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Investments and Derivative Instruments (Tables)
 6 Months Ended
Jun. 30, 2014
Derivative [Line Items]  
Offsetting Assets and Liabilities [Table Text Block]
As of June 30, 2014
 
(i)
 
(ii)
 
(iii) = (i) - (ii)
(iv)
 
(v) = (iii) - (iv)
 
 
 
 
 
Net Amounts Presented in the Statement of Financial Position
 
Collateral Disallowed for Offset in the Statement of Financial Position
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Statement of Financial Position
 
Derivative Assets [1]
 
Accrued Interest and Cash Collateral Received [2]
 
Financial Collateral Received [4]
 
Net Amount
Description
 
 
 
 
 
 
 
 
 
 
 
Other investments
$
1,014

 
$
818

 
$
239

 
$
(43
)
 
$
85

 
$
111

 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Statement of Financial Position
 
Derivative Liabilities [3]
 
Accrued Interest and Cash Collateral Pledged [3]
 
Financial Collateral Pledged [4]
 
Net Amount
Description
 
 
 
 
 
 
 
 
 
 
 
Other liabilities
$
(1,596
)
 
$
(749
)
 
$
(821
)
 
$
(26
)
 
$
(1,005
)
 
$
158


As of December 31, 2013
 
(i)
 
(ii)
 
(iii) = (i) - (ii)
(iv)
 
(v) = (iii) - (iv)
 
 
 
 
 
Net Amounts Presented in the Statement of Financial Position
 
Collateral Disallowed for Offset in the Statement of Financial Position
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Statement of Financial Position
 
Derivative Assets [1]
 
Accrued Interest and Cash Collateral Received [2]
 
Financial Collateral Received [4]
 
Net Amount
Description
 
 
 
 
 
 
 
 
 
 
 
Other investments
$
1,845

 
$
1,463

 
$
442

 
$
(60
)
 
$
242

 
$
140

 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Statement of Financial Position
 
Derivative Liabilities [3]
 
Accrued Interest and Cash Collateral Pledged [3]
 
Financial Collateral Pledged [4]
 
Net Amount
Description
 
 
 
 
 
 
 
 
 
 
 
Other liabilities
$
(2,626
)
 
$
(1,496
)
 
$
(1,223
)
 
$
93

 
$
(1,204
)
 
$
74

[1]
Included in other invested assets in the Company's Condensed Consolidated Balance Sheets.
[2]
Included in other assets in the Company's Condensed Consolidated Balance Sheets and is limited to the net derivative receivable associated with each counterparty.
[3]
Included in other liabilities in the Company's Condensed Consolidated Balance Sheets and is limited to the net derivative payable associated with each counterparty.
[4]
Excludes collateral associated with exchange-traded derivative instruments.
Cash Flow Hedges
For derivative instruments that are designated and quali
Net Realized Capital Gains (Losses)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Before tax)
2014
2013
 
2014
2013
Gross gains on sales [1]
$
122

$
207

 
$
305

$
1,916

Gross losses on sales
(33
)
(117
)
 
(162
)
(189
)
Net OTTI losses recognized in earnings
(7
)
(12
)
 
(29
)
(33
)
Valuation allowances on mortgage loans
(3
)
—

 
(3
)
—

Periodic net coupon settlements on credit derivatives
2

—

 
1

(4
)
Results of variable annuity hedge program


 



GMWB derivatives, net
(6
)
(31
)
 
9

16

Macro hedge program
(15
)
(47
)
 
(25
)
(132
)
Total results of variable annuity hedge program
(21
)
(78
)
 
