10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-13958

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	13-3317783
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Hartford Plaza, Hartford, Connecticut 06155
(Address of principal executive offices) (Zip Code)

(860) 547-5000
(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT
(ALL OF WHICH ARE LISTED ON THE NEW YORK STOCK EXCHANGE INC.):
Common Stock, par value $0.01 per share
Depositary shares, representing interests in 7.25% Mandatory Convertible Preferred Stock, Series F, par value $0.01 per share
Warrants (expiring June 26, 2019)
6.10% Notes due October 1, 2041

SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
None

Indicate by check mark:		Yes	No
•	if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.	þ
•	if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.		þ
•	whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	þ
•	whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).	þ
•	if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.	þ
•	whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
	Large accelerated filer þ       Accelerated filer o      Non-accelerated filer o       Smaller reporting company o
•	whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)		þ

The aggregate market value of the shares of Common Stock held by non-affiliates of the registrant as of June 30, 2011 was approximately $11.7 billion, based on the closing price of $26.37 per share of the Common Stock on the New York Stock Exchange on June 30, 2011.

As of February 17, 2012, there were outstanding 440,237,475 shares of Common Stock, $0.01 par value per share, of the registrant.

Documents Incorporated by Reference

Portions of the registrant’s definitive proxy statement for its 2012 annual meeting of shareholders are incorporated by reference in Part III of this Form 10-K.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011

TABLE OF CONTENTS

Item	Description	Page
	Part I
1.	Business		5
1A.	Risk Factors		14
1B.	Unresolved Staff Comments		27
2.	Properties		27
3.	Legal Proceedings		28
4.	Mine Safety Disclosures		29
	Part II
5.	Market for The Hartford’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		30
6.	Selected Financial Data		32
7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		33
7A.	Quantitative and Qualitative Disclosures About Market Risk		131
8.	Financial Statements and Supplementary Data		131
9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		131
9A.	Controls and Procedures		131
9B.	Other Information		133
	Part III
10.	Directors, Executive Officers and Corporate Governance of The Hartford		133
11.	Executive Compensation		134
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		134
13.	Certain Relationships and Related Transactions, and Director Independence		135
14.	Principal Accounting Fees and Services		135
	Part IV
15.	Exhibits, Financial Statement Schedules		135
	Signatures	II-1
	Exhibits Index	II-2
EX-10.04
EX-10.28
EX-12.01
EX-18.01
EX-21.01
EX-23.01
EX-24.01
EX-31.01
EX-31.02
EX-32.01
EX-32.02
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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Forward-Looking Statements

Certain of the statements contained herein are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects,” and similar references to future periods.

Forward-looking statements are based on our current expectations and assumptions regarding economic, competitive and legislative developments. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. They have been made based upon management’s expectations and beliefs concerning future developments and their potential effect upon The Hartford Financial Services Group, Inc. and its subsidiaries (collectively, the “Company”). Future developments may not be in line with management’s expectations or have unanticipated effects. Actual results could differ materially from expectations, depending on the evolution of various factors, including those set forth in Part I, Item 1A. Risk Factors and those identified from time to time in our other filings with the Securities and Exchange Commission. These important risks and uncertainties include:

• challenges related to the Company’s current operating environment, including continuing uncertainty about the strength and speed of the recovery in the United States and other key economies and the impact of governmental stimulus and austerity initiatives, sovereign credit concerns, including the potential consequences associated with recent and further potential downgrades to the credit ratings of debt issued by the United States government, European sovereigns and other adverse developments on financial, commodity and credit markets and consumer spending and investment, including in respect of Europe, and the effect of these events on our returns in our life and property and casualty investment portfolios and our hedging costs associated with our variable annuities business;

• the potential impact or consequences of our ongoing evaluation of the Company’s strategy and business portfolio, which may lead us to pursue one or more transactions or take other actions, including the discontinuance or placing in run-off of certain lines of business and/or the pursuit of strategic acquisitions, divestitures or restructurings, and the potential that any of the foregoing transactions or actions may not be achievable or that the benefits anticipated to be gained thereby may not be obtained;

• the success of our initiatives relating to the realignment of our business, including the continuing realignment of our hedge program for our variable annuity business, and plans to improve the profitability and long-term growth prospects of our key divisions, including through opportunistic acquisitions or divestitures or other actions or initiatives, and the impact of regulatory or other constraints on our ability to complete these initiatives and deploy capital among our businesses as and when planned;

• market risks associated with our business, including changes in interest rates, credit spreads, equity prices, market volatility and foreign exchange rates, and implied volatility levels, as well as continuing uncertainty in key sectors such as the global real estate market;

• the impact on our investment portfolio if our investment portfolio is concentrated in any particular segment of the economy;

• volatility in our earnings and potential material changes to our results resulting from our adjustment of our risk management program to emphasize protection of statutory surplus and cash flows;

• the impact on our statutory capital of various factors, including many that are outside the Company’s control, which can in turn affect our credit and financial strength ratings, cost of capital, regulatory compliance and other aspects of our business and results;

• risks to our business, financial position, prospects and results associated with negative rating actions or downgrades in the Company’s financial strength and credit ratings or negative rating actions or downgrades relating to our investments;

• the potential for differing interpretations of the methodologies, estimations and assumptions that underlie the valuation of the Company’s financial instruments that could result in changes to investment valuations;

• the subjective determinations that underlie the Company’s evaluation of other-than-temporary impairments on available-for-sale securities;

• losses due to nonperformance or defaults by others;

• the potential for further acceleration of deferred policy acquisition cost amortization;

• the potential for further impairments of our goodwill or the potential for changes in valuation allowances against deferred tax assets;

• the possible occurrence of terrorist attacks and the Company’s ability to contain its exposure, including the effect of the absence or insufficiency of applicable terrorism legislation on coverage;

• the possibility of unfavorable loss development including with respect to long-tailed exposures;

• the difficulty in predicting the Company’s potential exposure for asbestos and environmental claims;

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• the possibility of a pandemic, earthquake, or other natural or man-made disaster that may adversely affect our businesses and cost and availability of reinsurance;

• weather and other natural physical events, including the severity and frequency of storms, hail, winter storms, hurricanes and tropical storms, as well as climate change and its potential impact on weather patterns;

• the response of reinsurance companies under reinsurance contracts and the availability, pricing and adequacy of reinsurance to protect the Company against losses;

• actions by our competitors, many of which are larger or have greater financial resources than we do;

• the Company’s ability to distribute its products through distribution channels, both current and future;

• the cost and other effects of increased regulation as a result of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), which, among other effects, has resulted in the establishment of a newly created Financial Services Oversight Council with the power to designate “systemically important” institutions, will require central clearing of, and/or impose new margin and capital requirements on, derivatives transactions, and created a new “Federal Insurance Office” within the U.S. Department of the Treasury (“Treasury”);

• unfavorable judicial or legislative developments;

• the uncertain effects of emerging claim and coverage issues;

• the potential effect of other domestic and foreign regulatory developments, including those that could adversely impact the demand for the Company’s products, operating costs and required capital levels, including changes to statutory reserves and/or risk-based capital requirements related to secondary guarantees under universal life and variable annuity products or changes in U.S. federal or other tax laws that affect the relative attractiveness of our investment products;

• regulatory limitations on the ability of the Company and certain of its subsidiaries to declare and pay dividends;

• the Company’s ability to effectively price its property and casualty policies, including its ability to obtain regulatory consents to pricing actions or to non-renewal or withdrawal of certain product lines;

• the Company’s ability to maintain the availability of its systems and safeguard the security of its data in the event of a disaster, cyber or other information security incident or other unanticipated event;

• the risk that our framework for managing business risks may not be effective in mitigating material risk and loss to the Company;

• the potential for difficulties arising from outsourcing relationships;

• the impact of potential changes in federal or state tax laws, including changes affecting the availability of the separate account dividend received deduction;

• the impact of potential changes in accounting principles and related financial reporting requirements;

• the Company’s ability to protect its intellectual property and defend against claims of infringement; and

• other factors described in such forward-looking statements.

Any forward-looking statement made by the Company in this document speaks only as of the date of the filing of this Form 10-K. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

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PART I

Item 1. BUSINESS

(Dollar amounts in millions, except for per share data, unless otherwise stated)

General

The Hartford Financial Services Group, Inc. (together with its subsidiaries, “The Hartford”, the “Company”, “we”, or “our”) is an insurance and financial services company. The Hartford, headquartered in Connecticut, is among the largest providers of investment products and life, property, and casualty insurance to both individual and business customers in the United States of America. Also, The Hartford continues to administer business previously sold in Japan and the United Kingdom. Hartford Fire Insurance Company, founded in 1810, is the oldest of The Hartford’s subsidiaries. At December 31, 2011, total assets and total stockholders’ equity of The Hartford were $304.1 billion and $22.9 billion, respectively.

Organization

The Hartford strives to maintain and enhance its position as a market leader within the financial services industry. The Company sells diverse and innovative products through multiple distribution channels to consumers and businesses. The Company is continuously seeking to develop and expand its distribution channels, achieving cost efficiencies through economies of scale and improved technology, and capitalizes on its brand name and The Hartford Stag Logo, one of the most recognized symbols in the financial services industry.

The Company is currently focused on a customer-oriented strategy and organized around four divisions: Commercial Markets, Consumer Markets, Wealth Management and Runoff Operations. In the last two years, the Company announced the sales of certain businesses that are not core to its focus and strategy. The Company continues to evaluate its strategy and business portfolio with the goal of delivering shareholder value. As this review is ongoing and no decisions have yet been made, the following discussions of the Company’s business and any forward-looking statements contained herein assume a continuation of the Company’s current business focus and, as such, are subject to change based on any actions taken as a result of the Company’s ongoing review.

As a holding company that is separate and distinct from its subsidiaries, The Hartford Financial Services Group, Inc. has no significant business operations of its own. Therefore, it relies on the dividends from its insurance companies and other subsidiaries as the principal source of cash flow to meet its obligations. Additional information regarding the cash flow and liquidity needs of The Hartford Financial Services Group, Inc. may be found in the Capital Resources and Liquidity section of Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”).

The Company maintains a retail mutual fund operation whereby the Company, through wholly-owned subsidiaries, provides investment management and administrative services to The Hartford Mutual Funds, Inc. and The Hartford Mutual Funds II, Inc. (collectively, “mutual funds”), consisting of 57 non-proprietary mutual funds, as of December 31, 2011. The Company charges fees to these mutual funds, which are recorded as revenue by the Company. These mutual funds are registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940. The mutual funds are owned by the shareholders of those funds and not by the Company. In the fourth quarter of 2011, the Company entered into a preferred partnership agreement with Wellington Management Company, LLP (“Wellington Management”) and announced that Wellington Management will serve as the sole sub-advisor for The Hartford’s mutual funds, including equity and fixed income funds, pending a fund-by-fund review by The Hartford’s mutual funds board of directors. As of December 31, 2011, Wellington Management served as the sub-advisor for 29 of The Hartford’s non-proprietary mutual funds and has been the primary manager for the Company’s equity funds.

Reporting Segments

The Hartford is organized into four divisions: Commercial Markets, Consumer Markets, Wealth Management and Runoff Operations. In 2011, the Runoff Operations division was formed to reflect the manner in which the Company is currently organized for purposes of making operating decisions and assessing performance. As a result, the Company conducts business principally in nine reporting segments, and segment data for prior reporting periods has been adjusted accordingly. The Hartford includes in its Corporate category the Company’s debt financing and related interest expense, as well as other capital raising activities; banking operations; certain fee income and commission expenses associated with sales of non-proprietary products by broker-dealer subsidiaries; and certain purchase accounting adjustments and other charges not allocated to the reporting segments.

The following discussion describes the principal products and services, marketing and distribution, and competition of Commercial Markets, Consumer Markets and Wealth Management. For further discussion on the reporting segments, including financial disclosures on revenues by product, net income (loss), and assets for each reporting segment, see Note 3 of the Notes to Consolidated Financial Statements.

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Commercial Markets

The Commercial Markets division is organized into two reporting segments; Property & Casualty Commercial and Group Benefits.

Principal Products and Services

Property & Casualty Commercial provides workers’ compensation, property, automobile, liability and umbrella coverages under several different products, primarily throughout the United States, within its standard commercial lines, which consists of The Hartford’s small commercial and middle market lines of business. Additionally, a variety of customized insurance products and risk management services including workers’ compensation, automobile, general liability, professional liability, fidelity, surety, livestock and specialty casualty coverages are offered to large companies through the segment’s specialty lines.

Standard commercial lines seeks to offer products with more coverage options and customized pricing based on the policyholder’s individualized risk characteristics. For small businesses, those businesses whose annual payroll is under $5 and whose revenue and property values are less than $15 each, coverages are bundled as part of a single multi-peril package policy marketed under the Spectrum name. Medium-sized businesses, companies whose payroll, revenue and property values exceed the small business definition, are served within middle market. The middle market line of business provides workers’ compensation, property, automobile, liability, umbrella and marine coverages. The sale of Spectrum business owners’ package policies and workers’ compensation policies accounts for the majority of the written premium in the standard commercial lines.

Within the specialty lines, a significant portion of the specialty casualty business, including workers’ compensation business, is written through large deductible programs where the insured typically provides collateral to support loss payments made within their deductible. The specialty casualty business also provides retrospectively-rated programs where the premiums are adjustable based on loss experience. Captive and Specialty Programs provide insurance products and services primarily to captive insurance companies, pools and self-insurance groups.

Group Benefits provides group life, accident and disability coverage, group retiree health and voluntary benefits to individual members of employer groups, associations, affinity groups and financial institutions. Group Benefits offers disability underwriting, administration, claims processing and reinsurance to other insurers and self-funded employer plans. Policies sold in this segment are generally term insurance, allowing Group Benefits to adjust the rates or terms of its policies in order to minimize the adverse effect of market trends, declining interest rates, and other factors. Policies are typically sold with one, two or three-year rate guarantees depending upon the product.

In addition to the products and services traditionally offered within each of its lines of business, Commercial Markets offers The Hartford Productivity Advantage (“THPA”), a single-company solution for leave management, integrating the insurer’s short- and long-term group disability and workers’ compensation insurance with its leave management administration services.

Marketing and Distribution

Standard commercial lines provide insurance products and services through the Company’s home office located in Hartford, Connecticut, and multiple domestic regional office locations and insurance centers. The products are marketed nationwide utilizing brokers and independent agents. The current pace of consolidation within the independent agent and broker distribution channel will likely continue such that, in the future a larger proportion of written premium will likely be concentrated among fewer agents and brokers. Additionally the Company offers insurance products to customers of payroll service providers through its relationships with major national payroll companies.

Specialty lines also provide insurance products and services through its home office located in Hartford, Connecticut and multiple domestic office locations. Specialty lines markets its products nationwide utilizing a variety of distribution networks including independent retail agents, brokers and wholesalers.

The Group Benefits distribution network includes an experienced group of Company employees, managed through a regional sales office system, to distribute its group insurance products and services through a variety of distribution outlets including brokers, consultants, third-party administrators and trade associations.

The Company is engaged in a nationwide joint sales initiative across standard commercial lines, specialty lines and Group Benefits, facilitating the marketing of both integrated and traditional products and services across commercial markets.

6

Competition

In the small commercial marketplace, The Hartford competes against a number of large national carriers, as well as regional competitors in certain territories. Competitors include other stock companies, mutual companies and other underwriting organizations. The small commercial market has become increasingly competitive as favorable loss costs in the past few years have led carriers to differentiate themselves through product expansion, price reduction, enhanced service and cutting-edge technology. Larger carriers such as The Hartford have improved their pricing sophistication and ease of doing business with agents through the use of predictive modeling tools and automation which speeds up the process of evaluating a risk and quoting new business.

Written premium growth rates in the small commercial market have begun to rebound, while underwriting margins have been pressured by increases in loss costs, particularly in workers’ compensation, and higher catastrophes. A number of companies have sought to grow their business by increasing their underwriting appetite, appointing new agents and expanding business with existing agents. Also, carriers serving middle market-sized accounts are more aggressively competing for small commercial accounts as small commercial business has generally been less price-sensitive.

Middle market business is characterized as “high touch” and involves case-by-case underwriting and pricing decisions. Compared to small commercial lines, the pricing of middle market accounts is prone to more significant variation or cyclicality over time, with more sensitivity to legislative and macro-economic forces. The economic downturn which began in 2008 has driven a reduction in average premium size as shrinking company payrolls, smaller auto fleets, and fewer business locations depress insurance exposures. Additionally, various state legislative reforms in recent years designed to control workers compensation indemnity costs have led to rate reductions in many states. These factors, characterized by highly competitive pricing on new business, have resulted in more new business opportunities in the marketplace as customers shop their policies for a better price. In the face of this competitive environment, The Hartford continues to maintain a disciplined underwriting approach. To gain a competitive advantage in this environment, carriers are improving automation with agents and brokers, increasing pricing sophistication, and enhancing their product offerings. These enhancements include industry specialization, with The Hartford and other national carriers tailoring products and services to specific industry verticals such as technology, health care and renewable energy.

Specialty lines is comprised of a diverse group of businesses that operate independently within their specific industries. These businesses, while somewhat interrelated, have different business models and operating cycles. Specialty lines competes on an account- by-account basis due to the complex nature of each transaction. Competition in this market includes other stock companies, mutual companies, alternative risk sharing groups and other underwriting organizations. The relatively large size and underwriting capacity of The Hartford provides opportunities not available to smaller companies. Disciplined underwriting and targeted returns are the objectives of specialty lines since premium writings may fluctuate based on the segment’s view of perceived market opportunity.

For specialty casualty businesses, written pricing competition continues to be significant, particularly for the larger individual accounts. Carriers are protecting their in-force casualty business by initiating the renewal process well in advance of the policy renewal date, effectively preventing other carriers from quoting on the business and resulting in fewer new business opportunities within the marketplace. Within the national account business, as the market firms, more insureds may opt for loss-sensitive products in lieu of guaranteed cost policies.

Carriers writing professional liability business are increasingly focused on profitable private, middle market companies. This trend has continued as the downturn in the economy has led to a significant drop in the number of initial public offerings, and volatility for all public companies. Also, carriers’ new business opportunities in the marketplace for directors & officers and errors & omissions insurance have been significantly influenced by customer perceptions of financial strength, as investment portfolio losses have had a negative effect on the financial strength ratings of some insurers.

In the surety business, favorable underwriting results over the past couple of years have led to increased competition for market share, setting the stage for potential written price declines and less favorable terms and conditions. Driven by the upheaval in the credit markets, new private construction activity has declined dramatically, resulting in lower demand for contract surety business.

Group Benefits competes with numerous other insurance companies and other financial intermediaries marketing insurance products. This line of business focuses on both its risk management expertise and economies of scale to derive a competitive advantage. Competitive factors affecting Group Benefits include the variety and quality of products and services offered, the price quoted for coverage and services, the Company’s relationships with its third-party distributors, and the quality of customer service. In addition, active price competition continues in the marketplace resulting in longer rate guarantee periods being offered to customers. Top tier carriers in the marketplace also offer on-line and self service capabilities to agents and consumers. The relatively large size and underwriting capacity of the Group Benefits business provides opportunities not available to smaller companies.

In the commercial marketplace, the weak economy has prompted carriers to offer differentiated products and services as a means of gaining a competitive advantage. In addition to the initiatives specific to each of The Hartford’s Commercial Markets’ lines of business noted above, the Company is leveraging its diverse product, service and distribution capabilities to deliver differentiated value in the market, while simultaneously increasing its ability to access to its own diverse customer base.

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Consumer Markets

The Consumer Markets division constitutes the reporting segment.

Principal Products and Services

Consumer Markets provides standard automobile, homeowners and home-based business coverages to individuals across the United States, including a special program designed exclusively for members of AARP (“AARP Program”). The Hartford’s auto and homeowners products provide coverage options and customized pricing tailored to a customer’s individual risk. The Hartford has individual customer relationships with AARP Program policyholders and as a group these customers represent a significant portion of the total Consumer Markets’ business. Business sold to AARP members, either direct or through independent agents, amounted to earned premiums of $2.8 billion, $2.9 billion and $2.8 billion in 2011, 2010 and 2009, respectively. Consumer Markets also operates a member contact center for health insurance products offered through the AARP Health program, which is in place through 2018.

Marketing and Distribution

Consumer Markets reaches diverse customers through multiple distribution channels including direct sales to the consumer, brokers and independent agents. In direct sales to the consumer, the Company markets its products through a mix of media, including direct mail and ecommerce marketing, television and advertising, both digitally and in publications. Most of Consumer Markets’ direct sales to the consumer are associated with its exclusive licensing arrangement with AARP, which continues until January 1, 2020, to market automobile, homeowners and home-based business insurance products to AARP’s nearly 37 million members. This agreement provides Consumer Markets with an important competitive advantage given the number of “baby boomers” over age 50, many of whom become AARP members during this period.

Consumer Markets is focused on targeting specific customer groups and writing business through partnerships and affinities other than AARP. During 2011, the Company entered into affinity agreements with the American Kennel Club, Sierra Club and the National Wildlife Federation. In addition to selling product through its relationship with AARP and other affinities, beginning in 2012, the Company will market direct to the consumer within select underwriting markets, acquired through partnerships or list acquisitions, and to consumers in geographies where it is especially competitive.

The agency channel provides customized products and services to customers through a network of independent agents in the standard personal lines market. These independent agents are not employees of The Hartford. An important strategic objective of the Company is to develop common products and processes for all of its personal lines business regardless of the distribution channel. During 2011, the Company substantially completed the rollout of its Open Road Advantage product and, as of December 31, 2011, this product was available in 44 states across the Company’s distribution channels, including direct and through independent agents. In addition, as of December 31, 2011, the Hartford Home Advantage product was available in 38 states across similar distribution channels as the Open Road Advantage product.

Competition

The personal lines automobile and homeowners businesses are highly competitive. Personal lines insurance is written by insurance companies of varying sizes that compete on the basis of price, product, service (including claims handling), stability of the insurer and brand recognition. Companies with recognized brands, direct sales capability and economies of scale will have a competitive advantage. In recent years, a number of carriers have increased their advertising in an effort to gain new business and retain profitable business. This has been particularly true of carriers that sell directly to the consumer. Industry sales of personal lines insurance direct to the consumer have been growing faster than sales through agents, particularly for auto insurance.

Carriers that distribute products mainly through agents compete by offering agents commissions and additional incentives to attract new business. To distinguish themselves in the marketplace, top tier carriers are offering on-line and self service capabilities to agents and consumers. More agents have been using “comparative rater” tools that allow the agent to compare premium quotes among several insurance companies. The use of comparative rater tools has further increased price competition. Carriers with more efficient cost structures will have an advantage in competing for new business through price. The use of data mining and predictive modeling is used by more and more carriers to target the most profitable business and carriers have further segmented their pricing plans to expand market share in what they believe to be the most profitable segments. Some companies, including The Hartford, have written a greater percentage of their new business in preferred market segments which tend to have better loss experience but also lower average premiums. In addition, a number of companies have invested in telematics — the use of devices in insured vehicles to transmit information about driving behavior such as miles driven, speed, acceleration, deceleration — and are using that information to price the risk. Companies that are the first to introduce telematics may enjoy a competitive advantage through favorable risk selection.

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Wealth Management

The Wealth Management division consists of the following reporting segments: Individual Annuity, Individual Life, Retirement Plans and Mutual Funds. Wealth Management provides investment products for over 7 million customers and life insurance for approximately 711,000 customers.

In the fourth quarter of 2011, the Company announced that Wellington Management Company, LLP (“Wellington Management”) will serve as the sole sub-advisor for The Hartford’s non-proprietary mutual funds, including equity and fixed income funds, pending a fund-by-fund review by The Hartford’s mutual funds board of directors. As of December 31, 2011, Wellington Management served as the sub-advisor for 29 of The Hartford’s non-proprietary mutual funds and has been the primary manager for the Company’s equity funds.

As part of the Company’s strategic decision to focus on its U.S. businesses, the Company suspended all new sales in its Japan and European operations in the second quarter of 2009 and divested its Brazil joint venture, Canadian mutual fund business and its offshore insurance business in 2010. Runoff businesses, including International Annuity, Institutional Annuity and the Private Placement Life Insurance business, previously reported as part of Wealth Management are now included in the Life Other Operations segment of the Runoff Operations division formed in 2011.

Principal Products and Services

Individual Annuity offers individual variable, fixed market value adjusted (“fixed MVA”), fixed index and single premium immediate annuities in the U.S.

Individual Life sells a variety of life insurance products, including variable universal life, universal life, and term life.

Retirement Plans provides products and services to corporations, municipalities, and not-for-profit organizations pursuant to Sections 401(k), 457 and 403(b) of the Internal Revenue Code of 1986, as amended (the “Code”), respectively.

Mutual Funds offers retail mutual funds, investment-only mutual funds and college savings plans under Section 529 of the Code (collectively referred to as non-proprietary) and proprietary mutual funds.

Marketing and Distribution

Individual Annuity’s distribution network includes national and regional broker-dealer organizations, banks and other financial institutions and independent financial advisors. The Company periodically negotiates provisions and terms of its relationships with unaffiliated parties. The Company’s primary wholesaler of its individual annuities is Hartford Life Distributors, LLC, and its affiliate, PLANCO, LLC (collectively “HLD”) which are indirect wholly-owned subsidiaries of Hartford Life, Inc. HLD provides sales support to registered representatives, financial planners and broker-dealers at brokerage firms and banks across the United States.

Individual Life’s distribution network includes national and regional broker-dealer organizations, banks, independent agents, independent life and property-casualty agents, and Woodbury Financial Services, an indirect, wholly-owned subsidiary retail broker-dealer.

Retirement Plans distribution network includes Company employees with extensive retirement experience selling its products and services through national and regional broker-dealer firms, banks and other financial institutions.

Mutual Fund sales professionals are segmented into two teams; a retail team and an institutional team. The retail team distributes The Hartford’s open-end funds and markets 529 college savings plans to national and regional broker-dealer organizations, banks and other financial institutions, independent financial advisors and registered investment advisors. The institutional team distributes The Hartford’s funds to professional buyers, such as broker-dealers, consultants, record keepers, and bank trust groups.

Competition

Individual Annuity competes with other life insurance companies, as well as certain banks, securities brokerage firms, independent financial advisors, asset managers, and other financial intermediaries marketing annuities, mutual funds and other retirement-oriented products. Product sales are affected by competitive factors such as investment performance ratings, product design, visibility in the marketplace, financial strength ratings, distribution capabilities, levels of charges and credited rates, reputation and customer service. Individual Annuity’s annuity deposits continue to decline due to competitive activity and the Company’s product and risk decisions. Many competitors have responded to the equity market volatility by increasing the price of their living benefit products and changing the level of the guarantee offered. Management believes that the most significant industry de-risking changes have occurred. In 2011, the Company continued to enhance its variable annuity product designed to meet customers future income needs while abiding by the risk tolerances of the Company.

Individual Life competes with other life insurance companies in the United States, as well as other financial intermediaries marketing insurance products. Product sales are affected primarily by the availability and price of reinsurance, volatility in the equity markets, breadth and quality of life insurance products being offered, pricing, relationships with third-party distributors, effectiveness of wholesaling support, and the quality of underwriting and customer service. The individual life industry continues to see a distribution shift away from the traditional life insurance sales agents to the consultative financial advisor as the place people go to buy their life insurance. Individual Life’s regional sales office system is a differentiator in the market and allows it to compete effectively across multiple distribution outlets.

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Retirement Plans compete with other insurance carriers, large investment brokerage companies and large mutual fund companies. The 401(k), 457, and 403(b) products offer mutual funds wrapped in variable annuities, variable funding agreements, or mutual fund retirement products. Plan sponsors seek a diversity of available funds and favorable fund performance. Consolidation among industry providers has continued as competitors increase scale advantages.

Mutual Funds compete with other mutual fund companies along with investment brokerage companies and differentiate themselves through product solutions, performance, and service. In this non-proprietary broker sold market, the Company and its competitors compete aggressively for net sales.

Reserves

The Hartford establishes and carries as liabilities reserves for its insurance products to estimate for the following:

• a liability for unpaid losses, including those that have been incurred but not yet reported, as well as estimates of all expenses associated with processing and settling these claims;

• a liability equal to the balance that accrues to the benefit of the life insurance policyholder as of the consolidated financial statement date, otherwise known as the account value;

• a liability for future policy benefits, representing the present value of future benefits to be paid to or on behalf of policyholders less the present value of future net premiums;

• fair value reserves for living benefits embedded derivative guarantees; and

• death and living benefit reserves which are computed based on a percentage of revenues less actual claim costs.

Further discussion of The Hartford’s property and casualty insurance product reserves, including asbestos and environmental claims reserves, may be found in Part II, Item 7, MD&A — Critical Accounting Estimates — Property and Casualty Insurance Product Reserves, Net of Reinsurance. Additional discussion may be found in the Company’s accounting policies for insurance product reserves within Note 11 of the Notes to Consolidated Financial Statements.

Reinsurance

The Hartford cedes insurance to affiliated and unaffiliated insurers for both its property and casualty and life insurance products. Such arrangements do not relieve The Hartford of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to The Hartford.

For property and casualty insurance products, reinsurance arrangements are intended to provide greater diversification of business and limit The Hartford’s maximum net loss arising from large risks or catastrophes. A major portion of The Hartford’s property and casualty insurance product reinsurance is effected under general reinsurance contracts known as treaties, or, in some instances, is negotiated on an individual risk basis, known as facultative reinsurance. The Hartford also has in-force excess of loss contracts with reinsurers that protect it against a specified part or all of a layer of losses over stipulated amounts.

For life insurance products, The Hartford is involved in both the cession and assumption of insurance with other insurance and reinsurance companies. As of December 31, 2011, 2010 and 2009, the Company’s policy for the largest amount of life insurance retained on any one life by any one of its operations was $10. For the years ended December 31, 2011, 2010 and 2009, the Company did not make any significant changes in the terms under which reinsurance is ceded to other insurers. In addition, the Company has reinsured a portion of the risk associated with U.S. variable annuities and the associated guaranteed minimum death benefit (“GMDB”) and guaranteed minimum withdrawal benefit (“GMWB”) riders, Hartford Life Insurance K.K.’s (“HLIKK”), an indirect wholly owned subsidiary, variable annuity contract and rider benefits, and Hartford Life Limited Ireland’s (“HLL”), an indirect wholly owned subsidiary, GMDB and GMWB annuity contract and rider benefits.

For further discussion on reinsurance, see Part II, Item 7, MD&A — Enterprise Risk Management. Additional discussion may be found in the Company’s accounting policies for reinsurance within Note 6 of the Notes to Consolidated Financial Statements.

Investment Operations

The majority of the Company’s investment portfolios are managed by Hartford Investment Management Company (“HIMCO”). HIMCO manages the portfolios to maximize economic value, while attempting to generate the income necessary to support the Company’s various product obligations, within internally established objectives, guidelines and risk tolerances. The portfolio objectives and guidelines are developed based upon the asset/liability profile, including duration, convexity and other characteristics within specified risk tolerances. The risk tolerances considered include, for example, asset and credit issuer allocation limits, maximum portfolio limits for below investment grade holdings and foreign currency exposure limits. The Company attempts to minimize adverse impacts to the portfolio and the Company’s results of operations from changes in economic conditions through asset allocation limits, asset/liability duration matching and through the use of derivatives. For further discussion of HIMCO’s portfolio management approach, see Part II, Item 7, MD&A — Enterprise Risk Management — Credit Risk.

In addition to managing the general account assets of the Company, HIMCO is also a SEC registered investment adviser for third party institutional clients, a sub-advisor for certain mutual funds and serves as the sponsor and collateral manager for capital markets transactions. HIMCO specializes in investment management that incorporates proprietary research and active portfolio management within a disciplined risk framework that seeks to provide value added returns versus peers and benchmarks. As of December 31, 2011 and 2010, the fair value of HIMCO’s total assets under management was approximately $165.0 billion and $159.7 billion, respectively, of which $7.1 billion and $8.7 billion, respectively, were held in HIMCO managed third party accounts.

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Enterprise Risk Management

The Company has an enterprise risk management function (“ERM”) that is charged with providing analysis of the Company’s risks on an individual and aggregated basis and with ensuring that the Company’s risks remain within its risk appetite and tolerances. ERM plays an integral role at The Hartford by fostering a strong risk management culture and discipline. The mission of ERM is to support the Company in achieving its strategic priorities by:

• Providing a comprehensive view of the risks facing the Company, including risk concentrations and correlations;

• Helping management define the Company’s overall capacity and appetite for risk by evaluating the risk return profile of the business relative to the Company’s strategic intent and financial underpinning;

• Assisting management in setting specific risk tolerances and limits that are measurable, actionable, and comply with the Company’s overall risk philosophy;

• Communicating and monitoring the firm’s risk exposures relative to set limits and recommending, or implementing as appropriate, mitigating strategies; and

• Providing valuable insight to assist leaders in growing the businesses and achieving optimal risk-adjusted returns within established guidelines.

Enterprise Risk Management Structure and Governance

At The Hartford, the Board of Directors (“the Board”) has ultimate responsibility for risk oversight. It exercises its oversight function through its standing committees, each of which has primary risk oversight responsibility with respect to all matters within the scope of its duties as contemplated by its charter. In addition, the Finance, Investment and Risk Management Committee (“FIRMCo”), which is comprised of all members of the Board, has responsibility for oversight of all financial risk exposures facing the Company, and all risks that do not fall within the oversight responsibility of any other standing committee. The Audit Committee is responsible for discussing with management risk assessment policies and overseeing enterprise operational risk.

At the corporate level, the Company’s Enterprise Chief Risk Officer (“ECRO” or “Chief Risk Officer”) leads ERM. The Chief Risk Officer reports directly to the Company’s Chief Executive Officer (“CEO”). Reporting to the ECRO are the Chief Insurance Risk Officer (“CIRO”), Chief Operational Risk Officer (“CORO”), and the Chief Market Risk Officer (“CMRO”). The Company has established the Enterprise Risk and Capital Committee (“ERCC”) that includes the Company’s CEO, Chief Financial Officer (“CFO”), Chief Investment Officer (“CIO”), Chief Risk Officer, the divisional Presidents and the General Counsel. The ERCC is responsible for managing the Company’s risks and overseeing the enterprise risk management program. The ERCC reports to the Board primarily through FIRMCo and through interactions with the Audit Committee.

The Company also has committees that manage specific risks and recommend risk mitigation strategies to the ERCC. These committees include, the Company and Division Asset Liability Committees, Catastrophe Risk Committee, Emerging Risk Committees, and Operational Risk Committee (“ORC”).

Risk Management Framework

At the Company, risk is managed at multiple levels. The first line of risk management is generally the responsibility of the lines of business. Senior business leaders are responsible for taking and managing risks specific to their business objectives and business environment. In many cases, the second line of risk management is the principal responsibility of ERM. ERM has the responsibility to ensure the Company has insight into its aggregate risk and that risks are managed within the Company’s overall risk tolerance. Internal Audit forms the third line of risk management by helping assess and ensure that risk controls are present and effective.

The Company’s Risk Management Framework consists of four core elements:

1. Risk Culture and Governance: The Company has established policies for its major risks and a formal governance structure with leadership oversight and an assignment of accountability and authority. The governance structure starts at the Board and cascades to a central executive risk management committee and then to individual risk committees across the Company. In addition, the Company promotes a strong risk management culture and high expectations around ethical behavior.

2. Risk Identification and Assessment: Through its ERM organization, the Company has developed processes for the identification, assessment, and, when appropriate, response to internal and external risks to the Company’s operations and business objectives. Risk identification and prioritization has been established within each area, including processes around emerging risks.

3. Risk Appetite and Limits: The Company has a formal risk appetite statement that is approved by the Company’s ERCC and reviewed by the Board. Based on its risk appetite, the Company has implemented stated risk tolerances and an associated limit structure for each of its major insurance and financial risks. These formal limits are encapsulated in formal risk policies that are reviewed at least annually by the ERCC.

4. Risk Monitoring, Controls and Communication: The Company monitors its major risks at the enterprise level through a number of enterprise reports, including but not limited to, a monthly risk dashboard, tracking the return on risk-capital across products, and regular stress testing. ERM communicates the Company’s risk exposures to senior and executive management and the Board, and reviews key business performance metrics, risk indicators, audit reports, risk/control self assessments and risk event data.

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Risk Exposures and Quantification

The Company quantifies its enterprise insurance and financial risk exposures using multiple lenses including statutory, economic and, where appropriate, U.S. GAAP. ERM leverages various modeling techniques and metrics to provide a view of the Company’s risk exposure in both normal and stressed environments. ERM regularly monitors the Company’s risk exposure as compared to defined statutory limits and provides regular reporting to the ERCC.

In order to quantify group capital levels, risk correlations and concentrations, and the potential benefits of risk diversification at an enterprise level, the Company performs stress testing and scenario analysis. The Company uses its Economic Capital Model (“ECM”) to quantify the value of risk management across the business lines and to advance its risk-based decision-making and optimization across risk and business. The Company also uses the ECM to inform the attribution of risk capital to each line of business. ERM supports the attribution of risk capital by line of business and the analysis of returns on risk capital in conjunction with the Chief Financial Officer.

The Company categorizes its main risks as follows in order to achieve a consistent and disciplined approach to quantifying, evaluating, and managing risk:

• Insurance Risk

• Operational Risk

• Financial Risk

• Business Risk

Insurance Risk

The Company defines insurance risk as its exposure to loss due to property, liability, mortality, morbidity, disability, longevity and other perils and risks covered under its policies, including adverse development on loss reserves supporting its products and geographic accumulations of loss over time due to property or casualty catastrophes.

Operational Risk

The Company defines operational risk as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

Financial Risk

Financial risk is broadly defined by the Company to include liquidity, interest rate, equity, foreign exchange, and credit risks, all of which have the potential to materially impact the Company’s financial condition. Financial risk also includes exposure to events that may cause correlated movement in the above risk factors.

Business Risk

The Company manages its business risk at all levels of the organization. The Company categorizes its business risk as strategic risk and management risk. Strategic risk is defined as the risk to the defined company objectives from adverse developments in the Company’s strategy vis-à-vis changing market conditions and competitor actions. Management risk is defined as the risk to defined company objectives from the ineffective or inefficient execution of the Company’s strategic and business decisions. Enterprise strategic and management risks are assessed through strategic, business and operating plan reviews, as well as through management self-assessment processes and benchmarking.

For further discussion on risk management, see Part II, Item 7, MD&A — Enterprise Risk Management.

Regulation

Insurance companies are subject to comprehensive and detailed regulation and supervision throughout the United States. The extent of such regulation varies, but generally has its source in statutes which delegate regulatory, supervisory and administrative powers to state insurance departments. Such powers relate to, among other things, the standards of solvency that must be met and maintained; the licensing of insurers and their agents; the nature of and limitations on investments; establishing premium rates; claim handling and trade practices; restrictions on the size of risks which may be insured under a single policy; deposits of securities for the benefit of policyholders; approval of policy forms; periodic examinations of the affairs of companies; annual and other reports required to be filed on the financial condition of companies or for other purposes; fixing maximum interest rates on life insurance policy loans and minimum rates for accumulation of surrender values; and the adequacy of reserves and other necessary provisions for unearned premiums, unpaid losses and loss adjustment expenses and other liabilities, both reported and unreported.

Most states have enacted legislation that regulates insurance holding company systems such as The Hartford. This legislation provides that each insurance company in the system is required to register with the insurance department of its state of domicile and furnish information concerning the operations of companies within the holding company system that may materially affect the operations, management or financial condition of the insurers within the system. All transactions within a holding company system affecting insurers must be fair and equitable. Notice to the insurance departments is required prior to the consummation of transactions affecting the ownership or control of an insurer and of certain material transactions between an insurer and any entity in its holding company system. In addition, certain of such transactions cannot be consummated without the applicable insurance department’s prior approval. In the jurisdictions in which the Company’s insurance company subsidiaries are domiciled, the acquisition of more than 10% of The Hartford’s outstanding common stock would require the acquiring party to make various regulatory filings.

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Certain of the Company’s life insurance subsidiaries sell variable life insurance, variable annuity, and some fixed guaranteed products that are “securities” registered with the SEC under the Securities Act of 1933, as amended. Some of the products have separate accounts that are registered as investment companies under the Investment Company Act of 1940, as amended (the “1940 Act”) and/or are regulated by state law. Separate account investment products are also subject to state insurance regulation. Moreover, each separate account is generally divided into sub-accounts, each of which invests in an underlying mutual fund that is also registered as an investment company under the 1940 Act (“Underlying Funds”). The Company offers these Underlying Funds and retail mutual funds that are registered with and regulated by the SEC.

In addition, other subsidiaries of the Company are involved in the offering, selling and distribution of the Company’s variable insurance products, Underlying Funds and retail mutual funds as broker dealers and are subject to regulation promulgated and enforced by the Financial Industry Regulatory Authority (“FINRA”), the SEC and/or in, some instances, state securities administrators. Other entities operate as investment advisers registered with the SEC under the Investment Advisers Act of 1940 and are registered as investment advisers under certain state laws, as applicable. One subsidiary is an investment company registered under the 1940 Act. Because federal and state laws and regulations are primarily intended to protect investors in securities markets, they generally grant regulators broad rulemaking and enforcement authority. Some of these regulations include, among other things, regulations impacting sales methods, trading practices, suitability of investments, use and safekeeping of customers’ funds, corporate governance, capital, record keeping, and reporting requirements.

The extent of insurance regulation on business outside the United States varies significantly among the countries in which The Hartford operates. Some countries have minimal regulatory requirements, while others regulate insurers extensively. Foreign insurers in certain countries are faced with greater restrictions than domestic competitors domiciled in that particular jurisdiction. The Hartford’s international operations are comprised of insurers licensed in their respective countries.

In addition, as described under “Legislative Developments,” we are subject to a number of Dodd-Frank Act provisions. Failure to comply with federal and state laws and regulations may result in censure, fines, the issuance of cease-and-desist orders or suspension, termination or limitation of the activities of our operations and/or our employees. We cannot predict the impact of these actions on our businesses, results of operations or financial condition.

Intellectual Property

We rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property.

We have a worldwide trademark portfolio that we consider important in the marketing of our products and services, including, among others, the trademarks of The Hartford name, the Stag Logo and the combination of these two marks. The duration of trademark registrations varies from country to country and may be renewed indefinitely subject to country-specific use and registration requirements. We regard our trademarks as extremely valuable assets in marketing our products and services and vigorously seek to protect them against infringement.

Employees

The Hartford has approximately 24,400 employees as of December 31, 2011.

Available Information

The Hartford makes available, free of charge, on or through its Internet website (http://www.thehartford.com) The Hartford’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after The Hartford electronically files such material with, or furnishes it to, the SEC. None of the information made available on The Hartford’s Internet website shall be deemed to be incorporated by reference herein. Information filed or furnished to the SEC may be read and copied at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website (http://sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

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Item 1A. RISK FACTORS

Investing in The Hartford involves risk. In deciding whether to invest in The Hartford, you should carefully consider the following risk factors, any of which could have a significant or material adverse effect on the business, financial condition, results of operations, or liquidity of The Hartford and could also cause the trading price of our securities, including our common stock and other equity-related securities, to experience significant fluctuations and volatility. The Hartford may also be subject to other general risks that are not specifically enumerated. This information should be considered carefully together with the other information contained in this report and the other reports and materials filed by The Hartford with the Securities and Exchange Commission (“SEC”). The following risk factors are not necessarily listed in order of importance.

Our operating environment remains subject to uncertainty about the timing and strength of an economic recovery. The steps we have taken to realign our businesses and strengthen our capital position may not be adequate to mitigate the financial, competitive and other risks associated with our operating environment, which could adversely affect our business and results of operations.

The decline of certain global economies, including Europe, and the possible contagion effect, cast uncertainty regarding the timing and strength of an economic recovery, which negatively affected our operating environment in 2011. Continued high unemployment, lower family income, lower business investment and lower consumer spending in most geographic markets we serve have adversely affected the demand for financial and insurance products, as well as their profitability in some cases. Our results, financial condition and statutory capital remain sensitive to equity and credit market performance and effects of interest rates and foreign currency, and we expect that market conditions will put pressure on returns in our life and property and casualty investment portfolios and that our hedging costs (in particular with respect to our variable annuities businesses) will remain higher than historical levels. If global economies continue to decline, economic conditions do not broadly improve and real estate valuations do not stabilize and over time increase, we would expect to experience additional realized and unrealized investment losses, particularly in the real estate and financial services sectors. Negative rating agency actions with respect to our investments could also indirectly adversely affect our statutory capital and risk-based capital (“RBC”) ratios, which could in turn have other negative consequences for our business and results.

The steps we have taken to realign our businesses and strengthen our capital position may not be adequate if economic conditions do not continue to improve in line with our forecasts. These steps include ongoing initiatives, particularly the execution risk relating to the continued repositioning of our investment portfolios and the continuing refinement of our hedge programs for our variable annuity businesses. If our actions are not adequate, our ability to support the scale of our business and to absorb operating losses and liabilities under our customer contracts could be impaired, which would in turn adversely affect our overall competitiveness and the capital position of the Company.

Even if the measures we have taken (or take in the future) are effective to mitigate the risks associated with our current operating environment, they may have unintended consequences. For example, rebalancing our hedging program to protect economic value, while being mindful of statutory surplus, may result in greater earnings volatility under generally accepted accounting principles in the U.S. (“U.S. GAAP”). We could be required to consider actions to manage our capital position and liquidity or further reduce our exposure to market and financial risks. We may also be forced to sell assets on unfavorable terms that could cause us to incur charges or lose the potential for market upside on those assets in a market recovery. We could also face other pressures, such as employee recruitment and retention issues and potential loss of distribution for our products. Additionally, if there was concern over the Company’s capital position that creates an anticipation of the Company issuing additional common stock or equity linked instruments, trading prices for our common stock could decline.

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As a result of our ongoing evaluation of the Company’s strategy and business portfolio, we may pursue one or more transactions or take other actions, which may include discontinuance or placing in run-off certain lines of business and/or pursuing strategic acquisitions, divestitures or restructurings, any of which could subject the Company to a number of challenges, uncertainties and risks or negatively impact our business, financial condition, results of operations or liquidity.

As previously announced, we are evaluating our strategy and business portfolio with the goal of delivering greater shareholder value. In particular, we noted that while we recognize there are potential benefits to a separation of our P&C and life companies, there are challenges to successfully executing such a separation.

As a result of these or other evaluations of the Company’s strategy and business portfolio, we may pursue one or more transactions or take other actions, which may include discontinuing or placing in run-off certain lines of business and/or pursuing strategic acquisitions, divestitures or restructurings. Because these transactions involve a number of challenges, uncertainties and risks, we may not be able to consummate any such transaction or, if concluded, achieve some or all of the benefits, including in respect of shareholder value, that we expect to derive from it. Pursuit of these initiatives may also, among other things, divert management’s attention and resources or result in a loss of employees or clients, surrenders, withdrawals, contract terminations or potential adverse capital or tax impacts. Completion of certain divestitures or restructurings might require consents under the covenants of our indentures (including in respect of allocation of our indebtedness), might require actions to satisfy certain rating agency criteria and could result in our retaining insurance or reinsurance obligations or result in recognition of other contingent liabilities (including in respect of intercompany guarantees). Any such transactions could also involve related financing transactions, including the issuance of equity or equity-related securities that could have a dilutive effect on our shareholders. In addition, the completion of an acquisition may require use of our capital and may involve difficulty integrating acquired businesses into our existing operations. Moreover, completion of an acquisition, divestiture or restructuring may require regulatory approvals or other third-party approvals (including the consents noted above), and these may not be able to be obtained or may involve significant additional cost, time, regulatory capital commitments and other regulatory conditions and obligations. Any such transactions may also be subject to additional significant execution risks, costs and delays. As a result of any of the foregoing, our business, financial condition, results of operations and liquidity could be negatively impacted.

We are exposed to significant financial and capital markets risk, including changes in interest rates, credit spreads, equity prices, market volatility, foreign exchange rates and global real estate market deterioration that may have a material adverse effect on our business, financial condition, results of operations, and liquidity.

One important exposure to equity risk relates to the potential for lower earnings associated with certain of our businesses in Wealth Management and Runoff Operations, such as U.S. and international variable annuities, where fee income is earned based upon the fair value of the assets under management. Should equity markets decline from current levels, assets under management and related fee income will be reduced. Such a decline would also place greater stress on the variable annuities businesses, which requires significant allocated capital due to rating agencies and regulatory requirements, including with respect to stress scenarios. Furthermore, certain of our products offer guaranteed benefits that increase our potential obligation and statutory capital exposure should equity markets continue to decline. Sustained declines in equity markets may result in the need to devote significant additional capital to support these products. We are also exposed to interest rate and equity risk based upon the discount rate and expected long-term rate of return assumptions associated with our pension and other post-retirement benefit obligations. Prolonged low interest rates or market returns are likely to have a negative effect on the funded status of these plans.

Our exposure to interest rate risk relates primarily to the market price and cash flow variability associated with changes in interest rates. A rise in interest rates, in the absence of other countervailing changes, will increase the net unrealized loss position of our investment portfolio and, if long-term interest rates were to rise dramatically within a six-to-twelve month time period, certain of our Wealth Management businesses might be exposed to disintermediation risk. Disintermediation risk refers to the risk that our policyholders may surrender their contracts in a rising interest rate environment, requiring us to liquidate assets in an unrealized loss position. Although our products have features such as surrender charges, market-value adjustments and put options on certain retirement plans, we are subject to disintermediation risk. An increase in interest rates can also impact our tax planning strategies and in particular our ability to utilize tax benefits to offset certain previously recognized realized capital losses. In a declining rate environment, due to the long-term nature of the liabilities associated with certain of our life businesses, such as structured settlements and guaranteed benefits on variable annuities, sustained declines in long-term interest rates may subject us to reinvestment risks, increased hedging costs, spread compression and capital volatility. Our exposure to credit spreads primarily relates to market price and cash flow variability associated with changes in credit spreads. If issuer credit spreads widen significantly or retain historically wide levels over an extended period of time, additional other-than-temporary impairments and increases in the net unrealized loss position of our investment portfolio will likely result. In addition, losses have also occurred due to the volatility in credit spreads. When credit spreads widen, we incur losses associated with the credit derivatives where the Company assumes exposure. When credit spreads tighten, we incur losses associated with derivatives where the Company has purchased credit protection. If credit spreads tighten significantly, the Company’s net investment income associated with new purchases of fixed maturities may be reduced. In addition, a reduction in market liquidity can make it difficult to value certain of our securities when trading becomes less frequent. As such, valuations may include assumptions or estimates that may be more susceptible to significant period-to-period changes, which could have a material adverse effect on our business, financial condition, results of operations or liquidity.

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Our statutory surplus is also affected by widening credit spreads as a result of the accounting for the assets and liabilities on our fixed market value adjusted (“MVA”) annuities. Statutory separate account assets supporting the fixed MVA annuities are recorded at fair value. In determining the statutory reserve for the fixed MVA annuities we are required to use current crediting rates in the U.S. and Japanese LIBOR in Japan. In many capital market scenarios, current crediting rates in the U.S. are highly correlated with market rates implicit in the fair value of statutory separate account assets. As a result, the change in the statutory reserve from period to period will likely substantially offset the change in the fair value of the statutory separate account assets. However, in periods of volatile credit markets, actual credit spreads on investment assets may increase sharply for certain sub-sectors of the overall credit market, resulting in statutory separate account asset market value losses. As actual credit spreads are not fully reflected in current crediting rates in the U.S. or Japanese LIBOR in Japan, the calculation of statutory reserves will not substantially offset the change in fair value of the statutory separate account assets resulting in reductions in statutory surplus. This has resulted and may continue to result in the need to devote significant additional capital to support the fixed MVA product.

Our primary foreign currency exchange risk is related to certain guaranteed benefits associated with the Japan and U.K. variable annuities. The strengthening of the yen compared with other currencies will substantially increase our exposure to pay yen-denominated obligations. In addition, our foreign currency exchange risk relates to net income from foreign operations, non-U.S. dollar denominated investments, investments in foreign subsidiaries, and our yen-denominated individual fixed annuity product. In general, the weakening of foreign currencies versus the U.S. dollar will unfavorably affect net income from foreign operations, the value of non-U.S. dollar denominated investments, investments in foreign subsidiaries and realized gains or losses on the yen denominated annuity products. A strengthening of the U.S. dollar compared to foreign currencies will increase our exposure to the U.S. variable annuity guarantee benefits where policyholders have elected to invest in international funds, generating losses and statutory surplus strain.

Our real estate market exposure includes investments in commercial mortgage-backed securities, residential mortgage-backed securities, commercial real estate collateralized debt obligations, mortgage and real estate partnerships, and mortgage loans. Significant deterioration in the real estate market in the recent past has adversely affected our business and results of operations. Further deterioration in the real estate market, including increases in property vacancy rates, delinquencies and foreclosures, could have a negative impact on property values and sources of refinancing resulting in reduced market liquidity and higher risk premiums. This could result in impairments of real estate backed securities, a reduction in net investment income associated with real estate partnerships, and increases in our valuation allowance for mortgage loans.

Significant declines in equity prices, changes in U.S. interest rates, changes in credit spreads, inflation, the strengthening or weakening of foreign currencies against the U.S. dollar, or global real estate market deterioration, individually or in combination, could have a material adverse effect on our business, financial condition, results of operations and liquidity.

Concentration of our investment portfolio in any particular segment of the economy may have adverse effects on our business, financial condition, results of operations and liquidity.

The concentration of our investment portfolios in any particular industry, collateral type, group of related industries or geographic sector could have an adverse effect on our investment portfolios and consequently on our business, financial condition, results of operations and liquidity. Events or developments that have a negative impact on any particular industry, group of related industries or geographic region may have a greater adverse effect on our investment portfolio to the extent that the portfolio is concentrated rather than diversified.

Our adjustment of our risk management program relating to products we offer with guaranteed benefits to emphasize protection of statutory surplus and cash flows will likely result in greater U.S. GAAP volatility in our earnings and potentially material charges to net income in periods of rising equity market pricing levels.

Some of the products offered by our Wealth Management businesses and previously offered by our Life Other Operations business, especially variable annuities, offer guaranteed benefits which, in the event of a decline in equity markets, would not only result in lower earnings, but will also increase our exposure to liability for benefit claims. We are also subject to equity market volatility related to these benefits, including the guaranteed minimum withdrawal benefit (“GMWB”), guaranteed minimum accumulation benefit (“GMAB”), guaranteed minimum death benefit (“GMDB”) and guaranteed minimum income benefit (“GMIB”) offered with variable annuity products. We use reinsurance structures and have modified benefit features to mitigate the exposure associated with GMDB. We also use reinsurance in combination with a modification of benefit features and derivative instruments to attempt to minimize the claim exposure and to reduce the volatility of net income associated with the GMWB liability. However, due to the severe economic conditions starting in the fourth quarter of 2008, we have adjusted our risk management program to place greater relative emphasis on the protection of statutory surplus and cash flows. This shift in relative emphasis has resulted in greater U.S. GAAP earnings volatility and, based upon the types of hedging instruments used, can result in potentially material charges to net income in periods of rising equity market pricing levels, lower interest rates, rises in volatility and weakening of the yen against other currencies. While we believe that these actions have improved the efficiency of our risk management related to these benefits, we remain liable for the guaranteed benefits in the event that reinsurers or derivative counterparties are unable or unwilling to pay. We are also subject to the risk that these management procedures prove ineffective or that unanticipated policyholder behavior, combined with adverse market events, produces economic losses beyond the scope of the risk management techniques employed, which individually or collectively may have a material adverse effect on our business, financial condition, results of operations and liquidity.

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The amount of statutory capital that we have, and the amount of statutory capital that we must hold to maintain our financial strength and credit ratings and meet other requirements, can vary significantly from time to time and is sensitive to a number of factors outside of our control, including equity market, credit market, interest rate and foreign currency conditions, changes in policyholder behavior and changes in rating agency models.

We conduct the vast majority of our business through licensed insurance company subsidiaries. Accounting standards and statutory capital and reserve requirements for these entities are prescribed by the applicable insurance regulators and the National Association of Insurance Commissioners (“NAIC”). Insurance regulators have established regulations that provide minimum capitalization requirements based on RBC formulas for both life and property and casualty companies. The RBC formula for life companies establishes capital requirements relating to insurance, business, asset and interest rate risks, including equity, interest rate and expense recovery risks associated with variable annuities and group annuities that contain death benefits or certain living benefits. The RBC formula for property and casualty companies adjusts statutory surplus levels for certain underwriting, asset, credit and off-balance sheet risks. Our international operations are subject to regulation in the relevant jurisdiction in which they operate, which in many ways is similar to the state regulation outlined above, with similar related restrictions and obligations.

In any particular year, statutory surplus amounts and RBC ratios may increase or decrease depending on a variety of factors, including the amount of statutory income or losses generated by our insurance subsidiaries (which itself is sensitive to equity market and credit market conditions), the amount of additional capital our insurance subsidiaries must hold to support business growth, changes in equity market levels, the value of certain fixed-income and equity securities in our investment portfolio, the value of certain derivative instruments, changes in interest rates and foreign currency exchange rates, the impact of internal reinsurance arrangements, and changes to the NAIC RBC formulas. Most of these factors are outside of the Company’s control. The Company’s financial strength and credit ratings are significantly influenced by the statutory surplus amounts and RBC ratios of our insurance company subsidiaries. In addition, rating agencies may implement changes to their internal models that have the effect of increasing the amount of statutory capital we must hold in order to maintain our current ratings. Also, in extreme scenarios of equity market declines and other capital market volatility, the amount of additional statutory reserves that we are required to hold for our variable annuity guarantees increases at a greater than linear rate. This reduces the statutory surplus used in calculating our RBC ratios. When equity markets increase, surplus levels and RBC ratios will generally increase. This may be offset, however, as a result of a number of factors and market conditions, including the level of hedging costs and other risk transfer activities, reserve requirements for death and living benefit guarantees and RBC requirements could also increase, lowering RBC ratios. For example, while our property and casualty companies are expected to generate statutory surplus in 2012, our life companies’ statutory surplus is expected to be flat to negative in 2012, as compared to 2011, primarily due to high variable annuity hedge losses compared to fees earned and a depression on statutory earnings in other life businesses due largely to continued low interest rates and high loss cost trends in Group Benefits. Due to these factors, projecting statutory capital and the related RBC ratios is complex. If our statutory capital resources are insufficient to maintain a particular rating by one or more rating agencies, we may seek to raise capital through public or private equity or debt financing. If we were not to raise additional capital, either at our discretion or because we were unable to do so, our financial strength and credit ratings might be downgraded by one or more rating agencies.

Downgrades in our financial strength or credit ratings, which may make our products less attractive, could increase our cost of capital and inhibit our ability to refinance our debt, which would have a material adverse effect on our business, financial condition, results of operations and liquidity.

Financial strength and credit ratings, including commercial paper ratings, are important in establishing the competitive position of insurance companies. Rating agencies assign ratings based upon several factors. While most of the factors relate to the rated company, some of the factors relate to the views of the rating agency, general economic conditions, and circumstances outside the rated company’s control. In addition, rating agencies may employ different models and formulas to assess the financial strength of a rated company, and from time to time rating agencies have, at their discretion, altered these models. Changes to the models, general economic conditions, or circumstances outside our control could impact a rating agency’s judgment of its rating and the rating it assigns us. We cannot predict what actions rating agencies may take, or what actions we may take in response to the actions of rating agencies, which may adversely affect us.

Our financial strength ratings, which are intended to measure our ability to meet policyholder obligations, are an important factor affecting public confidence in most of our products and, as a result, our competitiveness. A downgrade or a potential downgrade in the rating of our financial strength or of one of our principal insurance subsidiaries could affect our competitive position and reduce future sales of our products.

Our credit ratings also affect our cost of capital. A downgrade or a potential downgrade of our credit ratings could make it more difficult or costly to refinance maturing debt obligations, to support business growth at our insurance subsidiaries and to maintain or improve the financial strength ratings of our principal insurance subsidiaries. Downgrades could begin to trigger potentially material collateral calls on certain of our derivative instruments and counterparty rights to terminate derivative relationships, both of which could limit our ability to purchase additional derivative instruments. These events could materially adversely affect our business, financial condition, results of operations and liquidity.

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Our valuations of many of our financial instruments include methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may materially adversely affect our results of operations and financial condition.

The following financial instruments are carried at fair value in the Company’s consolidated financial statements: fixed maturities, equity securities, freestanding and embedded derivatives, and separate account assets. The determination of fair values is made at a specific point in time, based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty. The use of different methodologies and assumptions may have a material effect on the estimated fair value amounts.

During periods of market disruption, including periods of rapidly widening credit spreads or illiquidity, it may be difficult to value certain of our securities if trading becomes less frequent and/or market data becomes less observable. There may be certain asset classes that were in active markets with significant observable data that become illiquid due to the financial environment. In such cases, securities may require more subjectivity and management judgment in determining their fair values and those fair values may differ materially from the value at which the investments may be ultimately sold. Further, rapidly changing or unprecedented credit and equity market conditions could materially impact the valuation of securities and the period-to-period changes in value could vary significantly. Decreases in value could have a material adverse effect on our results of operations and financial condition.

Evaluation of available-for-sale securities for other-than-temporary impairment involves subjective determinations and could materially impact our results of operations.

The evaluation of impairments is a quantitative and qualitative process, which is subject to risks and uncertainties and is intended to determine whether a credit and/or non-credit impairment exists and whether an impairment should be recognized in current period earnings or in other comprehensive income. The risks and uncertainties include changes in general economic conditions, the issuer’s financial condition or future recovery prospects, the effects of changes in interest rates or credit spreads and the expected recovery period. For securitized financial assets with contractual cash flows, the Company currently uses its best estimate of cash flows over the life of the security. In addition, estimating future cash flows involves incorporating information received from third-party sources and making internal assumptions and judgments regarding the future performance of the underlying collateral and assessing the probability that an adverse change in future cash flows has occurred. The determination of the amount of other-than-temporary impairments is based upon our quarterly evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available.

Additionally, our management considers a wide range of factors about the security issuer and uses their best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations in the impairment evaluation process include, but are not limited to:

• the length of time and the extent to which the fair value has been less than cost or amortized cost;

• changes in the financial condition, credit rating and near-term prospects of the issuer;

• whether the issuer is current on contractually obligated interest and principal payments;

• changes in the financial condition of the security’s underlying collateral;

• the payment structure of the security;

• the potential for impairments in an entire industry sector or sub-sector;

• the potential for impairments in certain economically depressed geographic locations;

• the potential for impairments of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss or has exhausted natural resources;

• unfavorable changes in forecasted cash flows on mortgage-backed and asset-backed securities;

• for mortgage-backed and asset-backed securities, commercial and residential property value declines that vary by property type and location and average cumulative collateral loss rates that vary by vintage year;

• other subjective factors, including concentrations and information obtained from regulators and rating agencies;

• our intent to sell a debt or an equity security with debt-like characteristics (collectively, “debt security”) or whether it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery; and

• our intent and ability to retain an equity security without debt-like characteristics for a period of time sufficient to allow for the recovery of its value.

Impairment losses in earnings could materially adversely affect our results of operation and financial condition.

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Losses due to nonperformance or defaults by others, including issuers of investment securities (which include structured securities such as commercial mortgage backed securities and residential mortgage backed securities, European private and sovereign issuers, or other high yielding bonds) mortgage loans or reinsurance and derivative instrument counterparties, could have a material adverse effect on the value of our investments, business, financial condition, results of operations and liquidity.

Issuers or borrowers whose securities or loans we hold, customers, trading counterparties, counterparties under swaps and other derivative contracts, reinsurers, clearing agents, exchanges, clearing houses and other financial intermediaries and guarantors may default on their obligations to us due to bankruptcy, insolvency, lack of liquidity, adverse economic conditions, operational failure, fraud, government intervention or other reasons. Such defaults could have a material adverse effect on our business, financial condition, results of operations and liquidity. Additionally, the underlying assets supporting our structured securities or loans may deteriorate causing these securities or loans to incur losses.

Our investment portfolio includes securities backed by real estate assets the value of which have been adversely impacted by the recent recessionary period, high unemployment rates and the associated property value declines, ultimately resulting in a reduction in expected future cash flows for certain securities. The Company also has exposure to European based issuers of securities and providers of reinsurance, as well as indirect European exposure resulting from the variable annuity products that it has sold in Japan and the United Kingdom. Further details of the European private and sovereign issuers held within the investment portfolio and indirect variable annuity exposures can be found in Part II, Item 7, MD&A — Enterprise Risk Management — Investment Portfolio Risks and Risk Management. The Company’s European based reinsurance arrangements are further described in Part II, Item 7, MD&A — Enterprise Risk Management — Investment Portfolio Risks and Risk Management — European Exposure.

Further property value declines and loss rates that exceed our current estimates, as outlined in Part II, Item 7, MD&A — Enterprise Risk Management — Other-Than-Temporary Impairments, a worsening of general economic conditions, including the European financial crisis, could have a material adverse effect on our business, financial condition, results of operations and liquidity.

To the extent the investment portfolio is not adequately diversified, concentrations of credit risk may exist which could negatively impact the Company if significant adverse events or developments occur in any particular industry, group of related industries or geographic regions. The Company is not exposed to any credit concentration risk of a single issuer greater than 10% of the Company’s stockholders’ equity other than U.S. government and U.S. government agencies backed by the full faith and credit of the U.S. government. However, if issuers of securities or loans we hold are acquired, merge or otherwise consolidate with other issuers of securities or loans held by the Company, the Company’s credit concentration risk could increase above the 10% threshold, for a period of time, until the Company is able to sell securities to get back in compliance with the established investment credit policies.

If assumptions used in estimating future gross profits differ from actual experience, we may be required to accelerate the amortization of DAC and increase reserves for guaranteed minimum death and income benefits, which could have a material adverse effect on our results of operations and financial condition.

The Company defers acquisition costs associated with the sales of its universal and variable life and variable annuity products. These costs are amortized over the expected life of the contracts. The remaining deferred but not yet amortized cost is referred to as the Deferred Acquisition Cost (“DAC”) asset. We amortize these costs in proportion to the present value of estimated gross profits (“EGPs”). The Company evaluates the EGPs compared to the DAC asset to determine if an impairment exists. The Company also establishes reserves for GMDB and GMIB using components of EGPs. The projection of estimated gross profits or components of estimated gross profits requires the use of certain assumptions, principally related to separate account fund returns in excess of amounts credited to policyholders, surrender and lapse rates, interest margin (including impairments), mortality, benefit utilization, annuitization and hedging costs. Of these factors, we anticipate that changes in investment returns are most likely to impact the rate of amortization of such costs. However, other factors such as those the Company might employ to reduce risk, such as the cost of hedging or other risk mitigating techniques, could also significantly reduce estimates of future gross profits. Estimating future gross profits is a complex process requiring considerable judgment and the forecasting of events well into the future. If our assumptions regarding policyholder behavior, including lapse rates, benefit utilization, surrenders, and annuitization, hedging costs or costs to employ other risk mitigating techniques prove to be inaccurate or if significant or sustained equity market declines occur, we could be required to accelerate the amortization of DAC related to variable annuity and variable universal life contracts, and increase reserves for GMDB and GMIB which would result in a charge to net income. Such adjustments could have a material adverse effect on our results of operations and financial condition.

If our businesses do not perform well, we may be required to recognize an impairment of our goodwill or to establish a valuation allowance against the deferred income tax asset, which could have a material adverse effect on our results of operations and financial condition.

Goodwill represents the excess of the amounts we paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. We test goodwill at least annually for impairment. Impairment testing is performed based upon estimates of the fair value of the “reporting unit” to which the goodwill relates. The reporting unit is the operating segment or a business one level below that operating segment if discrete financial information is prepared and regularly reviewed by management at that level. The fair value of the reporting unit is impacted by the performance of the business and could be adversely impacted by any efforts made by the Company to limit risk. If it is determined that the goodwill has been impaired, the Company must write down the goodwill by the amount of the impairment, with a corresponding charge to net income. These write downs could have a material adverse effect on our results of operations or financial condition.

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Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. Deferred tax assets are assessed periodically by management to determine if they are realizable. Factors in management’s determination include the performance of the business including the ability to generate capital gains, to offset previously recognized capital losses, from a variety of sources and tax planning strategies. If based on available information, it is more likely than not that we are unable to recognize a full tax benefit on realized capital losses, then a valuation allowance will be established with a corresponding charge to net income. Charges to increase our valuation allowance could have a material adverse effect on our results of operations and financial condition. As previously announced, we are evaluating our strategy and business portfolios with the goal of delivering greater shareholder value. Certain strategic transactions may adversely affect our ability to realize our deferred tax assets.

The occurrence of one or more terrorist attacks in the geographic areas we serve or the threat of terrorism in general may have a material adverse effect on our business, financial condition, results of operations and liquidity.

The occurrence of one or more terrorist attacks in the geographic areas we serve could result in substantially higher claims under our insurance policies than we have anticipated. Private sector catastrophe reinsurance is extremely limited and generally unavailable for terrorism losses caused by attacks with nuclear, biological, chemical or radiological weapons. Reinsurance coverage from the federal government under the Terrorism Risk Insurance Program Reauthorization Act of 2007 is also limited. Accordingly, the effects of a terrorist attack in the geographic areas we serve may result in claims and related losses for which we do not have adequate reinsurance. This would likely cause us to increase our reserves, adversely affect our results during the period or periods affected and, could adversely affect our business, financial condition, results of operations and liquidity. Further, the continued threat of terrorism and the occurrence of terrorist attacks, as well as heightened security measures and military action in response to these threats and attacks or other geopolitical or military crises, may cause significant volatility in global financial markets, disruptions to commerce and reduced economic activity. These consequences could have an adverse effect on the value of the assets in our investment portfolio as well as those in our separate accounts. The continued threat of terrorism also could result in increased reinsurance prices and potentially cause us to retain more risk than we otherwise would retain if we were able to obtain reinsurance at lower prices. Terrorist attacks also could disrupt our operations centers in the U.S. or abroad. As a result, it is possible that any, or a combination of all, of these factors may have a material adverse effect on our business, financial condition, results of operations and liquidity.

Our business, financial condition, results of operations and liquidity may be materially adversely affected by unfavorable loss development.

Our success, in part, depends upon our ability to accurately assess the risks associated with the businesses that we insure. We establish loss reserves to cover our estimated liability for the payment of all unpaid losses and loss expenses incurred with respect to premiums earned on the policies that we write. Loss reserves do not represent an exact calculation of liability. Rather, loss reserves are estimates of what we expect the ultimate settlement and administration of claims will cost, less what has been paid to date. These estimates are based upon actuarial and statistical projections and on our assessment of currently available data, as well as estimates of claims severity and frequency, legal theories of liability and other factors. Loss reserve estimates are refined periodically as experience develops and claims are reported and settled. Establishing an appropriate level of loss reserves is an inherently uncertain process. Because of this uncertainty, it is possible that our reserves at any given time will prove inadequate. Furthermore, since estimates of aggregate loss costs for prior accident years are used in pricing our insurance products, we could later determine that our products were not priced adequately to cover actual losses and related loss expenses in order to generate a profit. To the extent we determine that losses and related loss expenses are emerging unfavorably to our initial expectations, we will be required to increase reserves. Increases in reserves would be recognized as an expense during the period or periods in which these determinations are made, thereby adversely affecting our results of operations for the related period or periods. Depending on the severity and timing of any changes in these estimated losses, such determinations could have a material adverse effect on our business, financial condition, results of operations and liquidity.

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It is difficult for us to predict our potential exposure for asbestos and environmental claims, and our ultimate liability may exceed our currently recorded reserves, which may have a material adverse effect on our business, financial condition, results of operations and liquidity.

We continue to receive asbestos and environmental claims. Significant uncertainty limits the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses for both environmental and particularly asbestos claims. For some asbestos and environmental claims, we believe that the actuarial tools and other techniques we employ to estimate the ultimate cost of claims for more traditional kinds of insurance exposure are less precise in estimating reserves for our asbestos and environmental exposures. Accordingly, the degree of variability of reserve estimates for these longer-tailed exposures is significantly greater than for other more traditional exposures. It is also not possible to predict changes in the legal and legislative environment and their effect on the future development of asbestos and environmental claims. Because of the significant uncertainties that limit the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses for both environmental and particularly asbestos claims, the ultimate liabilities may exceed the currently recorded reserves. Increases in reserves would be recognized as an expense during the periods in which these determinations are made, thereby adversely affecting our results of operations for the related periods. Any such additional liability cannot be reasonably estimated now, but could have a material adverse effect on our business, financial condition, results of operations and liquidity.

We are particularly vulnerable to losses from catastrophes, both natural and man-made, which could materially and adversely affect our business, financial condition, results of operations and liquidity.

Our insurance operations expose us to claims arising out of catastrophes. Catastrophes can be caused by various unpredictable events, including earthquakes, hurricanes, hailstorms, severe winter weather, fires, tornadoes, explosions, pandemics and other natural or man-made disasters. The geographic distribution of our business subjects us to catastrophe exposure for natural events occurring in a number of areas, including, but not limited to, hurricanes in Florida, the Gulf Coast, the Northeast and the Atlantic coast regions of the United States, tornadoes in the Midwest and Southeast, and earthquakes in California and the New Madrid region of the United States. We expect that increases in the values and concentrations of insured property in these areas will continue to increase the severity of catastrophic events in the future. Starting in 2004 and 2005, third-party catastrophe loss models for hurricane loss events have incorporated medium-term forecasts of increased hurricane frequency and severity — reflecting the potential influence of multi-decadal climate patterns within the Atlantic. In addition, changing climate conditions across longer time scales, including the potential risk of broader climate change, may be increasing, or may in the future increase, the severity of certain natural catastrophe losses across various geographic regions. In addition, changing climate conditions, primarily rising global temperatures, may be increasing, or may in the future increase, the frequency and severity of natural catastrophes such as hurricanes. Potential examples of the impact of climate change on catastrophe exposure include, but are not limited to the following: an increase in the frequency or severity of wind and thunderstorm and tornado/hailstorm events due to increased convection in the atmosphere, more frequent brush fires in certain geographies due to prolonged periods of drought, higher incidence of deluge flooding, and the potential for an increase in severity of the largest hurricane events due to higher sea surface temperatures. Our operations are also exposed to risk of loss from catastrophes associated with pandemics and other events that could significantly increase our mortality and morbidity exposures. Policyholders may be unable to meet their obligations to pay premiums on our insurance policies or make deposits on our investment products.

Our liquidity could be constrained by a catastrophe, or multiple catastrophes, which could result in extraordinary losses. In addition, in part because accounting rules do not permit insurers to reserve for such catastrophic events until they occur, claims from catastrophic events could have a material adverse effect on our business, financial condition, results of operations and liquidity. To the extent that loss experience unfolds or models improve, we will seek to reflect any increased risk in the design and pricing of our products. However, the Company may be exposed to regulatory or legislative actions that prevent a full accounting of loss expectations in the design or pricing of our products or result in additional risk-shifting to the insurance industry.

We may incur losses due to our reinsurers’ unwillingness or inability to meet their obligations under reinsurance contracts and the availability, pricing and adequacy of reinsurance may not be sufficient to protect us against losses.

As an insurer, we frequently seek to reduce the losses that may arise from catastrophes, or other events that can cause unfavorable results of operations, through reinsurance. Under these reinsurance arrangements, other insurers assume a portion of our losses and related expenses; however, we remain liable as the direct insurer on all risks reinsured. Consequently, ceded reinsurance arrangements do not eliminate our obligation to pay claims, and we are subject to our reinsurers’ credit risk with respect to our ability to recover amounts due from them. Although we regularly evaluate the financial condition of our reinsurers to minimize our exposure to significant losses from reinsurer insolvencies, our reinsurers may become financially unsound or choose to dispute their contractual obligations by the time their financial obligations become due. The inability or unwillingness of any reinsurer to meet its financial obligations to us could have a material adverse effect on our results of operations. In addition, market conditions beyond our control determine the availability and cost of the reinsurance we are able to purchase. Historically, reinsurance pricing has changed significantly from time to time. No assurances can be made that reinsurance will remain continuously available to us to the same extent and on the same terms as are currently available. If we were unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider sufficient and at prices that we consider acceptable, we would have to either accept an increase in our net liability exposure, reduce the amount of business we write, or develop other alternatives to reinsurance.

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Competitive activity may adversely affect our market share and financial results, which could have a material adverse effect on our business, results of operations and financial condition.

The insurance industry is highly competitive. Our competitors include other insurers and, because many of our products include an investment component, securities firms, investment advisers, mutual funds, banks and other financial institutions. These competitors compete with us for producers such as brokers and independent agents and for our employees. Larger competitors may have lower operating costs and an ability to absorb greater risk while maintaining their financial strength ratings, thereby allowing them to price their products more competitively. These highly competitive pressures could result in increased pricing pressures on a number of our products and services and may harm our ability to maintain or increase our profitability. Because of the highly competitive nature of the insurance industry, there can be no assurance that we will continue to effectively compete with our industry rivals, or that competitive pressure will not have a material adverse effect on our business, results of operations and financial condition.

We may experience difficulty in marketing, distributing and providing investment advisory services in relation to our products through current and future distribution channels and advisory firms.

We distribute our annuity, life, property and casualty insurance products and mutual funds through a variety of distribution channels, including brokers, independent agents, broker-dealers, banks, wholesalers, affinity partners, our own internal sales force and other third-party organizations. In some areas of our business, we generate a significant portion of our business through or in connection with individual third-party arrangements. For example, we market our Consumer Markets products in part through an exclusive licensing arrangement with AARP that continues through January 2020. Our ability to distribute products through affinity partners may be adversely impacted by membership levels and the pace of membership growth. In addition, we work with a number of key investment advisers in managing our products and mutual funds. In December 2011, for example, we entered into a 5-year agreement with Wellington Management Company as the preferred sub-advisor for The Hartford Mutual Funds. We periodically negotiate provisions and renewals of these relationships, and there can be no assurance that such terms will remain acceptable to us or such third parties. An interruption in our continuing relationship with certain of these third parties, including potentially as a result of a strategic transaction, could materially affect our ability to market our products and could have a material adverse effect on our business, financial condition, results of operations and liquidity.

The impact of regulatory initiatives, including the enactment of The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), could have a material adverse impact on our business, financial condition, results of operations and liquidity.

Regulatory developments relating to the recent financial crisis may significantly affect our operations and prospects in ways that we cannot predict. U.S. and overseas governmental and regulatory authorities, including the SEC, The Federal Reserve, the Federal Deposit Insurance Corporation (“FDIC”), the New York Stock Exchange and the Financial Industry Regulatory Authority are considering enhanced or new regulatory requirements intended to prevent future crises or otherwise stabilize the institutions under their supervision. Such measures are likely to lead to stricter regulation of financial institutions generally, and heightened prudential requirements for systemically important companies in particular. Such measures could include taxation of financial transactions and restrictions on employee compensation.

The Dodd-Frank Act was enacted on July 21, 2010, mandating changes to the regulation of the financial services industry. The Dodd-Frank Act may affect our operations and governance in ways that could adversely affect our financial condition and results of operations.

Certain provisions of the Dodd-Frank Act will require central clearing of, and/or impose new margin and capital requirements on, derivatives transactions, which we expect will increase the costs of our hedging program. Other provisions in the Dodd-Frank Act that may impact us include: a new “Federal Insurance Office” within Treasury; discretionary authority for the SEC to impose a harmonized standard of care for investment advisers and broker-dealers who provide personalized advice about securities to retail customers; possible adverse impact on the pricing and liquidity of the securities in which we invest resulting from the proprietary trading and market making limitation of the Volcker Rule; possible prohibition of certain asset-backed securities transactions that could adversely impact our ability to offer insurance-linked securities; and enhancements to corporate governance, especially regarding risk management.

In particular, the Dodd-Frank Act vests a newly created Financial Services Oversight Council (“FSOC”) with the power to designate “systemically important” institutions, which will be subject to special regulatory supervision and other provisions intended to prevent, or mitigate the impact of, future disruptions in the U.S. financial system. Systemically important institutions are limited to large bank holding companies and nonbank financial companies that are so important that their potential failure could “pose a threat to the financial stability of the United States.” The FSOC released a second notice of proposed rulemaking setting forth the process they propose to follow when designating systemically important nonbank financial companies in October 2011, but has not yet released a final rule or indicated when the FSOC will begin designating systemically important nonbank financial companies.

