Separate Accounts, Death Benefits and Other Insurance Benefit Features

U.S. GMDB, International GMDB/GMIB, and UL Secondary Guarantee Benefits

Changes in the gross U.S. GMDB, International GMDB/GMIB, and UL secondary guarantee benefits are as follows:



	U.S. GMDB			International GMDB/GMIB			UL Secondary Guarantees
Liability balance as of January 1, 2012	$	1,104		$	975		$	228
Incurred	159			100			84
Paid	(141		)	(146		)	—
Unlock	(198		)	13			21
Currency translation adjustment	—			(17		)	—
Liability balance as of September 30, 2012	$	924		$	925		$	333
Reinsurance recoverable asset, as of January 1, 2012	$	724		$	40		$	22
Incurred	90			8			(2		)
Paid	(90		)	(21		)	—
Unlock	(108		)	18			—
Currency translation adjustment	—			—			—
Reinsurance recoverable asset, as of September 30, 2012	$	616		$	45		$	20



	U.S. GMDB			International GMDB/GMIB			UL Secondary Guarantees
Liability balance as of January 1, 2011	$	1,053		$	696		$	113
Incurred	171			91			29
Paid	(156		)	(116		)	—
Unlock	171			250			66
Currency translation adjustment	—			33			—
Liability balance as of September 30, 2011	$	1,239		$	954		$	208
Reinsurance recoverable asset, as of January 1, 2011	$	686		$	36		$	30
Incurred	99			14			(10		)
Paid	(101		)	(21		)	—
Unlock	113			11			—
Currency translation adjustment	—			2			—
Reinsurance recoverable asset, as of September 30, 2011	$	797		$	42		$	20

7. Separate Accounts, Death Benefits and Other Insurance Benefit Features (continued)

The following table provides details concerning GMDB and GMIB exposure as of September 30, 2012:



Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Maximum anniversary value (“MAV”) [1]	Account Value (“AV”) [8]		Net Amount at Risk (“NAR”) [10]		Retained Net Amount at Risk (“RNAR”) [10]		Weighted Average Attained Age of Annuitant
MAV only	$	20,175	$	4,204	$	851	69
With 5% rollup [2]	1,484		392		121		69
With Earnings Protection Benefit Rider (“EPB”) [3]	5,159		619		83		66
With 5% rollup & EPB	576		131		28		69
Total MAV	27,394		5,346		1,083
Asset Protection Benefit (“APB”) [4]	20,816		1,282		836		67
Lifetime Income Benefit (“LIB”) – Death Benefit [5]	1,085		42		42		65
Reset [6] (5-7 years)	3,165		158		157		69
Return of Premium (“ROP”) [7]/Other	22,147		381		362		66
Subtotal U.S. GMDB	74,607		7,209		2,480		67
Less: General Account Value with U.S. GMDB	7,380
Subtotal Separate Account Liabilities with U.S. GMDB	67,227
Separate Account Liabilities without U.S. GMDB	81,142
Total Separate Account Liabilities	$	148,369
Japan GMDB [9], [11]	$	28,725	$	9,107	$	7,882	70
Japan GMIB [9], [11]	$	26,917	$	6,092	$	6,092	70


[1]	MAV GMDB is the greatest of current AV, net premiums paid and the highest AV on any anniversary before age 80 years (adjusted for withdrawals).


[2]	Rollup GMDB is the greatest of the MAV, current AV, net premium paid and premiums (adjusted for withdrawals) accumulated at generally 5% simple interest up to the earlier of age 80 years or 100% of adjusted premiums.


[3]	EPB GMDB is the greatest of the MAV, current AV, or contract value plus a percentage of the contract’s growth. The contract’s growth is AV less premiums net of withdrawals, subject to a cap of 200% of premiums net of withdrawals.


[4]	APB GMDB is the greater of current AV or MAV, not to exceed current AV plus 25% times the greater of net premiums and MAV (each adjusted for premiums in the past 12 months).


[5]	LIB GMDB is the greatest of current AV, net premiums paid, or for certain contracts a benefit amount that ratchets over time, generally based on market performance.


[6]	Reset GMDB is the greatest of current AV, net premiums paid and the most recent five to seven year anniversary AV before age 80 years (adjusted for withdrawals).


[7]	ROP GMDB is the greater of current AV or net premiums paid.


[8]	AV includes the contract holder’s investment in the separate account and the general account.

[9]

GMDB includes a ROP and MAV (before age 80 years) paid in a single lump sum. GMIB is a guarantee to return initial investment, adjusted for earnings liquidity which allows for free withdrawal of earnings, paid through a fixed payout annuity, after a minimum deferral period of 10 years, 15 years or 20 years . The GRB related to the Japan GMIB was $32.3 billion and $34.1 billion as of September 30, 2012 and December 31, 2011, respectively. The GRB related to the Japan GMAB and GMWB was $657 as of September 30, 2012 and $701 as of December 31, 2011. These liabilities are not included in the Separate Account as they are not legally insulated from the general account liabilities of the insurance enterprise. As of September 30, 2012, 54% of the GMDB RNAR and 64% of the GMIB NAR is reinsured to a Hartford affiliate, as a result, the effects of the reinsurance are not reflected in this disclosure.


[10]	NAR is defined as the guaranteed benefit in excess of the current AV. RNAR represents NAR reduced for reinsurance. NAR and RNAR are highly sensitive to equity markets movements and increase when equity markets decline. Additionally Japan’s NAR and RNAR are highly sensitive to currency movements and increase when the Yen strengthens.


[11]	Policies with a guaranteed living benefit (GMIB in Japan) also have a guaranteed death benefit. The NAR for each benefit is shown in the table above, however these benefits are not additive. When a policy terminates due to death, any NAR related to GMWB or GMIB is released. Similarly, when a policy goes into benefit status on a GMWB or GMIB, its GMDB NAR is released.

7. Separate Accounts, Death Benefits and Other Insurance Benefit Features (continued)

In the U.S., account balances of contracts with guarantees were invested in variable separate accounts as follows:



Asset type	As of September 30, 2012		As of December 31, 2011
Equity securities (including mutual funds)	$	60,631	$	61,472
Cash and cash equivalents	6,596		7,516
Total	$	67,227	$	68,988

As of September 30, 2012 and December 31, 2011, approximately 17% and 17%, respectively, of the equity securities above were invested in fixed income securities through these funds and approximately 83% and 83%, respectively, were invested in equity securities through these funds.

See Note 4 for further information on guaranteed living benefits that are accounted for at fair value, such as GMWB.