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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2011

Fair Value Measurements [Tables] [Abstract]

Financial assets and liabilities carried at fair value

December 31, 2011
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	217	$	738	$	3	$	958
State and local government		-		2,456		-		2,456
Foreign government		-		1,251		23		1,274
Corporate		-		10,132		381		10,513
Federal agency mortgage-backed		-		9		-		9
Other mortgage-backed		-		79		1		80
Other asset-backed		-		363		564		927
Total fixed maturities⁽¹⁾		217		15,028		972		16,217
Equity securities		3		67		30		100
Subtotal		220		15,095		1,002		16,317
Short-term investments		-		225		-		225
GMIB assets⁽²⁾		-		-		712		712
Other derivative assets⁽³⁾		-		45		-		45
Total financial assets at fair value, excluding separate accounts	$	220	$	15,365	$	1,714	$	17,299
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	1,333	$	1,333
Other derivative liabilities⁽³⁾		-		30		-		30
Total financial liabilities at fair value	$	-	$	30	$	1,333	$	1,363

(1) Fixed maturities include $826 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $115 million of appreciation for securities classified in Level 3.

(2) The GMIB assets represent retrocessional contracts in place from two external reinsurers which cover 55% of the exposures on these contracts.

(3) Other derivative assets include $10 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $35 million of interest rate swaps not designated as accounting hedges. Other derivative liabilities reflect foreign currency and interest rate swaps qualifying as cash flow hedges. See Note 12 for additional information.

December 31, 2010
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	133	$	550	$	4	$	687
State and local government		-		2,467		-		2,467
Foreign government		-		1,137		17		1,154
Corporate		-		9,080		364		9,444
Federal agency mortgage-backed		-		10		-		10
Other mortgage-backed		-		85		3		88
Other asset-backed		-		348		511		859
Total fixed maturities⁽¹⁾		133		13,677		899		14,709
Equity securities		6		87		34		127
Subtotal		139		13,764		933		14,836
Short-term investments		-		174		-		174
GMIB assets⁽²⁾		-		-		480		480
Other derivative assets⁽³⁾		-		19		-		19
Total financial assets at fair value, excluding separate accounts	$	139	$	13,957	$	1,413	$	15,509
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	903	$	903
Other derivative liabilities⁽³⁾		-		32		-		32
Total financial liabilities at fair value	$	-	$	32	$	903	$	935

(1) Fixed maturities include $443 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $74 million of appreciation for securities classified in Level 3.


(2) The GMIB assets represent retrocessional contracts in place from two external reinsurers which cover 55% of the exposures on these contracts.


(3) Other derivative assets include $16 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $3 million of interest rate swaps not designated as accounting hedges. Other derivative liabilities reflect foreign currency and interest rate swaps qualifying as cash flow hedges. See Note 12 for additional information.

Level 3 financial assets and financial liabilities

	December 31,		December 31,
(In millions)	2011		2010
Other asset and mortgage-backed securities - valued using pricing models	$	565	$	514
Corporate and government bonds - valued using pricing models		355		312
Corporate bonds - valued at transaction price		52		73
Equity securities - valued at transaction price		30		34
Total	$	1,002	$	933

Changes in level 3 financial assets and liabilities carried at fair value

	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at January 1, 2011	$	933	$	480	$	(903)	$	(423)
Gains (losses) included in income:
GMIB fair value gain/(loss)		-		270		(504)		(234)
Other		10		-		-		-
Total gains (losses) included in shareholders' net income		10		270		(504)		(234)
Gains included in other comprehensive income		7		-		-		-
Gains required to adjust future policy benefits for settlement annuities (1)		41		-		-		-
Purchases, issuances, settlements:
Purchases		129		-		-		-
Sales		(20)		-		-		-
Settlements		(61)		(38)		74		36
Total purchases, sales and settlements		48		(38)		74		36
Transfers into/(out of) Level 3:
Transfers into Level 3		81		-		-		-
Transfers out of Level 3		(118)		-		-		-
Total transfers into/(out of) Level 3		(37)		-		-		-
Balance at December 31, 2011	$	1,002	$	712	$	(1,333)	$	(621)
Total gains (losses) included in shareholders' net income attributable to
instruments held at the reporting date	$	6	$	270	$	(504)	$	(234)

(1) Amounts do not accrue to shareholders.