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If we are designated as a systemically important institution, we could be subject to higher capital requirements and additional regulatory oversight imposed by The Federal Reserve, as well as to post-event assessments imposed by the FDIC to recoup the costs associated with the orderly liquidation of other systemically important institutions in the event one or more such institutions fails. Further, the FDIC is authorized to petition a state court to commence an insolvency proceeding to liquidate an insurance company that fails in the event the insurer’s state regulator fails to act. We may also be restricted from sponsoring and investing in private equity and hedge funds, which would limit our discretion in managing our general account. The Federal Reserve issued a proposed rule in December 2011 that would apply capital and liquidity requirements, single-counterparty credit limits, and stress testing and risk management requirements to systemically important institutions, and subject such institutions to an early remediation regime based on these requirements. The Federal Reserve has noted that they may tailor the application of the proposed rule to the particular attributes of systemically important nonbank financial companies. If The Hartford were to be designated as systemically important by the FSOC, these requirements could apply to The Hartford. However, it is not yet clear how or to what extent these requirements would be applied to systemically important nonbank financial companies.

We may experience unfavorable judicial or legislative developments involving claim litigation that could have a material adverse effect on our business, financial condition, results of operations and liquidity.

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves. The Company is also involved in legal actions that do not arise in the ordinary course of business, some of which assert claims for substantial amounts. Pervasive or significant changes in the judicial environment relating to matters such as trends in the size of jury awards, developments in the law relating to the liability of insurers or tort defendants, and rulings concerning the availability or amount of certain types of damages could cause our ultimate liabilities to change from our current expectations. Changes in federal or state tort litigation laws or other applicable law could have a similar effect. It is not possible to predict changes in the judicial and legislative environment and their impact on the future development of the adequacy of our loss reserves, particularly reserves for longer-tailed lines of business, including asbestos and environmental reserves, and how those changes might adversely affect our ability to price our products appropriately. Our business, financial condition, results of operations and liquidity could also be adversely affected if judicial or legislative developments cause our ultimate liabilities to increase from current expectations.

Our business, financial condition, results of operations and liquidity may be adversely affected by the emergence of unexpected and unintended claim and coverage issues.

As industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may either extend coverage beyond our underwriting intent or increase the frequency or severity of claims. In some instances, these changes may not become apparent until some time after we have issued insurance contracts that are affected by the changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a contract is issued, and this liability may have a material adverse effect on our business, financial condition, results of operations and liquidity at the time it becomes known.

Potential changes in domestic and foreign regulation may increase our business costs and required capital levels, which could have a material adverse effect on our business, financial condition, results of operations and liquidity.

We are subject to extensive U.S. and non-U.S. laws and regulations that are complex, subject to change and often conflicting in their approach or intended outcomes. Compliance with these laws and regulations is costly and can affect our strategy, as well as the demand for and profitability of the products we offer.

State insurance laws regulate most aspects of our U.S. insurance businesses, and our insurance subsidiaries are regulated by the insurance departments of the states in which they are domiciled, licensed or authorized to conduct business. U.S. state laws grant insurance regulatory authorities broad administrative powers with respect to, among other things:

• licensing companies and agents to transact business;

• calculating the value of assets to determine compliance with statutory requirements;

• mandating certain insurance benefits;

• regulating certain premium rates;

• reviewing and approving policy forms;

• regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements;

• protecting privacy;

• establishing statutory capital and reserve requirements and solvency standards;

• fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts;

• approving changes in control of insurance companies;

• approving acquisitions, divestitures and similar transactions;

• restricting the payment of dividends to the parent company and other transactions between affiliates;

• establishing assessments and surcharges for guaranty funds, second-injury funds and other mandatory pooling arrangements;

• requiring insurers to dividend any excess profits to policy holders; and

• regulating the types, amounts and valuation of investments.

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Because these laws and regulations are complex and sometimes inexact, there is also a risk that any particular regulator’s or enforcement authority’s interpretation of a legal, accounting, or reserving issue may change over time to our detriment, or expose us to different or additional regulatory risks. For example, certain of our domestic life insurance subsidiaries use the NAIC’s Model Regulation entitled “Valuation of Life Insurance Policies,” commonly known as Regulation XXX, in setting statutory reserves for term life insurance policies with long-term premium guarantees and universal life policies with secondary guarantees. In addition, Actuarial Guideline 38 (“AG38” or “AXXX”) clarifies the application of Regulation XXX with respect to universal life insurance policies with secondary guarantees, i.e., a guaranteed death benefit for a specified period of time, often for life. Virtually all of our in force universal life insurance products are now affected by Regulation XXX and AXXX. The application of these regulations and guidelines by insurers involves interpretations and judgments that may not be consistent with the opinion of state insurance departments. We cannot provide assurance that such differences of opinion will not result in regulatory, tax or other challenges to the actions we have taken to date. The result of those potential challenges could require us to increase statutory reserves or incur higher operating and/or tax costs. Moreover, it is possible that the reinsurance and capital management actions we have taken to mitigate the impact of Regulation XXX and AXXX on our universal life insurance business may face regulatory, rating agency or other challenges. Furthermore, we may be unable to continue to implement actions to mitigate the impact of these regulations on future sales of term life insurance and universal life policies, resulting in lower returns on such products than we currently anticipate or reduce our sales of these products.

Furthermore, our international operations are subject to regulation in the relevant jurisdictions in which they operate (primarily the Japan Financial Services Agency and the United Kingdom Financial Services Authority), which in many ways is similar to the state regulation outlined above, with similar related restrictions and obligations. Our asset management businesses are also subject to extensive regulation in the various jurisdictions where they operate.

In addition, future regulatory initiatives could be adopted at the federal or state level that could impact the profitability of our businesses.

These laws and regulations are primarily intended to protect investors in the securities markets or investment advisory clients and generally grant supervisory authorities broad administrative powers. Compliance with these laws and regulations is costly, time consuming and personnel intensive, and may have an adverse effect on our business, financial condition, results of operations and liquidity. See the risk factor, “The impact of regulatory initiatives, including the enactment of The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), could have a material adverse impact on our business, financial condition, results of operations and liquidity.”

Our ability to declare and pay dividends is subject to limitations.

The payment of future dividends on our capital stock is subject to the discretion of our board of directors, which considers, among other factors, our operating results, overall financial condition, credit-risk considerations and capital requirements, as well as general business and market conditions.

Moreover, as a holding company that is separate and distinct from our insurance subsidiaries, we have no significant business operations of our own. Therefore, we rely on dividends from our insurance company subsidiaries and other subsidiaries as the principal source of cash flow to meet our obligations. These obligations include payments on our debt securities and the payment of dividends on our capital stock. The Connecticut insurance holding company laws limit the payment of dividends by Connecticut-domiciled insurers. In addition, these laws require notice to and approval by the state insurance commissioner for the declaration or payment by those subsidiaries of any dividend which, together with other dividends or distributions made within the preceding 12 months, exceeds the greater of:

• 10% of the insurer’s policyholder surplus as of December 31 of the preceding year, or

• net income, or net gain from operations if the subsidiary is a life insurance company, for the previous calendar year, in each case determined under statutory insurance accounting principles.

In addition, if any dividend of a Connecticut-domiciled insurer exceeds the insurer’s earned surplus, it requires the prior approval of the Connecticut Insurance Commissioner.

The insurance holding company laws of the other jurisdictions in which our insurance subsidiaries are incorporated, or deemed commercially domiciled, generally contain similar, and in some instances more restrictive, limitations on the payment of dividends. Dividends paid to us by our insurance subsidiaries are further dependent on their cash requirements. For further discussion on dividends from insurance subsidiaries, see Part II, Item 7, MD&A — Capital Resources & Liquidity.

Our rights to participate in any distribution of the assets of any of our subsidiaries, for example, upon their liquidation or reorganization, and the ability of holders of our common stock to benefit indirectly from a distribution, are subject to the prior claims of creditors of the applicable subsidiary, except to the extent that we may be a creditor of that subsidiary. Claims on these subsidiaries by persons other than us include, as of December, 2011, claims by policyholders for benefits payable amounting to $117.1 billion, claims by separate account holders of $143.9 billion, and other liabilities including claims of trade creditors, claims from guaranty associations and claims from holders of debt obligations, amounting to $13.0 billion.

Holders of our capital stock are only entitled to receive such dividends as our board of directors may declare out of funds legally available for such payments. Moreover, our common stockholders are subject to the prior dividend rights of any holders of our preferred stock or depositary shares representing such preferred stock then outstanding. As of December 31, 2011, there were 575,000 shares of our Series F Preferred Stock issued and outstanding. Under the terms of the Series F Preferred Stock, our ability to declare and pay dividends on or repurchase our common stock will be subject to restrictions in the event we fail to declare and pay (or set aside for payment) full dividends on the Series F Preferred Stock.

24

The terms of our outstanding junior subordinated debt securities also prohibit us from declaring or paying any dividends or distributions on our capital stock or purchasing, acquiring, or making a liquidation payment on such stock, if we have given notice of our election to defer interest payments but the related deferral period has not yet commenced or a deferral period is continuing.

As a property and casualty insurer, the premium rates we are able to charge and the profits we are able to obtain are affected by the actions of state insurance departments that regulate our business, the cyclical nature of the business in which we compete and our ability to adequately price the risks we underwrite, which may have a material adverse effect on our business, financial condition, results of operations and liquidity.

Pricing adequacy depends on a number of factors, including the ability to obtain regulatory approval for rate changes, proper evaluation of underwriting risks, the ability to project future loss cost frequency and severity based on historical loss experience adjusted for known trends, our response to rate actions taken by competitors, and expectations about regulatory and legal developments and expense levels. We seek to price our property and casualty insurance policies such that insurance premiums and future net investment income earned on premiums received will provide for an acceptable profit in excess of underwriting expenses and the cost of paying claims.

State insurance departments that regulate us often propose premium rate changes for the benefit of the consumer at the expense of the insurer and may not allow us to reach targeted levels of profitability. In addition to regulating rates, certain states have enacted laws that require a property and casualty insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities, joint underwriting associations and other residual market plans, or to offer coverage to all consumers and often restrict an insurer’s ability to charge the price it might otherwise charge. In these markets, we may be compelled to underwrite significant amounts of business at lower than desired rates, participate in the operating losses of residual market plans or pay assessments to fund operating deficits of state-sponsored funds, possibly leading to unacceptable returns on equity. The laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance in the state, except pursuant to a plan that is approved by the state’s insurance department. Additionally, certain states require insurers to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Any of these factors could have a material adverse effect on our business, financial condition, results of operations and liquidity.

Additionally, the property and casualty insurance market is historically cyclical, experiencing periods characterized by relatively high levels of price competition, less restrictive underwriting standards and relatively low premium rates, followed by periods of relatively low levels of competition, more selective underwriting standards and relatively high premium rates. Prices tend to increase for a particular line of business when insurance carriers have incurred significant losses in that line of business in the recent past or when the industry as a whole commits less of its capital to writing exposures in that line of business. Prices tend to decrease when recent loss experience has been favorable or when competition among insurance carriers increases. In all of our property and casualty insurance product lines and states, there is a risk that the premium we charge may ultimately prove to be inadequate as reported losses emerge. In addition, there is a risk that regulatory constraints, price competition or incorrect pricing assumptions could prevent us from achieving targeted returns. Inadequate pricing could have a material adverse effect on our results of operations.

If we are unable to maintain the availability of our systems and safeguard the security of our data due to the occurrence of disasters or a cyber or other information security incident, our ability to conduct business may be compromised, we may incur substantial costs and suffer other negative consequences, all of which may have a material adverse effect on our business, financial condition, results of operations and liquidity.

We use computer systems to process, store, retrieve, evaluate and utilize customer and company data and information. Our computer, information technology and telecommunications systems, in turn, interface with and rely upon third-party systems. Our business is highly dependent on our ability, and the ability of certain third parties, to access these systems to perform necessary business functions, including, without limitation, conducting our financial reporting and analysis, providing insurance quotes, processing premium payments, making changes to existing policies, filing and paying claims, administering variable annuity products and mutual funds, providing customer support and managing our investment portfolios and hedging programs. Systems failures or outages could compromise our ability to perform these functions in a timely manner, which could harm our ability to conduct business and hurt our relationships with our business partners and customers. In the event of a disaster such as a natural catastrophe, a pandemic, an industrial accident, a blackout, a terrorist attack or war, systems upon which we rely may be inaccessible to our employees, customers or business partners for an extended period of time. Even if our employees and business partners are able to report to work, they may be unable to perform their duties for an extended period of time if our data or systems used to conduct our business are disabled or destroyed.

Moreover, our systems may be subject to a computer virus or other malicious code, unauthorized access, a cyber-attack or other computer related violation. Such an event could compromise our confidential information as well as that of our clients and third parties with whom we interact, impede or interrupt our business operations and may result in other negative consequences, including remediation costs, loss of revenue, additional regulatory scrutiny and litigation and reputational damage.

In addition, we routinely transmit, receive and store personal, confidential and proprietary information by email and other electronic means. Although we attempt to keep such information confidential, we may be unable to utilize such capabilities in all events, especially with clients, vendors, service providers, counterparties and other third parties who may not have or use appropriate controls to protect confidential information. Furthermore, certain of our businesses are subject to compliance with regulations enacted by U.S. federal and state governments, the European Union, Japan or other jurisdictions or enacted by various regulatory organizations or exchanges relating to the privacy of the information of clients, employees or others. A misuse or mishandling of confidential or proprietary information being sent to or received from an employee or third party could result in legal liability, regulatory action and reputational harm.

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Third parties to whom we outsource certain of our functions are also subject to the risks outlined above, any one of which may result in our incurring substantial costs and other negative consequences, including a material adverse effect on our business, financial condition, results of operations and liquidity.

Our framework for managing business risks may not be effective in mitigating risk and loss to us that could adversely affect our businesses.

Our business performance is highly dependent on our ability to manage risks that arise from a large number of day-to-day business activities, including insurance underwriting, claims processing, servicing, investment, financial and tax reporting, compliance with regulatory requirements and other activities, many of which are very complex and for some of which we rely on third parties. We seek to monitor and control our exposure to risks arising out of these activities through a risk control framework encompassing a variety of reporting systems, internal controls, management review processes and other mechanisms. We cannot be completely confident that these processes and procedures will effectively control all known risks or effectively identify unforeseen risks, or that our employees and third-party agents will effectively implement them. Management of business risks can fail for a number of reasons, including design failure, systems failure, failures to perform, cyber security attacks or unlawful activities on the part of employees or third parties. In the event that our controls are not effective or not properly implemented, we could suffer financial or other loss, disruption of our businesses, regulatory sanctions or damage to our reputation. Losses resulting from these failures can vary significantly in size, scope and scale and may have material adverse effects on our financial condition or results of operations.

If we experience difficulties arising from outsourcing relationships, our ability to conduct business may be compromised.

We outsource certain technology and business functions to third parties and expect to do so selectively in the future. If we do not effectively develop and implement our outsourcing strategy, third-party providers do not perform as anticipated, or we experience problems with a transition, we may experience operational difficulties, inability to meet obligations, including, but not limited to, policyholder obligations, increased costs and a loss of business that may have a material adverse effect on our results of operations. For other risks associated with our outsourcing of certain functions, see the risk factor, “If we are unable to maintain the availability of our systems and safeguard the security of our data due to the occurrence of disasters or a cyber or other information security incident, our ability to conduct business may be compromised, we may incur substantial costs and suffer other negative consequences, all of which may have a material adverse effect on our business, financial condition, results of operation and liquidity.”

Potential changes in federal or state tax laws, including changes impacting the availability of the separate account dividend received deduction, could adversely affect our business, financial condition, results of operations and liquidity.

Many of the products that the Company sells benefit from one or more forms of tax-favored status under current federal and state income tax regimes. For example, the Company sells life insurance policies that benefit from the deferral or elimination of taxation on earnings accrued under the policy, as well as permanent exclusion of certain death benefits that may be paid to policyholders’ beneficiaries. We also sell annuity contracts that allow the policyholders to defer the recognition of taxable income earned within the contract. Other products that the Company sells also enjoy similar, as well as other, types of tax advantages. The Company also benefits from certain tax items, including but not limited to, tax-exempt bond interest, dividends-received deductions, tax credits (such as foreign tax credits), and insurance reserve deductions.

Due in large part to the recent financial crisis that has affected many governments, there is an increasing risk that federal and/or state tax legislation could be enacted that would result in higher taxes on insurance companies and/or their policyholders. For example, on February 13, 2012, the Obama Administration released its “FY 2013, Budget of the United States Government” that includes proposals which, if enacted, would adversely affect the Company’s sale of variable annuities and variable life products and its profits on corporate owned life insurance policies. Although the specific form of any such potential legislation is uncertain, it could include lessening or eliminating some or all of the tax advantages currently benefiting the Company or its policyholders including, but not limited to, those mentioned above. This could occur in the context of deficit reduction or other tax reforms. The effects of any such changes could have a material adverse effect on our profitability and financial condition, and could result in materially lower product sales, lapses of policies currently held, and/or our incurrence of materially higher corporate taxes.

Changes in accounting principles and financial reporting requirements could result in material changes to our reported results and financial condition.

U.S. GAAP and related financial reporting requirements are complex, continually evolving and may be subject to varied interpretation by the relevant authoritative bodies. Such varied interpretations could result from differing views related to specific facts and circumstances. Changes in U.S. GAAP and financial reporting requirements, or in the interpretation of U.S. GAAP or those requirements, could result in material changes to our reported results and financial condition. Moreover, the SEC is currently evaluating International Financial Reporting Standards (“IFRS”) to determine whether IFRS should be incorporated into the financial reporting system for U.S. issuers. Certain of these standards could result in material changes to our reported results of operation.

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We may not be able to protect our intellectual property and may be subject to infringement claims.

We rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property. Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect our copyrights, trademarks, patents, trade secrets and know-how or to determine their scope, validity or enforceability, which represents a diversion of resources that may be significant in amount and may not prove successful. The loss of intellectual property protection or the inability to secure or enforce the protection of our intellectual property assets could have a material adverse effect on our business and our ability to compete.

We also may be subject to costly litigation in the event that another party alleges our operations or activities infringe upon another party’s intellectual property rights. Third parties may have, or may eventually be issued, patents that could be infringed by our products, methods, processes or services. Any party that holds such a patent could make a claim of infringement against us. We may also be subject to claims by third parties for breach of copyright, trademark, trade secret or license usage rights. Any such claims and any resulting litigation could result in significant liability for damages. If we were found to have infringed a third-party patent or other intellectual property rights, we could incur substantial liability, and in some circumstances could be enjoined from providing certain products or services to our customers or utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses, or alternatively could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

As of December 31, 2011, The Hartford owned building space of approximately 2.9 million square feet, of which approximately 2.6 million square feet comprised its Hartford, Connecticut location and other properties within the greater Hartford, Connecticut area. In addition, as of December 31, 2011, The Hartford leased approximately 3.2 million square feet, throughout the United States of America, and approximately 68 thousand square feet, in other countries. All of the properties owned or leased are used by one or more of all nine reporting segments, depending on the location. For more information on reporting segments, see Part I, Item 1, Business of The Hartford — Reporting Segments. The Company believes its properties and facilities are suitable and adequate for current operations.

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Item 3. LEGAL PROCEEDINGS

Litigation

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves. Subject to the uncertainties discussed below under the caption “Asbestos and Environmental Claims,” management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.

The Hartford is also involved in other kinds of legal actions, some of which assert claims for substantial amounts. These actions include, among others, and in addition to the matters described below, putative state and federal class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, underpayment of claims or improper underwriting practices in connection with various kinds of insurance policies, such as personal and commercial automobile, property, life and inland marine; improper sales practices in connection with the sale of life insurance and other investment products; and improper fee arrangements in connection with investment products. The Hartford also is involved in individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims. Like many other insurers, The Hartford also has been joined in actions by asbestos plaintiffs asserting, among other things, that insurers had a duty to protect the public from the dangers of asbestos and that insurers committed unfair trade practices by asserting defenses on behalf of their policyholders in the underlying asbestos cases. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to the consolidated financial condition of The Hartford. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, the outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.

Apart from the inherent difficulty of predicting litigation outcomes, particularly those that will be decided by a jury, the matters specifically identified below purport to seek substantial damages for unsubstantiated conduct spanning a multi-year period based on novel and complex legal theories and damages models. The alleged damages are not quantified or factually supported in the complaint, and, in any event, the Company’s experience shows that demands for damages often bear little relation to a reasonable estimate of potential loss. Most are in the earliest stages of litigation, with few or no substantive legal decisions by the court defining the scope of the claims, the class (if any), or the potentially available damages. In many, the Company has not yet answered the complaint or asserted its defenses, and fact discovery is still in progress or has not yet begun. Accordingly, unless otherwise specified below, management cannot reasonably estimate the possible loss or range of loss, if any, or predict the timing of the eventual resolution of these matters.

Broker Compensation Litigation — Following the New York Attorney General’s filing of a civil complaint against Marsh & McLennan Companies, Inc., and Marsh, Inc. (collectively, “Marsh”) in October 2004 alleging that certain insurance companies, including The Hartford, participated with Marsh in arrangements to submit inflated bids for business insurance and paid contingent commissions to ensure that Marsh would direct business to them, private plaintiffs brought several lawsuits against the Company predicated on the allegations in the Marsh complaint, to which the Company was not party. Among these is a multidistrict litigation in the United States District Court for the District of New Jersey. Two consolidated amended complaints were filed in the multidistrict litigation, one related to conduct in connection with the sale of property-casualty insurance and the other related to alleged conduct in connection with the sale of group benefits products. The Company and various of its subsidiaries are named in both complaints. The complaints assert, on behalf of a putative class of persons who purchased insurance through broker defendants, claims under the Sherman Act, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), state law, and in the case of the group benefits complaint, claims under the Employee Retirement Income Security Act of 1974 (“ERISA”). The claims are predicated upon allegedly undisclosed or otherwise improper payments of contingent commissions to the broker defendants to steer business to the insurance company defendants. The district court dismissed the Sherman Act and RICO claims in both complaints for failure to state a claim and has granted the defendants’ motions for summary judgment on the ERISA claims in the group-benefits products complaint. The district court further declined to exercise supplemental jurisdiction over the state law claims and dismissed those claims without prejudice. The plaintiffs appealed the dismissal of the claims in both consolidated amended complaints, except the ERISA claims. In August 2010, the United States Court of Appeals for the Third Circuit affirmed the dismissal of the Sherman Act and RICO claims against the Company. The Third Circuit vacated the dismissal of the Sherman Act and RICO claims against some defendants in the property casualty insurance case and vacated the dismissal of the state-law claims as to all defendants in light of the reinstatement of the federal claims. In September 2010, the district court entered final judgment for the defendants in the group benefits case. In March 2011, the Company reached an agreement in principle to settle on a class basis the property casualty insurance case for an immaterial amount. The settlement was preliminarily approved by the court in June 2011, and is contingent upon final court approval.

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Investment and Savings Plan ERISA and Shareholder Securities Class Action Litigation — In November and December 2008, following a decline in the share price of the Company’s common stock, seven putative class action lawsuits were filed in the United States District Court for the District of Connecticut on behalf of certain participants in the Company’s Investment and Savings Plan (the “Plan”), which offers the Company’s common stock as one of many investment options. These lawsuits have been consolidated, and a consolidated amended class-action complaint was filed on March 23, 2009, alleging that the Company and certain of its officers and employees violated ERISA by allowing the Plan’s participants to invest in the Company’s common stock and by failing to disclose to the Plan’s participants information about the Company’s financial condition. The lawsuit seeks restitution or damages for losses arising from the investment of the Plan’s assets in the Company’s common stock during the period from December 10, 2007 to the present. In January 2010, the district court denied the Company’s motion to dismiss the consolidated amended complaint. In February 2011, the parties reached an agreement in principle to settle on a class basis for an immaterial amount. The settlement was preliminarily approved by the court in January 2012, and is contingent upon final court approval.

Mutual Funds Litigation — In October 2010, a derivative action was brought on behalf of six Hartford retail mutual funds in the United States District Court for the District of Delaware, alleging that Hartford Investment Financial Services, LLC (“HIFSCO”), an indirect subsidiary of the Company, received excessive advisory and distribution fees in violation of its statutory fiduciary duty under Section 36(b) of the Investment Company Act of 1940. In February 2011, a nearly identical derivative action was brought against HIFSCO in the United States District Court for the District of New Jersey on behalf of six additional Hartford retail mutual funds. Both actions were assigned to the Honorable Renee Marie Bumb, a judge in the District of New Jersey who was sitting by designation with respect to the Delaware action. Plaintiffs in each action seek to rescind the investment management agreements and distribution plans between HIFSCO and the Hartford mutual funds and to recover the total fees charged thereunder or, in the alternative, to recover any improper compensation HIFSCO received. In addition, plaintiffs in the New Jersey action seek recovery of lost earnings. HIFSCO moved to dismiss both actions and, in September 2011, the motions to dismiss were granted in part and denied in part, with leave to amend the complaints. In November 2011, a stipulation of voluntary dismissal was filed in the Delaware action and plaintiffs in the New Jersey action filed an amended complaint on behalf of six Hartford mutual funds, seeking the same relief as in their original complaint. HIFSCO disputes the allegations and has filed a partial motion to dismiss.

Asbestos and Environmental Claims — As discussed in Part II, Item 7, MD&A — Critical Accounting Estimates — Property and Casualty Insurance Product Reserves, Net of Reinsurance — Reserving for Asbestos and Environmental Claims within Property & Casualty Other Operations, The Hartford continues to receive asbestos and environmental claims that involve significant uncertainty regarding policy coverage issues. Regarding these claims, The Hartford continually reviews its overall reserve levels and reinsurance coverages, as well as the methodologies it uses to estimate its exposures. Because of the significant uncertainties that limit the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses, particularly those related to asbestos, the ultimate liabilities may exceed the currently recorded reserves. Any such additional liability cannot be reasonably estimated now but could be material to The Hartford’s consolidated operating results, financial condition and liquidity.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

Item 5. MARKET FOR THE HARTFORD’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Hartford’s common stock is traded on the New York Stock Exchange (“NYSE”) under the trading symbol “HIG”.

The following table presents the high and low closing prices for the common stock of The Hartford on the NYSE for the periods indicated, and the quarterly dividends declared per share.

	1st Qtr.		2nd Qtr.		3rd Qtr.		4th Qtr.
2011
Common Stock Price
High	$	30.80	$	28.97	$	27.05	$	20.27
Low	$	24.75	$	23.81	$	15.82	$	14.92
Dividends Declared	$	0.10	$	0.10	$	0.10	$	0.10
2010
Common Stock Price
High	$	28.58	$	29.64	$	24.12	$	27.43
Low	$	22.34	$	22.13	$	19.09	$	22.26
Dividends Declared	$	0.05	$	0.05	$	0.05	$	0.05

On February 23, 2012, The Hartford’s Board of Directors declared a quarterly dividend of $0.10 per common share payable on April 2, 2012 to common shareholders of record as of March 5, 2012.

As of February 17, 2012, the Company had approximately 269,700 shareholders. The closing price of The Hartford’s common stock on the NYSE on February 17, 2012 was $21.65.

The Company’s Chief Executive Officer has certified to the NYSE that he is not aware of any violation by the Company of NYSE corporate governance listing standards, as required by Section 303A.12(a) of the NYSE’s Listed Company Manual.

There are also various legal and regulatory limitations governing the extent to which The Hartford’s insurance subsidiaries may extend credit, pay dividends or otherwise provide funds to The Hartford Financial Services Group, Inc. as discussed in Part II, Item 7, MD&A — Capital Resources and Liquidity — Liquidity Requirements and Sources of Capital.

See Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, for information related to securities authorized for issuance under equity compensation plans.

Purchases of Equity Securities by the Issuer

The following table summarizes the Company’s repurchases of its common stock for the three months ended December 31, 2011:

								Approximate Dollar
						Total Number of		Value of Shares that
						Shares Purchased		May Yet Be
				Average		as Part of Publicly		Purchased Under
	Total Number of			Price Paid		Announced Plans		the Plans or
Period	Shares Purchased			Per Share		or Programs		Programs
								(in millions)
October 1, 2011 – October 31, 2011		8,014	[1]	$	18.36		—	$	500
November 1, 2011 – November 30, 2011		12,649	[1]	$	19.25		—	$	500
December 1, 2011 – December 31, 2011		3,226,945		$	15.93		3,225,000	$	449
Total		3,247,608		$	15.95		3,225,000		N/A

[1] Primarily represents shares acquired from employees of the Company for tax withholding purposes in connection with the Company’s stock compensation plans.

On July 27, 2011 the Company’s Board of Directors authorized a $500 stock repurchase program. The Company’s repurchase authorization, which expires on August 5, 2014, permits purchases of common stock, as well as warrants or other derivative securities. Repurchases may be made in the open market, through derivative, accelerated share repurchase and other privately negotiated transactions, and through plans designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. The timing of any future repurchases will be dependent upon several factors, including the market price of the Company’s securities, the Company’s capital position, consideration of the effect of any repurchases on the Company’s financial strength or credit ratings, and other corporate considerations. The repurchase program may be modified, extended or terminated by the Board of Directors at any time. The Hartford has repurchased $94 of its common stock under this program through February 17, 2012.

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Total Return to Shareholders

The following tables present The Hartford’s annual percentage return and five-year total return on its common stock including reinvestment of dividends in comparison to the S&P 500 and the S&P Insurance Composite Index.

Annual Return Percentage
	For the Years Ended
Company/Index	2007			2008			2009			2010			2011
The Hartford Financial Services Group, Inc.		(4.55	%)		(79.99	%)		43.91	%		14.89	%		(37.55	%)
S&P 500 Index		5.49	%		(37.00	%)		26.46	%		15.06	%		2.11	%
S&P Insurance Composite Index		(6.31	%)		(58.14	%)		13.90	%		15.80	%		(8.28	%)

Cumulative Five-Year Total Return
	Base
	Period		For the Years Ended
Company/Index	2006		2007		2008		2009		2010		2011
The Hartford Financial Services Group, Inc.	$	100		95.45		19.10		27.48		31.57		19.72
S&P 500 Index	$	100		105.49		66.46		84.05		96.71		98.76
S&P Insurance Composite Index	$	100		93.69		39.22		44.67		51.72		47.44

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Item 6. SELECTED FINANCIAL DATA

(In millions, except for per share data and combined ratios)

	2011			2010			2009			2008			2007
Income Statement Data
Earned premiums	$	14,088		$	14,055		$	14,424		$	15,503		$	15,619
Fee income		4,750			4,748			4,547			5,103			5,408
Net investment income (loss):
Securities available-for-sale and other		4,272			4,364			4,017			4,327			5,203
Equity securities, trading		(1,359	)		(774	)		3,188			(10,340	)		145
Total net investment income (loss)		2,913			3,590			7,205			(6,013	)		5,348
Net realized capital losses:
Total other-than-temporary impairment (“OTTI”) losses		(263	)		(852	)		(2,191	)		(3,964	)		(483	)
OTTI losses recognized in other comprehensive income		89			418			683			—			—
Net OTTI losses recognized in earnings		(174	)		(434	)		(1,508	)		(3,964	)		(483	)
Net realized capital losses, excluding net OTTI losses recognized in earnings		29			(177	)		(496	)		(1,941	)		(512	)
Total net realized capital gains (losses)		(145	)		(611	)		(2,004	)		(5,905	)		(995	)
Other revenues		253			267			261			249			243
Total revenues		21,859			22,049			24,433			8,937			25,623
Benefits, losses and loss adjustment expenses		14,625			13,025			13,831			14,088			13,919
Benefits, losses and loss adjustment expenses — returns credited on international variable annuities		(1,359	)		(774	)		3,188			(10,340	)		145
Amortization of deferred policy acquisition costs and present value of future profits		3,427			2,527			4,257			4,260			2,982
Insurance operating costs and other expenses		4,398			4,407			4,370			4,448			4,357
Interest expense		508			508			476			343			263
Goodwill impairment		30			—			32			745			—
Total benefits, losses and expenses		21,629			19,693			26,154			13,544			21,666
Income (loss) from continuing operations before income taxes		230			2,356			(1,721	)		(4,607	)		3,957
Income tax expense (benefit)		(346	)		612			(838	)		(1,848	)		1,040
Income (loss) from continuing operations, net of tax		576			1,744			(883	)		(2,759	)		2,917
Income (loss) from discontinued operations, net of tax		86			(64	)		(4	)		10			32
Net income (loss)		662			1,680			(887	)		(2,749	)		2,949
Preferred stock dividends and accretion of discount		42			515			127			8			—
Net income (loss) available to common shareholders	$	620		$	1,165		$	(1,014	)	$	(2,757	)	$	2,949
Balance Sheet Data
Separate account assets	$	143,870		$	159,742		$	150,394		$	130,184		$	199,946
Total assets		304,064			318,346			307,717			287,583			360,361
Total debt (including capital lease obligations)		6,216			6,607			5,839			6,221			4,507
Separate account liabilities		143,870			159,742			150,394			130,184			199,946
Common equity, excluding AOCI		21,197			20,756			18,217			16,788			20,062
Preferred Stock		556			556			2,960			—			—
AOCI, net of tax		1,157			(1,001	)		(3,312	)		(7,520	)		(858	)
Total stockholders’ equity		22,910			20,311			17,865			9,268			19,204
Income (loss) from continuing operations, net of tax, available to common shareholders per common share
Basic	$	1.20		$	2.85		$	(2.92	)	$	(9.02	)	$	9.22
Diluted		1.12			2.62			(2.92	)		(9.02	)		9.14
Net income (loss) available to common shareholders per common share
Basic	$	1.39		$	2.70		$	(2.93	)	$	(8.99	)	$	9.32
Diluted		1.30			2.49			(2.93	)		(8.99	)		9.24
Cash dividends declared per common share		0.40			0.20			0.20			1.91			2.03
Other Data
Total revenues, excluding net investment income on equity securities, trading	$	23,218		$	22,823		$	21,245		$	19,277		$	25,478
Unlock benefit (charge), after-tax	$	(530	)	$	111		$	(1,034	)	$	(932	)	$	213
Total investments, excluding equity securities, trading	$	104,449		$	98,175		$	93,235		$	89,287		$	94,904

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

(Dollar amounts in millions, except for per share data, unless otherwise stated)

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the financial condition of The Hartford Financial Services Group, Inc. and its subsidiaries (collectively, “The Hartford” or the “Company”) as of December 31, 2011, compared with December 31, 2010, and its results of operations for each of the three years in the period ended December 31, 2011. This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes beginning on page F-1. The Hartford made changes to its reporting segments in 2011 to reflect the manner in which the Company is currently organized for purposes of making operating decisions and assessing performance. Accordingly, segment data for prior reporting periods has been adjusted to reflect the new segment reporting, see Note 3 of the Notes to Consolidated Financial Statement for further discussion. Additionally, certain reclassifications have been made to prior year financial information to conform to the current year presentation.

INDEX

Description	Page
Consolidated Results of Operations		34
Outlooks		37
Critical Accounting Estimates		39
The Hartford’s Operations Overview		64
Key Performance Measures and Ratios		70
Property & Casualty Commercial		76
Group Benefits		79
Consumer Markets		80
Individual Annuity		83
Individual Life		85
Retirement Plans		87
Mutual Funds		89
Life Other Operations		90
Property & Casualty Other Operations		92
Corporate		93
Enterprise Risk Management		94
Capital Resources and Liquidity		121
Impact of New Accounting Standards		131

33

CONSOLIDATED RESULTS OF OPERATIONS

										Increase			Increase
										(Decrease) From			(Decrease) From
Net income (loss) by segment	2011			2010			2009			2010 to 2011			2009 to 2010
Property & Casualty Commercial	$	528		$	995		$	899		$	(467	)	$	96
Group Benefits		90			185			193			(95	)		(8	)
Commercial Markets		618			1,180			1,092			(562	)		88
Consumer Markets		5			143			140			(138	)		3
Individual Annuity		(14	)		527			(444	)		(541	)		971
Individual Life		133			229			15			(96	)		214
Retirement Plans		15			47			(222	)		(32	)		269
Mutual Funds		98			132			34			(34	)		98
Wealth Management		232			935			(617	)		(703	)		1,552
Life Other Operations		358			(90	)		(698	)		448			608
Property & Casualty Other Operations		(117	)		(53	)		(78	)		(64	)		25
Corporate		(434	)		(435	)		(726	)		1			291
Total net income (loss)	$	662		$	1,680		$	(887	)	$	(1,018	)	$	2,567

Year ended December 31, 2011 compared to the year ended December 31, 2010

The decrease in net income from 2010 to 2011 was primarily due to the following items:

• An Unlock charge of $530, after-tax, in 2011 compared to an Unlock benefit of $111, after-tax, in 2010. The charge in 2011 was primarily driven by assumption changes which reduced expected future gross profits including additional costs associated with implementing the Japan hedging strategy and the U.S. variable annuity macro hedge program, as well as actual separate account returns below our aggregated estimated return. The Unlock benefit for 2010 was attributable to actual separate account returns being above our aggregated estimated return and the impact of assumption updates primarily related to decreasing lapse and withdrawal rates and lower hedge costs. For further discussion of Unlocks see the Critical Accounting Estimates within the MD&A.

• Current accident year catastrophe losses of $484, after-tax, in 2011 compared to $294, after-tax, in 2010. The losses in 2011 primarily relate to more severe tornadoes and wind storms in the Midwest and Southeast, Hurricane Irene, and winter storms in the Northeast and Midwest. The losses in 2010 include severe windstorm events, including a hail storm in Arizona, tornadoes and hail in the Midwest, Plains States and the Southeast and winter storms in the Mid-Atlantic and Northeast.

• The Company recorded reserve strengthening of $31, after-tax, in 2011, compared to reserve releases of $294, after-tax, in 2010, in its property and casualty insurance prior accident years development, excluding asbestos and environmental reserves. For additional information regarding prior accident years development, see Critical Accounting Estimates within the MD&A.

• An asbestos reserve strengthening of $189, after-tax, in 2011, compared to $110, after-tax, in 2010 resulting from the Company’s annual review of its asbestos liabilities in Property & Casualty Other Operations. The reserve strengthening in 2011 was primarily driven by higher frequency and severity of mesothelioma claims, particularly against certain smaller, more peripheral insureds, while the reserve strengthening in 2010 was primarily driven by increases in claim severity and expenses. For further information, see Property & Casualty Other Operations Claims within the Property and Casualty Insurance Product Reserves, Net of Reinsurance section in Critical Accounting Estimates.

• A $73, after-tax, charge in the second quarter of 2011 related to the write-off of capitalized costs associated with a policy administration software project that was discontinued.

Partially offsetting these decreases in net income were following items:

• Income (loss) from discontinued operations, net of tax, increased due to a realized gain on the sale of Specialty Risk Services of $150, after-tax, in the first quarter of 2011, which was partially offset by a loss of $74, after-tax, from the disposition of Federal Trust Corporation in the second quarter of 2011. In 2010, loss from discontinued operations, net of tax, primarily relates to goodwill impairment on Federal Trust Corporation of approximately $100, after-tax, recorded in the second quarter of 2010.

• The first quarter of 2010 includes an accrual for a litigation settlement of $73, before-tax, for a class action lawsuit related to structured settlements.

34

• Income tax expense (benefit) in 2010 includes a valuation allowance expense of $87 compared to a benefit of $78 in 2011. See Note 13 of the Notes to Consolidated Financial Statements for a reconciliation of the tax provision at the U.S. Federal statutory rate to the provision for income taxes.

• In the second quarter of 2011, the Company recorded a $52 income tax benefit related to a resolution of a tax matter with the IRS for the computation of dividends received deduction (“DRD”) for years 1998, 2000 and 2001. For additional information see Note 13 of the Notes to Consolidated Financial Statements.

• See the segment sections of the MD&A for a discussion on their respective performances.

Year ended December 31, 2010 compared to the year ended December 31, 2009

The change from net loss in 2009 to net income in 2010 was primarily due to the following items:

• An Unlock benefit of $111, after-tax, in 2010 compared to an Unlock charge of $1.0 billion, after-tax, in 2009. The Unlock benefit for 2010 was attributable to actual separate account returns being above our aggregated estimated return and the impact of assumption updates primarily related to decreasing lapse and withdrawal rates, partially offset by hedging, annuitization estimates on Japan products, and long-term expected rate of return updates. The Unlock charge for 2009 was primarily driven by actual separate account returns being significantly below our aggregated estimated return for the first quarter of 2009, partially offset by actual returns being greater than our aggregated estimated return for the remainder of 2009. For further discussion of Unlocks see the Critical Accounting Estimates within the MD&A.

• Net realized capital losses decreased primarily due to lower impairment losses, lower valuation allowances on mortgage loans, and net gains on sales in 2010 compared to net losses on sales in 2009. These changes were partially offset by losses on the variable annuity hedge program in 2010 compared to gains in 2009. For further discussion, see Net Realized Capital Gains (Losses) within Investment Results of Key Performance Measures and Ratios of this MD&A.

Partially offsetting these changes in net income (loss) were the following items:

• An asbestos reserve strengthening of $110, after-tax, in 2010, compared to $90, after-tax, in 2009 resulting from the Company’s annual review of its asbestos liabilities within Property & Casualty Other Operations. The reserve strengthening in 2010 and 2009 was primarily driven by increases in claim severity and expenses, particularly attributed to litigation in certain jurisdictions, and, to a lesser extent, development on primarily peripheral accounts. For further information, see Property & Casualty Other Operations Claims within the Property and Casualty Insurance Product Reserves, Net of Reinsurance section in Critical Accounting Estimates.

• Current accident year catastrophe losses of $294, after-tax, in 2010 compared to $199, after-tax, in 2009. The losses in 2010, primarily relate to severe windstorm events, particularly from hail in the Midwest, Plains States and the Southeast and from winter storms in the Mid-Atlantic and Northeast. The losses in 2009, primarily relate to ice storms, windstorms, and tornadoes across many states.

• The first quarter of 2010 includes an accrual for a litigation settlement of $73, before-tax, for a class action lawsuit related to structured settlements.

• The loss from discontinued operations, net of tax, increased in 2010 primarily due to a goodwill impairment on Federal Trust Corporation of approximately $100, after-tax, partially offset by a net realized capital gain of $41, after-tax, on the sale of the Hartford Investments Canada Corporation (“HICC”).

• Income tax expense (benefit) in 2010 includes a valuation allowance expense of $87 compared to an expense of $30 in 2009. In addition, 2009 included nondeductible costs associated with warrants of $78. See Note 13 of the Notes to Consolidated Financial Statements for a reconciliation of the tax provision at the U.S. Federal statutory rate to the provision for income taxes.

See the segment sections of the MD&A for a discussion on their respective performances.

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Income Taxes

The effective tax rates for 2011, 2010 and 2009 were (150%), 26%, and 49%, respectively. The differences between the effective rate and the U.S. statutory rate of 35% for 2011, 2010 and 2009 were due principally to tax-exempt interest earned on invested assets and the DRD. These items decreased tax expense on the 2011 and 2010 pre-tax income and increased the tax benefit on the 2009 pre-tax loss. The 2011 effective tax rate also includes a deferred tax asset valuation allowance decrease, and the 2010 and 2009 effective tax rates include a deferred tax asset valuation allowance increase. The 2009 effective tax rate also includes the tax effect of non-deductible costs associated with warrants.

The separate account DRD is estimated for the current year using information from the most recent return, adjusted for current year equity market performance and other appropriate factors, including estimated levels of corporate dividend payments and level of policy owner equity account balances. The actual current year DRD can vary from estimates based on, but not limited to, changes in eligible dividends received in the mutual funds, amounts of distributions from these mutual funds, amounts of short-term capital gains at the mutual fund level and the Company’s taxable income before the DRD. The Company recorded benefits of $201, $145 and $181 related to the DRD in the years ended December 31, 2011, 2010 and 2009, respectively. These amounts included benefits (charges) related to prior years’ tax returns of $3, $(3) and $29 in 2011, 2010 and 2009, respectively.

In Revenue Ruling 2007-61, issued on September 25, 2007, the IRS announced its intention to issue regulations with respect to certain computational aspects of the DRD on separate account assets held in connection with variable annuity contracts. Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54, issued in August 2007 that purported to change accepted industry and IRS interpretations of the statutes governing these computational questions. No regulations have been issued to date. Any regulations that the IRS may ultimately propose for issuance in this area will be subject to public notice and comment, at which time insurance companies and other members of the public will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown, but they could result in the elimination of some or all of the separate account DRD tax benefit that the Company receives. Management believes that it is highly likely that any such regulations would apply prospectively only.

The Company receives a foreign tax credit for foreign taxes paid including payments from its separate account assets. This credit reduces the Company’s U.S. tax liability. The separate account foreign tax credit is estimated for the current year using information from the most recent filed return, adjusted for the change in the allocation of separate account investments to the international equity markets during the current year. The actual current year foreign tax credit can vary from the estimates due to actual foreign tax credits passed through from the mutual funds. The Company recorded benefits of $11, $4 and $16 related to the separate account foreign tax credit in the years ended December 31, 2011, 2010 and 2009, respectively. These amounts included benefits (charges) related to prior years’ tax returns of $2, $(4) and $3 in 2011, 2010 and 2009, respectively.

The Company’s unrecognized tax benefits were unchanged during 2011 and 2010, remaining at $48 as of December 31, 2011, 2010 and 2009. This entire amount, if it were recognized, would affect the effective tax rate in the period it is released.

36

OUTLOOKS

The Hartford provides projections and other forward-looking information in the following discussions, which contain many forward-looking statements, particularly relating to the Company’s future financial performance. These forward-looking statements are estimates based on information currently available to the Company, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to the precautionary statements set forth on page 3 of this Form 10-K and the risk factors set forth under Item 1A and other similar information contained in this Form 10-K and in other filings made from time to time by the Company with the SEC. Actual results are likely to differ, and in the past have differed, materially from those forecast by the Company, depending on the outcome of various factors, including, but not limited to, those set forth in each discussion below and in Item 1A, Risk Factors.

Overview

As previously announced, we are evaluating our strategy and business portfolio with the goal of delivering shareholder value. As this review is ongoing and no decisions have yet been made, the following discussion of our outlooks and the forward-looking statements contained therein assume a continuation of our current business focus and, as such, are subject to change based on any actions taken as a result of our ongoing review.

The Hartford focuses on growing its three customer-oriented divisions, Commercial Markets, Consumer Markets, and Wealth Management, through enhanced product development, leveraging synergies of the divisions’ product offerings to meet customer needs, and increased efficiencies throughout the organization. Slow economic and employment expansion may adversely impact the performance of The Hartford’s insurance protection businesses where insureds may change their level of insurance, and asset accumulation businesses may see customers changing their level of savings based on anticipated economic conditions. In addition, the performance of The Hartford’s divisions is subject to uncertainty due to capital market conditions, which impact the earnings of its asset management businesses and valuations and earnings in its investment portfolio. The current and future interest rate environment also affects the performance of the Company’s divisions. A sustained low interest rate environment would result in lower net investment income, lower estimated gross profits on certain Wealth Management products, lower margins and increased pension expense.

Commercial Markets

Commercial Markets focuses on growth through market-differentiated products and services while maintaining a disciplined underwriting approach. In Property & Casualty Commercial, improving market conditions are expected to continue, which should enable the Company to achieve price increases, while a slowly recovering economy is anticipated to drive an increase in insurance exposures. As such, the Company expects low to mid single-digit written premium growth in 2012. This growth reflects the combination of our current market position, a broadening of underwriting expertise focused on selected industries, a leveraging of the payroll model, and numerous initiatives launched in the past several years. More specifically, this growth is anticipated to be driven by continued momentum in small commercial, including programs aimed at growing total policy counts, the rollout of new product enhancements and the continued expansion of ease of doing business technology, while management expects middle market and specialty growth to be tempered as a result of pricing actions taken to restore returns to adequate levels. The Property & Casualty Commercial combined ratio before catastrophes and prior accident year development is expected to remain in the mid to upper 90s for 2012 as compared to the 97.2% achieved in 2011. Earned price increases are expected to flow through the book, while loss costs are not expected to change dramatically. In Group Benefits, premiums are expected to decline in 2012, as compared to 2011, reflecting the competitive environment coupled with pricing actions implemented with the goal of improving profitability. Over time, as employers design benefit strategies to attract and retain employees, while attempting to control their benefit costs, management believes that the need for the Company’s products will expand. The Company believes that this combined with the significant number of employees who currently do not have coverage or adequate levels of coverage, creates continued opportunities for our products and services. The Company expects Group Benefits’ loss ratio in 2012 to improve from the 2011 loss ratio of 79.5% as a result of the pricing actions taken, given the expectation of persistent elevated disability incidence.

Consumer Markets

The Company expects written premium to decline in 2012, compared to 2011, including a decrease in both AARP direct and Agency business. Despite an improvement in policy retention in 2011 and an expected further increase in new business in 2012, management expects that non-renewed premium will exceed new business in 2012 resulting in an overall decline in written premium. In 2012, management expects that policy retention will improve but continue to be affected by the impact of renewal written pricing increases in a price sensitive market. Within the Agency channel, policy retention will also be affected by continued pricing and underwriting actions to improve profitability, including efforts to reposition the book into more mature, preferred market business. The Company expects new business to increase in 2012, primarily driven by AARP member business, both direct and through independent agents, as well as new business from affinities other than AARP and other targeted consumer direct marketing. New business is expected to benefit from the introduction of the Open Road Advantage auto product and the Hartford Home Advantage product. As of January 2012, the Open Road Advantage auto product was available in 44 states and the Hartford Home Advantage product was available in 38 states. Management expects that the combined ratio before catastrophes and prior accident year development will be flat to slightly lower in 2012, as compared to 2011, as an improvement in the current accident year loss and loss adjustment expense ratio before catastrophes will be largely offset by an expected increase in the underwriting expense ratio. For both auto and home, the current accident year loss and loss adjustment expense ratio before catastrophes is expected to improve in 2012, driven by earned pricing increases and lower claim frequency, partially offset by an expected modest increase in average claim severity. While management expects that industry non-catastrophe claim frequency will be relatively flat to slightly increasing in 2012, management expects The Hartford will have slightly lower claim frequency given its continued shift to a more preferred book of business.

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Wealth Management

Wealth Management currently focuses on driving profitable growth through innovation, product diversification and multichannel distribution. Additionally, management is focused on improving profit margins and generating statutory surplus in each of its operating segments. Individual Annuity continues to build out a portfolio of solutions to meet the needs of consumers planning for and living in retirement. In 2011, several of these solutions were incorporated in the Personal Retirement Manager II (“PRM II”). While initial indicators of sales activity have improved, the product’s ultimate success in contributing to Individual Annuity growth will depend on, among other things, our ability to market and distribute the product through new and existing distribution channels and market receptivity to the new product features. Further, Individual Annuity diversified its suite of product solutions through the introduction of a new fixed indexed annuity product. In addition, the Individual Annuity hedge program may contribute to earnings volatility since the program generates mark to market gains and losses, while not all the underlying liabilities being hedged are marked to market. Individual Life continues to differentiate itself through the creative offering of riders. The recently launched LongevityAccess rider, which allows policyholders to begin taking income from a policy at age 90, in tandem with the increasingly popular LifeAccess rider, which allows policyholders to take distributions from their policies in cases of chronic illness, gives The Hartford an ability to help people protect against premature death, outliving one’s assets, or deteriorating health. In addition to building out distribution through property & casualty agents, the Company continues to expand its distribution into career life insurance professionals through the Monarch program. The Retirement Plans business continues to experience strong sales. In addition to our core 401(k) market, we have seen growth in larger ($5-$25) corporate plans. The property & casualty channel will become an increasingly important area of focus for us given our conviction that this channel is underpenetrated and well suited for this business. In the fourth quarter, we introduced The Hartford Lifetime Income product, a patented income solution delivered through 401(k) plans, which provides a guaranteed paycheck for life and has been a major catalyst for growth in this business. Our Mutual Fund business has been offering new funds to improve our participation in asset classes where we see potential growth opportunities. In addition, the Company announced in the fourth quarter of 2011 that Wellington Management Company, LLP (“Wellington Management”) will serve as the sole sub-advisor for The Hartford’s mutual funds, including equity and fixed income funds, pending a fund-by-fund review by The Hartford’s mutual funds board of directors.

Runoff Operations

In the fourth quarter of 2011, The Hartford established a new Runoff Operations division consisting of Life Other Operations and Property & Casualty Other Operations in order to better differentiate between our ongoing and runoff businesses. The objective of the Runoff Operations division is to focus on managing profitability, improving capital efficiency and effectiveness, and limiting and managing risk associated with the businesses residing in the division. Life Other Operations consists of the Hartford’s international variable annuity business, institutional annuities business and Private Placement Life Insurance business. The international variable annuity business within Life Other Operations will continue to be a significant driver of earnings and earnings variability as a result of the hedge program associated with the Company’s international annuities. This hedge program generates mark to market gains and losses while the underlying liabilities being hedged are primarily not marked to market resulting in unpredictable earnings volatility period to period. Property & Casualty Other Operations, is focused on managing our asbestos environmental and other legacy liabilities. The results of the annual ground up study of asbestos reserves and the annual environmental reserve update will be the primary driver impacting the results for this business.

38

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ, and in the past have differed, from those estimates.

The Company has identified the following estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability:

• property and casualty insurance product reserves, net of reinsurance;

• estimated gross profits used in the valuation and amortization of assets and liabilities associated with variable annuity and other universal life-type contracts;

• evaluation of other-than-temporary impairments on available-for-sale securities and valuation allowances on mortgage loans;

• living benefits required to be fair valued (in other policyholder funds and benefits payable);

• goodwill impairment;

• valuation of investments and derivative instruments;

• pension and other postretirement benefit obligations;

• valuation allowance on deferred tax assets; and

• contingencies relating to corporate litigation and regulatory matters.

Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Consolidated Financial Statements. In developing these estimates management makes subjective and complex judgments that are inherently uncertain and subject to material change as facts and circumstances develop. Although variability is inherent in these estimates, management believes the amounts provided are appropriate based upon the facts available upon compilation of the financial statements.

Property and Casualty Insurance Product Reserves, Net of Reinsurance

The Hartford establishes reserves on its property and casualty insurance products to provide for the estimated costs of paying claims under insurance policies written by the Company. These reserves include estimates for both claims that have been reported and those that have not yet been reported, and include estimates of all expenses associated with processing and settling these claims. Incurred but not reported (“IBNR”) reserves represent the difference between the estimated ultimate cost of all claims and the actual reported loss and loss adjustment expenses (“reported losses”). Reported losses represent cumulative loss and loss adjustment expenses paid plus case reserves for outstanding reported claims. Company actuaries evaluate the total reserves (IBNR and case reserves) on an accident year basis. An accident year is the calendar year in which a loss is incurred, or, in the case of claims-made policies, the calendar year in which a loss is reported.

Reserve estimates can change over time because of unexpected changes in the external environment. Potential external factors include (1) changes in the inflation rate for goods and services related to covered damages such as medical care, hospital care, auto parts, wages and home repair; (2) changes in the general economic environment that could cause unanticipated changes in the claim frequency per unit insured; (3) changes in the litigation environment as evidenced by changes in claimant attorney representation in the claims negotiation and settlement process; (4) changes in the judicial environment regarding the interpretation of policy provisions relating to the determination of coverage and/or the amount of damages awarded for certain types of damages; (5) changes in the social environment regarding the general attitude of juries in the determination of liability and damages; (6) changes in the legislative environment regarding the definition of damages; and (7) new types of injuries caused by new types of injurious exposure: past examples include lead paint, construction defects and tainted Chinese-made drywall.

Reserve estimates can also change over time because of changes in internal Company operations. Potential internal factors include (1) periodic changes in claims handling procedures; (2) growth in new lines of business where exposure and loss development patterns are not well established; or (3) changes in the quality of risk selection in the underwriting process.

In the case of assumed reinsurance, all of the above risks apply. In addition, changes in ceding company case reserving and reporting patterns can create additional factors that need to be considered in estimating the reserves. Due to the inherent complexity of the assumptions used, final claim settlements may vary significantly from the present estimates, particularly when those settlements may not occur until well into the future.

Through both facultative and treaty reinsurance agreements, the Company cedes a share of the risks it has underwritten to other insurance companies. The Company’s net reserves for loss and loss adjustment expenses include anticipated recovery from reinsurers on unpaid claims. The estimated amount of the anticipated recovery, or reinsurance recoverable, is net of an allowance for uncollectible reinsurance.

39

Reinsurance recoverables include an estimate of the amount of gross loss and loss adjustment expense reserves that may be ceded under the terms of the reinsurance agreements, including IBNR unpaid losses. The Company calculates its ceded reinsurance projection based on the terms of any applicable facultative and treaty reinsurance, often including an estimate by reinsurance agreement of how IBNR losses will ultimately be ceded.

The Company provides an allowance for uncollectible reinsurance, reflecting management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay. The Company analyzes recent developments in commutation activity between reinsurers and cedants, recent trends in arbitration and litigation outcomes in disputes between reinsurers and cedants and the overall credit quality of the Company’s reinsurers. Where its contracts permit, the Company secures future claim obligations with various forms of collateral, including irrevocable letters of credit, secured trusts, funds held accounts and group-wide offsets. The allowance for uncollectible reinsurance was $290 as of December 31, 2011, including $83 related to Property & Casualty Commercial and $207 related to Property & Casualty Other Operations.

The Company’s estimate of reinsurance recoverables, net of an allowance for uncollectible reinsurance, is subject to similar risks and uncertainties as the estimate of the gross reserve for unpaid losses and loss adjustment expenses.

The Hartford, like other insurance companies, categorizes and tracks its insurance reserves for its segments by “line of business”. Furthermore, The Hartford regularly reviews the appropriateness of reserve levels at the line of business level, taking into consideration the variety of trends that impact the ultimate settlement of claims for the subsets of claims in each particular line of business. In addition, Property & Casualty Other Operations categorizes reserves as asbestos and environmental (“A&E”), whereby the Company reviews these reserve levels by type of event, rather than by line of business. Adjustments to previously established reserves, which may be material, are reflected in the operating results of the period in which the adjustment is determined to be necessary. In the judgment of management, information currently available has been properly considered in the reserves established for losses and loss adjustment expenses.

The following table shows loss and loss adjustment expense reserves by line of business as of December 31, 2011, net of reinsurance:

	Property & Casualty		Consumer		Property & Casualty		Total Property and
	Commercial		Markets		Other Operations		Casualty Insurance
Reserve Line of Business
Commercial property	$	187	$	—	$	—	$	187
Homeowners’		—		467		—		467
Auto physical damage		16		29		—		45
Auto liability		564		1,523		—		2,087
Package business		1,282		—		—		1,282
Workers’ compensation		7,471		—		—		7,471
General liability		2,641		31		—		2,672
Professional liability		702		—		—		702
Fidelity and surety		210		—		—		210
Assumed reinsurance		—		—		349		349
All other non-A&E		—		—		810		810
A&E		21		2		2,212		2,235
Total reserves-net		13,094		2,052		3,371		18,517
Reinsurance and other recoverables		2,343		9		681		3,033
Total reserves-gross	$	15,437	$	2,061	$	4,052	$	21,550

Reserving Methodology

(See Reserving for Asbestos and Environmental Claims within Property & Casualty Other Operations for a discussion of how A&E reserves are set)

How reserves are set

Reserves are set by line of business within the various segments. A single line of business may be written in more than one segment. Case reserves are established by a claims handler on each individual claim and are adjusted as new information becomes known during the course of handling the claim. Lines of business for which loss data (e.g., paid losses and case reserves) emerge (i.e., is reported) over a long period of time are referred to as long-tail lines of business. Lines of business for which loss data emerge more quickly are referred to as short-tail lines of business. The Company’s shortest-tail lines of business are property and auto physical damage. The longest tail lines of business include workers’ compensation, general liability, professional liability and assumed reinsurance. For short-tail lines of business, emergence of paid loss and case reserves is credible and likely indicative of ultimate losses. For long-tail lines of business, emergence of paid losses and case reserves is less credible in the early periods and, accordingly, may not be indicative of ultimate losses.

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The Company’s reserving actuaries, who are independent of the business units, regularly review reserves for both current and prior accident years using the most current claim data. For most lines of business, these reserve reviews incorporate a variety of actuarial methods and judgments and involve rigorous analysis. These selections incorporate input, as judged by the reserving actuaries to be appropriate, from claims personnel, pricing actuaries and operating management on reported loss cost trends and other factors that could affect the reserve estimates. Most reserves are reviewed fully each quarter, including loss and loss adjustment expense reserves for property, auto physical damage, auto liability, package business, workers’ compensation, most general liability, professional liability and fidelity and surety. Other reserves are reviewed semi-annually (twice per year) or annually. These include, but are not limited to, reserves for losses incurred in accident years older than twelve and twenty years, for Consumer Markets and Property & Casualty Commercial, respectively, assumed reinsurance, latent exposures, such as construction defects and unallocated loss adjustment expense. For reserves that are reviewed semi-annually or annually, management monitors the emergence of paid and reported losses in the intervening quarters to either confirm that the estimate of ultimate losses should not change or, if necessary, perform a reserve review to determine whether the reserve estimate should change.

An expected loss ratio is used in initially recording the reserves for both short-tail and long-tail lines of business. This expected loss ratio is determined through a review of prior accident years’ loss ratios and expected changes to earned pricing, loss costs, mix of business, ceded reinsurance and other factors that are expected to impact the loss ratio for the current accident year. For short-tail lines, IBNR for the current accident year is initially recorded as the product of the expected loss ratio for the period, earned premium for the period and the proportion of losses expected to be reported in future calendar periods for the current accident period. For long-tailed lines, IBNR reserves for the current accident year are initially recorded as the product of the expected loss ratio for the period and the earned premium for the period, less reported losses for the period.

In addition to the expected loss ratio, the actuarial techniques or methods used primarily include paid and reported loss development and frequency / severity techniques as well as the Bornhuetter-Ferguson method (a combination of the expected loss ratio and paid development or reported development method). Within any one line of business, the methods that are given more influence vary based primarily on the maturity of the accident year, the mix of business and the particular internal and external influences impacting the claims experience or the methods. The output of the reserve reviews are reserve estimates that are referred to herein as the “actuarial indication”.

As of December 31, 2011 and 2010, net property and casualty insurance product reserves for losses and loss adjustment expenses reported under accounting principles generally accepted in the United States of America (“U.S. GAAP”) were approximately equal to net reserves reported on a statutory basis. Under U.S. GAAP, liabilities for unpaid losses for permanently disabled workers’ compensation claimants are discounted at rates that are no higher than risk-free interest rates and which generally exceed the statutory discount rates set by regulators, such that workers’ compensation reserves for statutory reporting are higher than the reserves for U.S. GAAP reporting. Largely offsetting the effect of the difference in discounting is that a portion of the U.S. GAAP provision for uncollectible reinsurance is not recognized under statutory accounting. Most of the Company’s property and casualty insurance product reserves are not discounted. However, the Company has discounted liabilities funded through structured settlements and has discounted certain reserves for indemnity payments due to permanently disabled claimants under workers’ compensation policies.

Provided below is a general discussion of which methods are preferred by line of business. Because the actuarial estimates are generated at a much finer level of detail than line of business (e.g., by distribution channel, coverage, accident period), this description should not be assumed to apply to each coverage and accident year within a line of business. Also, as circumstances change, the methods that are given more influence will change.

Property and Auto Physical Damage. These lines are fast-developing and paid and reported development techniques are used as these methods use historical data to develop paid and reported loss development patterns, which are then applied to current paid and reported losses by accident period to estimate ultimate losses. The Company relies primarily on reported development techniques although a review of frequency and severity and the initial loss expectation based on the expected loss ratio is used for the most immature accident months. The advantage of frequency / severity techniques is that frequency estimates are generally easier to predict and external information can be used to supplement internal data in making severity estimates.

Personal Auto Liability. For auto liability, and bodily injury in particular, the Company performs a greater number of techniques than it does for property and auto physical damage. In addition, because the paid development technique is affected by changes in claim closure patterns and the reported development method is affected by changes in case reserving practices, the Company uses Berquist-Sherman techniques which adjust these patterns to reflect current settlement rates and case reserving techniques. The Company generally uses the reported development method for older accident years as a higher percentage of ultimate losses are reflected in reported losses than in cumulative paid losses and the frequency/severity and Berquist-Sherman methods for more recent accident years. Recent periods are influenced by changes in case reserve practices and changing disposal rates; the frequency/severity techniques are not affected as much by these changes and the Berquist-Sherman techniques specifically adjust for these changes.

Auto Liability for Commercial Lines and Short-Tailed General Liability. The Company performs a variety of techniques, including the paid and reported development methods and frequency / severity techniques. For older, more mature accident years, the Company finds that reported development techniques are best. For more recent accident years, the Company typically prefers frequency / severity techniques that make separate assumptions about loss activity above and below a selected capping level.

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Long-Tailed General Liability, Fidelity and Surety and Large Deductible Workers’ Compensation. For these long-tailed lines of business, the Company generally relies on the expected loss ratio and reported development techniques. The Company generally weights these techniques together, relying more heavily on the expected loss ratio method at early ages of development and more on the reported development method as an accident year matures.

Workers’ Compensation. Workers’ compensation is the Company’s single largest reserve line of business so a wide range of methods are reviewed in the reserve analysis. Methods performed include paid and reported development, variations on expected loss ratio methods, and an in-depth analysis on the largest states. Historically, paid development patterns in the Company’s workers’ compensation business have been stable, so paid techniques are preferred. Although paid techniques may be less predictive of the ultimate liability when a low percentage of ultimate losses are paid as in early periods of development, recent changes in the frequency of workers’ compensation claims have caused the Company to place greater reliance in paid methods with continued consideration of the state-by-state analysis and the expected loss ratio approach.

Professional Liability. Reported and paid loss developments patterns for this line tend to be volatile. Therefore, the Company typically relies on frequency and severity techniques.

Assumed Reinsurance and All Other. For these lines, the Company tends to rely on the reported development techniques. In assumed reinsurance, assumptions are influenced by information gained from claim and underwriting audits.

Allocated Loss Adjustment Expenses (ALAE). For some lines of business (e.g., professional liability and assumed reinsurance), ALAE and losses are analyzed together. For most lines of business, however, ALAE is analyzed separately, using paid development techniques and an analysis of the relationship between ALAE and loss payments.

Unallocated Loss Adjustment Expense (ULAE). ULAE is analyzed separately from loss and ALAE. For most lines of business, incurred ULAE costs to be paid in the future are projected based on an expected cost per claim year and the anticipated claim closure pattern and the ratio of paid ULAE to paid loss.

The final step in the reserve review process involves a comprehensive review by senior reserving actuaries who apply their judgment and, in concert with senior management, determine the appropriate level of reserves based on the information that has been accumulated. Numerous factors are considered in this process including, but not limited to, the assessed reliability of key loss trends and assumptions that may be significantly influencing the current actuarial indications, pertinent trends observed over the recent past, the level of volatility within a particular line of business, and the improvement or deterioration of actuarial indications in the current period as compared to the prior periods. Total recorded net reserves, excluding asbestos and environmental, were 1.8% higher than the actuarial indication of the reserves as of December 31, 2011.

See the Reserve Development section for a discussion of changes to reserve estimates recorded in 2011.

Current trends contributing to reserve uncertainty

The Hartford is a multi-line company in the property and casualty insurance business. The Hartford is therefore subject to reserve uncertainty stemming from a number of conditions, including but not limited to those noted above, any of which could be material at any point in time. Certain issues may become more or less important over time as conditions change. As various market conditions develop, management must assess whether those conditions constitute a long-term trend that should result in a reserving action (i.e., increasing or decreasing the reserve).

Within Property & Casualty Commercial and Property & Casualty Other Operations, the Company has exposure to claims asserted for bodily injury as a result of long-term or continuous exposure to harmful products or substances. Examples include, but are not limited to, pharmaceutical products, silica and lead paint. The Company also has exposure to claims from construction defects, where property damage or bodily injury from negligent construction is alleged. In addition, the Company has exposure to claims asserted against religious institutions and other organizations relating to molestation or abuse. Such exposures may involve potentially long latency periods and may implicate coverage in multiple policy periods. These factors make reserves for such claims more uncertain than other bodily injury or property damage claims. With regard to these exposures, the Company is monitoring trends in litigation, the external environment, the similarities to other mass torts and the potential impact on the Company’s reserves.

In Consumer Markets, reserving estimates are generally less variable than for the Company’s other property and casualty segments because of the coverages having relatively shorter periods of loss emergence. Estimates, however, can still vary due to a number of factors, including interpretations of frequency and severity trends and their impact on recorded reserve levels. Severity trends can be impacted by changes in internal claim handling and case reserving practices in addition to changes in the external environment. These changes in claim practices increase the uncertainty in the interpretation of case reserve data, which increases the uncertainty in recorded reserve levels. In addition, the introduction of new products has led to a different mix of business by type of insured than the Company experienced in the past. Such changes in mix increase the uncertainty of the reserve projections, since historical data and reporting patterns may not be applicable to the new business.

In standard commercial lines, workers’ compensation is the Company’s single biggest line of business and the line of business with the longest pattern of loss emergence. Medical costs make up more than 50% of workers’ compensation payments. As such, reserve estimates for workers’ compensation are particularly sensitive to changes in medical inflation, the changing use of medical care procedures and changes in state legislative and regulatory environments. In addition, a changing economic environment can affect the ability of an injured worker to return to work and the length of time a worker receives disability benefits. The Company has recently experienced a sharp increase in workers’ compensation claim frequency, while only seeing a partial offset from moderating severity trends. These factors increase the uncertainty in the estimate of reserves.

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In specialty lines, many lines of insurance are “long-tail”, including large deductible workers’ compensation insurance, as such, reserve estimates for these lines are more difficult to determine than reserve estimates for shorter-tail lines of insurance. Estimating required reserve levels for large deductible workers’ compensation insurance is further complicated by the uncertainty of whether losses that are attributable to the deductible amount will be paid by the insured; if such losses are not paid by the insured due to financial difficulties, the Company would be contractually liable. Another example of reserve variability relates to reserves for directors’ and officers’ insurance. There is potential volatility in the required level of reserves due to the continued uncertainty regarding the number and severity of class action suits, including uncertainty regarding the Company’s exposure to losses arising from the collapse of the sub-prime mortgage market. Additionally, the Company’s exposure to losses under directors’ and officers’ insurance policies is primarily in excess layers, making estimates of loss more complex. The recent financial market turmoil has increased the number of shareholder class action lawsuits against our insureds or their directors and officers and this trend could continue for some period of time.

Impact of changes in key assumptions on reserve volatility

As stated above, the Company’s practice is to estimate reserves using a variety of methods, assumptions and data elements. Within its reserve estimation process for reserves other than asbestos and environmental, the Company does not consistently use statistical loss distributions or confidence levels around its reserve estimate and, as a result, does not disclose reserve ranges.

The reserve estimation process includes assumptions about a number of factors in the internal and external environment. Across most lines of business, the most important assumptions are future loss development factors applied to paid or reported losses to date. The trend in loss costs is also a key assumption, particularly in the most recent accident years, where loss development factors are less credible.

The following discussion includes disclosure of possible variation from current estimates of loss reserves due to a change in certain key indicators of potential losses. Each of the impacts described below is estimated individually, without consideration for any correlation among key indicators or among lines of business. Therefore, it would be inappropriate to take each of the amounts described below and add them together in an attempt to estimate volatility for the Company’s reserves in total. The estimated variation in reserves due to changes in key indicators is a reasonable estimate of possible variation that may occur in the future, likely over a period of several calendar years. It is important to note that the variation discussed is not meant to be a worst-case scenario, and therefore, it is possible that future variation may be more than the amounts discussed below.

Recorded reserves for auto liability, net of reinsurance, are $2.1 billion across all lines, $1.5 billion of which is in Consumer Markets. Personal auto liability reserves are shorter-tailed than other lines of business (such as workers’ compensation) and, therefore, less volatile. However, the size of the reserve base means that future changes in estimates could be material to the Company’s results of operations in any given period. The key indicator for Consumer Markets auto liability is the annual loss cost trend, particularly the severity trend component of loss costs. A 2.5 point change in annual severity for the two most recent accident years would change the estimated net reserve need by $80, in either direction. A 2.5 point change in annual severity is within the Company’s historical variation.

Recorded reserves for workers’ compensation, net of reinsurance, are $7.5 billion. Loss development patterns are a key indicator for this line of business, particularly for more mature accident years. Historically, loss development patterns have been impacted by, among other things, medical cost inflation. The Company has reviewed the historical variation in reported loss development patterns. If the reported loss development patterns change by 3%, the estimated net reserve need would change by $400, in either direction. A 3% change in reported loss development patterns is within the Company’s historical variation, as measured by the variation around the average development factors as reported in statutory accident year reports.

Recorded reserves for general liability, net of reinsurance, are $2.7 billion. Loss development patterns are a key indicator for this line of business, particularly for more mature accident years. Historically, loss development patterns have been impacted by, among other things, emergence of new types of claims (e.g., construction defect claims) or a shift in the mixture between smaller, more routine claims and larger, more complex claims. The Company has reviewed the historical variation in reported loss development patterns. If the reported loss development patterns change by 9%, the estimated net reserve need would change by $200, in either direction. A 9% change in reported loss development patterns is within the Company’s historical variation, as measured by the variation around the average development factors as reported in statutory accident year reports.

Similar to general liability, assumed casualty reinsurance is affected by reported loss development patterns. In addition to the items identified above that would affect both direct and reinsurance liability claim development patterns, there is also an impact to reporting patterns for any changes in claim notification from ceding companies to the reinsurer. Recorded net reserves for HartRe assumed reinsurance business, excluding asbestos and environmental liabilities, within Property & Casualty Other Operations were $349 as of December 31, 2011. If the reported loss development patterns underlying the Company’s net reserves for HartRe assumed casualty reinsurance change by 5%, the estimated net reserve need would change by approximately $95, in either direction. A 5% change in reported loss development patterns is within the Company’s historical variation, as measured by the variation around the average development factors as reported in statutory accident year reports.

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Reserving for Asbestos and Environmental Claims within Property & Casualty Other Operations

How A&E reserves are set

In establishing reserves for asbestos claims, the Company evaluates its insureds’ estimated liabilities for such claims using a ground-up approach. The Company considers a variety of factors, including the jurisdictions where underlying claims have been brought, past, pending and anticipated future claim activity, disease mix, past settlement values of similar claims, dismissal rates, allocated loss adjustment expense, and potential bankruptcy impact.

Similarly, a ground-up exposure review approach is used to establish environmental reserves. The Company’s evaluation of its insureds’ estimated liabilities for environmental claims involves consideration of several factors, including historical values of similar claims, the number of sites involved, the insureds’ alleged activities at each site, the alleged environmental damage at each site, the respective shares of liability of potentially responsible parties at each site, the appropriateness and cost of remediation at each site, the nature of governmental enforcement activities at each site, and potential bankruptcy impact.

Having evaluated its insureds’ probable liabilities for asbestos and/or environmental claims, the Company then evaluates its insureds’ insurance coverage programs for such claims. The Company considers its insureds’ total available insurance coverage, including the coverage issued by the Company. The Company also considers relevant judicial interpretations of policy language and applicable coverage defenses or determinations, if any.

Evaluation of both the insureds’ estimated liabilities and the Company’s exposure to the insureds depends heavily on an analysis of the relevant legal issues and litigation environment. This analysis is conducted by the Company’s lawyers and is subject to applicable privileges.

For both asbestos and environmental reserves, the Company also compares its historical direct net loss and expense paid and reported experience, and net loss and expense paid and reported experience year by year, to assess any emerging trends, fluctuations or characteristics suggested by the aggregate paid and reported activity.

Once the gross ultimate exposure for indemnity and allocated loss adjustment expense is determined for its insureds by each policy year, the Company calculates its ceded reinsurance projection based on any applicable facultative and treaty reinsurance and the Company’s experience with reinsurance collections.

Uncertainties Regarding Adequacy of Asbestos and Environmental Reserves

A number of factors affect the variability of estimates for asbestos and environmental reserves including assumptions with respect to the frequency of claims, the average severity of those claims settled with payment, the dismissal rate of claims with no payment and the expense to indemnity ratio. The uncertainty with respect to the underlying reserve assumptions for asbestos and environmental adds a greater degree of variability to these reserve estimates than reserve estimates for more traditional exposures. While this variability is reflected in part in the size of the range of reserves developed by the Company, that range may still not be indicative of the potential variance between the ultimate outcome and the recorded reserves. The recorded net reserves as of December 31, 2011 of $2.24 billion ($1.90 billion and $328 for asbestos and environmental, respectively) is within an estimated range, unadjusted for covariance, of $1.75 billion to $2.59 billion. The process of estimating asbestos and environmental reserves remains subject to a wide variety of uncertainties, which are detailed in Note 12 of Notes to Consolidated Financial Statements. The Company believes that its current asbestos and environmental reserves are appropriate. However, analyses of future developments could cause the Company to change its estimates and ranges of its asbestos and environmental reserves, and the effect of these changes could be material to the Company’s consolidated operating results, financial condition and liquidity. Consistent with the Company’s long-standing reserving practices, the Company will continue to review and monitor its reserves in the Property & Casualty Other Operations segment regularly and, where future developments indicate, make appropriate adjustments to the reserves.

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Total Property and Casualty Insurance Product Reserves, Net of Reinsurance, Results

In the opinion of management, based upon the known facts and current law, the reserves recorded for the Company’s property and casualty businesses at December 31, 2011 represent the Company’s best estimate of its ultimate liability for losses and loss adjustment expenses related to losses covered by policies written by the Company. However, because of the significant uncertainties surrounding reserves, and particularly asbestos exposures, it is possible that management’s estimate of the ultimate liabilities for these claims may change and that the required adjustment to recorded reserves could exceed the currently recorded reserves by an amount that could be material to the Company’s results of operations, financial condition and liquidity.

Reserve Roll-forwards and Development

Based on the results of the quarterly reserve review process, the Company determines the appropriate reserve adjustments, if any, to record. Recorded reserve estimates are changed after consideration of numerous factors, including but not limited to, the magnitude of the difference between the actuarial indication and the recorded reserves, improvement or deterioration of actuarial indications in the period, the maturity of the accident year, trends observed over the recent past and the level of volatility within a particular line of business. In general, adjustments are made more quickly to more mature accident years and less volatile lines of business. Such adjustments of reserves are referred to as “reserve development”. Reserve development that increases previous estimates of ultimate cost is called “reserve strengthening”. Reserve development that decreases previous estimates of ultimate cost is called “reserve releases”. Reserve development can influence the comparability of year over year underwriting results and is set forth in the paragraphs and tables that follow.

A roll-forward follows of property and casualty insurance product liabilities for unpaid losses and loss adjustment expenses for the year ended December 31, 2011:

For the year ended December 31, 2011
							Property &			Total
	Property &						Casualty			Property and
	Casualty			Consumer			Other			Casualty
	Commercial			Markets			Operations			Insurance
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	14,727		$	2,177		$	4,121		$	21,025
Reinsurance and other recoverables		2,361			17			699			3,077
Beginning liabilities for unpaid losses and loss adjustment expenses, net		12,366			2,160			3,422			17,948
Provision for unpaid losses and loss adjustment expenses
Current accident year before catastrophes		4,139			2,536			—			6,675
Current accident year catastrophes		320			425			—			745
Prior accident years		125			(75	)		317			367
Total provision for unpaid losses and loss adjustment expenses		4,584			2,886			317			7,787
Payments		(3,856	)		(2,994	)		(368	)		(7,218	)
Ending liabilities for unpaid losses and loss adjustment expenses, net		13,094			2,052			3,371			18,517
Reinsurance and other recoverables		2,343			9			681			3,033
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	15,437		$	2,061		$	4,052		$	21,550
Earned premiums	$	6,127		$	3,747
Loss and loss expense paid ratio [1]		62.9			79.9
Loss and loss expense incurred ratio		74.8			77.0
Prior accident years development (pts) [2]		2.0			(2.0	)

[1]	The “loss and loss expense paid ratio” represents the ratio of paid losses and loss adjustment expenses to earned premiums.
[2]	“Prior accident years development (pts)” represents the ratio of prior accident years development to earned premiums.