(16
)
(116
)
Other, net [2]
(64
)
21

 
(135
)
91

Net realized capital gains (losses)
(4
)
21

 
(39
)
1,665

[1]
Includes $1.5 billion of gains relating to the sales of the Retirement Plans and Individual Life businesses for the six months ended June 30, 2013.
[2]
Primarily consists of changes in the value of non-qualifying derivatives, including interest rate derivatives used to manage duration, transactional foreign currency revaluation gains (losses) on the Japan 3Win fixed payout annuity liabilities assumed from HLIKK and gains (losses) on non-qualifying derivatives used to hedge the foreign currency exposure of the 3Win liabilities.   Gains (losses) from transactional foreign currency revaluation of the 3Win liabilities were $(18) and $(46), respectively, for the three and six months ended June 30, 2014, and $72 and $189, respectively, for the three and six months ended June 30, 2013.  Gains (losses) on instruments used to hedge the foreign currency exposure on the 3Win fixed payout annuities were $13 and $28, respectively, for the three and six months ended June 30, 2014, and $(54) and $(184), respectively, for the three and six months ended June 30, 2013. Also includes $71 of gains relating to the sales of the Retirement Plans and Individual Life businesses for the six months ended June 30, 2013.
Other-Than-Temporary Impairment Losses
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Before-tax)
2014
2013
 
2014
2013
Balance as of beginning of period
$
(531
)
$
(906
)
 
$
(552
)
$
(1,013
)
Additions for credit impairments recognized on [1]:


 


Securities not previously impaired
(1
)
(5
)
 
(8
)
(13
)
Securities previously impaired
(3
)
(7
)
 
(14
)
(9
)
Reductions for credit impairments previously recognized on:


 


Securities that matured or were sold during the period
40

12

 
73

126

Securities due to an increase in expected cash flows
7

4

 
13

7

Balance as of end of period
$
(488
)
$
(902
)
 
$
(488
)
$
(902
)
[1]
These additions are included in the net OTTI losses recognized in earnings in the Condensed Consolidated Statements of Operations.
Available-for-Sale Securities
 
June 30, 2014
 
December 31, 2013
 
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
$
2,313

$
36

$
(40
)
$
2,309

$
(1
)
 
$
2,404

$
25

$
(64
)
$
2,365

$
(2
)
CDOs [2]
2,360

118

(47
)
2,434

—

 
2,340

108

(59
)
2,387

—

CMBS
4,495

226

(25
)
4,696

(6
)
 
4,288

216

(58
)
4,446

(6
)
Corporate
26,223

2,570

(125
)
28,668

(3
)
 
27,013

1,823

(346
)
28,490

(7
)
Foreign govt./govt. agencies
1,650

79

(22
)
1,707

—

 
4,228

52

(176
)
4,104

—

Municipal
11,796

933

(16
)
12,713

—

 
11,932

425

(184
)
12,173

—

RMBS
4,324

135

(33
)
4,426

(2
)
 
4,639

90

(82
)
4,647

(4
)
U.S. Treasuries
3,157

146

(10
)
3,293

—

 
3,797

7

(59
)
3,745

—

Total fixed maturities, AFS
56,318

4,243

(318
)
60,246

(12
)
 
60,641

2,746

(1,028
)
62,357

(19
)
Equity securities, AFS
779

77

(33
)
823

—

 
850

67

(49
)
868

—

Total AFS securities
$
57,097

$
4,320

$
(351
)
$
61,069

$
(12
)
 
$
61,491

$
2,813

$
(1,077
)
$
63,225

$
(19
)
[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 June 30, 2014 and December 31, 2013.
[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).
Contractual Maturity
 
June 30, 2014
December 31, 2013
Contractual Maturity
Amortized Cost
Fair Value
Amortized Cost
Fair Value
One year or less
$
2,125

$
2,162

$
2,195

$
2,228

Over one year through five years
11,279

12,022

11,930

12,470

Over five years through ten years
9,257

9,844

10,814

11,183

Over ten years
20,165

22,353

22,031

22,631

Subtotal
42,826

46,381

46,970

48,512

Mortgage-backed and asset-backed securities
13,492

13,865

13,671

13,845

Total fixed maturities, AFS
$
56,318

$
60,246

$
60,641

$
62,357
Securities Unrealized Loss Aging
 
June 30, 2014
 
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
$
470

$
469

$
(1
)
 
$
559

$
520

$
(39
)
 
$
1,029

$
989

$
(40
)
CDOs [1]
237

236

(1
)
 
