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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Outstanding Derivative Instruments With Off-Balance-Sheet Risks



	As of September 30, 2013						As of December 31, 2012
	Notional		Fair Value				Notional		Fair Value
	Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts ⁽¹⁾	$	4,391	$	573	$	150	$	3,214	$	462	$	224
Foreign currency contracts ⁽¹⁾		615		32		41		420		39		26
Total cash flow hedges		5,006		605		191		3,634		501		250
Fair value hedges:
Interest rate contracts ⁽¹⁾		875		120		15		875		269		-
Non-Qualifying Hedges
Interest rate contracts ⁽¹⁾		44,081		340		613		36,539		1,042		475
Foreign currency contracts ⁽¹⁾		89		-		-		48		-		-
Equity market contracts ⁽¹⁾		19,426		1,052		184		19,857		1,734		170
Equity collar ⁽¹⁾		-		-		-		9		1		-
Credit contracts ⁽²⁾		126		-		5		148		-		11
Embedded derivatives:
Indexed annuity and universal life
contracts ⁽³⁾		-		-		924		-		-		732
Guaranteed living benefit
reserves ("GLB") ⁽³⁾		-		711		-		-		-		909
Reinsurance related ⁽⁴⁾		-		-		121		-		-		215
Total derivative instruments	$	69,603	$	2,828	$	2,053	$	61,110	$	3,547	$	2,762

⁽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.

Maturity Of The Notional Amounts Of Derivative Financial Instruments



	Remaining Life as of September 30, 2013
	Less Than		1 – 5		6 – 10		11 – 30		Over 30
	1 Year		Years		Years		Years		Years		Total
Interest rate contracts ⁽¹⁾	$	4,522	$	23,736	$	10,284	$	9,592	$	1,213	$	49,347
Foreign currency contracts ⁽²⁾		135		137		243		189		-		704
Equity market contracts		10,485		3,798		5,119		22		2		19,426
Credit contracts		-		126		-		-		-		126
Total derivative instruments
with notional amounts	$	15,142	$	27,797	$	15,646	$	9,803	$	1,215	$	69,603

⁽¹⁾	As of September 30, 2013, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was April 2067.

⁽²⁾	As of September 30, 2013, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was April 2028.

Change In Our Unrealized Gain On Derivative Instruments In Accumulated OCI



	For the Nine
	Months Ended
	September 30,
	2013		2012
Balance as of beginning-of-year	$	163	$	119
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the year:
Cash flow hedges:
Interest rate contracts		175		80
Foreign currency contracts		(17)		(3)
Fair value hedges:
Interest rate contracts		3		3
Change in foreign currency exchange rate adjustment		(12)		(7)
Change in DAC, VOBA, DSI and DFEL		6		9
Income tax benefit (expense)		(54)		(30)
Less:
Reclassification adjustment for gains (losses) included
in net income (loss):
Cash flow hedges:
Interest rate contracts ⁽¹⁾		(18)		(17)
Foreign currency contracts ⁽¹⁾		4		3
Fair value hedges:
Interest rate contracts ⁽²⁾		3		3
Associated amortization of DAC, VOBA, DSI and DFEL		1		2
Income tax benefit (expense)		4		3
Balance as of end-of-period	$	270	$	177

⁽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).

Gains (Losses) On Derivative Instruments Recorded Within Income (Loss) From Continuing Operations



	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Qualifying Hedges
Cash flow hedges:
Interest rate contracts ⁽¹⁾	$	(7)	$	(6)	$	(17)	$	(17)
Foreign currency contracts ⁽¹⁾		2		2		2		4
Total cash flow hedges		(5)		(4)		(15)		(13)
Fair value hedges:
Interest rate contracts ⁽²⁾		9		5		26		28
Non-Qualifying Hedges
Interest rate contracts ⁽³⁾		(113)		(6)		(775)		183
Foreign currency contracts ⁽³⁾		6		(4)		(7)		(8)
Equity market contracts ⁽³⁾		(381)		(343)		(959)		(773)
Equity market contracts ⁽⁴⁾		11		(136)		26		(246)
Credit contracts ⁽³⁾		4		(7)		7		(3)
Embedded derivatives:
Indexed annuity and universal life contracts ⁽³⁾		(63)		(63)		(225)		(143)
GLB reserves ⁽³⁾		419		570		1,620		861
Reinsurance related ⁽³⁾		10		(30)		94		(48)
Total derivative instruments	$	(103)	$	(18)	$	(208)	$	(162)