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Prior accident years development recorded in 2011

Included within prior accident years development for the year ended December 31, 2011 were the following loss and loss adjustment expense reserve strengthenings (releases):

For the year ended December 31, 2011
							Property &
							Casualty
	Property & Casualty			Consumer			Other			Total Property and
	Commercial			Markets			Operations			Casualty Insurance
Auto liability	$	(4	)	$	(93	)	$	—		$	(97	)
Homeowners		—			(1	)		—			(1	)
Professional liability		29			—			—			29
Package business		(76	)		—			—			(76	)
Workers’ compensation		171			—			—			171
General liability		(40	)		—			—			(40	)
Fidelity and surety		(7	)		—			—			(7	)
Commercial property		(4	)		—			—			(4	)
Net asbestos reserves		—			—			294			294
Net environmental reserves		—			—			26			26
Change in workers’ compensation discount, including accretion		38			—			—			38
Catastrophes		12			25			—			37
Other reserve re-estimates, net		6			(6	)		(3	)		(3	)
Total prior accident years development	$	125		$	(75	)	$	317		$	367

During 2011, the Company’s re-estimates of prior accident years reserves included the following significant reserve changes:

• Released reserves for personal auto liability claims, primarily for accident years 2006 through 2010. Favorable trends in reported severity have persisted or improved over this time period. As these accident years develop, the uncertainty around the ultimate losses is reduced and management places more weight on the emerged experience.

• Strengthened reserves in professional liability for accident years 2007 through 2008, primarily in the directors and officers (“D&O”) line of business. Detailed reviews of claims involving the sub-prime mortgage market collapse, and shareholder class action lawsuits, resulted in a higher estimate of future claim costs for these exposures.

• Released reserves in package business liability coverages and general liability, in accident years 2005 through 2009. As these accident years developed, claim severity has emerged lower than expected.

• Strengthened reserves in workers’ compensation in accident years 2008 through 2010. Accident year 2010 loss costs trends were higher than expected as an increase in frequency outpaced a moderation of severity trends. Strengthening in accident years 2009 and 2008 was the result of higher than expected loss emergence for these years. Strengthening in more recent years is partially offset by releases in accident years 2007 and prior. Severity emergence in these older accident years continues to be favorable.

• Strengthened prior year catastrophe reserves, primarily related to a severe wind and hail storm in Arizona during the fourth quarter of 2010. Severity of property damage associated with this event increased more than expected.

• Refer to the Property & Casualty Other Operations Claims section for discussion concerning the Company’s annual evaluations of net environmental and net asbestos reserves, and related reinsurance.

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A roll-forward follows of property and casualty insurance product liabilities for unpaid losses and loss adjustment expenses for the year ended December 31, 2010:

For the year ended December 31, 2010
							Property &			Total
	Property &						Casualty			Property and
	Casualty			Consumer			Other			Casualty
	Commercial			Markets			Operations			Insurance
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	15,051		$	2,109		$	4,491		$	21,651
Reinsurance and other recoverables		2,570			11			860			3,441
Beginning liabilities for unpaid losses and loss adjustment expenses, net		12,481			2,098			3,631			18,210
Provision for unpaid losses and loss adjustment expenses
Current accident year before catastrophes		3,579			2,737			—			6,316
Current accident year catastrophes		152			300			—			452
Prior accident years		(361	)		(86	)		251			(196	)
Total provision for unpaid losses and loss adjustment expenses		3,370			2,951			251			6,572
Payments		(3,485	)		(2,889	)		(460	)		(6,834	)
Ending liabilities for unpaid losses and loss adjustment expenses, net		12,366			2,160			3,422			17,948
Reinsurance and other recoverables		2,361			17			699			3,077
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	14,727		$	2,177		$	4,121		$	21,025
Earned premiums	$	5,744		$	3,947
Loss and loss expense paid ratio [1]		60.7			73.2
Loss and loss expense incurred ratio		58.7			74.8
Prior accident years development (pts) [2]		(6.3	)		(2.2	)

[1]	The “loss and loss expense paid ratio” represents the ratio of paid losses and loss adjustment expenses to earned premiums.
[2]	“Prior accident years development (pts)” represents the ratio of prior accident years development to earned premiums.

Prior accident years development recorded in 2010

Included within prior accident years development for the year ended December 31, 2010 were the following loss and loss adjustment expense reserve strengthenings (releases):

For the year ended December 31, 2010
							Property &
							Casualty
	Property & Casualty			Consumer			Other			Total Property and
	Commercial			Markets			Operations			Casualty Insurance
Auto liability	$	(54	)	$	(115	)	$	—		$	(169	)
Professional liability		(88	)		—			—			(88	)
Workers’ compensation		(70	)		—			—			(70	)
General liability		(108	)		—			—			(108	)
Package business		(19	)		—			—			(19	)
Commercial property		(16	)		—			—			(16	)
Fidelity and surety		(5	)		—			—			(5	)
Homeowners		—			23			—			23
Net environmental reserves		—			—			67			67
Net asbestos reserves		—			—			189			189
All other non-A&E		—			—			11			11
Uncollectible reinsurance		(30	)		—			—			(30	)
Change in workers’ compensation discount, including accretion		26			—			—			26
Catastrophes		1			10			—			11
Other reserve re-estimates, net		2			(4	)		(16	)		(18	)
Total prior accident years development	$	(361	)	$	(86	)	$	251		$	(196	)

During 2010, the Company’s re-estimates of prior accident years reserves included the following significant reserve changes:

• Released reserves for commercial auto liability claims as the Company lowered its reserve estimate to recognize a lower severity trend during 2009 that continued into 2010 on larger claims in accident years 2002 to 2009. In addition, reserves were released for personal auto liability claims for accident years 2004 to 2009, as favorable trends in reported severity have persisted, most notably for accident years 2008 and 2009. As these accident years develop, the uncertainty around the ultimate losses is reduced and management places more weight on the emerged experience.

• Released reserves for professional liability claims, primarily related to D&O claims in accident years 2004 to 2008. For these accident years, reported losses for claims under D&O policies have emerged favorably to initial expectations due to lower than expected claim severity.

• Released reserves for workers’ compensation business, primarily related to accident years 2006 and 2007. Management updated reviews of state reforms affecting these accident years and determined impacts to be more favorable than previously estimated.

47

• Released reserves for general liability claims, primarily related to accident years 2005 through 2008. The Company observed that claim emergence for these accident years continued to be lower than anticipated and believed this would continue, and therefore reduced its reserve estimate in response. Partially offsetting this release was strengthening on loss adjustment expense reserves during the second quarter of 2010 due to higher than expected allocated loss expenses for claims in accident years 2000 and prior.

• Released reserves for package business claims, primarily related to accident years 2005 through 2009. The Company observed that claim emergence within the liability portion of the package coverage for these accident years continued to be lower than anticipated and believed this lower level of claim activity would continue, and therefore reduced its reserve estimate in response.

• Strengthened reserves for homeowners’ claims, as the Company observed a lengthening of the claim reporting period for homeowners’ claims which resulted in increasing management’s estimate of the ultimate cost to settle these claims. The Company also began spending more on independent adjuster fees to better assess property damages.

• The Company reviewed its allowance for uncollectible reinsurance in the second quarter of 2010 and reduced its allowance, in part, by a reduction in gross ceded loss recoverables.

• Refer to the Property & Casualty Other Operations Claims section for discussion concerning the Company’s annual evaluations of net environmental and net asbestos reserves, and related reinsurance.

A roll-forward follows of property and casualty insurance product liabilities for unpaid losses and loss adjustment expenses for the year ended December 31, 2009:

For the year ended December 31, 2009
							Property &			Total
	Property &						Casualty			Property and
	Casualty			Consumer			Other			Casualty
	Commercial			Markets			Operations			Insurance
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	15,273		$	2,083		$	4,577		$	21,933
Reinsurance and other recoverables		2,742			46			798			3,586
Beginning liabilities for unpaid losses and loss adjustment expenses, net		12,531			2,037			3,779			18,347
Provision for unpaid losses and loss adjustment expenses
Current accident year before catastrophes		3,582			2,707			1			6,290
Current accident year catastrophes		78			228			—			306
Prior accident years		(394	)		(33	)		241			(186	)
Total provision for unpaid losses and loss adjustment expenses		3,266			2,902			242			6,410
Payments		(3,316	)		(2,841	)		(390	)		(6,547	)
Ending liabilities for unpaid losses and loss adjustment expenses, net		12,481			2,098			3,631			18,210
Reinsurance and other recoverables		2,570			11			860			3,441
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	15,051		$	2,109		$	4,491		$	21,651
Earned premiums	$	5,903		$	3,959
Loss and loss expense paid ratio [1]		56.2			71.8
Loss and loss expense incurred ratio		55.3			73.3
Prior accident years development (pts) [2]		(6.7	)		(0.8	)

[1]	The “loss and loss expense paid ratio” represents the ratio of paid losses and loss adjustment expenses to earned premiums.
[2]	“Prior accident years development (pts)” represents the ratio of prior accident years development to earned premiums.

48

Prior accident years development recorded in 2009

Included within prior accident years development for the year ended December 31, 2009 were the following loss and loss adjustment expense reserve strengthenings (releases):

For the year ended December 31, 2009
							Property &
							Casualty
	Property & Casualty			Consumer			Other			Total Property and
	Commercial			Markets			Operations			Casualty Insurance
Auto liability	$	(47	)	$	(77	)	$	—		$	(124	)
Professional liability		(127	)		—			—			(127	)
General liability, umbrella and high hazard liability		(112	)		—			—			(112	)
Workers’ compensation		(92	)		—			—			(92	)
Package business		38			—			—			38
Fidelity and surety		28			—			—			28
Homeowners		—			18			—			18
Net environmental reserves		—			—			75			75
Net asbestos reserves		—			—			138			138
All other non-A&E		—			—			35			35
Uncollectible reinsurance		(20	)		—			(20	)		(40	)
Change in workers’ compensation discount, including accretion		24			—			—			24
Catastrophes		(23	)		—			—			(23	)
Other reserve re-estimates, net		(63	)		26			13			(24	)
Total prior accident years development	$	(394	)	$	(33	)	$	241		$	(186	)

During 2009, the Company’s re-estimates of prior accident years reserves included the following significant reserve changes:

• Released reserves for personal auto liability claims, for accident years 2005 to 2007, as the Company recognized that favorable development in reported severity, first observed in early 2008, which was attributed, in part, to changes made in claim handling procedures in 2007, was a sustained trend for those accident years. In the third and fourth quarters of 2009, management also recognized sustained favorable development trends in AARP for accident years 2006 to 2008 and released reserves for those accident years.

• Released reserves for commercial auto liability claims, primarily related to accident years 2003 to 2008. In the fourth quarter of 2009, the Company recognized that the full value of large auto liability claims was being recognized as case reserves at an earlier age. The increased adequacy of case reserves caused the Company to decrease its estimate of reserves for IBNR loss and loss adjustment expenses.

• The Company released reserves for D&O and errors and omissions (“E&O”) claims in 2009 related to the 2003 to 2008 accident years. For these accident years, reported losses for claims under D&O and E&O policies had been emerging favorably to initial expectations due to lower than expected claim severity.

• Released reserves for general liability claims, primarily related to accident years 2003 to 2007. Beginning in the third quarter of 2007, the Company observed that reported losses for high hazard and umbrella general liability claims, primarily related to the 2001 to 2006 accident years, were emerging favorably and this caused management to reduce its estimate of the cost of future reported claims for these accident years, resulting in reserve releases from the third quarter of 2007 through 2009. During 2009, management determined that the lower level of loss emergence was also evident in accident year 2007 and had continued for accident years 2003 to 2006 and, as a result, the Company reduced the reserves. Largely offsetting the releases, the Company recognized that the cost of late emerging exposures were likely to be higher than previously expected, and also recognized additional ceded losses on accident years 1999 and prior.

• Released workers’ compensation reserves, primarily related to additional ceded losses on accident years 1999 and prior and lower allocated loss adjustment expense reserves in accident years 2003 to 2007. During the first quarter of 2009, the Company observed lower than expected allocated loss adjustment expense payments on older accident years. As a result, the Company reduced its estimate for future expense payments on more recent accident years.

• Strengthened reserves for liability claims under package business, primarily related to allocated loss adjustment expenses for accident years 2000 to 2005 and 2007 and 2008. During the first quarter of 2009, the Company identified higher than expected expense payments on older accident years related to the liability coverage. Additional analysis in the second quarter of 2009 showed that this higher level of loss adjustment expense was likely to continue into more recent accident years. As a result, in the second quarter of 2009, the Company increased its estimates for future expense payments for the 2007 and 2008 accident years. Largely offsetting the strengthenings, the Company recognized the cost of late emerging exposures were likely to be higher than previously expected, and also recognized a lower than expected frequency of high severity claims.

49

• Strengthened reserves for surety business, primarily related to accident years 2004 to 2007. The net strengthening consisted of $55 strengthening of reserves for customs bonds, partially offset by a $27 release of reserves for contract surety claims. During 2008, the Company became aware that there were a large number of late reported surety claims related to customs bonds. Continued high volume of late reported claims during 2009 caused the Company to strengthen the reserves. Because the pattern of claim reporting for customs bonds has not been similar to the reporting pattern of other surety bonds, future claim activity is difficult to predict. It is possible that as additional claim activity emerges, our estimate of both the number of future claims and the cost of those claims could change substantially.

• Strengthened reserves for homeowners’ claims. In 2008, the Company began to observe increasing claim settlement costs for the 2005 to 2008 accident years and, in the first quarter of 2009, determined that this higher cost level would continue, resulting in reserve strengthening for these accident years. In addition, beginning in 2008, the Company observed unfavorable emergence of homeowners’ casualty claims for accident years 2003 and prior, primarily related to underground storage tanks. Following a detailed review of these claims in the first quarter of 2009, management increased its estimate of the magnitude of this exposure and strengthened homeowners’ casualty claim reserves.

• The Company reviewed its allowance for uncollectible reinsurance in the second quarter of 2009 and reduced its allowance driven, in part, by a reduction in gross ceded loss recoverables.

• Refer to the Property & Casualty Other Operations Claims section for discussion concerning the Company’s annual evaluations of net environmental and net asbestos reserves, and related reinsurance.

50

Property & Casualty Other Operations Claims

Reserve Activity

Reserves and reserve activity in Property & Casualty Other Operations are categorized and reported as asbestos, environmental, or “all other”. The “all other” category of reserves covers a wide range of insurance and assumed reinsurance coverages, including, but not limited to, potential liability for construction defects, lead paint, silica, pharmaceutical products, molestation and other long-tail liabilities.

The following table presents reserve activity, inclusive of estimates for both reported and incurred but not reported claims, net of reinsurance, for Property & Casualty Other Operations, categorized by asbestos, environmental and all other claims, for the years ended December 31, 2011, 2010 and 2009.

Property & Casualty Other Operations Losses and Loss Adjustment Expenses

	Asbestos			Environmental			All Other [1]			Total
2011
Beginning liability — net [2] [3]	$	1,787		$	334		$	1,302		$	3,423
Losses and loss adjustment expenses incurred		294			26			(3	)		317
Losses and loss adjustment expenses paid		(189	)		(40	)		(140	)		(369	)
Ending liability — net [2] [3]	$	1,892	[4]	$	320		$	1,159		$	3,371
2010
Beginning liability — net [2] [3]	$	1,892		$	307		$	1,432		$	3,631
Losses and loss adjustment expenses incurred		189			67			(5	)		251
Losses and loss adjustment expenses paid		(294	)		(40	)		(125	)		(459	)
Ending liability — net [2] [3]	$	1,787		$	334		$	1,302		$	3,423
2009
Beginning liability — net [2] [3]	$	1,884		$	269		$	1,628		$	3,781
Losses and loss adjustment expenses incurred		138			75			29			242
Losses and loss adjustment expenses paid		(181	)		(40	)		(171	)		(392	)
Reclassification of asbestos and environmental liabilities		51			3			(54	)		—
Ending liability — net [2] [3]	$	1,892		$	307		$	1,432		$	3,631

[1]	“All Other” includes unallocated loss adjustment expense reserves. “All Other” also includes The Company’s allowance for uncollectible reinsurance. When the Company commutes a ceded reinsurance contract or settles a ceded reinsurance dispute, the portion of the allowance for uncollectible reinsurance attributable to that commutation or settlement, if any, is reclassified to the appropriate cause of loss.
[2]	Excludes amounts reported in Property & Casualty Commercial and Consumer Markets reporting segments (collectively “Ongoing Operations”) for asbestos and environmental net liabilities of $15 and $8, respectively, as of December 31, 2011, $11 and $5, respectively, as of December 31, 2010, and $10 and $5, respectively, as of December 31, 2009; total net losses and loss adjustment expenses incurred for the years ended December 31, 2011, 2010 and 2009 of $27, $15 and $16, respectively, related to asbestos and environmental claims; and total net losses and loss adjustment expenses paid for the years ended December 31, 2011, 2010 and 2008 of $20, $14 and $19, respectively, related to asbestos and environmental claims.
[3]	Gross of reinsurance, asbestos and environmental reserves, including liabilities in Property & Casualty Commercial and Commercial Markets, were $2,442 and $367, respectively, as of December 31, 2011; $2,308 and $378, respectively, as of December 31, 2010; and $2,484 and $367, respectively, as of December 31, 2009.
[4]	The one year and average three year net paid amounts for asbestos claims, including Ongoing Operations, were $198 and $230, respectively, resulting in a one year net survival ratio of 9.6 and a three year net survival ratio of 8.3. Net survival ratio is the quotient of the net carried reserves divided by the average annual payment amount and is an indication of the number of years that the net carried reserve would last (i.e. survive) if the future annual claim payments were consistent with the calculated historical average.

For paid and incurred losses and loss adjustment expenses reporting, the Company classifies its asbestos and environmental reserves into three categories: Direct, Assumed Reinsurance and London Market. Direct insurance includes primary and excess coverage. Assumed reinsurance includes both “treaty” reinsurance (covering broad categories of claims or blocks of business) and “facultative” reinsurance (covering specific risks or individual policies of primary or excess insurance companies). London Market business includes the business written by one or more of the Company’s subsidiaries in the United Kingdom, which are no longer active in the insurance or reinsurance business. Such business includes both direct insurance and assumed reinsurance.

Of the three categories of claims (Direct, Assumed Reinsurance and London Market), direct policies tend to have the greatest factual development from which to estimate the Company’s exposures.

Assumed reinsurance exposures are inherently less predictable than direct insurance exposures because the Company may not receive notice of a reinsurance claim until the underlying direct insurance claim is mature. This causes a delay in the receipt of information at the reinsurer level and adds to the uncertainty of estimating related reserves.

London Market exposures are the most uncertain of the three categories of claims. As a participant in the London Market (comprised of both Lloyd’s of London and London Market companies), certain subsidiaries of the Company wrote business on a subscription basis, with those subsidiaries’ involvement being limited to a relatively small percentage of a total contract placement. Claims are reported, via a broker, to the “lead” underwriter and, once agreed to, are presented to the following markets for concurrence. This reporting and claim agreement process makes estimating liabilities for this business the most uncertain of the three categories of claims.

51

The following table sets forth, for the years ended December 31, 2011, 2010 and 2009, paid and incurred loss activity by the three categories of claims for asbestos and environmental.

Paid and Incurred Losses and Loss Adjustment Expenses (“LAE”) Development — Asbestos and Environmental

	Asbestos [1]						Environmental [1]
	Paid			Incurred			Paid			Incurred
	Losses & LAE			Losses & LAE			Losses & LAE			Losses & LAE
2011
Gross
Direct	$	170		$	350		$	32		$	25
Assumed Reinsurance		55			12			8			—
London Market		23			16			6			4
Total		248			378			46			29
Ceded		(59	)		(84	)		(6	)		(3	)
Net	$	189		$	294		$	40		$	26
2010
Gross
Direct	$	201		$	209		$	35		$	50
Assumed Reinsurance		128			—			12			5
London Market		42			(15	)		7			10
Total		371			194			54			65
Ceded		(77	)		(5	)		(14	)		2
Net	$	294		$	189		$	40		$	67
2009
Gross
Direct	$	160		$	117		$	29		$	92
Assumed — Domestic		56			52			7			—
London Market		18			—			10			12
Total		234			169			46			104
Ceded		(53	)		(31	)		(6	)		(29	)
Net prior to reclassification	$	181		$	138		$	40		$	75
Reclassification of asbestos and environmental liabilities [2]		—			51			—			3
Net	$	181		$	189		$	40		$	78

[1]

Excludes asbestos and environmental paid and incurred loss and LAE reported in Ongoing Operations. Total gross losses and LAE incurred in Ongoing Operations for the years ended December 31, 2011, 2010 and 2009 includes $30, $15 and $17, respectively, related to asbestos and environmental claims. Total gross losses and LAE paid in Ongoing Operations for the years ended December 31, 2011, 2010 and 2009 includes $22, $14 and $20, respectively, related to asbestos and environmental claims.

[2]

During the three months ended June 30, 2009, the Company reclassified liabilities of $54 that were previously classified as “All Other” to “Asbestos” and “Environmental”.

In the fourth quarters of 2011, 2010 and 2009, the Company completed evaluations of certain of its non-asbestos and environmental reserves, including its assumed reinsurance liabilities. In 2011, the Company recognized no prior year development. In 2010, the Company recognized unfavorable prior year development of $11. In 2009, the Company recognized unfavorable prior year development of $35, principally driven by higher projected unallocated loss adjustment expenses.

During the third quarters of 2011, 2010 and 2009, the Company completed its annual ground up environmental reserve evaluations. In each of these evaluations, the Company reviewed all of its open direct domestic insurance accounts exposed to environmental liability as well as assumed reinsurance accounts and its London Market exposures for both direct and assumed reinsurance. During the third quarters of 2011 and 2010, the Company found estimates for some individual account exposures increased based upon unfavorable litigation results and increased clean-up or expense costs, with the vast majority of this deterioration emanating from a limited number of insureds. In 2009, the Company found estimates for some individual accounts increased based upon additional sites identified, litigation developments and new damage and defense cost information obtained on these accounts since the last review. The net effect of these account-specific changes as well as actuarial evaluations of new account emergence and historical loss and expense paid experience resulted in $19, $62 and $75 increases in net environmental liabilities in 2011, 2010 and 2009, respectively. The Company currently expects to continue to perform an evaluation of its environmental liabilities annually.

52

In reporting environmental results, the Company classifies its gross exposure into Direct, Assumed Reinsurance, and London Market. The following table displays gross environmental reserves and other statistics by category as of December 31, 2011.

Summary of Environmental Reserves
As of December 31, 2011

	Total Reserves
Gross [1] [2]
Direct	$	271
Assumed Reinsurance		39
London Market		57
Total		367
Ceded		(47	)
Net	$	320

[1]	The one year gross paid amount for total environmental claims is $58, resulting in a one year gross survival ratio of 6.4.
[2]	The three year average gross paid amount for total environmental claims is $58, resulting in a three year gross survival ratio of 6.4.

During the second quarters of 2011, 2010 and 2009, the Company completed its annual ground-up asbestos reserve evaluations. As part of these evaluations, the Company reviewed all of its open direct domestic insurance accounts exposed to asbestos liability, as well as assumed reinsurance accounts and its London Market exposures for both direct insurance and assumed reinsurance. Based on this evaluation, the Company strengthened its net asbestos reserves by $290 in second quarter 2011. During 2011, for certain direct policyholders, the Company experienced increases in claim frequency, severity and expense which were driven by mesothelioma claims, particularly against certain smaller, more peripheral insureds. The Company also experienced unfavorable development on its assumed reinsurance accounts driven largely by the same factors experienced by the direct policyholders. During 2010 and 2009, for certain direct policyholders, the Company experienced increases in claim severity and expense. Increases in severity and expense were driven by litigation in certain jurisdictions and, to a lesser extent, development on primarily peripheral accounts. The Company also experienced unfavorable development on its assumed reinsurance accounts driven largely by the same factors experienced by the direct policyholders. The net effect of these changes in 2010 and 2009 resulted in $169 and $138 increases in net asbestos reserves, respectively. The Company currently expects to continue to perform an evaluation of its asbestos liabilities annually.

The Company divides its gross asbestos exposures into Direct, Assumed Reinsurance and London Market. The Company further divides its direct asbestos exposures into the following categories: Major Asbestos Defendants (the “Top 70” accounts in Tillinghast’s published Tiers 1 and 2 and Wellington accounts), which are subdivided further as: Structured Settlements, Wellington, Other Major Asbestos Defendants, Accounts with Future Expected Exposures greater than $2.5, Accounts with Future Expected Exposures less than $2.5, and Unallocated.

• Structured Settlements are those accounts where the Company has reached an agreement with the insured as to the amount and timing of the claim payments to be made to the insured.

• The Wellington subcategory includes insureds that entered into the “Wellington Agreement” dated June 19, 1985. The Wellington Agreement provided terms and conditions for how the signatory asbestos producers would access their coverage from the signatory insurers.

• The Other Major Asbestos Defendants subcategory represents insureds included in Tiers 1 and 2, as defined by Tillinghast that are not Wellington signatories and have not entered into structured settlements with The Hartford. The Tier 1 and 2 classifications are meant to capture the insureds for which there is expected to be significant exposure to asbestos claims.

• Accounts with future expected exposures greater or less than $2.5 include accounts that are not major asbestos defendants.

• The Unallocated category includes an estimate of the reserves necessary for asbestos claims related to direct insureds that have not previously tendered asbestos claims to the Company and exposures related to liability claims that may not be subject to an aggregate limit under the applicable policies.

An account may move between categories from one evaluation to the next. For example, an account with future expected exposure of greater than $2.5 in one evaluation may be reevaluated due to changing conditions and recategorized as less than $2.5 in a subsequent evaluation or vice versa.

53

The following table displays gross asbestos reserves and other statistics by policyholder category as of December 31, 2011.

Summary of Gross Asbestos Reserves
As of December 31, 2011

	Number of		All Time			Total			All Time
	Accounts [2]		Paid [3]		Reserves				Ultimate [3]
Gross Asbestos Reserves as of June 30, 2011 [1]
Major asbestos defendants [5]
Structured settlements (includes 4 Wellington accounts) [6]		8	$	331		$	438		$	769
Wellington (direct only)		29		908			43			951
Other major asbestos defendants		28		527			28			555
No known policies (includes 3 Wellington accounts)		5		—			—			—
Accounts with future exposure > $2.5		85		929			702			1,631
Accounts with future exposure < $2.5		1,075		342			122			464
Unallocated [7]				1,895			563			2,458
Total Direct				4,932			1,896			6,828
Assumed Reinsurance				1,302			379			1,681
London Market				646			283			929
Total as of June 30, 2011 [1]				6,880			2,558			9,438
Gross paid loss activity for the third quarter and fourth quarter 2011				127			(127	)		—
Gross incurred loss activity for the third quarter and fourth quarter 2011				—			11			11
Total as of December 31, 2011 [4]			$	7,007		$	2,442		$	9,449

[1]	Gross Asbestos Reserves based on the second quarter 2011 asbestos reserve study.
[2]	An account may move between categories from one evaluation to the next. Reclassifications were made as a result of the reserve evaluation completed in the second quarter of 2011.
[3]	“All Time Paid” represents the total payments with respect to the indicated claim type that have already been made by the Company as of the indicated balance sheet date. “All Time Ultimate” represents the Company’s estimate, as of the indicated balance sheet date, of the total payments that are ultimately expected to be made to fully settle the indicated payment type. The amount is the sum of the amounts already paid (e.g. “All Time Paid”) and the estimated future payments (e.g. the amount shown in the column labeled “Total Reserves”).
[4]	Survival ratio is a commonly used industry ratio for comparing reserve levels between companies. While the method is commonly used, it is not a predictive technique. Survival ratios may vary over time for numerous reasons such as large payments due to the final resolution of certain asbestos liabilities, or reserve re-estimates. The survival ratio is computed by dividing the recorded reserves by the average of the past three years of payments. The ratio is the calculated number of years the recorded reserves would survive if future annual payments were equal to the average annual payments for the past three years. The 3-year gross survival ratio of 8.3 as of December 31, 2011 is computed based on total paid losses of $881 for the period from January 1, 2009 to December 31, 2011. As of December 31, 2011, the one year gross paid amount for total asbestos claims is $258 resulting in a one year gross survival ratio of 9.5.
[5]	Includes 24 open accounts at June 30, 2011. Included 25 open accounts at June 30, 2010.
[6]	Structured settlements include the Company’s reserves related to PPG Industries, Inc. (“PPG”). In January 2009, the Company, along with approximately three dozen other insurers, entered into a modified agreement in principle with PPG to resolve the Company’s coverage obligations for all of its PPG asbestos liabilities, including principally those arising out of its 50% stock ownership of Pittsburgh Corning Corporation (“PCC”), a joint venture with Corning, Inc. The agreement is contingent on the fulfillment of certain conditions, including the confirmation of a PCC plan of reorganization under Section 524(g) of the Bankruptcy Code, which have not yet been met.
[7]	Includes closed accounts (exclusive of Major Asbestos Defendants) and unallocated IBNR.

The Company provides an allowance for uncollectible reinsurance, reflecting management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay. During the second quarters of 2011, 2010 and 2009, the Company completed its annual evaluations of the collectability of the reinsurance recoverables and the adequacy of the allowance for uncollectible reinsurance associated with older, long-term casualty liabilities reported in the Property & Casualty Other Operations. In conducting this evaluation, the Company used its most recent detailed evaluations of ceded liabilities reported in the segment. The Company analyzed the overall credit quality of the Company’s reinsurers, recent trends in arbitration and litigation outcomes in disputes between cedants and reinsurers, and recent developments in commutation activity between reinsurers and cedants. The evaluation in the second quarters of 2010 and 2011 resulted in no adjustment to the allowance for uncollectible reinsurance. As of December 31, 2011 and 2010, the allowance for uncollectible reinsurance for Property & Casualty Other Operations totals $207. As a result of the second quarter of 2009 evaluation, the Company reduced its allowance for uncollectible reinsurance by $20 principally to reflect decreased reinsurance recoverable dispute exposure and favorable activity since the last evaluation. The Company currently expects to perform its regular comprehensive review of Property & Casualty Other Operations reinsurance recoverables annually. Due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables become due, particularly for older, long-term casualty liabilities, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required.

Consistent with the Company’s long-standing reserving practices, the Company will continue to review and monitor its reserves in the Property & Casualty Other Operations segment regularly and, where future developments indicate, make appropriate adjustments to the reserves. The company will complete both its annual ground-up asbestos and environmental reserve studies during the second quarter of 2012.

54

Impact of Re-estimates

The establishment of property and casualty insurance product reserves is an estimation process, using a variety of methods, assumptions and data elements. Ultimate losses may vary significantly from the current estimates. Many factors can contribute to these variations and the need to change the previous estimate of required reserve levels. Subsequent changes can generally be thought of as being the result of the emergence of additional facts that were not known or anticipated at the time of the prior reserve estimate and/or changes in interpretations of information and trends.

The table below shows the range of annual reserve re-estimates experienced by The Hartford over the past ten years. The amount of prior accident year development (as shown in the reserve rollforward) for a given calendar year is expressed as a percent of the beginning calendar year reserves, net of reinsurance. The percentage relationships presented are significantly influenced by the facts and circumstances of each particular year and by the fact that only the last ten years are included in the range. Accordingly, these percentages are not intended to be a prediction of the range of possible future variability. See “Impact of key assumptions on reserve volatility” within this section for further discussion of the potential for variability in recorded loss reserves.

					Property &
	Property & Casualty		Consumer		Casualty Other		Total Property and
	Commercial		Markets		Operations		Casualty Insurance
Range of prior accident year unfavorable (favorable) development for the ten years ended December 31, 2011 [1] [2]		(3.1) – 1.5		(5.2) – 5.1		3.0 – 67.5		(1.2) – 21.5

[1]	Excluding the reserve strengthening for asbestos and environmental reserves, over the past ten years reserve re-estimates for total property and casualty insurance ranged from (3.0)% to 1.6%.
[2]	Development for Corporate is included in Property & Casualty Commercial and Consumer Markets in 2007 and prior.

The potential variability of the Company’s property and casualty insurance product reserves would normally be expected to vary by segment and the types of loss exposures insured by those segments. Illustrative factors influencing the potential reserve variability for each of the segments are discussed above.

A table depicting the historical development of the liabilities for unpaid losses and loss adjustment expenses, net of reinsurance, follows.

Loss Development Table
Loss And Loss Adjustment Expense Liability Development — Net of Reinsurance
For the Years Ended December 31, [1]

	2001		2002		2003		2004		2005		2006		2007			2008			2009			2010		2011
Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance	$	12,860	$	13,141	$	16,218	$	16,191	$	16,863	$	17,604	$	18,231		$	18,347		$	18,210		$	17,948	$	18,517
Cumulative paid losses and loss expenses
One year later		3,339		3,480		4,415		3,594		3,702		3,727		3,703			3,771			3,882			4,037
Two years later		5,621		6,781		6,779		6,035		6,122		5,980		5,980			6,273			6,401
Three years later		8,324		8,591		8,686		7,825		7,755		7,544		7,752			8,074			—
Four years later		9,710		10,061		10,075		9,045		8,889		8,833		9,048			—			—
Five years later		10,871		11,181		11,063		9,928		9,903		9,778		—			—			—
Six years later		11,832		12,015		11,821		10,798		10,674		—		—			—			—
Seven years later		12,563		12,672		12,601		11,448		—		—		—			—			—
Eight years later		13,166		13,385		13,193		—		—		—		—			—			—
Nine years later		13,829		13,935		—		—		—		—		—			—			—
Ten years later		14,345		—		—		—		—		—		—			—			—
Liabilities re-estimated
One year later		13,153		15,965		16,632		16,439		17,159		17,652		18,005			18,161			18,014			18,315
Two years later		16,176		16,501		17,232		16,838		17,347		17,475		17,858			18,004			18,136
Three years later		16,768		17,338		17,739		17,240		17,318		17,441		17,700			18,139			—
Four years later		17,425		17,876		18,367		17,344		17,497		17,439		17,866			—			—
Five years later		17,927		18,630		18,554		17,570		17,613		17,676		—			—			—
Six years later		18,686		18,838		18,836		17,777		17,895		—		—			—			—
Seven years later		18,892		19,126		19,063		18,064		—		—		—			—			—
Eight years later		19,192		19,373		19,351		—		—		—		—			—			—
Nine years later		19,452		19,671		—		—		—		—		—			—			—
Ten years later		19,751		—		—		—		—		—		—			—			—
Deficiency (redundancy), net of reinsurance	$	6,891	$	6,530	$	3,133	$	1,873	$	1,032	$	72	$	(365	)	$	(208	)	$	(74	)	$	367

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The table above shows the cumulative deficiency (redundancy) of the Company’s reserves, net of reinsurance, as now estimated with the benefit of additional information. Those amounts are comprised of changes in estimates of gross losses and changes in estimates of related reinsurance recoveries.

The table below, for the periods presented, reconciles the net reserves to the gross reserves, as initially estimated and recorded, and as currently estimated and recorded, and computes the cumulative deficiency (redundancy) of the Company’s reserves before reinsurance.

Loss And Loss Adjustment Expense Liability Development — Gross
For the Years Ended December 31,

	2002		2003		2004		2005		2006			2007			2008			2009			2010		2011
Net reserve, as initially estimated	$	13,141	$	16,218	$	16,191	$	16,863	$	17,604		$	18,231		$	18,347		$	18,210		$	17,948	$	18,517
Reinsurance and other recoverables, as initially estimated		3,950		5,497		5,138		5,403		4,387			3,922			3,586			3,441			3,077		3,033
Gross reserve, as initially estimated	$	17,091	$	21,715	$	21,329	$	22,266	$	21,991		$	22,153		$	21,933		$	21,651		$	21,025	$	21,550
Net re-estimated reserve	$	19,671	$	19,351	$	18,064	$	17,895	$	17,676		$	17,866		$	18,139		$	18,136		$	18,315
Re-estimated and other reinsurance recoverables		5,693		5,592		5,469		5,792		4,193			3,910			3,585			3,064			2,799
Gross re-estimated reserve	$	25,364	$	24,943	$	23,533	$	23,687	$	21,869		$	21,776		$	21,724		$	21,200		$	21,114
Gross deficiency (redundancy)	$	8,273	$	3,228	$	2,204	$	1,421	$	(122	)	$	(377	)	$	(209	)	$	(451	)	$	89

The following table is derived from the Loss Development table and summarizes the effect of reserve re-estimates, net of reinsurance, on calendar year operations for the ten-year period ended December 31, 2011. The total of each column details the amount of reserve re-estimates made in the indicated calendar year and shows the accident years to which the re-estimates are applicable. The amounts in the total accident year column on the far right represent the cumulative reserve re-estimates during the ten year period ended December 31, 2011 for the indicated accident year(s).

Effect of Net Reserve Re-estimates on Calendar Year Operations

	Calendar Year
	2002		2003			2004			2005			2006			2007			2008			2009			2010			2011			Total
By Accident year
2001 & Prior	$	293	$	3,023		$	592		$	657		$	502		$	759		$	206		$	300		$	260		$	299		$	6,891
2002		—		(199	)		(56	)		180			36			(5	)		2			(12	)		(13	)		(1	)		(68	)
2003		—		—			(122	)		(237	)		(31	)		(126	)		(21	)		(6	)		(20	)		(10	)		(573	)
2004		—		—			—			(352	)		(108	)		(226	)		(83	)		(56	)		(20	)		(1	)		(846	)
2005		—		—			—			—			(103	)		(214	)		(133	)		(47	)		(91	)		(5	)		(593	)
2006		—		—			—			—			—			(140	)		(148	)		(213	)		(118	)		(45	)		(664	)
2007		—		—			—			—			—			—			(49	)		(113	)		(156	)		(71	)		(389	)
2008		—		—			—			—			—			—			—			(39	)		1			(31	)		(69	)
2009		—		—			—			—			—			—			—			—			(39	)		(13	)		(52	)
2010		—		—			—			—			—			—			—			—			—			245			245
Total	$	293	$	2,824		$	414		$	248		$	296		$	48		$	(226	)	$	(186	)	$	(196	)	$	367		$	3,882

During the 2007 calendar year, the Company refined its processes for allocating incurred but not reported (“IBNR”) reserves by accident year, resulting in a reclassification of $347 of IBNR reserves from the 2003 to 2006 accident years to the 2002 and prior accident years. This reclassification of reserves by accident year had no effect on total recorded reserves within any segment or on total recorded reserves for any line of business within a segment.

Reserve changes for accident years 2001 & Prior

The largest impacts of net reserve re-estimates are shown in the “2001 & Prior” accident years. The reserve deterioration is driven, in part, by deterioration of reserves for asbestos, environmental, assumed casualty reinsurance, workers’ compensation, and general liability claims. Numerous actuarial assumptions on assumed casualty reinsurance turned out to be low, including loss cost trends, particularly on excess of loss business, and the impact of deteriorating terms and conditions.

The reserve re-estimates in calendar year 2003 include an increase in reserves of $2.6 billion related to reserve strengthening based on the Company’s evaluation of its asbestos reserves. The reserve evaluation that led to the strengthening in calendar year 2003 confirmed the Company’s view of the existence of a substantial long-term deterioration in the asbestos litigation environment. The reserve re-estimates in calendar years 2004 through 2006 were largely attributable to reductions in the reinsurance recoverable asset associated with older, long-term casualty liabilities, and unexpected development on mature claims in both general liability and workers’ compensation.

The reserve re-estimates during calendar year 2008 are largely driven by increases in asbestos, environmental and general liability reserves. The reserve re-estimates in calendar years 2009, 2010 and 2011 are largely due to increases in asbestos and environmental reserves, resulting from the Company’s annual evaluations of these liabilities. These reserve evaluations reflect deterioration in the litigation environment surrounding asbestos and environmental liabilities during this period.

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Reserve changes for accident year 2002

Accident year 2002 is reasonably close to original estimates. However, it shows swings by calendar period, with some favorable development prior to calendar year 2005, largely offset by unfavorable development in calendar years 2005 through 2008. Reserve releases during calendar years 2003 and 2004 come largely from short-tail lines of business, where results emerge quickly and actual reported losses are predictive of ultimate losses. Reserve increases during calendar year 2005 were a result of unfavorable development on accident years prior to 2002 leading the Company to increase its estimate of unpaid losses for the 2002 accident year.

Reserve changes for accident years 2003 through 2007

Even after considering the 2007 calendar year reclassification of $347 IBNR reserves from accident years 2003 to 2006 to accident years 2002 and prior, accident years 2003 through 2007 show favorable development in calendar years 2004 through 2011. A portion of the release comes from short-tail lines of business, where results emerge quickly. During calendar year 2005 and 2006, favorable re-estimates occurred for both loss and allocated loss adjustment expenses. In addition, catastrophe reserves related to the 2004 and 2005 hurricanes developed favorably in 2006. During calendar years 2005 through 2008, the Company recognized favorable re-estimates of both loss and allocated loss adjustment expenses on workers’ compensation claims, driven, in part, by state regulatory reforms in California and Florida, underwriting actions, and expense reduction initiatives that had a greater impact in controlling costs than originally estimated. In 2007, the Company released reserves for package business claims as reported losses emerged favorably to previous expectations. In 2007 through 2009, the Company released reserves for general liability claims due to the favorable emergence of losses for high hazard and umbrella general liability claims. Reserves for professional liability claims were released in 2008 and 2009 related to the 2003 through 2007 accident years due to a lower estimate of claim severity on both directors’ and officers’ insurance claims and errors and omissions insurance claims. Reserves of auto liability claims, within Consumer Markets, were released in 2008 due largely to an improvement in emerged claim severity for the 2005 to 2007 accident years.

Reserve changes for accident years 2008 through 2009

Accident years 2008 through 2009 remain reasonably close to original estimates. Modest favorable reserve re-estimates during calendar periods 2009 through 2011 are primarily related to liability lines of business.

Reserve changes for accident year 2010

Unfavorable reserve re-estimates in calendar year 2011 are largely driven by workers’ compensation. Loss cost trends were higher than initially expected as an increase in frequency outpaced a moderation of severity trends.

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Estimated Gross Profits Used in the Valuation and Amortization of Assets and Liabilities Associated with Variable Annuity and Other Universal Life-Type Contracts

Estimated gross profits (“EGPs”) are used in the amortization of: the DAC asset, which includes the present value of future profits; sales inducement assets (“SIA”); and unearned revenue reserves (“URR”). See Note 7 of the Notes to Consolidated Financial Statements for additional information on DAC. See Note 10 of the Notes to Consolidated Financial Statements for additional information on SIA. Portions of EGPs are also used in the valuation of reserves for death and other insurance benefit features on variable annuity and universal life-type contracts. See Note 9 of the Notes to Consolidated Financial Statements for additional information on death and other insurance benefit reserves.

The most significant EGP based balances as of December 31, 2011 and 2010 are as follows:

	Individual Annuity				Individual Life				Retirement Plans				Life Other Operations
	2011		2010		2011		2010		2011		2010		2011		2010
DAC	$	2,815	$	3,251	$	2,755	$	2,633	$	813	$	820	$	1,256	$	1,652
SIA	$	291	$	329	$	47	$	45	$	22	$	23	$	54	$	41
URR	$	90	$	99	$	1,570	$	1,367	$	—	$	—	$	39	$	59
Death and Other Insurance Benefit Reserves	$	1,103	$	1,052	$	228	$	113	$	1	$	1	$	975	$	696

For most contracts, the Company estimates gross profits over 20 years as EGPs emerging subsequent to that timeframe are immaterial. Products sold in a particular year are aggregated into cohorts. Future gross profits for each cohort are projected over the estimated lives of the underlying contracts, based on future account value projections for variable annuity and variable universal life products. The projection of future account values requires the use of certain assumptions including: separate account returns; separate account fund mix; fees assessed against the contract holder’s account balance; surrender and lapse rates; interest margin; mortality; and the extent and duration of hedging activities and hedging costs. Changes in these assumptions and, in addition, changes to other policyholder behavior assumptions such as resets, partial surrenders, reaction to price increases, and asset allocations causes EGPs to fluctuate which impacts earnings.

The Company determines EGPs from a single deterministic reversion to mean (“RTM”) separate account return projection which is an estimation technique commonly used by insurance entities to project future separate account returns. Through this estimation technique, the Company’s DAC model is adjusted to reflect actual account values at the end of each quarter. Through consideration of recent market returns, the Company will unlock, or adjust, projected returns over a future period so that the account value returns to the long-term expected rate of return, providing that those projected returns do not exceed certain caps or floors. This Unlock for future separate account returns is determined each quarter. Under RTM, the expected long term weighted average rate of return is 8.3% and 5.9% for U.S. and Japan, respectively.

In the third quarter of each year, the Company completes a comprehensive non-market related policyholder behavior assumption study and incorporates the results of those studies into its projection of future gross profits. Additionally, throughout the year, the Company evaluates various aspects of policyholder behavior and periodically revises its policyholder assumptions as credible emerging data indicates that changes are warranted. Upon completion of the assumption study or evaluation of credible new information, the Company will revise its assumptions to reflect its current best estimate. These assumption revisions will change the projected account values and the related EGPs in the DAC, SIA and URR amortization models, as well as the death and other insurance benefit reserving model.

All assumption changes that affect the estimate of future EGPs including the update of current account values, the use of the RTM estimation technique and policyholder behavior assumptions are considered an Unlock in the period of revision. An Unlock adjusts DAC, SIA, URR and death and other insurance benefit reserve balances in the Consolidated Balance Sheets with an offsetting benefit or charge in the Consolidated Statements of Operations in the period of the revision. An Unlock that results in an after-tax benefit generally occurs as a result of actual experience or future expectations of product profitability being favorable compared to previous estimates. An Unlock that results in an after-tax charge generally occurs as a result of actual experience or future expectations of product profitability being unfavorable compared to previous estimates.

EGPs are also used to determine the expected excess benefits and assessments included in the measurement of death and other insurance benefit reserves. These excess benefits and assessments are derived from a range of stochastic scenarios that have been calibrated to the Company’s RTM separate account returns. The determination of death and other insurance benefit reserves is also impacted by discount rates, lapses, volatilities, mortality assumptions and benefit utilization, including assumptions around annuitization rates.

An Unlock revises EGPs, on a quarterly basis, to reflect market updates of policyholder account value and the Company’s current best estimate assumptions. Modifications to the Company’s hedging programs may impact EGPs, and correspondingly impact DAC recoverability. After each quarterly Unlock, the Company also tests the aggregate recoverability of DAC by comparing the DAC balance to the present value of future EGPs. The margin between the DAC balance and the present value of future EGPs for U.S. and Japan individual variable annuities was 23% and 40% as of December 31, 2011, respectively. If the margin between the DAC asset and the present value of future EGPs is exhausted, then further reductions in EGPs would cause portions of DAC to be unrecoverable and the DAC asset would be written down to equal future EGPs.

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Unlocks

The after-tax (charge) benefit to net income (loss) by asset and liability as a result of the Unlocks for 2011, 2010 and 2009, were:

For the year ended December 31, 2011:

						Death and Other
Segment						Insurance
After-tax (Charge) Benefit	DAC			URR		Benefit Reserves			SIA			Total
Individual Annuity	$	(162	)	$	6	$	—		$	(16	)	$	(172	)
Individual Life		(50	)		21		(40	)		—			(69	)
Retirement Plans		(44	)		—		—			(1	)		(45	)
Life Other Operations		(74	)		—		(173	)		3			(244	)
Total	$	(330	)	$	27	$	(213	)	$	(14	)	$	(530	)

The Unlock charge for the year ended December 31, 2011 was driven primarily by assumption changes which reduced expected future gross profits including additional costs associated with implementing the Japan hedging strategy and the U.S. variable annuity macro hedge program, as well as actual separate account returns below our aggregated estimated return.

For the year ended December 31, 2010:

						Death and Other
Segment						Insurance Benefit
After-tax (charge) benefit	DAC			URR		Reserves			SIA			Total
Individual Annuity	$	104		$	1	$	39		$	(1	)	$	143
Individual Life		23			5		1			(1	)		28
Retirement Plans		18			—		—			—			18
Life Other Operations		(62	)		6		(23	)		1			(78	)
Total	$	83		$	12	$	17		$	(1	)	$	111

The Unlock benefit for the year ended December 31, 2010 was driven primarily by actual separate account returns above our aggregated estimated return. Also included in the benefit are assumption changes related to benefits from withdrawals and lapses, offset by hedging, annuitization estimates on Japan products, and long-term expected rate of return updates.

For the year ended December 31, 2009:

						Death and
Segment						Other Insurance
After-tax (charge) benefit	DAC			URR		Benefit Reserves			SIA			Total [1]
Individual Annuity	$	(429	)	$	17	$	(158	)	$	(36	)	$	(606	)
Individual Life		(101	)		54		(4	)		—			(51	)
Retirement Plans		(55	)		—		—			(1	)		(56	)
Life Other Operations		(104	)		6		(210	)		(10	)		(318	)
Corporate		(3	)		—		—			—			(3	)
Total	$	(692	)	$	77	$	(372	)	$	(47	)	$	(1,034	)

[1] Includes $(49) related to DAC recoverability impairment associated with the decision to suspend sales in the U.K variable annuity business.

The Unlock charge for the year ended December 31, 2009 was driven primarily by actual separate account returns significantly below our aggregated estimated return for the first quarter of 2009, partially offset by actual returns being greater than our aggregated estimated return for the period from April 1, 2009 to December 31, 2009.

Evaluation of Other-Than-Temporary Impairments on Available-for-Sale Securities and Valuation Allowances on Mortgage Loans

The Company has a monitoring process overseen by a committee of investment and accounting professionals that identifies investments that are subject to an enhanced evaluation on a quarterly basis to determine if an other-than-temporary impairment (“impairment”) is present for AFS securities or a valuation allowance is required for mortgage loans. This evaluation is a quantitative and qualitative process, which is subject to risks and uncertainties. For further discussion of the accounting policies, see the Significant Investment Accounting Policies Section in Note 5 of the Notes to Consolidated Financial Statements. For a discussion of impairments recorded, see the Other-Than-Temporary Impairments within the Investment Portfolio Risks and Risk Management section of the MD&A.

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Living Benefits Required to be Fair Valued (in Other Policyholder Funds and Benefits Payable)

Fair values for GMWB and GMAB contracts are calculated using the income approach based upon internally developed models because active, observable markets do not exist for those items. The fair value of the Company’s guaranteed benefit liabilities, classified as embedded derivatives, and the related reinsurance and customized freestanding derivatives is calculated as an aggregation of the following components: Best Estimate Claims Payments; Credit Standing Adjustment; and Margins. The resulting aggregation is reconciled or calibrated, if necessary, to market information that is, or may be, available to the Company, but may not be observable by other market participants, including reinsurance discussions and transactions. The Company believes the aggregation of these components, as necessary and as reconciled or calibrated to the market information available to the Company, results in an amount that the Company would be required to transfer, or receive, for an asset, to or from market participants in an active liquid market, if one existed, for those market participants to assume the risks associated with the guaranteed minimum benefits and the related reinsurance and customized derivatives. The fair value is likely to materially diverge from the ultimate settlement of the liability as the Company believes settlement will be based on our best estimate assumptions rather than those best estimate assumptions plus risk margins. In the absence of any transfer of the guaranteed benefit liability to a third party, the release of risk margins is likely to be reflected as realized gains in future periods’ net income. For further discussion on the impact of fair value changes from living benefits see Note 4 of the Notes to Consolidated Financial Statements and for a discussion on the sensitivities of certain living benefits due to capital market factors see Variable Product Guarantee Risks and Risk Management.

Goodwill Impairment

Goodwill balances are reviewed for impairment at least annually or more frequently if events occur or circumstances change that would indicate that a triggering event for a potential impairment has occurred. During the fourth quarter of 2011, the Company changed the date of its annual impairment test for all reporting units to October 31^st from January 1^st for Wealth Management reporting units, June 30^th for Federal Trust Corporation within Corporate, and October 1^st for Property & Casualty Commercial and Consumer Markets. As a result, all reporting units performed an impairment test on October 31, 2011 in addition to the annual impairment tests performed on January 1^st or October 1^st as applicable. The change was made to be consistent across all reporting units and to more closely align the impairment testing date with the long-range planning and forecasting process. The Company has determined that this change in accounting principle is preferable under the circumstances and does not result in any delay, acceleration or avoidance of impairment. As it was impracticable to objectively determine projected cash flows and related valuation estimates as of each October 31 for periods prior to October 31, 2011, without applying information that has been learned since those periods, the Company has prospectively applied the change in the annual goodwill impairment testing date from October 31, 2011.

The goodwill impairment test follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit’s goodwill exceeds the implied goodwill value, an impairment loss is recognized in an amount equal to that excess.

Management’s determination of the fair value of each reporting unit incorporates multiple inputs into discounted cash flow calculations including assumptions that market participants would make in valuing the reporting unit. Assumptions include levels of economic capital, future business growth, earnings projections, and assets under management for certain Wealth Management reporting units and the weighted average cost of capital used for purposes of discounting. In the case of one business unit, a market comparison approach is used to determine fair value. Decreases in the amount of economic capital allocated to a reporting unit, decreases in business growth, decreases in earnings projections and increases in the weighted average cost of capital will all cause a reporting unit’s fair value to decrease.

A reporting unit is defined as an operating segment or one level below an operating segment. Most of the Company’s reporting units, for which goodwill has been allocated, are equivalent to the Company’s operating segments as there is no discrete financial information available for the separate components of the segment or all of the components of the segment have similar economic characteristics. In 2011 and 2010, The Hartford changed its reporting segments with no change to reporting units. The group disability and group life components of Group Benefits have been aggregated into one reporting unit; the homeowners and automobile components of Consumer Markets have been aggregated into one reporting unit; the variable life, universal life and term life components of Individual Life have been aggregated into one reporting unit; the 401(k), 457 and 403(b) components of Retirement Plans have been aggregated into one reporting unit; the retail mutual funds component of Mutual Funds has been aggregated into one reporting unit. In circumstances where the components of an operating segment constitute a business for which discrete financial information is available and segment management regularly reviews the operating results of that component such as Hartford Financial Products, the Company has classified those components as reporting units. Goodwill associated with the June 30, 2000 buyback of Hartford Life, Inc. was allocated to each of Hartford Life’s reporting units based on the reporting units’ fair value of in-force business at the time of the buyback. Although this goodwill was allocated to each reporting unit, it is held in Corporate for segment reporting.

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As of December 31, 2011, goodwill has been allocated to the following reporting units:

	Segment		Goodwill in
	Goodwill		Corporate		Total
Group Benefits	$	—	$	138	$	138
Consumer Markets		119		—		119
Individual Life		224		118		342
Retirement Plans		87		69		156
Mutual Funds		159		92		251
Total	$	589	$	417	$	1,006

As of December 31, 2010, goodwill has been allocated to the following reporting units:

	Segment		Goodwill in
	Goodwill		Corporate		Total
Hartford Financial Products within Property & Casualty Commercial	$	30	$	—	$	30
Group Benefits		—		138		138
Consumer Markets		119		—		119
Individual Life		224		118		342
Retirement Plans		87		69		156
Mutual Funds		159		92		251
Federal Trust Corporation within Corporate		—		15		15
Total	$	619	$	432	$	1,051

During the second quarter of 2011, the Company wrote off the remaining $15 of goodwill associated with the Federal Trust Corporation (“FTC”) reporting unit within Corporate due to the announced divestiture of FTC. The write-off of the FTC reporting unit goodwill was recorded as a loss on disposal within discontinued operations.

The Company completed its annual goodwill assessment for the reporting units within the Property & Casualty Commercial and Consumer Markets operating segments on October 1, 2011. The Consumer Markets reporting unit completed its annual goodwill assessment on October 1, 2011 and again on October 31, 2011 which resulted in no impairment of goodwill. In both tests, the reporting unit passed the first step of their annual impairment tests with a significant margin. The annual goodwill assessment for the Property & Casualty Commercial reporting unit that was performed on October 1, 2011 resulted in a write-down of goodwill of $30, pre-tax leaving no remaining goodwill. The results of the discounted cash flow calculations indicated that the fair value of the reporting unit was less than the carrying value; this was due primarily to a decrease in future expected underwriting cash flows. The decrease in future expected underwriting cash flows is driven by an expected reduction in written premium in the short term as the Company maintains pricing discipline in a downward market cycle, while retaining long term capabilities for future opportunities.

The Company completed its annual goodwill assessment for the individual reporting units within the Wealth Management operating segment and Corporate, except for the FTC reporting unit, as noted above, on January 1, 2011 and October 31, 2011, which resulted in no impairment of goodwill. In both tests, the reporting units passed the first step of their annual impairment tests with a significant margin with the exception of the Individual Life reporting unit at the January 1, 2011 test. The Individual Life reporting unit had a margin of less than 10% between fair value and book value on January 1, 2011. As of the October 31, 2011 impairment test, the Individual Life reporting unit had a fair value in excess of book value of approximately 15%, a modest improvement from the January 1, 2011 results due to improving cost of capital.

The fair value of the Individual Life reporting unit is based on discounted cash flows using earnings projections on in force business and future business growth. There could be a positive or negative impact on the result of step one in future periods if assumptions change about the level of economic capital, future business growth, earnings projections or the weighted average cost of capital.

See Note 8 of the Notes to Consolidated Financial Statements for information on the results of goodwill impairment tests performed in 2010 and 2009.

Valuation of Investments and Derivative Instruments

The fair value of AFS securities, fixed maturities, at fair value using the fair value option (“FVO”), equity securities, trading, and short-term investments in an active and orderly market (i.e., not distressed or forced liquidation) is determined by management after considering one of three primary sources of information: third-party pricing services, independent broker quotations or pricing matrices. Security pricing is applied using a “waterfall” approach whereby prices are first sought from third-party pricing services, the remaining unpriced securities are submitted to independent brokers for prices, or lastly, securities are priced using a pricing matrix. Typical inputs used by these pricing methods include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, and/or estimated cash flows, prepayments speeds and default rates. Based on the typical trading volumes and the lack of quoted market prices for fixed maturities, third-party pricing services will normally derive the security prices through recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information as outlined above. If there are no recent reported trades, the third party pricing services and brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. For further discussion, see the Available-for-Sale, Fixed Maturities, FVO, Equity Securities, Trading, and Short-Term Investments Section in Note 4 of the Notes to Consolidated Financial Statements.

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The Company has analyzed the third-party pricing services valuation methodologies and related inputs, and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. For further discussion of fair value measurement, see Note 4 of the Notes to Consolidated Financial Statements.

Valuation of Derivative Instruments, excluding embedded derivatives within liability contracts and reinsurance related derivatives

Derivative instruments are reported on the Consolidated Balance Sheets at fair value and are reported in Other Investments and Other Liabilities. The fair value of derivative instruments is determined using pricing valuation models, which utilize market data inputs or independent broker quotations. Excluding embedded and reinsurance related derivatives, as of December 31, 2011 and 2010, 98% and 97%, respectively, of derivatives based upon notional values, were priced by valuation models, which utilize independent market data. The remaining derivatives were priced by broker quotations. The derivatives are valued using mid-market level inputs that are predominantly observable in the market with the exception of the customized swap contracts that hedge guaranteed minimum withdrawal benefits (“GMWB”) liabilities. Inputs used to value derivatives include, but are not limited to, swap interest rates, foreign currency forward and spot rates, credit spreads and correlations, interest and equity volatility and equity index levels. For further discussion, see the Derivative Instruments, including embedded derivatives within the investments section in Note 4 of the Notes to Consolidated Financial Statements.

Pension and Other Postretirement Benefit Obligations

The Company maintains a U.S. qualified defined benefit pension plan (the “Plan”) that covers substantially all employees, as well as unfunded excess plans to provide benefits in excess of amounts permitted to be paid to participants of the Plan under the provisions of the Internal Revenue Code. The Company has also entered into individual retirement agreements with certain retired directors providing for unfunded supplemental pension benefits. In addition, the Company provides certain health care and life insurance benefits for eligible retired employees. The Company maintains international plans which represent an immaterial percentage of total pension assets, liabilities and expense and, for reporting purposes, are combined with domestic plans.

Pursuant to accounting principles related to the Company’s pension and other postretirement obligations to employees under its various benefit plans, the Company is required to make a significant number of assumptions in order to calculate the related liabilities and expenses each period. The two economic assumptions that have the most impact on pension and other postretirement expense are the discount rate and the expected long-term rate of return on plan assets. In determining the discount rate assumption, the Company utilizes a discounted cash flow analysis of the Company’s pension and other postretirement obligations and currently available market and industry data. The yield curve utilized in the cash flow analysis is comprised of bonds rated Aa or higher with maturities primarily between zero and thirty years. Based on all available information, it was determined that 4.75% and 4.50% were the appropriate discount rates as of December 31, 2011 to calculate the Company’s pension and other postretirement obligations, respectively. Accordingly, the 4.75% and 4.50% discount rates will also be used to determine the Company’s 2012 pension and other postretirement expense, respectively. At December 31, 2010, the discount rate was 5.50% and 5.25% for pension and other postretirement expense, respectively.

As of December 31, 2011, a 25 basis point increase/decrease in the discount rate would decrease/increase the pension and other postretirement obligations by $157 and $10, respectively.

The Company determines the expected long-term rate of return assumption based on an analysis of the Plan portfolio’s historical compound rates of return since 1979 (the earliest date for which comparable portfolio data is available) and over 5 year and 10 year periods. The Company selected these periods, as well as shorter durations, to assess the portfolio’s volatility, duration and total returns as they relate to pension obligation characteristics, which are influenced by the Company’s workforce demographics. In addition, the Company also applies long-term market return assumptions to an investment mix that generally anticipates 60% fixed income securities, 20% equity securities and 20% alternative assets to derive an expected long-term rate of return. Based upon these analyses, management maintained the long-term rate of return assumption at 7.30% as of December 31, 2011. This assumption will be used to determine the Company’s 2012 expense. The long-term rate of return assumption at December 31, 2010, that was used to determine the Company’s 2010 expense, was 7.30%.

Pension expense reflected in the Company’s results was $213, $186 and $137 in 2011, 2010 and 2009, respectively. The Company estimates its 2012 pension expense will be approximately $246, based on current assumptions. To illustrate the impact of these assumptions on annual pension expense for 2012 and going forward, a 25 basis point decrease in the discount rate will increase pension expense by approximately $18 and a 25 basis point change in the long-term asset return assumption will increase/decrease pension expense by approximately $11.

The Company uses a five-year averaging method to determine the market-related value of Plan assets, which is used to determine the expected return component of pension expense. Under this methodology, asset gains/losses that result from returns that differ from the Company’s long-term rate of return assumption are recognized in the market-related value of assets on a level basis over a five year period. The difference between actual asset returns for the plans of $613 and $434 for the years ended December 31, 2011 and 2010, respectively, as compared to expected returns of $298 and $286 for the years ended December 31, 2011 and 2010, respectively, will be fully reflected in the market-related value of plan assets over the next five years using the methodology described above. The level of actuarial net loss continues to exceed the allowable amortization corridor. Based on the 4.75% discount rate selected as of December 31, 2011 and taking into account estimated future minimum funding, the difference between actual and expected performance in 2011 will decrease annual pension expense in future years. The decrease in pension expense will be approximately $13 in 2012 and will increase ratably to a decrease of approximately $95 in 2017.

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Valuation Allowance on Deferred Tax Assets

Deferred tax assets represent the tax benefit of future deductible temporary differences and operating loss and tax credit carryforwards. Deferred tax assets are measured using the enacted tax rates expected to be in effect when such benefits are realized if there is no change in tax law. Under U.S. GAAP, we test the value of deferred tax assets for impairment on a quarterly basis at the entity level within each tax jurisdiction, consistent with our filed tax returns. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. The determination of the valuation allowance for our deferred tax assets requires management to make certain judgments and assumptions. In evaluating the ability to recover deferred tax assets, we have considered all available evidence as of December 31, 2011, including past operating results, the existence of cumulative losses in the most recent years, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. In the event we determine it is not more likely than not that we will be able to realize all or part of our deferred tax assets in the future, an increase to the valuation allowance would be charged to earnings in the period such determination is made. Likewise, if it is later determined that it is more likely than not that those deferred tax assets would be realized, the previously provided valuation allowance would be reversed. Our judgments and assumptions are subject to change given the inherent uncertainty in predicting future performance and specific industry and investment market conditions.

The Company has recorded a deferred tax asset valuation allowance that is adequate to reduce the total deferred tax asset to an amount that will be more likely than not realized. The deferred tax asset valuation allowance was $95, relating mostly to foreign net operating losses, as of December 31, 2011 and was $173 as of December 31, 2010. In assessing the need for a valuation allowance, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in open carry back years, as well as other tax planning strategies. These tax planning strategies include holding a portion of debt securities with market value losses until recovery, altering the level of tax exempt securities held, selling appreciated securities to offset capital losses, business considerations such as asset-liability matching, and the sales of certain corporate assets. Management views such tax planning strategies as prudent and feasible, and would implement them, if necessary, to realize the deferred tax asset. Based on the availability of additional tax planning strategies identified in the second quarter of 2011, the Company released $86, or 100% of the valuation allowance associated with investment realized capital losses. Future economic conditions and debt market volatility, including increases in interest rates, can adversely impact the Company’s tax planning strategies and in particular the Company’s ability to utilize tax benefits on previously recognized realized capital losses.

Contingencies Relating to Corporate Litigation and Regulatory Matters

Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable. Management establishes reserves for these contingencies at its “best estimate,” or, if no one number within the range of possible losses is more probable than any other, the Company records an estimated reserve at the low end of the range of losses.

The Company has a quarterly monitoring process involving legal and accounting professionals. Legal personnel first identify outstanding corporate litigation and regulatory matters posing a reasonable possibility of loss. These matters are then jointly reviewed by accounting and legal personnel to evaluate the facts and changes since the last review in order to determine if a provision for loss should be recorded or adjusted, the amount that should be recorded, and the appropriate disclosure. The outcomes of certain contingencies currently being evaluated by the Company, which relate to corporate litigation and regulatory matters, are inherently difficult to predict, and the reserves that have been established for the estimated settlement amounts are subject to significant changes. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to the consolidated financial condition of the Company. In view of the uncertainties regarding the outcome of these matters, as well as the tax-deductibility of payments, it is possible that the ultimate cost to the Company of these matters could exceed the reserve by an amount that would have a material adverse effect on the Company’s results of operations or liquidity in a particular quarterly or annual period.

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THE HARTFORD’S OPERATIONS OVERVIEW

The Hartford is a financial holding company for a group of subsidiaries that provide property and casualty and life insurance and investment products to both individual and business customers in the United States and continues to administer business previously sold in Japan and the U.K.

The Company conducts business in four divisions, Commercial Markets, Consumer Markets, Wealth Management and Runoff Operations, each containing reporting segments. The Commercial Markets division consists of the reporting segments of Property & Casualty Commercial and Group Benefits. The Consumer Markets division is also the reporting segment. The Wealth Management division consists of the following reporting segments: Individual Annuity, Individual Life, Retirement Plans and Mutual Funds. The Runoff division consists of Life Other Operations and Property & Casualty Other Operations. For additional discussion regarding The Hartford’s reporting segments, see Note 3 of the Notes to Consolidated Financial Statements.

The Company derives its revenues principally from: (a) premiums earned for insurance coverages provided to insureds; (b) fee income, including asset management fees, on separate account and mutual fund assets and mortality and expense fees, as well as cost of insurance charges; (c) net investment income; (d) fees earned for services provided to third parties; and (e) net realized capital gains and losses. Premiums charged for insurance coverages are earned principally on a pro rata basis over the terms of the related policies in-force. Asset management fees and mortality and expense fees are primarily generated from separate account assets, which are deposited through the sale of variable annuity and variable universal life products and from mutual funds. Cost of insurance charges are assessed on the net amount at risk for investment-oriented life insurance products. Service fees principally include revenues from member contact center services provided through the AARP Health program.

Profitability over time is greatly influenced by the Company’s underwriting discipline, which seeks to manage exposure to loss through favorable risk selection and diversification, its management of claims, its use of reinsurance, the size of its in force block, actual mortality and morbidity experience, and its ability to manage its expense ratio which it accomplishes through economies of scale and its management of acquisition costs and other underwriting expenses.

Pricing adequacy depends on a number of factors, including the ability to obtain regulatory approval for rate changes, proper evaluation of underwriting risks, the ability to project future loss cost frequency and severity based on historical loss experience adjusted for known trends, the Company’s response to rate actions taken by competitors, and expectations about regulatory and legal developments and expense levels. The Company seeks to price its insurance policies such that insurance premiums and future net investment income earned on premiums received will cover underwriting expenses and the ultimate cost of paying claims reported on the policies and provide for a profit margin. For many of its insurance products, the Company is required to obtain approval for its premium rates from state insurance departments.

The financial results in the Company’s variable annuity, mutual fund and, to a lesser extent, variable universal life businesses, depend largely on the amount of the contract holder account value or assets under management on which it earns fees and the level of fees charged. Changes in account value or assets under management are driven by two main factors: net flows, which measure the success of the Company’s asset gathering and retention efforts, and the market return of the funds, which is heavily influenced by the return realized in the equity markets. Net flows are comprised of new sales and other deposits less surrenders, death benefits, policy charges and annuitizations of investment type contracts, such as variable annuity contracts. In the mutual fund business, net flows are known as net sales. Net sales are comprised of new sales less redemptions by mutual fund customers. The Company uses the average daily value of the S&P 500 Index as an indicator for evaluating market returns of the underlying account portfolios in the United States. Relative financial results of variable products are highly correlated to the growth in account values or assets under management since these products generally earn fee income on a daily basis. Equity market movements could also result in benefits for or charges against deferred acquisition costs.

The profitability of fixed annuities and other “spread-based” products depends largely on the Company’s ability to earn target spreads between earned investment rates on its general account assets and interest credited to policyholders. In addition, the size and persistency of gross profits from these businesses is an important driver of earnings as it affects the rate of amortization of deferred policy acquisition costs.

The investment return, or yield, on invested assets is an important element of the Company’s earnings since insurance products are priced with the assumption that premiums received can be invested for a period of time before benefits, loss and loss adjustment expenses are paid. Due to the need to maintain sufficient liquidity to satisfy claim obligations, the majority of the Company’s invested assets have been held in available-for-sale securities, including, among other asset classes, corporate bonds, municipal bonds, government debt, short-term debt, mortgage-backed securities and asset-backed securities.

The primary investment objective for the Company is to maximize economic value, consistent with acceptable risk parameters, including the management of credit risk and interest rate sensitivity of invested assets, while generating sufficient after-tax income to meet policyholder and corporate obligations. Investment strategies are developed based on a variety of factors including business needs, regulatory requirements and tax considerations.

For a discussion on how The Hartford establishes property and casualty insurance product reserves, see “Property and Casualty Insurance Product Reserves, Net of Reinsurance” in the Critical Accounting Estimates section of MD&A and for further information on Unlocks, see “Estimated Gross Profits Used in the Valuation and Amortization of Assets and Liabilities Associated with Variable Annuity and Other Universal Life-Type Contracts” also in the Critical Accounting Estimates section of MD&A.

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Definitions of Non-GAAP and other measures and ratios

Account Value

Account value includes policyholders’ balances for investment contracts and reserves for future policy benefits for insurance contracts. Account value is a measure used by the Company because a significant portion of the Company’s fee income is based upon the level of account value. These revenues increase or decrease with a rise or fall in the amount of account value whether caused by changes in the market or through net flows.

After-tax Margin, Core Earnings excluding Unlock

After-tax margin, core earnings excluding Unlock, is a non-GAAP financial measure that the Company uses to evaluate, and believes is an important measure of, certain of the segment’s operating performance. After-tax margin is the most directly comparable U.S. GAAP measure. The Hartford believes that the measure after-tax margin, core earnings excluding Unlock, provides investors with a valuable measure of the performance of certain of the Company’s on-going businesses because it reveals trends in those businesses that may be obscured by the effect of realized gains (losses) and quarterly Unlocks. Unlocks occur when the Company determines based on actual experience or other evidence, that estimates of future gross profits should be revised. As the Unlock is a reflection of the Company’s new best estimates of future gross profits, the result of the Unlock and its impact distort the trend of after-tax margin. After-tax margin, excluding realized gains (losses) and Unlock, should not be considered as a substitute for After-tax margin and does not reflect the overall profitability of our businesses. Therefore, the Company believes it is important for investors to evaluate both after-tax margin, core earnings excluding Unlock, and after-tax margin when reviewing the Company’s performance. After-tax margin, core earnings excluding Unlock is calculated by dividing core earnings excluding Unlocks by total core revenues excluding Unlocks. A reconciliation of After-tax margin to After-tax margin, core earnings excluding Unlock for the year ended December 31, 2011, 2010 and 2009 is set forth in the After-tax Margin section within Key Performance Measures and Ratios. For additional information regarding the Unlock, see Critical Accounting Estimates within the MD&A.

Assets Under Management

Assets under management (“AUM”) include account values and mutual fund assets. AUM is a measure used by the Company because a significant portion of the Company’s revenues are based upon asset values. These revenues increase or decrease with a rise or fall in the amount of account value whether caused by changes in the market or through net flows.

Catastrophe ratio

The catastrophe ratio (a component of the loss and loss adjustment expense ratio) represents the ratio of catastrophe losses incurred in the current calendar year (net of reinsurance) to earned premiums and includes catastrophe losses incurred for both the current and prior accident years. A catastrophe is an event that causes $25 or more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers. The catastrophe ratio includes the effect of catastrophe losses, but does not include the effect of reinstatement premiums.

Combined ratio

The combined ratio is the sum of the loss and loss adjustment expense ratio, the expense ratio and the policyholder dividend ratio. This ratio is a relative measurement that describes the related cost of losses and expenses for every $100 of earned premiums. A combined ratio below 100.0 demonstrates underwriting profit; a combined ratio above 100.0 demonstrates underwriting losses.

Combined ratio before catastrophes and prior accident year development

The combined ratio before catastrophes and prior accident year development, a non-GAAP measure, represents the combined ratio for the current accident year, excluding the impact of catastrophes. Combined ratio is the most directly comparable U.S. GAAP measure. The Company believes this ratio is an important measure of the trend in profitability since it removes the impact of volatile and unpredictable catastrophe losses and prior accident year reserve development. A reconciliation of combined ratio to combined ratio before prior accident year reserve development for the years ended December 31, 2011, 2010 and 2009 is set forth in the Combined ratio before catastrophes and prior year development section within Key Performance Measures and Ratios.

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Core Earnings

Core earnings, a non-GAAP measure is an important measure of the Company’s operating performance. The Hartford believes that the measure core earnings provides investors with a valuable measure of the performance of the Company’s ongoing businesses because it reveals trends in our insurance and financial services businesses that may be obscured by including the net effect of certain realized capital gains and losses and discontinued operations. Some realized capital gains and losses are primarily driven by investment decisions and external economic developments, the nature and timing of which are unrelated to the insurance and underwriting aspects of our business. Accordingly, core earnings excludes the effect of all realized gains and losses (net of tax and the effects of deferred policy acquisition costs (“DAC”) that tend to be highly variable from period to period based on capital market conditions. The Hartford believes, however, that some realized capital gains and losses are integrally related to our insurance operations, so core earnings includes net realized gains and losses such as net periodic settlements on credit derivatives and net periodic settlements on the Japan fixed annuity cross-currency swap. These net realized gains and losses are directly related to an offsetting item included in the income statement such as net investment income. Core earnings is also used by management to assess our operating performance and is one of the measures considered in determining incentive compensation for the Company’s managers. Net income is the most directly comparable U.S. GAAP measure. Core earnings should not be considered as a substitute for net income and does not reflect the overall profitability of the Company’s business. Therefore, The Hartford believes that it is useful for investors to evaluate both net income and core earnings when reviewing the Company’s performance. A reconciliation of net income to core earnings for the years ended December 31, 2011, 2010 and 2009 is set forth below

	For the years ended December 31,
	2011			2010			2009
Core earnings	$	970		$	1,972		$	797
Less: Realized gains (losses) excluded from core earnings		(394	)		(228	)		(1,680	)
Less: Discontinued operations		86			(64	)		(4	)
Net income (loss)	$	662		$	1,680		$	(887	)

Current accident year loss and loss adjustment expense ratio before catastrophes

The current accident year loss and loss adjustment expense ratio before catastrophes is a measure of the cost of non-catastrophe claims incurred in the current accident year divided by earned premiums. Management believes that the current accident year loss and loss adjustment expense ratio before catastrophes is a performance measure that is useful to investors as it removes the impact of volatile and unpredictable catastrophe losses and prior accident year reserve development.

DAC amortization ratio, Core Earnings excluding Unlock

DAC amortization ratio, core earnings excluding Unlock, is a non-GAAP financial measure that the Company uses to evaluate, and believes is an important measure of, certain of the segment’s operating performance. DAC amortization ratio is the most directly comparable U.S. GAAP measure. The Hartford believes that the measure DAC amortization ratio, core earnings excluding Unlock, provides investors with a valuable measure of the performance of certain of the Company’s on-going businesses because it reveals trends in our businesses that may be obscured by the effect of realized gains (losses) or quarterly Unlocks. Unlocks occur when the Company determines, based on actual experience or other evidence, that estimates of future gross profits should be revised. The Unlock is a reflection of the Company’s new best estimates of future gross profits. The result of the Unlock and is impact distort the trend of DAC amortization ratio. DAC amortization ratio, core earnings excluding Unlock, should not be considered as a substitute for DAC amortization ratio and does not reflect the overall profitability of our businesses. Therefore, the Company believes it is important for investors to evaluate both DAC amortization ratio, core earnings excluding Unlock, and DAC amortization ratio when reviewing the Company’s performance. DAC amortization ratio, core earnings excluding Unlock is calculated by dividing Core DAC amortization costs by pre-tax core earnings before DAC amortization costs. A reconciliation of DAC amortization ratio to DAC amortization ratio, core earnings excluding Unlock for the years ended December 31, 2011, 2010 and 2009 is set forth in the Individual Annuity Operating Summary with MD&A. For additional information regarding the Unlock, see Critical Accounting Estimates within the MD&A.

Expense ratio

The expense ratio for the underwriting segments of Property & Casualty Commercial and Consumer Markets is the ratio of underwriting expenses, excluding bad debt expense, to earned premiums. Underwriting expenses include the amortization of deferred policy acquisition costs and insurance operating costs and expenses. Deferred policy acquisition costs include commissions, taxes, licenses and fees and other underwriting expenses and are amortized over the policy term.

The expense ratio for the remaining segments is expressed as a ratio of insurance operating costs and expenses to a revenue measure, depending on the type of business. This calculation excludes the amortization of deferred policy acquisition costs, which is calculated as a separate ratio, and is discussed below.

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Fee Income

Fee income is largely driven from amounts collected as a result of contractually defined percentages of assets under management. These fees are generally collected on a daily basis. For individual life insurance products, fees are contractually defined as percentages based on levels of insurance, age, premiums and deposits collected and contract holder value. Life insurance fees are generally collected on a monthly basis. Therefore, the growth in assets under management either through positive net flows or net sales, or favorable equity market performance will have a favorable impact on fee income. Conversely, either negative net flows or net sales, or unfavorable equity market performance will reduce fee income.

Loss and loss adjustment expense ratio

The loss and loss adjustment expense ratio is a measure of the cost of claims incurred in the calendar year divided by earned premium and includes losses incurred for both the current and prior accident years, as well as the costs of mortality and morbidity and other contractholder benefits to policyholders. Since Group Benefits occasionally buys a block of claims for a stated premium amount, the Company excludes this buyout from the loss ratio used for evaluating the underwriting results of the business as buyouts may distort the loss ratio. Among other factors, the loss and loss adjustment expense ratio needed for the Company to achieve its targeted return on equity fluctuates from year to year based on changes in the expected investment yield over the claim settlement period, the timing of expected claim settlements and the targeted returns set by management based on the competitive environment.

The loss and loss adjustment expense ratio is affected by claim frequency and claim severity, particularly for shorter-tail property lines of business, where the emergence of claim frequency and severity is credible and likely indicative of ultimate losses. Claim frequency represents the percentage change in the average number of reported claims per unit of exposure in the current accident year compared to that of the previous accident year. Claim severity represents the percentage change in the estimated average cost per claim in the current accident year compared to that of the previous accident year. As one of the factors used to determine pricing, the Company’s practice is to first make an overall assumption about claim frequency and severity for a given line of business and then, as part of the ratemaking process, adjust the assumption as appropriate for the particular state, product or coverage.