1,719

1,676

(46
)
 
1,956

1,912

(47
)
CMBS
100

98

(2
)
 
587

564

(23
)
 
687

662

(25
)
Corporate
682

673

(9
)
 
1,683

1,567

(116
)
 
2,365

2,240

(125
)
Foreign govt./govt. agencies
129

128

(1
)
 
322

301

(21
)
 
451

429

(22
)
Municipal
119

118

(1
)
 
490

475

(15
)
 
609

593

(16
)
RMBS
285

283

(2
)
 
645

614

(31
)
 
930

897

(33
)
U.S. Treasuries
289

288

(1
)
 
492

483

(9
)
 
781

771

(10
)
Total fixed maturities, AFS
2,311

2,293

(18
)
 
6,497

6,200

(300
)
 
8,808

8,493

(318
)
Equity securities, AFS
52

47

(5
)
 
228

200

(28
)
 
280

247

(33
)
Total securities in an unrealized loss position
$
2,363

$
2,340

$
(23
)
 
$
6,725

$
6,400

$
(328
)
 
$
9,088

$
8,740

$
(351
)
 
December 31, 2013
 
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
$
893

$
888

$
(5
)
 
$
477

$
418

$
(59
)
 
$
1,370

$
1,306

$
(64
)
CDOs [1]
137

135

(2
)
 
1,933

1,874

(57
)
 
2,070

2,009

(59
)
CMBS
812

788

(24
)
 
610

576

(34
)
 
1,422

1,364

(58
)
Corporate
4,922

4,737

(185
)
 
1,225

1,064

(161
)
 
6,147

5,801

(346
)
Foreign govt./govt. agencies
2,961

2,868

(93
)
 
343

260

(83
)
 
3,304

3,128

(176
)
Municipal
3,150

2,994

(156
)
 
190

162

(28
)
 
3,340

3,156

(184
)
RMBS
2,046

2,008

(38
)
 
591

547

(44
)
 
2,637

2,555

(82
)
U.S. Treasuries
2,914

2,862

(52
)
 
33

26

(7
)
 
2,947

2,888

(59
)
Total fixed maturities, AFS
17,835

17,280

(555
)
 
5,402

4,927

(473
)
 
23,237

22,207

(1,028
)
Equity securities, AFS
196

188

(8
)
 
223

182

(41
)
 
419

370

(49
)
Total securities in an unrealized loss position
$
18,031

$
17,468

$
(563
)
 
$
5,625

$
5,109

$
(514
)
 
$
23,656

$
22,577

$
(1,077
)
[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).
Mortgage Loans
 
June 30, 2014
 
December 31, 2013
 
Amortized Cost [1]
Valuation Allowance
Carrying Value
 
Amortized Cost [1]
Valuation Allowance
Carrying Value
Total commercial mortgage loans
$
5,605

$
(19
)
$
5,586

 
$
5,665

$
(67
)
$
5,598

[1]
Amortized cost represents carrying value prior to valuation allowances, if any.
Valuation Allowance for Mortgage Loans
 
2014
2013
Balance, as of January 1
$
(67
)
$
(68
)
(Additions)/Reversals
(3
)
(2
)
Deductions
51

2

Balance, as of June 30
$
(19
)
$
(68
)
Commercial Mortgage Loans Credit Quality
Commercial Mortgage Loans Credit Quality
 
