Investments

9 Months Ended

Sep. 30, 2011

Investments.

Investments

4.  Investments

The following is a summary of Ameriprise Financial investments:

	September 30, 2011		December 31, 2010
	(in millions)
Available-for-Sale securities, at fair value	$	34,012	$	32,619
Commercial mortgage loans, net	2,520		2,577
Trading securities	567		565
Policy loans	741		733
Other investments	750		559
Total	$	38,590	$	37,053

Available-for-Sale securities distributed by type were as follows:

	September 30, 2011
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Noncredit OTTI (1)
	(in millions)
Corporate debt securities	$	15,750	$	1,674	$	(81	)	$	17,343	$	—
Residential mortgage backed securities	7,436		311		(314		)	7,433		(125		)
Commercial mortgage backed securities	4,625		264		(4		)	4,885		—
Asset backed securities	2,004		72		(42		)	2,034		(16		)
State and municipal obligations	1,985		161		(63		)	2,083		—
U.S. government and agencies obligations	63		10		—			73		—
Foreign government bonds and obligations	111		17		(1		)	127		—
Common stocks	6		3		(1		)	8		—
Other debt obligations	26		—		—			26		—
Total	$	32,006	$	2,512	$	(506	)	$	34,012	$	(141	)

	December 31, 2010
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Noncredit OTTI (1)
	(in millions)
Corporate debt securities	$	15,433	$	1,231	$	(58	)	$	16,606	$	—
Residential mortgage backed securities	7,213		368		(323		)	7,258		(117		)
Commercial mortgage backed securities	4,583		293		(8		)	4,868		—
Asset backed securities	1,982		78		(40		)	2,020		(16		)
State and municipal obligations	1,666		21		(105		)	1,582		—
U.S. government and agencies obligations	135		8		—			143		—
Foreign government bonds and obligations	91		17		—			108		—
Common stocks	6		4		—			10		—
Other debt obligations	24		—		—			24		—
Total	$	31,133	$	2,020	$	(534	)	$	32,619	$	(133	)

(1) Represents the amount of other-than-temporary impairment (“OTTI”) losses in accumulated other comprehensive income. Amount includes unrealized gains and losses on impaired securities subsequent to the initial impairment measurement date. These amounts are included in gross unrealized gains and losses as of the end of the period.

At both September 30, 2011 and December 31, 2010, fixed maturity securities comprised approximately 88% of Ameriprise Financial investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or, if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. At both September 30, 2011 and December 31, 2010, the Company’s internal analysts rated $1.2 billion of securities, using criteria similar to those used by NRSROs. A summary of fixed maturity securities by rating was as follows:

	September 30, 2011						December 31, 2010
Ratings	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
	(in millions, except percentages)
AAA	$	12,047	$	12,646	37	%	$	12,142	$	12,809	39	%
AA	1,802		1,948		6		1,843		1,899		6
A	4,959		5,373		16		4,449		4,670		14
BBB	11,223		12,407		36		10,536		11,408		35
Below investment grade	1,969		1,630		5		2,157		1,823		6
Total fixed maturities	$	32,000	$	34,004	100	%	$	31,127	$	32,609	100	%

At September 30, 2011 and December 31, 2010, approximately 35% and 29%, respectively, of the securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. No holdings of any other issuer were greater than 10% of total equity.

The following tables provide information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position:

	September 30, 2011
	Less than 12 months						12 months or more						Total
	Number of	Fair		Unrealized			Number of	Fair		Unrealized			Number of	Fair		Unrealized
Description of Securities	Securities	Value		Losses			Securities	Value		Losses			Securities	Value		Losses
	(in millions, except number of securities)
Corporate debt securities	149	$	1,701	$	(64	)	7	$	95	$	(17	)	156	$	1,796	$	(81	)
Residential mortgage backed securities	102	1,204		(31		)	134	701		(283		)	236	1,905		(314		)
Commercial mortgage backed securities	35	474		(4		)	3	31		—			38	505		(4		)
Asset backed securities	38	396		(11		)	30	146		(31		)	68	542		(42		)
State and municipal obligations	28	59		(2		)	57	241		(61		)	85	300		(63		)
Foreign government bonds and obligations	4	21		(1		)	—	—		—			4	21		(1		)
Common stocks	7	2		(1		)	—	—		—			7	2		(1		)
Total	363	$	3,857	$	(114	)	231	$	1,214	$	(392	)	594	$	5,071	$	(506	)

