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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2012

Fair Value Measurements Tables [Abstract]

Financial assets and liabilities carried at fair value

March 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	$	141	$	705	$	2	$	848
State and local government		-		2,524		-		2,524
Foreign government		-		1,254		21		1,275
Corporate		-		10,770		438		11,208
Federal agency mortgage-backed		-		158		-		158
Other mortgage-backed		-		88		1		89
Other asset-backed		-		368		579		947
Total fixed maturities⁽¹⁾		141		15,867		1,041		17,049
Equity securities		4		72		31		107
Subtotal		145		15,939		1,072		17,156
Short-term investments		-		187		-		187
GMIB assets⁽²⁾		-		-		617		617
Other derivative assets⁽³⁾		-		37		-		37
Total financial assets at fair value, excluding separate accounts	$	145	$	16,163	$	1,689	$	17,997
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	1,162	$	1,162
Other derivative liabilities⁽³⁾		-		31		-		31
Total financial liabilities at fair value	$	-	$	31	$	1,162	$	1,193

(1) Fixed maturities included $712 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $101 million of appreciation for securities classified in Level 3.

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

(3) Other derivative assets included $8 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $29 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 9 for additional information.

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 included $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 that cover 55% of the exposures on these contracts.

(3) Other derivative assets included $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 reflected foreign currency and interest rate swaps qualifying as cash flow hedges. See Note 9 for additional information.

Level 3 financial assets and financial liabilities

	March 31,		December 31,
(In millions)	2012		2011
Other asset and mortgage-backed securities - valued using pricing models	$	580	$	565
Corporate and government bonds - valued using pricing models		384		335
Corporate bonds - valued at transaction price		77		72
Equity securities - valued at transaction price		31		30
Total	$	1,072	$	1,002

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

As of March 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	$	577	Liquidity	60-680 (80)
			Weighting of credit spreads	60-5,200 (465)
Corporate and government bonds	$	242	Liquidity	10-475 (235)

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

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 income attributable to
instruments held at the reporting date	$	-	$	(86)	$	153	$	67

(1) Amounts do not accrue to shareholders.

For the Three Months Ended March 31, 2011
	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 shareholders' net income:
GMIB fair value gain/(loss)		-		(21)		37		16
Other		5		-		-		-
Total gains (losses) included in shareholders' net income		5		(21)		37		16
Gains included in other comprehensive income		2		-		-		-
Losses required to adjust future policy benefits for settlement annuities⁽¹⁾		(6)		-		-		-
Purchases, sales and settlements:
Purchases		7		-		-		-
Settlements		(12)		-		16		16
Total purchases, sales and settlements		(5)		-		16		16
Transfers into/(out of) Level 3:
Transfers into Level 3		-		-		-		-
Transfers out of Level 3		(1)		-		-		-
Total transfers into/(out of) Level 3		(1)		-		-		-
Balance at March 31, 2011	$	928	$	459	$	(850)	$	(391)
Total gains (losses) included in income attributable to
instruments held at the reporting date	$	5	$	(21)	$	37	$	16

(1) Amounts do not accrue to shareholders.

Separate account assets schedule

March 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)	$	269	$	1,400	$	-	$	1,669
Non-guaranteed separate accounts ⁽¹⁾		1,864		4,005		943		6,812
Total separate account assets	$	2,133	$	5,405	$	943	$	8,481

(1) As of March 31, 2012, non-guaranteed separate accounts included $3.2 billion in assets supporting the Company's pension plans, including $894 million classified in Level 3.

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
Guaranteed separate accounts (See Note 17)	$	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) As of December 31, 2011, non-guaranteed separate accounts included $3.0 billion in assets supporting the Company's pension plans, including $702 million classified in Level 3.

Level 3 separate account assets

	Three Months Ended
	March 31,
(In millions)	2012		2011
Balance at January 1	$	750	$	594
Policyholder gains ⁽¹⁾		18		58
Purchases, sales and settlements:
Purchases		184		9
Sales		-		(40)
Settlements		(11)		(59)
Total purchases, sales and settlements		173		(90)
Transfers into/(out of) Level 3:
Transfers into Level 3		3		-
Transfers out of Level 3		(1)		(3)
Total transfers into/(out of) Level 3		2		(3)
Balance at March 31	$	943	$	559

(1) Included are gains of $12 million attributable to instruments still held at March 31, 2012 and gains of $40 million attributable to instruments still held at March 31, 2011.

Financial instruments not carried at fair value

(In millions)			March 31, 2012				December 31, 2011
	Classification in the Fair Value Hierarchy		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	3,390	$	3,259	$	3,380	$	3,301
Contractholder deposit funds, excluding universal life products	Level 3	$	1,084	$	1,053	$	1,056	$	1,035
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,430	$	4,947	$	5,281	$	4,946

- 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 Accounting Standards Codification

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-Name Statement of Financial Accounting Standard (FAS)

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