Variable Annuity and Insurance Guarantees

9 Months Ended

Sep. 30, 2011

Variable Annuity and Insurance Guarantees

Variable Annuity and Insurance Guarantees

8.  Variable Annuity and Insurance Guarantees

The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions.

Certain UL contracts offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.

The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities:

	September 30, 2011							December 31, 2010
Variable Annuity  Guarantees by  Benefit Type(1)	Total Contract Value		Contract Value in Separate Accounts		Net Amount at Risk(2)		Weighted Average Attained Age	Total Contract Value		Contract Value in Separate Accounts		Net Amount  at Risk(2)		Weighted Average Attained Age
	(in millions, except age)
GMDB:
Return of premium	$	37,267	$	35,574	$	971	62	$	37,714	$	36,028	$	173	62
Five/six-year reset	11,421		8,920		614		63	13,689		11,153		312		62
One-year ratchet	6,951		6,490		842		64	7,741		7,242		287		63
Five-year ratchet	1,392		1,338		56		60	1,466		1,414		8		60
Other	697		670		124		68	680		649		61		67
Total — GMDB	$	57,728	$	52,992	$	2,607	62	$	61,290	$	56,486	$	841	62
GGU death benefit	$	882	$	829	$	76	63	$	970	$	912	$	79	64
GMIB	$	456	$	424	$	133	65	$	597	$	561	$	76	64
GMWB:
GMWB	$	3,743	$	3,722	$	447	65	$	4,341	$	4,317	$	106	64
GMWB for life	21,678		21,572		1,791		64	20,374		20,259		129		63
Total — GMWB	$	25,421	$	25,294	$	2,238	64	$	24,715	$	24,576	$	235	63
GMAB	$	3,308	$	3,302	$	161	56	$	3,540	$	3,523	$	22	56

(1)Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table.

(2)Represents the current guaranteed benefit amount in excess of the current contract value. GMIB, GMWB and GMAB benefits are subject to waiting periods and payment periods specified in the contract.

Changes in additional liabilities for variable annuity and insurance guarantees were as follows:

	GMDB & GGU			GMIB			GMWB		GMAB		UL
	(in millions)
Balance at January 1, 2010	$	6		$	6		$	204	$	100	$	15
Incurred claims	16			3			736		131		43
Paid claims	(15		)	(1		)	—		—		(4		)
Balance at September 30, 2010	$	7		$	8		$	940	$	231	$	54
Balance at January 1, 2011	$	5		$	8		$	337	$	104	$	68
Incurred claims	10			2			1,013		172		38
Paid claims	(7		)	(1		)	—		—		(9		)
Balance at September 30, 2011	$	8		$	9		$	1,350	$	276	$	97

The liabilities for guaranteed benefits are supported by general account assets.

The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits:

	September 30, 2011		December 31, 2010
	(in millions)
Mutual funds:
Equity	$	28,939	$	32,310
Bond	22,372		22,319
Other	1,901		2,208
Total mutual funds	$	53,212	$	56,837