	December 31, 2010
	Less than 12 months						12 months or more						Total
	Number of	Fair		Unrealized			Number of	Fair		Unrealized			Number of	Fair		Unrealized
Description of Securities	Securities	Value		Losses			Securities	Value		Losses			Securities	Value		Losses
	(in millions, except number of securities)
Corporate debt securities	115	$	1,859	$	(46	)	13	$	157	$	(12	)	128	$	2,016	$	(58	)
Residential mortgage backed securities	108	782		(12		)	133	712		(311		)	241	1,494		(323		)
Commercial mortgage backed securities	30	498		(7		)	1	23		(1		)	31	521		(8		)
Asset backed securities	29	354		(8		)	25	123		(32		)	54	477		(40		)
State and municipal obligations	206	696		(31		)	60	232		(74		)	266	928		(105		)
Total	488	$	4,189	$	(104	)	232	$	1,247	$	(430	)	720	$	5,436	$	(534	)

As part of Ameriprise Financial’s ongoing monitoring process, management determined that a majority of the gross unrealized losses on its Available-for-Sale securities are attributable to movement in credit spreads.

The following table presents a rollforward of the cumulative amounts recognized in the Consolidated Statements of Operations for other-than-temporary impairments related to credit losses on securities for which a portion of the securities’ total other-than-temporary impairments was recognized in other comprehensive income:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011			2010
	(in millions)
Beginning balance	$	299	$	291	$	297		$	263
Credit losses for which an other-than-temporary impairment was not previously recognized	1		—		14			15
Credit losses for which an other-than-temporary impairment was previously recognized	4		2		9			15
Reductions for securities sold during the period (realized)	—		—		(16		)	—
Ending balance	$	304	$	293	$	304		$	293

The change in net unrealized securities gains (losses) in other comprehensive income includes three components, net of tax: (i) unrealized gains (losses) that arose from changes in the market value of securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit other-than-temporary impairment losses to credit losses and (iii) other items primarily consisting of adjustments in asset and liability balances, such as DAC, DSIC, benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates.

The following table presents a rollforward of the net unrealized securities gains (losses) on Available-for-Sale securities included in accumulated other comprehensive income:

	Net						Accumulated Other
	Unrealized						Comprehensive Income
	Securities			Deferred			Related to Net Unrealized
	Gains (Losses)			Income Tax			Securities Gains (Losses)
	(in millions)
Balance at January 1, 2010	$	474		$	(164	)	$	310
Net unrealized securities gains arising during the period (2)	1,596			(559		)	1,037
Reclassification of gains included in net income	(10		)	3			(7		)
Impact of DAC, DSIC, benefit reserves and reinsurance recoverables	(591		)	206			(385		)
Balance at September 30, 2010	$	1,469		$	(514	)	$	955	(1)
Balance at January 1, 2011	$	946		$	(331	)	$	615
Net unrealized securities gains arising during the period (2)	518			(178		)	340
Reclassification of losses included in net income	2			(1		)	1
Impact of DAC, DSIC, benefit reserves and reinsurance recoverables	(378		)	132			(246		)
Balance at September 30, 2011	$	1,088		$	(378	)	$	710	(1)

(1)    Includes $(71) million and $(66) million of noncredit related impairments on securities and net unrealized securities losses on previously impaired securities at September 30, 2011 and September 30, 2010, respectively.

(2)    Includes other-than-temporary impairment losses on Available-for-Sale securities related to factors other than credit that were recognized in other comprehensive income during the period.

Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in earnings were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
	(in millions)						(in millions)
Gross realized gains	$	—		$	7		$	39		$	47
Gross realized losses	—			(3		)	(18		)	(4		)
Other-than-temporary impairments	(5		)	(2		)	(23		)	(33		)

Other-than-temporary impairments for the three months and nine months ended September 30, 2011and 2010 primarily related to credit losses on non-agency residential mortgage backed securities.

Available-for-Sale securities by contractual maturity at September 30, 2011 were as follows: 

	Amortized Cost		Fair Value
	(in millions)
Due within one year	$	1,040	$	1,056
Due after one year through five years	5,856		6,121
Due after five years through 10 years	6,376		7,067
Due after 10 years	4,663		5,408
	17,935		19,652
Residential mortgage backed securities	7,436		7,433
Commercial mortgage backed securities	4,625		4,885
Asset backed securities	2,004		2,034
Common stocks	6		8
Total	$	32,006	$	34,012

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities, as well as common and preferred stocks, were not included in the maturities distribution.

Trading Securities

Net recognized gains and (losses) related to trading securities held at September 30, 2011 and 2010 were $(10) million and $12 million, respectively, for the three months then ended and $(7) million and $23 million, respectively, for the nine months then ended.