Loss ratio, excluding buyouts

The loss ratio is utilized for the Group Benefits segment and is expressed as a ratio of benefits, losses and loss adjustment expenses to premiums and other considerations, excluding buyout premiums. Buyout premiums represent takeover of open claim liabilities and other non-recurring premium amounts.

Mutual Fund Assets

Mutual fund assets include retail, investment-only and college savings plan assets under Section 529 of the Code, collectively referred to as non-proprietary, and proprietary mutual funds. Non-proprietary mutual fund assets are owned by the shareholders of those funds and not by the Company. Proprietary mutual funds include mutual funds sponsored by the Company which are owned by the separate accounts of the Company to support insurance and investment products sold by the Company. The non-proprietary mutual fund assets are not reflected in the Company’s consolidated financial statements. Mutual fund assets are a measure used by the Company because a significant portion of the Company’s revenues are based upon asset values. These revenues increase or decrease with a rise or fall in the amount of account value whether caused by changes in the market or through net flows.

Net Investment Spread

Management evaluates performance of certain products based on net investment spread. These products include those that have insignificant mortality risk, such as fixed annuities, certain general account universal life contracts and certain institutional contracts. Net investment spread is determined by taking the difference between the earned rate (excluding the effects of realized capital gains and losses, including those related to the Company’s GMWB product and related reinsurance and hedging programs) and the related crediting rates on average general account assets under management. The net investment spreads are for the total portfolio of relevant contracts in each segment and reflect business written at different times. When pricing products, the Company considers current investment yields and not the portfolio average. The determination of credited rates is based upon consideration of current market rates for similar products, portfolio yields and contractually guaranteed minimum credited rates. Net investment spread can be volatile period over period, which can have a significant positive or negative effect on the operating results of each segment. The volatile nature of net investment spread is driven primarily by earnings on limited partnership and other alternative investments and prepayment premiums on securities. Investment earnings can also be influenced by factors such as changes in interest rates, credit spreads and decisions to hold higher levels of short-term investments. Net investment spread is calculated by dividing net investment earnings by average reserves using a 13-point average, less interest credited divided by average account value using a 13-point average.

New business written premium

New business written premium represents the amount of premiums charged for policies issues to customers who were not insured with the Company in the previous policy term. New business written premium plus renewal policy written premium equals total written premium.

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Policies in force

Policies in force represent the number of policies with coverage in effect as of the end of the period. The number of policies in force is a growth measure used for Consumer Markets and standard commercial lines within Property & Casualty Commercial and is affected by both new business growth and premium renewal retention.

Policy count retention

Policy count retention represents the ratio of the number of policies renewed during the period divided by the number of policies from the previous policy term period. The number of policies available to renew from the previous policy term represents the number of policies written in the previous policy term net of any cancellations of those policies. Policy count retention is affected by a number of factors, including the percentage of renewal policy quotes accepted and decisions by the Company to non-renew policies because of specific policy underwriting concerns or because of a decision to reduce premium writings in certain classes of business or states. Policy count retention is also affected by advertising and rate actions taken by competitors.

Policyholder dividend ratio

The policyholder dividend ratio is the ratio of policyholder dividends to earned premium.

Prior accident year loss and loss adjustment expense ratio

The prior year loss and loss adjustment expense ratio represents the increase (decrease) in the estimated cost of settling catastrophe and non-catastrophe claims incurred in prior accident years as recorded in the current calendar year divided by earned premiums.

Reinstatement premiums

Reinstatement premium represents additional ceded premium paid for the reinstatement of the amount of reinsurance coverage that was reduced as a result of a reinsurance loss payment.

Renewal earned pricing increase (decrease)

Written premiums are earned over the policy term, which is six months for certain personal lines auto business and 12 months for substantially all of the remainder of the Company’s property and casualty business. Because the Company earns premiums over the 6 to 12 month term of the policies, renewal earned pricing increases (decreases) lag renewal written pricing increases (decreases) by 6 to 12 months.

Renewal written pricing increase (decrease)

Renewal written pricing increase (decrease) represents the combined effect of rate changes, amount of insurance and individual risk pricing decisions per unit of exposure since the prior year. The rate component represents the average change in rate filings during the period and the amount of insurance represents the value of the rating base, such as model year/vehicle symbol for auto, building replacement costs for property and wage inflation for workers’ compensation. The renewal written price increase (decrease) does not include other factors that affect average premium per unit of exposure such as changes in the mix of business by state, territory, class plan and tier of risk. A number of factors affect renewal written pricing increases (decreases) including expected loss costs as projected by the Company’s pricing actuaries, rate filings approved by state regulators, risk selection decisions made by the Company’s underwriters and marketplace competition. Renewal written pricing changes reflect the property and casualty insurance market cycle. Prices tend to increase for a particular line of business when insurance carriers have incurred significant losses in that line of business in the recent past or the industry as a whole commits less of its capital to writing exposures in that line of business. Prices tend to decrease when recent loss experience has been favorable or when competition among insurance carriers increases.

Return on Assets (“ROA”), Core Earnings excluding Unlock

ROA, core earnings excluding Unlock, is a non-GAAP financial measure that the Company uses to evaluate, and believes is an important measure of, certain of the segment’s operating performance. ROA is the most directly comparable U.S. GAAP measure. The Hartford believes that the measure ROA, core earnings excluding Unlock, provides investors with a valuable measure of the performance of certain of the Company’s on-going businesses because it reveals trends in our businesses that may be obscured by the effect of realized gains (losses) or quarterly Unlocks. Unlocks occur when the Company determines, based on actual experience or other evidence, that estimates of future gross profits should be revised. As the Unlock is a reflection of the Company’s new best estimates of future gross profits. The result and its impact distort the trend of ROA. ROA, core earnings excluding Unlock, should not be considered as a substitute for ROA and does not reflect the overall profitability of our businesses. Therefore, the Company believes it is important for investors to evaluate both ROA, core earnings excluding Unlock, and ROA when reviewing the Company’s performance. ROA is calculated by dividing core earnings excluding Unlocks by a two-point average AUM. A reconciliation of ROA to ROA, core earnings excluding Unlock for the years ended December 31, 2011, 2010 and 2009 is set forth in the ROA section within Key Performance Measures and Ratios.

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Underwriting results

Underwriting results is a before-tax measure that represents earned premiums less incurred losses, loss adjustment expenses, underwriting expenses and policyholder dividends. The Hartford believes that underwriting results provides investors with a valuable measure of before-tax profitability derived from underwriting activities, which are managed separately from the Company’s investing activities. The underwriting segments of Property & Casualty Commercial and Consumer Markets are evaluated by management primarily based upon underwriting results. A reconciliation of underwriting results to net income for Property & Casualty Commercial and Consumer Markets is set forth in their respective discussions herein.

Written and earned premiums

Written premium is a statutory accounting financial measure which represents the amount of premiums charged for policies issued, net of reinsurance, during a fiscal period. Earned premium is a U.S. GAAP and statutory measure. Premiums are considered earned and are included in the financial results on a pro rata basis over the policy period. Management believes that written premium is a performance measure that is useful to investors as it reflects current trends in the Company’s sale of property and casualty insurance products. Written and earned premium are recorded net of ceded reinsurance premium.

Traditional life insurance type products, such as those sold by Group Benefits, collect premiums from policyholders in exchange for financial protection for the policyholder from a specified insurable loss, such as death or disability. These premiums together with net investment income earned from the overall investment strategy are used to pay the contractual obligations under these insurance contracts. Two major factors, new sales and persistency, impact premium growth. Sales can increase or decrease in a given year based on a number of factors, including but not limited to, customer demand for the Company’s product offerings, pricing competition, distribution channels and the Company’s reputation and ratings. Persistency refers to the percentage of policies remaining in-force from year-to-year.

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KEY PERFORMANCE MEASURES AND RATIOS

The Hartford considers several measures and ratios to be the key performance indicators for its businesses. The following discussions include the more significant ratios and measures of profitability for the years ended December 31, 2011, 2010 and 2009. Management believes that these ratios and measures are useful in understanding the underlying trends in The Hartford’s businesses. However, these key performance indicators should only be used in conjunction with, and not in lieu of, the results presented in the segment discussions that follow in this MD&A. These ratios and measures may not be comparable to other performance measures used by the Company’s competitors.

Combined ratio before catastrophes and prior year development

Combined ratio before catastrophes and prior accident year development is a key indicator of overall profitability for the property and casualty underwriting segments of Property & Casualty Commercial and Consumer Markets since it removes the impact of volatile and unpredictable catastrophe losses and prior accident year reserve development.

	2011			2010			2009
Property & Casualty Commercial
Combined ratio		104.5			89.7			85.9
Catastrophe ratio		5.4			2.7			0.9
Non-catastrophe prior year development		1.8			(6.3	)		(6.3	)
Combined ratio before catastrophes and prior year development		97.2			93.4			91.2
Consumer Markets
Combined ratio		101.5			99.0			97.2
Catastrophe ratio		12.0			7.8			5.9
Non-catastrophe prior year development		(2.7	)		(2.4	)		(1.0	)
Combined ratio before catastrophes and prior year development		92.2			93.6			92.3

Year ended December 31, 2011 compared to the year ended December 31, 2010

• Property & Casualty Commercial’s combined ratio before catastrophes and prior year development deteriorated primarily due to an increase in current accident year losses and loss adjustment expenses ratio before catastrophes, largely due to loss costs outpacing earned pricing increases predominantly related to workers compensation business.

• Consumer Markets combined ratio before catastrophes and prior year development decreased primarily due to changes in the current accident year loss and loss adjustment expenses ratio before catastrophes, as a decrease for auto was partially offset by an increase for home. The decrease for auto was driven by the effect of earned pricing increases and lower estimated frequency on auto liability claims, which was partially offset by higher auto physical damage loss costs. The increase for home was primarily due to an increase in the frequency of non-catastrophe weather claims, partially offset by the effect of earned pricing increases.

Year ended December 31, 2010 compared to the year ended December 31, 2009

• Property & Casualty Commercial’s combined ratio before catastrophes and prior year development increased primarily due to higher severity on package business and workers’ compensation, as well as an increased ratio for specialty casualty, and to a lesser extent an increase in the expense ratio due to increased expenses for taxes, licenses and fees.

• Consumer Markets combined ratio before catastrophes and prior year development increased primarily due to an increase in the current accident year loss and loss adjustment expense ratio before catastrophes for auto of 1.3 points due to higher auto physical damage emerged frequency and higher expected auto liability loss costs relative to average premium. The current accident year loss and loss adjustment expense ratio before catastrophes for home increased 0.7 points primarily due to an increase in loss adjustment expenses, partially offset by the effect of earned pricing increases.

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Return on Assets

Return on assets is a key indicator of overall profitability for the Individual Annuity, Retirement Plans, Mutual Funds and Life Other Operations reporting segments as a significant portion of their earnings is based on average assets under management.

Ratios	2011		2010		2009
Individual Annuity [1]
ROA	(1.6	) bps	54.7	bps	(48.6	)  bps
Effect of net realized losses, net of tax and DAC on ROA	(41.3	)  bps	0.2	bps	(38.5	)  bps
Effect of Unlock on ROA	(7.2	)  bps	15.8	bps	(47.0	)  bps
ROA, core earnings excluding Unlock	46.9	bps	38.7	bps	36.9	bps
Retirement Plans [1]
ROA	2.9	bps	9.7	bps	(54.8	)  bps
Effect of net realized losses, net of tax and DAC on ROA	(0.7	) bps	(4.8	) bps	(46.4	) bps
Effect of Unlock on ROA	(7.5	) bps	5.4	bps	(11.4	) bps
ROA, core earnings excluding Unlock	11.1	bps	9.1	bps	3.0	bps
Mutual Funds [1]
ROA	10.5	bps	13.7	bps	8.8	bps
Effect of net realized gains/(losses), net of tax and DAC on ROA	—	bps	3.9	bps	—	bps
ROA, core earnings excluding Unlock	10.5	bps	9.8	bps	8.8	bps
Life Other Operations [1]
ROA	39.2	bps	(9.6	)  bps	(74.5	)  bps
Effect of net realized gains/(losses), net of tax and DAC on ROA	1.7	bps	(32.0	)  bps	(51.7	)  bps
Effect of Unlock on ROA	3.5	bps	(7.7	)  bps	(32.4	)  bps
ROA, core earnings excluding Unlock	34.0	bps	30.1	bps	9.6	bps

[1] Proprietary mutual funds, Investment-Only mutual funds, Canadian mutual funds, and 529 college savings plans are reported in Mutual Funds in 2011 and 2010. Prior to 2010, proprietary mutual fund assets were included in Individual Annuity, Retirement Plans, and Mutual Funds, as those same assets generate earnings for each of these segments.

Year ended December 31, 2011 compared to year ended December 31, 2010

• Individual Annuity’s ROA, core earnings excluding Unlock, increased in 2011 primarily due to the favorable impact of a flat DAC amortization rate on 2011 earnings and a DRD tax settlement benefit in 2011.

• Retirement Plans’ ROA, core earnings excluding Unlock, increased in 2011 primarily due to increased fee and investment income resulting from higher average general account invested assets and favorable partnership income as well as a DRD tax settlement benefit.

• Mutual Funds’ ROA, core earnings excluding Unlock, increased in 2011 primarily due to higher earnings from continuing operations resulting primarily from lower operating expenses in 2011. Assets under management and asset-based fee income were unfavorably impacted by declining equity market performance and increasing outflows over the course of 2011.

• Life Other Operations’ ROA, core earnings excluding Unlock, increased in 2011 primarily due to a lower DAC amortization rate, as earnings increased in 2011 compared to 2010, and a DRD tax settlement benefit, offset in part by decreased investment income due to lower average account values in 2011 as compared to 2010.

Year ended December 31, 2010 compared to year ended December 31, 2009

• Individual Annuity’s ROA, core earnings excluding Unlock, increased in 2010 primarily due to improved net investment income on limited partnerships and other alternative investments, a lower DAC amortization rate, lower operating expenses associated with the restructuring of operations.

• Retirement Plans’ ROA, core earnings excluding Unlock, increased in 2010 primarily due to improved performance on limited partnerships and other alternative investments in 2010, and was driven by improvement in the equity markets, which led to increased account values and increased deposit activity.

• Mutual Funds’ ROA, core earnings excluding Unlock, increased in 2010 primarily due to improvement in the equity markets, which enabled this line of business to partially return to scale, and the impact of lower operating expenses, partially offset by the addition of proprietary mutual fund assets to this line of business, which has a lower ROA level than the non-proprietary mutual fund business.

• Life Other Operations’ ROA, core earnings excluding Unlock, increased in 2010 primarily due to lower operating expenses in 2010 and the absence of 3 Win charges recognized in the first quarter of 2009.

71

After-tax margin

After-tax margin is a key indicator of overall profitability for the Individual Life and Group Benefits reporting segments as a significant portion of their earnings are a result of the net margin from losses incurred on earned premiums, fees and other considerations.

	2011			2010			2009
Individual Life
After-tax margin		9.6	%		17.9	%		1.3	%
Effect of net realized gains (losses), net of tax and DAC on after-tax margin		1.3	%		1.3	%		(6.6	%)
Effect of Unlock on after-tax margin		(5.5	%)		1.7	%		(4.7	%)
After-tax margin, core earnings excluding Unlock		13.8	%		14.9	%		12.6	%
Group Benefits
After-tax margin (excluding buyouts)		2.0	%		3.9	%		4.2	%
Effect of net realized gains (losses), net of tax on after-tax margin		0.1	%		0.5	%		(1.5	%)
After-tax margin (excluding buyouts), excluding realized gains (losses)		1.9	%		3.4	%		5.7	%

Year ended December 31, 2011 compared to year ended December 31, 2010

• Individual Life’s after-tax margin, core earnings excluding Unlock, decrease was primarily due to increased benefits, losses and expenses and increased mortality costs, partially offset by increased net investment income.

• The decrease in Group Benefits’ after-tax margin (excluding buyouts), excluding realized gains (losses), was primarily due to higher mortality and morbidity driven by elevated incidence and lower claim terminations, and to a lesser extent, a decrease in fully insured ongoing premiums, driven by lower sales over the past year, as well as from a challenging economic environment.

Year ended December 31, 2010 compared to year ended December 31, 2009

• Individual Life’s after-tax margin, core earnings excluding Unlock, increase was primarily due to lower DAC amortization and net realized capital gains in 2010 compared to net realized capital losses in 2009.

• Group Benefits’ after-tax margin (excluding buyouts), excluding realized gains (losses), decrease was primarily due to a higher loss ratio from unfavorable morbidity driven by lower claim terminations on disability business.

72

Investment Results

Composition of Invested Assets

	December 31, 2011					December 31, 2010
	Amount		Percent			Amount		Percent
Fixed maturities, AFS, at fair value	$	81,809		78.3	%	$	77,820		79.2	%
Fixed maturities, at fair value using the fair value option		1,328		1.3	%		649		0.7	%
Equity securities, AFS, at fair value		921		0.9	%		973		1.0	%
Mortgage loans		5,728		5.5	%		4,489		4.6	%
Policy loans, at outstanding balance		2,001		1.9	%		2,181		2.2	%
Limited partnerships and other alternative investments		2,532		2.4	%		1,918		2.0	%
Other investments [1]		2,394		2.3	%		1,617		1.6	%
Short-term investments		7,736		7.4	%		8,528		8.7	%
Total investments excluding equity securities, trading		104,449		100.0	%		98,175		100.0	%
Equity securities, trading, at fair value [2]		30,499					32,820
Total investments	$	134,948				$	130,995

[1]

Primarily relates to derivative instruments.

[2]

As of December 31, 2011 and 2010, approximately $28.5 billion and $30.5 billion, respectively, of equity securities, trading, support Japan variable annuities. Those equity securities, trading, were invested in mutual funds, which, in turn, invested in the following asset classes, Japan equity 21%, Japan fixed income (primarily government securities) 15%, global equity 21%, global government bonds 42%, and cash and other 1% for both periods presented.

Total investments increased since December 31, 2010 primarily due to increases in fixed maturities, AFS, mortgage loans and other investments, partially offset by a decline in equity securities, trading and short-term investments. The increase in fixed maturities, AFS, was largely the result of improved valuations as a result of declining interest rates, partially offset by credit spread widening. The increase in mortgage loans related to the funding of commercial whole loans, and the increase in other investments primarily related to increases in value of derivatives largely due to a decline in the equity market, strengthening of the Japanese yen in comparison to the U.S. dollar and a decline in interest rates. These increases were partially offset by a decline in equity securities, trading, primarily due to deteriorations in market performance of the underlying investments and net outflows, partially offset by the Japanese yen strengthening in comparison to the euro. The decline in short-term investments primarily relates to increased allocations to mortgage loans and limited partnerships and other alternative investments.

Net Investment Income (Loss)

	For the years ended December 31,
	2011						2010						2009
	Amount			Yield [1]			Amount			Yield [1]			Amount			Yield [1]
Fixed maturities [2]	$	3,396			4.2	%	$	3,489			4.3	%	$	3,617			4.5	%
Equity securities, AFS		36			3.8	%		53			4.8	%		93			6.5	%
Mortgage loans		281			5.4	%		260			5.2	%		307			4.8	%
Policy loans		131			6.1	%		132			6.1	%		139			6.3	%
Limited partnerships and other alternative investments		243			12.0	%		216			12.6	%		(341	)		(15.6	%)
Other [3]		301						329						314
Investment expense		(116	)					(115	)					(112	)
Total securities AFS and other	$	4,272			4.4	%	$	4,364			4.5	%	$	4,017			4.1	%
Equity securities, trading		(1,359	)					(774	)					3,188
Total net investment income (loss), before-tax	$	2,913					$	3,590					$	7,205
Total securities, AFS and other excluding limited partnerships and other alternative investments		4,029			4.2	%		4,148			4.3	%		4,358			4.5	%

[1]	Yields calculated using annualized investment income before investment expenses divided by the monthly average invested assets at cost, amortized cost, or adjusted carrying value, as applicable, excluding consolidated variable interest entity noncontrolling interests. Included in the fixed maturity yield is Other, which primarily relates to derivatives (see footnote [3] below). Included in the total net investment income yield is investment expense.
[2]	Includes net investment income on short-term investments.
[3]	Includes income from derivatives that qualify for hedge accounting and hedge fixed maturities.

73

Year ended December 31, 2011 compared to the year ended December 31, 2010

Total net investment income declined largely due to equity securities, trading, resulting from a market decline of the underlying investment funds supporting the Japanese variable annuity product and net outflows, partially offset by the Japanese yen strengthening in comparison to the euro. Also contributing to the decline was lower income on fixed maturities resulting from the proceeds from sales being reinvested at lower rates. These declines were partially offset by an increase in limited partnership and other alternative investment income due to additional allocations to this asset class and strong private equity and real estate returns, as well as an increase in mortgage loan income due to additional investments in commercial whole loans. The Company’s expectation for 2012, based on the current interest rate and credit environment, is that reinvestment rates will be slightly lower than maturing securities; however, the Company has increased its investment in certain higher yielding asset classes, such as commercial mortgage loans and a modest amount of high-yield securities. Therefore, the Company expects the 2012 portfolio yield, excluding limited partnerships, to be relatively consistent with 2011.

Year ended December 31, 2010 compared to the year ended December 31, 2009

Total net investment income decreased largely due to equity securities, trading, resulting primarily from declines in market performance of the underlying investment funds supporting the Japanese variable annuity product. Total net investment income, excluding equity securities, trading, increased primarily due to improved performance of limited partnerships and other alternative investments primarily within real estate and private equity funds, partially offset by lower income on fixed maturities resulting from a decline in average short-term interest rates and lower reinvestment rates.

Net Realized Capital Gains (Losses)

	For the years ended December 31,
	2011			2010			2009
Gross gains on sales	$	693		$	836		$	1,056
Gross losses on sales		(384	)		(522	)		(1,397	)
Net OTTI losses recognized in earnings		(174	)		(434	)		(1,508	)
Valuation allowances on mortgage loans		24			(154	)		(403	)
Japanese fixed annuity contract hedges, net [1]		3			27			47
Periodic net coupon settlements on credit derivatives/Japan		(10	)		(17	)		(49	)
Results of variable annuity hedge program
U.S. GMWB derivatives, net		(397	)		89			1,464
U.S. macro hedge program		(216	)		(445	)		(733	)
Total U.S. program		(613	)		(356	)		731
International program		775			11			(112	)
Total results of variable annuity hedge program		162			(345	)		619
Other, net [2]		(459	)		(2	)		(369	)
Net realized capital gains (losses), before-tax	$	(145	)	$	(611	)	$	(2,004	)

[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.

Details on the Company’s net realized capital gains and losses are as follows:

Gross gains and losses on sales	•     Gross gains and losses on sales for the year ended December 31, 2011 were predominately from investment grade corporate securities, U.S. Treasuries, municipal bonds and commercial real estate related securities. These sales were the result of reinvestment into spread product well-positioned for modest economic growth, as well as the purposeful reduction of certain exposures. •     Gross gains and losses on sales for the year ended December 31, 2010 were predominantly from sales of investment grade corporate securities in order to take advantage of attractive market opportunities, as well as sales of U.S. Treasuries related to tactical repositioning of the portfolio. •     Gross gains and losses on sales for the year ended December 31, 2009 were predominantly within corporate, government and structured securities. Also included were gains of $360 related to the sale of Verisk/ISO securities. Gross gains and losses on sales primarily resulted from efforts to reduce portfolio risk through sales of subordinated financials and real estate related securities and from sales of U.S. Treasuries to manage liquidity.
Net OTTI losses	•     For further information, see Other-Than-Temporary Impairments within the Investment Portfolio Risks and Risk Management section of the MD&A.
Valuation allowances on mortgage loans	•     For further information, see Valuation Allowances on Mortgage Loans within the Investment Portfolio Risks and Risk Management section of the MD&A.

74

Variable annuity hedge program

•     For the year ended December 31, 2011, the loss on U.S. GMWB related derivatives, net, was primarily due to a decrease in long-term interest rates that resulted in a charge of ($283) and a higher interest rate volatility that resulted in a charge of ($84). The loss on U.S. macro hedge program for the year ended December 31, 2011 was primarily driven by time decay and a decrease in equity market volatility since the purchase date of certain options during the fourth quarter. The gain associated with the international program for the year ended December 31, 2011 was primarily driven by the Japanese yen strengthening, lower global equity markets, and a decrease in interest rates. •     For the year ended December 31, 2010, the gain on U.S. GMWB derivatives, net, was primarily due to liability model assumption updates of $159 and lower implied market volatility of $118, and outperformance of the underlying actively managed funds as compared to their respective indices of $104, partially offset by losses due to a general decrease in long-term rates of ($158) and rising equity markets of ($90). The net loss on the U.S. macro hedge program was primarily the result of a higher equity market valuation and the impact of trading activity. •     For the year ended December 31, 2009, the gain on GMWB derivatives, net, was primarily due to liability model assumption updates related to favorable policyholder experience of $566, the relative outperformance of the underlying actively managed funds as compared to their respective indices of $550, and the impact of the Company’s own credit standing of $154. Additional net gains of $56 resulted from lower implied market volatility and a general increase in long-term interest rates, partially offset by rising equity markets. The net loss on the U.S. macro hedge program was primarily the result of a higher equity market valuation.

Other, net

•     Other, net loss for the year ended December 31, 2011, was primarily due to losses of ($148) on credit derivatives and fair value option securities driven by credit spread widening and losses of ($141) on transactional foreign currency re-valuation associated with the internal reinsurance of the Japan variable annuity business, which is offset in AOCI, due to appreciation of the Japanese yen versus the U.S. dollar. Additionally, losses of ($94) for the year ended December 31, 2011 resulted from equity futures and options used to hedge equity market risk in the investment portfolio due to an increase in the equity market during the hedged period. Also included were losses of ($69) on Japan 3Win foreign currency swaps primarily driven by a decrease in long-term U.S. interest rates. •     Other, net loss for the year ended December 31, 2010 was primarily due to a loss of ($326) on transactional foreign currency re-valuation due to an increase in value of the Japanese yen versus the U.S. dollar associated with the internal reinsurance of the Japan variable annuity business, which is offset in AOCI. This loss was partially offset by gains of $217 on credit derivatives driven by credit spread tightening, and gains of $59 on interest rate derivatives used to manage portfolio duration driven by a decline in long-term interest rates. •     Other, net loss for the year ended December 31, 2009 primarily resulted in net losses of ($463) on credit derivatives where the Company purchased credit protection due to credit spread tightening and approximately ($300) from contingent obligations associated with the Allianz transaction. These losses were partially offset by gains of $155 on credit derivatives that assume credit risk due to credit spread tightening, as well as $140 from a change in spot rates related to transactional foreign currency predominately on the internal reinsurance of the Japan variable annuity business, which is offset in AOCI.

75

PROPERTY & CASUALTY COMMERCIAL

Underwriting Summary	2011			2010			2009
Written premiums	$	6,176		$	5,796		$	5,715
Change in unearned premium reserve		49			52			(188	)
Earned premiums		6,127			5,744			5,903
Losses and loss adjustment expenses
Current accident year before catastrophes		4,139			3,579			3,582
Current accident year catastrophes		320			152			78
Prior accident years		125			(361	)		(394	)
Total losses and loss adjustment expenses		4,584			3,370			3,266
Amortization of deferred policy acquisition costs		1,356			1,353			1,393
Underwriting expenses		443			426			399
Dividends to policyholders		18			5			10
Underwriting results		(274	)		590			835
Net servicing income		13			9			6
Net investment income		910			935			755
Net realized capital gains (losses)		(50	)		3			(209	)
Goodwill impairment		(30	)		—			—
Other expenses		(151	)		(147	)		(139	)
Income from continuing operations before income taxes		418			1,390			1,248
Income tax expense		40			407			356
Income from continuing operations, net of tax		378			983			892
Income from discontinued operations, net of tax [1]		150			12			7
Net income	$	528		$	995		$	899

[1] Represents the income from operations and sale of Specialty Risk Services (“SRS”). For additional information, see Note 20 of the Notes to Consolidated Financial Statements.

Premium Measures [1]	2011			2010			2009
New business premium	$	1,097		$	1,122		$	1,101
Standard commercial lines policy count retention		82	%		84	%		81	%
Standard commercial lines renewal written pricing increase (decrease)		4	%		1	%		(1	%)
Standard commercial lines renewal earned pricing increase (decrease)		2	%		—			(2	%)
Standard commercial lines policies in-force as of end of period		1,252,820			1,211,047			1,159,759

[1] Standard commercial lines represents the Company’s small commercial and middle market property and casualty lines.

Ratios	2011		2010			2009
Loss and loss adjustment expense ratio
Current accident year before catastrophes		67.6		62.3			60.7
Current accident year catastrophes		5.2		2.7			1.3
Prior accident years		2.0		(6.3	)		(6.7	)
Total loss and loss adjustment expense ratio		74.8		58.7			55.3
Expense ratio		29.4		31.0			30.4
Policyholder dividend ratio		0.3		0.1			0.2
Combined ratio		104.5		89.7			85.9
Catastrophe ratio
Current accident year		5.2		2.7			1.3
Prior accident years		0.2		—			(0.4	)
Total catastrophe ratio		5.4		2.7			0.9
Combined ratio before catastrophes		99.1		87.1			84.9
Combined ratio before catastrophes and prior accident year development		97.2		93.4			91.2
Other revenues [1]	$	97	$	96		$	103

[1] Represents servicing revenues.

76

Year ended December 31, 2011 compared to the year ended December 31, 2010

Net income decreased in 2011, as compared to the prior year, primarily due to a decrease in underwriting results due to higher current accident year losses, including catastrophes, and unfavorable prior accident years development in 2011 compared to favorable prior accident years development in 2010. The decrease in underwriting results was partially offset by the net realized capital gain on the sale of SRS. The annual goodwill assessment for the Property & Casualty Commercial reporting unit resulted in a write-down of goodwill of $30, pre-tax for the year ended December 31, 2011. For further discussion, see Goodwill and Other Intangible Assets within Note 8 of the Notes to Consolidated Financial Statements.

Current accident year catastrophe losses increased $168, pre-tax, from 2010 to 2011. In 2011, catastrophes primarily included severe thunderstorms and tornadoes in the Midwest and Southeast, Hurricane Irene in the Northeast, Tropical Storm Lee, and winter storms, earlier in the year, in the Northeast and Midwest. In 2010, catastrophes primarily included tornadoes, thunderstorms and hail events in the Midwest, Plains States and the Southeast and winter storms in the Mid-Atlantic and Northeast.

For information regarding prior accident years reserve development, including reserve (releases) strengthenings by reserve line, see the Property and Casualty Insurance Product Reserves, Net of Reinsurance section within Critical Accounting Estimates.

The increase in earned premiums in 2011, is primarily due to improvements in workers’ compensation, driven by higher new business premium, renewal earned pricing increases and an increase in policies-in-force. The earned pricing changes were primarily a reflection of written pricing changes over the last year. Renewal written pricing increased for all standard commercial lines driven by improving market conditions.

Current accident year losses and loss adjustment expenses before catastrophes increased, due primarily to the increase in earned premiums for workers’ compensation, as well as an increase in the current accident year loss and loss adjustment expense ratio before catastrophes. The ratio increased primarily due to loss costs outpacing earned pricing increases driven by an increase in workers’ compensation claim frequency, partially offset by moderating severity, resulting in an increase in current accident year reserve strengthening.

Underwriting expenses increased in 2011, driven by an increase in technology costs, partially offset by a decrease in compensation related costs. The year ended December 31, 2011 included a $12 release of reserves for other state funds and taxes, while the year ended December 31, 2010 included strengthening of $20, which was due to an increase in the assessment for New York state funds and taxes. The change in dividends to policyholders is due to a decrease in 2010 of dividends payable primarily for workers’ compensation policyholders.

Net realized capital losses increased primarily due to losses on derivatives, partially offset by lower impairments. For additional information, see the Investment Results section within Key Performance Measures and Ratios.

The effective tax rate, in both periods, differs from the U.S. Federal statutory rate primarily due to permanent differences related to investments in tax exempt securities. In addition, due to the availability of additional tax planning strategies, the Company released $22, or 100%, of the valuation allowance associated with investment realized capital losses in 2011. For further discussion, see Income Taxes within Note 13 of the Notes to Consolidated Financial Statements.

77

Year ended December 31, 2010 compared to the year ended December 31, 2009

Net income increased in 2010, as compared to the prior year, driven by improvements in net realized capital gains (losses) and higher net investment income, despite a decrease in underwriting results. The primary causes of the decrease in underwriting results were lower earned premiums and higher current accident year catastrophe losses.

Earned premiums decreased across most product lines, with the exception of workers compensation and specialty casualty. The effects of the economic downturn contributed to the decrease in earned premiums during 2010. Although earned premiums declined, several key measures showed improvement. New business written premium increased, driven by increases in specialty casualty and package business, partially offset by decreases in general liability, professional liability and marine. In addition, for standard commercial lines, policy count retention increased in all lines of business, due in part by an improvement in mid-term cancellations in 2010. Renewal earned pricing was flat for standard commercial lines, as an increase in package business and property was offset by a decrease in all other lines. The earned pricing changes were primarily a reflection of written pricing changes over the last year. Renewal written pricing increased for standard commercial lines driven by increases in property and workers compensation, partially offset by decreases in all other lines. Lastly, the number of policies-in-force increased, primarily due to the increase in policy count retention. The growth in policies in-force does not correspond directly with the change in earned premiums due to the effect of changes in earned pricing and changes in the average premium per policy.

Current accident year losses and loss adjustment expenses before catastrophes decreased slightly, due to the decrease in earned premiums, which was mostly offset by an increase in the current accident year loss and loss adjustment expense ratio before catastrophes. The ratio increased, primarily due to higher severity on package business and workers’ compensation, as well as an increased ratio for specialty casualty.

Current accident year catastrophe losses in 2010 were higher than in 2009 primarily due to more severe windstorm events, particularly from hail in the West, Midwest, plains states and the Southeast, and from winter storms in the Mid-Atlantic and Northeast. Losses in 2009 were primarily incurred from ice storms, windstorms and tornadoes across many states.

For information regarding prior accident years reserve development, including reserve (releases) strengthenings by reserve line, see the Property and Casualty Insurance Product Reserves, Net of Reinsurance section within Critical Accounting Estimates.

Underwriting expenses increased in 2010, driven by an increase in taxes, licenses and fees of $19, which included a $5 increase in reserve strengthening for other state funds and taxes and a $7 reduction in TWIA assessments recognized in 2009 related to hurricane Ike. Also contributing to the increase were higher technology costs, partially offset by lower compensation-related costs. Amortization of deferred policy acquisition costs decreased, largely due to the decrease in earned premiums. The change in dividends to policyholders is due to a decrease in 2010 of dividends payable primarily for workers’ compensation policyholders.

Net realized capital gains (losses) improved as compared to the prior year, as did net investment income. The improvements in net realized capital gains (loss) were primarily driven by lower impairments in 2010 compared to 2009 and realized gains on derivatives in 2010 compared to losses in 2009. Net investment income increased in 2010, primarily as a result of improvements in limited partnerships and other alternative investments, partially offset by lower returns on taxable fixed maturities due to declining interest rates. For additional information, see the Investment Results section within Key Performance Measures and Ratios.

The effective tax rate, in both periods, differs from the U.S. Federal statutory rate primarily due to permanent differences related to investments in tax exempt securities. For further discussion, see Income Taxes within Note 13 of the Notes to Consolidated Financial Statements.

78

GROUP BENEFITS

Operating Summary	2011			2010		2009
Premiums and other considerations	$	4,147		$	4,278	$	4,350
Net investment income		411			429		403
Net realized capital gains (losses)		(3	)		46		(124	)
Total revenues		4,555			4,753		4,629
Benefits, losses and loss adjustment expenses		3,306			3,331		3,196
Amortization of deferred policy acquisition costs		55			61		61
Insurance operating costs and other expenses		1,104			1,111		1,120
Total benefits, losses and expenses		4,465			4,503		4,377
Income before income taxes		90			250		252
Income tax expense		—			65		59
Net income	$	90		$	185	$	193

Premiums and other considerations	2011		2010		2009
Fully insured — ongoing premiums	$	4,036	$	4,166	$	4,309
Buyout premiums		49		58		—
Other		62		54		41
Total premiums and other considerations	$	4,147	$	4,278	$	4,350
Fully insured ongoing sales, excluding buyouts	$	505	$	583	$	741

Ratios, excluding buyouts	2011			2010			2009
Loss ratio		79.5	%		77.6	%		73.5	%
Loss ratio, excluding financial institutions		84.5	%		82.8	%		77.8	%
Expense ratio		28.3	%		27.8	%		27.1	%
Expense ratio, excluding financial institutions		23.7	%		23.3	%		22.6	%

Group Benefits has a block of financial institution business that is experience rated. This business comprised approximately 9% to 10% of the segment’s 2011, 2010 and 2009 premiums and other considerations (excluding buyouts). With respect to the segment’s core earnings, the financial institution business comprised 2% for 2011, 6% for 2010, 2% for 2009, excluding a one-time payment to a third party administrator in 2011 and a commission accrual adjustment in 2009.

Year ended December 31, 2011 compared to the year ended December 31, 2010

Net income decreased, relative to prior year, primarily due to higher mortality and morbidity driven by elevated incidence and lower claim terminations, and to a lesser extent, a decrease in fully insured ongoing premiums, driven by lower sales over the past year, as well as, from a challenging economic environment.

The effective tax rate, in both periods, differs from the U.S. Federal statutory rate primarily due to permanent differences related to investments in tax exempt securities. In addition, due to the availability of additional tax planning strategies, the Company released $5 or 100% of the valuation allowance associated with investment realized capital losses in 2011. For further discussion, see Income Taxes within Note 13 of the Notes to Consolidated Financial Statements.

Year ended December 31, 2010 compared to the year ended December 31, 2009

Net income decreased as compared to prior year, as a decrease in premiums and other considerations and higher claim costs offset the improvements in net realized capital gains (losses) and net investment income. Premiums and other considerations decreased due to a 3% decline in fully insured ongoing premiums which was driven by lower sales due to the competitive marketplace, and the pace of the economic recovery. The loss ratio, excluding buyouts, increased compared to the prior year, particularly in group disability, primarily due to unfavorable morbidity experience from higher incidence and lower claim terminations.

The favorable change to net realized capital gains in 2010, from net realized capital losses in 2009, was due to impairments on investment securities recorded in 2009. For further discussion on impairments, see Other-Than-Temporary Impairments within the Investment Credit Risk section of the MD&A. Net investment income increased as a result of higher weighted average portfolio yields primarily due to improved performance on limited partnerships and other alternative investments.

The effective tax rate, in both periods, differs from the U.S. Federal statutory rate primarily due to permanent differences related to investments in tax exempt securities. For further discussion, see Income Taxes within Note 13 of the Notes to Consolidated Financial Statements.

79

CONSUMER MARKETS

Operating Summary	2011			2010			2009
Written premiums	$	3,675		$	3,886		$	3,995
Change in unearned premium reserve		(72	)		(61	)		36
Earned premiums		3,747			3,947			3,959
Losses and loss adjustment expenses
Current accident year before catastrophes		2,536			2,737			2,707
Current accident year catastrophes		425			300			228
Prior accident years		(75	)		(86	)		(33	)
Total losses and loss adjustment expenses		2,886			2,951			2,902
Amortization of deferred policy acquisition costs		639			667			674
Underwriting expenses		279			290			273
Underwriting results		(57	)		39			110
Net servicing income		19			35			29
Net investment income		187			187			178
Net realized capital gains (losses)		(11	)		—			(52	)
Other expenses		(162	)		(66	)		(77	)
Income (loss) before income taxes		(24	)		195			188
Income tax expense (benefit)		(29	)		52			48
Net income	$	5		$	143		$	140

Written Premiums	2011		2010		2009
Product Line
Automobile	$	2,562	$	2,745	$	2,877
Homeowners		1,113		1,141		1,118
Total	$	3,675	$	3,886	$	3,995
Earned Premiums
Product Line
Automobile	$	2,619	$	2,806	$	2,857
Homeowners		1,128		1,141		1,102
Total	$	3,747	$	3,947	$	3,959

Premium Measures	2011			2010			2009
Policies in force at year end
Automobile		2,080,535			2,226,351			2,395,421
Homeowners		1,338,676			1,426,107			1,488,408
Total policies in force at year end		3,419,211			3,652,458			3,883,829
New business premium
Automobile	$	298		$	311		$	455
Homeowners	$	91		$	106		$	149
Policy count retention
Automobile		83	%		83	%		86	%
Homeowners		84	%		85	%		86	%
Renewal written pricing increase
Automobile		5	%		6	%		3	%
Homeowners		8	%		10	%		5	%
Renewal earned pricing increase
Automobile		6	%		5	%		4	%
Homeowners		9	%		7	%		6	%

80

Ratios and Supplemental Data	2011			2010			2009
Loss and loss adjustment expense ratio
Current accident year before catastrophes		67.7			69.4			68.4
Current accident year catastrophes		11.3			7.6			5.8
Prior accident years		(2.0	)		(2.2	)		(0.8	)
Total loss and loss adjustment expense ratio		77.0			74.8			73.3
Expense ratio		24.5			24.2			23.9
Combined ratio		101.5			99.0			97.2
Catastrophe ratio
Current accident year		11.3			7.6			5.8
Prior accident years		0.7			0.3			0.1
Total catastrophe ratio		12.0			7.8			5.9
Combined ratio before catastrophes		89.5			91.2			91.3
Combined ratio before catastrophes and prior accident years development		92.2			93.6			92.3
Other revenues [1]	$	156		$	172		$	154

[1] Represents servicing revenues.

Product Combined Ratios	2011		2010		2009
Automobile		96.4		97.1		96.9
Homeowners		113.7		104.0		98.2
Total		101.5		99.0		97.2

Year ended December 31, 2011 compared to the year ended December 31, 2010

Net income decreased in 2011, as compared to the prior year, due to higher current accident year catastrophes and a $113, pre-tax, charge, recorded in other expenses, related to the write off of capitalized costs associated with a discontinued policy administration software project.

Current accident year catastrophe losses increased from 2010 to 2011, driven by an increase in tornado and thunderstorm losses in the Midwest and Southeast of approximately $140, pre-tax. In 2011, catastrophes primarily included severe tornadoes, hail and thunderstorm events in the Midwest and Southeast and Hurricane Irene. In 2010, catastrophes primarily included tornadoes, hail and thunderstorm events in the Midwest, Plains States and the Southeast, as well as, a severe wind and hail storm event in Arizona.

Earned premiums decreased in auto and were down modestly for homeowners. For both auto and homeowners, non-renewal of existing policies more than offset the impacts of new business written premium and renewal earned pricing increases. Compared to 2010, the number of policies in-force as of December 31, 2011 decreased for both auto and home, driven by non-renewals.

Auto new business written premium decreased, primarily due to the effect of written pricing increases and underwriting actions that lowered the policy issue rate in Agency. Home new business written premium decreased in both AARP and Agency driven largely by the effect of written pricing increases. While auto and home new business written premium declined for the full year, new business increased in the latter part of the year with new business growth in both channels in the fourth quarter of 2011.

The higher auto renewal earned pricing in 2011 was due to rate increases and the effect of policyholders purchasing newer vehicle models in place of older models. Average renewal earned premium per policy for auto increased modestly as renewal earned pricing increases were partially offset by the effect of a continued shift to more preferred market business which has lower average earned premium. Homeowners’ renewal earned pricing increases were due to rate increases and increased coverage amounts. For both auto and home, the Company has increased rates in certain states for certain classes of business to maintain profitability in the face of rising loss costs.

Current accident year losses and loss adjustment expenses before catastrophes decreased primarily due to lower earned premiums. The overall current accident year loss and loss adjustment expense ratio before catastrophes decreased during 2011 as a 2.6 point decrease for auto was partially offset by a 1.2 point increase for home. For auto, the effect of earned pricing increases and lower estimated frequency on auto liability claims was partially offset by higher auto physical damage loss costs. For home, an increase in the frequency of non-catastrophe weather claims was partially offset by the effect of earned pricing increases.

Amortization of deferred acquisition costs decreased largely due to a decline in commissions paid to agents due to lower Agency earned premium. The decrease in underwriting expenses was primarily driven by a decrease in reserves for other state funds and taxes. The decline in net servicing income in 2011 was largely due to lower contact center transaction volumes handled as a third party administrator under the AARP Health program.

For information regarding prior accident years reserve development, including reserve (releases) strengthenings by reserve line, see the Property and Casualty Insurance Product Reserves, Net of Reinsurance section within Critical Accounting Estimates.

The effective tax rate, in both periods, differs from the U.S. Federal statutory rate primarily due to permanent differences related to investments in tax exempt securities. For further discussion, see Income Taxes within Note 13 of the Notes to Consolidated Financial Statements.

81

Year ended December 31, 2010 compared to the year ended December 31, 2009

Net income increased slightly in 2010, as compared to the prior year, despite a decrease in underwriting results. The primary causes of the decrease in underwriting results were higher current accident year losses and loss adjustment expenses, including catastrophes, partially offset by more favorable prior accident year reserve development. The lower underwriting results were offset by improvements in net realized capital gains (losses) and higher net investment income.

Current accident year losses and loss adjustment expenses before catastrophes increased primarily due to an increase in the current accident year loss and loss adjustment expense ratio before catastrophes for auto due to higher auto physical damage emerged frequency and higher expected auto liability loss costs relative to average premium. The current accident year loss and loss adjustment expense ratio before catastrophes for home increased primarily due to an increase in loss adjustment expenses, partially offset by the effect of earned pricing increases.

Current accident year catastrophes were higher in 2010 than in 2009 primarily due to a severe wind and hail storm event in Arizona during the fourth quarter of 2010. Losses in 2010 were also incurred from tornadoes, thunderstorms and hail events in the Midwest, plains states and the Southeast, as well as from winter storms in the Mid-Atlantic and Northeast. Catastrophe losses in 2009 were primarily incurred from windstorms in Texas and the Midwest as well as the two large Colorado hail and windstorm events.

For information regarding prior accident years reserve development, including reserve (releases) strengthenings by reserve line, see the Property and Casualty Insurance Product Reserves, Net of Reinsurance section within Critical Accounting Estimates.

Earned premiums decreased in 2010, as lower earned premiums in auto were partially offset by an increase in homeowners. Auto earned premiums were down reflecting a decrease in new business written premium and policy count retention since the fourth quarter of 2009 and a decrease in average renewal earned premium per policy. Homeowners’ earned premiums grew primarily due to the effect of increases in earned pricing, partially offset by a decrease in new business written premium and policy count retention.

Auto and home new business written premium decreased primarily due to the effect of written pricing increases and underwriting actions that lowered the policy issue rate. Also contributing to the decrease in new business were fewer responses from direct marketing on AARP business and fewer quotes from independent agents driven by increased competition. Partially offsetting the decrease in auto new business was the effect of an increase in policies sold to AARP members through agents. Partially offsetting the decrease in home new business was an increase in the cross-sale of homeowners’ insurance to insureds that have auto policies.

The change in auto renewal earned pricing was flat due to rate increases and the effect of policyholders purchasing newer vehicle models in place of older models. Despite auto renewal earned pricing increasing, average renewal earned premium per policy for auto declined due to a shift to more preferred market segments and a greater concentration of business in states and territories with lower average premium. Homeowners’ renewal earned pricing increased due to rate increases and increased coverage amounts reflecting higher rebuilding costs. For both auto and home, the Company has increased rates in certain states for certain classes of business to maintain profitability in the face of rising loss costs.

Policy count retention for auto and home decreased primarily driven by the effect of renewal written pricing increases and underwriting actions to improve profitability. The decrease in the policy count retention for homeowners was partially offset by the effect of the Company’s non-renewal of Florida homeowners’ agency business in 2009. Compared to 2009, the number of policies in-force as of 2010 decreased for both auto and home, driven by the decreases in policy retention and new business.

The expense ratio increased due largely to an increase in legal settlement costs in 2010 and higher amortization of acquisition costs on AARP business, partially offset by lower direct marketing spend for consumer direct business. Also contributing to the increase in the expense ratio was a reduction of TWIA hurricane assessments in 2009 largely offset by an increase in reserves for other state funds and taxes in 2009.

Net realized capital gains (losses) improved, as compared to prior year. The improvements were primarily driven by lower impairments in 2010 compared to 2009 and realized gains on derivatives in 2010 compared to losses in 2009. Net investment income increased, primarily as a result of increased income from limited partnerships and other alternative investments, partially offset by lower returns on taxable fixed maturities due to declining interest rates. For additional information, see the Investment Results section within Key Performance Measures and Ratios.

The effective tax rate, in both periods, differs from the U.S. Federal statutory rate primarily due to permanent differences related to investments in tax exempt securities. For further discussion, see Income Taxes within Note 13 of the Notes to Consolidated Financial Statements.

82

INDIVIDUAL ANNUITY

Operating Summary	2011			2010			2009
Fee income and other	$	1,411		$	1,493		$	1,472
Earned premiums		249			223			(7	)
Net investment income		768			814			771
Net realized capital losses		(591	)		(339	)		(7	)
Total revenues		1,837			2,191			2,229
Benefits, losses and loss adjustment expenses		1,106			1,054			1,310
Amortization of DAC		483			(56	)		1,339
Insurance operating costs and other expenses		536			542			505
Total benefits, losses and expenses		2,125			1,540			3,154
Income (loss) before income taxes		(288	)		651			(925	)
Income tax expense (benefit)		(274	)		124			(481	)
Net income (loss)	$	(14	)	$	527		$	(444	)

Assets Under Management [1]	2011		2010		2009
Fixed MVA annuity and other account values	$	11,631		12,223		12,110
Variable annuity account values		68,760		83,013		84,679
Total assets under management	$	80,391	$	95,236	$	96,789

Account Value Roll Forward	2011			2010			2009
Variable Annuities
Account value, beginning of period	$	83,013		$	119,387		$	105,921
Transfers affecting beginning of period [1]		—			(34,708	)		(31,343	)
Account value, beginning of period, as adjusted	$	83,013		$	84,679		$	74,578
Net flows		(11,552	)		(9,966	)		(7,122	)
Change in market value and other		(2,701	)		8,300			17,223
Account value, end of period	$	68,760		$	83,013		$	84,679
Net Investment Spread	17		bps	27		bps	1		bps
Expense Ratios
General insurance expense ratio	23.5		bps	22.4		bps	24.1		bps
DAC amortization ratio		247.7	%		(9.4	%)		323.4	%
Effect of realized gains (losses) on DAC amortization		(183.3	%)		39.3	%		(141.4	%)
Effect of Unlocks on DAC amortization		(12.0	%)		22.4	%		(120.1	%)
DAC amortization ratio, core earnings, excluding Unlock		52.4	%		52.3	%		62.0	%

[1] International and institutional annuities were transferred retrospectively to Life Other Operations.

83

Year ended December 31, 2011 compared to the year ended December 31, 2010

Net income decreased in 2011 compared to 2010 primarily due to an Unlock charge taken in 2011 compared to an Unlock benefit in 2010 and increased net realized capital losses in 2011. Additionally, lower account values driven by equity performance and net outflows resulted in lower fee income.

The Unlock charge was $172, after-tax, in 2011 as compared to an Unlock benefit of $143, after-tax, in 2010. The Unlock charge in 2011 was due to the annual assumption update which reflected additional hedging costs incurred in 2011 resulting in increased benefits losses and loss adjustment expenses and DAC amortization. For further discussion of the Unlock see the Critical Accounting Estimates within the MD&A.

The higher net realized capital losses in 2011 were primarily due to increased losses on the variable annuity hedging program. The variable annuity hedging program losses were $613 in 2011 compared with losses of $356 in 2010. For further discussion on the results of the variable annuity hedging program see Investment Results, Net Realized Capital Gains (Losses) within Key Performance Measures and Ratios of the MD&A.

Net investment spread decreased by 10 bps in 2011 compared to 2010 primarily due to lower returns on partnership, derivative and other alternative investments. Yields decreased by 28 bps due to a lower interest rate environment, however, this decrease was offset by a benefit of 18 bps from lower crediting rates related to maturities of older contracts with higher crediting rates or contract renewals with current lower crediting rates.

Individual Annuity’s effective tax rate differs from the statutory rate of 35% primarily due to permanent differences for the separate account DRD on annuity products. Income taxes include separate account DRD benefits of $155 in 2011 compared to $108 in 2010. Included in the 2011 separate account benefit is a tax benefit of $51 including $6 interest related to a DRD settlement. For further discussion, see Note 13 of the Notes to Consolidated Financial Statements.

Year ended December 31, 2010 compared to the year ended December 31, 2009

Net income increased in 2010 compared to 2009 primarily due to significant improvements in the equity markets, which resulted in an Unlock benefit in 2010 as compared to an Unlock charge in 2009, as well as continued market value appreciation in account value resulting in increased fee income, and due to continued expense reduction efforts in 2010.

The Unlock benefit was $143, after-tax, in 2010 as compared to an Unlock charge of $606, after-tax, in 2009. The benefit in 2010 was primarily due to equity market improvements that were greater than expectations for the year ended December 31, 2010, while 2009’s charge was primarily the result of equity market performance significantly below expectations for the first quarter of 2009. The Unlock resulted in decreases to both benefits, losses and loss adjustment expenses and amortization of DAC. For further discussion of the Unlock see the Critical Accounting Estimates within the MD&A.

The higher net realized capital losses in 2010 were primarily due to losses on the variable annuity hedging program compared to gains in 2009, partially offset by lower impairment losses in 2010 and net realized gains on sales of securities in 2010 compared to net realized losses in 2009. The variable annuity hedging program losses were $356 in 2010 compared with gains of $731 in 2009. For further discussion on the results of the variable annuity hedging program see Investment Results, Net Realized Capital Gains (Losses) within Key Performance Measures and Ratios of the MD&A.

Net investment income on securities available-for-sale and other increased slightly due to improving investments results on limited partnership and other alternative investments.

Net investment spread increased by 26 bps in 2010 compared to 2009 primarily due to an increase in partnership returns, partially offset by declines in fixed maturities. Yields decreased by 7 bps due to a lower interest rate environment, however, this decrease was offset by a benefit of 33 bps from lower crediting rates related to maturities of older contracts with higher crediting rates or contract renewals with current lower crediting rates.

Individual Annuity’s effective tax rate differs from the statutory rate of 35% primarily due to permanent differences for the separate account DRD on U.S. annuity products. For further discussion, see Note 13 of the Notes to Consolidated Financial Statements.

84

INDIVIDUAL LIFE

Operating Summary	2011			2010			2009
Fee income and other	$	1,001		$	952		$	1,027
Earned premiums		(102	)		(96	)		(87	)
Net investment income		456			400			335
Net realized capital gains (losses)		30			24			(145	)
Total revenues		1,385			1,280			1,130
Benefits, losses and loss adjustment expenses		816			644			640
Insurance operating costs and other expenses		182			181			188
Amortization of DAC		221			119			314
Total benefits, losses and expenses		1,219			944			1,142
Income (loss) before income taxes		166			336			(12	)
Income tax expense (benefit)		33			107			(27	)
Net income	$	133		$	229		$	15
Account Values
Individual variable universal life insurance	$	5,535		$	6,115		$	5,766
Universal life, interest sensitive whole life, modified guaranteed life insurance and other		6,765			6,128			5,693
Total account values	$	12,300		$	12,243		$	11,459
Individual Life Insurance In-force
Variable universal life insurance	$	69,716		$	74,044		$	78,671
Universal life, interest sensitive whole life, modified guaranteed life insurance		64,006			58,789			56,030
Term life		81,494			75,797			69,968
Total life insurance in-force	$	215,216		$	208,630		$	204,669
Net Investment Spread	153		bps	145		bps	81		bps
Death Benefits	$	423		$	362		$	346

Year ended December 31, 2011 compared to the year ended December 31, 2010

Net income decreased in 2011 compared to 2010 largely due to an Unlock charge taken in 2011 compared to an Unlock benefit in 2010 and unfavorable mortality in 2011, partially offset by an increase in net investment income driven by higher invested assets and favorable partnership income.

The Unlock charge was $69, after-tax, for 2011 compared to an Unlock benefit of $28, after-tax, for 2010. The Unlock charge in 2011 was due to the annual assumption update completed in the third quarter and resulted in an increase in fee income, benefit and claim expense and DAC amortization. For further discussion of Unlocks see the Critical Accounting Estimates within the MD&A.

Net investment spread increased by 8 bps in 2011 compared to 2010. While yields were down slightly compared to 2010, the increase in spread was driven by lower crediting rates on new business written relative to in-force business with higher crediting rates.

The increase in death benefits for 2011 compared to 2010 was due to unfavorable mortality experience due to higher reinsurance retention relative to 2010 but within expected levels of volatility for 2011.

Individual Life’s effective tax rate differs from the statutory rate of 35% primarily due to permanent differences for the separate account DRD. Income taxes include separate account DRD benefits of $17 and $13 for the years ended December 31, 2011 and 2010, respectively. The separate account DRD benefit for the year ended December 31, 2011 includes $5 related to a DRD settlement.

85

Year ended December 31, 2010 compared to the year ended December 31, 2009

Net income increased in 2010 compared to 2009 primarily due to net realized capital gains and Unlock benefit in 2010. In addition, Individual Life’s net income increased, excluding the improvements to net realized gains and an Unlock benefit, due to improvements in the segment’s individual life business.

Individual Life’s net realized gains in 2010 compared to net realized capital losses in 2009 were primarily due to lower losses from impairments. For further discussion on impairments, see Other-Than-Temporary Impairments within the Investment Credit Risk section of the MD&A.

The Unlock benefit was $28, after-tax, in 2010 as compared to an Unlock charge of $51, after-tax, in 2009. The benefit in 2010 was primarily due to assumption updates related to lapse rates, investment margin and mortality, partially offset by persistency, while 2009’s charge was primarily the result of assumption updates related to investment margin and expenses, as well as equity market performance significantly below expectations in 2009, partially offset by assumption updates on lapse rates. The Unlock primarily resulted in decreases to amortization of DAC and fee income and other. For further discussion of the Unlock see the Critical Accounting Estimates within the MD&A.

Net investment income increased primarily due to improved performance of limited partnerships and other alternative investments and earnings on a higher average invested asset base in 2010 compared to 2009, partially offset by lower yields on fixed maturity investments. Net investment spread increased by 64 bps in 2010 compared to 2009 driven by improved investment yields of 33 bps and decreased crediting rates of 31 bps. The lower crediting rates related to maturities of older contracts with higher crediting rates or contract renewals with current lower crediting rates.

Individual Life’s effective tax rate differs from the statutory rate of 35% primarily due to permanent differences for the separate account DRD, partially offset by a valuation allowance on deferred tax benefits related to certain realized losses in 2010. For further discussion, see Note 13 of the Notes to Consolidated Financial Statements.

86

RETIREMENT PLANS

Operating Summary	2011			2010			2009
Fee income and other	$	373		$	352		$	321
Earned premiums		7			7			3
Net investment income		396			364			315
Net realized capital losses		(10	)		(18	)		(333	)
Total revenues		766			705			306
Benefits, losses and loss adjustment expenses		308			278			269
Insurance operating costs and other expenses		354			340			346
Amortization of DAC		134			27			56
Total benefits, losses and expenses		796			645			671
Income (loss) before income taxes		(30	)		60			(365	)
Income tax expense (benefit)		(45	)		13			(143	)
Net income (loss)	$	15		$	47		$	(222	)
Assets Under Management	2011			2010			2009
401(k) account values	$	21,124		$	20,291		$	16,142
403(b)/457 account values		12,775			12,649			11,116
401(k)/403(b) mutual funds		18,403			19,578			16,704
Total assets under management	$	52,302		$	52,518		$	43,962
Assets Under Management Roll Forward	2011			2010			2009
Assets under management, beginning of period	$	52,518		$	43,962		$	37,036
Net flows		761			1,545			(1,142	)
Transfers in and reclassifications [1]		267			1,488			—
Change in market value and other		(1,244	)		5,523			8,068
Assets under management, end of period	$	52,302		$	52,518		$	43,962
Net Investment Spread	98		bps	99		bps	66		bps

[1] Lifetime Income and Maturity Funding business of $194 was transferred from Individual Annuity to Retirement Plans effective January 1, 2010. Also in 2010, the Company identified specific plans that required reclassification of $1.3 billion from AUA to AUM.

Year ended December 31, 2011 compared to the year ended December 31, 2010

Net income decreased in 2011 compared to 2010 due largely to the Unlock charge taken in the third quarter compared to an Unlock benefit in 2010, partially offset by a favorable one-time true up in tax expense.

The Unlock charge was $45, after-tax, in 2011 as compared to an Unlock benefit of $18, after-tax, in 2010. The Unlock charge in 2011 was primarily due to the annual assumption update completed in the third quarter. The most significant assumption changes related to reduced investment spread in the general account delayed projected expense benefits and increased trail commissions due to the mix of business. Each of these items reduces expected future gross profits. The benefit in 2010 was primarily due to assumption changes based on actual experience and to a lesser extent from the market performance variance to expectations. For further discussion of Unlocks see the Critical Accounting Estimates within the MD&A.

Net investment income increased in 2011 compared to 2010 although portfolio yields were lower in 2011. Net investment spread decreased by 1 bps driven by lower yields of 12 bps on higher average general account invested assets and favorable partnership income, offset by lower crediting rates of 11 bps.

Retirement Plans’ effective tax rate differs from the statutory rate of 35% primarily due to permanent differences for the separate account DRD. For 2011 and 2010 income taxes include separate account DRD benefits of $25 and $18, respectively. Included in the separate account benefit for 2011 is a $4 benefit related to a DRD settlement and a $2 benefit related to a true up the 2010 tax year provision. In addition, due to the availability of additional tax planning strategies, the Company released $10 or 100% of the valuation allowance associated with realized capital losses during 2011. For further discussion, see Note 13 of the Notes to Consolidated Financial Statements.

87

Year ended December 31, 2010 compared to the year ended December 31, 2009

Retirement Plans’ net income in 2010 compared to a net loss in 2009 was primarily due to significant improvements in net realized capital losses, as well as higher net investment income and improvements in the equity markets which resulted in an Unlock benefit in 2010 as compared to an Unlock charge in 2009 and continued market value appreciation in AUM which resulted in increased fee income and other.

Net realized capital losses were lower in 2010 compared to 2009 due to lower losses from impairments, derivatives, and trading losses compared to 2009.

Net investment income increased in 2010 compared to 2009 primarily due to the improved performance from limited partnerships and other alternative investments and higher average general account invested assets compared to 2009. Correspondingly, the improvements in performance on limited partnerships and other alternative investments drove an increase in the net investment spread of 33 bps, partially offset by lower returns on fixed maturity securities. Net investment spread also improved due to lower crediting rates of 8 bps.

The Unlock benefit was $18, after-tax, in 2010 as compared to an Unlock charge of $56, after-tax, in 2009. The benefit in 2010 was primarily due to assumption changes based on actual experience and to a lesser extent from the market performance variance to expectations for the year ended December 31, 2010, while 2009’s charge was primarily the result assumption changes based on actual experience and equity market performance significantly below expectations. The Unlock primarily resulted in a decrease to amortization of DAC. For further discussion of the Unlock see the Critical Accounting Estimates within the MD&A.

Fee income and other increased primarily due to increases in asset based fees on higher average account values resulting from improvements in equity markets and increased net flows.

Retirement Plans’ effective tax rate differs from the statutory rate of 35% primarily due to permanent differences for the separate account DRD. For further discussion, see Note 13 of the Notes to Consolidated Financial Statements.

88

MUTUAL FUNDS

Operating Summary	2011			2010			2009
Fee income and other	$	649		$	664		$	518
Net investment loss		(3	)		(8	)		(21	)
Net realized capital gains (loss)		1			—			—
Total revenues		647			656			497
Insurance operating costs and other expenses		448			458			395
Amortization of DAC		47			51			50
Total benefits, losses and expenses		495			509			445
Income from continuing operations, before income taxes		152			147			52
Income tax expense		54			52			18
Income from continuing operations		98			95			34
Income from discontinued operations, net of tax [1]		—			37			—
Net income	$	98		$	132		$	34

Assets Under Management	2011		2010		2009
Retail mutual fund assets	$	40,228	$	48,753	$	42,829
Investment Only mutual fund assets		6,983		6,659		—
529 College Savings Plan and Canadian mutual fund assets		1,557		1,472		1,202
Total non-proprietary and Canadian mutual fund assets		48,768		56,884		44,031
Proprietary mutual fund assets		36,770		43,602		—
Total mutual fund assets under management	$	85,538	$	100,486	$	44,031

Non-Proprietary and Canadian Mutual Fund AUM Roll Forward	2011			2010		2009
Non-Proprietary and Canadian Mutual Fund AUM, beginning of period	$	56,884		$	44,031	$	32,710
Transfers in (out) [2]		—			5,617		(826	)
Net flows		(4,378	)		2,750		2,115
Change in market value and other		(3,738	)		4,486		10,032
Non-Proprietary and Canadian Mutual Fund AUM, end of period	$	48,768		$	56,884	$	44,031

Proprietary Mutual Fund AUM Roll Forward	2011			2010			2009
Proprietary Mutual Fund AUM, beginning of period	$	43,602		$	—		$	—
Transfers in [3]		—			43,890			—
Net flows		(5,797	)		(5,334	)		—
Change in market value		(1,035	)		5,046			—
Proprietary Mutual Fund AUM, end of period	$	36,770		$	43,602		$	—

[1]	Represents income from discontinued operations, net of tax of Hartford Investments Canada Corporation (“HICC”). For additional information, see Note 20 of the Notes to Consolidated Financial Statements.
[2]	Canadian and Offshore businesses were transferred to International Annuity within Life Other Operations effective January 1, 2009. Investment-only and Canadian mutual fund assets were transferred from Life Other Operations effective January 1, 2010.
[3]	Proprietary mutual fund assets under management are included in the Mutual Fund reporting segment effective January 1, 2010.

Year ended December 31, 2011 compared to the year ended December 31, 2010

Net income decreased in 2011 primarily due to discontinued operations. The decline in income from discontinued operations in 2011 compared to 2010 is due to the sale of the Canadian mutual fund operations, which closed in December 2010. Net income from continuing operations increased compared to 2010 due to a decline in expenses largely due to a capital infusion to the Money Market Funds in the third quarter of 2010.

Year ended December 31, 2010 compared to the year ended December 31, 2009

Net income increased in 2010 compared to 2009 due to the inclusion of a net realized gain on the sale of Canadian mutual fund operations of $41 after-tax, within income from discontinued operations. In addition higher overall account balances attributed to the improved equity markets, and positive net flows on non-proprietary and Canadian mutual fund assets, resulted in higher fee income, partially offset by higher trail commissions, as well as capital infusions to the money market funds. Also contributing to the net income in 2010 is the increase in scale of the reporting segment’s businesses.

89

LIFE OTHER OPERATIONS

Operating Summary	2011			2010			2009
Fee income and other	$	1,045		$	1,046		$	948
Earned premiums		(25	)		3			345
Net investment income (loss)
Securities available-for-sale and other		973			999			947
Equity securities trading [1]		(1,359	)		(774	)		3,188
Total net investment income (loss)		(386	)		225			4,135
Net realized capital gains (losses)		586			(417	)		(702	)
Total revenues		1,220			857			4,726
Benefits, losses and loss adjustment expenses		1,305			1,148			1,854
Benefits, losses and loss adjustment expenses — returns credited on international variable annuities [1]		(1,359	)		(774	)		3,188
Amortization of DAC		492			305			370
Insurance operating costs and other expenses		274			262			350
Total benefits, losses and expenses		712			941			5,762
Income (loss) from continuing operations, before income taxes		508			(84	)		(1,036	)
Income tax expense (benefit)		150			—			(343	)
Income (loss) from continuing operations		358			(84	)		(693	)
Loss from discontinued operations, net of tax [2]		—			(6	)		(5	)
Net income (loss)	$	358		$	(90	)	$	(698	)
Assets Under Management [3]
Variable annuity account values [4]	$	31,162		$	33,507		$	32,948
Fixed MVA annuity and other account values [5]		4,786			4,596			4,365
Institutional annuity account values [6]		19,330			19,674			22,373
Private Placement Life Insurance (“PPLI”)		36,335			36,042			35,146
Account Value Roll Forward
Variable Annuities
Account value, beginning of period	$	33,507		$	32,948		$	31,335
Net flows		(1,848	)		(1,946	)		(606	)
Change in market value and other		(2,130	)		(1,531	)		2,545
Effect of currency translation		1,633			4,036			(326	)
Account value, end of period	$	31,162		$	33,507		$	32,948

[1]	Includes investment income and mark-to-market effects of equity securities, trading, supporting the international variable annuity business, which are classified in net investment income with corresponding amounts credited to policyholders within benefits, losses and loss adjustment expenses.
[2]	Represents loss from discontinued operations, net of tax of Hartford Advantage investment, Ltd. (“HAIL”). For additional information, see Note 20 of the Notes to Consolidated Financial Statements.
[3]	International and institutional annuities were transferred retrospectively from Individual Annuity; PPLI was transferred retrospectively from Individual Life.
[4]	Canadian and Offshore businesses were transferred from Mutual Funds effective January 1, 2009. Investment-only and Canadian mutual fund assets were transferred to Mutual Funds effective January 1, 2010.
[5]	Includes approximately $1.9 billion, $1.9 billion and $1.8 billion related to the triggering of the guaranteed minimum income benefit for the 3 Win product as of December 31, 2011, 2010 and 2009, respectively. This account value is not expected to generate material future profit or loss to the Company.
[6]	Included in the balance is approximately $1.3 billion for the year ended December 31, 2011 and approximately $1.4 billion for the year ended December 31, 2010 related to an intrasegment funding agreement which is eliminated in consolidation.

90

Year ended December 31, 2011 compared to the year ended December 31, 2010

Net income increased in 2011 compared to 2010 primarily due to the change in net realized capital gains (losses), offset in part by increases in 2011 in the Unlock charge and DAC amortization resulting from assumption changes reflecting the declining performance of the equity markets in 2011. Benefits, losses and loss adjustment expenses increased in 2011 reflecting the decline in equity market performance however, these expenses were partially offset by the release of a reserve related to a Japan product. In addition, insurance operating costs and other expenses increased in 2011 due to costs associated with expected assessments related to the Executive Life Insurance Company of New York (“ELNY”) insolvency.

The net realized capital gains in 2011 compared to net realized capital losses in 2010 were primarily due to gains in the variable annuity hedging program and lower net impairment losses. Variable annuity hedging program gains were $775 in 2011 compared to $11 in 2010; net impairment losses were $54 and $172, respectively, in 2011 and 2010. For further discussion on the results of the variable annuity hedging program see Investment Results, Net Realized Capital Gains (Losses) within Key Performance Measures and Ratios of the MD&A.

The Unlock charge was $244, after-tax, in 2011 compared to an Unlock charge of $78, after-tax, in 2010. The Unlock charge in 2011 was primarily a result of the impact of the annual assumption update. Including expected Japan hedging costs, and actual separate account returns below our aggregated estimated returns. Benefits, losses and loss adjustment expenses as well as DAC amortization increased accordingly. For further discussion of the Unlock see the Critical Accounting Estimates within the MD&A.

Life Other Operations effective tax rate differs from the statutory rate of 35% primarily due to varying tax rates by country and the valuation allowance on deferred tax benefits related to certain realized losses on securities that back certain institutional annuities. For further discussion, see Note 13 of the Notes to Consolidated Financial Statements.

Year ended December 31, 2010 compared to the year ended December 31, 2009

Net income increased in 2010 compared to 2009 primarily due to the change in net realized capital gains (losses), a lower Unlock charge and lower DAC amortization, as well as continued expense reduction efforts.

The Unlock charge was $78, after-tax, in 2010 compared to an Unlock charge of $318, after-tax, in 2009. The Unlock charge in 2010 was primarily due to equity market improvements that were less than expected for 2010, while the Unlock charge in 2009 was primarily due to equity market performance significantly below expectations for the first quarter of 2009. Benefits, losses and loss adjustment expenses, as well as DAC amortization decreased in 2010 due to the lower Unlock charge. For further discussion of the Unlock see the Critical Accounting Estimates within the MD&A.

The lower net realized capital losses in 2010 compared to 2009 were primarily due to lower impairment losses and net realized gains on sales of securities as compared with net realized losses in 2009. Variable annuity hedging program gains were were $11 in 2010 compared to losses of $112 in 2009; net impairment losses were $172 and $619, respectively, in 2010 and 2009. For further discussion on the results of the variable annuity hedging program see Investment Results, Net Realized Capital Gains (Losses) within Key Performance Measures and Ratios of the MD&A.

Management’s decision to suspend sales of structured settlements and terminal funding products resulted in decreased earned premiums in 2010 as compared to 2009 with a corresponding decrease in benefits, losses and loss adjustment expenses. In addition, benefits, losses and loss adjustment expenses were lower for institutional annuities driven by the Company’s execution on its call and buyback strategy associated with stable value products, which reduced the related liabilities.

Life Other Operations effective tax rate differs from the statutory rate of 35% primarily due to varying tax rates by country and the valuation allowance on deferred tax benefits related to certain realized losses on securities that back certain institutional annuities. For further discussion, see Note 13 of the Notes to Consolidated Financial Statements.

91

PROPERTY & CASUALTY OTHER OPERATIONS

Operating Summary	2011			2010			2009
Earned premiums	$	—		$	1		$	—
Net investment income		151			163			161
Net realized capital gains (losses)		(1	)		24			(26	)
Total revenues		150			188			135
Benefits, losses and loss adjustment expenses		317			251			241
Insurance operating costs and other expenses		24			30			23
Total benefits, losses and expenses		341			281			264
Loss before income taxes		(191	)		(93	)		(129	)
Income tax benefit		(74	)		(40	)		(51	)
Net loss	$	(117	)	$	(53	)	$	(78	)

Year ended December 31, 2011 compared to the year ended December 31, 2010

The net loss in Property & Casualty Other Operations increased in 2011, as compared to 2010, primarily due to reserve strengthening of $290, pre-tax, in 2011, resulting from the company’s annual review of its asbestos liabilities. In the comparable prior year period, the reserve strengthening was $169, pre-tax.

Partially offsetting the increase in asbestos reserve strengthening was lower reserve strengthening of net environmental reserves of $19, pre-tax, in 2011 compared to $62, pre-tax, in 2010, resulting from the company’s annual review of its environmental liabilities.

For further information, see Property & Casualty Other Operations Claims within the Property and Casualty Insurance Product Reserves, Net of Reinsurance section in Critical Accounting Estimates.

Year ended December 31, 2010 compared to the year ended December 31, 2009

The net loss in Property & Casualty Other Operations improved in 2010, as compared to 2009, primarily due to a change from net realized capital losses in 2009 to net realized capital gains in 2010. The change in net realized capital gains (losses) is a result of impairments in 2009. In addition, the net loss improved due to lower reserve strengthening of $62, pre-tax, in 2010, compared to $75, pre-tax, in 2009, resulting from the company’s annual review of its environmental liabilities.

Partially offsetting the improvements in net realized capital gains (losses) and environmental reserve actions was increased reserve strengthening of $169, pre-tax, in 2010, compared to $138, pre-tax, in 2009, resulting from the company’s annual review of its asbestos liabilities.

For further information, see Property & Casualty Other Operations Claims within the Property and Casualty Insurance Product Reserves, Net of Reinsurance section in Critical Accounting Estimates.

92

CORPORATE

Operating Summary [1]	2011			2010			2009
Earned premiums	$	—		$	2		$	(1	)
Fee income [2]		209			187			220
Net investment income		23			81			173
Net realized capital gains (losses)		(96	)		66			(406	)
Other revenue		—			(1	)		4
Total revenues		136			335			(10	)
Benefits, losses and loss adjustment expenses		(3	)		(2	)		153
Insurance operating costs and other expenses		202			325			323
Interest expense		508			508			476
Goodwill impairment		—			—			32
Total benefits, losses and expenses		707			831			984
Loss from continuing operations before income taxes		(571	)		(496	)		(994	)
Income tax benefit		(201	)		(168	)		(274	)
Loss from continuing operations, net of tax		(370	)		(328	)		(720	)
Loss from discontinued operations, net of tax [3]		(64	)		(107	)		(6	)
Net loss	$	(434	)	$	(435	)	$	(726	)

[1]	Leveraged corporate owned life insurance was transferred from Corporate to Life Other Operations, effective January 1, 2010.
[2]	Fee income includes the income associated with the sales of non-proprietary insurance products in the Company’s broker-dealer subsidiaries that has an offsetting commission expense in insurance operating costs and other expenses.
[3]	Represents the loss from operations and sale of Federal Trust Corporation. For additional information, see Note 20 of the Notes to Consolidated Financial Statements.

Year ended December 31, 2011 compared to the year ended December 31, 2010

The net loss in Corporate remained flat due to net realized capital losses in 2011, compared to gains in 2010, partially offset by a decrease in insurance operating costs and other expenses. The net realized capital losses in 2011 primarily relate to losses on derivatives.

Insurance operating costs and other expenses decreased primarily as a result of an accrual for a litigation settlement of $73, before-tax, in 2010, for a class action lawsuit related to structured settlements.

The loss from discontinued operations, net of tax, in 2011, is due to a net realized capital loss of $74, after-tax, from the disposition of Federal Trust Corporation. Loss from discontinued operations, net of tax, in 2010, primarily relates to goodwill impairment on Federal Trust Corporation of approximately $100, after-tax.

See Note 13 of the Notes to Consolidated Financial Statements for a reconciliation of the tax provision at the U.S. Federal statutory rate to the provision (benefit) for income taxes.

Year ended December 31, 2010 compared to the year ended December 31, 2009

The net loss in Corporate decreased primarily due to improvements in net realized capital gains (losses), partially offset by an increase in interest expense.

The change to net realized capital gains, from net realized capital losses was due to impairments on investment securities recorded in 2009. In addition, 2009 included a net realized capital loss of approximately $300 as a result of a contingency payment made to Allianz due to the Company’s participation in the Capital Purchase Program. See Note 15 of the Notes to Consolidated Financial Statements for a further discussion on Allianz.

Interest expense increased primarily due to the issuance of $1.1 billion of senior notes in the first quarter of 2010. For further information, see Senior Notes within Note 14 of the Notes to Consolidated Financial Statements.

The effective tax rate in 2009 differed from the U.S. Federal statutory rate due to nondeductible costs associated with the contingency payment to Allianz.

93

ENTERPRISE RISK MANAGEMENT

The Company has an enterprise risk management function (“ERM”) that is charged with providing analysis of the Company’s risks on an individual and aggregated basis and with ensuring that the Company’s risks remain within its risk appetite and tolerances. The Company has established the Enterprise Risk and Capital Committee (“ERCC”) that includes the Company’s CEO, Chief Financial Officer (“CFO”), Chief Investment Officer (“CIO”), Chief Risk Officer, the divisional Presidents and the General Counsel. The ERCC is responsible for managing the Company’s risks and overseeing the enterprise risk management program. The Company categorizes its main risks as follows:

• Insurance Risk

• Operational Risk

• Financial Risk

• Business Risk

Insurance Risk Management

The Company categorizes its insurance risks across both property-casualty and life products. The Company’s insurance operations are vested in the ability to add value through the effective underwriting, pooling, and pricing of insurance risks. As such, working under the direction of the Company’s Chief Insurance Risk Officer (“CIRO”), the Company has developed a disciplined approach to insurance risk management that is well integrated into the organization’s underwriting, pricing, reinsurance, claims, and capital management processes.

At the same time, the Company has policies and procedures to manage concentrations or correlations of insurance risk, including ERM policies governing the risks related to natural and man-made property catastrophes such as hurricanes, earthquakes, tornado/hailstorms, winter storms, pandemics, terrorism, and casualty catastrophes. The Company establishes risk limits to control potential loss and actively monitors the risk exposures as a percent of statutory surplus. The Company also uses reinsurance to transfer insurance risk to well-established and financially secure reinsurers (see Reinsurance Section). The Company’s CIRO has enterprise responsibility for establishing and maintaining the framework, principles and guidelines of The Hartford’s insurance risk management program.

Non-Catastrophic Insurance Risks

Non-catastrophic insurance risks exist within each of the Company’s divisions and include, but are not limited to, the following:

• Property: Risk of loss to personal or commercial property from automobile related accidents, weather, explosions, smoke, shaking, fire, theft, vandalism, inadequate installation, faulty equipment, collisions and falling objects, and/or machinery mechanical breakdown resulting in physical damage and other covered perils.

