Fair Values of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2012

Fair Values of Assets and Liabilities

Schedule of assets and liabilities measured at fair value on a recurring basis

	December 31, 2012
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Cash equivalents	$	18	$	1,539	$	—	$	1,557
Available-for-Sale securities:
Corporate debt securities		—		17,051		1,764		18,815
Residential mortgage backed securities		—		5,145		284		5,429
Commercial mortgage backed securities		—		3,213		206		3,419
Asset backed securities		—		1,097		178		1,275
State and municipal obligations		—		2,239		—		2,239
U.S. government and agencies obligations		19		39		—		58
Foreign government bonds and obligations		—		224		—		224
Common stocks		3		4		6		13
Total Available-for-Sale securities		22		29,012		2,438		31,472
Trading securities		1		24		—		25
Separate account assets		—		72,397		—		72,397
Other assets:
Interest rate derivative contracts		—		2,358		—		2,358
Equity derivative contracts		285		973		—		1,258
Foreign currency derivative contracts		—		6		—		6
Commodity derivative contracts		—		1		—		1
Total other assets		285		3,338		—		3,623
Total assets at fair value	$	326	$	106,310	$	2,438	$	109,074
Liabilities
Future policy benefits and claims:
EIA embedded derivatives	$	—	$	2	$	—	$	2
IUL embedded derivatives		—		45		—		45
GMWB and GMAB embedded derivatives		—		—		833		833
Total future policy benefits and claims		—		47		833		880	(1)
Customer deposits		—		8		—		8
Other liabilities:
Interest rate derivative contracts		—		1,486		—		1,486
Equity derivative contracts		258		1,565		—		1,823
Foreign currency derivative contracts		1		—		—		1
Other		1		3		—		4
Total other liabilities		260		3,054		—		3,314
Total liabilities at fair value	$	260	$	3,109	$	833	$	4,202

(1)

The Company's adjustment for nonperformance risk resulted in a $389 million cumulative decrease to the embedded derivative liability.

	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Cash equivalents	$	20	$	2,287	$	—	$	2,307
Available-for-Sale securities:
Corporate debt securities		—		16,685		1,355		18,040
Residential mortgage backed securities		—		7,461		215		7,676
Commercial mortgage backed securities		—		4,669		50		4,719
Asset backed securities		—		1,516		189		1,705
State and municipal obligations		—		2,130		—		2,130
U.S. government and agencies obligations		22		49		—		71
Foreign government bonds and obligations		—		144		—		144
Common stocks		2		2		5		9
Other debt obligations		—		11		—		11
Total Available-for-Sale securities		24		32,667		1,814		34,505
Trading securities		1		30		—		31
Separate account assets		—		66,780		—		66,780
Investments segregated for regulatory purposes		—		293		—		293
Other assets:
Interest rate derivative contracts		—		1,958		—		1,958
Equity derivative contracts		274		1,077		—		1,351
Credit derivative contracts		—		1		—		1
Foreign currency derivative contracts		—		7		—		7
Commodity derivative contracts		—		2		—		2
Total other assets		274		3,045		—		3,319
Total assets at fair value	$	319	$	105,102	$	1,814	$	107,235
Liabilities
Future policy benefits and claims:
EIA embedded derivatives	$	—	$	2	$	—	$	2
IUL embedded derivatives		—		3		—		3
GMWB and GMAB embedded derivatives		—		—		1,585		1,585
Total future policy benefits and claims		—		5		1,585		1,590	(1)
Customer deposits		—		6		—		6
Other liabilities:
Interest rate derivative contracts		—		1,209		—		1,209
Equity derivative contracts		297		764		—		1,061
Foreign currency derivative contracts		3		10		—		13
Other		—		2		—		2
Total other liabilities		300		1,985		—		2,285
Total liabilities at fair value	$	300	$	1,996	$	1,585	$	3,881

(1)

The Company's adjustment for nonperformance risk resulted in a $506 million cumulative decrease to the embedded derivative liability.

Schedule of changes in level 3 assets and liabilities measured at fair value on a recurring basis

	Available-for-Sale Securities																		Future Policy Benefits and Claims: GMWB and GMAB Embedded Derivatives
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Common Stocks			Total
	(in millions)
Balance, January 1, 2012	$	1,355		$	215		$	50		$	189		$	5		$	1,814		$	(1,585	)
Total gains (losses) included in:
Net income		(1	)		(45	)		1			3			—			(42)	(1)		948	(2)
Other comprehensive income		12			68			8			1			—			89			—
Purchases		543			309			20			—			2			874			—
Sales		—			(75	)		(19	)		(18	)		—			(112	)		—
Issues		—			—			—			—			—			—			(188	)
Settlements		(155	)		(56	)		(3	)		(19	)		—			(233	)		(8	)
Transfers into Level 3		10			42			183			22			—			257			—
Transfers out of Level 3		—			(174	)		(34	)		—			(1	)		(209	)		—
Balance, December 31, 2012	$	1,764		$	284		$	206		$	178		$	6		$	2,438		$	(833	)
Changes in unrealized gains (losses) relating to assets and liabilities held at December 31, 2012 included in:
Net investment income	$	(1	)	$	—		$	1		$	2		$	—		$	2		$	—
Benefits, claims, losses and settlement expenses		—			—			—			—			—			—			908

(1)

Included in net investment income in the Consolidated Statements of Operations.

