Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income (Loss) From Operations Before Provision (Benefit) For Income Taxes

	Years ended December 31,
In millions	2011		2010			2009
Domestic	$	(2,231)	$	(146	)	$	1,100
Foreign		(8)		51			117
Income (loss) before income taxes	$	(2,239)	$	(95	)	$	1,217

Income Tax Expense (Benefit) On Income (Loss) And Shareholders' Equity

	Years ended December 31,
In millions	2011		2010		2009
Current taxes:
Federal	$	(1)	$	91	$	(488	)
State		1		(17)		5
Foreign		15		(1)		(25	)
Deferred taxes:
Federal		(919)		(239)		1,046
State		0		—		—
Foreign		(16)		18		45
Provision (benefit) for income taxes		(920)		(148)		583
Income taxes charged (credited) to shareholders' equity related to:
Total adjustments due to the adoption of new accounting standards		—		(21)		(3	)
Change in unrealized gains and losses on investments		119		112		526
Change in other-than-temporary impairment losses		3		(4)		(50	)
Change in fair value of derivative instruments		3		(7)		46
Change in foreign currency translation		(1)		2		4
Share-based compensation		4		3		5
Total income taxes charged (credited) to shareholders' equity		128		85		528
Total effect of income taxes	$	(792)	$	(63)	$	1,111

Effective Income Tax Rate Reconciliation From Statutory Rate Due To The Tax Effect

	Years ended December 31,
	2011		2010		2009
Federal income tax computed at the statutory rates		35.0%		35.0%		35.0%
Increase (reduction) in taxes resulting from:
Tax-exempt interest		1.5%		40.2%		(3.1)%
Mark-to-market on warrants		0.3%		(11.2)%		0.0%
Change in valuation allowance		6.2%		119.4%		13.8%
Change in uncertain tax positions		(1.0)%		(22.3)%		0.0%
State income tax, net of federal benefit		0.0%		11.5%		0.3%
Deferred tax inventory adjustment		0.0%		(13.6)%		0.7%
Foreign taxes		0.1%		(1.8)%		(1.6)%
Other		(1.0)%		(1.4)%		2.8%
Effective tax rate		41.1%		155.8%		47.9%

Deferred Tax Assets And Liabilities

	As of December 31,
In millions	2011		2010
Deferred tax liabilities:
Unearned premium revenue	$	174	$	61
Loss and loss adjustment expense reserves		31		493
Deferral of cancellation of indebtedness income		119		119
Deferred acquisition costs		123		144
Investments in VIEs		154		173
Other		—		216
Total gross deferred tax liabilities		601		1,206
Deferred tax assets:
Compensation and employee benefits		40		40
Net operating loss and tax credit carryforwards		330		274
Capital loss carryforward and other-than-temporary impairments		236		376
Net unrealized losses on insured derivatives		1,614		1,442
Net losses on financial instruments at fair value and foreign exchange		58		41
Net unrealized losses in accumulated other comprehensive income		105		229
Alternative minimum tax credit carryforward		22		45
Net deferred taxes on VIEs		73		43
Other		104		—
Total gross deferred tax assets		2,582		2,490
Valuation allowance		236		376
Net deferred tax asset	$	1,745	$	908

Change In Unrecognized Tax Benefit

In millions
Unrecognized tax positions as of January 1, 2009	$	19
The gross amount of the increase (decrease) in UTB as a result of tax positions taken:
During a prior year		2
The amounts of decreases in the UTB related to settlement with taxing authorities:		(11)
Unrecognized tax positions as of December 31, 2009	$	10
The gross amount of the increase (decrease) in UTB as a result of tax positions taken:
During a prior year		21
The reduction to UTB as a result of the applicable statute of limitations		(5	)
Unrecognized tax positions as of December 31, 2010	$	26
The gross amount of the increase (decrease) in UTB as a result of tax positions taken:
During a prior year		21
Unrecognized tax positions as of December 31, 2011	$	47