• Liability: Risk of loss from automobile related accidents, uninsured and underinsured drivers, lawsuits from accidents, defective products, breach of warranty, negligent acts by professional practitioners, environmental claims, latent exposures, fraud, coercion, forgery, failure to fulfill obligations per contract surety, liability from errors and omissions, derivative lawsuits, and other securities actions and covered perils.

• Mortality: Risk of loss from unexpected trends in insured deaths impacting timing of payouts from life insurance or annuity products, personal or commercial automobile related accidents, and death of employees or executives during the course of employment, while on disability, or while collecting worker’s compensation benefits.

• Morbidity: Risk of loss to an insured from illness incurred during the course of employment or illness from other covered perils.

• Disability: Risk of loss incurred from personal or commercial automobile related losses, accidents arising outside of the workplace, injuries or accidents incurred during the course of employment, or from equipment each loss resulting short term or long term disability payments.

• Longevity: Risk of loss from increase life expectancy trends among policyholders receiving long term benefit payments or annuity payouts.

The Company’s processes for managing these risks include disciplined underwriting protocols, exposure controls, sophisticated risk based pricing, risk modeling, risk transfer, and capital management strategies. The Company has established underwriting guidelines for both individual risks, including individual policy limits, and risks in the aggregate, including aggregate exposure limits by geographic zone and peril. Pricing indications for each line of business are set independent of the business by corporate actuarial and are integrated into the reserve review process to ensure consistency between pricing and reserving. Monthly reports track loss cost trends relative to pricing objectives within each state and product, and corporate actuarial provides an independent report to the Board on the Company’s reserve position and loss cost trends.

94

Natural Catastrophe Risk

Natural catastrophe risk is defined as the exposure arising from natural phenomena (e.g., weather, earthquakes, wildfires, etc.) that create a concentration or aggregation of loss across the Company’s insurance or asset portfolios. The Company uses both internal and third-party models to estimate the potential loss resulting from various catastrophe events and the potential financial impact those events would have on the Company’s financial position and results of operations across the property-casualty, life, and asset management businesses. For natural catastrophe perils, the Company generally limits its estimated pre-tax loss as a result of natural catastrophes for property & casualty exposures from a single 250-year event to less than 30% of statutory surplus prior to reinsurance and to less than 15% of statutory surplus after reinsurance. The Company’s modeled loss estimates are derived by averaging 21 modeled loss events representing a 250-year return period loss. For the peril of earthquake, the 21 events averaged to determine the modeled loss estimate include events occurring in California as well as the Northeastern, Southeastern and Midwestern regions of the United States with associated magnitudes ranging from 5.9 to 7.7 on the Moment Magnitude scale. For the peril of hurricane, the 21 events averaged to determine the modeled loss estimate include category 3, 4 and 5 events in Florida, as well as other Gulf and Northeastern region landfalls.

While Enterprise Risk Management has a process to track and manage these limits, from time to time, the estimated loss to natural catastrophes from a single 250-year event prior to reinsurance may fluctuate above or below these limits due to changes in modeled loss estimates, exposures, or statutory surplus. Currently, the Company’s estimated pre-tax loss to a single 250-year natural catastrophe event prior to reinsurance is less than 30% of the statutory surplus of the property and casualty insurance subsidiaries and the Company’s estimated pre-tax loss net of reinsurance is less than 15% of statutory surplus of the property and casualty operations. The estimated 250 year pre-tax probable maximum losses from hurricane events are estimated to be $1.7 billion and $632, before and after reinsurance, respectively. The estimated 250 year pre-tax probable maximum loss from earthquake events is estimated to be $793 before reinsurance and $482 net of reinsurance. The loss estimates represent total property losses for hurricane events and property and workers’ compensation losses for earthquake events resulting from a single event. The estimates provided are based on 250-year return period loss estimates that have a 0.4% likelihood of being exceeded in any single year.

The net loss estimates provided above assume that the Company is able to recover all losses ceded to reinsurers under its reinsurance programs. There are various methodologies used in the industry to estimate the potential property and workers’ compensation losses that would arise from various catastrophe events and companies may use different models and assumptions in their estimates. Therefore, the Company’s estimates of gross and net losses arising from a 250-year hurricane or earthquake event may not be comparable to estimates provided by other companies. Furthermore, the Company’s estimates are subject to significant uncertainty and could vary materially from the actual losses that would arise from these events and the loss estimates provided by other companies. The Company also manages natural catastrophe risk for group life, group disability, and individual life insurance, which in combination with property and workers compensation loss estimates, are subject to separate enterprise risk management net aggregate loss limits as a percent of enterprise surplus.

Terrorism Risk

The Company defines terrorism risk as the risk of losses from terrorist attacks, including losses caused by single-site and multi-site conventional attacks, as well as the potential for attacks using nuclear, biological, chemical or radiological weapons (“NBCR”). The Company monitors aggregations of terrorism risk exposure around key landmarks primarily in major metropolitan areas that span the Company’s insurance portfolio. Enterprise limits for terrorism apply to aggregations of risk across property-casualty, group benefits, life insurance and specific asset portfolios and are defined based on a deterministic, single-site conventional terrorism attack scenario. The Company manages its potential estimated loss from a terrorism loss scenario to less than $1.3 billion. In addition, the Company monitors exposures monthly and employs both internally developed and vendor-licensed loss modeling tools as part of its risk management discipline.

Pandemic Risk

Pandemic risk is the exposure to loss arising from widespread influenza or other pathogens or bacterial infections that create an aggregation of loss across the Company’s insurance or asset portfolios. Consistent with industry practice, the Company assesses exposure to pandemics by analyzing the potential impact from a variety of pandemic scenarios based on conditions consistent with historical outbreaks of flu-like viruses such as the “Severe” 1918 Spanish Flu, the Asian flu of 1957, the Hong Kong flu of 1968, and the 2009 outbreak of the swine flu. For pandemic risk, the Company generally limits its estimated pre-tax loss from a single 250 year event to less than 12.5% of the statutory surplus for the enterprise. In evaluating these scenarios, the Company assesses the impact on group and individual life policies, short-term and long term disability, annuities, COLI, property & casualty claims, and losses in the investment portfolio associated with market declines in the event of a widespread pandemic.

95

Reinsurance as a Risk Management Strategy

The Hartford utilizes reinsurance to transfer risk to affiliated and unaffiliated insurers. Reinsurance is used to manage aggregation of risk as well as to transfer certain risk to reinsurance companies based on specific geographic or risk concentrations. All reinsurance processes are aligned under a single enterprise reinsurance risk management policy. Reinsurance purchasing is a centralized function within Commercial, Consumer Markets and Wealth Management to support a consistent strategy and to ensure that the reinsurance activities are fully integrated into the organization’s risk management processes.

A variety of traditional reinsurance products are used as part of the Company’s risk management strategy, including excess of loss occurrence-based products that protect property and worker’s compensation exposures, and individual risk or quota share arrangements, that protect specific classes or lines of business. The Company has no significant finite risk contracts in place and the statutory surplus benefit from all such prior year contracts is immaterial. Facultative reinsurance is used by the Company to manage policy-specific risk exposures based on established underwriting guidelines. The Hartford also participates in governmentally administered reinsurance facilities such as the Florida Hurricane Catastrophe Fund (“FHCF”), the Terrorism Risk Insurance Program established under The Terrorism Risk Insurance Program Reauthorization Act of 2007 (“TRIPRA”) and other reinsurance programs relating to particular risks or specific lines of business.

Reinsurance for Catastrophes

The Company has several catastrophe reinsurance programs, including reinsurance treaties that cover property and workers’ compensation losses aggregating from single catastrophe events. The following table summarizes the primary catastrophe treaty reinsurance coverage’s that the Company has in place as of February 1, 2012:

		% of layer(s)
Coverage	Treaty term	reinsured			Per occurrence limit			Retention
Principal property catastrophe program covering property catastrophe losses from a single event	1/1/2012 to 1/1/2013		90	%	$	750		$	350
Reinsurance with the FHCF covering Florida Personal Lines property catastrophe losses from a single event	6/1/2011 to 6/1/2012		90	%		145	[1]		55
Workers compensation losses arising from a single catastrophe event [2]	7/1/2011 to 7/1/2012		95	%		350			100

[1]	The per occurrence limit on the FHCF treaty is $145 for the 6/1/2011 to 6/1/2012 treaty year based on the Company’s election to purchase the required coverage from FHCF. For 6/1/2010 to 6/1/2011, the Company elected not to purchase additional limits under the Temporary Increase in Coverage Limit (TICL) statutory provision.
[2]	In addition, to the limit shown above, the workers compensation reinsurance includes a non-catastrophe, industrial accident layer, 80% of $30 excess a $20 retention.

In addition to the property catastrophe reinsurance coverage described in the above table, the Company has other catastrophe and working layer treaties and facultative reinsurance agreements that cover property catastrophe losses on an aggregate excess of loss and on a per risk basis. The principal property catastrophe reinsurance program and other reinsurance programs include a provision to reinstate limits in the event that a catastrophe loss exhausts limits on one or more layers under the treaties.

In addition to the reinsurance protection provided by The Hartford’s traditional property catastrophe reinsurance program described above, the Hartford has fully collateralized reinsurance coverage’s from Foundation Re III for losses sustained from qualifying hurricane loss events. Under the terms of the treaties, the Company is reimbursed for losses from hurricanes using customized industry index contracts designed to replicate The Hartford’s own catastrophe losses, with a provision that the actual losses incurred by the Company for covered events, net of reinsurance recoveries, cannot be less than zero.

The following table summarizes the terms of the reinsurance treaties with Foundation Re III that were in place as of December 31, 2011:

			Bond amount issued
Covered perils	Treaty term	Covered losses	by Foundation Re III
Hurricane loss events affecting the Gulf and Eastern Coast of the United States	1/27/2010 to 1/27/2014	90% of $200 in losses in excess of an index loss trigger equating to approximately $1.2 billion in losses to The Hartford	$	180
Hurricane loss events affecting the Gulf and Eastern Coast of the United States	2/18/2011 to 2/18/2015	67.5% of $200 in losses in excess of an index loss trigger equating to approximately $1.4 billion in losses to The Hartford		135

As of December 31, 2011, there have been no events that are expected to trigger a recovery under the Foundation Re III reinsurance program and, accordingly, the Company has not recorded any recoveries from the associated reinsurance treaties.

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Reinsurance for Terrorism

For the risk of terrorism, private sector catastrophe reinsurance capacity is generally limited and largely unavailable for terrorism losses caused by nuclear, biological, chemical or radiological weapons attacks. As such, the Company’s principal reinsurance protection against large-scale terrorist attacks is the coverage currently provided through the TRIPRA. On December 26, 2007, the President signed TRIPRA extending the Terrorism Risk Insurance Act of 2002 (“TRIA”) through the end of 2014. TRIPRA provides a backstop for insurance-related losses resulting from any “act of terrorism” certified by the Secretary of the Treasury, in concurrence with the Secretary of State and Attorney General, that result in industry losses in excess of $100. In addition, TRIPRA revised the TRIA definition of a certified “act of terrorism” by removing the requirement that an act be committed “on behalf of any foreign person or foreign interest”. As a result, domestic acts of terrorism can now be certified as “acts of terrorism” under the program, subject to the other requirements of TRIPRA. Under the program, in any one calendar year, the federal government would pay 85% of covered losses from a certified act of terrorism after an insurer’s losses exceed 20% of the Company’s eligible direct commercial earned premiums of the prior calendar year, up to a combined annual aggregate limit for the federal government and all insurers of $100 billion. If an act of terrorism or acts of terrorism result in covered losses exceeding the $100 billion annual industry aggregate limit, a future Congress would be responsible for determining how additional losses in excess of $100 billion will be paid.

Among other items, TRIPRA required that the President’s Working Group on Financial Markets (“PWG”) continue to perform an analysis regarding the long-term availability and affordability of insurance for terrorism risk. Among the findings detailed in the PWG’s initial report, released October 2, 2006, were that the high level of uncertainty associated with predicting the frequency of terrorist attacks, coupled with the unwillingness of some insurance policyholders to purchase insurance coverage, makes predicting long-term development of the terrorism risk market difficult, and that there is likely little potential for future market development for NBCR coverage. The January 2011 PWG report notes some improvements in capacity and modeling, but also noted that take-up rates for terrorism coverage remained relatively flat over the past three years and that insurers remain uncertain about the ability of models to predict the frequency and severity of terrorist attacks. With respect to NBCR coverage, a December 2008 study by the U.S. Government Accountability Office (“GAO”) found that property and casualty insurers still generally seek to exclude NBCR coverage from their commercial policies when permitted. However, while nuclear, pollution and contamination exclusions are contained in many property and liability insurance policies, the GAO report concluded that such exclusions may be subject to challenges in court because they were not specifically drafted to address terrorist attacks. Furthermore, workers’ compensation policies generally have no exclusion or limitations. The GAO found that commercial property and casualty policyholders, including companies that own high-value properties in large cities, generally reported that they could not obtain NBCR coverage. Commercial property and casualty insurers generally remain unwilling to offer NBCR coverage because of uncertainties about the risk and the potential for catastrophic losses.

Reinsurance Recoverables

Reinsurance Security

To manage reinsurer credit risk, a security review committee evaluates the credit standing, financial performance, management and operational quality of each potential reinsurer. Through this process, the Company maintains a centralized list of reinsurers approved for participation in reinsurance transactions. Only reinsurers approved through this process are eligible to participate in new reinsurance transactions. The Company’s approval designations reflect the differing credit exposure associated with various classes of business. Participation eligibility is categorized based upon the nature of the risk reinsured, including the expected liability payout duration. In addition to defining participation eligibility, the Company regularly monitors credit risk exposure to each reinsurance counterparty and has established limits tiered by counterparty credit rating. For further discussions on how the Company manages and mitigates third party credit risk, refer to the Credit Risk section.

Property and Casualty Insurance Product Reinsurance Recoverable

Property and casualty insurance product reinsurance recoverables represent loss and loss adjustment expense recoverable from a number of entities, including reinsurers and pools. The following table shows the components of the gross and net reinsurance recoverable as of December 31, 2011 and 2010:

Reinsurance Recoverable	December 31, 2011			December 31, 2010
Paid loss and loss adjustment expenses	$	153		$	198
Unpaid loss and loss adjustment expenses		2,884			2,963
Gross reinsurance recoverable		3,037			3,161
Less: allowance for uncollectible reinsurance		(290	)		(290	)
Net reinsurance recoverable	$	2,747		$	2,871

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As shown in the following table, a portion of the total gross reinsurance recoverable relates to the Company’s mandatory participation in various involuntary assigned risk pools and the value of annuity contracts held under structured settlement agreements. Reinsurance recoverables due from mandatory pools are backed by the financial strength of the property and casualty insurance industry. Annuities purchased from third-party life insurers under structured settlements are recognized as reinsurance recoverables in cases where the Company has not obtained a release from the claimant. Of the remaining gross reinsurance recoverable as of December 31, 2011 and 2010, the following table shows the portion of recoverables due from companies rated by A.M. Best.

Distribution of gross reinsurance recoverable	December 31, 2011						December 31, 2010
Gross reinsurance recoverable	$	3,037					$	3,161
Less: mandatory (assigned risk) pools and structured settlements		(617	)					(614	)
Gross reinsurance recoverable excluding mandatory pools and structured settlements	$	2,420					$	2,547
				% of Total						% of Total
Rated A- (Excellent) or better by A.M. Best [1]	$	1,774			73.3	%	$	1,869			73.3	%
Other rated by A.M. Best		52			2.2	%		43			1.7	%
Total rated companies		1,826			75.5	%		1,912			75.0	%
Voluntary pools		100			4.1	%		107			4.2	%
Captives		242			10.0	%		226			8.9	%
Other not rated companies		252			10.4	%		302			11.9	%
Total	$	2,420			100.0	%	$	2,547			100.0	%

[1] Based on A.M. Best ratings as of December 31, 2011 and 2010, respectively.

Where its contracts permit, the Company secures future claim obligations with various forms of collateral, including irrevocable letters of credit, secured trusts, funds held accounts and group wide offsets. As part of its reinsurance recoverable review, the Company analyzes recent developments in commutation activity between reinsurers and cedants, recent trends in arbitration and litigation outcomes in disputes between cedants and reinsurers and the overall credit quality of the Company’s reinsurers. Due largely to investment losses sustained by reinsurers in 2008 along with significant catastrophe losses and European sovereign debt concerns in 2011, the financial strength ratings of some reinsurers have been downgraded and the financial strength ratings of other reinsurers have been put on negative watch. Nevertheless, as indicated in the above table, approximately 73% of the gross reinsurance recoverables due from reinsurers rated by A.M. Best were rated A- (excellent) or better as of December 31, 2011. Due to the inherent uncertainties as to collection and the length of time before such amounts will be due, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or cash flows in a particular quarterly or annual period.

Annually, the Company completes evaluations of the reinsurance recoverable asset associated with older, long-term casualty liabilities reported in the Property & Casualty Other Operations reporting segment, and the allowance for uncollectible reinsurance reported in the Property & Casualty Commercial reporting segment. For a discussion regarding the results of these evaluations, see Property and Casualty Insurance Product Reserves, Net of Reinsurance within the Critical Accounting Estimates section of the MD&A.

Guaranty Funds and Other Insurance Assessments

As part of its risk management strategy, the Company regularly monitors the financial wherewithal of other insurers and, in particular, activity by insurance regulators and various state guaranty associations relations to troubled insurers. In all states, insurers licensed to transact certain classes of insurance are required to become members of a guaranty fund. In most states, in the event of the insolvency of an insurer writing any such class of insurance in the state, members of the funds are assessed to pay certain claims of the insolvent insurer. A particular state’s fund assesses its members based on their respective written premiums in the state for the classes of insurance in which the insolvent insurer was engaged. Assessments are generally limited for any year to one or two percent of the premiums written per year depending on the state. The amount and timing of assessments related to past insolvencies is unpredictable.

Citizens Property Insurance Corporation in Florida (“Citizens”), a non-affiliate insurer, provides property insurance to Florida homeowners and businesses that are unable to obtain insurance from other carriers, including for properties deemed to be “high risk”. Citizens maintains a Personal Lines account, a Commercial Lines account and a High Risk account. If Citizens incurs a deficit in any of these accounts, Citizens may impose a “regular assessment” on other insurance carriers in the state, such as the Company, to fund the deficits, subject to certain restrictions and subject to approval by the Florida Office of Insurance Regulation. Carriers are then permitted to surcharge policyholders to recover the assessments over the next few years. Citizens may also opt to finance a portion of the deficits through issuing bonds and may impose “emergency assessments” on other insurance carriers to fund the bond repayments. Unlike with regular assessments, however, insurance carriers only serve as a collection agent for emergency assessments and are not required to remit surcharges for emergency assessments to Citizens until they collect surcharges from policyholders. Under U.S. GAAP, the Company is required to accrue for regular assessments in the period the assessments become probable and estimable and the obligating event has occurred. Surcharges to recover the amount of regular assessments may not be recorded as an asset until the related premium is written. Emergency assessments that may be levied by Citizens are not recorded in the income statement.

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Operational Risk Management

The Hartford has an Operational Risk Management (“ORM”) function whose responsibility is to provide a comprehensive and enterprise-wide view of the Company’s operational risk on an aggregate basis. The Company defines operational risk as the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. This inadequacy or failure may come from internal or external events. It includes legal risk and considers reputational risk as an impact. The Company has developed a library of operational risks which have been classified into the following seven risk categories:

• Internal Fraud

• External Fraud

• Employment Practices & Workplace Safety

• Business Disruption & Systems Failures

• Clients, Products & Business Practice

• Damage to Physical Assets

• Execution, Delivery & Process Management

ORM is led by the Chief Operational Risk Officer (“CORO”) who is responsible for establishing, maintaining and communicating the framework, principles and guidelines of The Hartford’s operational risk management program. Responsibility for day-to-day management of operational risk lies within each business unit and functional area..

ORM works closely with the Operational Risk Committee (“ORC”), an enterprise wide governance body comprised of senior leaders from functional areas such as ORM, Enterprise Services, Enterprise Operations, Claims, Information Technology, Compliance and Internal Audit. The ORC meets regularly and provides a forum for ensuring the effective management of operational risks across the enterprise. The ORC’s responsibilities include reviewing and approving: policies governing operational risk, functional risk tolerances, and risk mitigation strategies. This group also identifies emerging operational risks, prioritizes them, and determines action plans. Individual committees, such as the Enterprise Sourcing Board, Enterprise Privacy and Security Committee and the Enterprise Health, Environment and Safety Committee, focus on specific operational risk issues and report to the ORC.

ORM is responsible for ensuring controls and providing a framework for managing operational risks. ORM has various tools and processes for identifying, monitoring, measuring, prioritizing, and reporting operational risks. ORM uses a centralized Governance, Risk, and Compliance (GRC) system to help manage operational risk across the Company’s finance, legal, data security, and information technology functions. The Company’s business risk assessment process is used to identify operational risks and evaluate controls to mitigate those risks.

Financial Risk Management

The Company identifies the following categories of financial risk:

• Liquidity Risk

• Interest Rate Risk

• Equity Risk

• Foreign Currency Exchange Risk

• Credit Risk

Financial risks include direct, and indirect risks to the Company’s financial objectives coming from events that impact market conditions or prices. Financial risk also includes exposure to events that may cause correlated movement in multiple risk factors. The primary source of financial risks are the Company’s general account assets and the liabilities which those assets back, together with the guarantees which the company has written over various liability products, particularly its portfolio of variable annuities. The Company assesses its financial risk on a U.S. GAAP, statutory and economic basis. The Hartford has developed a disciplined approach to financial risk management that is well integrated into the Company’s underwriting, pricing, hedging, claims, asset and liability management, new product, and capital management processes. Consistent with its risk appetite, the Company establishes financial risk limits to control potential loss. Exposures are actively monitored, and mitigated where appropriate. The Company uses various risk management strategies, including reinsurance and over-the-counter and exchange traded derivatives to transfer risk to well-established and financially secure counterparties. The Company’s Chief Market Risk Officer has enterprise responsibility for establishing and maintaining the framework, principles, and guidelines of The Hartford’s financial risk management program.

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Liquidity Risk

Liquidity risk is the risk to current or prospective earnings or capital arising from the company’s inability or perceived inability to meet its contractual cash obligations at the legal entity level when they come due over given horizons without incurring unacceptable costs and without relying on uncommitted funding sources. Liquidity risk includes the inability to manage unplanned increases or accelerations in cash outflows, decreases or changes in funding sources, and changes in market conditions that affect the ability to liquidate assets quickly to meet obligations with minimal loss in value. Components of liquidity risk include funding risk, transaction risk and market liquidity risk. Funding risk is the gap between sources and uses of cash under normal and stressed conditions taking into consideration structural, regulatory and legal entity constraints. Changes in institution-specific conditions that affect the Company’s ability to sell assets or otherwise transact business without incurring a significant loss in value is transaction risk. Changes in general market conditions that affect the institution’s ability to sell assets or otherwise transact business without incurring a significant loss in value is market liquidity risk.

The Company has defined ongoing monitoring and reporting requirements to assess liquidity across the enterprise. The Company measures and manages liquidity risk exposures and funding needs within prescribed limits and across legal entities, business lines and currencies, taking into account legal, regulatory and operational limitations to the transferability of liquidity. The Company also monitors internal and external conditions, identifies material risk changes and emerging risks that may impact liquidity. The Company’s CFO has primary responsibility for liquidity risk.

For further discussion on liquidity see the section on Capital Resources and Liquidity.

Interest Rate Risk

Interest rate risk is the risk of financial loss due to adverse changes in the value of assets and liabilities arising from movements in interest rates. Interest rate risk encompasses exposures with respect to changes in the level of interest rates, the shape of the term structure of rates and the volatility of interest rates. Interest rate risk does not include exposure to changes in credit spreads. The Company has exposure to interest rates arising from its fixed securities, interest sensitive liabilities and discount rate assumptions associated with the Company’s pension and other post retirement benefit obligations.

An increase in interest rates from current levels is generally a favorable development for the Company. Rate increases are expected to provide additional net investment income, increase sales of fixed rate Wealth Management and Life Other Operations investment products, reduce the cost of the variable annuity hedging program, limit the potential risk of margin erosion due to minimum guaranteed crediting rates in certain Wealth Management and Life Other Operations products and, if sustained, could reduce the Company’s prospective pension expense. Conversely, a rise in interest rates will reduce the fair value of the investment portfolio, increase interest expense on the Company’s variable rate debt obligations and, if long-term interest rates rise dramatically within a six to twelve month time period, certain Wealth Management and Life Other Operations businesses may be exposed to disintermediation risk. Disintermediation risk refers to the risk that policyholders will surrender their contracts in a rising interest rate environment requiring the Company to liquidate assets in an unrealized loss position. In conjunction with the interest rate risk measurement and management techniques, certain of Wealth Management and Life Other Operation’s fixed income product offerings have market value adjustment provisions at contract surrender. An increase in interest rates may also impact the Company’s tax planning strategies and in particular its ability to utilize tax benefits to offset certain previously recognized realized capital losses.

A decline in interest rates results in certain mortgage-backed securities being more susceptible to paydowns and prepayments. During such periods, the Company generally will not be able to reinvest the proceeds at comparable yields. Lower interest rates will also likely result in lower net investment income, increased hedging cost associated with variable annuities and, if declines are sustained for a long period of time, it may subject the Company to reinvestment risks, higher pension costs expense and possibly reduced profit margins associated with guaranteed crediting rates on certain Wealth Management and Life Other Operations products. Conversely, the fair value of the investment portfolio will increase when interest rates decline and the Company’s interest expense will be lower on its variable rate debt obligations.

The Company manages its exposure to interest rate risk by constructing investment portfolios that maintain asset allocation limits and asset/liability duration matching targets which may include the use of derivatives. The Company analyzes interest rate risk using various models including parametric models and cash flow simulation under various market scenarios of the liabilities and their supporting investment portfolios, which may include derivative instruments. Measures the Company uses to quantify its exposure to interest rate risk inherent in its invested assets and interest rate sensitive liabilities include duration, convexity and key rate duration. Duration is the price sensitivity of a financial instrument or series of cash flows to a parallel change in the underlying yield curve used to value the financial instrument or series of cash flows. For example, a duration of 5 means the price of the security will change by approximately 5% for a 100 basis point change in interest rates. Convexity is used to approximate how the duration of a security changes as interest rates change in a parallel manner. Key rate duration analysis measures the price sensitivity of a security or series of cash flows to each point along the yield curve and enables the Company to estimate the price change of a security assuming non-parallel interest rate movements.

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To calculate duration, convexity, and key rate durations, projections of asset and liability cash flows are discounted to a present value using interest rate assumptions. These cash flows are then revalued at alternative interest rate levels to determine the percentage change in fair value due to an incremental change in the entire yield curve for duration and convexity, or a particular point on the yield curve for key rate duration. Cash flows from corporate obligations are assumed to be consistent with the contractual payment streams on a yield to worst basis. Yield to worst is a basis that represents the lowest potential yield that can be received without the issuer actually defaulting. The primary assumptions used in calculating cash flow projections include expected asset payment streams taking into account prepayment speeds, issuer call options and contract holder behavior. Mortgage-backed and asset-backed securities are modeled based on estimates of the rate of future prepayments of principal over the remaining life of the securities. These estimates are developed by incorporating collateral surveillance and anticipated future market dynamics. Actual prepayment experience may vary from these estimates.

The Company is also exposed to interest rate risk based upon the discount rate assumption associated with the Company’s pension and other postretirement benefit obligations. The discount rate assumption is based upon an interest rate yield curve comprised of bonds rated Aa with maturities primarily between zero and thirty years. For further discussion of interest rate risk associated with the benefit obligations, see the Critical Accounting Estimates Section of the MD&A under Pension and Other Postretirement Benefit Obligations and Note 17 of the Notes to Consolidated Financial Statements. In addition, management evaluates performance of certain Wealth Management and Life Other Operations products based on net investment spread which is, in part, influenced by changes in interest rates. For further discussion, see the Individual Annuity, Individual Life, and Retirement Plans sections of the MD&A.

The investments and liabilities primarily associated with interest rate risk are included in the following discussion. Certain product liabilities, including those containing GMWB, GMIB, GMAB, or GMDB, expose the Company to interest rate risk but also have significant equity risk. These liabilities are discussed as part of the Equity Risk section below.

Fixed Maturity Investments

The Company’s investment portfolios primarily consist of investment grade fixed maturity securities. The fair value of these investments was $83.1 billion and $78.4 billion at December 31, 2011 and 2010, respectively. The fair value of these and other invested assets fluctuates depending on the interest rate environment and other general economic conditions. The weighted average duration of the fixed maturity portfolio was approximately 5.3 years and 5.1 years as of December 31, 2011 and 2010, respectively.

Liabilities

The Company’s investment contracts and certain insurance product liabilities, other than non-guaranteed separate accounts, include asset accumulation vehicles such as fixed annuities, guaranteed investment contracts, other investment and universal life-type contracts and certain insurance products such as long-term disability.

Asset accumulation vehicles primarily require a fixed rate payment, often for a specified period of time, such as fixed rate annuities with a market value adjustment feature. Product examples include fixed rate annuities with a market value adjustment feature and fixed rate guaranteed investment contracts. The term to maturity of these contracts generally range from less than one year to ten years. In addition, certain products such as universal life contracts and the general account portion of Wealth Management’s and Life Other Operation’s variable annuity products, credit interest to policyholders subject to market conditions and minimum interest rate guarantees. The term to maturity of the asset portfolio supporting these products may range from short to intermediate.

While interest rate risk associated with many of these products has been reduced through the use of market value adjustment features and surrender charges, the primary risk associated with these products is that the spread between investment return and credited rate may not be sufficient to earn targeted returns.

The Company also manages the risk of certain insurance liabilities similarly to investment type products due to the relative predictability of the aggregate cash flow payment streams. Products in this category may contain significant reliance upon actuarial (including mortality and morbidity) pricing assumptions and do have some element of cash flow uncertainty. Product examples include structured settlement contracts, on-benefit annuities (i.e., the annuitant is currently receiving benefits thereon) and short-term and long-term disability contracts. The cash outflows associated with these policy liabilities are not interest rate sensitive but do vary based on the timing and amount of benefit payments. The primary risks associated with these products are that the benefits will exceed expected actuarial pricing and/or that the actual timing of the cash flows will differ from those anticipated, or interest rate levels may deviate from those assumed in product pricing, ultimately resulting in an investment return lower than that assumed in pricing. The average duration of the liability cash flow payments can range from less than one year to in excess of fifteen years.

Derivatives

The Company utilizes a variety of derivative instruments to mitigate interest rate risk associated with its investment portfolio. Interest rate swaps are primarily used to convert interest receipts or payments to a fixed or variable rate. The use of such swaps enables the Company to customize contract terms and conditions to customer objectives and manage the interest rate risk profile within established tolerances. Interest rate swaps are also used to hedge the variability in the cash flow of a forecasted purchase or sale of fixed rate securities due to changes in interest rates. Forward rate agreements are used to convert interest receipts on floating-rate securities to fixed rates. These derivatives are used to lock in the forward interest rate curve and reduce income volatility that results from changes in interest rates. Interest rate caps, floors, swaptions, and futures may be used to manage portfolio duration.

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At December 31, 2011 and 2010, notional amounts pertaining to derivatives utilized to manage interest rate risk totaled $19.8 billion and $19.3 billion, respectively ($19.5 billion and $18.9 billion, respectively, related to investments and $0.3 billion and $0.4 billion, respectively, related to Wealth Management and Life Other Operations liabilities). The fair value of these derivatives was ($332) and ($372) as of December 31, 2011 and 2010, respectively

Interest Rate Sensitivity

The before-tax change in the net economic value of investment contracts (e.g., fixed annuity contracts) issued by the Company’s Wealth Management and Life Other Operations, as well as certain insurance product liabilities (e.g., short-term and long-term disability contracts) issued by the Company’s Commercial Markets operations, for which the payment rates are fixed at contract issuance and the investment experience is substantially absorbed by the Company’s operations, along with the corresponding invested assets are included in the following table. Also included in this analysis are the interest rate sensitive derivatives used by the Company to hedge its exposure to interest rate risk in the investment portfolios supporting these contracts. This analysis does not include the assets and corresponding liabilities of certain insurance products such as auto, property, whole and term life insurance, and certain life contingent annuities. Certain financial instruments, such as limited partnerships and other alternative investments, have been omitted from the analysis due to the fact that the investments are accounted for under the equity method and generally lack sensitivity to interest rate changes. Separate account assets and liabilities, equity securities, trading and the corresponding liabilities associated with the variable annuity products sold in Japan are excluded from the analysis because gains and losses in separate accounts accrue to policyholders. The calculation of the estimated hypothetical change in net economic value below assumes a 100 basis point upward and downward parallel shift in the yield curve.

	Change in Net Economic Value as of December 31,
	2011					2010
Basis point shift		- 100			+ 100		- 100			+ 100
Amount	$	(494	)	$	287	$	(190	)	$	96

The fixed liabilities included above represented approximately 43% and 47% of the Company’s general account liabilities as of December 31, 2011 and 2010, respectively. The assets supporting the fixed liabilities are monitored and managed within set duration guidelines, and are evaluated on a daily basis, as well as annually using scenario simulation techniques in compliance with regulatory requirements.

The following table provides an analysis showing the estimated before-tax change in the fair value of the Company’s fixed maturity investments and related derivatives, not included in the table above, assuming 100 basis point upward and downward parallel shifts in the yield curve as of December 31, 2011 and 2010. Certain financial instruments, such as limited partnerships and other alternative investments, have been omitted from the analysis due to the fact that the investments are accounted for under the equity method and generally lack sensitivity to interest rate changes.

	Change in Fair Value as of December 31,
	2011					2010
Basis point shift		- 100		+ 100			- 100		+ 100
Amount	$	3,248	$	(2,985	)	$	2,988	$	(2,774	)

The selection of the 100 basis point parallel shift in the yield curve was made only as an illustration of the potential hypothetical impact of such an event and should not be construed as a prediction of future market events. Actual results could differ materially from those illustrated above due to the nature of the estimates and assumptions used in the above analysis. The Company’s sensitivity analysis calculation assumes that the composition of invested assets and liabilities remain materially consistent throughout the year and that the current relationship between short-term and long-term interest rates will remain constant over time. As a result, these calculations may not fully capture the impact of portfolio re-allocations, significant product sales or non-parallel changes in interest rates.

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Equity Risk

Equity risk is defined as the risk of financial loss due to changes in the value of global equities or equity indices. The Company has exposure to equity risk from assets under management, embedded derivatives within the Company’s variable annuities and assets that support the Company’s pension plans. Equity Risk on the Company’s Variable Annuity products is mitigated through various hedging programs. (See the Variable Annuity Hedge Program Section)

The Company’s exposure to equity risk includes the potential for lower earnings associated with certain of the Wealth Management’s businesses such as variable annuities where fee income is earned based upon the fair value of the assets under management. For further discussion of equity risk, see the Variable Product Guarantee Risks and Risk Management section below. In addition, Wealth Management offers certain guaranteed benefits, primarily associated with variable annuity products, which increases the Company’s potential benefit exposure as the equity markets decline.

The Company is also subject to equity risk based upon the assets that support its pension plans. The asset allocation mix is reviewed on a periodic basis. In order to minimize risk, the pension plans maintain a listing of permissible and prohibited investments. In addition, the pension plans have certain concentration limits and investment quality requirements imposed on permissible investment options. For further discussion of equity risk associated with the pension plans, see the Critical Accounting Estimates section of the MD&A under “Pension and Other Postretirement Benefit Obligations” and Note 17 of the Notes to Consolidated Financial Statements.

Variable Product Guarantee Risks and Risk Management

The Company’s variable products are significantly influenced by the U.S., Japanese, and other equity markets. Increases or declines in equity markets impact certain assets and liabilities related to the Company’s variable products and the Company’s earnings derived from those products. The Company’s variable products include variable annuity contracts, mutual funds, and variable life insurance.

Generally, declines in equity markets will:

• reduce the value of assets under management and the amount of fee income generated from those assets;

• reduce the value of equity securities trading supporting the international variable annuities, the related policyholder funds and benefits payable, and the amount of fee income generated from those variable annuities;

• increase the liability for GMWB benefits resulting in realized capital losses;

• increase the value of derivative assets used to hedge product guarantees resulting in realized capital gains;

• increase the costs of the hedging instruments we use in our hedging program;

• increase the Company’s net amount at risk for GMDB and GMIB benefits;

• decrease the Company’s actual gross profits, resulting in increased DAC amortization;

• increase the amount of required assets to be held backing variable annuity guarantees to maintain required regulatory reserve levels and targeted risk based capital ratios;

• adversely affect customer sentiment toward equity-linked products, causing a decline in sales; and

• decrease the Company’s estimated future gross profits. See Estimated Gross Profits Used in the Valuation and Amortization of Assets and Liabilities Associated with Variable Annuity and Other Universal Life-Type Contracts within the Critical Accounting Estimates section of the MD&A for further information.

Generally, increases in equity markets will reduce the value of the dynamic hedge program and macro hedge derivative assets, resulting in realized capital losses, and will generally have the inverse impact of those listed above. See section on Variable Annuity Hedging Program for more information.

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Variable Annuity Guaranteed Benefits

The majority of the Company’s U.S., Japan, and U.K. variable annuities include optional living benefit and guaranteed minimum death benefit features. The net amount at risk (“NAR”) is generally defined as the guaranteed minimum benefit amount in excess of the contractholder’s current account value. Global variable annuity account values with guarantee features were $99.8 billion and $116.7 billion as of December 31, 2011 and December 31, 2010, respectively.

The following table summarizes the account values of the Company’s U.S. and Japan variable annuities with guarantee features and the NAR split between various guarantee features:

Total Variable Annuity Guarantees
As of December 31, 2011
							% of
	Account		Gross Net		Retained Net		Contracts In			% In the
($ in billions)	Value		Amount at Risk		Amount at Risk		the Money			Money[4]
U. S Variable Annuity [1]
GMDB [2]	$	68.7	$	12.0	$	5.1		77	%		15	%
GMWB		36.6		1.9		1.6		45	%		12	%
Japan Variable Annuity [1]
GMDB		29.2		10.9		9.4		99	%		27	%
GMIB [3]		27.3		7.5		7.5		99	%		22	%
UK Variable Annuity [1]
GMDB		1.9		0.08		0.08		100	%		4	%
GMWB		1.8		0.07		0.07		57	%		3	%

Total Variable Annuity Guarantees
As of December 31, 2010
							% of
	Account		Gross Net		Retained Net		Contracts In			% In the
($ in billions)	Value		Amount at Risk		Amount at Risk		the Money			Money[4]
U. S Variable Annuity [1]
GMDB [2]	$	83.0	$	10.7	$	4.3		70	%		12	%
GMWB		44.8		1.3		1.1		35	%		9	%
Japan Variable Annuity [1]
GMDB		31.2		8.8		7.6		98	%		22	%
GMIB [3]		29.7		6.1		6.1		99	%		17	%
UK Variable Annuity [1]
GMDB		2.2		0.04		0.04		100	%		1	%
GMWB		2.5		0.03		0.03		25	%		1	%

[1]	Policies with a guaranteed living benefits (a GMWB in the US or UK, or a GMIB in Japan) also have a guaranteed death benefit. The net amount at risk (“NAR”) for each benefit is shown; 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, by contract, the GMDB NAR is reduced to $0. When a policy goes into benefit status on a GMIB, its GMDB NAR is released
[2]	Excludes group annuity contracts with GMDB benefits.
[3]	Includes small amount of GMWB
[4	For all contracts that are “in the money”, this represents the percentage by which the average contract was in the money.

The Company expects to incur these payments in the future only if the policyholder has an “in the money” GMWB at their death or their account value is reduced to a specified level, through contractually permitted withdrawals and/or market declines. If the account value is reduced to the specified level, the contract holder will receive an annuity equal to the guaranteed remaining benefit (“GRB”) . For the Company’s “life-time” GMWB products, this annuity can continue beyond the GRB. As the account value fluctuates with equity market returns on a daily basis and the “life-time” GMWB payments can exceed the GRB, the ultimate amount to be paid by the Company, if any, is uncertain and could be significantly more or less than the Company’s current carried liability. For additional information on the Company’s GMWB liability, see Note 4 of the Notes to Consolidated Financial Statements.

Many policyholders with a GMDB also have a GMWB in the U.S. or GMIB in Japan. Policyholders that have a product that offer both guarantees can only receive the GMDB or the GMIB benefit in Japan or the GMDB or GMWB in the U.S. For additional information on the Company’s GMDB liability, see Note 9 of the Notes to Consolidated Financial Statements.

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For GMIB contracts, in general, the policyholder has the right to elect to annuitize benefits, beginning (for certain products) on the tenth or fifteenth anniversary year of contract commencement, receive lump sum payment of the then current account value, or remain in the variable sub-account. For GMIB contracts, if the policyholder makes the election, the policyholder is entitled to receive the original investment value over a 10- to 15- year annuitization period. A small percentage of the contracts will first become eligible to elect annuitization beginning in 2013. The remainder of the contracts will first become eligible to elect annuitization from 2014 to 2022. Because policyholders have various contractual rights to defer their annuitization election, the period over which annuitization election can take place is subject to policyholder behavior and therefore indeterminate. In addition, upon annuitization the contractholder surrenders access to the account value and the account value is transferred to the Company’s general account where it is invested and the additional investment proceeds are used towards payment of the original investment value. If the original investment value exceeds the account value upon annuitization then the contract is “in the money”. As of December 31, 2011, 65% of retained NAR is reinsured to an affiliate of The Hartford. For additional information on the Company’s GMIB liability, see Note 9 of the Notes to Consolidated Financial Statements.

The following table represents the timing of account values eligible for annuitization under the Japan GMIB as of December 31, 2011, as well as the NAR. The account values reflect 100% annuitization at the earliest point allowed by the contract and no adjustments for future market returns and policyholder behaviors. Future market returns, changes in the value of the Japanese yen and policyholder behaviors will impact account values eligible for annuitization in the years presented.

	GMIB [1]
($ in billions)	Account Value		Net Amount at Risk
2013	$	0.3	$	—
2014		4.5		0.9
2015		7.3		2.0
2016		2.5		0.8
2017		2.8		0.9
2018 & beyond [2]		6.9		2.0
Total	$	24.3	$	6.6

[1]	Excludes certain non-GMIB living benefits of $2.9 billion of account value and $0.9 billion of NAR.
[2]	In 2018 & beyond, $2.6 billion of the $6.9 billion is primarily associated with account value that is eligible in 2021.

Variable Annuity Market Risk Exposures

The following table summarizes the broad Variable Annuity Guarantees offered by the Company and the market risks to which the guarantee is most exposed from a U.S. GAAP accounting perspective.

Variable Annuity Guarantees [1]	U.S. GAAP Treatment [1]	Primary Market Risk Exposures [1]
U.S. Variable Guarantees
GMDB	Accumulation of the portion of fees required to cover expected claims, less accumulation of actual claims paid	Equity Market Levels
GMWB	Fair Value	Equity Market Levels / Implied Volatility / Interest Rates
For Life Component of GMWB	Accumulation of the portion of fees required to cover expected claims, less accumulation of actual claims paid	Equity Market Levels
International Variable Guarantees
GMDB & GMIB	Accumulation of the portion of fees required to cover expected claims, less accumulation of actual claims paid	Equity Market Levels / Interest Rates / Foreign Currency
GMWB	Fair Value	Equity Market Levels / Implied Volatility / Interest Rates / Foreign Currency
GMAB	Fair Value	Equity Market Levels / Implied Volatility / Interest Rates / Foreign Currency

[1] Each of these guarantees and the related U.S. GAAP accounting volatility will also be influenced by actual and estimated policyholder behavior.

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Risk Hedging

Variable Annuity Hedging Program

The Company’s variable annuity hedging is primarily focused on reducing the economic exposure to market risks associated with guaranteed benefits that are embedded in our global VA contracts through the use of reinsurance and capital market derivative instruments. The variable annuity hedging also considers the potential impacts on Statutory accounting results.

Reinsurance

The Company uses reinsurance for a portion of contracts with GMWB riders issued prior to the third quarter of 2003 and GMWB risks associated with a block of business sold between the third quarter of 2003 and the second quarter of 2006. The Company also uses reinsurance for a majority of the GMDB issued in the U.S. and a portion of the GMDB issued in Japan.

Capital Market Derivatives

GMWB Hedge Program

The Company enters into derivative contracts to hedge market risk exposures associated with the GMWB liabilities that are not reinsured. These derivative contracts include customized swaps, interest rate swaps and futures, and equity swaps, options, and futures, on certain indices including the S&P 500 index, EAFE index, and NASDAQ index.

Additionally, the Company holds customized derivative contracts to provide protection from certain capital market risks for the remaining term of specified blocks of non-reinsured GMWB riders. These customized derivative contracts are based on policyholder behavior assumptions specified at the inception of the derivative contracts. The Company retains the risk for differences between assumed and actual policyholder behavior and between the performance of the actively managed funds underlying the separate accounts and their respective indices.

While the Company actively manages this dynamic hedging program, increased U.S. GAAP earnings volatility may result from factors including, but not limited to: policyholder behavior, capital markets, divergence between the performance of the underlying funds and the hedging indices, changes in hedging positions and the relative emphasis placed on various risk management objectives.

Macro Hedge Program

The Company’s macro hedging program uses derivative instruments such as options, futures, swaps, and forwards on equities and interest rates to provide protection against the statutory tail scenario risk arising from U.S., GMWB and GMDB liabilities, on the Company’s statutory surplus. These macro hedges cover some of the residual risks not otherwise covered by specific dynamic hedging programs. Management assesses this residual risk under various scenarios in designing and executing the macro hedge program. The macro hedge program will result in additional U.S. GAAP earnings volatility as changes in the value of the macro hedge derivatives, which are designed to reduce statutory reserve and capital volatility, may not be closely aligned to changes in U.S. GAAP liabilities.

International Hedge Programs

The Company enters into derivative contracts to hedge market risk exposures associated with the guaranteed benefits which are embedded in the international variable annuity contracts. These derivative contracts include foreign currency forwards and options, interest rate swaps and futures, and equity swaps, options, and futures on certain broadly traded global equity indices including the S&P500 index, Nikkei 225 index, FTSE 100 index, and Euro Stoxx 50. During 2011, the Company increased its equity, currency, and interest rate hedge cover.

While the Company actively manages these dynamic hedging programs, increased U.S. GAAP earnings volatility may result from factors including, but not limited to: focus on reducing the economic exposure to market risks associated with guaranteed benefits, capital markets, changes in hedging positions and the relative emphasis placed on various risk management objectives.

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Variable Annuity Hedging Program Sensitivities

The following table presents the accounting treatment of the underlying guaranteed living benefits and the related hedge assets by hedge program.

U.S. Programs				International Programs
GMWB		Macro		Japan/UK
Hedge Assets	Liabilities	Hedge Assets	Liabilities	Hedge Assets	Liabilities [1]
Fair Value	Fair Value	Fair Value	Not Fair Value	Fair Value	Not Fair Value

[1] The liabilities for international variable annuity are primarily not measured on a fair value basis. However there is an immaterial portion of the international variable annuity with a GMWB or GMAB which is measured on a fair value basis.

The following table presents our estimates of the potential instantaneous impacts from sudden market stresses related to equity market prices, interest rates, implied market volatilities, and foreign currency exchange rates. The sensitivities below represent: (1) the net estimated difference between the change in the fair value of GMWB liabilities and the underlying hedge instruments and (2) the estimated change in fair value of the hedge instruments for the macro and international hedge programs, before the impacts of amortization of DAC, and taxes. As noted in the table above, certain hedge assets are used to hedge liabilities that are not carried at fair value and will not have a liability offset in the U.S. GAAP sensitivity analysis. All sensitivities are measured as of December 30, 2011, and are related to the fair value of liabilities and hedge instruments in place as of that date for the Company’s variable annuity hedge programs. The impacts presented in the table below are estimated individually as of December 30, 2011, and performed without consideration of any correlation among market risk factors.

U.S. GAAP Sensitivity Analysis	U.S. Programs																		International Programs
(pre Tax/DAC) [1]	GMWB									Macro									Japan/UK
Equity Market Return		-20	%		-10	%		+10	%		-20	%		-10	%		+10	%		-20	%		-10	%		+10	%
Potential Net Fair Value Impact	$	(35	)	$	(4	)	$	(20	)	$	380		$	141		$	(89	)	$	908		$	456		$	(451	)
Interest Rates	-50		bps	-25		bps	+25		bps	-50		bps	-25		bps	+25		bps	-50		bps	-25		bps	+25		bps
Potential Net Fair Value Impact	$	(221	)	$	(106	)	$	99		$	12		$	6		$	(6	)	$	477		$	235		$	(240	)
Implied Volatilities		+10	%		+2	%		-10	%		+10	%		+2	%		-10	%		+10	%		+2	%		-10	%
Potential Net Fair Value Impact	$	(565	)	$	(110	)	$	509		$	90		$	19		$	(111	)	$	30		$	6		$	(26	)
Yen Strengthens +/ Weakens -		+20	%		+10	%		-10	%		+20	%		+10	%		-10	%		+20	%		+10	%		-10	%
Potential Net Fair Value Impact		N/A			N/A			N/A			N/A			N/A			N/A		$	2,875		$	1,197		$	(749	)

[1] These sensitivities are based on the following key market levels as of December 30, 2011: 1) S&P of 1,257.60; 2) 10yr US swap rate of 2.03%; 3) S&P 10yr volatility of 30.15% and 4) FX rates of USDJPY @ 76.91 and EURJPY @99.66.

The above sensitivity analysis is an estimate and should not be used to predict the Company’s future financial performance of its variable annuity hedge programs. The actual net changes in the fair value liability and the hedging assets illustrated in the above table may vary materially depending on a variety of factors which include but are not limited to:

• The sensitivity analysis is only valid as of the measurement date and assumes instantaneous changes in the capital market factors and no ability to rebalance hedge positions prior to the market changes;

• Changes to the underlying hedging program, policyholder behavior, and variation in underlying fund performance relative to the hedged index, which could materially impact the liability; and

• The impact of elapsed time on liabilities or hedge assets, any non-parallel shifts in capital market factors, or correlated moves across the sensitivities.

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Foreign Currency Exchange Risk

Foreign currency exchange risk is defined as the risk of financial loss due to changes in the relative value between currencies. The Company’s foreign currency exchange risk is related to non-U.S. dollar denominated liability contracts, including its GMDB, GMAB, GMWB and GMIB benefits associated with its Japanese and U.K. variable annuities, the investment in and net income of the Japanese and U.K. operations, non-U.S. dollar denominated investments, which primarily consist of fixed maturity investments, and a yen denominated individual fixed annuity product. In addition, the Company’s Life Other Operations issued non-U.S. dollar denominated funding agreement liability contracts. A portion of the Company’s foreign currency exposure is mitigated through the use of derivatives.

The company manages the market risk, including foreign currency exchange risk, associated with the guaranteed benefits related to the Japanese and U.K. variable annuities through its comprehensive International Hedge Program. For more information on the International Hedge Program, including the foreign currency exchange risk sensitivity analysis, see the Variable Product Guarantee Risks and Risk Management section.

In order to manage the currency exposure related to non-U.S. dollar denominated investments and the non-U.S. dollar denominated funding agreement liability contracts, the Company enters into foreign currency swaps and forwards to hedge the variability in cash flows or fair value. These foreign currency swap and forward agreements are structured to match the foreign currency cash flows of the hedged foreign denominated securities and liabilities.

The yen denominated individual fixed annuity product was written by Hartford Life Insurance K.K. (“HLIKK”), a wholly-owned Japanese subsidiary of Hartford Life, Inc. (“HLI”), and subsequently reinsured to Hartford Life Insurance Company, a U.S. dollar based wholly-owned indirect subsidiary of HLI. During 2009, the Company suspended new sales of the Japan business. The underlying investment involves investing in U.S. securities markets, which offer favorable credit spreads. The yen denominated fixed annuity product (“yen fixed annuities”) is recorded in the consolidated balance sheets with invested assets denominated in dollars while policyholder liabilities are denominated in yen and converted to U.S. dollars based upon the December 31 yen to U.S. dollar spot rate. The difference between U.S. dollar denominated investments and yen denominated liabilities exposes the Company to currency risk. The Company manages this currency risk associated with the yen fixed annuities primarily with pay variable U.S. dollar and receive fixed yen currency swaps.

Although economically an effective hedge, a divergence between the yen denominated fixed annuity product liability and the currency swaps exists primarily due to the difference in the basis of accounting between the liability and the derivative instruments (i.e. historical cost versus fair value). The yen denominated fixed annuity product liabilities are recorded on a historical cost basis and are only adjusted for changes in foreign spot rates and accrued income. The currency swaps are recorded at fair value, incorporating changes in value due to changes in forward foreign exchange rates, interest rates and accrued income. A portion of the Company’s foreign currency exposure is mitigated through the use of derivatives.

Fixed Maturity Investments

The risk associated with the non-U.S. dollar denominated fixed maturities relates to potential decreases in value and income resulting from unfavorable changes in foreign exchange rates. The fair value of the non-U.S. dollar denominated fixed maturities, which are primarily denominated in euro, sterling, yen and Canadian dollars, at December 31, 2011 and 2010, were approximately $2.3 billion and $1.4 billion, respectively. Included in these amounts are $1.9 billion and $1.0 billion at December 31, 2011 and 2010, respectively, related to non-U.S. dollar denominated fixed maturity securities that directly support liabilities denominated in the same currencies. At December 31, 2011 and 2010, the derivatives used to hedge currency exchange risk related to the remaining non-U.S. dollar denominated fixed maturities had a total notional amount of $399 and $431, respectively, and total fair value of $12 and ($6), respectively.

Based on the fair values of the Company’s non-U.S. dollar denominated securities, including the associated yen denominated fixed annuity product liabilities, and derivative instruments as of December 31, 2011 and 2010, management estimates that a 10% unfavorable change in exchange rates would decrease the fair values by a before-tax total of approximately $113 and $87, respectively. The estimated impact was based upon a 10% change in December 31 spot rates. The selection of the 10% unfavorable change was made only for illustration of the potential hypothetical impact of such an event and should not be construed as a prediction of future market events. Actual results could differ materially from those illustrated above due to the nature of the estimates and assumptions used in the above analysis.

Liabilities

The Company’s Wealth Management operations issued non-U.S. dollar denominated funding agreement liability contracts. The Company hedges the foreign currency risk associated with these liability contracts with currency rate swaps. At December 31, 2011 and 2010, the derivatives used to hedge foreign currency exchange risk related to foreign denominated liability contracts had a total notional amount of $771 and a total fair value of ($57) and ($17), respectively.

The Company uses currency swaps to manage the foreign currency risk associated with the yen denominated individual fixed annuity product. As of December 31, 2011 and 2010, the notional value of the currency swaps was $1.9 billion and $2.1 billion and the fair value was $514 and $608, respectively. The currency swaps are recorded at fair value, incorporating changes in value due to changes in forward foreign exchange rates, interest rates and accrued income. A before-tax net gain of $3 and $27 for the years ended December 31, 2011 and 2010, respectively, which includes the changes in value of the currency swaps, excluding net periodic coupon settlements, and the yen fixed annuity contract remeasurement, was recorded in net realized capital gains and losses.

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Financial Risk on Statutory Capital

Statutory surplus amounts and risk-based capital (“RBC”) ratios may increase or decrease in any period depending upon a variety of factors and may be compounded in extreme scenarios or if multiple factors occur at the same time. At times the impact of changes in certain market factors or a combination of multiple factors on RBC ratios can be counterintuitive. Factors include:

• In general, as equity market levels and interest rates decline, the amount and volatility of both our actual potential obligation, as well as the related statutory surplus and capital margin for death and living benefit guarantees associated with U.S. variable annuity contracts can be materially negatively affected, sometimes at a greater than linear rate. Other market factors that can impact statutory surplus, reserve levels and capital margin include differences in performance of variable subaccounts relative to indices and/or realized equity and interest rate volatilities. In addition, as equity market levels increase, generally surplus levels will increase. RBC ratios will also tend to increase when equity markets increase. However, as a result of a number of factors and market conditions, including the level of hedging costs and other risk transfer activities, reserve requirements for death and living benefit guarantees and RBC requirements could increase with rising equity markets, resulting in lower RBC ratios. Non-market factors, which can also impact the amount and volatility of both our actual potential obligation, as well as the related statutory surplus and capital margin, include actual and estimated policyholder behavior experience as it pertains to lapsation, partial withdrawals, and mortality.

• Similarly, for guaranteed benefits (GMDB, GMIB, and GMWB) reinsured from our international operations to our U.S. insurance subsidiaries, the amount and volatility of both our actual potential obligation, as well as the related statutory surplus and capital margin can be materially affected by a variety of factors, both market and non-market. Market factors include declines in various equity market indices and interest rates, changes in value of the yen versus other global currencies, difference in the performance of variable subaccounts relative to indices, and increases in realized equity, interest rate, and currency volatilities. Non-market factors include actual and estimated policyholder behavior experience as it pertains to lapsation, withdrawals, mortality, and annuitization. Risk mitigation activities, such as hedging, may also result in material and sometimes counterintuitive impacts on statutory surplus and capital margin. Notably, as changes in these market and non-market factors occur, both our potential obligation and the related statutory reserves and/or required capital can increase or decrease at a greater than linear rate.

• As the value of certain fixed-income and equity securities in our investment portfolio decreases, due in part to credit spread widening, statutory surplus and RBC ratios may decrease.

• As the value of certain derivative instruments that do not get hedge accounting decreases, statutory surplus and RBC ratios may decrease.

• The life insurance subsidiaries’ exposure to foreign currency exchange risk exists with respect to non-U.S. dollar denominated assets and liabilities. Assets and liabilities denominated in foreign currencies are accounted for at their U.S. dollar equivalent values using exchange rates at the balance sheet date. As foreign currency exchange rates vary in comparison to the U.S. dollar, the remeasured value of those non-dollar denominated assets or liabilities will also vary, causing an increase or decrease to statutory surplus.

• Our statutory surplus is also impacted by widening credit spreads as a result of the accounting for the assets and liabilities in our fixed market value adjusted (“MVA”) annuities. Statutory separate account assets supporting the fixed MVA annuities are recorded at fair value. In determining the statutory reserve for the fixed MVA annuities, we are required to use current crediting rates in the U.S. and Japanese LIBOR in Japan. In many capital market scenarios, current crediting rates in the U.S. are highly correlated with market rates implicit in the fair value of statutory separate account assets. As a result, the change in statutory reserve from period to period will likely substantially offset the change in the fair value of the statutory separate account assets. However, in periods of volatile credit markets, such as we have experienced, actual credit spreads on investment assets may increase sharply for certain sub-sectors of the overall credit market, resulting in statutory separate account asset market value losses. As actual credit spreads are not fully reflected in the current crediting rates in the U.S. or Japanese LIBOR in Japan, the calculation of statutory reserves will not substantially offset the change in fair value of the statutory separate account assets resulting in reductions in statutory surplus. This has resulted and may continue to result in the need to devote significant additional capital to support the product.

• With respect to our fixed annuity business, sustained low interest rates may result in a reduction in statutory surplus and an increase in National Association of Insurance Commissioners (“NAIC”) required capital.

Most of these factors are outside of the Company’s control. The Company’s financial strength and credit ratings are significantly influenced by the statutory surplus amounts and RBC ratios of our insurance company subsidiaries. In addition, rating agencies may implement changes to their internal models that have the effect of increasing or decreasing the amount of statutory capital we must hold in order to maintain our current ratings.

The Company has reinsured approximately 18% of its risk associated with U.S. GMWB and 58% of its risk associated with the aggregate U.S. GMDB exposure. These reinsurance agreements serve to reduce the Company’s exposure to changes in the statutory reserves and the related capital and RBC ratios associated with changes in the capital markets. The Company also continues to explore other solutions for mitigating the capital market risk effect on surplus, such as internal and external reinsurance solutions, modifications to our hedging program, changes in product design, increasing pricing and expense management

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Credit Risk

Credit risk is defined as the risk of financial loss due to uncertainty of obligor’s or counterparty’s ability or willingness to meet its obligations in accordance with agreed upon terms. The majority of the Company’s credit risk is concentrated in its investment holdings but is also present in reinsurance and insurance portfolios. Credit risk is comprised of three major factors: the risk of change in credit quality, or credit migration risk; the risk of default; and the risk of a change in value of a financial instrument due to changes in credit spread that are unrelated to changes in obligor credit quality. A decline in creditworthiness is typically associated with an increase in an investment’s credit spread, potentially resulting in an increase in other-than-temporary impairments and an increased probability of a realized loss upon sale.

The objective of the Company’s enterprise credit risk management strategy is to identify, quantify, and manage credit risk on an aggregate portfolio basis and to limit potential losses in accordance with an established credit risk appetite. The Company manages to its risk appetite by primarily holding a diversified mix of investment grade issuers and counterparties across its investment, reinsurance, and insurance portfolios. Potential losses are also limited within portfolios by diversifying across geographic regions, asset types, and sectors.

The Company manages a credit exposure from its inception to its maturity or sale. Both the investment and reinsurance areas have formulated procedures for counterparty approvals and authorizations. Although approval processes may vary by area and type of credit risk, approval processes establish minimum levels of creditworthiness and financial stability. Eligible credits are subjected to prudent and conservative underwriting reviews. Within the investment portfolio, private securities, such as commercial mortgages, and private placements, must be presented to their respective review committees for approval.

Credit risks are managed on an on-going basis through the use of various processes and analyses. At the investment, reinsurance, and insurance product levels, fundamental credit analyses are performed at the issuer/counterparty level on a regular basis. To provide a holistic review within the investment portfolio, fundamental analyses are supported by credit ratings, assigned by nationally recognized rating agencies or internally assigned, and by quantitative credit analyses. The Company utilizes a credit VaR to measure default and migration risk on a monthly basis. Issuer and security level risk measures are also utilized. In the event of deterioration in credit quality, the Company maintains watch lists of problem counterparties within the investment and reinsurance portfolios. The watch lists are updated based on regular credit examinations and management reviews. The Company also performs quarterly assessments of probable expected losses in the investment portfolio. The process is conducted on a sector basis and is intended to promptly assess and identify potential problems in the portfolio and to recognize necessary impairments.

Credit risk policies at the enterprise and operation level ensure comprehensive and consistent approaches to quantifying, evaluating, and managing credit risk under expected and stressed conditions. These policies define the scope of the risk, authorities, accountabilities, terms, and limits, and are regularly reviewed and approved by senior management and ERM. Aggregate counterparty credit quality and exposure is monitored on a daily basis utilizing an enterprise-wide credit exposure information system that contains data on issuers, ratings, exposures, and credit limits. Exposures are tracked on a current and potential basis. Credit exposures are reported regularly to the ERCC and to the Finance, Investment and Risk Management Committee (“FIRMCo”). Exposures are aggregated by ultimate parent across investments, reinsurance receivables, insurance products with credit risk, and derivative counterparties. The credit database and reporting system are available to all key credit practitioners in the enterprise.

The Company exercises various and differing methods to mitigate its credit risk exposure within its investment and reinsurance portfolios. Some of the reasons for mitigating credit risk include financial instability or poor credit, avoidance of arbitration or litigation, future uncertainty, and exposure in excess of risk tolerances. Credit risk within the investment portfolio is most commonly mitigated through the use of derivative instruments or asset sales. Counterparty credit risk is mitigated through the practice of entering into contracts only with highly creditworthy institutions and through the practice of holding and posting of collateral. Systemic credit risk is mitigated through the construction of high-quality, diverse portfolios that are subject to regular underwriting of credit risks. For further discussion of the Company’s investment and derivative instruments, see the Investment Management section and Note 5 of the Notes to Consolidated Financial Statements. Further discussion on managing and mitigating credit risk from the use of reinsurance via an enterprise security review process, see the Reinsurance section.

The Company is not exposed to any credit concentration risk of a single issuer greater than 10% of the Company’s stockholders’ equity other than U.S. government and government agencies backed by the full faith and credit of the U.S. government. For further discussion of concentration of credit risk, see the Concentration of Credit Risk section in Note 5 of the Notes to Consolidated Financial Statements.

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Derivative Instruments

The Company utilizes a variety of over-the-counter and exchange traded derivative instruments as a part of its overall risk management strategy, as well as to enter into replication transactions. Derivative instruments are used to manage risk associated with interest rate, equity market, credit spread, issuer default, price, and currency exchange rate risk or volatility. Replication transactions are used as an economical means to synthetically replicate the characteristics and performance of assets that would otherwise be permissible investments under the Company’s investment policies. For further information on the Company’s use of derivatives, see Note 5 of the Notes to Consolidated Financial Statements.

Derivative activities are monitored and evaluated by the Company’s compliance and risk management teams and reviewed by senior management. In addition, the Company monitors counterparty credit exposure on a monthly basis to ensure compliance with Company policies and statutory limitations. The notional amounts of derivative contracts represent the basis upon which pay or receive amounts are calculated and are not reflective of credit risk. Downgrades to the credit ratings of The Hartford’s insurance operating companies may have adverse implications for its use of derivatives including those used to hedge benefit guarantees of variable annuities. In some cases, downgrades may give derivative counterparties the unilateral contractual right to cancel and settle outstanding derivative trades or require additional collateral to be posted. In addition, downgrades may result in counterparties becoming unwilling to engage in additional over-the-counter (“OTC”) derivatives or may require collateralization before entering into any new trades. This will restrict the supply of derivative instruments commonly used to hedge variable annuity guarantees, particularly long-dated equity derivatives and interest rate swaps. Under these circumstances, the Company’s operating subsidiaries could conduct hedging activity using a combination of cash and exchange-traded instruments, in addition to using the available OTC derivatives.

The Company uses various derivative counterparties in executing its derivative transactions. The use of counterparties creates credit risk that the counterparty may not perform in accordance with the terms of the derivative transaction. The Company has developed a derivative counterparty exposure policy which limits the Company’s exposure to credit risk. The derivative counterparty exposure policy establishes market-based credit limits, favors long-term financial stability and creditworthiness of the counterparty and typically requires credit enhancement/credit risk reducing agreements. The Company minimizes the credit risk of derivative instruments by entering into transactions with high quality counterparties primarily rated A or better, which are monitored and evaluated by the Company’s risk management team and reviewed by senior management. In addition, the Company monitors counterparty credit exposure on a monthly basis to ensure compliance with Company policies and statutory limitations. The Company also generally requires that derivative contracts, other than exchange traded contracts, certain forward contracts, and certain embedded and reinsurance derivatives, be governed by an International Swaps and Derivatives Association Master Agreement, which is structured by legal entity and by counterparty and permits right of offset.

The Company has developed credit exposure thresholds which are based upon counterparty ratings. Credit exposures are measured using the market value of the derivatives, resulting in amounts owed to the Company by its counterparties or potential payment obligations from the Company to its counterparties. Credit exposures are generally quantified daily based on the prior business day’s market value and collateral is pledged to and held by, or on behalf of, the Company to the extent the current value of the derivatives exceed the contractual thresholds. In accordance with industry standard and the contractual agreements, collateral is typically settled on the next business day. The Company has exposure to credit risk for amounts below the exposure thresholds which are uncollateralized, as well as for market fluctuations that may occur between contractual settlement periods of collateral movements.

For the company’s domestic derivative programs, the maximum uncollateralized threshold for a derivative counterparty for a single legal entity is $10. The Company currently transacts OTC derivatives in five legal entities that have a threshold greater than zero and therefore the maximum combined threshold for a single counterparty across all legal entities that use derivatives is $50. In addition, the Company may have exposure to multiple counterparties in a single corporate family due to a common credit support provider. As of December 31, 2011, for the company’s domestic derivative programs, the maximum combined threshold for all counterparties under a single credit support provider across all legal entities that use derivatives is $100. Based on the contractual terms of the collateral agreements, these thresholds may be immediately reduced due to a downgrade in either party’s credit rating. Beginning in the fourth quarter of 2011, the Company began hedging its Japan exposures within the legal entity HLIKK. The counterparty credit exposures at HLIKK generally follow the maximum uncollateralized threshold of the domestic program however, for two counterparties, collateralization requirements are currently not in place. These two counterparties maintain credit ratings of A or better and the Company actively monitors their credit standing. For further discussion, see the Derivative Commitments section of Note 12 of the Notes to Consolidated Financial Statements.

For the year ended December 31, 2011, the Company has incurred no losses on derivative instruments due to counterparty default.

In addition to counterparty credit risk, the Company may also introduce credit risk through the use of credit default swaps that are entered into to manage credit exposure. Credit default swaps involve a transfer of credit risk of one or many referenced entities from one party to another in exchange for periodic payments. The party that purchases credit protection will make periodic payments based on an agreed upon rate and notional amount, and for certain transactions there will also be an upfront premium payment. The second party, who assumes credit risk, will typically only make a payment if there is a credit event as defined in the contract and such payment will be typically equal to the notional value of the swap contract less the value of the referenced security issuer’s debt obligation. A credit event is generally defined as default on contractually obligated interest or principal payments or bankruptcy of the referenced entity.

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The Company uses credit derivatives to purchase credit protection and to assume credit risk with respect to a single entity, referenced index, or asset pool. The Company purchases credit protection through credit default swaps to economically hedge and manage credit risk of certain fixed maturity investments across multiple sectors of the investment portfolio. The Company also enters into credit default swaps that assume credit risk as part of replication transactions. Replication transactions are used as an economical means to synthetically replicate the characteristics and performance of assets that would otherwise be permissible investments under the Company’s investment policies. These swaps reference investment grade single corporate issuers and baskets, which include customized diversified portfolios of corporate issuers, which are established within sector concentration limits and may be divided into tranches which possess different credit ratings.

As of December 31, 2011 and 2010, the notional amount related to credit derivatives that purchase credit protection was $1.7 billion and $2.6 billion, respectively, while the fair value was $36 and ($9), respectively. As of December 31, 2011 and 2010, the notional amount related to credit derivatives that assume credit risk was $3.0 billion and $2.6 billion, respectively, while the fair value was ($648) and ($434), respectively. For further information on credit derivatives, see the Capital Markets Risk Management section of the MD&A and Note 5 of the Notes to Consolidated Financial Statements.

Investment Portfolio Risks and Risk Management

Investment Portfolio Composition

The following table presents the Company’s fixed maturities, AFS, by credit quality. The ratings referenced below are based on the ratings of a nationally recognized rating organization or, if not rated, assigned based on the Company’s internal analysis of such securities

Fixed Maturities by Credit Quality
	December 31, 2011							December 31, 2010
					Percent of							Percent of
	Amortized				Total Fair			Amortized				Total Fair
	Cost		Fair Value		Value			Cost		Fair Value		Value
United States Government/Government agencies	$	8,901	$	9,364		11.4	%	$	9,961	$	9,918		12.7	%
AAA		9,631		10,113		12.4	%		10,080		10,174		13.1	%
AA		15,471		15,844		19.4	%		15,933		15,554		20.0	%
A		19,501		21,053		25.7	%		19,265		19,460		25.0	%
BBB		20,972		21,760		26.6	%		18,849		19,153		24.6	%
BB & below		4,502		3,675		4.5	%		4,331		3,561		4.6	%
Total fixed maturities	$	78,978		81,809		100.0	%	$	78,419		77,820		100.0	%

The movement in the overall credit quality of the Company’s portfolio was primarily attributable to sales of U.S. Treasuries as the Company continues to reinvest in spread product and purchase investment grade corporate securities concentrated in industrial and utility issuers. Fixed maturities, FVO, are not included in the above table. For further discussion on fair value option securities, see Note 4 of the Notes to Consolidated Financial Statements.

112

The following table presents the Company’s AFS securities by type, as well as fixed maturities, FVO.

Securities by Type
	December 31, 2011												December 31, 2010
										Percent												Percent
	Cost or		Gross		Gross					of Total			Cost or		Gross		Gross					of Total
	Amortized		Unrealized		Unrealized			Fair		Fair			Amortized		Unrealized		Unrealized			Fair		Fair
	Cost		Gains		Losses			Value		Value			Cost		Gains		Losses			Value		Value
Asset-backed securities (“ABS”)
Consumer loans	$	2,688		34	$	(208	)	$	2,514		3.1	%	$	2,496	$	23	$	(221	)	$	2,298		2.9	%
Small business		418		1		(123	)		296		0.4	%		453		—		(141	)		312		0.4	%
Other		324		20		(1	)		343		0.4	%		298		15		(34	)		279		0.4	%
CDOs
Collateralized loan obligations (“CLOs”)		2,334		—		(181	)		2,153		2.6	%		2,429		1		(212	)		2,218		2.9	%
CREs		485		16		(167	)		334		0.4	%		653		—		(266	)		387		0.5	%
Other		—		—		—			—		—			6		—		—			6		—
CMBS
Agency backed [1]		637		40		—			677		0.8	%		519		9		(4	)		524		0.7	%
Bonds		5,992		182		(487	)		5,687		7.0	%		6,985		147		(583	)		6,549		8.4	%
Interest only (“IOs”)		563		49		(25	)		587		0.7	%		793		79		(28	)		844		1.1	%
Corporate
Basic industry [2]		3,690		309		(19	)		3,979		4.9	%		2,993		190		(24	)		3,159		4.1	%
Capital goods		3,327		331		(33	)		3,625		4.4	%		3,179		223		(23	)		3,379		4.3	%
Consumer cyclical		2,277		206		(8	)		2,475		3.0	%		1,883		115		(12	)		1,986		2.6	%
Consumer non-cyclical		5,985		644		(13	)		6,616		8.1	%		6,126		444		(29	)		6,541		8.4	%
Energy		3,338		381		(15	)		3,704		4.5	%		3,377		212		(23	)		3,566		4.6	%
Financial services		7,763		334		(526	)		7,571		9.3	%		7,545		253		(470	)		7,328		9.4	%
Tech./comm.		4,357		443		(61	)		4,739		5.8	%		4,268		269		(68	)		4,469		5.7	%
Transportation		1,285		123		(6	)		1,402		1.7	%		1,141		69		(13	)		1,197		1.5	%
Utilities		8,236		857		(38	)		9,055		11.2	%		7,099		386		(58	)		7,427		9.5	%
Other [2]		903		33		(20	)		845		1.0	%		885		13		(27	)		832		1.1	%
Foreign govt./govt. agencies		2,030		141		(10	)		2,161		2.6	%		1,627		73		(17	)		1,683		2.2	%
Municipal
Taxable		1,688		120		(51	)		1,757		2.1	%		1,319		9		(129	)		1,199		1.5	%
Tax-exempt		10,869		655		(21	)		11,503		14.1	%		11,150		141		(366	)		10,925		14.0	%
Residential mortgage-backed securities (“RMBS”)
Agency		4,436		222		—			4,658		5.7	%		4,283		109		(27	)		4,365		5.6	%
Non-agency		62		—		(2	)		60		0.1	%		78		—		(3	)		75		0.1	%
Alt-A		115		5		(21	)		99		0.1	%		168		—		(19	)		149		0.2	%
Sub-prime		1,348		25		(433	)		940		1.1	%		1,507		—		(413	)		1,094		1.4	%
U.S. Treasuries		3,828		203		(2	)		4,029		4.9	%		5,159		24		(154	)		5,029		6.5	%
Fixed maturities, AFS		78,978		5,374		(2,471	)		81,809		100	%		78,419		2,804		(3,364	)		77,820		100.0	%
Equity securities
Financial services		479		10		(187	)		302					569		4		(127	)		446
Other		577		58		(16	)		619					444		88		(5	)		527
Equity securities, AFS		1,056		68		(203	)		921					1,013		92		(132	)		973
Total AFS securities	$	80,034		5,442	$	(2,674	)	$	82,730				$	79,432	$	2,896	$	(3,496	)	$	78,793
Fixed maturities, FVO								$	1,328											$	649

[1] Represents securities with pools of loans issued by the Small Business Administration which are backed by the full faith and credit of the U.S. government. [2] Gross unrealized gains (losses) exclude the fair value of bifurcated embedded derivative features of certain securities. Subsequent changes in value will be recorded in net realized capital gains (losses).

The Company continues to invest in a diversified portfolio with a focus on investment grade basic industry and utility issuers, while reducing its exposure to U.S. Treasuries, commercial real estate securities and subordinated financial services securities. The Company’s AFS net unrealized position improved primarily as a result of improved security valuations largely due to declining interest rates, partially offset by credit spread widening. Fixed maturities, FVO, represents Japan government securities supporting the Japan fixed annuity product, as well as securities containing an embedded credit derivative for which the Company elected the fair value option. The underlying credit risk of the securities containing credit derivatives are primarily investment grade CRE CDOs and a subordinated position on a basket of corporate bonds. For further discussion on fair value option securities, see Note 4 of the Notes to Consolidated Financial Statements.

113

European Exposure

Many economies within Europe continue to experience significant adverse economic conditions which have been precipitated in part by high unemployment rates and government debt levels. As a result, issuers in several European countries have experienced credit deterioration and rating downgrades and a reduced ability to access capital markets and/or higher borrowing costs. The concerns regarding the European countries have impacted the capital markets which, in turn, has made it more difficult to contain the European financial crisis. Austerity measures aimed at reducing sovereign debt levels, along with steps taken by the European Central Bank to provide liquidity and credit support to certain countries issuing debt, have helped to stabilize markets recently. However, risks remain elevated.

The Company manages the credit risk associated with the European securities within the investment portfolio on an on-going basis using several processes which are supported by macroeconomic analysis and issuer credit analysis. For additional details regarding the Company’s management of credit risk, see the Credit Risk section of this MD&A. The Company considers alternate scenarios, including a base-case and both a positive and negative “tail” scenario that includes a partial or full break-up of the Eurozone. The outlook for key factors is evaluated, including the economic prospects for key countries, the potential for the spread of sovereign debt contagion, and the likelihood that policymakers and politicians pursue sufficient fiscal discipline and introduce appropriate backstops. Given the inherent uncertainty in the outcome of developments in the Eurozone, however, the Company has been focused on controlling both absolute levels of exposure and the composition of that exposure through both bond and derivative transactions.

The Company has limited direct European exposure, totaling only 5% of total invested assets as of December 31, 2011. The following tables present the Company’s European securities included in the Securities by Type table above. The Company identifies exposures with the issuers’ ultimate parent country of domicile, which may not be the country of the security issuer. Certain European countries were separately listed below, Greece, Italy, Ireland, Portugal and Spain (“GIIPS”), because of the current significant economic strains persisting in these countries. The criteria used for indentifying the countries separately listed includes credit default spreads that exceed the iTraxx SovX index level and an S&P credit quality rating of A or lower.

The following tables present the Company’s European securities included in the Securities by Type table above.

December 31, 2011
	Corporate & Equity,				Corporate & Equity,				Foreign Govt./
	AFS Non-Finan. [1]				AFS Financials				Govt. Agencies				Total
	Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value		Cost		Value
Italy	$	314	$	255	$	—	$	—	$	—	$	—	$	314	$	255
Spain		191		189		20		19		—		—		211		208
Ireland		163		162		—		—		—		—		163		162
Portugal		15		15		—		—		—		—		15		15
Greece		—		—		—		—		—		—		—		—
Higher risk		683		621		20		19		—		—		703		640
Europe excluding higher risk		4,277		4,698		1,255		1,135		901		970		6,433		6,800
Total Europe	$	4,960	$	5,316	$	1,275	$	1,154	$	901	$	970	$	7,136	$	7,440
Europe exposure net of credit default swap protection [2]													$	6,439	$	7,467

114

December 31, 2010
	Corporate & Equity, AFS				Corporate & Equity, AFS				Foreign Govt./
	Non-Finan. [1]				Financials				Govt. Agencies				Total
	Amortized		Fair		Amortized		Fair		Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value		Cost		Value		Cost		Value
Italy	$	374	$	359	$	17	$	17	$	—	$	—	$	391	$	376
Spain		263		279		54		46		—		—		317		325
Ireland		178		173		4		3		—		—		182		176
Portugal		31		28		—		—		—		—		31		28
Greece		—		—		—		—		—		—		—		—
Higher risk		846		839		75		66		—		—		921		905
Europe excluding higher risk		4,837		5,229		1,682		1,623		592		606		7,111		7,458
Total Europe	$	5,683	$	6,068	$	1,757	$	1,689	$	592	$	606	$	8,032	$	8,363
Europe exposure net of credit default swap protection [2]													$	6,695	$	8,358

[1]	Includes amortized cost and fair value of $67 and $67 as of December 31, 2011 and $27 and $27, respectively, as of December 31, 2010 related to limited partnerships and other alternative investments, the majority of which is domiciled in the United Kingdom.
[2]	Includes a notional amount and fair value of $697 and $27, respectively, as of December 31, 2011 and $1.3 billion and ($5), respectively, as of December 31, 2010 related to credit default swap protection. This includes a notional amount of $89 and $42 as of December 31, 2011 and 2010, respectively, related to single name corporate issuers in the financial services sector.

