Variable Annuity and Insurance Guarantees

9 Months Ended

Sep. 30, 2012

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, 2012							December 31, 2011
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	$	44,851	$	43,105	$	73	63	$	40,011	$	38,275	$	382	63
Five/six-year reset	11,489		8,976		135		63	11,631		9,118		350		63
One-year ratchet	7,440		7,002		128		65	7,233		6,777		479		64
Five-year ratchet	1,600		1,547		4		61	1,472		1,418		25		61
Other	881		854		63		68	759		732		93		68
Total — GMDB	$	66,261	$	61,484	$	403	63	$	61,106	$	56,320	$	1,329	63
GGU death benefit	$	962	$	911	$	92	63	$	920	$	868	$	78	63
GMIB	$	439	$	412	$	73	65	$	463	$	433	$	106	65
GMWB:
GMWB	$	3,955	$	3,937	$	42	66	$	3,887	$	3,868	$	236	65
GMWB for life	27,775		27,655		233		64	23,756		23,625		863		64
Total — GMWB	$	31,730	$	31,592	$	275	64	$	27,643	$	27,493	$	1,099	64
GMAB	$	3,732	$	3,724	$	6	57	$	3,516	$	3,509	$	63	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, 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
Balance at January 1, 2012	$	5		$	9		$	1,377		$	237		$	111
Incurred claims	5			1			(304		)	(103		)	39
Paid claims	(6		)	(1		)	—			—			(8		)
Balance at September 30, 2012	$	4		$	9		$	1,073		$	134		$	142

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, 2012		December 31, 2011
	(in millions)
Mutual funds:
Equity	$	32,561	$	30,738
Bond	26,005		23,862
Other	3,116		1,969
Total mutual funds	$	61,682	$	56,569