Investments and Derivative Instruments (Tables)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
OTTI losses recognized in OCI	$	(22	)	$	(11	)	$	(37	)	$	(83	)
Changes in fair value and/or sales	91			21			125			88
Tax and deferred acquisition costs	(34		)	—			(48		)	6
Change in OTTI losses recognized in OCI	$	35		$	10		$	40		$	11



	Three Months Ended September 30,						Nine Months Ended September 30,
(Before-tax)	2012			2011			2012			2011
Gross gains on sales	$	205		$	197		$	710		$	519
Gross losses on sales	(131		)	(63		)	(387		)	(294		)
Net OTTI losses recognized in earnings	(37		)	(60		)	(164		)	(138		)
Valuation allowances on mortgage loans	—			—			1			23
Japanese fixed annuity contract hedges, net [1]	(24		)	9			(42		)	(2		)
Periodic net coupon settlements on credit derivatives/Japan	2			1			1			(8		)
Results of variable annuity hedge program
GMWB derivatives, net	381			(323		)	451			(300		)
U.S. macro hedge program	(109		)	107			(292		)	6
Total U.S. program	272			(216		)	159			(294		)
International program	(167		)	1,132			(633		)	865
Total results of variable annuity hedge program	105			916			(474		)	571
Other, net [2]	(1		)	(425		)	153			(430		)
Net realized capital gains (losses)	$	119		$	575		$	(202	)	$	241


[1]	Relates to the Japanese fixed annuity product (adjustment of product liability for changes in spot currency exchange rates, related derivative hedging instruments, excluding net period coupon settlements, and Japan FVO securities).


[2]	Primarily consists of gains and losses on non-qualifying derivatives and fixed maturities, FVO, Japan 3Win related foreign currency swaps, and other investment gains and losses.



	Three Months Ended September 30,						Nine Months Ended September 30,
(Before-tax)	2012			2011			2012			2011
Balance as of beginning of period	$	(1,407	)	$	(1,933	)	$	(1,676	)	$	(2,072	)
Additions for credit impairments recognized on [1]:
Securities not previously impaired	(5		)	(4		)	(21		)	(40		)
Securities previously impaired	(9		)	(38		)	(19		)	(63		)
Reductions for credit impairments previously recognized on:
Securities that matured or were sold during the period	104			157			392			349
Securities due to an increase in expected cash flows	2			4			9			12
Balance as of end of period	$	(1,315	)	$	(1,814	)	$	(1,315	)	$	(1,814	)


[1]	These additions are included in the net OTTI losses recognized in earnings in the Condensed Consolidated Statements of Operations.



	September 30, 2012												December 31, 2011
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI [1]			Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI [1]
ABS	$	2,916	$	69	$	(227	)	$	2,758	$	(3	)	$	3,430	$	55	$	(332	)	$	3,153	$	(7	)
CDOs [2]	3,279		50		(217		)	3,072		(13		)	2,819		16		(348		)	2,487		(44		)
CMBS	6,114		403		(244		)	6,273		(13		)	7,192		271		(512		)	6,951		(31		)
Corporate [2]	39,032		4,794		(393		)	43,433		(23		)	41,161		3,661		(739		)	44,011		—
Foreign govt./govt. agencies	4,019		202		(5		)	4,216		—			2,030		141		(10		)	2,161		—
Municipal	12,939		1,372		(20		)	14,291		—			12,557		775		(72		)	13,260		—
RMBS	7,382		337		(242		)	7,477		(47		)	5,961		252		(456		)	5,757		(105		)
U.S. Treasuries	5,009		213		(16		)	5,206		—			3,828		203		(2		)	4,029		—
Total fixed maturities, AFS	80,690		7,440		(1,364		)	86,726		(99		)	78,978		5,374		(2,471		)	81,809		(187		)
Equity securities, AFS	865		77		(64		)	878		—			1,056		68		(203		)	921		—
Total AFS securities	$	81,555	$	7,517	$	(1,428	)	$	87,604	$	(99	)	$	80,034	$	5,442	$	(2,674	)	$	82,730	$	(187	)


[1]	Represents the amount of cumulative non-credit OTTI losses recognized in OCI on securities that also had credit impairments. These losses are included in gross unrealized losses as of September 30, 2012 and December 31, 2011.