The Company’s European investment exposure largely relates to corporate entities which are domiciled in or generated a significant portion of its revenue within the United Kingdom, Germany, the Netherlands and Switzerland. As of December 31, 2011 and 2010, exposure to the United Kingdom totals less than 2% of total invested assets. The majority of investments are U.S. dollar-denominated, and those securities that are pound and euro-denominated are hedged to U.S. dollars or support foreign-denominated liabilities. For a discussion of foreign currency risks, see the Foreign Currency Exchange Risk section of this MD&A. The Company does not hold any sovereign exposure to the higher risk countries and does not hold any exposure to issuers in Greece. As of December 31, 2011 and 2010, the Company’s unfunded commitments associated with its investment portfolio was immaterial, and the weighted average credit quality of European investments was A and A-, respectively.

As of December 31, 2011 and 2010, the Company’s total credit default swaps that provide credit protection had a notional amount of $697 and $1.3 billion, respectively, and a fair value of $27 and ($5), respectively. Included in those notional amounts as of December 31, 2011 and 2010 were $407 and $532, respectively, on credit default swaps that reference single name corporate and financial European issuers, of which $125 and $57, respectively, related to the higher risk countries. The maturity dates of credit defaults swaps are primarily consistent with the hedged bonds. Also included are credit default swaps with a notional amount of $290 and $805, respectively, as of December 31, 2011 and 2010 which reference a standard basket of European corporate and financial issuers. For further information on the use of the Company’s credit derivatives and counterparty credit quality, see Derivative Instruments within the Credit Risk section of this MD&A.

In addition to the credit risk associated with the investment portfolio, the Company has $247 of reinsurance recoverables due from legal entity counterparties domiciled within Europe. For a more detail discussion of the Company’s reinsurance arrangements, see Note 6 of the Notes to the Consolidated Financial Statements.

Included in the Company’s equity securities, trading, portfolio are investments in World Government Bond Index Funds (“WGBI funds”). The fair value of the WGBI funds at December 31, 2011 and 2010 was $12.5 billion and $12.9 billion, respectively. Because several of these funds are managed by third party asset managers, the Company does not have access to detailed holdings; however, the WGBI funds investment mandate follows the Citigroup non-Japan World Government Fund Index (“the index”) and includes allocations to certain European sovereign debt. The estimated fair value of the European allocation based upon the index benchmark allocation was $5.4 billion and $5.8 billion as of December 31, 2011 and 2010, respectively. Included in this estimated European exposure were investments in Ireland, Italy, Portugal and Spain with an estimated fair value of $1.7 billion and $2.0 billion as of December 31, 2011 and 2010, respectively. The index guidelines allow investment in issuers rated BBB- or higher by Standard and Poors or Baa3 or higher by Moodys. Should an issuer’s credit rating fall below both of these rating levels they will be removed from the Index and the holdings will be liquidated. Because these assets support the international variable annuity business, changes in the value of these investments are reflected in the corresponding policyholder liabilities. The Company’s indirect exposure to these holdings is through any guarantees issued on the underlying variable annuity policies.

115

Financial Services

The Company’s exposure to the financial services sector is predominantly through banking and insurance institutions. The following table presents the Company’s exposure to the financial services sector included in the Securities by Type table above.

	December 31, 2011							December 31, 2010
	Amortized				Net			Amortized				Net
	Cost		Fair Value		Unrealized			Cost		Fair Value		Unrealized
AAA	$	240	$	245	$	5		$	302	$	309	$	7
AA		1,698		1,675		(23	)		2,085		2,095		10
A		3,664		3,685		21			3,760		3,599		(161	)
BBB		2,335		1,998		(337	)		1,677		1,518		(159	)
BB & below		305		270		(35	)		290		253		(37	)
Total	$	8,242	$	7,873	$	(369	)	$	8,114	$	7,774	$	(340	)

Domestic financial companies continued to stabilize throughout 2011 due to improved earnings performance, strengthening of asset quality and capital retention. However, spread volatility remains high due to concerns around European sovereign risks and potential contagion, regulatory pressures and a weaker U.S. macroeconomic environment. Financial institutions remain vulnerable to these concerns, as well as ongoing stress in the real estate markets which could adversely impact the Company’s net unrealized position. Included in the table above as of December 31, 2011, is an amortized cost and fair value of $1.3 billion and $1.2 billion, respectively, related to European investment exposure, of which only $20 and $19, respectively, relates to GIIPS. As of December 31, 2010, amortized cost and fair value includes $1.8 billion and $1.7 billion, respectively, of European exposure, of which only $75 and $66, respectively, relates to GIIPS.

Commercial Real Estate

The commercial real estate market continued to show signs of improving fundamentals, such as increases in transaction activities, more readily available financing and new issuances. While delinquencies still remain at historically high levels, they are expected to move lower in 2012.

The following table presents the Company’s exposure to commercial mortgage backed-securities (“CMBS”) bonds by current credit quality and vintage year, included in the Securities by Type table above. Credit protection represents the current weighted average percentage of the outstanding capital structure subordinated to the Company’s investment holding that is available to absorb losses before the security incurs the first dollar loss of principal and excludes any equity interest or property value in excess of outstanding debt.

CMBS — Bonds [1]

December 31, 2011
	AAA					AA					A					BBB					BB and Below					Total
	Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair
	Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value
2003 & Prior	$	408	$	415		$	148	$	144		$	83	$	81		$	16	$	13		$	33	$	30		$	688	$	683
2004		333		349			68		75			45		41			30		28			26		21			502		514
2005		520		556			101		96			178		151			177		138			71		57			1,047		998
2006		713		762			516		493			180		159			362		298			430		302			2,201		2,014
2007		245		267			296		275			123		97			166		130			195		149			1,025		918
2008		55		60			—		—			—		—			—		—			—		—			55		60
2009		28		29			—		—			—		—			—		—			—		—			28		29
2010		29		31			—		—			—		—			—		—			—		—			29		31
2011		417		440			—		—			—		—			—		—			—		—			417		440
Total	$	2,748	$	2,909		$	1,129	$	1,083		$	609	$	529		$	751	$	607		$	755	$	559		$	5,992	$	5,687
Credit protection				27.3	%				22.7	%				19.7	%				13.8	%				8.2	%				21.6	%

116

December 31, 2010
	AAA					AA					A					BBB					BB and Below					Total
	Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair			Amortized		Fair
	Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value			Cost		Value
2003 & Prior	$	782	$	803		$	146	$	142		$	107	$	103		$	24	$	21		$	26	$	22		$	1,085	$	1,091
2004		489		511			35		35			68		61			33		27			6		5			631		639
2005		610		632			131		121			213		177			182		147			123		96			1,259		1,173
2006		1,016		1,050			566		536			256		224			496		416			436		339			2,770		2,565
2007		305		320			278		250			71		55			253		200			278		198			1,185		1,023
2008		55		58			—		—			—		—			—		—			—		—			55		58
Total	$	3,257	$	3,374		$	1,156	$	1,084		$	715	$	620		$	988	$	811		$	869	$	660		$	6,985	$	6,549
Credit protection				28.8	%				22.5	%				13.3	%				13.8	%				8.0	%				21.5	%

[1] The vintage year represents the year the pool of loans was originated.

The Company also has AFS exposure to commercial real estate (“CRE”) collateralized debt obligations (“CDOs”) with an amortized cost and fair value of $485 and $334, respectively, as of December 31, 2011 and $653 and $387, respectively, as of December 31, 2010. These securities are comprised of diversified pools of commercial mortgage loans or equity positions of other CMBS securitizations. Although the Company does not plan to invest in this asset class going forward, we continue to monitor these investments as economic and market uncertainties regarding future performance impacts market liquidity and results in higher risk premiums.

In addition to CMBS bonds and CRE CDOs, the Company has exposure to commercial mortgage loans as presented in the following table. These loans are collateralized by a variety of commercial properties and are diversified both geographically throughout the United States and by property type. These loans may be either in the form of a whole loan, where the Company is the sole lender, or a loan participation. Loan participations are loans where the Company has purchased or retained a portion of an outstanding loan or package of loans and participates on a pro-rata basis in collecting interest and principal pursuant to the terms of the participation agreement. In general, A-Note participations have senior payment priority, followed by B-Note participations and then mezzanine loan participations. As of December 31, 2011, loans within the Company’s mortgage loan portfolio that have had extensions or restructurings other than what is allowable under the original terms of the contract are immaterial.

Commercial Mortgage Loans
	December 31, 2011							December 31, 2010
	Amortized		Valuation			Carrying		Amortized			Valuation			Carrying
	Cost [1]		Allowance			Value		Cost [1]		Allowance				Value
Agricultural	$	268	$	(19	)	$	249	$	339		$	(23	)	$	316
Whole loans		4,892		(17	)		4,875		3,326			(23	)		3,303
A-Note participations		265		—			265		319			—			319
B-Note participations		296		(66	)		230		327			(70	)		257
Mezzanine loans		109		—			109		181			(36	)		145
Total	$	5,830	$	(102	)	$	5,728	$	4,492		$	(152	)	$	4,340

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

Since December 31, 2010, the Company funded $1.8 billion of commercial whole loans with a weighted average loan-to-value (“LTV”) ratio of 62% and a weighted average yield of 4.5%. The Company continues to originate commercial whole loans in primary markets, such as multi-family and retail, focusing on loans with strong LTV ratios and high quality property collateral. As of December 31, 2011, the Company had mortgage loans held-for-sale with a carrying value and valuation allowance of $74 and $4, respectively, and $87 and $7, respectively, as of December 31, 2010.

Municipal Bonds

The Company holds investments in securities backed by states, municipalities and political subdivisions (“municipal”) with an amortized cost and fair value of $12.6 billion and $13.3 billion, respectively, as of December 31, 2011 and $12.5 billion and $12.1 billion, respectively, as of December 31, 2010. The Company’s municipal bond portfolio primarily consists of high quality essential service revenue and general obligation bonds. As of December 31, 2011, the largest issuer concentrations were the states of California, Massachusetts and Illinois, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation bonds. As of December 31, 2010, the largest issuer concentrations were the states of California, Massachusetts and Georgia, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation bonds.

117

Limited Partnerships and Other Alternative Investments

The following table presents the Company’s investments in limited partnerships and other alternative investments which include hedge funds, mortgage and real estate funds, mezzanine debt funds, and private equity and other funds. Hedge funds include investments in funds of funds and direct funds. These hedge funds invest in a variety of strategies including global macro and long/short credit and equity. Mortgage and real estate funds consist of investments in funds whose assets consist of mortgage loans, mortgage loan participations, mezzanine loans or other notes which may be below investment grade, as well as equity real estate and real estate joint ventures. Mezzanine debt funds include investments in funds whose assets consist of subordinated debt that often incorporates equity-based options such as warrants and a limited amount of direct equity investments. Private equity and other funds primarily consist of investments in funds whose assets typically consist of a diversified pool of investments in small to mid-sized non-public businesses with high growth potential.

	December 31, 2011					December 31, 2010
	Amount		Percent			Amount		Percent
Hedge funds	$	896		35.4	%	$	439		22.8	%
Mortgage and real estate funds		479		18.9	%		406		21.2	%
Mezzanine debt funds		118		4.7	%		132		6.9	%
Private equity and other funds		1,039		41.0	%		941		49.1	%
Total	$	2,532		100.0	%	$	1,918		100.0	%

Since December 31, 2010, the increase in hedge funds relates to additional investments in the type of fund strategies that the Company expects to generate superior risk-adjusted returns over time.

Available-for-Sale Securities — Unrealized Loss Aging

The total gross unrealized losses were $2.7 billion as of December 31, 2011, which have improved $822, or 24%, from December 31, 2010 as interest rates declined, partially offset by credit spread widening. As of December 31, 2011, $743 of the gross unrealized losses were associated with securities depressed less than 20% of cost or amortized cost.

The remaining $1.9 billion of gross unrealized losses were associated with securities depressed greater than 20%, which includes $156 associated with securities depressed over 50% for twelve months or more. These securities are backed primarily by commercial and residential real estate that have market spreads that continue to be wider than the spreads at the security’s respective purchase date. The unrealized losses remain largely due to the continued market and economic uncertainties surrounding residential and certain commercial real estate and lack of liquidity. Based upon the Company’s cash flow modeling and current market and collateral performance assumptions, these securities have sufficient credit protection levels to receive contractually obligated principal and interest payments. Also included in the gross unrealized losses depressed greater than 20% are financial services securities that have a floating-rate coupon and/or long-dated maturities.

As part of the Company’s ongoing security monitoring process, the Company has reviewed its AFS securities in an unrealized loss position and concluded that there were no additional impairments as of December 31, 2011 and that these securities are temporarily depressed and are expected to recover in value as the securities approach maturity or as real estate related market spreads continue to improve. For these securities in an unrealized loss position where a credit impairment has not been recorded, the Company’s best estimate of expected future cash flows are sufficient to recover the amortized cost basis of the security. Furthermore, the Company neither has an intention to sell nor does it expect to be required to sell these securities. For further information regarding the Company’s impairment analysis, see Other-Than-Temporary Impairments in the Investment Portfolio Risks and Risk Management section of this MD&A.

The following table presents the Company’s unrealized loss aging for AFS securities by length of time the security was in a continuous unrealized loss position.

	December 31, 2011									December 31, 2010
			Cost or									Cost or
			Amortized		Fair		Unrealized					Amortized		Fair		Unrealized
	Items		Cost		Value		Loss [1]			Items		Cost		Value		Loss [1]
Three months or less		855	$	3,933	$	3,672	$	(261	)		1,503	$	17,431	$	16,783	$	(643	)
Greater than three to six months		485		2,617		2,517		(100	)		115		732		690		(42	)
Greater than six to nine months		224		1,181		1,097		(84	)		91		438		397		(41	)
Greater than nine to eleven months		42		106		95		(11	)		42		185		169		(16	)
Greater than twelve months		943		11,613		9,324		(2,218	)		1,231		15,599		12,811		(2,754	)
Total		2,549	$	19,450	$	16,705	$	(2,674	)		2,982	$	34,385	$	30,850	$	(3,496	)

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

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The following tables present the Company’s unrealized loss aging for AFS securities continuously depressed over 20% by length of time (included in the table above).

	December 31, 2011									December 31, 2010
			Cost or									Cost or
			Amortized		Fair		Unrealized					Amortized		Fair		Unrealized
Consecutive Months	Items		Cost		Value		Loss [1]			Items		Cost		Value		Loss
Three months or less		206	$	1,823	$	1,289	$	(500	)		99	$	771	$	582	$	(189	)
Greater than three to six months		134		1,749		1,205		(544	)		22		136		104		(32	)
Greater than six to nine months		42		406		269		(137	)		28		234		169		(65	)
Greater than nine to eleven months		9		1		—		(1	)		13		43		32		(11	)
Greater than twelve months		239		1,806		1,057		(749	)		390		4,361		2,766		(1,595	)
Total		630	$	5,785	$	3,820	$	(1,931	)		552	$	5,545	$	3,653	$	(1,892	)

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

The following tables present the Company’s unrealized loss aging for AFS securities continuously depressed over 50% by length of time (included in the tables above).

	December 31, 2011									December 31, 2010
			Cost or									Cost or
			Amortized		Fair		Unrealized					Amortized		Fair		Unrealized
Consecutive Months	Items		Cost		Value		Loss			Items		Cost		Value		Loss
Three months or less		50	$	152	$	55	$	(97	)		20	$	27	$	12	$	(15	)
Greater than three to six months		26		110		46		(64	)		1		2		1		(1	)
Greater than six to nine months		7		33		11		(22	)		12		65		29		(36	)
Greater than nine to eleven months		5		5		1		(4	)		—		—		—		—
Greater than twelve months		54		227		71		(156	)		94		722		260		(462	)
Total		142	$	527	$	184	$	(343	)		127	$	816	$	302	$	(514	)

Other-Than-Temporary Impairments

The following table presents the Company’s impairments recognized in earnings by security type.

	For the years ended December 31,
	2011		2010		2009
ABS	$	27	$	13	$	54
CDOs		41		164		511
CMBS
Bonds		16		157		257
IOs		5		3		25
Corporate		50		33		198
Equity		17		14		145
RMBS
Non-agency		—		2		4
Alt-A		1		10		62
Sub-prime		15		37		232
Other		2		1		20
Total	$	174	$	434	$	1,508

Year ended December 31, 2011

For the year ended December 31, 2011, impairments recognized in earnings were comprised of credit impairments of $125, securities that the Company intends to sell of $32 and impairments on equity securities of $17.

Credit impairments were primarily concentrated in structured securities associated with commercial real estate, as well as direct private investments. The structured securities were impaired primarily due to property-specific deterioration of the underlying collateral. The Company calculated these impairments utilizing both a top down modeling approach and a security-specific collateral review. The top down modeling approach used discounted cash flow models that considered losses under current and expected future economic conditions. Assumptions used over the current period included macroeconomic factors, such as a high unemployment rate, as well as sector specific factors such as property value declines, commercial real estate delinquency levels and changes in net operating income. The macroeconomic assumptions considered by the Company did not materially change during 2011 and, as such, the credit impairments recognized for the year ended December 31, 2011 were primarily driven by actual or expected collateral deterioration, largely as a result of the Company’s security-specific collateral review.

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The security-specific collateral review is performed to estimate potential future losses. This review incorporates assumptions about expected future collateral cash flows, including projected rental rates and occupancy levels that varied based on property type and sub-market. The results of the security-specific collateral review allowed the Company to estimate the expected timing of a security’s first loss, if any, and the probability and severity of potential ultimate losses. The Company then discounted these anticipated future cash flows at the security’s book yield prior to impairment.

Included in corporate and equity security types were direct private investments that were impaired primarily due to the likelihood of a disruption in contractual principal and interest payments due to the restructuring of the debtor’s obligation. Impairments on equity securities were primarily related to preferred stock associated with these direct private investments.

Impairments on securities for which the Company has the intent to sell were primarily on corporate bonds, certain ABS aircraft bonds and CMBS as market pricing continues to improve and the Company would like the ability to reduce certain exposures.

In addition to the credit impairments recognized in earnings, the Company recognized non-credit impairments in other comprehensive income of $89 for the year ended December 31, 2011, predominantly concentrated in CRE CDOs and RMBS. These non-credit impairments represent the difference between fair value and the Company’s best estimate of expected future cash flows discounted at the security’s effective yield prior to impairment, rather than at current market implied credit spreads. These non-credit impairments primarily represent increases in market liquidity premiums and credit spread widening that occurred after the securities were purchased, as well as a discount for variable-rate coupons which are paying less than at purchase date. In general, larger liquidity premiums and wider credit spreads are the result of deterioration of the underlying collateral performance of the securities, as well as the risk premium required to reflect future uncertainty in the real estate market.

Future impairments may develop as the result of changes in intent to sell of specific securities or if actual results underperform current modeling assumptions, which may be the result of, but are not limited to, macroeconomic factors and security-specific performance below current expectations. Ultimate loss formation will be a function of macroeconomic factors and idiosyncratic security-specific performance.

Year ended December 31, 2010

For the year ended December 31, 2010, impairments recognized in earnings were comprised of credit impairments of $372 primarily concentrated on structured securities associated with commercial and residential real estate. Also included were impairments on debt securities for which the Company intended to sel1 of $54, mainly comprised of CMBS bonds in order to take advantage of price appreciation, as well as impairments on equity securities of $8 primarily on below investment grade securities depressed 20% for more than six months.

Year ended December 31, 2009

Impairments recognized in earnings were comprised of credit impairments of $1.2 billion primarily concentrated on CRE CDOs, below-prime RMBS and CMBS. Also included were impairments on debt securities for which the Company intended to sell of $156, mainly comprised of corporate financial services securities, as well as impairments on equity securities of $136 related to below investment grade hybrid securities.

Valuation Allowances on Mortgage Loans

The following table presents (additions)/reversals to valuation allowances on mortgage loans.

	For the years ended December 31,
	2011			2010			2009
Credit-related concerns	$	27		$	(70	)	$	(310	)
Held for sale
Agricultural loans		(3	)		(10	)		(4	)
B-note participations		—			(22	)		(51	)
Mezzanine loans		—			(52	)		(43	)
Total	$	24		$	(154	)	$	(408	)

Year ended December 31, 2011

For the year ended December 31, 2011, valuation allowances on mortgage loan reversals of $24 were largely driven by the release of a reserve associated with the sale of a previously reserved for mezzanine loan. Continued improvement in commercial real estate property valuations will positively impact future loss development, with future impairments driven by idiosyncratic loan-specific performance. Excluded from the table above are valuation allowances associated with mortgage loans related to the divestiture of Federal Trust Corporation. For further information regarding the divestiture of Federal Trust Corporation, see Note 20 of the Notes to the Consolidated Financial Statements.

Years ended December 31, 2010 and 2009

For the years ended December 31, 2010 and 2009, valuation allowances on mortgage loan additions of ($154) and ($408), respectively, primarily related to B-Note participant and mezzanine loan sales. Also included were additions for expected credit losses due to borrower financial difficulty and/or collateral deterioration.

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CAPITAL RESOURCES AND LIQUIDITY

Capital resources and liquidity represent the overall financial strength of The Hartford and its insurance operations and their ability to generate cash flows from each of their business segments, borrow funds at competitive rates and raise new capital to meet operating and growth needs over the next twelve months.

Liquidity Requirements and Sources of Capital

The Hartford Financial Services Group, Inc.

The liquidity requirements of the holding company of The Hartford Financial Services Group, Inc. (“HFSG Holding Company”) have been and will continue to be met by HFSG Holding Company’s fixed maturities, short-term investments and cash of $1.6 billion at December 31, 2011, dividends from its insurance operations, as well as the issuance of common stock, debt or other capital securities and borrowings from its credit facilities. Expected liquidity requirements of the HFSG Holding Company for the next twelve months include interest on debt of approximately $480, common stockholder dividends, subject to the discretion of the Board of Directors, of approximately $170, and preferred stock dividends of approximately $42.

Furthermore, the Company’s Board of Directors has authorized a $500 stock repurchase program that permits purchases of common stock, as well as warrants and other derivative securities. The Hartford has repurchased $94 of its common stock under this program through February 17, 2012.

In addition, in 2010 The Hartford entered into an intercompany liquidity agreement that allows for short-term advances of funds among the HFSG Holding Company and certain affiliates of up to $2.0 billion for liquidity and other general corporate purposes. The Connecticut Insurance Department granted approval for certain affiliated insurance companies that are parties to the agreement to treat receivables from a parent, including the HFSG Holding Company, as admitted assets for statutory accounting purposes.

Debt

On October 17, 2011, The Hartford repaid its $400, 5.25% senior notes at maturity. For additional information regarding debt, see Note 14 of the Notes to Consolidated Financial Statements.

Dividends

On February 23, 2012, The Hartford’s Board of Directors declared a quarterly dividend of $0.10 per common share payable on April 2, 2012 to common shareholders of record as of March 5, 2012 and a dividend of $18.125 on each share of Series F preferred stock payable on April 2, 2012 to shareholders of record as of March 15, 2012.

Pension Plans and Other Postretirement Benefits

While the Company has significant discretion in making voluntary contributions to the U. S. qualified defined benefit pension plan, the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006 and further amended by the Worker, Retiree, and Employer Recovery Act of 2008, and Internal Revenue Code regulations mandate minimum contributions in certain circumstances. The Company made contributions to the U. S. qualified defined benefit pension plan of $200, $200, and $200 in 2011, 2010 and 2009. No contributions were made to the other postretirement plans in 2011, 2010 and 2009. The Company’s 2011 required minimum funding contribution was immaterial. The Company presently anticipates contributing approximately $200 to its U. S. qualified defined benefit pension plan in 2012, based upon certain economic and business assumptions. These assumptions include, but are not limited to, equity market performance, changes in interest rates and the Company’s other capital requirements. The Company does not have a required minimum funding contribution for the U.S. qualified defined benefit pension plan for 2012 and the funding requirements for all of the pension plans is expected to be immaterial.

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Dividends from Insurance Subsidiaries

Dividends to the HFSG Holding Company from its insurance subsidiaries are restricted. The payment of dividends by Connecticut-domiciled insurers is limited under the insurance holding company laws of Connecticut. These laws require notice to and approval by the state insurance commissioner for the declaration or payment of any dividend, which, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (i) 10% of the insurer’s policyholder surplus as of December 31 of the preceding year or (ii) net income (or net gain from operations, if such company is a life insurance company) for the twelve-month period ending on the thirty-first day of December last preceding, in each case determined under statutory insurance accounting principles. In addition, if any dividend of a Connecticut-domiciled insurer exceeds the insurer’s earned surplus, it requires the prior approval of the Connecticut Insurance Commissioner. The insurance holding company laws of the other jurisdictions in which The Hartford’s insurance subsidiaries are incorporated (or deemed commercially domiciled) generally contain similar (although in certain instances somewhat more restrictive) limitations on the payment of dividends. Dividends paid to HFSG Holding Company by its life insurance subsidiaries are further dependent on cash requirements of HLI and other factors. The Company’s property-casualty insurance subsidiaries are permitted to pay up to a maximum of approximately $1.4 billion in dividends to HFSG Holding Company in 2012 without prior approval from the applicable insurance commissioner. The Company’s life insurance subsidiaries are permitted to pay up to a maximum of approximately $625 in dividends to HLI in 2012 without prior approval from the applicable insurance commissioner. The aggregate of these amounts is the maximum the insurance subsidiaries could pay to HFSG Holding Company in 2012 without prior approval from the applicable insurance commissioner. In addition to statutory limitations on paying dividends, the Company also takes other items into consideration when determining dividends from subsidiaries. These considerations include, but are not limited to expected earnings and capitalization of the subsidiary, regulatory capital requirements and liquidity requirements of the individual operating company. In 2012, HFSG Holding Company anticipates receiving $800 in dividends from its property-casualty insurance subsidiaries, net of dividends to fund interest payments on an intercompany note between Hartford Holdings, Inc. and Hartford Fire Insurance Company, and no dividends from the life insurance subsidiaries. In 2011, HFSG Holding Company and HLI received $80 in dividends from the life insurance subsidiaries, and HFSG Holding Company received $1.1 billion in dividends from its property-casualty insurance subsidiaries, including $150 reflecting the net realized capital gain on the sale of SRS, $160 related to funding interest payments on an intercompany note between Hartford Holdings Inc. and Hartford Fire Insurance Company and $800 used in conjunction with other resources at the HFSG Holding Company principally to fund dividends, interest, capital contributions to subsidiaries and debt maturities.

Other Sources of Capital for the HFSG Holding Company

The Hartford endeavors to maintain a capital structure that provides financial and operational flexibility to its insurance subsidiaries, ratings that support its competitive position in the financial services marketplace (see the “Ratings” section below for further discussion), and shareholder returns. As a result, the Company may from time to time raise capital from the issuance of equity, equity-related debt or other capital securities and is continuously evaluating strategic opportunities. The issuance of common equity, equity-related debt or other capital securities could result in the dilution of shareholder interests or reduced net income due to additional interest expense.

Shelf Registrations

On August 4, 2010, The Hartford filed with the Securities and Exchange Commission (the “SEC”) an automatic shelf registration statement (Registration No. 333-168532) for the potential offering and sale of debt and equity securities. The registration statement allows for the following types of securities to be offered: debt securities, junior subordinated debt securities, preferred stock, common stock, depositary shares, warrants, stock purchase contracts, and stock purchase units. In that The Hartford is a well-known seasoned issuer, as defined in Rule 405 under the Securities Act of 1933, the registration statement went effective immediately upon filing and The Hartford may offer and sell an unlimited amount of securities under the registration statement during the three-year life of the registration statement.

Contingent Capital Facility

The Hartford is party to a put option agreement that provides The Hartford with the right to require the Glen Meadow ABC Trust, a Delaware statutory trust, at any time and from time to time, to purchase The Hartford’s junior subordinated notes in a maximum aggregate principal amount not to exceed $500. Under the Put Option Agreement, The Hartford will pay the Glen Meadow ABC Trust premiums on a periodic basis, calculated with respect to the aggregate principal amount of Notes that The Hartford had the right to put to the Glen Meadow ABC Trust for such period. The Hartford has agreed to reimburse the Glen Meadow ABC Trust for certain fees and ordinary expenses. The Company holds a variable interest in the Glen Meadow ABC Trust where the Company is not the primary beneficiary. As a result, the Company did not consolidate the Glen Meadow ABC Trust. As of December 31, 2011, The Hartford has not exercised its right to require Glen Meadow ABC Trust to purchase the Notes. As a result, the Notes remain a source of capital for the HFSG Holding Company.

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Commercial Paper and Revolving Credit Facility

The table below details the Company’s short-term debt programs and the applicable balances outstanding.

					Maximum Available As of				Outstanding As of
	Effective		Expiration		December 31,				December 31,
Description	Date		Date		2011		2010		2011		2010
Commercial Paper
The Hartford		11/10/86		N/A	$	2,000	$	2,000	$	—	$	—
Revolving Credit Facility
5-year revolving credit facility [1]		8/9/07		8/9/12		1,900		1,900		—		—
Total Commercial Paper and Revolving Credit Facility					$	3,900	$	3,900	$	—	$	—

[1] Terminated in January 2012, see discussion that follows.

While The Hartford’s maximum borrowings available under its commercial paper program are $2.0 billion, the Company is dependent upon market conditions to access short-term financing through the issuance of commercial paper to investors. As of December 31, 2011, the Company has no commercial paper outstanding.

In January 2012, the Company entered into a senior unsecured revolving credit facility (the “Credit Facility”) that provides for borrowing capacity up to $1.75 billion (which is available in U.S. dollars, and in Euro, Sterling, Canadian dollars and Japanese Yen) through January 6, 2016 and terminated its $1.9 billion unsecured revolving credit facility due August 9, 2012. As of December 31, 2011, the Company was in compliance with all financial covenants under the terminated credit facility.

Of the total availability under the Credit Facility, up to $250 is available to support letters of credit issued on behalf of the Company or subsidiaries of the Company. Under the Credit Facility, the Company must maintain a minimum level of consolidated net worth of $16 billion. The minimum level of consolidated net worth, as defined, will be adjusted in the first quarter of 2012 upon the adoption of a new DAC accounting standard, see Note 1 of the Notes to Consolidated Financial Statements, by the lesser of approximately $1.0 billion, after-tax representing 70% of the adoption-related estimated DAC charge, or $1.7 billion. The definition of consolidated net worth under the terms of the credit facility excludes AOCI and includes the Company’s outstanding junior subordinated debentures and perpetual preferred securities, net of discount. In addition, the Company’s maximum ratio of consolidated total debt to consolidated total capitalization is 35%, and the ratio of consolidated total debt of subsidiaries to consolidated total capitalization is limited to 10%. The Company will certify compliance with the financial covenants for the syndicate of participating financial institutions on a quarterly basis.

The Hartford’s Japan operations also maintain two lines of credit in support of operations. Both lines of credit are in the amount of $65, or ¥5 billion, and individually have expiration dates of September 30, 2012 and January 3, 2013.

Derivative Commitments

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings of the individual legal entity that entered into the derivative agreement as set by nationally recognized statistical rating agencies. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could demand immediate and ongoing full collateralization and in certain instances demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement. The settlement amount is determined by netting the derivative positions transacted under each agreement. If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of December 31, 2011, is $725. Of this $725 the legal entities have posted collateral of $716 in the normal course of business. Based on derivative market values as of December 31, 2011, a downgrade of one level below the current financial strength ratings by either Moody’s or S&P could require approximately an additional $37 to be posted as collateral. Based on derivative market values as of December 31, 2011, a downgrade by either Moody’s or S&P of two levels below the legal entities’ current financial strength ratings could require approximately an additional $48 of assets to be posted as collateral. These collateral amounts could change as derivative market values change, as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated. The nature of the collateral that we would post, if required, would be primarily in the form of U.S. Treasury bills and U.S. Treasury notes.

The aggregate notional amount of derivative relationships that could be subject to immediate termination in the event of rating agency downgrades to either BBB+ or Baa1 as of December 31, 2011 was $14.5 billion with a corresponding fair value of $418. The notional and fair value amounts include a customized GMWB derivative with a notional amount of $4.2 billion and a fair value of $207, for which the Company has a contractual right to make a collateral payment in the amount of approximately $45 to prevent its termination. This customized GMWB derivative contains an early termination trigger such that if the unsecured, unsubordinated debt of the counterparty’s related party guarantor is downgraded two levels or more below the current ratings by Moody’s and one or more levels by S&P, the counterparty could terminate all transactions under the applicable International Swaps and Derivatives Association Master Agreement. As of December 31, 2011, the gross fair value of the affected derivative contracts is $223, which would approximate the settlement value.

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Insurance Operations

Current and expected patterns of claim frequency and severity or surrenders may change from period to period but continue to be within historical norms and, therefore, the Company’s insurance operations’ current liquidity position is considered to be sufficient to meet anticipated demands over the next twelve months, including any obligations related to the Company’s restructuring activities. For a discussion and tabular presentation of the Company’s current contractual obligations by period, refer to Off-Balance Sheet Arrangements and Aggregate Contractual Obligations within the Capital Resources and Liquidity section of the MD&A.

The principal sources of operating funds are premiums, fees earned from assets under management and investment income, while investing cash flows originate from maturities and sales of invested assets. The primary uses of funds are to pay claims, claim adjustment expenses, commissions and other underwriting expenses, to purchase new investments and to make dividend payments to the HFSG Holding Company.

The Company’s insurance operations consist of property and casualty insurance products (collectively referred to as “Property & Casualty Operations”) and life insurance products (collectively referred to as “Life Operations”).

Property & Casualty Operations

Property & Casualty Operations holds fixed maturity securities including a significant short-term investment position (securities with maturities of one year or less at the time of purchase) to meet liquidity needs.

The following table summarizes Property & Casualty Operations’ fixed maturities, short-term investments, and cash, as of December 31, 2011:

Fixed maturities	$	26,034
Short-term investments		658
Cash		203
Less: Derivative collateral		(222	)
Total	$	26,673

Liquidity requirements that are unable to be funded by Property & Casualty Operation’s short-term investments would be satisfied with current operating funds, including premiums received or through the sale of invested assets. A sale of invested assets could result in significant realized losses.

Life Operations

Life Operations’ total general account contractholder obligations are supported by $76 billion of cash and total general account invested assets, excluding equity securities, trading, which includes a significant short-term investment position to meet liquidity needs.

The following table summarizes Life Operations’ fixed maturities, short-term investments, and cash, as of December 31, 2011:

Fixed maturities	$	56,950
Short-term investments		5,641
Cash		2,377
Less: Derivative collateral		(2,836	)
Cash associated with Japan variable annuities		(684	)
Total	$	61,448

Capital resources available to fund liquidity, upon contract holder surrender, are a function of the legal entity in which the liquidity requirement resides. Generally, obligations of Group Benefits will be funded by Hartford Life and Accident Insurance Company; obligations of Individual Annuity, Individual Life and private placement life insurance products will be generally funded by both Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company; obligations of Retirement Plans and institutional investment products will be generally funded by Hartford Life Insurance Company; and obligations of the Company’s international annuity subsidiaries will be generally funded by the legal entity in the country in which the obligation was generated.

Hartford Life Insurance Company (“HLIC”), an indirect wholly owned subsidiary, became a member of the Federal Home Loan Bank of Boston (“FHLBB”) in May 2011. Membership allows HLIC access to collateralized advances, which may be used to support various spread-based business and enhance liquidity management. The Connecticut Department of Insurance (“CTDOI”) will permit HLIC to pledge up to $1.48 billion in qualifying assets to secure FHLBB advances for 2012. The amount of advances that can be taken are dependent on the asset types pledged to secure the advances. The pledge limit is recalculated annually based on statutory admitted assets and capital and surplus. HLIC would need to seek the prior approval of the CTDOI if there were a desire to exceed these limits. As of December 31, 2011, HLIC had no advances outstanding under the FHLBB facility.

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	As of
	December 31,
Contractholder Obligations	2011
Total Life contractholder obligations	$	239,723
Less: Separate account assets [1]		(143,870	)
International statutory separate accounts [1]		(30,461	)
General account contractholder obligations	$	65,392
Composition of General Account Contractholder Obligations
Contracts without a surrender provision and/or fixed payout dates [2]	$	30,339
Fixed MVA annuities [3]		9,727
International fixed MVA annuities		2,642
Guaranteed investment contracts (“GIC”) [4]		567
Other [5]		22,117
General account contractholder obligations	$	65,392

[1]	In the event customers elect to surrender separate account assets or international statutory separate accounts, Life Operations will use the proceeds from the sale of the assets to fund the surrender, and Life Operations’ liquidity position will not be impacted. In many instances Life Operations will receive a percentage of the surrender amount as compensation for early surrender (surrender charge), increasing Life Operations’ liquidity position. In addition, a surrender of variable annuity separate account or general account assets (see below) will decrease Life Operations’ obligation for payments on guaranteed living and death benefits.
[2]	Relates to contracts such as payout annuities or institutional notes, other than guaranteed investment products with an MVA feature (discussed below) or surrenders of term life, group benefit contracts or death and living benefit reserves for which surrenders will have no current effect on Life Operations’ liquidity requirements.
[3]	Relates to annuities that are held in a statutory separate account, but under U.S. GAAP are recorded in the general account as Fixed MVA annuity contract holders are subject to the Company’s credit risk. In the statutory separate account, Life Operations is required to maintain invested assets with a fair value equal to the MVA surrender value of the Fixed MVA contract. In the event assets decline in value at a greater rate than the MVA surrender value of the Fixed MVA contract, Life Operations is required to contribute additional capital to the statutory separate account. Life Operations will fund these required contributions with operating cash flows or short-term investments. In the event that operating cash flows or short-term investments are not sufficient to fund required contributions, the Company may have to sell other invested assets at a loss, potentially resulting in a decrease in statutory surplus. As the fair value of invested assets in the statutory separate account are generally equal to the MVA surrender value of the Fixed MVA contract, surrender of Fixed MVA annuities will have an insignificant impact on the liquidity requirements of Life Operations.
[4]	GICs are subject to discontinuance provisions which allow the policyholders to terminate their contracts prior to scheduled maturity at the lesser of the book value or market value. Generally, the market value adjustment reflects changes in interest rates and credit spreads. As a result, the market value adjustment feature in the GIC serves to protect the Company from interest rate risks and limit Life Operations’ liquidity requirements in the event of a surrender.
[5]	Surrenders of, or policy loans taken from, as applicable, these general account liabilities, which include the general account option for Individual Annuity’s individual variable annuities and Individual Life variable life contracts, the general account option for Retirement Plans’ annuities and universal life contracts sold by Individual Life may be funded through operating cash flows of Life Operations, available short-term investments, or Life Operations may be required to sell fixed maturity investments to fund the surrender payment. Sales of fixed maturity investments could result in the recognition of significant realized losses and insufficient proceeds to fully fund the surrender amount. In this circumstance, Life Operations may need to take other actions, including enforcing certain contract provisions which could restrict surrenders and/or slow or defer payouts.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

The Company does not have any off-balance sheet arrangements that are reasonably likely to have a material effect on the financial condition, results of operations, liquidity, or capital resources of the Company, except for the contingent capital facility described above and the following:

• The Company has unfunded commitments to purchase investments in limited partnerships, private placements and mortgage loans of approximately $1.4 billion as disclosed in Note 12 of Notes to Consolidated Financial Statements.

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The following table identifies the Company’s aggregate contractual obligations as of December 31, 2011:

	Payments due by period
			Less than		1-3		3-5		More than
	Total		1 year		years		years		5 years
Property and casualty obligations [1]	$	22,093	$	5,721	$	4,384	$	2,818	$	9,170
Life, annuity and disability obligations [2]		341,984		22,894		34,895		30,701		253,494
Operating lease obligations [3]		242		58		81		47		56
Long-term debt obligations [4]		19,202		480		1,460		1,678		15,584
Consumer notes [5]		348		168		104		55		21
Purchase obligations [6]		3,484		2,693		544		214		33
Other long-term liabilities reflected on the balance sheet [7]		2,505		1,986		379		140		—
Total [8]	$	389,858	$	34,000	$	41,847	$	35,653	$	278,358

[1] The following points are significant to understanding the cash flows estimated for obligations under property and casualty contracts:

• Reserves for Property & Casualty unpaid losses and loss adjustment expenses include IBNR and case reserves. While payments due on claim reserves are considered contractual obligations because they relate to insurance policies issued by the Company, the ultimate amount to be paid to settle both case reserves and IBNR is an estimate, subject to significant uncertainty. The actual amount to be paid is not finally determined until the Company reaches a settlement with the claimant. Final claim settlements may vary significantly from the present estimates, particularly since many claims will not be settled until well into the future.

• In estimating the timing of future payments by year, the Company has assumed that its historical payment patterns will continue. However, the actual timing of future payments could vary materially from these estimates due to, among other things, changes in claim reporting and payment patterns and large unanticipated settlements. In particular, there is significant uncertainty over the claim payment patterns of asbestos and environmental claims. In addition, the table does not include future cash flows related to the receipt of premiums that may be used, in part, to fund loss payments.

• Under U.S. GAAP, the Company is only permitted to discount reserves for losses and loss adjustment expenses in cases where the payment pattern and ultimate loss costs are fixed and determinable on an individual claim basis. For the Company, these include claim settlements with permanently disabled claimants. As of December 31, 2011, the total property and casualty reserves in the above table are gross of a reserve discount of $542.

[2]	Estimated life, annuity and disability obligations include death and disability claims, policy surrenders, policyholder dividends and trail commissions offset by expected future deposits and premiums on in-force contracts. Estimated life, annuity and disability obligations are based on mortality, morbidity and lapse assumptions comparable with the Company’s historical experience, modified for recent observed trends. The Company has also assumed market growth and interest crediting consistent with other assumptions. In contrast to this table, the majority of the Company’s obligations are recorded on the balance sheet at the current account values and do not incorporate an expectation of future market growth, interest crediting, or future deposits. Therefore, the estimated obligations presented in this table significantly exceed the liabilities recorded in reserve for future policy benefits and unpaid losses and loss adjustment expenses, other policyholder funds and benefits payable and separate account liabilities. Due to the significance of the assumptions used, the amounts presented could materially differ from actual results.
[3]	Includes future minimum lease payments on operating lease agreements. See Note 12 of Notes to Consolidated Financial Statements for additional discussion on lease commitments.
[4]	Includes contractual principal and interest payments. See Note 14 of Notes to Consolidated Financial Statements for additional discussion of long-term debt obligations.
[5]	Consumer notes include principal payments and contractual interest for fixed rate notes and interest based on current rates for floating rate notes. See Note 14 of Notes to Consolidated Financial Statements for additional discussion of consumer notes.
[6]	Includes $1.4 billion in commitments to purchase investments including approximately $700 of limited partnership, $108 of private placements and $553 of mortgage loans. Outstanding commitments under these limited partnerships and mortgage loans are included in payments due in less than 1 year since the timing of funding these commitments cannot be reliably estimated. The remaining commitments to purchase investments primarily represent payables for securities purchased which are reflected on the Company’s consolidated balance sheet.
	Also included in purchase obligations is $1.1 billion relating to contractual commitments to purchase various goods and services such as maintenance, human resources, information technology, and transportation in the normal course of business. Purchase obligations exclude contracts that are cancelable without penalty or contracts that do not specify minimum levels of goods or services to be purchased.
[7]	Includes cash collateral of $2 billion which the Company has accepted in connection with the Company’s derivative instruments. Since the timing of the return of the collateral is uncertain, the return of the collateral has been included in the payments due in less than 1 year.
	Also included in other long term liabilities is $48 of net unrecognized tax benefits.
[8]	Does not include estimated voluntary contribution of $200 to the Company’s pension plan in 2012.

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Capitalization

The capital structure of The Hartford as of December 31, 2011 and December 31, 2010 consisted of debt and stockholders’ equity, summarized as follows:

	December 31,			December 31,
	2011			2010			Change
Short-term debt (includes current maturities of long-term debt)	$	—		$	400			(100	%)
Long-term debt		6,216			6,207			—
Total debt [1]		6,216			6,607			(6	%)
Stockholders’ equity excluding accumulated other comprehensive loss, net of tax (“AOCI”)		21,753			21,312			2	%
AOCI, net of tax		1,157			(1,001	)	NM
Total stockholders’ equity	$	22,910		$	20,311			13	%
Total capitalization including AOCI	$	29,126		$	26,918			8	%
Debt to stockholders’ equity		27	%		33	%
Debt to capitalization		21	%		25	%

[1] Total debt of the Company excludes $314 and $382 billion of consumer notes as of December 31, 2011 and December 31, 2010, respectively.

The Hartford’s total capitalization increased $2.2 billion, or 8%, from December 31, 2010 to December 31, 2011 due to improvements in AOCI, net of tax, and increases in stockholders’ equity, excluding AOCI. AOCI, net of tax, improved primarily due to improvements in the Company’s net unrealized position on available-for-sale securities of $2.0 billion primarily as a result of improved security valuations largely due to declining interest rates, partially offset by credit spread widening. The increase in stockholders’ equity, excluding AOCI, was primarily due to net income of $662.

For additional information on equity and AOCI, net of tax, see Notes 15 and 16, respectively, of the Notes to Consolidated Financial Statements.

Cash Flow

	2011			2010			2009
Net cash provided by operating activities	$	2,274		$	3,309		$	2,974
Net cash used for investing activities	$	(1,182	)	$	(434	)	$	(3,123	)
Net cash provided by (used for) financing activities	$	(609	)	$	(2,955	)	$	523
Cash — end of year	$	2,581		$	2,062		$	2,142

Year ended December 31, 2011 compared to the year ended December 31, 2010

The decrease in cash provided by operating activities compared to the prior year period reflected an increase in losses paid on property and casualty insurance products, and to a lesser extent, lower net investment income on available-for-sale securities, excluding limited partnerships and other alternative investments.

Cash used for investing activities in 2011 primarily relates to net purchases of mortgage loans of $1.3 billion and net purchases of fixed maturities, fair value option of $627, partially offset by net receipts on derivatives of $720 and net proceeds of available-for-sale securities of $256. Cash used for investing activities in 2010 primarily relates to net purchases of available-for-sale securities of $1.5 billion and net payments on derivatives of $338, partially offset by net proceeds from sales of mortgage loans of $1.4 billion.

Cash used for financing activities in 2011 primarily consists of repayment of long-term debt and dividends paid on common and preferred stock, partially offset by net inflows on investment and universal life-type contracts. In the comparable prior period of 2010, cash used for financing activities increased primarily due to repayments of consumer notes of $754, repayment of $275 in senior notes and net outflows on investment and universal life-type contracts.

Year ended December 31, 2010 compared to the year ended December 31, 2009

The increase in cash provided by operating activities, compared to the prior year period, was primarily the result of increases in fee income.

Cash used for investing activities in 2010 primarily relates to net purchases of available-for-sale securities of $1.5 billion and net payments on derivatives of $338, partially offset by net proceeds from sales of mortgage loans of $1.4 billion. Cash used for investing activities in 2009 consisted of net outflows of $2.9 billion from changes in payables on securities lending, net purchases of available-for-sale securities and $561of net payments on derivatives, partially offset by net proceeds from sales of mortgage loans of $396.

Cash used for financing activities in 2010 primarily consists of repayments of consumer notes of $754, repayment of $275 in senior notes and net outflows on investment and universal life-type contracts. Cash provided by financing activities in 2009 primarily consists of proceeds from the issuance of preferred stock and warrants to U.S. Treasury of $3.4 billion, partially offset by net outflows on investment and universal life-type contracts.

Operating cash flows in each of the last three years have been adequate to meet liquidity requirements.

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Equity Markets

For a discussion of the potential impact of the equity markets on capital and liquidity, see the Financial Risk on Statutory Capital and Liquidity Risk section in this MD&A.

Ratings

Ratings impact the Company’s cost of borrowing and its ability to access financing and are an important factor in establishing competitive position in the insurance and financial services marketplace. There can be no assurance that the Company’s ratings will continue for any given period of time or that they will not be changed. In the event the Company’s ratings are downgraded, the Company’s cost of borrowing and ability to access financing, as well as the level of revenues or the persistency of its business may be adversely impacted.

The following table summarizes The Hartford’s significant member companies’ financial ratings from the major independent rating organizations as of February 17, 2012.

Insurance Financial Strength Ratings:	A.M. Best		Fitch		Standard & Poor’s		Moody’s
Hartford Fire Insurance Company		A		A+		A		A2
Hartford Life Insurance Company		A		A-		A		A3
Hartford Life and Accident Insurance Company		A		A-		A		A3
Hartford Life and Annuity Insurance Company		A		A-		A		A3
Other Ratings:
The Hartford Financial Services Group, Inc.:
Senior debt	bbb+		BBB-		BBB		Baa3
Commercial paper	AMB-2			F2		A-2		P-3

These ratings are not a recommendation to buy or hold any of The Hartford’s securities and they may be revised or revoked at any time at the sole discretion of the rating organization.

The agencies consider many factors in determining the final rating of an insurance company. One consideration is the relative level of statutory surplus necessary to support the business written. Statutory surplus represents the capital of the insurance company reported in accordance with accounting practices prescribed by the applicable state insurance department. See Part I, Item 1A. Risk Factors — “Downgrades in our financial strength or credit ratings, which may make our products less attractive, could increase our cost of capital and inhibit our ability to refinance our debt, which would have a material adverse effect on our business, financial condition, results of operations and liquidity.”

Statutory Surplus

The table below sets forth statutory surplus for the Company’s insurance companies. The statutory surplus amounts as of December 31, 2011 and 2010 in the table below are based on actual statutory filings with the applicable regulatory authorities.

	2011		2010
U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries	$	7,388	$	7,731
Property and casualty insurance subsidiaries		7,412		7,721
Total	$	14,800	$	15,452

Total statutory capital and surplus for the U.S. life insurance subsidiaries, including domestic captive insurance subsidiaries, decreased by $343, primarily due to variable annuity surplus impacts of $470 and an increase in the asset valuation reserve of $323, partially offset by an increase in capital contributions of $287 and an increase in statutory admitted deferred tax assets of $268. Total statutory capital and surplus for the property and casualty insurance subsidiaries decreased by $309, primarily due to dividends to the HFSG Holding Company of $1.1 billion, partially offset by statutory net income, after tax, of $514, an increase in statutory admitted assets of $145, unrealized gains of $90, and an increase in statutory admitted deferred tax assets of $26.

The Company also holds regulatory capital and surplus for its operations in Japan. Under the accounting practices and procedures governed by Japanese regulatory authorities, the Company’s statutory capital and surplus was $1.3 billion as of December 31, 2011 and 2010.

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Statutory Capital

The Company’s stockholders’ equity, as prepared using U.S. generally accepted accounting principles (“U.S. GAAP”) was $22.9 billion as of December 31, 2011. The Company’s estimated aggregate statutory capital and surplus, as prepared in accordance with the National Association of Insurance Commissioners’ Accounting Practices and Procedures Manual (“U.S.STAT”) was $14.8 billion as of December 31, 2011. Significant differences between U.S.GAAP stockholders’ equity and aggregate statutory capital and surplus prepared in accordance with U.S.STAT include the following:

• Costs incurred by the Company to acquire insurance policies are deferred under U.S.GAAP while those costs are expensed immediately under U.S.STAT.

• Temporary differences between the book and tax basis of an asset or liability which are recorded as deferred tax assets are evaluated for recoverability under U.S.GAAP while those amounts deferred are subject to limitations under U.S.STAT.

• The assumptions used in the determination of Life benefit reserves is prescribed under U.S.STAT, while the assumptions used under U.S.GAAP are generally the Company’s best estimates. The methodologies for determining life insurance reserve amounts may also be different. For example, reserving for living benefit reserves under U.S.STAT is generally addressed by the Commissioners’ Annuity Reserving Valuation Methodology and the related Actuarial Guidelines, while under U.S.GAAP, those same living benefits may be considered embedded derivatives and recorded at fair value or they may be considered SOP 03-1 reserves. The sensitivity of these life insurance reserves to changes in equity markets, as applicable, will be different between U.S.GAAP and U.S.STAT.

• The difference between the amortized cost and fair value of fixed maturity and other investments, net of tax, is recorded as an increase or decrease to the carrying value of the related asset and to equity under U.S.GAAP, while U.S.STAT only records certain securities at fair value, such as equity securities and certain lower rated bonds required by the NAIC to be recorded at the lower of amortized cost or fair value.

• U.S.STAT for life insurance companies establishes a formula reserve for realized and unrealized losses due to default and equity risks associated with certain invested assets (the Asset Valuation Reserve), while U.S.GAAP does not. Also, for those realized gains and losses caused by changes in interest rates, U.S.STAT for life insurance companies defers and amortizes the gains and losses, caused by changes in interest rates, into income over the original life to maturity of the asset sold (the Interest Maintenance Reserve) while U.S.GAAP does not.

• Goodwill arising from the acquisition of a business is tested for recoverability on an annual basis (or more frequently, as necessary) for U.S.GAAP, while under U.S.STAT goodwill is amortized over a period not to exceed 10 years and the amount of goodwill is limited.

In addition, certain assets, including a portion of premiums receivable and fixed assets, are non-admitted (recorded at zero value and charged against surplus) under U.S.STAT. U.S.GAAP generally evaluates assets based on their recoverability.

Risk-Based Capital

State insurance regulators and the NAIC have adopted risk-based capital requirements for life insurance companies to evaluate the adequacy of statutory capital and surplus in relation to investment and insurance risks. The requirements provide a means of measuring the minimum amount of statutory surplus appropriate for an insurance company to support its overall business operations based on its size and risk profile. Under risk-based capital (“RBC”) requirements, a company’s RBC is calculated by applying factors and performing calculations relating to various asset, premium, claim, expense and reserve items. The adequacy of a company’s actual capital is determined by the ratio of a company’s total adjusted capital, as defined by the insurance regulators, to its company action level of RBC (known as the RBC ratio), also as defined by insurance regulators. RBC standards are used by regulators to set in motion appropriate regulatory actions related to insurers that show indications of inadequate conditions. In addition, rating agencies consider RBC ratios, along with their proprietary models, in making ratings determinations.

Sensitivity

In any particular year, statutory surplus amounts and RBC ratios may increase or decrease depending upon a variety of factors. The amount of change in the statutory surplus or RBC ratios can vary based on individual factors and may be compounded in extreme scenarios or if multiple factors occur at the same time. At times the impact of changes in certain market factors or a combination of multiple factors on RBC ratios can be counterintuitive. For further discussion on these factors and the potential impacts to the life insurance subsidiaries, see the Financial Risk on Statutory Capital section within Enterprise Risk Management.

Statutory capital at the property and casualty subsidiaries has historically been maintained at or above the capital level required to meet “AA level” ratings from rating agencies. Statutory capital generated by the property and casualty subsidiaries in excess of the capital level required to meet “AA level” ratings is available for use by the enterprise or for corporate purposes. The amount of statutory capital can increase or decrease depending on a number of factors affecting property and casualty results including, among other factors, the level of catastrophe claims incurred, the amount of reserve development, the effect of changes in interest rates on investment income and the discounting of loss reserves, and the effect of realized gains and losses on investments.

In addition, the Company can access the $500 Glen Meadow trust contingent capital facility and maintains the ability to access $1.9 billion of capacity under its revolving credit facility.

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Contingencies

Legal Proceedings — For a discussion regarding contingencies related to The Hartford’s legal proceedings, please see the information contained under “Litigation” and “Asbestos and Environmental Claims,” in Note 12 of the Notes to Consolidated Financial Statements, which is incorporated herein by reference.

For a discussion of terrorism reinsurance legislation and how it affects The Hartford, see “Terrorism” under the Insurance Risk Management section of the MD&A.

Tax proposals and regulatory initiatives which have been or are being considered by Congress and/or the United States Treasury Department could have a material effect on the insurance business. These proposals and initiatives include, or could include, new taxes or assessments on large financial institutions, changes pertaining to the income tax treatment of insurance companies and life insurance products and annuities, repeal or reform of the estate tax and comprehensive federal tax reform, and changes to the regulatory structure for financial institutions. The nature and timing of any Congressional or regulatory action with respect to any such efforts is unclear.

Legislative Developments

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) was enacted on July 21, 2010, mandating changes to the regulation of the financial services industry. The Dodd-Frank Act may affect our operations and governance in ways that could adversely affect our financial condition and results of operations.

In particular, the Dodd-Frank Act vests a newly created Financial Services Oversight Council with the power to designate “systemically important” institutions, which will be subject to special regulatory supervision and other provisions intended to prevent, or mitigate the impact of, future disruptions in the U.S. financial system. Systemically important institutions are limited to large bank holding companies and nonbank financial companies that are so important that their potential failure could “pose a threat to the financial stability of the United States.” If we are designated as a systemically important institution, we could be subject to higher capital requirements and additional regulatory oversight imposed by The Federal Reserve, as well as to post-event assessments imposed by the Federal Deposit Insurance Corporation (“FDIC”) to recoup the costs associated with the orderly liquidation of other systemically important institutions in the event one or more such institutions fails. Further, the FDIC is authorized to petition a state court to commence an insolvency proceeding to liquidate an insurance company that fails in the event the insurer’s state regulator fails to act. Other provisions will require central clearing of, and/or impose new margin and capital requirements on, derivatives transactions, which we expect will increase the costs of our hedging program.

The Hartford is subject to a number of applicable Dodd-Frank Act provisions. For example, if we are designated a systemically important financial institution, the Dodd-Frank Act may restrict us from sponsoring and investing in private equity and hedge funds, which would limit our discretion in managing our general account. Other provisions in the Dodd-Frank Act that may impact us include: a new “Federal Insurance Office” within Treasury; discretionary authority for the SEC to impose a harmonized standard of care for investment advisers and broker-dealers who provide personalized advice about securities to retail customers; possible adverse impact on the pricing and liquidity of the securities in which we invest resulting from the proprietary trading and market making limitation of the Volcker Rule; possible prohibition of certain asset-backed securities transactions that could adversely impact our ability to offer insurance-linked securities; and enhancements to corporate governance, especially regarding risk management.

FY 2013, Budget of the United States Government

On February 13, 2012, the Obama Administration released its “FY 2013, Budget of the United States Government” (the “Budget”). Although the Administration has not released proposed statutory language, the Budget includes proposals which if enacted, would affect the taxation of life insurance companies and certain life insurance products. In particular, the proposals would affect the treatment of corporate owned life insurance (“COLI”) policies by limiting the availability of certain interest deductions for companies that purchase those policies. The proposals would also change the method used to determine the amount of dividend income received by a life insurance company on assets held in separate accounts used to support products, including variable life insurance and variable annuity contracts, that are eligible for the dividends received deduction (“DRD”). The DRD reduces the amount of dividend income subject to tax and is a significant component of the difference between the Company’s actual tax expense and expected amount determined using the federal statutory tax rate of 35%. If proposals of this type were enacted, the Company’s sale of variable annuities and variable life products and its profits on COLI policies could be adversely affected and the Company’s actual tax expense could increase, reducing earnings.

Guaranty Fund and Other Insurance-related Assessments

For a discussion regarding Guaranty Fund and Other Insurance-related Assessments, see Note 12 of the Notes to Consolidated Financial Statements.

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IMPACT OF NEW ACCOUNTING STANDARDS

For a discussion of accounting standards, see Note 1 of the Notes to Consolidated Financial Statements.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is set forth in the Capital Markets Risk Management section of Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Consolidated Financial Statements and Schedules elsewhere herein.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

The Company’s principal executive officer and its principal financial officer, based on their evaluation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)), have concluded that the Company’s disclosure controls and procedures are effective for the purposes set forth in the definition thereof in Exchange Act Rule 13a-15(e) as of December 31, 2011.

Management’s annual report on internal control over financial reporting

The management of The Hartford Financial Services Group, Inc. and its subsidiaries (“The Hartford”) is responsible for establishing and maintaining adequate internal control over financial reporting for The Hartford as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. A company’s internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Hartford’s management assessed its internal controls over financial reporting as of December 31, 2011 in relation to criteria for effective internal control over financial reporting described in “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment under those criteria, The Hartford’s management concluded that its internal control over financial reporting was effective as of December 31, 2011.

Attestation report of the Company’s registered public accounting firm

The Hartford’s independent registered public accounting firm, Deloitte & Touche LLP, has issued their attestation report on the Company’s internal control over financial reporting which is set forth below.

131

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
The Hartford Financial Services Group, Inc.

Hartford, Connecticut

We have audited the internal control over financial reporting of The Hartford Financial Services Group, Inc. and its subsidiaries (collectively, the “Company”) as of December 31, 2011, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the consolidated financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2011 of the Company and our report, dated February 24, 2012, expressed an unqualified opinion on those consolidated financial statements and financial statement schedules and included an explanatory paragraph regarding the Company’s change in its method of accounting and reporting for variable interest entities and embedded credit derivatives as required by accounting guidance adopted in 2010, and for other-than temporary impairments as required by accounting guidance adopted in 2009.

DELOITTE & TOUCHE LLP

Hartford, Connecticut
February 24, 2012

132

Changes in internal control over financial reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fourth fiscal quarter of 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. OTHER INFORMATION

None.

PART III

Item 10. DIRECTORS, AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE OF THE HARTFORD

Certain of the information called for by Item 10 will be set forth in the definitive proxy statement for the 2012 annual meeting of shareholders (the “Proxy Statement”) to be filed by The Hartford with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K under the captions “Nominee for Directorships”, “Section 16(a) Beneficial Ownership Reporting Compliance”, “Corporate Governance” and “Board of Directors” and is incorporated herein by reference.

The Company has adopted a Code of Ethics and Business Conduct, which is applicable to all employees of the Company, including the principal executive officer, the principal financial officer and the principal accounting officer. The Code of Ethics and Business Conduct is available on the Company’s website at: www.thehartford.com. Any waiver of, or material amendment to, the Code of Ethics and Business Conduct applicable to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions will be posted promptly to our web site in accordance with applicable NYSE and SEC rules.

Executive Officers of The Hartford

Information about the executive officers of The Hartford who are also nominees for election as directors will be set forth in The Hartford’s Proxy Statement. Set forth below is information about the other executive officers of the Company:

			Position with The Hartford and Business Experience
Name	Age		During the Past Five Years
Jonathan R. Bennett		47	Executive Vice President, Digital Commerce & Customer Analytics (July 2010-Present); Executive Vice President of Personal & Small Business Insurance (2005-July 2010)
Beth A. Bombara		44	Senior Vice President and Controller (June 2007-Present); Vice President (2004-June 2007)
James M. Eckerle		52	Executive Vice President of Strategic Initiatives and Enterprise Technology (October 2010-Present); Senior Vice President of Global Transition, Quality and Change, Bank of America (2004-October 2010)
Douglas Elliot		51	Executive Vice President and President of Commercial Markets (April 2011-Present); President and Chief Executive Officer, HSB Group (July 2007-March 2011); President and Chief Operating Officer, HSB Group (January 2007-June 2007); Senior Advisor, Aspen Insurance Holdings (2006); Chief Executive Officer of General Commercial and Personal Lines, St. Paul Travelers Companies (2004-2007)
Alan J. Kreczko		60	Executive Vice President and General Counsel (June 2007-Present); Senior Vice President and Deputy General Counsel (2002-June 2007)
David N. Levenson		45	Executive Vice President and President of Wealth Management (July 2010-Present); Executive Vice President of Legacy Holdings (June 2009-July 2010); Head of Product Distribution, President and CEO of Hartford Life K.K.1 (2006-2009)
André A. Napoli		46	Executive Vice President and President of Consumer Markets (August 2010-Present); Executive Vice President and Chief Administrative Officer, CUNA Mutual Group (July 2009-August 2010 ); Senior Vice President, Consumer Products, CUNA Mutual Group (August 2007-July 2009); Vice President, Standard Auto Product and Pricing, Nationwide (October 2006-August 2007); Vice President, Personal Lines Pricing and Research, Nationwide (July 2005-October 2006)
Robert Rupp		59	Executive Vice President and Chief Risk Officer (October 2011-Present); Executive Vice President, Head of Enterprise-Wide Market Risk, BONY Mellon (September 2008-October 2011); Managing Director, Risk Management, JP Morgan Chase (2004-2008)
Christopher J. Swift		51	Executive Vice President and Chief Financial Officer (March 2010-Present); Vice President and CFO, American Life Insurance Company (March 2009-April 2010); Vice President and CFO, AIG’s Global Life Insurance and Retirement Services Division (July 2005-March 2009)

133

			Position with The Hartford and Business Experience
Name	Age		During the Past Five Years
Karen C. Tripp		56	Executive Vice President of Marketing and Communications (September 2010-Present); Vice President of Corporate Communications, L3 Communications (2007-September 2010); General Manager of Global Communications, General Electric (2002-2007)
Hugh M. Whelan		51	Acting President of Hartford Investment Management Company1 (October 2011-Present), Executive Vice President, Hartford Investment Management Company (2005-2011)
Eileen G. Whelley		57	Executive Vice President of Human Resources (June 2007-Present); Executive Vice President of Global HR (December 2006-June 2007); GE Vice President and Executive Vice President of Human Resources, NBC Universal (2004-December 2006)

¹ Denotes a subsidiary of The Hartford

Item 11. EXECUTIVE COMPENSATION

The information called for by Item 11 will be set forth in the Proxy Statement under the captions “Compensation Discussion and Analysis”, “Executive Compensation”, “Director Compensation”, “Report of the Compensation and Management Development Committee”, and “Compensation and Management Development Committee Interlocks and Insider Participation” and is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Certain of the information called for by Item 12 will be set forth in the Proxy Statement under the caption “Information on Stock Ownership” and is incorporated herein by reference.

Equity Compensation Plan Information

The following table provides information as of December 31, 2011 about the securities authorized for issuance under the Company’s equity compensation plans. The Company maintains The Hartford Incentive Stock Plan (the “2000 Stock Plan”), The Hartford 2005 Incentive Stock Plan (the “2005 Stock Plan”), The Hartford 2010 Incentive Stock Plan (the “2010 Stock Plan”), and The Hartford Employee Stock Purchase Plan (the “ESPP”). On May 19, 2010, the shareholders of the Company approved the 2010 Stock Plan, which superseded the 2005 Stock Plan. Pursuant to the provisions of the 2010 Stock Plan, no additional shares may be issued from the 2005 Stock Plan. To the extent that any awards under the 2005 Stock Plan are forfeited, terminated, expire unexercised or are settled in cash in lieu of stock, the shares subject to such awards (or the relevant portion thereof) shall be available for award under the 2010 Stock Plan and such shares shall be added to the total number of shares available under the 2010 Stock Plan.

In addition, the Company maintains the 2000 PLANCO Non-employee Option Plan (the “PLANCO Plan”) pursuant to which it may grant awards to non-employee wholesalers of products of Hartford Life Distributors, LLC, and its affiliate, PLANCO, LLC (collectively “HLD”).

	(a)		(b)		(c)
	Number of Securities		Weighted-average		Number of Securities Remaining
	to be Issued Upon		Exercise Price of		Available for Future Issuance
	Exercise of		Outstanding		Under Equity Compensation Plans
	Outstanding Options,		Options, Warrants		(Excluding Securities Reflected in
	Warrants and Rights		and Rights		Column (a))
Equity compensation plans approved by stockholders		4,833,390	$	47.89		21,124,460	[1]
Equity compensation plans not approved by stockholders		5,956		47.12		264,388
Total		4,839,346	$	47.89		21,388,848

[1] Of these shares, 6,472,280 shares remain available for purchase under the ESPP.

134

Summary Description of the 2000 PLANCO Non-Employee Option Plan

The Company’s Board of Directors adopted the PLANCO Plan on July 20, 2000, and amended it on February 20, 2003 to increase the number of shares of the Company’s common stock subject to the plan to 450,000 shares. The stockholders of the Company have not approved the PLANCO Plan. No awards have been issued under the PLANCO Plan since 2003.

Eligibility — Any non-employee independent contractor serving on the wholesale sales force as an insurance agent who is an exclusive agent of the Company or who derives more than 50% of his or her annual income from the Company is eligible.

Terms of options — Nonqualified stock options (“NQSOs”) to purchase shares of common stock are available for grant under the PLANCO Plan. The administrator of the PLANCO Plan, the Compensation and Management Development Committee, (i) determines the recipients of options under the PLANCO Plan, (ii) determines the number of shares of common stock covered by such options, (iii) determines the dates and the manner in which options become exercisable (which is typically in three equal annual installments beginning on the first anniversary of the date of grant), (iv) sets the exercise price of options (which may be less than, equal to or greater than the fair market value of common stock on the date of grant) and (v) determines the other terms and conditions of each option. Payment of the exercise price may be made in cash, other shares of the Company’s common stock or through a same day sale program. The term of an NQSO may not exceed ten years and two days from the date of grant.

If an optionee’s required relationship with the Company terminates for any reason, other than for cause, any exercisable options remain exercisable for a fixed period of four months, not to exceed the remainder of the option’s term. Any options that are not exercisable at the time of such termination are cancelled on the date of such termination. If the optionee’s required relationship is terminated for cause, the options are canceled immediately.

Acceleration in Connection with a Change in Control — Upon the occurrence of a change in control, each option outstanding on the date of such change in control, and which is not then fully vested and exercisable, shall immediately vest and become exercisable. In general, a “Change in Control” will be deemed to have occurred upon the acquisition of 40% or more of the outstanding voting stock of the Company, a tender or exchange offer to acquire 15% or more of the outstanding voting stock of the Company, certain mergers or corporate transactions resulting in the shareholders of the Company before the transactions owning less than 55% of the entity surviving the transactions, certain transactions involving a transfer of substantially all of the Company’s assets or a change in greater than 50% of the Board members over a two year period. See Note 18 of the Notes to Consolidated Financial Statements for a description of the 2010 Stock Plan and the ESPP.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Any information called for by Item 13 will be set forth in the Proxy Statement under the caption “Corporate Governance” and “Board of Directors” and is incorporated herein by reference.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information called for by Item 14 will be set forth in the Proxy Statement under the caption “Report of the Audit Committee” and is incorporated herein by reference.

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as a part of this report:

(1)	Consolidated Financial Statements. See Index to Consolidated Financial Statements and Schedules elsewhere herein.
(2)	Consolidated Financial Statement Schedules. See Index to Consolidated Financial Statement and Schedules elsewhere herein.
(3)	Exhibits. See Exhibit Index elsewhere herein.

135

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

	Page(s)
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Statements of Operations — For the Years Ended December 31, 2011, 2010 and 2009		F-3
Consolidated Statements of Comprehensive Income (Loss) — For the Years Ended December 31, 2011, 2010 and 2009		F-4
Consolidated Balance Sheets — As of December 31, 2011 and 2010		F-5
Consolidated Statements of Changes in Stockholders’ Equity — For the Years Ended December 31, 2011, 2010 and 2009		F-6
Consolidated Statements of Cash Flows — For the Years Ended December 31, 2011, 2010 and 2009		F-7
Notes to Consolidated Financial Statements		F-8-93
Schedule I — Summary of Investments — Other Than Investments in Affiliates		S-1
Schedule II — Condensed Financial Information of The Hartford Financial Services Group, Inc		S-2-3
Schedule III — Supplementary Insurance Information		S-4-5
Schedule IV — Reinsurance		S-6
Schedule V — Valuation and Qualifying Accounts		S-7
Schedule VI — Supplemental Information Concerning Property and Casualty Insurance Operations		S-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
The Hartford Financial Services Group, Inc.
Hartford, Connecticut

We have audited the accompanying consolidated balance sheets of The Hartford Financial Services Group, Inc. and its subsidiaries (collectively, the “Company”) as of December 31, 2011 and 2010, and the related consolidated statements of operations, changes in stockholders’ equity, comprehensive income (loss), and cash flows for each of the three years in the period ended December 31, 2011. Our audits also included the consolidated financial statement schedules listed in the Index at Item 15. These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of The Hartford Financial Services Group, Inc. and its subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 1 of the consolidated financial statements, the Company changed its method of accounting and reporting for variable interest entities and embedded credit derivatives as required by accounting guidance adopted in 2010, and for other-than-temporary impairments as required by accounting guidance adopted in 2009.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2011, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2012 expressed an unqualified opinion on the Company’s internal control over financial reporting.

DELOITTE & TOUCHE LLP
Hartford, Connecticut
February 24, 2012

F-2

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Consolidated Statements of Operations

	For the years ended December 31,
(In millions, except for per share data)	2011			2010			2009
Revenues
Earned premiums	$	14,088		$	14,055		$	14,424
Fee income		4,750			4,748			4,547
Net investment income:
Securities available-for-sale and other		4,272			4,364			4,017
Equity securities, trading		(1,359	)		(774	)		3,188
Total net investment income		2,913			3,590			7,205
Net realized capital gains (losses):
Total other-than-temporary impairment (“OTTI”) losses		(263	)		(852	)		(2,191	)
OTTI losses recognized in other comprehensive income (“OCI”)		89			418			683
Net OTTI losses recognized in earnings		(174	)		(434	)		(1,508	)
Net realized capital gains (losses), excluding net OTTI losses recognized in earnings		29			(177	)		(496	)
Total net realized capital losses		(145	)		(611	)		(2,004	)
Other revenues		253			267			261
Total revenues		21,859			22,049			24,433
Benefits, losses and expenses
Benefits, losses and loss adjustment expenses		14,625			13,025			13,831
Benefits, losses and loss adjustment expenses — returns credited on international variable annuities		(1,359	)		(774	)		3,188
Amortization of deferred policy acquisition costs and present value of future profits		3,427			2,527			4,257
Insurance operating costs and other expenses		4,398			4,407			4,370
Interest expense		508			508			476
Goodwill impairment		30			—			32
Total benefits, losses and expenses		21,629			19,693			26,154
Income (loss) from continuing operations before income taxes		230			2,356			(1,721	)
Income tax expense (benefit)		(346	)		612			(838	)
Income (loss) from continuing operations, net of tax		576			1,744			(883	)
Income (loss) from discontinued operations, net of tax		86			(64	)		(4	)
Net income (loss)	$	662		$	1,680		$	(887	)
Preferred stock dividends and accretion of discount		42			515			127
Net income (loss) available to common shareholders	$	620		$	1,165		$	(1,014	)
Income (loss) from continuing operations, net of tax, available to common shareholders per common share
Basic	$	1.20		$	2.85		$	(2.92	)
Diluted	$	1.12		$	2.62		$	(2.92	)
Net income (loss) available to common shareholders per common share
Basic	$	1.39		$	2.70		$	(2.93	)
Diluted	$	1.30		$	2.49		$	(2.93	)
Cash dividends declared per common share	$	0.40		$	0.20		$	0.20

See Notes to Consolidated Financial Statements.

F-3

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Consolidated Statements of Comprehensive Income

	For the years ended December 31,
(In millions)	2011			2010			2009
Comprehensive Income
Net income (loss)	$	662		$	1,680		$	(887	)
Other comprehensive income
Change in net unrealized gain/loss on securities		1,979			1,707			5,909
Change in OTTI losses recognized in other comprehensive income		9			116			(224	)
Change in net gain/loss on cash-flow hedging instruments		131			128			(387	)
Change in foreign currency translation adjustments		112			289			(23	)
Change in pension and other postretirement plan adjustments		(73	)		(123	)		(155	)
Total other comprehensive income		2,158			2,117			5,120
Total comprehensive income	$	2,820		$	3,797		$	4,233

See Notes to Consolidated Financial Statements.

F-4

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Consolidated Balance Sheets

	As of December 31,
(In millions, except for share and per share data)	2011			2010
Assets
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost of $78,978 and $78,419) (includes variable interest entity assets, at fair value, of $153 and $406)	$	81,809		$	77,820
Fixed maturities, at fair value using the fair value option (includes variable interest entity assets, at fair value, of $338 and $323)		1,328			649
Equity securities, trading, at fair value (cost of $32,928 and $33,899)		30,499			32,820
Equity securities, available-for-sale, at fair value (cost of $1,056 and $1,013)		921			973
Mortgage loans (net of allowances for loan losses of $102 and $155)		5,728			4,489
Policy loans, at outstanding balance		2,001			2,181
Limited partnerships and other alternative investments (includes variable interest entity assets of $7 and $14)		2,532			1,918
Other investments		2,394			1,617
Short-term investments		7,736			8,528
Total investments		134,948			130,995
Cash		2,581			2,062
Premiums receivable and agents’ balances, net		3,446			3,273
Reinsurance recoverables, net		4,768			4,862
Deferred policy acquisition costs and present value of future profits		8,744			9,857
Deferred income taxes, net		1,398			3,725
Goodwill		1,006			1,051
Property and equipment, net		1,029			1,150
Other assets		2,274			1,629
Separate account assets		143,870			159,742
Total assets	$	304,064		$	318,346
Liabilities
Reserve for future policy benefits and unpaid losses and loss adjustment expenses	$	41,016		$	39,598
Other policyholder funds and benefits payable		45,612			44,550
Other policyholder funds and benefits payable — international variable annuities		30,461			32,793
Unearned premiums		5,222			5,176
Short-term debt		—			400
Long-term debt		6,216			6,207
Consumer notes		314			382
Other liabilities (includes variable interest entity liabilities of $471 and $394)		8,443			9,187
Separate account liabilities		143,870			159,742
Total liabilities		281,154			298,035
Commitments and Contingencies (Note 12)
Stockholders’ Equity
Preferred stock, $0.01 par value — 50,000,000 shares authorized, 575,000 shares issued, liquidation preference $1,000 per share		556			556
Common stock, $0.01 par value — 1,500,000,000 shares authorized, 469,750,171 and 469,754,771 shares issued		5			5
Additional paid-in capital		10,391			10,448
Retained earnings		12,519			12,077
Treasury stock, at cost — 27,211,115 and 25,205,283 shares		(1,718	)		(1,774	)
Accumulated other comprehensive income (loss), net of tax		1,157			(1,001	)
Total stockholders’ equity		22,910			20,311
Total liabilities and stockholders’ equity	$	304,064		$	318,346

See Notes to Consolidated Financial Statements.

F-5

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
Consolidated Statements of Changes in Stockholders’ Equity

	For the years ended December 31,
(In millions, except for share data)	2011			2010			2009
Preferred Stock, at beginning of period	$	556		$	2,960		$	—
Issuance of mandatory convertible preferred stock		—			556			—
Accelerated accretion of discount from redemption of preferred stock issued to U.S. Treasury		—			440			—
Issuance (redemption) of preferred stock to the U.S. Treasury		—			(3,400	)		2,920
Accretion of preferred stock discount on issuance to U.S. Treasury		—			—			40
Preferred Stock, at end of period		556			556			2,960
Common Stock		5			5			4
Additional Paid-in Capital, at beginning of period		10,448			8,985			7,569
Issuance of common shares under public offering		—			1,599			—
Issuance of shares under incentive and stock compensation plans		(50	)		(130	)		(126	)
Tax expense on employee stock options and awards		(7	)		(6	)		(11	)
Issuance of shares under discretionary equity issuance plan		—			—			887
Issuance of warrants to U.S. Treasury		—			—			480
Reclassification of warrants from other liabilities to equity and extension of warrants’ term		—			—			186
Additional Paid-in Capital, at end of period		10,391			10,448			8,985
Retained Earnings, at beginning of period, before cumulative effect of accounting change, net of tax		12,077			11,164			11,336
Cumulative effect of accounting change, net of tax		—			26			—
Retained Earnings, at beginning of period, as adjusted		12,077			11,190			11,336
Net income (loss)		662			1,680			(887	)
Cumulative effect of accounting changes, net of tax		—			(194	)		912
Accelerated accretion of discount from redemption of preferred stock issued to U.S. Treasury		—			(440	)		—
Dividends on preferred stock		(42	)		(75	)		(87	)
Dividends declared on common stock		(178	)		(84	)		(70	)
Accretion of preferred stock discount on issuance to U.S. Treasury		—			—			(40	)
Retained Earnings, at end of period		12,519			12,077			11,164
Treasury Stock, at Cost, at beginning of period		(1,774	)		(1,936	)		(2,120	)
Issuance of shares under incentive and stock compensation plans from treasury stock		115			165			187
Treasury stock acquired		(51	)		—			—
Return of shares under incentive and stock compensation plans to treasury stock		(8	)		(3	)		(3	)
Treasury Stock, at Cost, at end of period		(1,718	)		(1,774	)		(1,936	)
Accumulated Other Comprehensive Loss, Net of Tax, at beginning of period		(1,001	)		(3,312	)		(7,520	)
Cumulative effect of accounting changes, net of tax		—			194			(912	)
Total other comprehensive income		2,158			2,117			5,120
Accumulated Other Comprehensive Income (Loss), Net of Tax, at end of period		1,157			(1,001	)		(3,312	)
Noncontrolling Interest, at beginning of period		—			29			92
Recognition of noncontrolling interest in other liabilities		—			(29	)		—
Change in noncontrolling interest ownership		—			—			(56	)
Noncontrolling loss		—			—			(7	)
Noncontrolling Interest, at end of period		—			—			29
Total Stockholders’ Equity	$	22,910		$	20,311		$	17,894
Preferred Shares Outstanding, at beginning of period (in thousands)		575			3,400			6,048
Redemption of preferred shares issued to the U.S. Treasury		—			(3,400	)		—
Issuance of mandatory convertible preferred shares		—			575			—
Conversion of preferred to common shares		—			—			(6,048	)
Issuance of shares to U.S. Treasury		—			—			3,400
Preferred Shares Outstanding, at end of period		575			575			3,400
Common Shares Outstanding, at beginning of period (in thousands)		444,549			383,007			300,579
Issuance of shares under public offering		—			59,590			—
Issuance of shares under incentive and stock compensation plans		1,476			2,095			2,356
Return of shares under incentive and stock compensation plans and other to treasury stock		(261	)		(143	)		(204	)
Treasury stock acquired		(3,225	)		—			(27	)
Conversion of preferred to common shares		—			—			24,194
Issuance of shares under discretionary equity issuance plan		—			—			56,109
Common Shares Outstanding, at end of period		442,539			444,549			383,007

See Notes to Consolidated Financial Statements.