June 30, 2014
 
December 31, 2013
Loan-to-value
Carrying Value
Avg. Debt-Service Coverage Ratio
 
Carrying Value
Avg. Debt-Service Coverage Ratio
Greater than 80%
$
64

1.00x
 
$
101

0.99x
65% - 80%
824

1.75x
 
1,195

1.82x
Less than 65%
4,698

2.59x
 
4,302

2.53x
Total commercial mortgage loans
$
5,586

2.44x
 
$
5,598

2.34x
Mortgage Loans by Region
Mortgage Loans by Region
 
June 30, 2014
 
December 31, 2013
 
Carrying Value
Percent of Total
 
Carrying Value
Percent of Total
East North Central
$
181

3.2
%
 
$
187

3.3
%
Middle Atlantic
403

7.2
%
 
409

7.3
%
Mountain
93

1.7
%
 
104

1.9
%
New England
382

6.8
%
 
353

6.3
%
Pacific
1,476

26.4
%
 
1,587

28.3
%
South Atlantic
1,006

18.0
%
 
899

16.1
%
West North Central
44

0.8
%
 
47

0.8
%
West South Central
337

6.0
%
 
338

6.0
%
Other [1]
1,664

29.9
%
 
1,674

30.0
%
Total mortgage loans
$
5,586

100.0
%
 
$
5,598

100.0
%
[1]
Primarily represents loans collateralized by multiple properties in various regions.
Mortgage Loans by Property Type
Mortgage Loans by Property Type
 
June 30, 2014
 
December 31, 2013
 
Carrying Value
Percent of Total
 
Carrying
Value
Percent of Total
Commercial
 
 
 
 
 
Agricultural
$
62

1.1
%
 
$
125

2.2
%
Industrial
1,687

30.2
%
 
1,718

30.7
%
Lodging
26

0.5
%
 
27

0.5
%
Multifamily
1,211

21.7
%
 
1,155

20.6
%
Office
1,351

24.2
%
 
1,278

22.8
%
Retail
1,096

19.6
%
 
1,140

20.4
%
Other
153

2.7
%
 
155

2.8
%
Total mortgage loans
$
5,586

100.0
%
 
$
5,598

100.0
%
Variable Interest Entities Primary Beneficiary
 
June 30, 2014
 
December 31, 2013
 
Total Assets
Total Liabilities [1]
Maximum Exposure to Loss [2]
 
Total Assets
Total Liabilities [1]
Maximum Exposure to Loss [2]
CDOs [3]
$
14

$
14

$
—

 
$
31

$
33

$
—

Investment funds [4]
170

—

179

 
164

—

173

Limited partnerships and other alternative investments
3

—

3

 
4

—

4

Total
$
187

$
14

$
182

 
$
199

$
33

$
177

[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 short-term investments, or cash in the Company’s Condensed Consolidated Balance Sheets.
[4]
Total assets included in fixed maturities, FVO, short-term investments, and equity, AFS in the Company’s Condensed Consolidated Balance Sheets.
GMWB reinsurance contracts
 
Notional Amount
 
Fair Value
 
June 30,
2014
December 31, 2013
 
June 30,
2014
December 31, 2013
Customized swaps
$
7,514

$
7,839

 
$
64

$
74

Equity swaps, options, and futures
4,104

4,237

 
16

44

Interest rate swaps and futures
3,925

6,615

 
(7
)
(77
)
Total
$
15,543

$
18,691

 
$
73

$
41
Macro hedge program
 
Notional Amount
 
Fair Value
 
June 30,
2014
December 31, 2013
 
June 30,
2014
December 31, 2013
Equity options and swaps
4,374

9,934

 
120

139

Foreign currency options
874

—

 
—

—

Total
$
5,248

$
9,934

 
$
120

$
139
Derivative Classification by Balance Sheet Location
 
Net Derivatives
 
Asset Derivatives
 
Liability Derivatives
 
Notional Amount
 
Fair Value
 
Fair Value
 
Fair Value
Hedge Designation/ Derivative Type
Jun. 30, 2014
Dec. 31, 2013
 
Jun. 30, 2014
Dec. 31, 2013
 
Jun. 30, 2014
Dec. 31, 2013
 
Jun. 30, 2014
Dec. 31, 2013
Cash flow hedges
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
$
4,530

$
5,026

 
$
(4
)
$
(92
)
 
$
41

$
50

 
$
(45
)
$
(142
)
Foreign currency swaps
143

143

 
(9
)
(5
)
 
2

2

 
(11
)
(7
)
Total cash flow hedges
4,673

5,169

 
(13
)
(97
)
 
43

52

 
(56
)
(149
)
Fair value hedges
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
221

1,799

 
—

(24
)
 