[2]	Gross unrealized gains (losses) exclude the change in fair value of bifurcated embedded derivative features of certain securities. Changes in fair value are recorded in net realized capital gains (losses).



	September 30, 2012
Contractual Maturity	Amortized Cost		Fair Value
One year or less	$	2,178	$	2,195
Over one year through five years	14,920		15,851
Over five years through ten years	15,614		17,161
Over ten years	28,287		31,939
Subtotal	60,999		67,146
Mortgage-backed and asset-backed securities	19,691		19,580
Total fixed maturities, AFS	$	80,690	$	86,726



	September 30, 2012
	Less Than 12 Months							12 Months or More							Total
	Amortized Cost		Fair Value		Unrealized Losses			Amortized Cost		Fair Value		Unrealized Losses			Amortized Cost		Fair Value		Unrealized Losses
ABS	$	12	$	11	$	(1	)	$	1,071	$	845	$	(226	)	$	1,083	$	856	$	(227	)
CDOs [1]	20		19		(1		)	3,169		2,914		(216		)	3,189		2,933		(217		)
CMBS	232		201		(31		)	1,575		1,362		(213		)	1,807		1,563		(244		)
Corporate	1,402		1,332		(70		)	2,289		1,966		(323		)	3,691		3,298		(393		)
Foreign govt./govt. agencies	272		270		(2		)	19		16		(3		)	291		286		(5		)
Municipal	135		131		(4		)	183		167		(16		)	318		298		(20		)
RMBS	148		146		(2		)	1,147		907		(240		)	1,295		1,053		(242		)
U.S. Treasuries	1,085		1,069		(16		)	—		—		—			1,085		1,069		(16		)
Total fixed maturities	3,306		3,179		(127		)	9,453		8,177		(1,237		)	12,759		11,356		(1,364		)
Equity securities	112		106		(6		)	278		220		(58		)	390		326		(64		)
Total securities in an unrealized loss	$	3,418	$	3,285	$	(133	)	$	9,731	$	8,397	$	(1,295	)	$	13,149	$	11,682	$	(1,428	)

5. Investments and Derivative Instruments (continued)



	December 31, 2011
	Less Than 12 Months							12 Months or More							Total
	Amortized Cost		Fair Value		Unrealized Losses			Amortized Cost		Fair Value		Unrealized Losses			Amortized Cost		Fair Value		Unrealized Losses
ABS	$	629	$	594	$	(35	)	$	1,169	$	872	$	(297	)	$	1,798	$	1,466	$	(332	)
CDOs [1]	81		59		(22		)	2,709		2,383		(326		)	2,790		2,442		(348		)
CMBS	1,297		1,194		(103		)	2,144		1,735		(409		)	3,441		2,929		(512		)
Corporate	4,388		4,219		(169		)	3,268		2,627		(570		)	7,656		6,846		(739		)
Foreign govt./govt. agencies	218		212		(6		)	51		47		(4		)	269		259		(10		)
Municipal	299		294		(5		)	627		560		(67		)	926		854		(72		)
RMBS	415		330		(85		)	1,206		835		(371		)	1,621		1,165		(456		)
U.S. Treasuries	343		341		(2		)	—		—		—			343		341		(2		)
Total fixed maturities	7,670		7,243		(427		)	11,174		9,059		(2,044		)	18,844		16,302		(2,471		)
Equity securities	167		138		(29		)	439		265		(174		)	606		403		(203		)
Total securities in an unrealized loss	$	7,837	$	7,381	$	(456	)	$	11,613	$	9,324	$	(2,218	)	$	19,450	$	16,705	$	(2,674	)


[1]	Unrealized losses exclude the change in fair value of bifurcated embedded derivative features of certain securities. Changes in fair value are recorded in net realized capital gains (losses).