	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at January 1, 2010	$	845	$	482	$	(903)	$	(421)
Gains (losses) included in income:
GMIB fair value gain/(loss)		-		57		(112)		(55)
Other		27		-		-		-
Total gains (losses) included in shareholders' net income		27		57		(112)		(55)
Gains included in other comprehensive income		10		-		-		-
Gains required to adjust future policy benefits for settlement annuities (1)		34		-		-		-
Purchases, issuances, settlements:
Purchases		39		-		-		-
Sales		(1)		-		-		-
Settlements		(112)		(59)		112		53
Total purchases, sales, and settlements		(74)		(59)		112		53
Transfers into/(out of) Level 3:
Transfers into Level 3		155		-		-		-
Transfers out of Level 3		(64)		-		-		-
Total transfers into/(out of) Level 3		91		-		-		-
Balance at December 31, 2010	$	933	$	480	$	(903)	$	(423)
Total gains (losses) included in shareholders' net income attributable to
instruments held at the reporting date	$	18	$	57	$	(112)	$	(55)

(1) Amounts do not accrue to shareholders.

Separate account assets schedule

2011
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Guaranteed separate accounts (See Note 23)	$	249	$	1,439	$	-	$	1,688
Non-guaranteed separate accounts (1)		1,804		3,851		750		6,405
Total separate account assets	$	2,053	$	5,290	$	750	$	8,093

(1) Non-guaranteed separate accounts include $3.0 billion in assets supporting the Company's pension plan, including $702 million classified in Level 3.

2010
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Guaranteed separate accounts (See Note 23)	$	286	$	1,418	$	-	$	1,704
Non-guaranteed separate accounts (1)		1,947		3,663		594		6,204
Total separate account assets	$	2,233	$	5,081	$	594	$	7,908

(1) Non-guaranteed separate accounts include $2.8 billion in assets supporting the Company's pension plan, including $557 million classified in Level 3.

Level 3 separate account assets

(In millions)
Balance at January 1, 2011	$	594
Policyholder gains (1)		114
Purchases, issuances, settlements:
Purchases		257
Sales		(51)
Settlements		(152)
Total purchases, sales and settlements		54
Transfers into/(out of) Level 3:
Transfers into Level 3		4
Transfers out of Level 3		(16)
Total transfers into/(out of) Level 3:		(12)
Balance at December 31, 2011	$	750

(1) Included in this amount are gains of $96 million attributable to instruments still held at the reporting date.

(In millions)
Balance at January 1, 2010	$	550
Policyholder gains (1)		71
Purchases, issuances, settlements:
Purchases		211
Sales		(145)
Settlements		(76)
Total purchases, sales and settlements		(10)
Transfers into/(out of) Level 3:
Transfers into Level 3		9
Transfers out of Level 3		(26)
Total transfers into/(out of) Level 3:		(17)
Balance at December 31, 2010	$	594

(1) Included in this amount are gains of $53 million attributable to instruments still held at the reporting date.

Financial instruments not carried at fair value

(In millions)		December 31, 2011				December 31, 2010
		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	$	3,380	$	3,301	$	3,470	$	3,486
Contractholder deposit funds, excluding universal life products	$	1,056	$	1,035	$	1,001	$	989
Long-term debt, including current maturities, excluding capital leases	$	5,281	$	4,946	$	2,926	$	2,709

- Definition

Summarization of information required and determined to be disclosed concerning the fair value of financial instruments (as defined) classified in Level 3, including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities classified in Level 3 would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) the maximum amount of loss the Company is exposed to, based on the gross fair value of the related item; (3) quantitative information about market risks; (4) for items presented in the financial statement for which fair value measurement is elected, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (5) the difference between the aggregate fair value and unpaid principal balance of loans and long-term receivables and long-term debt instruments (as applicable); (6) the amount of gains and losses arising from changes in fair value; and (7) other required (as defined) and desired information.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

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