⁽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 commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

Gains (Losses) On Derivative Instruments Designated As Cash Flow Hedges



	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Gain (loss) recognized as a component of OCI with
the offset to net investment income	$	(5)	$	(5)	$	(14)	$	(15)

Gains (Losses) On Derivative Instruments Designated As Fair Value Hedges



	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Gain (loss) recognized as a component of OCI with
the offset to interest expense	$	1	$	1	$	3	$	3

Open Credit Default Swap Liabilities

As of September 30, 2013

Credit

Reason

Nature

Rating of

Number

Maximum

for

Underlying

Fair

Potential

Maturity

Entering

Recourse

Obligation ⁽¹⁾

Instruments

Value ⁽²⁾

Payout

12/20/2016 ⁽³⁾

⁽⁴⁾

⁽⁵⁾

BBB-

(2)

3/20/2017 ⁽³⁾

⁽⁴⁾

⁽⁵⁾

BBB-

(3)

(5)

126

As of December 31, 2012

Credit

Reason

Nature

Rating of

Number

Maximum

for

Underlying

Fair

Potential

Maturity

Entering

Recourse

Obligation ⁽¹⁾

Instruments

Value ⁽²⁾

Payout

12/20/2016 ⁽³⁾

⁽⁴⁾

⁽⁵⁾

BBB-

(4)

3/20/2017 ⁽³⁾

⁽⁴⁾

⁽⁵⁾

BBB-

(7)

(11)

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 a counterparty of the consolidated VIEs discussed in Note 4 in our 2012 Form 10-K.

⁽⁴⁾	Credit default swaps were entered into in order to generate income by providing default protection in return for a quarterly payment.

⁽⁵⁾	Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract.

Collateral Support Agreements



		As of			As of
	September 30,			December 31,
		2013			2012
Maximum potential payout		$	126		$	148
Less: Counterparty thresholds			-			-
Maximum collateral potentially required to post		$	126		$	148

Schedule Of Collateral Amounts With Rights To Reclaim Or Obligation To Return Cash



	As of September 30, 2013				As of December 31, 2012
	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	$	-	$	-	$	41	$	-
AA-		18		(7)		58		-
A+		150		-		605		-
A		396		(40)		770		(68)
A-		567		(92)		1,214		-
BBB		14		-		4		-
	$	1,145	$	(139)	$	2,692	$	(68)

Schedule Of Offsetting Assets And Liabilities



		As of September 30, 2013
							Securities
							Lending and
				Embedded				Reverse
	Derivative			Derivative			Repurchase
	Instruments			Instruments			Agreements			Total
Financial Assets
Gross amount of recognized assets		$	2,117		$	711		$	-	$	2,828
Gross amounts offset			(1,003)			-			-		(1,003)
Net amount of assets			1,114			711			-		1,825
Gross amounts not offset:
Cash collateral received			(1,006)			-			-		(1,006)
Net amount		$	108		$	711		$	-	$	819

Financial Liabilities
Gross amount of recognized liabilities		$	1,008		$	1,045		$	2,596	$	4,649
Gross amounts offset			(1,003)			-			-		(1,003)
Net amount of liabilities			5			1,045			2,596		3,646
Gross amounts not offset:
Financial instruments			-			-			(2,596)		(2,596)
Net amount		$	5		$	1,045		$	-	$	1,050



	As of December 31, 2012
						Securities
					Lending and
			Embedded			Reverse
	Derivative		Derivative			Repurchase
	Instruments		Instruments			Agreements		Total
Financial Assets
Gross amount of recognized assets	$	3,547	$	-		$	-	$	3,547
Gross amounts offset		(895)		-			-		(895)
Net amount of assets		2,652		-			-		2,652
Gross amounts not offset:
Cash collateral received		(2,624)		-			-		(2,624)
Net amount	$	28	$	-		$	-	$	28

Financial Liabilities
Gross amount of recognized liabilities	$	906	$	1,856		$	1,614	$	4,376
Gross amounts offset		(895)		-			-		(895)
Net amount of liabilities		11		1,856			1,614		3,481
Gross amounts not offset:
Financial instruments		-		-			(1,614)		(1,614)
Net amount	$	11	$	1,856		$	-	$	1,867