—

3

 
—

(27
)
Total fair value hedges
221

1,799

 
—

(24
)
 
—

3

 
—

(27
)
Non-qualifying strategies
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps and futures
13,638

8,453

 
(545
)
(487
)
 
283

171

 
(828
)
(658
)
Foreign exchange contracts
 
 
 
 
 
 
 
 
 
 
 
Foreign currency swaps and forwards
239

258

 
(13
)
(9
)
 
6

6

 
(19
)
(15
)
Japan 3Win fixed payout annuity hedge
1,571

1,571

 
(326
)
(354
)
 
—

—

 
(326
)
(354
)
Japanese fixed annuity hedging instruments
—

1,436

 
—

(6
)
 
—

88

 
—

(94
)
Credit contracts
 
 
 
 
 
 
 
 
 
 
 
Credit derivatives that purchase credit protection
639

938

 
(17
)
(15
)
 
—

1

 
(17
)
(16
)
Credit derivatives that assume credit risk [1]
1,510

1,886

 
22

33

 
25

36

 
(3
)
(3
)
Credit derivatives in offsetting positions
5,526

7,764

 
(4
)
(7
)
 
59

76

 
(63
)
(83
)
Equity contracts
 
 
 
 
 
 
 
 
 
 
 
Equity index swaps and options
321

358

 
(2
)
(1
)
 
22

19

 
(24
)
(20
)
Variable annuity hedge program
 
 
 
 
 
 
 
 
 
 
 
GMWB product derivatives [2]
19,596

21,512

 
2

(36
)
 
15

—

 
(13
)
(36
)
GMWB reinsurance contracts
4,042

4,508

 
31

29

 
31

29

 
—

—

GMWB hedging instruments
15,543

18,691

 
73

41

 
227

333

 
(154
)
(292
)
Macro hedge program
5,248

9,934

 
120

139

 
149

178

 
(29
)
(39
)
International program product derivatives [2]
—

366

 
—

6

 
—

6

 
—

—

International program hedging instruments
—

73,048

 
—

(33
)
 
—

866

 
—

(899
)
Other
 
 
 
 
 
 
 
 
 
 
 
Contingent capital facility put option
500

500

 
15

17

 
15

17

 
—

—

Modified coinsurance reinsurance contracts
1,280

1,250

 
32

67

 
32

67

 
—

—

Derivative instruments formerly associated with Japan [3]
19,904

—

 
87

—

 
188

—

 
(101
)
—

Total non-qualifying strategies
89,557

152,473

 
(525
)
(616
)
 
1,052

1,893

 
(1,577
)
(2,509
)
Total cash flow hedges, fair value hedges, and non-qualifying strategies
$
94,451

$
159,441

 
$
(538
)
$
(737
)
 
$
1,095

$
1,948

 
$
(1,633
)
$
(2,685
)
Balance Sheet Location
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, available-for-sale
$
475

$
473

 
$
3

$
(2
)
 
$
3

$
1

 
$
—

$
(3
)
Other investments
31,441

53,219

 
239

442

 
489

909

 
(250
)
(467
)
Other liabilities
37,559

78,055

 
(821
)
(1,223
)
 
525

936

 
(1,346
)
(2,159
)
Consumer notes
8

9

 
(2
)
(2
)
 
—

—

 
(2
)
(2
)
Reinsurance recoverables
5,322

5,758

 
63

96

 
63

96

 
—

—

Other policyholder funds and benefits payable
19,646

21,927

 
(20
)
(48
)
 
15

6

 
(35
)
(54
)
Total derivatives
$
94,451

$
159,441

 
$
(538
)
$
(737
)
 
$
1,095

$
1,948

 
$
(1,633
)
$
(2,685
)
[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
erivatives 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 June 30,
 
Six Months Ended June 30,
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
2013
 
2014
2013
 
2014
2013
 
2014
2013
Interest rate swaps
$
57

$
(178
)
 
$
101

$
(249
)
 
$
—

$
(2
)
 