	September 30, 2012							December 31, 2011
	Amortized Cost [1]		Valuation Allowance			Carrying Value		Amortized Cost [1]		Valuation Allowance			Carrying Value
Commercial	$	6,946	$	(83	)	$	6,863	$	5,830	$	(102	)	$	5,728
Total mortgage loans	$	6,946	$	(83	)	$	6,863	$	5,830	$	(102	)	$	5,728


[1]	Amortized cost represents carrying value prior to valuation allowances, if any



	2012			2011
Balance, as of January 1	$	(102	)	$	(155	)
(Additions)/Reversals	1			(27		)
Deductions	18			35
Balance, as of September 30	$	(83	)	$	(147	)



Commercial Mortgage Loans Credit Quality
	September 30, 2012			December 31, 2011
Loan-to-value	Carrying Value		Avg. Debt-Service Coverage Ratio	Carrying Value		Avg. Debt-Service Coverage Ratio
Greater than 80%	$	372	1.54x	$	707	1.45x
65% - 80%	2,569		2.12x	2,384		1.60x
Less than 65%	3,922		2.49x	2,637		2.40x
Total commercial mortgage loans	$	6,863	2.29x	$	5,728	1.94x



Mortgage Loans by Region
	September 30, 2012				December 31, 2011
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
East North Central	$	145	2.1	%	$	94	1.6	%
Middle Atlantic	498		7.3	%	508		8.9	%
Mountain	100		1.5	%	125		2.2	%
New England	335		4.9	%	294		5.1	%
Pacific	2,054		29.9	%	1,690		29.5	%
South Atlantic	1,388		20.2	%	1,149		20.1	%
West North Central	16		0.2	%	30		0.5	%
West South Central	435		6.3	%	224		3.9	%
Other [1]	1,892		27.6	%	1,614		28.2	%
Total mortgage loans	$	6,863	100.0	%	$	5,728	100.0	%


[1]	Primarily represents loans collateralized by multiple properties in various regions.



Mortgage Loans by Property Type
	September 30, 2012				December 31, 2011
	Carrying Value		Percent of Total		Carrying Value		Percent of Total
Commercial
Agricultural	$	155	2.3	%	$	249	4.3	%
Industrial	2,082		30.3	%	1,747		30.5	%
Lodging	82		1.2	%	93		1.6	%
Multifamily	1,329		19.4	%	1,070		18.7	%
Office	1,517		22.1	%	1,078		18.8	%
Retail	1,449		21.1	%	1,234		21.5	%
Other	249		3.6	%	257		4.6	%
Total mortgage loans	$	6,863	100.0	%	$	5,728	100.0	%



	September 30, 2012						December 31, 2011
	Total Assets		Total Liabilities [1]		Maximum Exposure to Loss [2]		Total Assets		Total Liabilities [1]		Maximum Exposure to Loss [2]
CDOs [3]	$	446	$	420	$	15	$	491	$	471	$	29
Investment funds [4]	164		—		157		—		—		—
Limited partnerships	6		—		6		7		—		7
Total	$	616	$	420	$	178	$	498	$	471	$	36


[1]	Included in other liabilities in the Company’s Condensed Consolidated Balance Sheets.


[2]	The maximum exposure to loss represents the maximum loss amount that the Company could recognize as a reduction in net investment income or as a realized capital loss and is the cost basis of the Company’s investment.


[3]	Total assets included in fixed maturities, AFS, and fixed maturities, FVO, in the Company’s Condensed Consolidated Balance Sheets.


[4]	Total assets included in fixed maturities, AFS, and short-term investments in the Company’s Condensed Consolidated Balance Sheets.



	Notional Amount				Fair Value
	September 30, 2012		December 31, 2011		September 30, 2012		December 31, 2011
Customized swaps	$	8,153	$	8,389	$	269	$	385
Equity swaps, options, and futures	6,330		5,320		308		498
Interest rate swaps and futures	5,330		2,697		97		11
Total	$	19,813	$	16,406	$	674	$	894



	Notional Amount				Fair Value
	September 30, 2012		December 31, 2011		September 30, 2012		December 31, 2011
Equity futures	$	—	$	59	$	—	$	—
Equity options	5,583		6,760		82		357
Total	$	5,583	$	6,819	$	82	$	357



