAC, VOBA, DSI, and DFEL	(6)	(2)
Variable annuity net derivatives results
Gross gain (loss)	(133)	10
Associated amortization of DAC, VOBA, DSI, and DFEL	22	(7)
Total realized gain (loss)	$ (85)	$ 2

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New Accounting Standards (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Accounting for costs associated with acquiring or renewing insurance contracts cumulative effect adjustment [Text Block]

				As of December 31,
				2011		2010
Assets
Deferred acquisition costs				$	(1,415)	$	(1,516)
Liabilities and Stockholders' Equity
Other liabilities - deferred income taxes				$	(490)	$	(524)
Stockholders' equity:
	Retained earnings				(1,157)		(1,095)
	Accumulated other comprehensive income (loss)				232		103
		Total stockholders' equity			(925)		(992)
			Total liabilities and stockholders' equity	$	(1,415)	$	(1,516)

Revenues
Realized gain (loss)			$	4
Expenses
Underwriting, acquisition, insurance and other expenses				(43)
	Income (loss) from continuing operations before taxes			(39)
	Federal income tax expense (benefit)			14
		Income (loss) from continuing operations	$	(25)
Earnings (Loss) Per Common Share - Basic			$	(0.08)
Earnings (Loss) Per Common Share - Diluted			$	(0.08)