$
(1
)
$
(2
)
Foreign currency swaps
(2
)
5

 
(3
)
6

 
—

—

 
—

—

Total
$
55

$
(173
)
 
$
98

$
(243
)
 
$
—

$
(2
)
 
$
(1
)
$
(2
)
Derivatives in Cash Flow Hedging Relationships
 
 
Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Location
2014
2013
 
2014
2013
Interest rate swaps
Net realized capital gain/(loss)
$
1

$
7

 
$
2

$
80

Interest rate swaps
Net investment income
22

25

 
45

49

Foreign currency swaps
Net realized capital gain/(loss)
—

2

 
—

(1
)
Total
 
$
23

$
34

 
$
47

$
128
Derivatives in Fair Value Hedging Relationships
rivatives in Fair-Value Hedging Relationships
 
Gain or (Loss) Recognized in Income [1]
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
 
Derivative
Hedge Item
 
Derivative
Hedge Item
 
Derivative
Hedge Item
 
Derivative
Hedge Item
Interest rate swaps
 
 
 
 
 
 
 
 
 
 
 
Net realized capital gain/(loss)
$
(1
)
$
—

 
$
11

$
(16
)
 
$
(2
)
$
—

 
$
11

$
(17
)
Foreign currency swaps
 
 
 
 
 
 
 
 
 
 
 
Net realized capital gain/(loss)
—

—

 
—

—

 
—

—

 
(2
)
2

Benefits, losses and loss adjustment expenses
—

—

 
—

—

 
—

—

 
(1
)
1

Total
$
(1
)
$
—

 
$
11

$
(16
)
 
$
(2
)
$
—

 
$
8

$
(14
)
[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.
Gain or loss recognized in income on non-qualifying strategies
erivatives Used in Non-Qualifying Strategies
Gain or (Loss) Recognized within Net Realized Capital Gains and Losses
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
2013
 
2014
2013
Interest rate contracts
 
 
 
 
 
Interest rate swaps and forwards
$
(89
)
$
(12
)
 
$
(145
)
$
5

Foreign exchange contracts
 
 
 
 
 
Foreign currency swaps and forwards
(5
)
7

 
(4
)
8

Japan 3Win fixed payout annuity hedge [1]
13

(54
)
 
28

(184
)
Credit contracts
 
 
 
 
 
Credit derivatives that purchase credit protection
(6
)
(5
)
 
(10
)
(12
)
Credit derivatives that assume credit risk
20

(12
)
 
19

2

Equity contracts
 
 
 
 
 
Equity index swaps and options
(1
)
(4
)
 
(1
)
(24
)
Variable annuity hedge program
 
 
 
 
 
GMWB product derivatives
55

192

 
91

648

GMWB reinsurance contracts
(7
)
(32
)
 
(11
)
(92
)
GMWB hedging instruments
(54
)
(191
)
 
(71
)
(540
)
Macro hedge program
(15
)
(47
)
 
(25
)
(132
)
Other
 
 
 
 
 
Contingent capital facility put option
(2
)
(2
)
 
(3
)
(4
)
Modified coinsurance reinsurance contracts
(16
)
49

 
(35
)
54

Total [2]
$
(107
)
$
(111
)
 
$
(167
)
$
(271
)
[1]
The associated liability is adjusted for changes in foreign exchange spot rates through realized capital gains and was $(18) and $72 for the three months ended June 30, 2014 and 2013, respectively and $(46) and $189, for the six months ended June 30, 2014 and 2013, respectively.
[2]
Excludes investments that contain an embedded credit derivative for which the Company has elected the fair value option. For further discussion, see the Fair Value Option section in Note 5 - Fair Value Measurements.
F
Credit Derivatives Description
As of June 30, 2014
 
 
 
 
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
$
281

$
5

3 years
Corporate Credit/
Foreign Gov.
BBB+
$
270

$
(7
)
Below investment grade risk exposure
29

—

3 years
Corporate Credit
BB
4

—

Basket credit default swaps [4]
 
 
 
 
 
 
 
