Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Measurements [Tables] [Abstract]

Financial assets and liabilities carried at fair value

March 31, 2013
(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	$	132	$	715	$	-	$	847
State and local government		-		2,401		-		2,401
Foreign government		-		1,218		24		1,242
Corporate		-		10,422		584		11,006
Federal agency mortgage-backed		-		107		-		107
Other mortgage-backed		-		82		1		83
Other asset-backed		-		269		645		914
Total fixed maturities⁽¹⁾		132		15,214		1,254		16,600
Equity securities		6		91		34		131
Subtotal		138		15,305		1,288		16,731
Short-term investments		-		122		-		122
GMIB assets⁽²⁾		-		-		1,117		1,117
Other derivative assets⁽³⁾		-		7		-		7
Total financial assets at fair value, excluding separate accounts	$	138	$	15,434	$	2,405	$	17,977
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	1,099	$	1,099
Other derivative liabilities⁽³⁾		-		28		-		28
Total financial liabilities at fair value	$	-	$	28	$	1,099	$	1,127

(1) Fixed maturities included $810 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $103 million of appreciation for securities classified in Level 3.

(2) The GMIB assets represent retrocessional contracts in place from three external reinsurers that cover the exposures on these contracts.

(3) Other derivative assets included $6 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $1 million of interest rate swaps not designated as accounting hedges. Other derivative liabilities reflected foreign currency and interest rate swaps qualifying as cash flow hedges. See Note 10 for additional information.

December 31, 2012
(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	$	156	$	746	$	-	$	902
State and local government		-		2,437		-		2,437
Foreign government		-		1,298		24		1,322
Corporate		-		11,201		695		11,896
Federal agency mortgage-backed		-		122		-		122
Other mortgage-backed		-		88		1		89
Other asset-backed		-		340		597		937
Total fixed maturities⁽¹⁾		156		16,232		1,317		17,705
Equity securities		4		73		34		111
Subtotal		160		16,305		1,351		17,816
Short-term investments		-		154		-		154
GMIB assets⁽²⁾		-		-		622		622
Other derivative assets⁽³⁾		-		41		-		41
Total financial assets at fair value, excluding separate accounts	$	160	$	16,500	$	1,973	$	18,633
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	1,170	$	1,170
Other derivative liabilities⁽³⁾		-		31		-		31
Total financial liabilities at fair value	$	-	$	31	$	1,170	$	1,201

(1) Fixed maturities included $875 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $108 million of appreciation for securities classified in Level 3.

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

(3) Other derivative assets included $5 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $36 million of interest rate swaps not designated as accounting hedges. Other derivative liabilities reflected foreign currency and interest rate swaps qualifying as cash flow hedges. See Note 10 for additional information.

Level 3 financial assets and financial liabilities

	March 31,		December 31,
(In millions)	2013		2012
Other asset and mortgage-backed securities - valued using pricing models	$	646	$	598
Corporate and government fixed maturities - valued using pricing models		484		596
Corporate fixed maturities - valued at transaction price		124		123
Equity securities - valued at transaction price		34		34
Total	$	1,288	$	1,351

Level 3 Fair Value And Significant Unobservable Inputs Developed Directly By Company


As of March 31, 2013			Unobservable Input	Unobservable Adjustment to Discount Rates Range (Weighted Average) in Basis Points
(In millions except basis points)		Fair Value	Unobservable Input
Other asset and mortgage-backed securities	$	632	Liquidity	60-510 (140)
			Weighting of credit spreads	110-4,830 (430)
Corporate and government fixed maturities	$	331	Liquidity	75-675 (170)


As of December 31, 2012			Unobservable Input	Unobservable Adjustment to Discount Rates Range (Weighted Average) in Basis Points
(In millions except basis points)		Fair Value	Unobservable Input
Other asset and mortgage-backed securities	$	584	Liquidity	60 - 410 (140)
			Weighting of credit spreads	50 - 4,540 (410)
Corporate and government fixed maturities	$	439	Liquidity	20 - 640 (190)

