7. 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:


				International			UL Secondary
	U.S. GMDB			GMDB/GMIB			Guarantees
Liability balance as of January 1, 2011	$	1,053		$	696		$	113
Incurred		110			61			27
Paid		(95	)		(76	)		—
Unlock		(63	)		2			—
Currency translation adjustment		—			2			—

Liability balance as of June 30, 2011	$	1,005		$	685		$	140

Reinsurance recoverable asset, as of January 1, 2011	$	686		$	36		$	30
Incurred		65			(3	)		5
Paid		(65	)		1			—
Unlock		(27	)		6			—
Currency translation adjustment		—			—			—

Reinsurance recoverable asset, as of June 30, 2011	$	659		$	40		$	35


				International			UL Secondary
	U.S. GMDB			GMDB/GMIB			Guarantees
Liability balance as of January 1, 2010	$	1,233		$	599		$	76
Incurred		127			62			20
Paid		(155	)		(61	)		—
Unlock		107			32			—
Currency translation adjustment		—			32			—

Liability balance as of June 30, 2010	$	1,312		$	664		$	96

Reinsurance recoverable asset, as of January 1, 2010	$	787		$	51		$	22
Incurred		74			(2	)		4
Paid		(94	)		—			—
Unlock		65			(7	)		—
Currency translation adjustment		—			2			—

Reinsurance recoverable asset, as of June 30, 2010	$	832		$	44		$	26

The following table provides details concerning GMDB and GMIB exposure as of June 30, 2011:


Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
					Retained Net
			Net Amount		Amount			Weighted Average
	Account		at Risk		at Risk			Attained Age of
Maximum anniversary value (“MAV”) [1]	Value (“AV”)		(“NAR”) [10]		(“RNAR”) [10]		Annuitant
MAV only	$	24,081	$	4,765	$	1,030			68
With 5% rollup [2]		1,648		416		131			68
With Earnings Protection Benefit Rider (“EPB”) [3]		6,228		747		91			65
With 5% rollup & EPB		685		142		30			68

Total MAV		32,642		6,070		1,282
Asset Protection Benefit (“APB”) [4]		26,268		1,820		1,171			65
Lifetime Income Benefit (“LIB”) — Death Benefit [5]		1,252		53		53			64
Reset [6] (5-7 years)		3,584		193		191			68
Return of Premium (“ROP”) [7]/Other		23,557		462		439			65

Subtotal U.S. GMDB [8]		87,303		8,598		3,136			66
Less: General Account Value with U.S. GMDB		7,008

Subtotal Separate Account Liabilities with GMDB		80,295
Separate Account Liabilities without U.S. GMDB		77,190

Total Separate Account Liabilities	$	157,485

Japan GMDB [9], [11]	$	30,785	$	8,469	$	7,233			69
Japan GMIB [9], [11]	$	28,526	$	5,442	$	5,442			69


[1]		MAV GMDB is the greatest of current AV, net premiums paid and the highest AV on any anniversary before age 80 (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 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 (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) 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, 15 or 20 years. The GRB related to the Japan GMIB was $33.2 billion and $33.9 billion as of June 30, 2011 and December 31, 2010, respectively. The GRB related to the Japan GMAB and GMWB was $687 and $707 as of June 30, 2011 and December 31, 2010, respectively. 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 June 30, 2011, 55% of the GMDB RNAR and 68% of the GMIB NAR is reinsured to a Hartford affiliate.

[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.

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


Asset type	As of June 30, 2011		As of December 31, 2010
Equity securities (including mutual funds)	$	72,395	$	75,601
Cash and cash equivalents		7,900		8,365

Total	$	80,295	$	83,966

As of June 30, 2011 and December 31, 2010, approximately 16% and 15%, respectively, of the equity securities above were invested in fixed income securities through these funds and approximately 84% and 85%, respectively, were invested in equity securities.

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