F-6

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Consolidated Statements of Cash Flows

	For the years ended December 31,
(In millions)	2011			2010			2009
Operating Activities
Net income (loss)	$	662		$	1,680		$	(887	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Amortization of deferred policy acquisition costs and present value of future profits		3,427			2,544			4,267
Additions to deferred policy acquisition costs and present value of future profits		(2,608	)		(2,648	)		(2,853	)
Change in reserve for future policy benefits and unpaid losses and loss adjustment expenses and unearned premiums		1,451			(93	)		558
Change in reinsurance recoverables		(31	)		353			236
Change in receivables and other assets		(211	)		437			380
Change in payables and accruals		(491	)		(612	)		(1,271	)
Change in accrued and deferred income taxes		(103	)		561			(246	)
Net realized capital losses		24			554			2,010
Net receipts (disbursements) from investment contracts related to policyholder funds — international variable annuities		(2,332	)		497			1,498
Net (increase) decrease in equity securities, trading		2,321			(499	)		(1,501	)
Depreciation and amortization		668			596			470
Goodwill impairment		30			153			32
Other operating activities, net		(533	)		(214	)		281
Net cash provided by operating activities		2,274			3,309			2,974
Investing Activities
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale		37,914			49,155			53,538
Fixed maturities, fair value option		37			20			—
Equity securities, available-for-sale		239			325			949
Mortgage loans		515			1,723			629
Partnerships		237			367			391
Payments for the purchase of:
Fixed maturities, available-for-sale		(37,627	)		(50,807	)		(54,346	)
Fixed maturities, fair value option		(664	)		(75	)		—
Equity securities, available-for-sale		(270	)		(163	)		(307	)
Mortgage loans		(1,800	)		(291	)		(233	)
Partnerships		(784	)		(348	)		(274	)
Proceeds from business sold		278			241			(7	)
Derivatives, net		720			(338	)		(561	)
Change in policy loans, net		180			(7	)		34
Change in payables for collateral under securities lending, net		—			(46	)		(2,925	)
Other investing activities, net		(157	)		(190	)		(11	)
Net cash used for investing activities		(1,182	)		(434	)		(3,123	)
Financing Activities
Deposits and other additions to investment and universal life-type contracts		11,531			12,602			14,239
Withdrawals and other deductions from investment and universal life-type contracts		(21,022	)		(22,476	)		(24,341	)
Net transfers from separate accounts related to investment and universal life-type contracts		9,843			8,409			7,203
Proceeds from issuance of long-term debt		—			1,090			—
Repayments at maturity for long-term debt and payments on capital lease obligations		(405	)		(343	)		(24	)
Change in commercial paper		—			—			(375	)
Repayments at maturity or settlement of consumer notes		(68	)		(754	)		(74	)
Net proceeds from issuance of mandatory convertible preferred stock		—			556			—
Net proceeds from issuance of common shares under public offering		—			1,600			—
Redemption of preferred stock issued to the U.S. Treasury		—			(3,400	)		—
Proceeds from issuance of preferred stock and warrants to U.S. Treasury		—			—			3,400
Net proceeds from issuance of common shares under discretionary equity issuance plan		—			—			887
Proceeds from net issuance of shares under incentive and stock compensation plans and excess tax benefit		10			25			17
Treasury stock acquired		(46	)		—			—
Dividends paid on preferred stock		(42	)		(85	)		(73	)
Dividends paid on common stock		(153	)		(85	)		(149	)
Changes in bank deposits and payments on bank advances		(257	)		(94	)		(187	)
Net cash provided by (used for) financing activities		(609	)		(2,955	)		523
Foreign exchange rate effect on cash		36			—			(43	)
Net increase (decrease) in cash		519			(80	)		331
Cash — beginning of period		2,062			2,142			1,811
Cash — end of period	$	2,581		$	2,062		$	2,142
Supplemental Disclosure of Cash Flow Information
Income taxes paid (received)	$	179		$	308		$	(243	)
Interest paid	$	501		$	485		$	475

See Notes to Consolidated Financial Statements.

F-7

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in millions, except for per share data, unless otherwise stated)

1. Basis of Presentation and Accounting Policies

Basis of Presentation

The Hartford Financial Services Group, Inc. is a holding company for insurance and financial services subsidiaries that provide investment products and life and property and casualty insurance to both individual and business customers in the United States (collectively, “The Hartford”, the “Company”, “we” or “our”). Also, The Hartford continues to administer business previously sold in Japan and the U.K.

The Consolidated Financial Statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”), which differ materially from the accounting practices prescribed by various insurance regulatory authorities.

Consolidation

The Consolidated Financial Statements include the accounts of The Hartford Financial Services Group, Inc., companies in which the Company directly or indirectly has a controlling financial interest and those variable interest entities (“VIEs”) in which the Company is required to consolidate. Entities in which the Company has significant influence over the operating and financing decisions but are not required to consolidate are reported using the equity method. For further discussions on VIEs see Note 5 of the Notes to Consolidated Financial Statements. Material intercompany transactions and balances between The Hartford and its subsidiaries and affiliates have been eliminated.

Discontinued Operations

The results of operations of a component of the Company that either has been disposed of or is classified as held-for-sale are reported in discontinued operations if the operations and cash flows of the component have been or will be eliminated from the ongoing operations of the Company as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction.

The Company is presenting the operations of certain businesses that meet the criteria for reporting as discontinued operations. Amounts for prior periods have been retrospectively reclassified. See Note 20 of the Notes to Consolidated Financial Statements for information on the specific subsidiaries and related impacts.

Use of Estimates

The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining property and casualty insurance product reserves, net of reinsurance; estimated gross profits used in the valuation and amortization of assets and liabilities associated with variable annuity and other universal life-type contracts; evaluation of other-than-temporary impairments on available-for-sale securities and valuation allowances on investments; living benefits required to be fair valued; goodwill impairment; valuation of investments and derivative instruments; pension and other postretirement benefit obligations; valuation allowance on deferred tax assets; and contingencies relating to corporate litigation and regulatory matters. Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Consolidated Financial Statements.

Mutual Funds

The Company maintains a retail mutual fund operation whereby the Company, through wholly-owned subsidiaries, provides investment management and administrative services to The Hartford Mutual Funds, Inc. and The Hartford Mutual Funds II, Inc. (collectively, “mutual funds”), consisting of 57 non-proprietary mutual funds, as of December 31, 2011. The Company charges fees to these mutual funds, which are recorded as revenue by the Company. These mutual funds are registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940. The mutual funds are owned by the shareholders of those funds and not by the Company. In the fourth quarter of 2011, the Company entered into a preferred partnership agreement with Wellington Management Company, LLP (“Wellington Management”) and announced that Wellington Management will serve as the sole sub-advisor for The Hartford’s non-proprietary mutual funds, including equity and fixed income funds, pending a fund-by-fund review by The Hartford’s mutual funds board of directors. As of December 31, 2011, Wellington Management served as the sub-advisor for 29 of The Hartford’s non-proprietary mutual funds and has been the primary manager for the Company’s equity funds.

The mutual funds are owned by the shareholders of those funds and not by the Company. As such, the mutual fund assets and liabilities and related investment returns are not reflected in the Company’s Consolidated Financial Statements since they are not assets, liabilities and operations of the Company

Reclassifications

Certain reclassifications have been made to prior year financial information to conform to the current year presentation.

F-8

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

1. Basis of Presentation and Accounting Policies (continued)

Future Adoption of New Accounting Standards

Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts

In October 2010, the FASB issued a standard clarifying the definition of acquisition costs that are eligible for deferral. Acquisition costs are to include only those costs that are directly related to the successful acquisition or renewal of insurance contracts; incremental direct costs of contract acquisition that are incurred in transactions with either independent third parties or employees; and advertising costs meeting the capitalization criteria for direct-response advertising.

This standard is effective for fiscal years beginning after December 15, 2011, and interim periods within those years. This standard may be applied prospectively upon the date of adoption, with retrospective application permitted, but not required. Early adoption as of the beginning of a fiscal year is permitted.

The Company elected to adopt this standard retrospectively on January 1, 2012, resulting in a write down of the Company’s deferred acquisition costs relating to those costs which no longer meet the revised standard as summarized above. The Company estimates the cumulative effect of the retrospective adoption of this standard, when reflected in future financial statements, will reduce stockholders’ equity as of December 31, 2011 by approximately $1.5 billion, after-tax and increase 2011 net income by approximately $45. Excluding the effects of the DAC Unlock and amortization related to realized gains and losses, the estimated effect would be a decrease to 2011 net income of approximately $10. Future income statement impacts will reflect higher non-deferrable expenses and lower amortization due to the lower DAC balance, before the effect of any DAC Unlock and amortization related to realized gains and losses.

Significant Accounting Policies

The Company’s significant accounting policies are described below or are referenced below to the applicable Note where the description is included.

Accounting Policy	Note
Fair Value Measurements		4
Investments and Derivative Instruments		5
Reinsurance		6
Deferred Policy Acquisition Costs and Present Value of Future Profits		7
Goodwill and Other Intangible Assets		8
Separate Accounts, Death Benefits and Other Insurance Benefit Features		9
Sales Inducements		10
Reserve for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses		11
Commitments and Contingencies		12
Income Taxes		13
Employee Benefit Plans		17

Revenue Recognition

Property and casualty insurance premiums are earned on a pro rata basis over the lives of the policies and include accruals for ultimate premium revenue anticipated under auditable and retrospectively rated policies. Unearned premiums represent the premiums applicable to the unexpired terms of policies in force. An estimated allowance for doubtful accounts is recorded on the basis of periodic evaluations of balances due from insureds, management’s experience and current economic conditions. The Company charges off any balances that are determined to be uncollectible. The allowance for doubtful accounts included in premiums receivable and agents’ balances in the Consolidated Balance Sheets was $119 as of December 31, 2011 and 2010.

Traditional life and group disability products premiums are generally recognized as revenue when due from policyholders.

Fee income for universal life-type contracts consists of policy charges for policy administration, cost of insurance charges and surrender charges assessed against policyholders’ account balances and are recognized in the period in which services are provided. The amounts collected from policyholders for investment and universal life-type contracts are considered deposits and are not included in revenue. Unearned revenue reserves, representing amounts assessed as consideration for origination of a universal life-type contract, are deferred and recognized in income over the period benefited, generally in proportion to estimated gross profits.

Other revenue consists primarily of revenues associated with the Company’s servicing businesses.

F-9

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

1. Basis of Presentation and Accounting Policies (continued)

Dividends to Policyholders

Policyholder dividends are paid to certain property and casualty and life insurance policyholders. Policies that receive dividends are referred to as participating policies. Such dividends are accrued using an estimate of the amount to be paid based on underlying contractual obligations under policies and applicable state laws.

Net written premiums for participating property and casualty insurance policies represented 9%, 8% and 8% of total net written premiums for the years ended December 31, 2011, 2010 and 2009, respectively. Participating dividends to policyholders were $18, $5 and $10 for the years ended December 31, 2011, 2010 and 2009, respectively.

Total participating policies in-force represented 1% of the total life insurance policies in-force as of December 31, 2011, 2010, and 2009. Dividends to policyholders were $17, $21 and $13 for the years ended December 31, 2011, 2010, and 2009, respectively. There were no additional amounts of income allocated to participating policyholders. If limitations exist on the amount of net income from participating life insurance contracts that may be distributed to stockholder’s, the policyholder’s share of net income on those contracts that cannot be distributed is excluded from stockholder’s equity by a charge to operations and a credit to a liability.

Cash

Cash represents cash on hand and demand deposits with banks or other financial institutions.

Property and Equipment

Property and equipment is carried at cost net of accumulated depreciation. Depreciation is based on the estimated useful lives of the various classes of property and equipment and is determined principally on the straight-line method. Accumulated depreciation was $2.1 billion and $1.9 billion as of December 31, 2011 and 2010, respectively. Depreciation expense was $216, $276, and $253 for the years ended December 31, 2011, 2010, and 2009, respectively.

Other Policyholder Funds and Benefits Payable

Other policyholder funds and benefits payable consist of universal life-type contracts and investment contracts.

Universal life-type contracts consist of fixed and variable annuities, 401(k), certain governmental annuities, private placement life insurance (“PPLI”), variable universal life insurance, universal life insurance and interest sensitive whole life insurance. The liability for universal life-type contracts is equal to the balance that accrues to the benefit of the policyholders as of the financial statement date (commonly referred to as the account value), including credited interest, amounts that have been assessed to compensate the Company for services to be performed over future periods, and any amounts previously assessed against policyholders that are refundable on termination of the contract.

Investment contracts consist of institutional and governmental products, without life contingencies, including funding agreements, certain structured settlements and guaranteed investment contracts. The liability for investment contracts is equal to the balance that accrues to the benefit of the contract holder as of the financial statement date, which includes the accumulation of deposits plus credited interest, less withdrawals and amounts assessed through the financial statement date. Contract holder funds include funding agreements held by Variable Interest Entities issuing medium-term notes.

Foreign Currency Translation

Foreign currency translation gains and losses are reflected in stockholders’ equity as a component of accumulated other comprehensive income (loss). The Company’s foreign subsidiaries’ balance sheet accounts are translated at the exchange rates in effect at each year end and income statement accounts are translated at the average rates of exchange prevailing during the year. The national currencies of the international operations are generally their functional currencies.

F-10

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Earnings (Loss) per Share

The following tables present a reconciliation of net income (loss) and shares used in calculating basic earnings (loss) per common share to those used in calculating diluted earnings (loss) per common share.

	For the years ended December 31,
(In millions, except for per share data)	2011		2010			2009
Earnings
Income (loss) from continuing operations
Income (loss) from continuing operations, net of tax	$	576	$	1,744		$	(883	)
Less: Preferred stock dividends and accretion of discount		42		515			127
Income (loss) from continuing operations, net of tax, available to common shareholders		534		1,229			(1,010	)
Add: Dilutive effect of preferred stock dividends		—		33			—
Income (loss) from continuing operations, net of tax, available to common shareholders and assumed conversion of preferred shares	$	534	$	1,262		$	(1,010	)
Income (loss) from discontinued operations, net of tax	$	86	$	(64	)	$	(4	)
Net income
Net income	$	662	$	1,680		$	(887	)
Less: Preferred stock dividends and accretion of discount		42		515			127
Net income (loss) available to common shareholders		620		1,165			(1,014	)
Add: Dilutive effect of preferred stock dividends		—		33			—
Net income (loss) available to common shareholders and assumed conversion of preferred shares	$	620	$	1,198		$	(1,014	)
Shares
Weighted average common shares outstanding, basic		445.0		431.5			346.3
Dilutive effect of warrants		31.9		32.3			—
Dilutive effect of stock compensation plans		1.1		1.3			—
Dilutive effect of mandatory convertible preferred shares		—		16.4			—
Weighted average shares outstanding and dilutive potential common shares		478.0		481.5			346.3
Earnings (loss) per common share
Basic
Income (loss) from continuing operations, net of tax, available to common shareholders	$	1.20	$	2.85		$	(2.92	)
Income (loss) from discontinued operations, net of tax		0.19		(0.15	)		(0.01	)
Net income (loss) available to common shareholders	$	1.39	$	2.70		$	(2.93	)
Diluted
Income (loss) from continuing operations, net of tax, available to common shareholders	$	1.12	$	2.62		$	(2.92	)
Income (loss) from discontinued operations, net of tax		0.18		(0.13	)		(0.01	)
Net income (loss) available to common shareholders	$	1.30	$	2.49		$	(2.93	)

F-11

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Earnings (Loss) per Share (continued)

Basic earnings per share is computed based on the weighted average number of common shares outstanding during the year. Diluted earnings per share includes the dilutive effect of warrants, stock compensation plans, and assumed conversion of preferred shares to common using the treasury stock method. Contingently issuable shares are included for the number of shares issuable assuming the end of the reporting period was the end of the contingency period, if dilutive.

Under the treasury stock method for the warrants issued as a result of the Company’s participation in the Capital Purchase Program, see Note 15, exercise shall be assumed at the beginning of the period. The proceeds from exercise of $9.699 per share in 2011 and 9.790 per share in 2010 and 2009 shall be assumed to be used to purchase common shares at the average market price during the period.

Under the treasury stock method for the warrants issued to Allianz, see Note 15, exercise shall be assumed at the beginning of the period. The proceeds from exercise of $25.23 in 2011, $25.23 in 2010 and $25.25 in 2009 per share shall be assumed to be used to purchase common shares at the average market price during the period.

Under the treasury stock method for stock compensation plans, shares are assumed to be issued and then reduced for the number of shares repurchaseable with theoretical proceeds at the average market price for the period. Theoretical proceeds for the stock compensation plans include option exercise price payments, unamortized stock compensation expense and tax benefits realized in excess of the tax benefit recognized in net income. The difference between the number of shares assumed issued and number of shares purchased represents the dilutive shares. Upon exercise of outstanding options or vesting of other stock compensation plan awards, the additional shares issued and outstanding are included in the calculation of the Company’s weighted average shares from the date of exercise or vesting.

Under the if-converted method for mandatory convertible preferred stock, see Note 15, the conversion to common shares is assumed if the inclusion of these shares and the related dividend adjustment are dilutive to the earnings per share calculation. For the year ended December 31, 2011, 20.7 million shares and the related dividend adjustment would have been antidilutive to the earnings per share calculations and therefore are excluded. Assuming the impact of the mandatory convertible preferred shares was dilutive, weighted average common shares outstanding and dilutive potential common shares would have totaled 498.7 million shares. For the year ended December 31, 2010, these shares and the related dividend adjustment are included in the diluted earnings per share calculation.

As a result of the net loss in the year ended December 31, 2009, the Company used basic weighted average common shares outstanding in the calculation of diluted loss per share, since the inclusion of shares for warrants of 14.6 million, stock compensation plans of 0.9 million, would have been antidilutive to the earnings per share calculation. In the absence of the net loss, weighted average common shares outstanding and dilutive potential common shares would have totaled 361.8 million for the year ended December 31, 2009.

F-12

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. Segment Information

The Company is organized into four divisions: Commercial Markets, Consumer Markets, Wealth Management and Runoff Operations. In 2011, the Runoff Operations division was formed to reflect the manner in which the Company is currently organized for purposes of making operating decisions and assessing performance. As a result, the Company conducts business principally in nine reporting segments, and segment data for prior reporting periods has been adjusted accordingly.

The Company’s reporting segments, as well as the Corporate category, are as follows:

Commercial Markets

Property & Casualty Commercial

Property & Casualty Commercial provides workers’ compensation, property, automobile, marine, livestock, liability and umbrella coverages primarily throughout the United States (“U.S.”), along with a variety of customized insurance products and risk management services including professional liability, fidelity, surety, and specialty casualty coverages.

Group Benefits

Group Benefits provides employers, associations, affinity groups and financial institutions with group life, accident and disability coverage, along with other products and services, including voluntary benefits, and group retiree health.

Consumer Markets

Consumer Markets provides standard automobile, homeowners and home-based business coverages to individuals across the U.S., including a special program designed exclusively for members of AARP. Consumer Markets also operates a member contact center for health insurance products offered through the AARP Health program.

Wealth Management

Individual Annuity

Individual Annuity offers individual variable, fixed market value adjusted (“fixed MVA”), fixed index and single premium immediate annuities in the U.S.

Individual Life

Individual Life sells a variety of life insurance products, including variable universal life, universal life, and term life.

Retirement Plans

Retirement Plans provides products and services to corporations pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), and products and services to municipalities and not-for-profit organizations under Sections 457 and 403(b) of the Code, collectively referred to as government plans.

Mutual Funds

Mutual Funds offers retail mutual funds, investment-only mutual funds and college savings plans under Section 529 of the Code (collectively referred to as non-proprietary) and proprietary mutual fund supporting insurance products issued by The Hartford.

F-13

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. Segment Information (continued)

Runoff Operations

Life Other Operations

Life Other Operations consists of the international annuity business of the former Global Annuity reporting segment as well as certain product offerings previously included in the former Global Annuity and Life Insurance reporting segments. Life Other Operations encompasses the administration of investment retirement savings and other insurance and savings products to individuals and groups outside of the U.S., primarily in Japan and Europe, as well as institutional annuity products and private placement life insurance.

Property & Casualty Other Operations

Property & Casualty Other Operations, previously included in the former Corporate and Other category, includes the Company’s management of certain property and casualty operations that have discontinued writing new business and substantially all of the Company’s asbestos and environmental exposures.

Corporate

The Company includes in the Corporate category the Company’s debt financing and related interest expense, as well as other capital raising activities; banking operations; certain fee income and commission expenses associated with sales of non-proprietary products by broker-dealer subsidiaries; and certain purchase accounting adjustments and other charges not allocated to the segments. The former Corporate and Other category was renamed for 2011 segment reporting due to the inclusion of the Property & Casualty Other Operations as a separate reporting segment in the new Runoff Operations division.

Financial Measures and Other Segment Information

Certain transactions between segments occur during the year that primarily relate to tax settlements, insurance coverage, expense reimbursements, services provided, security transfers and capital contributions. Also, one segment may purchase group annuity contracts from another to fund pension costs and annuities to settle casualty claims. In addition, certain inter-segment transactions occur that relate to interest income on allocated surplus. Consolidated net investment income is unaffected by such transactions.

The following table presents net income (loss) for each reporting segment, as well as the Corporate category.

	For the years ended December 31,
Net income (loss)	2011			2010			2009
Property & Casualty Commercial	$	528		$	995		$	899
Group Benefits		90			185			193
Consumer Markets		5			143			140
Individual Annuity		(14	)		527			(444	)
Individual Life		133			229			15
Retirement Plans		15			47			(222	)
Mutual Funds		98			132			34
Life Other Operations		358			(90	)		(698	)
Property & Casualty Other Operations		(117	)		(53	)		(78	)
Corporate		(434	)		(435	)		(726	)
Net income (loss)	$	662		$	1,680		$	(887	)

F-14

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. Segment Information (continued)

The following table presents revenues by product line for each reporting segment, as well as the Corporate category.

	For the years ended December 31,
Revenues	2011			2010			2009
Earned premiums, fees, and other considerations
Property & Casualty Commercial
Workers’ compensation	$	2,809		$	2,387		$	2,275
Property		528			547			597
Automobile		583			598			646
Package business		1,145			1,124			1,123
Liability		540			540			619
Fidelity and surety		215			224			250
Professional liability		307			324			393
Total Property & Casualty Commercial		6,127			5,744			5,903
Group Benefits
Group disability		1,929			2,004			1,975
Group life and accident		2,024			2,052			2,126
Other		194			222			249
Total Group Benefits		4,147			4,278			4,350
Consumer Markets
Automobile		2,619			2,806			2,857
Homeowners		1,128			1,141			1,102
Total Consumer Markets [1]		3,747			3,947			3,959
Individual Annuity
Variable annuity		1,604			1,702			1,468
Fixed / MVA and other annuity		56			14			(3	)
Total Individual Annuity		1,660			1,716			1,465
Individual Life
Variable life		396			416			503
Universal life		455			391			390
Term / Other life		48			49			47
Total Individual Life		899			856			940
Retirement Plans
401(k)		332			318			286
Government plans		48			41			38
Total Retirement Plans		380			359			324
Mutual Funds
Non-Proprietary		590			603			518
Proprietary		59			61			—
Total Mutual Funds		649			664			518
Life Other Operations		1,020			1,049			1,293
Property & Casualty Other Operations		—			1			—
Corporate		209			189			219
Total earned premiums, fees, and other considerations		18,838			18,803			18,971
Net investment income (loss):
Securities available-for-sale and other		4,272			4,364			4,017
Equity securities, trading		(1,359	)		(774	)		3,188
Total net investment income (loss)		2,913			3,590			7,205
Net realized capital gains (losses)		(145	)		(611	)		(2,004	)
Other revenues		253			267			261
Total revenues	$	21,859		$	22,049		$	24,433

[1] For 2011, 2010 and 2009, AARP members accounted for earned premiums of $2.8 billion, $2.9 billion and $2.8 billion, respectively.

F-15

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. Segment Information (continued)

Geographical Revenue Information	For the years ended December 31,
Revenues	2011		2010			2009
United States of America	$	21,561	$	22,140		$	20,189
Japan		135		(329	)		3,816
Other		163		238			428
Total revenues	$	21,859	$	22,049		$	24,433

Amortization of deferred policy acquisition costs and	For the years ended December 31,
present value of future profits	2011		2010			2009
Property & Casualty Commercial	$	1,356	$	1,353		$	1,393
Group Benefits		55		61			61
Consumer Markets		639		667			674
Individual Annuity		483		(56	)		1,339
Individual Life		221		119			314
Retirement Plans		134		27			56
Mutual Funds		47		51			50
Life Other Operations		492		305			370
Total amortization of deferred policy acquisition costs and present value of future profits	$	3,427	$	2,527		$	4,257

	For the years ended December 31,
Income tax expense (benefit)	2011			2010			2009
Property & Casualty Commercial	$	40		$	407		$	356
Group Benefits		—			65			59
Consumer Markets		(29	)		52			48
Individual Annuity		(274	)		124			(481	)
Individual Life		33			107			(27	)
Retirement Plans		(45	)		13			(143	)
Mutual Funds		54			52			18
Life Other Operations		150			—			(343	)
Property & Casualty Other Operations		(74	)		(40	)		(51	)
Corporate		(201	)		(168	)		(274	)
Total income tax expense (benefit)	$	(346	)	$	612		$	(838	)

	As of December 31,
Assets	2011		2010
Property & Casualty Commercial	$	24,692	$	23,736
Group Benefits		9,485		9,028
Consumer Markets		6,513		6,778
Individual Annuity		87,055		101,144
Individual Life		17,930		16,538
Retirement Plans		35,410		34,152
Mutual Funds		307		301
Life Other Operations		111,407		113,065
Property & Casualty Other Operations		4,639		4,733
Corporate		6,626		8,871
Total assets	$	304,064	$	318,346

F-16

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements

The following financial instruments are carried at fair value in the Company’s Consolidated Financial Statements: fixed maturity and equity securities, available-for-sale (“AFS”), fixed maturities at fair value using fair value option (“FVO”), equity securities, trading, short-term investments, freestanding and embedded derivatives, separate account assets and certain other liabilities.

The following section applies the fair value hierarchy and disclosure requirements for the Company’s financial instruments that are carried at fair value. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad Levels (Level 1, 2 or 3).

Level 1	Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. Level 1 securities include highly liquid U.S. Treasuries, money market funds and exchange traded equity securities, open-ended mutual funds reported in separate account assets and derivative securities.
Level 2	Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. Most fixed maturities and preferred stocks, including those reported in separate account assets, are model priced by vendors using observable inputs and are classified within Level 2.
Level 3	Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Level 3 securities include less liquid securities, guaranteed product embedded and reinsurance derivatives and other complex derivative securities. Because Level 3 fair values, by their nature, contain one or more significant unobservable inputs as there is little or no observable market for these assets and liabilities, considerable judgment is used to determine the Level 3 fair values. Level 3 fair values represent the Company’s best estimate of an amount that could be realized in a current market exchange absent actual market exchanges.

In many situations, inputs used to measure the fair value of an asset or liability position may fall into different levels of the fair value hierarchy. In these situations, the Company will determine the level in which the fair value falls based upon the lowest level input that is significant to the determination of the fair value. Transfers of securities among the levels occur at the beginning of the reporting period. Transfers between Level 1 and Level 2 were not material for the year ended December 31, 2011. In most cases, both observable (e.g., changes in interest rates) and unobservable (e.g., changes in risk assumptions) inputs are used in the determination of fair values that the Company has classified within Level 3. Consequently, these values and the related gains and losses are based upon both observable and unobservable inputs. The Company’s fixed maturities included in Level 3 are classified as such because these securities are primarily priced by independent brokers and/or within illiquid markets.

F-17

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

These disclosures provide information as to the extent to which the Company uses fair value to measure financial instruments and information about the inputs used to value those financial instruments to allow users to assess the relative reliability of the measurements. The following tables present assets and (liabilities) carried at fair value by hierarchy level.

	December 31, 2011
				Quoted Prices in
				Active Markets			Significant			Significant
				for Identical			Observable			Unobservable
				Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	3,153		$	—		$	2,792		$	361
CDOs		2,487			—			2,119			368
CMBS		6,951			—			6,363			588
Corporate		44,011			—			41,756			2,255
Foreign government/government agencies		2,161			—			2,112			49
States, municipalities and political subdivisions (“Municipal”)		13,260			—			12,823			437
RMBS		5,757			—			4,694			1,063
U.S. Treasuries		4,029			750			3,279			—
Total fixed maturities		81,809			750			75,938			5,121
Fixed maturities, FVO		1,328			—			833			495
Equity securities, trading		30,499			1,967			28,532			—
Equity securities, AFS		921			352			476			93
Derivative assets
Credit derivatives		(24	)		—			(11	)		(13	)
Equity derivatives		31			—			—			31
Foreign exchange derivatives		519			—			519			—
Interest rate derivatives		195			—			147			48
U.S. GMWB hedging instruments		494			—			11			483
U.S. macro hedge program		357			—			—			357
International program hedging instruments		731			—			692			39
Other derivative contracts		28			—			—			28
Total derivative assets [1]		2,331			—			1,358			973
Short-term investments		7,736			750			6,986			—
Reinsurance recoverable for U.S. GMWB		443			—			—			443
Separate account assets [2]		139,432			101,644			36,757			1,031
Total assets accounted for at fair value on a recurring basis	$	264,499		$	105,463		$	150,880		$	8,156
Percentage of level to total		100	%		40	%		57	%		3	%
Liabilities accounted for at fair value on a recurring basis
Other policyholder funds and benefits payable
U.S guaranteed withdrawal benefits	$	(2,538	)	$	—		$	—		$	(2,538	)
International guaranteed withdrawal benefits		(66	)		—			—			(66	)
International other guaranteed living benefits		(5	)		—			—			(5	)
Equity linked notes		(9	)		—			—			(9	)
Total other policyholder funds and benefits payable		(2,618	)		—			—			(2,618	)
Derivative liabilities
Credit derivatives		(573	)		—			(25	)		(548	)
Equity derivatives		9			—			—			9
Foreign exchange derivatives		134			—			134			—
Interest rate derivatives		(527	)		—			(421	)		(106	)
U.S. GMWB hedging instruments		400			—			—			400
International program hedging instruments		19			—			23			(4	)
Total derivative liabilities [3]		(538	)		—			(289	)		(249	)
Other Liabilities		(9	)		—			—			(9	)
Consumer notes [4]		(4	)		—			—			(4	)
Total liabilities accounted for at fair value on a recurring basis	$	(3,169	)	$	—		$	(289	)	$	(2,880	)

F-18

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

	December 31, 2010
				Quoted Prices in
				Active Markets			Significant			Significant
				for Identical			Observable			Unobservable
				Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	2,889		$	—		$	2,412		$	477
CDOs		2,611			—			30			2,581
CMBS		7,917			—			7,228			689
Corporate		39,884			—			37,755			2,129
Foreign government/government agencies		1,683			—			1,627			56
Municipal		12,124			—			11,852			272
RMBS		5,683			—			4,398			1,285
U.S. Treasuries		5,029			434			4,595			—
Total fixed maturities		77,820			434			69,897			7,489
Fixed maturities, FVO		649			—			127			522
Equity securities, trading		32,820			2,279			30,541			—
Equity securities, AFS		973			298			521			154
Derivative assets
Credit derivatives		3			—			(18	)		21
Equity derivatives		2			—			—			2
Foreign exchange derivatives		795			—			795			—
Interest rate derivatives		(106	)		—			(70	)		(36	)
U.S. GMWB hedging instruments		339			—			(122	)		461
U.S. macro hedge program		203			—			—			203
International program hedging instruments		256			2			249			5
Other derivative contracts		32			—			—			32
Total derivative assets [1]		1,524			2			834			688
Short-term investments		8,528			541			7,987			—
Reinsurance recoverable for U.S. GMWB		280			—			—			280
Separate account assets [2]		153,727			116,717			35,763			1,247
Total assets accounted for at fair value on a recurring basis	$	276,321		$	120,271		$	145,670		$	10,380
Percentage of level to total		100	%		43	%		53	%		4	%

F-19

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

	December 31, 2010
				Quoted Prices
				in Active			Significant			Significant
				Markets for			Observable			Unobservable
				Identical Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Liabilities accounted for at fair value on a recurring basis
Other policyholder funds and benefits payable
U.S guaranteed withdrawal benefits	$	(1,611	)	$	—		$	—		$	(1,611	)
International guaranteed withdrawal benefits		(36	)		—			—			(36	)
International other guaranteed living benefits		3			—			—			3
Equity linked notes		(9	)		—			—			(9	)
Total other policyholder funds and benefits payable		(1,653	)		—			—			(1,653	)
Derivative liabilities
Credit derivatives		(482	)		—			(71	)		(411	)
Equity derivatives		2			—			—			2
Foreign exchange derivatives		(34	)		—			(34	)		—
Interest rate derivatives		(266	)		—			(249	)		(17	)
U.S. GMWB hedging instruments		128			—			(11	)		139
International program hedging instruments		(2	)		(2	)		—			—
Total derivative liabilities [3]		(654	)		(2	)		(365	)		(287	)
Other liabilities		(37	)		—			—			(37	)
Consumer notes [4]		(5	)		—			—			(5	)
Total liabilities accounted for at fair value on a recurring basis	$	(2,349	)	$	(2	)	$	(365	)	$	(1,982	)

[1]	Includes over-the-counter derivative instruments in a net asset value position which may require the counterparty to pledge collateral to the Company. As of December 31, 2011 and 2010, $1.4 billion and $968, respectively, of cash collateral liability was netted against the derivative asset value in the Consolidated Balance Sheet and is excluded from the table above. See footnote 3 below for derivative liabilities.
[2]	Approximately $4.0 and $6.0 billion of investment sales receivable that are not subject to fair value accounting are excluded as of December 31, 2011 and 2010, respectively.
[3]	Includes over-the-counter derivative instruments in a net negative market value position (derivative liability). In the Level 3 roll-forward table included below in this Note 4, the derivative asset and liability are referred to as “freestanding derivatives” and are presented on a net basis.
[4]	Represents embedded derivatives associated with non-funding agreement-backed consumer equity linked notes.

Determination of Fair Values

The valuation methodologies used to determine the fair values of assets and liabilities under the “exit price” notion, reflect market-participant objectives and are based on the application of the fair value hierarchy that prioritizes relevant observable market inputs over unobservable inputs. The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices where available and where prices represent a reasonable estimate of fair value. The Company also determines fair value based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company’s default spreads, liquidity and, where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments listed in the above tables.

The fair valuation process is monitored by the Valuation Committee, which is a cross-functional group of senior management within HIMCO that meets at least quarterly. The Valuation Committee is co-chaired by the Heads of Investment Operations and Accounting, and has representation from various investment sector professionals, accounting, operations, legal, compliance and risk management. The purpose of the committee is to oversee the pricing policy and procedures by ensuring objective and reliable valuation practices and pricing of financial instruments, as well as addressing fair valuation issues and approving changes to valuation methodologies and pricing sources. There is also a Fair Value Working Group (“Working Group”) which includes the Heads of Investment Operations and Accounting, as well as other investment, operations, accounting and risk management professionals that meet monthly to review market data trends, pricing and trading statistics and results, and any proposed pricing methodology changes described in more detail in the following paragraphs.

F-20

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

Available-for-Sale Securities, Fixed Maturities, FVO, Equity Securities, Trading, and Short-term Investments

The fair value of AFS securities, fixed maturities, FVO, equity securities, trading, and short-term investments in an active and orderly market (e.g. not distressed or forced liquidation) are determined by management after considering one of three primary sources of information: third-party pricing services, independent broker quotations or pricing matrices. Security pricing is applied using a “waterfall” approach whereby publicly available prices are first sought from third-party pricing services, the remaining unpriced securities are submitted to independent brokers for prices, or lastly, securities are priced using a pricing matrix. Based on the typical trading volumes and the lack of quoted market prices for fixed maturities, third-party pricing services will normally derive the security prices from recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information as outlined above. If there are no recently reported trades, the third-party pricing services and independent brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Included in the pricing of ABS and RMBS are estimates of the rate of future prepayments of principal over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and prepayment speeds previously experienced at the interest rate levels projected for the underlying collateral. Actual prepayment experience may vary from these estimates.

Prices from third-party pricing services are often unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced via independent broker quotations which utilize inputs that may be difficult to corroborate with observable market based data. Additionally, the majority of these independent broker quotations are non-binding.

A pricing matrix is used to price private placement securities for which the Company is unable to obtain a price from a third-party pricing service by discounting the expected future cash flows from the security by a developed market discount rate utilizing current credit spreads. Credit spreads are developed each month using market based data for public securities adjusted for credit spread differentials between public and private securities which are obtained from a survey of multiple private placement brokers. The appropriate credit spreads determined through this survey approach are based upon the issuer’s financial strength and term to maturity, utilizing an independent public security index and trade information and adjusting for the non-public nature of the securities.

The Working Group performs ongoing analysis of the prices and credit spreads received from third parties to ensure that the prices represent a reasonable estimate of the fair value. This process involves quantitative and qualitative analysis and is overseen by investment and accounting professionals. As a part of this analysis, the Company considers trading volume, new issuance activity and other factors to determine whether the market activity is significantly different than normal activity in an active market, and if so, whether transactions may not be orderly considering the weight of available evidence. If the available evidence indicates that pricing is based upon transactions that are stale or not orderly, the Company places little, if any, weight on the transaction price and will estimate fair value utilizing an internal pricing model. In addition, the Company ensures that prices received from independent brokers represent a reasonable estimate of fair value through the use of internal and external cash flow models developed based on spreads, and when available, market indices. As a result of this analysis, if the Company determines that there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly and approved by the Valuation Committee. The Company’s internal pricing model utilizes the Company’s best estimate of expected future cash flows discounted at a rate of return that a market participant would require. The significant inputs to the model include, but are not limited to, current market inputs, such as credit loss assumptions, estimated prepayment speeds and market risk premiums.

The Company conducts other specific activities to monitor controls around pricing. Daily analyses identify price changes over 3-5%, sale trade prices that differ over 3% from the prior day’s price and purchase trade prices that differ more than 3% from the current day’s price. Weekly analyses identify prices that differ more than 5% from published bond prices of a corporate bond index. Monthly analyses identify price changes over 3%, prices that haven’t changed, missing prices and second source validation on most sectors. Analyses are conducted by a dedicated pricing unit who follows up with trading and investment sector professionals and challenges prices with vendors when the estimated assumptions used differ from what the Company feels a market participant would use. Any changes from the identified pricing source are verified by further confirmation of assumptions used. Examples of other procedures performed include, but are not limited to, initial and on-going review of third-party pricing services’ methodologies, review of pricing statistics and trends and back testing recent trades. For a sample of structured securities, a comparison of the vendor’s assumptions to our internal econometric models is also performed; any differences are challenged in accordance with the process described above.

The Company has analyzed the third-party pricing services’ valuation methodologies and related inputs, and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Most prices provided by third-party pricing services are classified into Level 2 because the inputs used in pricing the securities are market observable. Due to a general lack of transparency in the process that brokers use to develop prices, most valuations that are based on brokers’ prices are classified as Level 3. Some valuations may be classified as Level 2 if the price can be corroborated with observable market data.

F-21

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

Derivative Instruments, including embedded derivatives within investments

Derivative instruments are fair valued using pricing valuation models that utilize independent market data inputs, quoted market prices for exchange-traded derivatives, or independent broker quotations. Excluding embedded and reinsurance related derivatives, as of December 31, 2011 and 2010, 98% and 97%, respectively, of derivatives, based upon notional values, were priced by valuation models or quoted market prices. The remaining derivatives were priced by broker quotations.

The Company performs various controls on derivative valuations which include both quantitative and qualitative analysis. Analyses are conducted by a dedicated derivative pricing team that works directly with investment sector professionals to analyze impacts of changes in the market environment and investigate variances. There is a monthly analysis to identify market value changes greater than pre-defined thresholds, stale prices, missing prices and zero prices. Also on a monthly basis, a second source validation, typically to broker quotations, is performed for certain of the more complex derivatives, as well as for all new deals during the month. A model validation review is performed on any new models, which typically includes detailed documentation and validation to a second source. The model validation documentation and results of validation are presented to the Valuation Committee for approval. There is a monthly control to review changes in pricing sources to ensure that new models are not moved to production until formally approved.

The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instrument may not be classified with the same fair value hierarchy level as the associated assets and liabilities. Therefore the realized and unrealized gains and losses on derivatives reported in Level 3 may not reflect the offsetting impact of the realized and unrealized gains and losses of the associated assets and liabilities.

Valuation Techniques and Inputs for Investments

Generally, the Company determines the estimated fair value of its AFS securities, fixed maturities, FVO, equity securities, trading, and short-term investments using the market approach. The income approach is used for securities priced using a pricing matrix, as well as for derivative instruments. For Level 1 investments, which are comprised of on-the-run U.S. Treasuries, exchange-traded equity securities, short-term investments, and exchange traded futures and option contracts, valuations are based on observable inputs that reflect quoted prices for identical assets in active markets that the Company has the ability to access at the measurement date.

For most of the Company’s debt securities, the following inputs are typically used in the Company’s pricing methods: reported trades, benchmark yields, bids and/or estimated cash flows. For securities except U.S. Treasuries, inputs also include issuer spreads, which may consider credit default swaps. Derivative instruments are valued using mid-market inputs that are predominantly observable in the market.

A description of additional inputs used in the Company’s Level 2 and Level 3 measurements is listed below:

Level 2 The fair values of most of the Company’s Level 2 investments are determined by management after considering prices received from third party pricing services. These investments include most fixed maturities and preferred stocks, including those reported in separate account assets.

• ABS, CDOs, CMBS and RMBS — Primary inputs also include monthly payment information, collateral performance, which varies by vintage year and includes delinquency rates, collateral valuation loss severity rates, collateral refinancing assumptions, credit default swap indices and, for ABS and RMBS, estimated prepayment rates.

• Corporates, including investment grade private placements — Primary inputs also include observations of credit default swap curves related to the issuer.

• Foreign government/government agencies - Primary inputs also include observations of credit default swap curves related to the issuer and political events in emerging markets.

• Municipals — Primary inputs also include Municipal Securities Rulemaking Board reported trades and material event notices, and issuer financial statements.

• Short-term investments — Primary inputs also include material event notices and new issue money market rates.

• Equity securities, trading — Consist of investments in mutual funds. Primary inputs include net asset values obtained from third party pricing services.

• Credit derivatives — Significant inputs primarily include the swap yield curve and credit curves.

• Foreign exchange derivatives — Significant inputs primarily include the swap yield curve, currency spot and forward rates, and cross currency basis curves.

• Interest rate derivatives — Significant input is primarily the swap yield curve.

F-22

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

Level 3 Most of the Company’s securities classified as Level 3 are valued based on brokers’ prices. This includes less liquid securities such as lower quality asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”), commercial real estate (“CRE”) CDOs and residential mortgage-backed securities (“RMBS”) primarily backed by below-prime loans. Primary inputs for these structured securities are consistent with the typical inputs used in Level 2 measurements noted above, but are Level 3 due to their illiquid markets. Additionally, certain long-dated securities are priced based on third party pricing services, including municipal securities, foreign government/government agencies, bank loans and below investment grade private placement securities. Primary inputs for these long-dated securities are consistent with the typical inputs used in Level 1 and Level 2 measurements noted above, but include benchmark interest rate or credit spread assumptions that are not observable in the marketplace. Also included in Level 3 are certain derivative instruments that either have significant unobservable inputs or are valued based on broker quotations. Significant inputs for these derivative contracts primarily include the typical inputs used in the Level 1 and Level 2 measurements noted above, but also may include the following:

• Credit derivatives — Significant unobservable inputs may include credit correlation and swap yield curve and credit curve extrapolation beyond observable limits.

• Equity derivatives — Significant unobservable inputs may include equity volatility.

• Interest rate contracts — Significant unobservable inputs may include swap yield curve extrapolation beyond observable limits and interest rate volatility.

Product Derivatives

The Company currently offers certain variable annuity products with GMWB riders in the U.S., and formerly offered such products in the U.K. and Japan. The GMWB represents an embedded derivative in the variable annuity contract. When it is determined that (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host for measurement purposes. The embedded derivative is carried at fair value, with changes in fair value reported in net realized capital gains and losses. The Company’s GMWB liability is reported in other policyholder funds and benefits payable in the Consolidated Balance Sheets.

In valuing the embedded derivative, the Company attributes to the derivative a portion of the expected fees to be collected over the expected life of the contract from the contract holder equal to the present value of future GMWB claims (the “Attributed Fees”). The excess of fees collected from the contract holder in the current period over the current period’s Attributed Fees are associated with the host variable annuity contract and reported in fee income.

U.S. GMWB Reinsurance Derivative

The Company has reinsurance arrangements in place to transfer a portion of its risk of loss due to GMWB. These arrangements are recognized as derivatives and carried at fair value in reinsurance recoverables. Changes in the fair value of the reinsurance agreements are reported in net realized capital gains and losses.

The fair value of the U.S. GMWB reinsurance derivative is calculated as an aggregation of the components described in the Living Benefits Required to be Fair Valued discussion below and is modeled using significant unobservable policyholder behavior inputs, identical to those used in calculating the underlying liability, such as lapses, fund selection, resets and withdrawal utilization and risk margins.

Separate Account Assets

Separate account assets are primarily invested in mutual funds but also have investments in fixed maturity and equity securities. The separate account investments are valued in the same manner, and using the same pricing sources and inputs, as the fixed maturity, equity security, and short-term investments of the Company.

F-23

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

Living Benefits Required to be Fair Valued (in Other Policyholder Funds and Benefits Payable)

Fair values for GMWB and guaranteed minimum accumulation benefit (“GMAB”) contracts are calculated using the income approach based upon internally developed models because active, observable markets do not exist for those items. The fair value of the Company’s guaranteed benefit liabilities, classified as embedded derivatives, and the related reinsurance and customized freestanding derivatives is calculated as an aggregation of the following components: Best Estimate Claim Payments; Credit Standing Adjustment; and Margins. The resulting aggregation is reconciled or calibrated, if necessary, to market information that is, or may be, available to the Company, but may not be observable by other market participants, including reinsurance discussions and transactions. The Company believes the aggregation of these components, as necessary and as reconciled or calibrated to the market information available to the Company, results in an amount that the Company would be required to transfer or receive, for an asset, to or from market participants in an active liquid market, if one existed, for those market participants to assume the risks associated with the guaranteed minimum benefits and the related reinsurance and customized derivatives. The fair value is likely to materially diverge from the ultimate settlement of the liability as the Company believes settlement will be based on our best estimate assumptions rather than those best estimate assumptions plus risk margins. In the absence of any transfer of the guaranteed benefit liability to a third party, the release of risk margins is likely to be reflected as realized gains in future periods’ net income. Each component described below is unobservable in the marketplace and require subjectivity by the Company in determining their value.

Best Estimate

Claim Payments

The Best Estimate Claim Payments is calculated based on actuarial and capital market assumptions related to projected cash flows, including the present value of benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior such as lapses, fund selection, resets and withdrawal utilization. For the customized derivatives, policyholder behavior is prescribed in the derivative contract. Because of the dynamic and complex nature of these cash flows, best estimate assumptions and a Monte Carlo stochastic process is used in valuation. The Monte Carlo stochastic process involves the generation of thousands of scenarios that assume risk neutral returns consistent with swap rates and a blend of observable implied index volatility levels. Estimating these cash flows involves numerous estimates and subjective judgments regarding a number of variables —including expected market rates of return, market volatility, correlations of market index returns to funds, fund performance, discount rates and assumptions about policyholder behavior which emerge over time.

At each valuation date, the Company assumes expected returns based on:

• risk-free rates as represented by the eurodollar futures, LIBOR deposits and swap rates to derive forward curve rates;

• market implied volatility assumptions for each underlying index based primarily on a blend of observed market “implied volatility” data;

• correlations of historical returns across underlying well known market indices based on actual observed returns over the ten years preceding the valuation date; and

• three years of history for fund indexes compared to separate account fund regression.

As many guaranteed benefit obligations are relatively new in the marketplace, actual policyholder behavior experience is limited. As a result, estimates of future policyholder behavior are subjective and based on analogous internal and external data. As markets change, mature and evolve and actual policyholder behavior emerges, management continually evaluates the appropriateness of its assumptions for this component of the fair value model.

On a daily basis, the Company updates capital market assumptions used in the GMWB liability model such as interest rates, equity indices and the blend of implied equity index volatilities. The Company monitors various aspects of policyholder behavior and may modify certain of its assumptions, including living benefit lapses and withdrawal rates, if credible emerging data indicates that changes are warranted. At a minimum, all policyholder behavior assumptions are reviewed and updated, as appropriate, in conjunction with the completion of the Company’s comprehensive study to refine its estimate of future gross profits during the third quarter of each year.

Credit Standing Adjustment

This assumption makes an adjustment that market participants would make, in determining fair value, to reflect the risk that guaranteed benefit obligations or the GMWB reinsurance recoverables will not be fulfilled (“nonperformance risk”). As a result of sustained volatility in the Company’s credit default spreads, during 2009 the Company changed its estimate of the Credit Standing Adjustment to incorporate a blend of observable Company and reinsurer credit default spreads from capital markets, adjusted for market recoverability. Prior to the first quarter of 2009, the Company calculated the Credit Standing Adjustment by using default rates published by rating agencies, adjusted for market recoverability. The credit standing adjustment assumption, net of reinsurance, resulted in pre-tax realized gains (losses) of $55, ($10) and $26, for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011 the credit standing adjustment was $80.

F-24

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

Margins

The behavior risk margin adds a margin that market participants would require, in determining fair value, for the risk that the Company’s assumptions about policyholder behavior could differ from actual experience. The behavior risk margin is calculated by taking the difference between adverse policyholder behavior assumptions and best estimate assumptions.

Assumption updates, including policyholder behavior assumptions, affected best estimates and margins for total pre-tax realized gains of $52, $159 and $566 for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011 the behavior risk margin was $419.

In addition to the non-market-based updates described above, the Company recognized non-market-based updates driven by the relative outperformance (underperformance) of the underlying actively managed funds as compared to their respective indices resulting in pre-tax realized gains (losses) of approximately $(72), $104 and $550 for the years ended December 31, 2011, 2010 and 2009, respectively.

Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The tables below provide fair value roll-forwards for the year ended December 31, 2011 and 2010, for the financial instruments classified as Level 3.

Roll-forward of Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) for the twelve months from January 1, 2011 to December 31, 2011.

	Fixed Maturities, AFS
													Foreign									Total Fixed			Fixed
													govt./govt									Maturities,			Maturities,
Assets	ABS			CDOs			CMBS			Corporate			agencies			Municipal			RMBS			AFS			FVO
Fair value as of January 1, 2011	$	477		$	2,581		$	689		$	2,129		$	56		$	272		$	1,285		$	7,489		$	522
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(27	)		(41	)		11			(40	)		—			—			(21	)		(118	)		22
Included in OCI [3]		22			126			52			(31	)		1			48			3			221			—
Purchases		58			—			29			108			3			131			25			354			—
Settlements		(37	)		(151	)		(86	)		(121	)		(4	)		—			(135	)		(534	)		(3	)
Sales		(10	)		(66	)		(317	)		(162	)		(7	)		(2	)		(16	)		(580	)		(42	)
Transfers into Level 3 [4]		82			30			268			774			39			4			82			1,279			—
Transfers out of Level 3 [4]		(204	)		(2,111	)		(58	)		(402	)		(39	)		(16	)		(160	)		(2,990	)		(4	)
Fair value as of December 31, 2011	$	361		$	368		$	588		$	2,255		$	49		$	437		$	1,063		$	5,121		$	495
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	(16	)	$	(41	)	$	(17	)	$	(17	)	$	—		$	—		$	(15	)	$	(106	)	$	19

				Freestanding Derivatives [5]
																U.S.			Intl.
	Equity												U.S.			Macro			Program						Total Free-
	Securities,									Interest			GMWB			Hedge			Hedging			Other			Standing
Assets (Liabilities)	AFS			Credit			Equity			Rate			Hedging			Program			Instr.			Contracts			Derivatives [5]
Fair value as of January 1, 2011	$	154		$	(390	)	$	4		$	(53	)	$	600		$	203		$	5		$	32		$	401
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(12	)		(170	)		(9	)		(21	)		279			(128	)		(3	)		(4	)		(56	)
Included in OCI [3]		(4	)		—			—			—			—			—			—			—			—
Purchases		39			1			45			64			23			347			33			—			513
Settlements		—			(2	)		—			(48	)		(19	)		(65	)		—			—			(134	)
Sales		(10	)		—			—			—			—			—			—			—			—
Transfers into Level 3 [4]		7			—			—			—			—			—			—			—			—
Transfers out of Level 3 [4]		(81	)		—			—			—			—			—			—			—			—
Fair value as of December 31, 2011	$	93		$	(561	)	$	40		$	(58	)	$	883		$	357		$	35		$	28		$	724
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	(10	)	$	(163	)	$	(8	)	$	(19	)	$	278		$	(107	)	$	(5	)	$	(4	)	$	(28	)

F-25

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

	Reinsurance Recoverable
Assets	for U.S. GMWB		Separate Accounts
Fair value as of January 1, 2011	$	280	$	1,247
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		131		25
Included in OCI [3]		—		—
Purchases		—		292
Settlements		32		—
Sales		—		(171	)
Transfers into Level 3 [4]		—		14
Transfers out of Level 3 [4]		—		(376	)
Fair value as of December 31, 2011	$	443	$	1,031
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	131	$	(1	)

	Other Policyholder Funds and Benefits Payable
													Total Other
	U.S.			International									Policyholder
	Guaranteed			Guaranteed			International			Equity			Funds and
	Withdrawal			Living			Other Living			Linked			Benefits			Other			Consumer
Liabilities	Benefits			Benefits			Benefits			Notes			Payable			Liabilities			Notes
Fair value as of January 1, 2011	$	(1,611	)	$	(36	)	$	3		$	(9	)	$	(1,653	)	$	(37	)	$	(5	)
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(780	)		(21	)		(4	)		—			(805	)		28			1
Included in OCI [3]		—			—			—			—			0			—			—
Settlements		(147	)		(9	)		(4	)		—			(160	)		—			—
Fair value as of December 31, 2011	$	(2,538	)	$	(66	)	$	(5	)	$	(9	)	$	(2,618	)	$	(9	)	$	(4	)
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	(780	)	$	(21	)	$	(4	)	$	—		$	(805	)	$	28		$	1

F-26

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

Roll-forward of Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) for the twelve months from January 1, 2010 to December 31, 2010.

	Fixed Maturities, AFS
													Foreign									Total Fixed			Fixed
													govt./govt.									Maturities,			Maturities,
Assets	ABS			CDOs			CMBS			Corporate			agencies			Municipal			RMBS			AFS			FVO
Fair value as of January 1, 2010	$	580		$	2,835		$	307		$	8,027		$	93		$	262		$	1,153		$	13,257		$	—
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(17	)		(151	)		(132	)		(14	)		—			1			(43	)		(356	)		80
Included in OCI [3]		92			533			409			320			5			24			254			1,637			—
Purchases, issuances, and settlements		(74	)		(234	)		(186	)		78			(8	)		14			(161	)		(571	)		(11	)
Transfers into Level 3 [4]		40			42			443			967			8			11			146			1,657			453
Transfers out of Level 3 [4]		(144	)		(444	)		(152	)		(7,249	)		(42	)		(40	)		(64	)		(8,135	)		—
Fair value as of December 31, 2010	$	477		$	2,581		$	689		$	2,129		$	56		$	272		$	1,285		$	7,489		$	522
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	(8	)	$	(158	)	$	(73	)	$	(24	)	$	—		$	—		$	(38	)	$	(301	)	$	76

				Freestanding Derivatives [5]
																U.S.			Intl.
	Equity												U.S.			Macro			Program						Total Free-
	Securities,									Interest			GMWB			Hedge			Hedging			Other			Standing
Assets (Liabilities)	AFS			Credit			Equity			Rate			Hedging			Program			Instr.			Contracts			Derivatives [5]
Fair value as of January 1, 2010	$	58		$	(228	)	$	(2	)	$	5		$	236		$	278		$	12		$	36		$	337
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(6	)		124			6			(4	)		(74	)		(312	)		(29	)		(4	)		(293	)
Included in OCI [3]		9			—			—			1			—			—			—			—			1
Purchases, issuances, and settlements		16			4			—			(44	)		442			237			22			—			661
Transfers into Level 3 [4]		98			(290	)		—			—			—			—			—			—			(290	)
Transfers out of Level 3 [4]		(21	)		—			—			(11	)		(4	)		—			—			—			(15	)
Fair value as of December 31, 2010	$	154		$	(390	)	$	4		$	(53	)	$	600		$	203		$	5		$	32		$	401
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	(8	)	$	116		$	6		$	(24	)	$	(61	)	$	(292	)	$	(29	)	$	(4	)	$	(288	)

	Reinsurance Recoverable
Assets	for U.S. GMWB			Separate Accounts
Fair value as of January 1, 2010	$	347		$	962
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(102	)		142
Purchases, issuances, and settlements		35			314
Transfers into Level 3 [4]		—			14
Transfers out of Level 3 [4]		—			(185	)
Fair value as of December 31, 2010	$	280		$	1,247
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	(102	)	$	20

F-27

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

	Other Policyholder Funds and Benefits Payable
																Total Other
	U.S.			International												Policyholder
	Guaranteed			Guaranteed			International			Equity						Funds and
	Withdrawal			Living			Other Living			Linked			Institutional			Benefits			Other			Consumer
Liabilities	Benefits			Benefits			Benefits			Notes			Notes			Payable			Liabilities			Notes
Fair value as of January 1, 2010	$	(1,957	)	$	(45	)	$	2		$	(10	)	$	(2	)	$	(2,012	)	$	—		$	(5	)
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		486			22			4			—			2			514			(26	)		—
Included in OCI [3]		—			(4	)		—			—			—			(4	)		—			—
Purchases, issuances, and settlements		(140	)		(9	)		(3	)		1			—			(151	)		—			—
Transfers into Level 3 [4]		—			—			—			—			—			—			(11	)		—
Fair value as of December 31, 2010	$	(1,611	)	$	(36	)	$	3		$	(9	)	$	—		$	(1,653	)	$	(37	)	$	(5	)
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	486		$	22		$	4		$	—		$	2		$	514		$	—		$	—

[1]	The Company classifies gains and losses on GMWB reinsurance derivatives and Guaranteed Living Benefit embedded derivatives as unrealized gains (losses) for purposes of disclosure in this table because it is impracticable to track on a contract-by-contract basis the realized gains (losses) for these derivatives and embedded derivatives.
[2]	All amounts in these rows are reported in net realized capital gains/losses. The realized/unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on net income for the Company. All amounts are before income taxes and amortization DAC.
[3]	All amounts are before income taxes and amortization of DAC.
[4]	Transfers in and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.
[5]	Derivative instruments are reported in this table on a net basis for asset/(liability) positions and reported in the Consolidated Balance Sheet in other investments and other liabilities.
[6]	Includes both market and non-market impacts in deriving realized and unrealized gains (losses).
[7]	Amounts presented are for Level 3 only and therefore may not agree to other disclosures included herein.

Fair Value Option

The Company elected the fair value option for its investments containing an embedded credit derivative which were not bifurcated as a result of new accounting guidance effective July 1, 2010. The underlying credit risk of these securities is primarily corporate bonds and commercial real estate. The Company elected the fair value option given the complexity of bifurcating the economic components associated with the embedded credit derivative. Additionally, the Company elected the fair value option for purchases of foreign government securities to align with the accounting for yen-based fixed annuity liabilities, which are adjusted for changes in spot rates through realized gains and losses. Similar to other fixed maturities, income earned from these securities is recorded in net investment income. Changes in the fair value of these securities are recorded in net realized capital gains and losses.

The Company previously elected the fair value option for one of its consolidated VIEs in order to apply a consistent accounting model for the VIE’s assets and liabilities. The VIE is an investment vehicle that holds high quality investments, derivative instruments that reference third-party corporate credit and issues notes to investors that reflect the credit characteristics of the high quality investments and derivative instruments. The risks and rewards associated with the assets of the VIE inure to the investors. The investors have no recourse against the Company. As a result, there has been no adjustment to the market value of the notes for the Company’s own credit risk.

The following table presents the changes in fair value of those assets and liabilities accounted for using the fair value option reported in net realized capital gains and losses in the Company’s Consolidated Statements of Operations.

	For the years ended December 31,
	2011			2010
Assets
Fixed maturities, FVO
ABS	$	—		$	(5	)
Corporate		10			(7	)
CRE CDOs		(33	)		83
Foreign government		45			—
RMBS		—			(1	)
Other liabilities
Credit-linked notes		28			(26	)
Total realized capital gains	$	50		$	44

F-28

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Fair Value Measurements (continued)

The following table presents the fair value of assets and liabilities accounted for using the fair value option included in the Company’s Consolidated Balance Sheets.

	As of December 31,
	2011		2010
Assets
Fixed maturities, FVO
ABS	$	65	$	65
CRE CDOs		225		270
Corporate		272		250
Foreign government		766		64
Total fixed maturities, FVO	$	1,328	$	649
Other liabilities
Credit-linked notes [1]	$	9	$	37

[1] As of December 31, 2011 and 2010, the outstanding principal balance of the notes was $243.

Financial Instruments Not Carried at Fair Value

The following table presents carrying amounts and fair values of The Hartford’s financial instruments not carried at fair value and not included in the above fair value discussion as of December 31, 2011 and December 31, 2010.

	December 31, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Assets
Policy loans	$	2,001	$	2,153	$	2,181	$	2,294
Mortgage loans		5,728		5,977		4,489		4,524
Liabilities
Other policyholder funds and benefits payable [1]	$	10,343	$	11,238	$	11,155	$	11,383
Senior notes [2]		4,481		4,623		4,880		5,072
Junior subordinated debentures [2]		1,735		2,430		1,727		2,596
Consumer notes [3]		310		305		377		392

[1]	Excludes guarantees on variable annuities, group accident and health and universal life insurance contracts, including corporate owned life insurance.
[2]	Included in long-term debt in the Consolidated Balance Sheets, except for current maturities, which are included in short-term debt.
[3]	Excludes amounts carried at fair value and included in disclosures above.

The Company has not made any changes in its valuation methodologies for the following assets and liabilities since December 31, 2010.

• Fair value for policy loans and consumer notes were estimated using discounted cash flow calculations using current interest rates.

• Fair values for mortgage loans were estimated using discounted cash flow calculations based on current lending rates for similar type loans. Current lending rates reflect changes in credit spreads and the remaining terms of the loans.

• Fair values for other policyholder funds and benefits payable, not carried at fair value, are determined by estimating future cash flows, discounted at the current market rate.

• Fair values for senior notes and junior subordinated debentures are based primarily on market quotations from independent third party pricing services.

F-29

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments

Significant Investment Accounting Policies

Overview

The Company’s investments in fixed maturities include bonds, redeemable preferred stock and commercial paper. These investments, along with certain equity securities, which include common and non-redeemable preferred stocks, are classified as AFS and are carried at fair value. The after-tax difference from cost or amortized cost is reflected in stockholders’ equity as a component of Other Comprehensive Income (Loss) (“OCI”), after adjustments for the effect of deducting the life and pension policyholders’ share of the immediate participation guaranteed contracts and certain life and annuity deferred policy acquisition costs and reserve adjustments. Fixed maturities for which the Company elected the fair value option are classified as FVO and are carried at fair value. The equity investments associated with the variable annuity products offered in Japan are recorded at fair value and are classified as trading with changes in fair value recorded in net investment income. Policy loans are carried at outstanding balance. Mortgage loans are recorded at the outstanding principal balance adjusted for amortization of premiums or discounts and net of valuation allowances. Short-term investments are carried at amortized cost, which approximates fair value. Limited partnerships and other alternative investments are reported at their carrying value with the change in carrying value accounted for under the equity method and accordingly the Company’s share of earnings are included in net investment income. Recognition of limited partnerships and other alternative investment income is delayed due to the availability of the related financial information, as private equity and other funds are generally on a three-month delay and hedge funds are on a one-month delay. Accordingly, income for the years ended December 31, 2011, 2010 and 2009 may not include the full impact of current year changes in valuation of the underlying assets and liabilities, which are generally obtained from the limited partnerships and other alternative investments’ general partners. Other investments primarily consist of derivatives instruments which are carried at fair value.

Recognition and Presentation of Other-Than-Temporary Impairments

The Company deems debt securities and certain equity securities with debt-like characteristics (collectively “debt securities”) to be other-than-temporarily impaired (“impaired”) if a security meets the following conditions: a) the Company intends to sell or it is more likely than not the Company will be required to sell the security before a recovery in value, or b) the Company does not expect to recover the entire amortized cost basis of the security. If the Company intends to sell or it is more likely than not the Company will be required to sell the security before a recovery in value, a charge is recorded in net realized capital losses equal to the difference between the fair value and amortized cost basis of the security. For those impaired debt securities which do not meet the first condition and for which the Company does not expect to recover the entire amortized cost basis, the difference between the security’s amortized cost basis and the fair value is separated into the portion representing a credit other-than-temporary impairment (“impairment”), which is recorded in net realized capital losses, and the remaining impairment, which is recorded in OCI. Generally, the Company determines a security’s credit impairment as the difference between its amortized cost basis and its best estimate of expected future cash flows discounted at the security’s effective yield prior to impairment. The remaining non-credit impairment, which is recorded in OCI, is the difference between the security’s fair value and the Company’s best estimate of expected future cash flows discounted at the security’s effective yield prior to the impairment, which typically represents current market liquidity and risk premiums. The previous amortized cost basis less the impairment recognized in net realized capital losses becomes the security’s new cost basis. The Company accretes the new cost basis to the estimated future cash flows over the expected remaining life of the security by prospectively adjusting the security’s yield, if necessary. The following table presents the change in non-credit impairments recognized in OCI as disclosed in the Company’s Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2011 and 2010, respectively.

	For the years ended December 31,
	2011			2010			2009
OTTI losses recognized in OCI	$	(89	)	$	(418	)	$	(683	)
Changes in fair value and/or sales		112			647			244
Tax and deferred acquisition costs		(14	)		(113	)		215
Change in non-credit impairments recognized in OCI	$	9		$	116		$	(224	)

F-30

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

The Company’s evaluation of whether a credit impairment exists for debt securities includes but is not limited to, the following factors: (a) changes in the financial condition of the security’s underlying collateral, (b) whether the issuer is current on contractually obligated interest and principal payments, (c) changes in the financial condition, credit rating and near-term prospects of the issuer, (d) the extent to which the fair value has been less than the amortized cost of the security and (e) the payment structure of the security. The Company’s best estimate of expected future cash flows used to determine the credit loss amount is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions and judgments regarding the future performance of the security. The Company’s best estimate of future cash flows involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, current and projected delinquency rates, and loan-to-value (“LTV”) ratios. In addition, for structured securities, the Company considers factors including, but not limited to, average cumulative collateral loss rates that vary by vintage year, commercial and residential property value declines that vary by property type and location and commercial real estate delinquency levels. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries which may include estimating the underlying collateral value. In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer and/or underlying collateral such as changes in the projections of the underlying property value estimates.

For equity securities where the decline in the fair value is deemed to be other-than-temporary, a charge is recorded in net realized capital losses equal to the difference between the fair value and cost basis of the security. The previous cost basis less the impairment becomes the security’s new cost basis. The Company asserts its intent and ability to retain those equity securities deemed to be temporarily impaired until the price recovers. Once identified, these securities are systematically restricted from trading unless approved by a committee of investment and accounting professionals (“Committee”). The Committee will only authorize the sale of these securities based on predefined criteria that relate to events that could not have been reasonably foreseen. Examples of the criteria include, but are not limited to, the deterioration in the issuer’s financial condition, security price declines, a change in regulatory requirements or a major business combination or major disposition.

The primary factors considered in evaluating whether an impairment exists for an equity security include, but are not limited to: (a) the length of time and extent to which the fair value has been less than the cost of the security, (b) changes in the financial condition, credit rating and near-term prospects of the issuer, (c) whether the issuer is current on preferred stock dividends and (d) the intent and ability of the Company to retain the investment for a period of time sufficient to allow for recovery.

Mortgage Loan Valuation Allowances

The Company’s security monitoring process reviews mortgage loans on a quarterly basis to identify potential credit losses. Commercial mortgage loans are considered to be impaired when management estimates that, based upon current information and events, it is probable that the Company will be unable to collect amounts due according to the contractual terms of the loan agreement. Criteria used to determine if an impairment exists include, but are not limited to: current and projected macroeconomic factors, such as unemployment rates, and property-specific factors such as rental rates, occupancy levels, LTV ratios and debt service coverage ratios (“DSCR”). In addition, the Company considers historic, current and projected delinquency rates and property values. These assumptions require the use of significant management judgment and include the probability and timing of borrower default and loss severity estimates. In addition, projections of expected future cash flows may change based upon new information regarding the performance of the borrower and/or underlying collateral such as changes in the projections of the underlying property value estimates.

For mortgage loans that are deemed impaired, a valuation allowance is established for the difference between the carrying amount and the Company’s share of either (a) the present value of the expected future cash flows discounted at the loan’s effective interest rate, (b) the loan’s observable market price or, most frequently, (c) the fair value of the collateral. A valuation allowance has been established for either individual loans or as a projected loss contingency for loans with an LTV ratio of 90% or greater and consideration of other credit quality factors, including DSCR. Changes in valuation allowances are recorded in net realized capital gains and losses. Interest income on impaired loans is accrued to the extent it is deemed collectible and the loans continue to perform under the original or restructured terms. Interest income ceases to accrue for loans when it is probable that the Company will not receive interest and principal payments according to the contractual terms of the loan agreement, or if a loan is more than 60 days past due. Loans may resume accrual status when it is determined that sufficient collateral exists to satisfy the full amount of the loan and interest payments, as well as when it is probable cash will be received in the foreseeable future. Interest income on defaulted loans is recognized when received.

F-31

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Net Realized Capital Gains and Losses

Net realized capital gains and losses from investment sales, after deducting the life and pension policyholders’ share for certain products, are reported as a component of revenues and are determined on a specific identification basis, as well as changes in value associated with fixed maturities for which the fair value option was elected. Net realized capital gains and losses also result from fair value changes in derivatives contracts (both free-standing and embedded) that do not qualify, or are not designated, as a hedge for accounting purposes, and the change in value of derivatives in certain fair-value hedge relationships. Impairments and mortgage loan valuation allowances are recognized as net realized capital losses in accordance with the Company’s impairment and mortgage loan valuation allowance policies previously discussed above. Foreign currency transaction remeasurements are also included in net realized capital gains and losses.

Net Investment Income

Interest income from fixed maturities and mortgage loans is recognized when earned on the constant effective yield method based on estimated timing of cash flows. The amortization of premium and accretion of discount for fixed maturities also takes into consideration call and maturity dates that produce the lowest yield. For securitized financial assets subject to prepayment risk, yields are recalculated and adjusted periodically to reflect historical and/or estimated future repayments using the retrospective method; however, if these investments are impaired, any yield adjustments are made using the prospective method. Prepayment fees on fixed maturities and mortgage loans are recorded in net investment income when earned. For limited partnerships and other alternative investments, the equity method of accounting is used to recognize the Company’s share of earnings. For impaired debt securities, the Company accretes the new cost basis to the estimated future cash flows over the expected remaining life of the security by prospectively adjusting the security’s yield, if necessary. The Company’s non-income producing investments were not material for the years ended December 31, 2011, 2010 and 2009.

Net investment income on equity securities, trading, includes dividend income and the changes in market value of the securities associated with the variable annuity products sold in Japan and the United Kingdom. The returns on these policyholder-directed investments inure to the benefit of the variable annuity policyholders but the underlying funds do not meet the criteria for separate account reporting. Accordingly, these assets are reflected in the Company’s general account and the returns credited to the policyholders are reflected in interest credited, a component of benefits, losses and loss adjustment expenses.

Significant Derivative Instruments Accounting Policies

Overview

The Company utilizes a variety of derivative instruments, including swaps, caps, floors, forwards, futures and options through one of four Company-approved objectives: to hedge risk arising from interest rate, equity market, credit spread and issuer default, price or currency exchange rate risk or volatility; to manage liquidity; to control transaction costs; or to enter into replication transactions.

Interest rate, volatility, dividend, credit default and index swaps involve the periodic exchange of cash flows with other parties, at specified intervals, calculated using agreed upon rates or other financial variables and notional principal amounts. Generally, no cash or principal payments are exchanged at the inception of the contract. Typically, at the time a swap is entered into, the cash flow streams exchanged by the counterparties are equal in value.

Interest rate cap and floor contracts entitle the purchaser to receive from the issuer at specified dates, the amount, if any, by which a specified market rate exceeds the cap strike interest rate or falls below the floor strike interest rate, applied to a notional principal amount. A premium payment is made by the purchaser of the contract at its inception and no principal payments are exchanged.

Forward contracts are customized commitments that specify a rate of interest or currency exchange rate to be paid or received on an obligation beginning on a future start date and are typically settled in cash.

Financial futures are standardized commitments to either purchase or sell designated financial instruments, at a future date, for a specified price and may be settled in cash or through delivery of the underlying instrument. Futures contracts trade on organized exchanges. Margin requirements for futures are met by pledging securities or cash, and changes in the futures’ contract values are settled daily in cash.

Option contracts grant the purchaser, for a premium payment, the right to either purchase from or sell to the issuer a financial instrument at a specified price, within a specified period or on a stated date.

Foreign currency swaps exchange an initial principal amount in two currencies, agreeing to re-exchange the currencies at a future date, at an agreed upon exchange rate. There may also be a periodic exchange of payments at specified intervals calculated using the agreed upon rates and exchanged principal amounts.

The Company’s derivative transactions are used in strategies permitted under the derivative use plans required by the State of Connecticut, the State of Illinois and the State of New York insurance departments.

F-32

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Accounting and Financial Statement Presentation of Derivative Instruments and Hedging Activities

Derivative instruments are recognized on the Consolidated Balance Sheets at fair value. For balance sheet presentation purposes, the Company offsets the fair value amounts, income accruals, and cash collateral held, related to derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset.

On the date the derivative contract is entered into, the Company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability (“fair value” hedge), (2) a hedge of the variability in cash flows of a forecasted transaction or of amounts to be received or paid related to a recognized asset or liability (“cash flow” hedge), (3) a hedge of a net investment in a foreign operation (“net investment” hedge) or (4) held for other investment and/or risk management purposes, which primarily involve managing asset or liability related risks which do not qualify for hedge accounting.

Fair Value Hedges

Changes in the fair value of a derivative that is designated and qualifies as a fair value hedge, including foreign-currency fair value hedges, along with the changes in the fair value of the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings with any differences between the net change in fair value of the derivative and the hedged item representing the hedge ineffectiveness. Periodic cash flows and accruals of income/expense (“periodic derivative net coupon settlements”) are recorded in the line item of the consolidated statements of operations in which the cash flows of the hedged item are recorded.

Cash Flow Hedges

Changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge, including foreign-currency cash flow hedges, are recorded in AOCI and are reclassified into earnings when the variability of the cash flow of the hedged item impacts earnings. Gains and losses on derivative contracts that are reclassified from AOCI to current period earnings are included in the line item in the consolidated statements of operations in which the cash flows of the hedged item are recorded. Any hedge ineffectiveness is recorded immediately in current period earnings as net realized capital gains and losses. Periodic derivative net coupon settlements are recorded in the line item of the consolidated statements of operations in which the cash flows of the hedged item are recorded.

Net Investment in a Foreign Operation Hedges

Changes in fair value of a derivative used as a hedge of a net investment in a foreign operation, to the extent effective as a hedge, are recorded in the foreign currency translation adjustments account within AOCI. Cumulative changes in fair value recorded in AOCI are reclassified into earnings upon the sale or complete, or substantially complete, liquidation of the foreign entity. Any hedge ineffectiveness is recorded immediately in current period earnings as net realized capital gains and losses. Periodic derivative net coupon settlements are recorded in the line item of the consolidated statements of operations in which the cash flows of the hedged item are recorded.

Other Investment and/or Risk Management Activities

The Company’s other investment and/or risk management activities primarily relate to strategies used to reduce economic risk or replicate permitted investments and do not receive hedge accounting treatment. Changes in the fair value, including periodic derivative net coupon settlements, of derivative instruments held for other investment and/or risk management purposes are reported in current period earnings as net realized capital gains and losses.

Hedge Documentation and Effectiveness Testing

To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in fair value or cash flow of the hedged item. At hedge inception, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking each hedge transaction. The documentation process includes linking derivatives that are designated as fair value, cash flow, or net investment hedges to specific assets or liabilities on the balance sheet or to specific forecasted transactions and defining the effectiveness and ineffectiveness testing methods to be used. The Company also formally assesses both at the hedge’s inception and ongoing on a quarterly basis, whether the derivatives that are used in hedging transactions have been and are expected to continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. Hedge effectiveness is assessed using qualitative and quantitative methods. Qualitative methods may include comparison of critical terms of the derivative to the hedged item. Quantitative methods include regression or other statistical analysis of changes in fair value or cash flows associated with the hedge relationship. Hedge ineffectiveness of the hedge relationships are measured each reporting period using the “Change in Variable Cash Flows Method”, the “Change in Fair Value Method”, the “Hypothetical Derivative Method”, or the “Dollar Offset Method”.

F-33

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Discontinuance of Hedge Accounting

The Company discontinues hedge accounting prospectively when (1) it is determined that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item; (2) the derivative is de-designated as a hedging instrument; or (3) the derivative expires or is sold, terminated or exercised.

When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair-value hedge, the derivative continues to be carried at fair value on the balance sheet with changes in its fair value recognized in current period earnings.

When hedge accounting is discontinued because the Company becomes aware that it is not probable that the forecasted transaction will occur, the derivative continues to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in AOCI are recognized immediately in earnings.

In other situations in which hedge accounting is discontinued on a cash-flow hedge, including those where the derivative is sold, terminated or exercised, amounts previously deferred in AOCI are reclassified into earnings when earnings are impacted by the variability of the cash flow of the hedged item.

Embedded Derivatives

The Company purchases and issues financial instruments and products that contain embedded derivative instruments. When it is determined that (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host for measurement purposes. The embedded derivative, which is reported with the host instrument in the consolidated balance sheets, is carried at fair value with changes in fair value reported in net realized capital gains and losses.