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

For the Three Months Ended March 31, 2013
	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, 2013	$	1,351	$	622	$	(1,170)	$	(548)
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		(49)		49		-
Other		6		1		-		1
Total gains (losses) included in shareholders' net income		6		(48)		49		1
Losses included in other comprehensive income		(1)		-		-		-
Losses required to adjust future policy benefits for settlement annuities⁽¹⁾		(5)		-		-		-
Purchases, sales and settlements:
Purchases		5		-		-		-
Sales		(12)		-		-		-
Settlements		(51)		543		22		565
Total purchases, sales and settlements		(58)		543		22		565
Transfers into/(out of) Level 3:
Transfers into Level 3		54		-		-		-
Transfers out of Level 3		(59)		-		-		-
Total transfers into/(out of) Level 3		(5)		-		-		-
Balance at March 31, 2013	$	1,288	$	1,117	$	(1,099)	$	18
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	2	$	(48)	$	49	$	1

(1) Amounts do not accrue to shareholders.

For the Three Months Ended March 31, 2012
	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, 2012	$	1,002	$	712	$	(1,333)	$	(621)
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		(86)		153		67
Other		-		-		-		-
Total gains (losses) included in shareholders' net income		-		(86)		153		67
Gains included in other comprehensive income		8		-		-		-
Losses required to adjust future policy benefits for settlement annuities⁽¹⁾		(11)		-		-		-
Purchases, sales and settlements:
Purchases		37		-		-		-
Settlements		(3)		(9)		18		9
Total purchases, sales and settlements		34		(9)		18		9
Transfers into/(out of) Level 3:
Transfers into Level 3		73		-		-		-
Transfers out of Level 3		(34)		-		-		-
Total transfers into/(out of) Level 3		39		-		-		-
Balance at March 31, 2012	$	1,072	$	617	$	(1,162)	$	(545)
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	-	$	(86)	$	153	$	67

(1) Amounts do not accrue to shareholders.

Separate account assets schedule

March 31, 2013
(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 17)	$	247	$	310	$	-	$	557
Non-guaranteed separate accounts⁽¹⁾		1,880		4,502		1,011		7,393
Total separate account assets	$	2,127	$	4,812	$	1,011	$	7,950

(1) As of March 31, 2013, non-guaranteed separate accounts included $3.5 billion in assets supporting the Company's pension plans, including $960 million classified in Level 3.

December 31, 2012
(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 17)	$	245	$	324	$	-	$	569
Non-guaranteed separate accounts⁽¹⁾		1,925		4,258		1,005		7,188
Total separate account assets	$	2,170	$	4,582	$	1,005	$	7,757

(1) As of December 31, 2012, non-guaranteed separate accounts included $3.4 billion in assets supporting the Company's pension plans, including $956 million classified in Level 3.

Level 3 separate account assets

	Three Months Ended
	March 31,
(In millions)	2013		2012
Balance at January 1	$	1,005	$	750
Policyholder gains ⁽¹⁾		7		18
Purchases, sales and settlements:
Purchases		31		184
Sales		-		-
Settlements		(30)		(11)
Total purchases, sales and settlements		1		173
Transfers into/(out of) Level 3:
Transfers into Level 3		-		3
Transfers out of Level 3		(2)		(1)
Total transfers into/(out of) Level 3		(2)		2
Balance at March 31,	$	1,011	$	943

(1) Included in this amount are gains of $7 million attributable to instruments still held at March 31, 2013 and gains of $12 million attributable to instruments still held at March 31, 2012.

Financial instruments not carried at fair value

(In millions)			March 31, 2013				December 31, 2012
	Classification in the Fair Value Hierarchy		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	2,943	$	2,811	$	2,999	$	2,851
Contractholder deposit funds, excluding universal life products	Level 3	$	1,084	$	1,059	$	1,082	$	1,056
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,767	$	4,986	$	5,821	$	4,986

- 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 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

-Number 159

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-Subparagraph c(2), d, e, f

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-Name Accounting Standards Codification

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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-Subparagraph b-d

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-Name Accounting Standards Codification

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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