	Net Derivatives										Asset Derivatives				Liability Derivatives
	Notional Amount				Fair Value						Fair Value				Fair Value
Hedge Designation/ Derivative Type	Sep 30, 2012		Dec 31, 2011		Sep 30, 2012			Dec 31, 2011			Sep 30, 2012		Dec 31, 2011		Sep 30, 2012			Dec 31, 2011
Cash flow hedges
Interest rate swaps	$	7,914	$	8,652	$	359		$	329		$	359	$	329	$	—		$	—
Foreign currency swaps	180		291		(18		)	6			4		30		(22		)	(24		)
Total cash flow hedges	8,094		8,943		341			335			363		359		(22		)	(24		)
Fair value hedges
Interest rate swaps	776		1,007		(61		)	(78		)	—		—		(61		)	(78		)
Foreign currency swaps	40		677		15			(39		)	15		63		—			(102		)
Total fair value hedges	816		1,684		(46		)	(117		)	15		63		(61		)	(180		)
Non-qualifying strategies
Interest rate contracts
Interest rate swaps, caps, floors, and futures	13,179		10,144		(553		)	(583		)	578		531		(1,131		)	(1,114		)
Foreign exchange contracts
Foreign currency swaps and forwards	397		380		(14		)	(12		)	7		6		(21		)	(18		)
Japan 3Win foreign currency swaps	2,054		2,054		78			184			78		184		—			—
Japanese fixed annuity hedging instruments	1,648		1,945		371			514			392		540		(21		)	(26		)
Credit contracts
Credit derivatives that purchase credit protection	1,041		1,721		(4		)	36			15		56		(19		)	(20		)
Credit derivatives that assume credit risk [1]	3,669		2,952		(339		)	(648		)	13		2		(352		)	(650		)
Credit derivatives in offsetting positions	9,428		8,189		(39		)	(57		)	110		164		(149		)	(221		)
Equity contracts
Equity index swaps and options	924		1,501		55			27			68		40		(13		)	(13		)
Variable annuity hedge program
U.S. GMWB product derivatives [2]	30,213		34,569		(1,413		)	(2,538		)	—		—		(1,413		)	(2,538		)
U.S. GMWB reinsurance contracts	6,116		7,193		199			443			199		443		—			—
U.S. GMWB hedging instruments	19,813		16,406		674			894			842		1,022		(168		)	(128		)
U.S. macro hedge program	5,583		6,819		82			357			82		357		—			—
International program product derivatives [2]	2,607		2,710		(36		)	(71		)	—		—		(36		)	(71		)
International program hedging instruments	67,294		33,726		562			750			1,150		887		(588		)	(137		)
Other
Contingent capital facility put option	500		500		24			28			24		28		—			—
Total non-qualifying strategies	164,466		130,809		(353		)	(676		)	3,558		4,260		(3,911		)	(4,936		)
Total cash flow hedges, fair value hedges, and non-qualifying strategies	$	173,376	$	141,436	$	(58	)	$	(458	)	$	3,936	$	4,682	$	(3,994	)	$	(5,140	)
Balance Sheet Location
Fixed maturities, available-for-sale	$	703	$	703	$	(40	)	$	(72	)	$	—	$	—	$	(40	)	$	(72	)
Other investments	74,605		60,227		1,473			2,331			2,322		3,165		(849		)	(834		)
Other liabilities	59,051		35,944		(229		)	(538		)	1,415		1,074		(1,644		)	(1,612		)
Consumer notes	27		35		(2		)	(4		)	—		—		(2		)	(4		)
Reinsurance recoverables	6,116		7,193		199			443			199		443		—			—
Other policyholder funds and benefits payable	32,874		37,334		(1,459		)	(2,618		)	—		—		(1,459		)	(2,618		)
Total derivatives	$	173,376	$	141,436	$	(58	)	$	(458	)	$	3,936	$	4,682	$	(3,994	)	$	(5,140	)


[1]	The derivative instruments related to this strategy are held for other investment purposes.


[2]	These derivatives are embedded within liabilities and are not held for risk management purposes.