(2)

Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations.

	Available-for-Sale Securities																	Future Policy Benefits and Claims: GMWB and GMAB Embedded Derivatives
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Common Stocks		Total
	(in millions)
Balance, January 1, 2011	$	1,325		$	4,532		$	51		$	191		$	5	$	6,104		$	(421	)
Total gains (losses) included in:
Net income		7			53			—			3			—		63	(1)		(1,007)	(2)
Other comprehensive income		11			(118	)		—			(10	)		—		(117	)		—
Purchases		189			556			104			118			—		967			—
Sales		(51	)		(2	)		—			—			—		(53	)		—
Issues		—			—			—			—			—		—			(149	)
Settlements		(122	)		(943	)		(4	)		(29	)		—		(1,098	)		(8	)
Transfers into Level 3		7			—			1			14			—		22			—
Transfers out of Level 3		(11	)		(3,863	)		(102	)		(98	)		—		(4,074	)		—
Balance, December 31, 2011	$	1,355		$	215		$	50		$	189		$	5	$	1,814		$	(1,585	)
Changes in unrealized gains (losses) relating to assets and liabilities held at December 31, 2011 included in:
Net investment income	$	—		$	(33	)	$	—		$	2		$	—	$	(31	)	$	—
Benefits, claims, losses and settlement expenses		—			—			—			—			—		—			(1,035	)

(1)

Included in net investment income in the Consolidated Statements of Operations.

(2)

Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations.

	Available-for-Sale Securities																			Future Policy Benefits and Claims: GMWB and GMAB Embedded Derivatives
	Corporate Debt Securities		Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Common Stocks		Other Structured Investments			Total
	(in millions)
Balance, January 1, 2010	$	1,252	$	4,287		$	72		$	150		$	4	$	58		$	5,823		$	(299	)
Total gains included in:
Net income		1		62			1			5			—		—			69	(1)		4	(2)
Other comprehensive income		30		318			10			12			1		—			371			—
Purchases, sales, issues and settlements, net		17		(114	)		112			48			—		(58)	(3)		5			(126	)
Transfers into Level 3		25		—			—			—			—		—			25			—
Transfers out of Level 3		—		(21	)		(144	)		(24	)		—		—			(189	)		—
Balance, December 31, 2010	$	1,325	$	4,532		$	51		$	191		$	5	$	—		$	6,104		$	(421	)
Changes in unrealized gains (losses) relating to assets and liabilities held at December 31, 2010 included in:
Net investment income	$	—	$	60		$	—		$	5		$	—	$	—		$	65		$	—
Benefits, claims, losses and settlement expenses		—		—			—			—			—		—			—			(15	)

(1)

Included in net investment income in the Consolidated Statements of Operations.

(2)

Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Operations.

(3)

Represents the elimination of Ameriprise Financial's investment in CDOs, which were consolidated due to the adoption of a new accounting standard. See Note 2 and Note 4 for additional information related to the consolidation of CDOs.

Significant unobservable inputs used in the fair value measurements

	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(in millions)
Corporate debt securities (private placements)	$	1,712	Discounted cash flow	Yield/spread to U.S. Treasuries	1.1% - 8.5% (2.1)%
GMWB and GMAB embedded derivatives	$	833	Discounted cash flow	Utilization of guaranteed withdrawals(1)	0% - 56.4%
				Surrender rate	0% - 56.3%
				Market volatility(2)	5.6% - 21.2%
				Nonperformance risk(3)	97 bps

(1)

The utilization of guaranteed withdrawls represents the percentage of policyholders that will begin withdrawing in any given year.

(2)

Market volatility is implied volatility of fund of funds.

(3)

The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives.

Schedule of carrying value and estimated fair value of financial instruments

	December 31, 2012
											December 31, 2011
			Fair Value
	Carrying Value										Carrying Value
			Level 1		Level 2		Level 3		Total				Fair Value
	(in millions)
Financial Assets
Mortgage loans, net	$	3,609	$	—	$	—	$	3,694	$	3,694	$	3,727	$	3,613
Policy and certificate loans		754		—		2		648		650		742		715
Receivables		1,067		135		926		12		1,073		1,267		1,265
Restricted and segregated cash		2,538		2,538		—		—		2,538		1,500		1,500
Other investments and assets		390		—		333		60		393		429		429
Financial Liabilities
Future policy benefits and claims	$	14,701	$	—	$	—	$	15,982	$	15,982	$	15,064	$	16,116
Investment certificate reserves		3,494		—		—		3,494		3,494		2,766		2,752
Banking and brokerage customer deposits		3,024		3,024		—		—		3,024		7,078		7,091
Separate account liabilities		3,362		—		3,362		—		3,362		3,966		3,966
Debt and other liabilities		3,033		145		3,109		142		3,396		3,180		3,412