Investment grade risk exposure
2,844

47

4 years
Corporate Credit
BBB
2,062

(33
)
Below investment grade risk exposure
57

5

5 years
Corporate Credit
B+
—

—

Investment grade risk exposure
558

(6
)
6 years
CMBS Credit
AA
273

3

Below investment grade risk exposure
154

(20
)
3 years
CMBS Credit
CCC+
154

20

Embedded credit derivatives
 
 
 
 
 
 
 
Investment grade risk exposure
350

340

3 years
Corporate Credit
A-
—

—

Total [5]
$
4,273

$
371

 
 
 
$
2,763

$
(17
)
As of December 31, 2013
 
 
 
 
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
$
1,259

$
8

1 year
Corporate Credit/
Foreign Gov.
A-
$
1,066

$
(9
)
Below investment grade risk exposure
24

—

1 year
Corporate Credit
CCC
24

(1
)
Basket credit default swaps [4]
 
 
 
 
 
 
 
Investment grade risk exposure
3,447

50

3 years
Corporate Credit
BBB
2,270

(35
)
Below investment grade risk exposure
166

15

5 years
Corporate Credit
BB-
—

—

Investment grade risk exposure
327

(7
)
3 years
CMBS Credit
A
327

7

Below investment grade risk exposure
195

(31
)
3 years
CMBS Credit
B-
195

31

Embedded credit derivatives
 
 
 
 
 
 
 
Investment grade risk exposure
350

339

3 years
Corporate Credit
BBB+
—

—

Total [5]
$
5,768

$
374

 
 
 
$
3,882

$
(7
)
[1]
The average credit ratings are based on availability and the midpoint of the applicable ratings among Moody’s, S&P, Fitch and Morningstar. 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. These derivatives are governed by agreements, clearing house rules and applicable law which include collateral posting requirements. There is no additional 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 $3.6 billion and $4.1 billion as of June 30, 2014 and December 31, 2013, 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.
[5]
Excludes investments that contain an embedded credit derivative for which the Company has elected the fair value option. For further discussion, see the Fair Value Option section in Note 5 - Fair Value Measurements.

Derivative Collateral Arrangements
The Company enters into various collateral arrangements in connection with its derivative instruments, which require both the pledging and accepting of collateral. As of June 30, 2014 and December 31, 2013 the Company pledged securities collateral associated with derivative instruments with a fair value of $1.0 billion and $1.3 billion, respectively, which have been included in fixed maturities on the Consolidated Balance Sheets. The counterparties have the right to sell or re-pledge these securities. The Company also pledged cash collateral associated with derivative instruments with a fair value of $218 and $347, respectively, as of June 30, 2014 and December 31, 2013 which have been primarily included within other assets on the Company's Condensed Consolidated Balance Sheets.
As of June 30, 2014 and December 31, 2013 the Company accepted cash collateral associated with derivative instruments of $238 and $180, respectively, which was invested and recorded in the Consolidated Balance Sheets in fixed maturities and short-term investments with corresponding amounts recorded in other liabilities. The Company also accepted securities collateral as of June 30, 2014 and December 31, 2013 with a fair value of $85 and $243, respectively, of which the Company has the ability to sell or repledge $57 and $191, respectively. As of June 30, 2014 and December 31, 2013 the fair value of repledged securities totaled $0 and $39, respectively, and the Company did not sell any securities. In addition, as of June 30, 2014 and December 31, 2013 non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets.
International [Member]
  
Derivative [Line Items]  
Notional and Fair Value for International Program Hedging Instruments [Table Text Block] [Table Text Block]
 
December 31, 2013
 
Notional Amount
Fair Value
Credit derivatives
350

5

Currency forwards [1]
13,410

(60
)
Currency options
12,066

(54
)
Equity futures
999

—

Equity options
3,051

(30
)
Equity swaps
4,269

(119
)
Interest rate futures
952

—

Interest rate swaps and swaptions
37,951

225

Total
$
73,048

$
(33
)
[1]
 As of December 31, 2013 the net notional amount was $(1.8) billion which included $5.8 billion related to long positions and $7.6 billion related to short positions.