Derivatives in Cash Flow Hedging Relationships



	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)										Net Realized Capital Gains(Losses) Recognized in Income on Derivative (Ineffective Portion)
	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended September 30,					Nine Months Ended September 30,
	2012			2011		2012			2011		2012		2011			2012		2011
Interest rate swaps	$	42		$	263	$	185		$	345	$	—	$	(3	)	$	—	$	(5	)
Foreign currency swaps	(2		)	—		(31		)	—		—		—			—		—
Total	$	40		$	263	$	154		$	345	$	—	$	(3	)	$	—	$	(5	)

Derivatives in Cash Flow Hedging Relationships



		Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)
		Three Months Ended September 30,					Nine Months Ended September 30,
	Location	2012		2011			2012			2011
Interest rate swaps	Net realized capital gain/(loss)	$	4	$	4		$	10		$	8
Interest rate swaps	Net investment income	36		33			110			96
Foreign currency swaps	Net realized capital gain/(loss)	1		(9		)	(7		)	(1		)
Total		$	41	$	28		$	113		$	103

Derivatives in Fair-Value Hedging Relationships



	Gain or (Loss) Recognized in Income [1]
	Three Months Ended September 30,										Nine Months Ended September 30,
	2012					2011					2012					2011
	Derivative			Hedge Item		Derivative			Hedge Item		Derivative			Hedge Item		Derivative			Hedge Item
Interest rate swaps
Net realized capital gain/(loss)	$	(2	)	$	1	$	(54	)	$	54	$	(7	)	$	4	$	(71	)	$	71
Foreign currency swaps
Net realized capital gain/(loss)	(6		)	6		(28		)	28		(8		)	8		8			(8		)
Benefits, losses and loss adjustment expenses	—			—		(5		)	5		(6		)	6		(14		)	14
Total	$	(8	)	$	7	$	(87	)	$	87	$	(21	)	$	18	$	(77	)	$	77


[1]	The amounts presented do not include the periodic net coupon settlements of the derivative or the coupon income (expense) related to the hedged item. The net of the amounts presented represents the ineffective portion of the hedge.

Derivatives Used in Non-Qualifying Strategies

Gain or (Loss) Recognized within Net Realized Capital Gains and Losses



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Interest rate contracts
Interest rate swaps, caps, floors, and forwards	$	3		$	(25	)	$	(12	)	$	(24	)
Foreign exchange contracts
Foreign currency swaps and forwards	(4		)	19			23			7
Japan 3Win foreign currency swaps [1]	15			39			(106		)	14
Japanese fixed annuity hedging instruments [2]	24			103			(46		)	98
Credit contracts
Credit derivatives that purchase credit protection	(18		)	31			(49		)	11
Credit derivatives that assume credit risk	99			(183		)	272			(178		)
Equity contracts
Equity index swaps and options	(13		)	(56		)	(29		)	(54		)
Variable annuity hedge program
U.S. GMWB product derivatives	823			(1,315		)	1,235			(1,047		)
U.S. GMWB reinsurance contracts	(184		)	241			(265		)	180
U.S. GMWB hedging instruments	(258		)	751			(519		)	567
U.S. macro hedge program	(109		)	107			(292		)	6
International program product derivatives	26			(54		)	45			(44		)
International program hedging instruments	(193		)	1,186			(678		)	909
Other
Contingent capital facility put option	(2		)	(1		)	(5		)	(4		)
Total	$	209		$	843		$	(426	)	$	441


[1]	The associated liability is adjusted for changes in spot rates through realized capital gains and was $(46) and $(93) for the three months ended September 30, 2012 and 2011, respectively, and $19 and $(100) for the nine months ended September 30, 2012 and 2011, respectively.


[2]	The associated liability is adjusted for changes in spot rates through realized capital gains and was $(54) and $(115) for the three months ended September 30, 2012 and 2011, respectively, and $33 and $(125) for the nine months ended September 30, 2012 and 2011, respectively.



							Underlying Referenced Credit Obligation(s) [1]
Credit Derivative type by derivative risk exposure	Notional Amount [2]		Fair Value			Weighted Average Years to Maturity	Type	Average Credit Rating	Offsetting Notional Amount [3]		Offsetting Fair Value [3]
Single name credit default swaps
Investment grade risk exposure	$	2,402	$	(7	)	3 years	Corporate Credit/ Foreign Gov.	A	$	1,368	$	(30	)
Below investment grade risk exposure	144		(1		)	1 year	Corporate Credit	BB-	144		(4		)
Basket credit default swaps [4]
Investment grade risk exposure	4,434		(10		)	4 years	Corporate Credit	BBB+	2,677		(4		)
Investment grade risk exposure	330		(24		)	4 years	CMBS Credit	A	330		24
Below investment grade risk exposure	353		(282		)	3 years	Corporate Credit	BB	—		—
Below investment grade risk exposure	195		(54		)	4 years	CMBS Credit	B+	195		54
Embedded credit derivatives
Investment grade risk exposure	225		205			4 years	Corporate Credit	BBB-	—		—
Below investment grade risk exposure	300		264			4 years	Corporate Credit	BB+	—		—
Total	$	8,383	$	91					$	4,714	$	40

As of December 31, 2011



							Underlying Referenced Credit Obligation(s) [1]
Credit Derivative type by derivative risk exposure	Notional Amount [2]		Fair Value			Weighted Average Years to Maturity	Type	Average Credit Rating	Offsetting Notional Amount [3]		Offsetting Fair Value [3]
Single name credit default swaps
Investment grade risk exposure	$	1,628	$	(34	)	3 years	Corporate Credit/ Foreign Gov.	A+	$	1,424	$	(15	)
Below investment grade risk exposure	170		(7		)	2 years	Corporate Credit	BB-	144		(5		)
Basket credit default swaps [4]
Investment grade risk exposure	3,645		(92		)	3 years	Corporate Credit	BBB+	2,001		29
Investment grade risk exposure	525		(98		)	5 years	CMBS Credit	BBB+	525		98
Below investment grade risk exposure	553		(509		)	3 years	Corporate Credit	BBB+	—		—
Embedded credit derivatives
Investment grade risk exposure	25		24			3 years	Corporate Credit	BBB-	—		—
Below investment grade risk exposure	500		411			5 years	Corporate Credit	BB+	—		—
Total	$	7,046	$	(305	)				$	4,094	$	107


[1]	The average credit ratings are based on availability and the midpoint of the applicable ratings among Moody’s, S&P, and Fitch. If no rating is available from a rating agency, then an internally developed rating is used.


[2]	Notional amount is equal to the maximum potential future loss amount. There is no specific collateral related to these contracts or recourse provisions included in the contracts to offset losses.


[3]	The Company has entered into offsetting credit default swaps to terminate certain existing credit default swaps, thereby offsetting the future changes in value of, or losses paid related to, the original swap.

[4]

Includes $5.0 billion and $4.2 billion as of September 30, 2012 and December 31, 2011, respectively, of standard market indices of diversified portfolios of corporate issuers referenced through credit default swaps. These swaps are subsequently valued based upon the observable standard market index. Also includes $353 and $533 as of September 30, 2012 and December 31, 2011, respectively, of customized diversified portfolios of corporate issuers referenced through credit default swaps.

International [Member]



	Notional Amount				Fair Value
	September 30, 2012		December 31, 2011		September 30, 2012		December 31, 2011
Credit derivatives	$	50	$	—	$	6	$	—
Currency forwards [1]	10,148		8,622		14		446
Currency options	9,708		7,357		166		127
Equity futures	4,323		3,835		—		—
Equity options	4,751		1,565		51		74
Equity swaps [2]	2,588		392		34		(8		)
Interest rate futures	727		739		—		—
Interest rate swaps and swaptions	34,999		11,216		291		111
Total	$	67,294	$	33,726	$	562	$	750


[1]	As of September 30, 2012 and December 31, 2011 net notional amounts are $1.9 billion and $7.2 billion, respectively, which include $6.0 billion and $7.9 billion, respectively, related to long positions and $4.1 billion and $0.7 billion, respectively, related to short positions.