Credit Risk

Credit risk is measured as the amount owed to the Company based on current market conditions and potential payment obligations between the Company and its counterparties. For each legal entity of the Company, credit exposures are generally quantified daily based on the prior business day’s market value and collateral is pledged to and held by, or on behalf of, the Company to the extent the current value of derivatives exceeds the contractual thresholds for every counterparty. For the company’s domestic derivative programs, the maximum uncollateralized threshold for a derivative counterparty for a single level entity is generally $10. The Company also minimizes the credit risk of derivative instruments by entering into transactions with high quality counterparties rated A or better, which are monitored and evaluated by the Company’s risk management team and reviewed by senior management. In addition, the Company monitors counterparty credit exposure on a monthly basis to ensure compliance with Company policies and statutory limitations. The Company generally requires that derivative contracts, other than exchange traded contracts, certain forward contracts, and certain embedded and reinsurance derivatives, be governed by an International Swaps and Derivatives Association Master Agreement which is structured by legal entity and by counterparty and permits right of offset.

Net Investment Income (Loss)

	For the years ended December 31,
(Before-tax)	2011			2010			2009
Fixed maturities	$	3,396		$	3,489		$	3,617
Equity securities, AFS		36			53			93
Mortgage loans		281			260			307
Policy loans		131			132			139
Limited partnerships and other alternative investments		243			216			(341	)
Other investments		301			329			314
Investment expenses		(116	)		(115	)		(112	)
Total securities AFS and other		4,272			4,364			4,017
Equity securities, trading		(1,359	)		(774	)		3,188
Total net investment income (loss)	$	2,913		$	3,590		$	7,205

The net unrealized gain (loss) on equity securities, trading, included in net investment income during the years ended December 31, 2011, 2010 and 2009, was ($1.3) billion, ($68) and $3.4 billion, respectively, substantially all of which have corresponding amounts credited to policyholders. These amounts were not included in gross unrealized gains (losses).

F-34

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Net Realized Capital Gains (Losses)

	For the years ended December 31,
	2011			2010			2009
Gross gains on sales	$	693		$	836		$	1,056
Gross losses on sales		(384	)		(522	)		(1,397	)
Net OTTI losses recognized in earnings		(174	)		(434	)		(1,508	)
Valuation allowances on mortgage loans		24			(154	)		(403	)
Japanese fixed annuity contract hedges, net [1]		3			27			47
Periodic net coupon settlements on credit derivatives/Japan		(10	)		(17	)		(49	)
Results of variable annuity hedge program
U.S. GMWB derivatives, net		(397	)		89			1,464
U.S. macro hedge program		(216	)		(445	)		(733	)
Total U.S. program		(613	)		(356	)		731
International program		775			11			(112	)
Total results of variable annuity hedge program		162			(345	)		619
Other, net [2]		(459	)		(2	)		(369	)
Net realized capital losses, before-tax	$	(145	)	$	(611	)	$	(2,004	)

[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.

Sales of Available-for-Sale Securities

	For the years ended December 31,
	2011			2010			2009
Fixed maturities, AFS
Sale proceeds	$	36,956		$	46,482		$	41,973
Gross gains		617			706			755
Gross losses		(381	)		(452	)		(1,272	)
Equity securities, AFS
Sale proceeds	$	239		$	325		$	941
Gross gains		59			24			429
Gross losses		—			(16	)		(151	)

Sales of AFS securities in 2011 were the result of the reinvestment into spread product well-positioned for modest economic growth, as well as the purposeful reduction of certain exposures.

Other-Than-Temporary Impairment Losses

The following table presents a roll-forward of the Company’s cumulative credit impairments on debt securities held as of December 31, 2011, 2010 and 2009.

	For the years ended December 31,
	2011			2010			2009
Balance as of beginning of period	$	(2,072	)	$	(2,200	)	$	—
Credit impairments remaining in retained earnings related to adoption of new accounting guidance in April 2009		—			—			(1,320	)
Additions for credit impairments recognized on [1]:
Securities not previously impaired		(56	)		(211	)		(840	)
Securities previously impaired		(69	)		(161	)		(292	)
Reductions for credit impairments previously recognized on:
Securities that matured or were sold during the period		505			468			245
Securities that the Company intends to sell or more likely than not will be required to sell before recovery		—			—			3
Securities due to an increase in expected cash flows		16			32			4
Balance as of end of period	$	(1,676	)	$	(2,072	)	$	(2,200	)

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

F-35

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Available-for-Sale Securities

The following table presents the Company’s AFS securities by type.

	December 31, 2011												December 31, 2010
	Cost or		Gross		Gross					Non-			Cost or		Gross		Gross					Non-
	Amortized		Unrealized		Unrealized			Fair		Credit			Amortized		Unrealized		Unrealized			Fair		Credit
	Cost		Gains		Losses			Value		OTTI [1]			Cost		Gains		Losses			Value		OTTI [1]
ABS	$	3,430	$	55	$	(332	)	$	3,153	$	(7	)	$	3,247	$	38	$	(396	)	$	2,889	$	(2	)
CDOs		2,819		16		(348	)		2,487		(44	)		3,088		1		(478	)		2,611		(82	)
CMBS		7,192		271		(512	)		6,951		(31	)		8,297		235		(615	)		7,917		(9	)
Corporate [2]		41,161		3,661		(739	)		44,011		—			38,496		2,174		(747	)		39,884		7
Foreign govt./govt. agencies		2,030		141		(10	)		2,161		—			1,627		73		(17	)		1,683		—
Municipal		12,557		775		(72	)		13,260		—			12,469		150		(495	)		12,124		—
RMBS		5,961		252		(456	)		5,757		(105	)		6,036		109		(462	)		5,683		(124	)
U.S. Treasuries		3,828		203		(2	)		4,029		—			5,159		24		(154	)		5,029		—
Total fixed maturities, AFS		78,978		5,374		(2,471	)		81,809		(187	)		78,419		2,804		(3,364	)		77,820		(210	)
Equity securities, AFS		1,056		68		(203	)		921		—			1,013		92		(132	)		973		—
Total AFS securities	$	80,034	$	5,442	$	(2,674	)	$	82,730	$	(187	)	$	79,432	$	2,896	$	(3,496	)	$	78,793	$	(210	)

[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 December 31, 2011 and 2010.
[2]	Gross unrealized gains (losses) exclude the fair value of bifurcated embedded derivative features of certain securities. Subsequent changes in value will be recorded in net realized capital gains (losses).

The following table presents the Company’s fixed maturities, AFS, by contractual maturity year.

	December 31, 2011
Maturity	Amortized Cost		Fair Value
One year or less	$	3,206	$	3,240
Over one year through five years		16,140		16,790
Over five years through ten years		15,041		16,111
Over ten years		25,189		27,320
Subtotal		59,576		63,461
Mortgage-backed and asset-backed securities		19,402		18,348
Total	$	78,978	$	81,809

Estimated maturities may differ from contractual maturities due to security call or prepayment provisions. Due to the potential for variability in payment spreads (i.e. prepayments or extensions), mortgage-backed and asset-backed securities are not categorized by contractual maturity.

Concentration of Credit Risk

The Company aims to maintain a diversified investment portfolio including issuer, sector and geographic stratification, where applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate credit risk.

As of December 31, 2011 and 2010, the Company was not exposed to any concentration of credit risk of a single issuer greater than 10% of the Company’s stockholders’ equity other than U.S. government and certain U.S. government agencies. As of December 31, 2011, other than U.S. government and certain U.S. government agencies, the Company’s three largest exposures by issuer were the Government of Japan, Government of the United Kingdom and AT&T Inc. which each comprised less than 0.8% of total invested assets. As of December 31, 2010, other than U.S. government and certain U.S. government agencies, the Company’s three largest exposures by issuer were JP Morgan Chase & Co., Wells Fargo & Co. and AT&T Inc. which each comprised less than 0.5% of total invested assets.

The Company’s three largest exposures by sector as of December 31, 2011 were commercial real estate, municipal investments and U.S. Treasuries which comprised approximately 10%, 10% and 7%, respectively, of total invested assets. The Company’s three largest exposures by sector as of December 31, 2010 were commercial real estate, municipal investments and U.S. Treasuries which comprised approximately 10%, 9% and 9%, respectively, of total invested assets.

F-36

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Security Unrealized Loss Aging

The following tables present the Company’s unrealized loss aging for AFS securities by type and length of time the security was in a continuous unrealized loss position.

	December 31, 2011
	Less Than 12 Months							12 Months or More							Total
	Amortized		Fair		Unrealized			Amortized		Fair		Unrealized			Amortized		Fair		Unrealized
	Cost		Value		Losses			Cost		Value		Losses			Cost		Value		Losses
ABS	$	629	$	594	$	(35	)	$	1,169	$	872	$	(297	)	$	1,798	$	1,466	$	(332	)
CDOs		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 [1]		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	)

	December 31, 2010
	Less Than 12 Months							12 Months or More							Total
	Amortized		Fair		Unrealized			Amortized		Fair		Unrealized			Amortized		Fair		Unrealized
	Cost		Value		Losses			Cost		Value		Losses			Cost		Value		Losses
ABS	$	302	$	290	$	(12	)	$	1,410	$	1,026	$	(384	)	$	1,712	$	1,316	$	(396	)
CDOs		321		293		(28	)		2,724		2,274		(450	)		3,045		2,567		(478	)
CMBS		556		530		(26	)		3,962		3,373		(589	)		4,518		3,903		(615	)
Corporate		5,533		5,329		(199	)		4,017		3,435		(548	)		9,550		8,764		(747	)
Foreign govt./govt. agencies		356		349		(7	)		78		68		(10	)		434		417		(17	)
Municipal		7,485		7,173		(312	)		1,046		863		(183	)		8,531		8,036		(495	)
RMBS		1,744		1,702		(42	)		1,567		1,147		(420	)		3,311		2,849		(462	)
U.S. Treasuries		2,436		2,321		(115	)		158		119		(39	)		2,594		2,440		(154	)
Total fixed maturities		18,733		17,987		(741	)		14,962		12,305		(2,623	)		33,695		30,292		(3,364	)
Equity securities		53		52		(1	)		637		506		(131	)		690		558		(132	)
Total securities in an unrealized loss	$	18,786	$	18,039	$	(742	)	$	15,599	$	12,811	$	(2,754	)	$	34,385	$	30,850	$	(3,496	)

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

As of December 31, 2011, AFS securities in an unrealized loss position, comprised of 2,549 securities, primarily related to corporate securities within the financial services sector, CMBS, and RMBS which have experienced significant price deterioration. As of December 31, 2011, 75% of these securities were depressed less than 20% of cost or amortized cost. The decline in unrealized losses during 2011 was primarily attributable to a decline in interest rates, partially offset by credit spread widening.

Most of the securities depressed for twelve months or more relate to structured securities with exposure to commercial and residential real estate, as well as certain floating rate corporate securities or those securities with greater than 10 years to maturity, concentrated in the financial services sector. Current market spreads continue to be significantly wider for structured securities with exposure to commercial and residential real estate, as compared to spreads at the security’s respective purchase date, largely due to the economic and market uncertainties regarding future performance of commercial and residential real estate. In addition, the majority of securities have a floating-rate coupon referenced to a market index where rates have declined substantially. The Company neither has an intention to sell nor does it expect to be required to sell the securities outlined above.

F-37

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Mortgage Loans

	December 31, 2011							December 31, 2010
	Amortized		Valuation			Carrying		Amortized		Valuation			Carrying
	Cost [1]		Allowance			Value		Cost [1]		Allowance			Value
Commercial	$	5,830	$	(102	)	$	5,728	$	4,492	$	(152	)	$	4,340
Residential		—		—			—		152		(3	)		149
Total mortgage loans	$	5,830	$	(102	)	$	5,728	$	4,644	$	(155	)	$	4,489

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

As of December 31, 2011, the carrying value of mortgage loans associated with the valuation allowance was $621. Included in the table above are mortgage loans held-for-sale with a carrying value and valuation allowance of $74 and $4, respectively, as of December 31, 2011, and $87 and $7, respectively, as of December 31, 2010. The carrying value of these loans is included in mortgage loans in the Company’s Consolidated Balance Sheets. These amounts do not include mortgage loans related to the divestiture of Federal Trust Corporation. For further information on Federal Trust Corporation, see Note 20. As of December 31, 2011, loans within the Company’s mortgage loan portfolio that have had extensions or restructurings other than what is allowable under the original terms of the contract are immaterial.

The following table presents the activity within the Company’s valuation allowance for mortgage loans. These loans have been evaluated both individually and collectively for impairment. Loans evaluated collectively for impairment are immaterial.

	For the years ended December 31,
	2011			2010			2009
Balance as of January 1	$	(155	)	$	(366	)	$	(26	)
Additions		(26	)		(157	)		(408	)
Deductions		79			368			68
Balance as of December 31	$	(102	)	$	(155	)	$	(366	)

The current weighted-average LTV ratio of the Company’s commercial mortgage loan portfolio was 68% as of December 31, 2011, while the weighted-average LTV ratio at origination of these loans was 64%. LTV ratios compare the loan amount to the value of the underlying property collateralizing the loan. The loan values are updated no less than annually through property level reviews of the portfolio. Factors considered in the property valuation include, but are not limited to, actual and expected property cash flows, geographic market data and capitalization rates. DSCRs compare a property’s net operating income to the borrower’s principal and interest payments. The current weighted average DSCR of the Company’s commercial mortgage loan portfolio was 1.94x as of December 31, 2011. The Company held only two delinquent commercial mortgage loans past due by 90 days or more. The total carrying value and valuation allowance of these loans totaled $14 and $60, respectively, as of December 31, 2011, and are not accruing income.

The following table presents the carrying value of the Company’s commercial mortgage loans by LTV and DSCR.

Commercial Mortgage Loans Credit Quality
	December 31, 2011					December 31, 2010
	Carrying		Avg. Debt-Service			Carrying		Avg. Debt-Service
Loan-to-value	Value		Coverage Ratio			Value		Coverage Ratio
Greater than 80%	$	707		1.45	x	$	1,358		1.49	x
65% – 80%		2,384		1.60	x		1,829		1.93	x
Less than 65%		2,637		2.40	x		1,153		2.26	x
Total commercial mortgage loans	$	5,728		1.94	x	$	4,340		1.87	x

F-38

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

The following tables present the carrying value of the Company’s mortgage loans by region and property type.

Mortgage Loans by Region
	December 31, 2011					December 31, 2010
	Carrying		Percent of			Carrying		Percent of
	Value		Total			Value		Total
East North Central	$	94		1.6	%	$	77		1.7	%
Middle Atlantic		508		8.9	%		428		9.5	%
Mountain		125		2.2	%		109		2.4	%
New England		294		5.1	%		259		5.8	%
Pacific		1,690		29.5	%		1,147		25.6	%
South Atlantic		1,149		20.1	%		1,177		26.3	%
West North Central		30		0.5	%		36		0.8	%
West South Central		224		3.9	%		231		5.1	%
Other [1]		1,614		28.2	%		1,025		22.8	%
Total mortgage loans	$	5,728		100.0	%	$	4,489		100.0	%

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

Mortgage Loans by Property Type
	December 31, 2011					December 31, 2010
	Carrying		Percent of			Carrying		Percent of
	Value		Total			Value		Total
Commercial
Agricultural	$	249		4.3	%	$	315		7.0	%
Industrial		1,747		30.5	%		1,141		25.4	%
Lodging		93		1.6	%		132		2.9	%
Multifamily		1,070		18.7	%		713		15.9	%
Office		1,078		18.8	%		986		22.1	%
Retail		1,234		21.5	%		669		14.9	%
Other		257		4.6	%		384		8.5	%
Residential		—		—			149		3.3	%
Total mortgage loans	$	5,728		100.0	%	$	4,489		100.0	%

F-39

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Variable Interest Entities

The Company is involved with various special purpose entities and other entities that are deemed to be VIEs primarily as a collateral manager and as an investor through normal investment activities, as well as a means of accessing capital. A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest or lacks sufficient funds to finance its own activities without financial support provided by other entities.

The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Consolidated Financial Statements.

Consolidated VIEs

The following table presents the carrying value of assets and liabilities, and the maximum exposure to loss relating to the VIEs for which the Company is the primary beneficiary. Creditors have no recourse against the Company in the event of default by these VIEs nor does the Company have any implied or unfunded commitments to these VIEs. The Company’s financial or other support provided to these VIEs is limited to its investment management services and original investment.

	December 31, 2011						December 31, 2010
					Maximum						Maximum
	Total		Total		Exposure		Total		Total		Exposure
	Assets		Liabilities [1]		to Loss [2]		Assets		Liabilities [1]		to Loss [2]
CDOs [3]	$	491	$	471	$	29	$	729	$	393	$	289
Limited partnerships		7		—		7		14		1		13
Total	$	498	$	471	$	36	$	743	$	394	$	302

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

CDOs represent structured investment vehicles for which the Company has a controlling financial interest as it provides collateral management services, earns a fee for those services and also holds investments in the securities issued by these vehicles. Limited partnerships represent one hedge fund for which the Company holds a majority interest in the fund as an investment.

Non-Consolidated VIEs

The Company holds a significant variable interest for one VIE for which it is not the primary beneficiary and, therefore, was not consolidated on the Company’s Consolidated Balance Sheets. This VIE represents a contingent capital facility (“facility”) that has been held by the Company since February 2007 for which the Company has no implied or unfunded commitments. Assets and liabilities recorded for the facility were $28 as of December 31, 2011 and $32 as of December 31, 2010. Additionally, the Company has a maximum exposure to loss of $3 as of December 31, 2011 and $4 as of December 31, 2010, which represents the issuance costs that were incurred to establish the facility. The Company does not have a controlling financial interest as it does not manage the assets of the facility nor does it have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the facility, as the asset manager has significant variable interest in the vehicle. The Company’s financial or other support provided to the facility is limited to providing ongoing support to cover the facility’s operating expenses. For further information on the facility, see Note 14.

In addition, the Company, through normal investment activities, makes passive investments in structured securities issued by VIEs for which the Company is not the manager which are included in ABS, CDOs, CMBS and RMBS in the Available-for-Sale Securities table and fixed maturities, FVO, in the Company’s Consolidated Balance Sheets. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits and the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment.

F-40

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Equity Method Investments

The Company has investments in limited partnerships and other alternative investments which include hedge funds, mortgage and real estate funds, mezzanine debt funds, and private equity and other funds (collectively, “limited partnerships”). These investments are accounted for under the equity method and the Company’s maximum exposure to loss as of December 31, 2011 is limited to the total carrying value of $2.5 billion. In addition, the Company has outstanding commitments totaling $700 to fund limited partnership and other alternative investments as of December 31, 2011. The Company’s investments in limited partnerships are generally of a passive nature in that the Company does not take an active role in the management of the limited partnerships. In 2011, aggregate investment income (losses) from limited partnerships and other alternative investments exceeded 10% of the Company’s pre-tax consolidated net income. Accordingly, the Company is disclosing aggregated summarized financial data for the Company’s limited partnership investments. This aggregated summarized financial data does not represent the Company’s proportionate share of limited partnership assets or earnings. Aggregate total assets of the limited partnerships in which the Company invested totaled $91.3 billion and $93.9 billion as of December 31, 2011 and 2010, respectively. Aggregate total liabilities of the limited partnerships in which the Company invested totaled $20.6 billion and $22.3 billion as of December 31, 2011 and 2010, respectively. Aggregate net investment income (loss) of the limited partnerships in which the Company invested totaled $1.3 billion, $857 and ($688) for the periods ended December 31, 2011, 2010 and 2009, respectively. Aggregate net income (loss) of the limited partnerships in which the Company invested totaled $9.1 billion, $10.3 billion and ($9.1) billion for the periods ended December 31, 2011, 2010 and 2009, respectively. As of, and for the period ended, December 31, 2011, the aggregated summarized financial data reflects the latest available financial information.

Derivative Instruments

The Company utilizes a variety of over-the-counter and exchange traded derivative instruments as a part of its overall risk management strategy, as well as to enter into replication transactions. Derivative instruments are used to manage risk associated with interest rate, equity market, credit spread, issuer default, price, and currency exchange rate risk or volatility. Replication transactions are used as an economical means to synthetically replicate the characteristics and performance of assets that would otherwise be permissible investments under the Company’s investment policies. The Company also purchases and issues financial instruments and products that either are accounted for as free-standing derivatives, such as certain reinsurance contracts, or may contain features that are deemed to be embedded derivative instruments, such as the GMWB rider included with certain variable annuity products.

Cash flow hedges

Interest rate swaps

Interest rate swaps are primarily used to convert interest receipts on floating-rate fixed maturity securities or interest payments on floating-rate guaranteed investment contracts to fixed rates. These derivatives are predominantly used to better match cash receipts from assets with cash disbursements required to fund liabilities.

The Company also enters into forward starting swap agreements to hedge the interest rate exposure related to the purchase of fixed-rate securities. These derivatives are primarily structured to hedge interest rate risk inherent in the assumptions used to price certain liabilities.

Foreign currency swaps

Foreign currency swaps are used to convert foreign currency-denominated cash flows related to certain investment receipts and liability payments to U.S. dollars in order to reduce cash flow fluctuations due to changes in currency rates.

Fair value hedges

Interest rate swaps

Interest rate swaps are used to hedge the changes in fair value of certain fixed rate liabilities and fixed maturity securities due to fluctuations in interest rates.

Foreign currency swaps

Foreign currency swaps are used to hedge the changes in fair value of certain foreign currency-denominated fixed rate liabilities due to changes in foreign currency rates by swapping the fixed foreign payments to floating rate U.S. dollar denominated payments.

F-41

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Non-qualifying strategies

Interest rate swaps, swaptions, caps, floors, and futures

The Company uses interest rate swaps, swaptions, caps, floors, and futures to manage duration between assets and liabilities in certain investment portfolios. In addition, the Company enters into interest rate swaps to terminate existing swaps, thereby offsetting the changes in value of the original swap. As of December 31, 2011 and 2010, the notional amount of interest rate swaps in offsetting relationships was $7.8 billion and $7.1 billion, respectively.

Foreign currency swaps and forwards

The Company enters into foreign currency swaps and forwards to convert the foreign currency exposures of certain foreign currency-denominated fixed maturity investments to U.S. dollars.

Japan 3Win foreign currency swaps

Prior to the second quarter of 2009, The Company offered certain variable annuity products with a GMIB rider through a wholly-owned Japanese subsidiary. The GMIB rider is reinsured to a wholly-owned U.S. subsidiary, which invests in U.S. dollar denominated assets to support the liability. The U.S. subsidiary entered into pay U.S. dollar, receive yen swap contracts to hedge the currency and interest rate exposure between the U.S. dollar denominated assets and the yen denominated fixed liability reinsurance payments.

Japanese fixed annuity hedging instruments

Prior to the second quarter of 2009, The Company offered a yen denominated fixed annuity product through a wholly-owned Japanese subsidiary and reinsured to a wholly-owned U.S. subsidiary. The U.S. subsidiary invests in U.S. dollar denominated securities to support the yen denominated fixed liability payments and entered into currency rate swaps to hedge the foreign currency exchange rate and yen interest rate exposures that exist as a result of U.S. dollar assets backing the yen denominated liability.

Credit derivatives that purchase credit protection

Credit default swaps are used to purchase credit protection on an individual entity or referenced index to economically hedge against default risk and credit-related changes in value on fixed maturity securities. These contracts require the Company to pay a periodic fee in exchange for compensation from the counterparty should the referenced security issuers experience a credit event, as defined in the contract.

Credit derivatives that assume credit risk

Credit default swaps are used to assume credit risk related to an individual entity, referenced index, or asset pool, as a part of replication transactions. These contracts entitle the Company to receive a periodic fee in exchange for an obligation to compensate the derivative counterparty should the referenced security issuers experience a credit event, as defined in the contract. The Company is also exposed to credit risk due to credit derivatives embedded within certain fixed maturity securities. These securities are primarily comprised of structured securities that contain credit derivatives that reference a standard index of corporate securities.

Credit derivatives in offsetting positions

The Company enters into credit default swaps to terminate existing credit default swaps, thereby offsetting the changes in value of the original swap going forward.

Equity index swaps and options

The Company offers certain equity indexed products, which may contain an embedded derivative that requires bifurcation. The Company enters into S&P index swaps and options to economically hedge the equity volatility risk associated with these embedded derivatives. In addition, during the third quarter of 2011, the Company entered into equity index options and futures with the purpose of hedging the impact of an adverse equity market environment on the investment portfolio.

U.S GMWB product derivatives

The Company offers certain variable annuity products with a GMWB rider in the U.S. The GMWB is a bifurcated embedded derivative that provides the policyholder with a guaranteed remaining balance (“GRB”) if the account value is reduced to zero through a combination of market declines and withdrawals. The GRB is generally equal to premiums less withdrawals. Certain contract provisions can increase the GRB at contractholder election or after the passage of time. The notional value of the embedded derivative is the GRB.

U.S. GMWB reinsurance contracts

The Company has entered into reinsurance arrangements to offset a portion of its risk exposure to the GMWB for the remaining lives of covered variable annuity contracts. Reinsurance contracts covering GMWB are accounted for as free-standing derivatives. The notional amount of the reinsurance contracts is the GRB amount.

F-42

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

U.S. GMWB hedging instruments

The Company enters into derivative contracts to partially hedge exposure associated with a portion of the GMWB liabilities that are not reinsured. These derivative contracts include customized swaps, interest rate swaps and futures, and equity swaps, options, and futures, on certain indices including the S&P 500 index, EAFE index, and NASDAQ index.

The following table represents notional and fair value for U.S. GMWB hedging instruments.

	Notional Amount				Fair Value
	December 31,		December 31,		December 31,		December 31,
	2011		2010		2011		2010
Customized swaps	$	8,389	$	10,113	$	385	$	209
Equity swaps, options, and futures		5,320		4,943		498		391
Interest rate swaps and futures		2,697		2,800		11		(133	)
Total	$	16,406	$	17,856	$	894	$	467

U.S. macro hedge program

The Company utilizes equity options and futures contracts to partially hedge against a decline in the equity markets and the resulting statutory surplus and capital impact primarily arising from guaranteed minimum death benefit (“GMDB”), GMIB and GMWB obligations.

The following table represents notional and fair value for the U.S. macro hedge program.

	Notional Amount				Fair Value
	December 31,		December 31,		December 31,		December 31,
	2011		2010		2011		2010
Equity futures	$	59	$	166	$	—	$	—
Equity options		6,760		12,891		357		203
Total	$	6,819	$	13,057	$	357	$	203

International program product derivatives

The Company formerly offered certain variable annuity products with GMWB or GMAB riders in the U.K. and Japan. The GMWB and GMAB are bifurcated embedded derivatives. The GMWB provides the policyholder with a GRB if the account value is reduced to zero through a combination of market declines and withdrawals. The GRB is generally equal to premiums less withdrawals. Certain contract provisions can increase the GRB at contractholder election or after the passage of time. The GMAB provides the policyholder with their initial deposit in a lump sum after a specified waiting period. The notional amount of the embedded derivatives are the foreign currency denominated GRBs converted to U.S. dollars at the current foreign spot exchange rate as of the reporting period date.

International program hedging instruments

The Company utilizes equity futures, options and swaps, and currency forwards and options to partially hedge against a decline in the debt and equity markets or changes in foreign currency exchange rates and the resulting statutory surplus and capital impact primarily arising from GMDB, GMIB and GMWB obligations issued in the U.K. and Japan. The Company also enters into foreign currency denominated interest rate swaps and swaptions to hedge the interest rate exposure related to the potential annuitization of certain benefit obligations.

The following table represents notional and fair value for the international program hedging instruments.

	Notional Amount				Fair Value
	December 31,		December 31,		December 31,			December 31,
	2011		2010		2011			2010
Currency forwards	$	8,622	$	4,951	$	446		$	166
Currency options [1]		7,357		5,296		127			62
Equity futures		3,835		1,002		—			—
Equity options		1,565		1,073		74			4
Equity swaps		392		369		(8	)		1
Interest rate futures		739		—		—			—
Interest rate swaps and swaptions		11,216		2,182		111			21
Total	$	33,726	$	14,873	$	750		$	254

[1] As of December 31, 2011 and 2010, notional amounts include $5.3 billion and $3.1 billion, respectively, related to long positions and $2.1 billion and $2.2 billion, respectively, related to short positions.

Contingent capital facility put option

The Company entered into a put option agreement that provides the Company the right to require a third-party trust to purchase, at any time, The Hartford’s junior subordinated notes in a maximum aggregate principal amount of $500. Under the put option agreement, The Hartford will pay premiums on a periodic basis and will reimburse the trust for certain fees and ordinary expenses.

F-43

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Derivative Balance Sheet Classification

The table below summarizes the balance sheet classification of the Company’s derivative related fair value amounts, as well as the gross asset and liability fair value amounts. The fair value amounts presented do not include income accruals or cash collateral held amounts, which are netted with derivative fair value amounts to determine balance sheet presentation. Derivatives in the Company’s separate accounts are not included because the associated gains and losses accrue directly to policyholders. The Company’s derivative instruments are held for risk management purposes, unless otherwise noted in the table below. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and is presented in the table to quantify the volume of the Company’s derivative activity. Notional amounts are not necessarily reflective of credit risk.

	Net Derivatives										Asset Derivatives				Liability Derivatives
	Notional Amount				Fair Value						Fair Value				Fair Value
	Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,			Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,
Hedge Designation/ Derivative Type	2011		2010		2011			2010			2011		2010		2011			2010
Cash flow hedges
Interest rate swaps	$	8,652	$	10,290	$	329		$	115		$	329	$	188	$	—		$	(73	)
Foreign currency swaps		291		335		6			6			30		29		(24	)		(23	)
Total cash flow hedges		8,943		10,625		335			121			359		217		(24	)		(96	)
Fair value hedges
Interest rate swaps		1,007		1,120		(78	)		(46	)		—		5		(78	)		(51	)
Foreign currency swaps		677		677		(39	)		(12	)		63		71		(102	)		(83	)
Total fair value hedges		1,684		1,797		(117	)		(58	)		63		76		(180	)		(134	)
Non-qualifying strategies
Interest rate contracts
Interest rate swaps, caps, floors, and futures		10,144		7,938		(583	)		(441	)		531		126		(1,114	)		(567	)
Foreign exchange contracts
Foreign currency swaps and forwards		380		368		(12	)		(18	)		6		1		(18	)		(19	)
Japan 3Win foreign currency swaps		2,054		2,285		184			177			184		177		—			—
Japanese fixed annuity hedging instruments		1,945		2,119		514			608			540		608		(26	)		—
Credit contracts
Credit derivatives that purchase credit protection		1,721		2,559		36			(9	)		56		29		(20	)		(38	)
Credit derivatives that assume credit risk [1]		2,952		2,569		(648	)		(434	)		2		8		(650	)		(442	)
Credit derivatives in offsetting positions		8,189		8,367		(57	)		(75	)		164		98		(221	)		(173	)
Equity contracts
Equity index swaps and options		1,501		189		27			(10	)		40		5		(13	)		(15	)
Variable annuity hedge program
U.S. GMWB product derivatives [2]		34,569		40,255		(2,538	)		(1,611	)		—		—		(2,538	)		(1,611	)
U.S. GMWB reinsurance contracts		7,193		8,767		443			280			443		280		—			—
U.S. GMWB hedging instruments		16,406		17,856		894			467			1,022		647		(128	)		(180	)
U.S. macro hedge program		6,819		13,057		357			203			357		203		—			—
International program product derivatives [2]		2,710		2,730		(71	)		(33	)		—		3		(71	)		(36	)
International program hedging instruments		33,726		14,873		750			254			887		265		(137	)		(11	)
Other
Contingent capital facility put option		500		500		28			32			28		32		—			—
Total non-qualifying strategies		130,809		124,432		(676	)		(610	)		4,260		2,482		(4,936	)		(3,092	)
Total cash flow hedges, fair value hedges, and non-qualifying strategies	$	141,436	$	136,854	$	(458	)	$	(547	)	$	4,682	$	2,775	$	(5,140	)	$	(3,322	)
Balance Sheet Location
Fixed maturities, available-for-sale	$	703	$	728	$	(72	)	$	(39	)	$	—	$	—	$	(72	)	$	(39	)
Other investments		60,227		55,948		2,331			1,524			3,165		2,105		(834	)		(581	)
Other liabilities		35,944		28,333		(538	)		(654	)		1,074		387		(1,612	)		(1,041	)
Consumer notes		35		39		(4	)		(5	)		—		—		(4	)		(5	)
Reinsurance recoverables		7,193		8,767		443			280			443		280		—			—
Other policyholder funds and benefits payable		37,334		43,039		(2,618	)		(1,653	)		—		3		(2,618	)		(1,656	)
Total derivatives	$	141,436	$	136,854	$	(458	)	$	(547	)	$	4,682	$	2,775	$	(5,140	)	$	(3,322	)

[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.

F-44

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Change in Notional Amount

The net increase in notional amount of derivatives since December 31, 2010, was primarily due to the following:

• During 2011, the Company significantly strengthened its hedge protection of variable annuity products offered in Japan. As such, the notional amount related to the international program hedging instruments increased by $18.9 billion as the Company entered into additional foreign currency denominated interest rate swaps and swaptions, currency forwards, currency options and equity futures.

• The decrease of $8.7 billion in the combined GMWB hedging program, which includes the GMWB product, reinsurance, and hedging derivatives, was primarily a result of policyholder lapses and withdrawals.

• The U.S. macro hedge program notional decreased $6.2 billion primarily due to the expiration of certain out of the money options in January of 2011.

Change in Fair Value

The improvement in the total fair value of derivative instruments since December 31, 2010, was primarily related to the following:

• The fair value related to the international program hedging instruments increased as a result of the additional notional added during the year, as well as strengthening of the Japanese yen, lower global equity markets, and a decrease in interest rates.

• The decrease in the combined GMWB hedging program, which includes the GMWB product, reinsurance, and hedging derivatives, was primarily a result of a general decrease in long-term interest rates and higher interest rate volatility.

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of OCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in current period earnings. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

The following table presents the components of the gain or loss on derivatives that qualify as cash flow hedges:

Derivatives in Cash Flow Hedging Relationships
									Net Realized Capital Gains (Losses)
	Gain (Loss) Recognized in OCI								Recognized in Income
	on Derivative (Effective Portion)								on Derivative (Ineffective Portion)
	2011			2010		2009			2011			2010			2009
Interest rate swaps	$	337		$	294	$	(461	)	$	(4	)	$	2		$	(3	)
Foreign currency swaps		(3	)		8		(194	)		—			(1	)		75
Total	$	334		$	302	$	(655	)	$	(4	)	$	1		$	72

Derivatives in Cash Flow Hedging Relationships
		Gain (Loss) Reclassified from AOCI
		into Income (Effective Portion)
		2011			2010			2009
Interest rate swaps	Net realized capital gains (losses)	$	9		$	18		$	11
Interest rate swaps	Net investment income (loss)		126			94			47
Foreign currency swaps	Net realized capital gains (losses)		(3	)		(7	)		(119	)
Foreign currency swaps	Net investment income (loss)		—			—			2
Total		$	132		$	105		$	(59	)

As of December 31, 2011, the before-tax deferred net gains on derivative instruments recorded in AOCI that are expected to be reclassified to earnings during the next twelve months are $111. This expectation is based on the anticipated interest payments on hedged investments in fixed maturity securities that will occur over the next twelve months, at which time the Company will recognize the deferred net gains (losses) as an adjustment to interest income over the term of the investment cash flows. The maximum term over which the Company is hedging its exposure to the variability of future cash flows (for forecasted transactions, excluding interest payments on existing variable-rate financial instruments) is approximately two years.

During the year ended December 31, 2011, the Company had no net reclassifications from AOCI to earnings resulting from the discontinuance of cash-flow hedges due to forecasted transactions that were no longer probable of occurring. For the years ended December 31, 2010 and 2009, the Company had less than $1 and $1 of net reclassifications, respectively, from AOCI to earnings resulting from the discontinuance of cash-flow hedges due to forecasted transactions that were no longer probable of occurring.

F-45

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

Fair Value Hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. The Company includes the gain or loss on the derivative in the same line item as the offsetting loss or gain on the hedged item. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

The Company recognized in income gains (losses) representing the ineffective portion of fair value hedges as follows:

Derivatives in Fair Value Hedging Relationships
	Gain (Loss) Recognized in Income [1]
	2011					2010						2009
				Hedged					Hedged						Hedged
	Derivative			Item		Derivative			Item			Derivative			Item
Interest rate swaps
Net realized capital gains (losses)	$	(73	)	$	70	$	(43	)	$	36		$	72		$	(68	)
Benefits, losses and loss adjustment expenses		—			—		(1	)		3			(37	)		40
Foreign currency swaps
Net realized capital gains (losses)		(1	)		1		8			(8	)		51			(51	)
Benefits, losses and loss adjustment expenses		(22	)		22		(12	)		12			2			(2	)
Total	$	(96	)	$	93	$	(48	)	$	43		$	88		$	(81	)

[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.

Non-qualifying Strategies

For non-qualifying strategies, including embedded derivatives that are required to be bifurcated from their host contracts and accounted for as derivatives, the gain or loss on the derivative is recognized currently in earnings within net realized capital gains (losses). The following table presents the gain or loss recognized in income on non-qualifying strategies:

Non-qualifying Strategies
Gain (Loss) Recognized within Net Realized Capital Gains (Losses)
	December 31,
	2011			2010			2009
Interest rate contracts
Interest rate swaps, caps, floors, and forwards	$	(22	)	$	45		$	31
Foreign exchange contracts
Foreign currency swaps and forwards		3			(1	)		(49	)
Japan 3Win foreign currency swaps [1]		31			215			(22	)
Japanese fixed annuity hedging instruments [2]		109			385			(12	)
Credit contracts
Credit derivatives that purchase credit protection		(10	)		(23	)		(533	)
Credit derivatives that assume credit risk		(174	)		196			167
Equity contracts
Equity index swaps and options		(89	)		5			(3	)
Warrants		—			—			70
Variable annuity hedge program
U.S. GMWB product derivatives		(780	)		486			4,686
U.S. GMWB reinsurance contracts		131			(102	)		(988	)
U.S. GMWB hedging instruments		252			(295	)		(2,234	)
U.S. macro hedge program		(216	)		(445	)		(733	)
International program product derivatives		(25	)		26			67
International program hedging instruments		800			(15	)		(179	)
Other
Contingent capital facility put option		(5	)		(6	)		(8	)
Total	$	5		$	471		$	260

[1]	The associated liability is adjusted for changes in spot rates through realized capital gains and was ($100), ($273) and $64 for the years ended December 31, 2011, 2010 and 2009, respectively.
[2]	The associated liability is adjusted for changes in spot rates through realized capital gains and losses and was ($129), ($332) and $67 for the years ended December 31, 2011, 2010 and 2009, respectively.

F-46

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

For the year ended December 31, 2011, the net realized capital gain (loss) related to derivatives used in non-qualifying strategies was primarily comprised of the following:

• The net gain associated with the international program hedging instruments was primarily driven by strengthening of the Japanese yen, lower global equity markets, and a decrease in interest rates.

• The loss related to the combined GMWB hedging program, which includes the GMWB product, reinsurance, and hedging derivatives, was primarily a result of a general decrease in long-term interest rates and higher interest rate volatility.

• The net loss on the U.S. macro hedge program was primarily driven by time decay and a decrease in equity market volatility since the purchase date of certain options during the fourth quarter.

• The loss on credit derivatives that assume credit risk as a part of replication transactions resulted from credit spread widening.

For the year ended December 31, 2010, the net realized capital gain (loss) related to derivatives used in non-qualifying strategies was primarily comprised of the following:

• The net loss associated with the U.S. macro hedge program was primarily due to a higher equity market valuation, time decay, and lower implied market volatility.

• The net gain on the Japanese fixed annuity hedging instruments was primarily due to the strengthening of the Japanese yen in comparison to the U.S. dollar.

• The net gain related to the Japan 3Win foreign currency swaps was primarily due to the strengthening of the Japanese yen in comparison to the U.S. dollar, partially offset by the decrease in long-term U.S. interest rates.

• The net gain associated with credit derivatives that assume credit risk as a part of replication transactions resulted from credit spread tightening.

• The gain related to the combined GMWB hedging program, which includes the GMWB product, reinsurance, and hedging derivatives, was primarily a result of liability model assumption updates during third quarter, lower implied market volatility, and outperformance of the underlying actively managed funds as compared to their respective indices, partially offset by a general decrease in long-term interest rates and rising equity markets.

For the year ended December 31, 2009, the net realized capital gain (loss) related to derivatives used in non-qualifying strategies was primarily due to the following:

• The gain related to the net GMWB product, reinsurance, and hedging derivatives was primarily due to liability model assumption updates given favorable trends in policyholder experience, the relative outperformance of the underlying actively managed funds as compared to their respective indices, and the impact of the Company’s own credit standing. Additional net gains on GMWB related derivatives include lower implied market volatility and a general increase in long-term interest rates, partially offset by rising equity markets.

• The net loss on the U.S. macro hedge program was primarily the result of a higher equity market valuation and the impact of trading activity.

• The net loss on credit derivatives that purchase credit protection to economically hedge fixed maturity securities and the net gain on credit derivatives that assume credit risk as a part of replication transactions resulted from credit spreads tightening.

Refer to Note 12 for additional disclosures regarding contingent credit related features in derivative agreements.

Credit Risk Assumed through Credit Derivatives

The Company enters into credit default swaps that assume credit risk of a single entity, referenced index, or asset pool in order to synthetically replicate investment transactions. The Company will receive periodic payments based on an agreed upon rate and notional amount and will only make a payment if there is a credit event. A credit event payment will typically be equal to the notional value of the swap contract less the value of the referenced security issuer’s debt obligation after the occurrence of the credit event. A credit event is generally defined as a default on contractually obligated interest or principal payments or bankruptcy of the referenced entity. The credit default swaps in which the Company assumes credit risk primarily reference investment grade single corporate issuers and baskets, which include standard and customized diversified portfolios of corporate issuers. The diversified portfolios of corporate issuers are established within sector concentration limits and may be divided into tranches that possess different credit ratings.

F-47

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

The following tables present the notional amount, fair value, weighted average years to maturity, underlying referenced credit obligation type and average credit ratings, and offsetting notional amounts and fair value for credit derivatives in which the Company is assuming credit risk as of December 31, 2011 and 2010.

As of December 31, 2011
						Weighted	Underlying Referenced
						Average	Credit Obligation(s) [1]			Offsetting
Credit Derivative type by derivative	Notional		Fair			Years to		Average Credit		Notional			Offsetting
risk exposure	Amount [2]		Value			Maturity	Type		Rating	Amount [3]		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

As of December 31, 2010
							Underlying Referenced
						Weighted	Credit Obligation(s) [1]
						Average		Average		Offsetting
Credit Derivative type by derivative	Notional					Years to		Credit		Notional		Offsetting
risk exposure	Amount [2]		Fair Value			Maturity	Type	Rating		Amount [3]		Fair Value [3]
Single name credit default swaps
Investment grade risk exposure	$	1,562	$	(14	)	3 years	Corporate Credit/ Foreign Gov.		A+	$	1,447	$	(41	)
Below investment grade risk exposure		204		(6	)	3 years	Corporate Credit	BB-			168		(13	)
Basket credit default swaps [4]
Investment grade risk exposure		3,145		(1	)	4 years	Corporate Credit	BBB+			2,019		(14	)
Investment grade risk exposure		525		(50	)	6 years	CMBS Credit	BBB+			525		50
Below investment grade risk exposure		767		(381	)	4 years	Corporate Credit	BBB+			25		—
Embedded credit derivatives
Investment grade risk exposure		25		25		4 years	Corporate Credit	BBB-			—		—
Below investment grade risk exposure		525		463		6 years	Corporate Credit	BB+			—		—
Total	$	6,753	$	36						$	4,184	$	(18	)

[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 $4.2 billion and $3.9 billion as of December 31, 2011 and 2010, 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 $553 and $542 as of December 31, 2011 and 2010, respectively, of customized diversified portfolios of corporate issuers referenced through credit default swaps.

F-48

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Investments and Derivative Instruments (continued)

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 December 31, 2011 and 2010, collateral pledged having a fair value of $1.1 billion and $790, respectively, was included in fixed maturities, AFS, in the Consolidated Balance Sheets.

From time to time, the Company enters into secured borrowing arrangements as a means to increase net investment income. The Company received cash collateral of $33 as of December 31, 2011 and 2010.

The following table presents the classification and carrying amount of loaned securities and derivative instruments collateral pledged.

	December 31, 2011		December 31, 2010
Fixed maturities, AFS	$	1,086	$	823
Short-term investments		199		—
Total collateral pledged	$	1,285	$	823

As of December 31, 2011 and 2010, the Company had accepted collateral with a fair value of $2.6 billion and $1.5 billion, respectively, of which $2.0 billion and $1.1 billion, respectively, was cash collateral which was invested and recorded in the Consolidated Balance Sheets in fixed maturities and short-term investments with corresponding amounts recorded in other assets and other liabilities. The Company is only permitted by contract to sell or repledge the noncash collateral in the event of a default by the counterparty. As of December 31, 2011 and 2010, noncash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets.

Securities on Deposit with States

The Company is required by law to deposit securities with government agencies in states where it conducts business. As of December 31, 2011 and 2010, the fair value of securities on deposit was approximately $1.6 billion and $1.4 billion, respectively.

F-49

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. Reinsurance

Accounting Policy

The Company cedes insurance to affiliated and unaffiliated insurers in order to limit its maximum losses and to diversify its exposures and provide statutory surplus relief. Such arrangements do not relieve the Company of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company also assumes reinsurance from other insurers and is a member of and participates in reinsurance pools and associations. Assumed reinsurance refers to the Company’s acceptance of certain insurance risks that other insurance companies have underwritten.

Reinsurance accounting is followed for ceded and assumed transactions that provide indemnification against loss or liability relating to insurance risk (i.e. risk transfer). To meet risk transfer requirements, a reinsurance agreement must include insurance risk, consisting of underwriting, investment, and timing risk, and a reasonable possibility of a significant loss to the reinsurer. If the ceded and assumed transactions do not meet risk transfer requirements, the Company accounts for these transactions as financing transactions.

Premiums, benefits, losses and loss adjustment expenses reflect the net effects of ceded and assumed reinsurance transactions. Included in other assets are prepaid reinsurance premiums, which represent the portion of premiums ceded to reinsurers applicable to the unexpired terms of the reinsurance contracts. Included in reinsurance recoverables are balances due from reinsurance companies for paid and unpaid losses and loss adjustment expenses and are presented net of an allowance for uncollectible reinsurance.

The Company also is a member of and participates in several reinsurance pools and associations. The Company evaluates the financial condition of its reinsurers and concentrations of credit risk. Reinsurance is placed with reinsurers that meet strict financial criteria established by the Company. As of December 31, 2011, 2010 and 2009, the Company had no reinsurance-related concentrations of credit risk greater than 10% of the Company’s stockholders’ equity.

Results

The Company is involved in both the cession and assumption of insurance with affiliated and unaffiliated insurers. As of December 31, 2011, 2010 and 2009, the Company’s policy for the largest amount of life insurance retained on any one life by any company was $10.

Life insurance fees, earned premiums and other were comprised of the following:

	For the years ended December 31,
	2011			2010			2009
Gross fee income, earned premiums and other	$	9,342		$	9,482		$	9,419
Reinsurance assumed		134			192			162
Reinsurance ceded		(524	)		(576	)		(484	)
Net fee income, earned premiums and other	$	8,952		$	9,098		$	9,097

The Company reinsures certain of its risks to other reinsurers under yearly renewable term, coinsurance, and modified coinsurance arrangements, and variations thereto. Yearly renewable term and coinsurance arrangements result in passing all or a portion of the risk to the reinsurer. Generally, the reinsurer receives a proportionate amount of the premiums less an allowance for commissions and expenses and is liable for a corresponding proportionate amount of all benefit payments. Modified coinsurance is similar to coinsurance except that the cash and investments that support the liabilities for contract benefits are not transferred to the assuming company, and settlements are made on a net basis between the companies. Coinsurance with funds withheld is a form of coinsurance except that the investment assets that support the liabilities are withheld by the ceding company.

The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. Life insurance recoveries on ceded reinsurance agreements were $224, $275 and $305 for the years ended December 31, 2011, 2010, and 2009, respectively.

In addition, the Company has reinsured a portion of the risk associated with GMDB and GMWB riders of U.S. variable annuities, variable annuity contract and rider benefits of Hartford Life Insurance KK (“HLIKK”), an indirect wholly owned subsidiary, and GMDB and GMWB annuity contract and rider benefits of Hartford Life Limited Ireland (“HLL”), an indirect wholly owned subsidiary.

F-50

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. Reinsurance (continued)

The effect of reinsurance on property and casualty premiums written and earned was as follows:

	For the years ended December 31,
Premiums Written	2011			2010			2009
Direct	$	10,368		$	10,070		$	10,185
Assumed		226			234			238
Ceded		(742	)		(619	)		(712	)
Net	$	9,852		$	9,685		$	9,711

Premiums Earned
Direct	$	10,337		$	10,105		$	10,386
Assumed		225			256			253
Ceded		(688	)		(668	)		(778	)
Net	$	9,874		$	9,693		$	9,861

Ceded losses, which reduce losses and loss adjustment expenses incurred, were $385, $598, and $286 for the years ended December 31, 2011, 2010, and 2009, respectively.

Reinsurance recoverables include balances due from reinsurance companies for paid and unpaid losses and loss adjustment expenses and are presented net of an allowance for uncollectible reinsurance. The reinsurance recoverables balance includes an estimate of the amount of gross losses and loss adjustment expense reserves that may be ceded under the terms of the reinsurance agreements, including incurred but not reported unpaid losses. The Company’s estimate of losses and loss adjustment expense reserves ceded to reinsurers is based on assumptions that are consistent with those used in establishing the gross reserves for business ceded to the reinsurance contracts. The Company calculates its ceded reinsurance projection based on the terms of any applicable facultative and treaty reinsurance, including an estimate of how incurred but not reported losses will ultimately be ceded by reinsurance agreements. Accordingly, the Company’s estimate of reinsurance recoverables is subject to similar risks and uncertainties as the estimate of the gross reserve for unpaid losses and loss adjustment expenses.

The allowance for uncollectible reinsurance was $290 as of December 31, 2011 and 2010. The allowance for uncollectible reinsurance reflects management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay. The Company analyzes recent developments in commutation activity between reinsurers and cedants, recent trends in arbitration and litigation outcomes in disputes between reinsurers and cedants and the overall credit quality of the Company’s reinsurers. Based on this analysis, the Company may adjust the allowance for uncollectible reinsurance or charge off reinsurer balances that are determined to be uncollectible. Where its contracts permit, the Company secures future claim obligations with various forms of collateral, including irrevocable letters of credit, secured trusts, funds held accounts and group-wide offsets.

Due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables become due, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or cash flows in a particular quarter or annual period.

F-51

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. Deferred Policy Acquisition Costs and Present Value of Future Profits

Accounting Policy

The Company capitalizes acquisition costs that vary with and are primarily related to the acquisition of new and renewal insurance business. For life insurance products, the DAC asset, which includes the present value of future profits, related to most universal life-type contracts (including variable annuities) is amortized over the estimated life of the contracts acquired in proportion to the present value of estimated gross profits (“EGPs”). EGPs are also used to amortize other assets and liabilities in the Company’s Consolidated Balance Sheets, such as, sales inducement assets (“SIA”) and unearned revenue reserves (“URR”). Components of EGPs are used to determine reserves for universal life type contracts (including variable annuities) with death or other insurance benefits such as guaranteed minimum death, guaranteed minimum income and universal life secondary guarantee benefits. These benefits are accounted for and collectively referred to as death and other insurance benefit reserves and are held in addition to the account value liability representing policyholder funds.

For most contracts, the Company estimates gross profits over 20 years as EGPs emerging subsequent to that timeframe are immaterial. Products sold in a particular year are aggregated into cohorts. Future gross profits for each cohort are projected over the estimated lives of the underlying contracts, based on future account value projections for variable annuity and variable universal life products. The projection of future account values requires the use of certain assumptions including: separate account returns; separate account fund mix; fees assessed against the contract holder’s account balance; surrender and lapse rates; interest margin; mortality; and the extent and duration of hedging activities and hedging costs.

The Company determines EGPs from a single deterministic reversion to mean (“RTM”) separate account return projection which is an estimation technique commonly used by insurance entities to project future separate account returns. Through this estimation technique, the Company’s DAC model is adjusted to reflect actual account values at the end of each quarter. Through consideration of recent market returns, the Company will unlock, or adjust, projected returns over a future period so that the account value returns to the long-term expected rate of return, providing that those projected returns do not exceed certain caps or floors. This Unlock for future separate account returns is determined each quarter.

In the third quarter of each year, the Company completes a comprehensive non-market related policyholder behavior assumption study and incorporates the results of those studies into its projection of future gross profits. Additionally, throughout the year, the Company evaluates various aspects of policyholder behavior and periodically revises its policyholder assumptions as credible emerging data indicates that changes are warranted. Upon completion of an assumption study or evaluation of credible new information, the Company will revise its assumptions to reflect its current best estimate. These assumption revisions will change the projected account values and the related EGPs in the DAC, SIA and URR amortization models, as well as, the death and other insurance benefit reserving models.

All assumption changes that affect the estimate of future EGPs including the update of current account values, the use of the RTM estimation technique and policyholder behavior assumptions are considered an Unlock in the period of revision. An Unlock adjusts the DAC, SIA, URR and death and other insurance benefit reserve balances in the Consolidated Balance Sheets with an offsetting benefit or charge in the Consolidated Statements of Operations in the period of the revision. An Unlock that results in an after-tax benefit generally occurs as a result of actual experience or future expectations of product profitability being favorable compared to previous estimates. An Unlock that results in an after-tax charge generally occurs as a result of actual experience or future expectations of product profitability being unfavorable compared to previous estimates.

An Unlock revises EGPs to reflect the Company’s current best estimate assumptions. The Company also tests the aggregate recoverability of DAC by comparing the existing DAC balance to the present value of future EGPs.

For property and casualty insurance products, costs are deferred and amortized ratably over the period the related premiums are earned. Deferred acquisition costs are reviewed to determine if they are recoverable from future income, and if not, are charged to expense. Anticipated investment income is considered in the determination of the recoverability of DACs. For the years ended December 31, 2011, 2010 and, 2009 no amount of DAC was charged to expense based on the determination of recoverability.

F-52

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. Deferred Policy Acquisition Costs and Present Value of Future Profits (continued)

Results

Changes in the DAC balance are as follows:

	2011			2010			2009
Balance, January 1	$	9,857		$	10,686		$	13,248
Deferred Costs		2,608			2,648			2,853
Amortization — DAC		(2,920	)		(2,665	)		(3,247	)
Amortization — DAC from discontinued operations		—			(17	)		(10	)
Amortization — Unlock benefit (charge), pre-tax [1]		(507	)		138			(1,010	)
Adjustments to unrealized gains and losses on securities available-for-sale and other [2]		(377	)		(1,159	)		(1,031	)
Effect of currency translation		83			215			(39	)
Cumulative effect of accounting change, pre-tax [3]		—			11			(78	)
Balance, December 31	$	8,744		$	9,857		$	10,686

[1]	The most significant contributors to the Unlock charge recorded during the year ended December 31, 2011 were assumption changes which reduced expected future gross profits including additional costs associated with implementing the Japan hedging strategy and the U.S. variable annuity macro hedge program, as well as actual separate account returns below our aggregated estimated return.
	The most significant contributors to the Unlock benefit recorded during the year ended December 31, 2010 were actual separate account returns being above our aggregated estimated return. Also included in the benefit are assumption updates related to benefits from withdrawals and lapses, offset by hedging, annuitization estimates on Japan products, and long-term expected rate of return updates.
	The most significant contributors to the Unlock charge recorded during the year ended December 31, 2009 were the results of actual separate account returns being significantly below our aggregated estimated return for the first quarter of 2009, partially offset by actual returns being greater than our aggregated estimated return for the period from April 1, 2009 to December 31, 2009.
[2]	The most significant contributor to the adjustments was the effect of declining interest rates, resulting in unrealized gains on securities classified in AOCI. Other includes a $34 decrease as a result of the disposition of DAC from the sale of the Hartford Investment Canadian Canada in 2010.
[3]	For the year ended December 31, 2010 the effect of adopting new accounting guidance for embedded credit derivatives resulted in a decrease to retained earnings and, as a result, a DAC benefit. In addition, an offsetting amount was recorded in unrealized losses as unrealized losses decreased upon adoption of the new accounting guidance. For the year ended December 31, 2009 the effect of adopting new accounting guidance for investments other- than- temporarily impaired resulted in an increase to retained earnings and, as a result, a DAC charge. In addition, an offsetting amount was recorded in unrealized losses as unrealized losses increased upon adoption of the new accounting guidance.

As of December 31, 2011, estimated future net amortization expense of present value of future profits for the succeeding five years is $39, $58, $24, $23 and $22 in 2012, 2013, 2014, 2015 and 2016, respectively.

F-53

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. Goodwill and Other Intangible Assets

Goodwill

Accounting Policy

Goodwill represents the excess of costs over the fair value of net assets acquired. Goodwill is not amortized but is reviewed for impairment at least annually or more frequently if events occur or circumstances change that would indicate that a triggering event for a potential impairment has occurred. During the fourth quarter of 2011, the Company changed the date of its annual impairment test for all reporting units to October 31^st from January 1^st for Wealth Management reporting units, June 30^th for Federal Trust Corporation within Corporate, and October 1^st for Property & Casualty Commercial and Consumer Markets. As a result, all reporting units performed an impairment test on October 31, 2011 in addition to the annual impairment tests performed on January 1^st or October 1^st as applicable. The change was made to be consistent across all reporting units and to more closely align the impairment testing date with the long-range planning and forecasting process. The Company has determined that this change in accounting principle is preferable under the circumstances and does not result in any delay, acceleration or avoidance of impairment. As it was impracticable to objectively determine projected cash flows and related valuation estimates as of each October 31 for periods prior to October 31, 2011, without applying information that has been learned since those periods, the Company has prospectively applied the change in the annual goodwill impairment testing date from October 31, 2011.

The goodwill impairment test follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit’s goodwill exceeds the implied goodwill value, an impairment loss is recognized in an amount equal to that excess.

Management’s determination of the fair value of each reporting unit incorporates multiple inputs into discounted cash flow calculations, including assumptions that market participants would make in valuing the reporting unit. Assumptions include levels of economic capital, future business growth, earnings projections and assets under management for certain Wealth Management reporting units and the weighted average cost of capital used for purposes of discounting. In the case of one business unit a market comparison approach is used to determine fair value. Decreases in the amount of economic capital allocated to a reporting unit, decreases in business growth, decreases in earnings projections and increases in the weighted average cost of capital will all cause a reporting unit’s fair value to decrease.

Goodwill within Corporate is primarily attributed to the Company’s “buy-back” of Hartford Life, Inc. in 2000 and was allocated to each of Hartford Life’s reporting units based on the reporting unit’s fair value of in-force business at the buy-back date. Although this goodwill was allocated to each reporting unit, it is held in Corporate for segment reporting.

Results

The carrying amount of goodwill allocated to reporting segments is as follows:

	December 31, 2011										December 31, 2010
			Accumulated			Discontinued			Carrying				Accumulated			Discontinued			Carrying
	Gross		Impairments			Operations[1]			Value		Gross		Impairments			Operations[1]			Value
Commercial Markets
Property & Casualty Commercial	$	30	$	(30	)	$	—		$	—	$	30	$	—		$	—		$	30
Consumer Markets		119		—			—			119		119		—			—			119
Wealth Management
Individual Life		224		—			—			224		224		—			—			224
Retirement Plans		87		—			—			87		87		—			—			87
Mutual Funds		159		—			—			159		159		—			—			159
Total Wealth Management		470		—			—			470		470		—			—			470
Corporate		787		(355	)		(15	)		417		940		(355	)		(153	)		432
Total Goodwill	$	1,406	$	(385	)	$	(15	)	$	1,006	$	1,559	$	(355	)	$	(153	)	$	1,051

[1] Represents goodwill written off related to Federal Trust Corporation which is currently recorded in discontinued operations.

F-54

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. Goodwill and Other Intangible Assets (continued)

During the second quarter of 2011, the Company wrote off the remaining $15 of goodwill associated with the Federal Trust Corporation (“FTC”) reporting unit within Corporate due to the announced divestiture of FTC. The write-off of the FTC reporting unit goodwill was recorded as a loss on disposal within discontinued operations.

The Consumer Markets reporting unit completed its annual goodwill assessment on October 1, 2011 and again on October 31, 2011, which resulted in no impairment of goodwill. In both tests, the Consumer Markets reporting unit passed the first step of the annual impairment tests with a significant margin. The annual goodwill assessment for the Property & Casualty Commercial reporting unit that was performed on October 1, 2011 resulted in a write-down of goodwill of $30, pre-tax leaving no remaining goodwill. The results of the discounted cash flow calculations indicated that the fair value of the reporting unit was less than the carrying value; this was due primarily to a decrease in future expected underwriting cash flows. The decrease in future expected underwriting cash flows is driven by an expected reduction in written premium in the short term as the Company maintains pricing discipline in a downward market cycle, while retaining long term capabilities for future opportunities.

The Company completed its annual goodwill assessment for the individual reporting units within the Wealth Management operating segment and Corporate, except for the FTC reporting unit, as noted above, on January 1, 2011 and October 31, 2011, which resulted in no impairment of goodwill. In both tests, the reporting units passed the first step of their annual impairment tests with a significant margin with the exception of the Individual Life reporting unit at the January 1, 2011 test. The Individual Life reporting unit had a margin of less than 10% between fair value and book value on January 1, 2011. As of the October 31, 2011 impairment test, the Individual Life reporting unit had a fair value in excess of book value of approximately 15%, modest improvement from January 1, 2011 results due to improving cost of capital.

The fair value of the Individual Life reporting unit is based on discounted cash flows using earnings projections on in force business and future business growth. There could be a positive or negative impact on the result of step one in future periods if assumptions change about the level of economic capital, future business growth, earnings projections or the weighted average cost of capital.

The annual goodwill assessment for the reporting units within Property & Casualty Commercial and Consumer Markets was completed on October 1, 2010, which resulted in no write-downs of goodwill for the year ended December 31, 2010.

The Company completed its annual goodwill assessment for the individual reporting units within Wealth Management and Corporate, except for the FTC reporting unit, on January 1, 2010, which resulted in no write-downs of goodwill in 2010. The reporting units passed the first step of their annual impairment tests with a significant margin with the exception of the Retirement Plans and Individual Life reporting units.

The Retirement Plans reporting unit passed with a margin of less than 10% between fair value and book value. The fair value is based on discounted cash flows using earnings projections on in force business and future business growth. There could be a positive or negative impact on the result of step one in future periods if assumptions change about the level of economic capital, future business growth assumptions, earnings projections or the weighted average cost of capital.

The Individual Life reporting unit completed the second step of the annual goodwill impairment test resulting in an implied goodwill value that was in excess of its carrying value. Even though the fair value of the reporting unit was lower than its carrying value, the implied level of goodwill in Individual Life exceeded the carrying amount of goodwill. In the hypothetical purchase accounting required by the step two of the goodwill impairment test, the implied present value of future profits was substantially lower than that of the DAC asset removed in purchase accounting. A higher discount rate was used for calculating the present value of future profits as compared to that used for calculating the present value of estimated gross profits for DAC. As a result, in the hypothetical purchase accounting, implied goodwill exceeded the carrying amount of goodwill.

The Company completed its annual goodwill assessment for the Federal Trust Corporation (“FTC”) reporting unit within Corporate on June 30, 2010. Downward pressure on valuations in general and depressed prices in the banking sector in particular resulted in very few unassisted bank deals taking place. Thus, the Company’s annual assessment resulted in an impairment charge of $153 pre-tax. This amount was reclassified to discontinued operations during the second quarter of 2011.

The Company’s goodwill impairment test on January 1, 2009 for the individual reporting units within Wealth Management and Corporate resulted in a write-down of $32. As a result of rating agency downgrades of the Company’s financial strength ratings during the first quarter of 2009 and high credit spreads related to the Company, the Company believed its ability to generate new business in the Institutional reporting unit within Corporate would remain pressured for ratings-sensitive products. The Company believed the associated goodwill was impaired due to the pressure on new sales for ratings-sensitive business and the significant unrealized losses on investment portfolios. In addition, the Company completed its annual goodwill assessment for the individual reporting units within Property & Casualty Commercial and Consumer Markets on October 1, 2009, which resulted in no write-downs of goodwill for the year ended December 31, 2009.

F-55

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. Goodwill and Other Intangible Assets

Other Intangible Assets

Accounting Policy

Net amortization expense for other intangible assets is included in other insurance operating and other expenses in the Consolidated Statement of Operations. Acquired intangible assets primarily consist of distribution agreements and servicing intangibles, and are included in other assets in the Consolidated Balance Sheets. With the exception of Goodwill, the Company has no intangible assets with indefinite useful lives.

Results

Activity in acquired intangible assets that are subject to amortization is as follows:

	For the years ended December 31,
	2011			2010			2009
Gross carrying amount, beginning of year	$	89		$	90		$	121
Accumulated net amortization		25			18			47
Net carrying amount, beginning of year		64			72			74
Acquisition of business		—			(1	)		6
Amortization, net of the accretion of interest		(9	)		(7	)		(8	)
Net carrying amount, end of year		55			64			72
Accumulated net amortization		34			25			18
Gross carrying amount, end of year	$	89		$	89		$	90

In 2009, the Company completed two acquisitions that resulted in additional acquired intangible assets of $1 in distribution agreements and $5 in other. In 2009, the Company fully amortized acquired intangible assets for renewal rights and other of $22 and $14, respectively.

For the years ended December 31, 2011, 2010 and 2009, the Company did not capitalize any costs to extend or renew the term of a recognized intangible asset. As of December 31, 2011, the weighted average amortization period was 13 years for total acquired intangible assets. Net amortization expense for other intangibles is expected to be approximately $6 in each of the succeeding five years.

For a discussion of present value of future profits that continue to be subject to amortization and aggregate amortization expense, see Note 7.

F-56

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

9. Separate Accounts, Death Benefits and Other Insurance Benefit Features

Accounting Policy

The Company records the variable portion of individual variable annuities, 401(k), institutional, 403(b)/457, private placement life and variable life insurance products within separate accounts. Separate account assets are reported at fair value and separate account liabilities are reported at amounts consistent with separate account assets. Investment income and gains and losses from those separate account assets accrue directly to the policyholder, who assumes the related investment risk, and are offset by the related liability changes reported in the same line item in the Consolidated Statements of Operations. The Company earns fees for investment management, certain administrative expenses, and mortality and expense risks assumed which are reported in fee income.

Certain contracts classified as universal life-type include death and other insurance benefit features including GMDB and GMIB, offered with variable annuity contracts, or secondary guarantee benefits offered with universal life (“UL”) insurance contracts. GMDBs and GMIBs have been written in various forms as described in this note. UL secondary guarantee benefits ensure that the universal life 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. These death and other insurance benefit features require an additional liability be held above the account value liability representing the policyholders’ funds. This liability is reported in reserve for future policy benefits in the Company’s Consolidated Balance Sheets. Changes in the death and other insurance benefit reserves are recorded in benefits, losses and loss adjustment expenses in the Company’s Consolidated Statements of Operations.

The death and other insurance benefit liability is determined by estimating the expected present value of the benefits in excess of the policyholder’s expected account value in proportion to the present value of total expected assessments. The liability is accrued as actual assessments are recorded. The expected present value of benefits and assessments are generally derived from a set of stochastic scenarios, that have been calibrated to our RTM separate account returns, and assumptions including market rates of return, volatility, discount rates, lapse rates and mortality experience. Consistent with the Company’s policy on the Unlock, the Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefits, losses and loss adjustment expense. For further information on the Unlock, see Note 7 Deferred Policy Acquisition Costs and Present Value of Future Benefits.

The Company reinsures a portion of its in-force GMDB and UL secondary guarantees. The death and other insurance benefit reserves, net of reinsurance, are established by estimating the expected value of net reinsurance costs and death and other insurance benefits in excess of the projected account balance. The additional death and other insurance benefits and net reinsurance costs are recognized ratably over the accumulation period based on total expected assessments.

F-57

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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		220			122			53
Paid		(222	)		(165	)		—
Unlock		53			287			62
Currency translation adjustment		—			35			—
Liability balance as of December 31, 2011	$	1,104		$	975		$	228
Reinsurance recoverable asset, as of January 1, 2011	$	686		$	36		$	30
Incurred		128			18			(8	)
Paid		(143	)		(30	)		—
Unlock		53			15			—
Currency translation adjustment		—			1			—
Reinsurance recoverable asset, as of December 31, 2011	$	724		$	40		$	22

				International			UL Secondary
	U.S. GMDB			GMDB/GMIB			Guarantees
Liability balance as of January 1, 2010	$	1,233		$	599		$	76
Incurred		239			103			39
Paid		(294	)		(134	)		—
Unlock		(125	)		39			(2	)
Currency translation adjustment		—			89			—
Liability balance as of December 31, 2010	$	1,053		$	696		$	113
Reinsurance recoverable asset, as of January 1, 2010	$	787		$	51		$	22
Incurred		139			(26	)		8
Paid		(176	)		1			—
Unlock		(64	)		5			—
Currency translation adjustment		—			5			—
Reinsurance recoverable asset, as of December 31, 2010	$	686		$	36		$	30

F-58

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The following table provides details concerning GMDB and GMIB exposure as of December 31, 2011:

Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
					Retained Net
	Account		Net Amount		Amount		Weighted Average
	Value		at Risk		at Risk		Attained Age of
Maximum anniversary value (“MAV”) [1]	(“AV”) [8]		(“NAR”) [10]		(“RNAR”) [10]		Annuitant
MAV only	$	20,718	$	5,998	$	1,500		68
With 5% rollup [2]		1,469		521		181		68
With Earnings Protection Benefit Rider (“EPB”) [3]		5,378		940		104		65
With 5% rollup & EPB		585		169		35		68
Total MAV		28,150		7,628		1,820
Asset Protection Benefit (“APB”) [4]		22,343		3,139		2,042		66
Lifetime Income Benefit (“LIB”) — Death Benefit [5]		1,095		120		120		64
Reset [6] (5-7 years)		3,139		307		304		68
Return of Premium (“ROP”) [7]/Other		21,512		876		850		65
Subtotal U.S. GMDB		76,239		12,070		5,136		67
Less: General Account Value with U.S. GMDB		7,251
Subtotal Separate Account Liabilities with GMDB		68,988
Separate Account Liabilities without U.S. GMDB		74,882
Total Separate Account Liabilities	$	143,870
Japan GMDB [9], [11]	$	29,234	$	10,857	$	9,413		70
Japan GMIB [9], [11]	$	27,282	$	7,502	$	7,502		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 $34.1 billion and $33.9 billion as of December 31, 2011 and December 31, 2010, respectively. The GRB related to the Japan GMAB and GMWB was $701 as of December 31, 2011 and $707 as of December 31, 2010. 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 December 31, 2011, 55% of the GMDB RNAR and 65% 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 December 31, 2011		As of December 31, 2010
Equity securities (including mutual funds)	$	61,472	$	75,601
Cash and cash equivalents		7,516		8,365
Total	$	68,988	$	83,966

As of December 31, 2011 and December 31, 2010, approximately 17% and 15%, respectively, of the equity securities above were invested in fixed income securities through these funds and approximately 83% and 85%, respectively, were invested in equity securities.

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

F-59

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

10. Sales Inducements

Accounting Policy

The Company currently offers enhanced crediting rates or bonus payments to contract holders on certain of its individual and group annuity products. The expense associated with offering a bonus is deferred and amortized over the life of the related contract in a pattern consistent with the amortization of deferred policy acquisition costs. Amortization expense associated with expenses previously deferred is recorded over the remaining life of the contract. Consistent with the Unlock, the Company unlocked the amortization of the sales inducement asset. See Note 7 for more information concerning the Unlock.

Changes in deferred sales inducement activity were as follows for the years ended December 31:

	2011			2010			2009
Balance, beginning of year	$	459		$	438		$	553
Sales inducements deferred		20			31			59
Amortization charged to income		(17	)		(8	)		(105	)
Amortization — Unlock		(28	)		(2	)		(69	)
Balance, end of year	$	434		$	459		$	438

11. Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses

Life Insurance Products Accounting Policy

Liabilities for future policy benefits are calculated by the net level premium method using interest, withdrawal and mortality assumptions appropriate at the time the policies were issued. The methods used in determining the liability for unpaid losses and future policy benefits are standard actuarial methods recognized by the American Academy of Actuaries. For the tabular reserves, discount rates are based on the Company’s earned investment yield and the morbidity/mortality tables used are standard industry tables modified to reflect the Company’s actual experience when appropriate. In particular, for the Company’s group disability known claim reserves, the morbidity table for the early durations of claim is based exclusively on the Company’s experience, incorporating factors such as gender, elimination period and diagnosis. These reserves are computed such that they are expected to meet the Company’s future policy obligations. Future policy benefits are computed at amounts that, with additions from estimated premiums to be received and with interest on such reserves compounded annually at certain assumed rates, are expected to be sufficient to meet the Company’s policy obligations at their maturities or in the event of an insured’s death. Changes in or deviations from the assumptions used for mortality, morbidity, expected future premiums and interest can significantly affect the Company’s reserve levels and related future operations and, as such, provisions for adverse deviation are built into the long-tailed liability assumptions.

Liabilities for the Company’s group life and disability contracts, as well as its individual term life insurance policies, include amounts for unpaid losses and future policy benefits. Liabilities for unpaid losses include estimates of amounts to fully settle known reported claims, as well as claims related to insured events that the Company estimates have been incurred but have not yet been reported. These reserve estimates are based on known facts and interpretations of circumstances, and consideration of various internal factors including The Hartford’s experience with similar cases, historical trends involving claim payment patterns, loss payments, pending levels of unpaid claims, loss control programs and product mix. In addition, the reserve estimates are influenced by consideration of various external factors including court decisions, economic conditions and public attitudes. The effects of inflation are implicitly considered in the reserving process.

F-60

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (continued)

Life Insurance Products Unpaid Losses and Loss Adjustment Expenses

A rollforward of liabilities, primarily from group disability products, for unpaid losses and loss adjustment expenses follows:

	For the years ended December 31,
	2011		2010		2009
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	6,388	$	6,131	$	6,066
Reinsurance recoverables		209		213		231
Beginning liabilities for unpaid losses and loss adjustment expenses, net		6,179		5,918		5,835
Add provision for unpaid losses and loss adjustment expenses
Current year		3,196		3,260		3,244
Prior years		98		70		(88	)
Total provision for unpaid losses and loss adjustment expenses		3,294		3,330		3,156
Less payments
Current year		1,524		1,552		1,580
Prior years		1,635		1,517		1,493
Total payments		3,159		3,069		3,073
Ending liabilities for unpaid losses and loss adjustment expenses, net		6,314		6,179		5,918
Reinsurance recoverables		233		209		213
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	6,547	$	6,388	$	6,131

The unfavorable prior year development in both 2011 and 2010 is a result of lower claim terminations, particularly in long-term disability. The favorable prior year development in 2009 was principally due to continued disability and waiver claims management.

The liability for future policy benefits and unpaid losses and loss adjustment expenses is as follows:

	2011		2010
Group Life Term, Disability and Accident unpaid losses and loss adjustment expenses	$	6,547	$	6,388
Group Life Other unpaid losses and loss adjustment expenses		213		216
Individual Life unpaid losses and loss adjustment expenses		134		110
Future Policy Benefits		12,572		11,859
Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses	$	19,466	$	18,573

Property and Casualty Insurance Products Accounting Policy

The Hartford establishes property and casualty insurance products reserves to provide for the estimated costs of paying claims under insurance policies written by the Company. These reserves include estimates for both claims that have been reported and those that have been incurred but not reported, and include estimates of all losses and loss adjustment expenses associated with processing and settling these claims. Estimating the ultimate cost of future losses and loss adjustment expenses is an uncertain and complex process. This estimation process is based significantly on the assumption that past developments are an appropriate predictor of future events, and involves a variety of actuarial techniques that analyze experience, trends and other relevant factors. The uncertainties involved with the reserving process have become increasingly difficult due to a number of complex factors including social and economic trends and changes in the concepts of legal liability and damage awards. Accordingly, final claim settlements may vary from the present estimates, particularly when those payments may not occur until well into the future.

The Hartford regularly reviews the adequacy of its estimated losses and loss adjustment expense reserves by line of business within the various reporting segments. Adjustments to previously established reserves are reflected in the operating results of the period in which the adjustment is determined to be necessary. Such adjustments could possibly be significant, reflecting any variety of new and adverse or favorable trends.

F-61

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (continued)

Most of the Company’s property and casualty insurance products insurance reserves are not discounted. However, the Company has discounted liabilities funded through structured settlements and has discounted certain reserves for indemnity payments due to permanently disabled claimants under workers’ compensation policies. Structured settlements are agreements that provide fixed periodic payments to claimants and include annuities purchased to fund unpaid losses for permanently disabled claimants and, prior to 2008, agreements that funded loss run-offs for unrelated parties. Most of the annuities have been issued by the Company and these structured settlements are recorded at present value as annuity obligations, either within the reserve for future policy benefits if the annuity benefits are life-contingent or within other policyholder funds and benefits payable if the annuity benefits are not life-contingent. If not funded through an annuity, reserves for certain indemnity payments due to permanently disabled claimants under workers’ compensation policies are recorded as property and casualty insurance products reserves and were discounted to present value at an average interest rate of 4.4% in 2011 and 4.8% in 2010. As of December 31, 2011 and 2010, property and casualty insurance products reserves were discounted by a total of $542 and $524, respectively. The current accident year benefit from discounting property and casualty insurance products reserves was $58 in 2011, $46 in 2010 and $40 in 2009. The growth in discounting benefit over the past three years is due to growth in the workers’ compensation line of business, tempered by a reduction in the discount rate, reflecting a lower risk-free rate of return over this period. Accretion of discounts for prior accident years totaled $38 in 2011, $26 in 2010, and $24 in 2009. For annuities issued by the Company to fund certain workers’ compensation indemnity payments where the claimant has not released the Company of its obligation, the Company has recorded annuity obligations totaling $867 as of December 31, 2011 and $896 as of December 31, 2010.

Property and Casualty Insurance products Unpaid Losses and Loss Adjustment Expenses

A rollforward of liabilities for unpaid losses and loss adjustment expenses follows:

	For the years ended December 31,
	2011		2010			2009
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	21,025	$	21,651		$	21,933
Reinsurance and other recoverables		3,077		3,441			3,586
Beginning liabilities for unpaid losses and loss adjustment expenses, net		17,948		18,210			18,347
Add provision for unpaid losses and loss adjustment expenses
Current year		7,420		6,768			6,596
Prior years		367		(196	)		(186	)
Total provision for unpaid losses and loss adjustment expenses		7,787		6,572			6,410
Less payments
Current year		3,181		2,952			2,776
Prior years		4,037		3,882			3,771
Total payments		7,218		6,834			6,547
Ending liabilities for unpaid losses and loss adjustment expenses, net		18,517		17,948			18,210
Reinsurance and other recoverables		3,033		3,077			3,441
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	21,550	$	21,025		$	21,651

In the opinion of management, based upon the known facts and current law, the reserves recorded for The Hartford’s property and casualty insurance products at December 31, 2011 represent the Company’s best estimate of its ultimate liability for losses and loss adjustment expenses related to losses covered by policies written by the Company. Based on information or trends that are not presently known, future reserve re-estimates may result in adjustments to these reserves. Such adjustments could possibly be significant, reflecting any variety of new and adverse or favorable trends. Because of the significant uncertainties surrounding environmental and particularly asbestos exposures, it is possible that management’s estimate of the ultimate liabilities for these claims may change and that the required adjustment to recorded reserves could exceed the currently recorded reserves by an amount that could be material to The Hartford’s results of operations, financial condition and liquidity. For a further discussion, see Note 12.

Examples of current trends affecting frequency and severity include increases in medical cost inflation rates, the changing use of medical care procedures, the introduction of new products and changes in internal claim practices. Other trends include changes in the legislative and regulatory environment over workers’ compensation claims and evolving exposures to claims relating to molestation or abuse and other mass torts. In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liabilities and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims, and uncertainty as to the monetary amount being sought by the claimant from the insured.

F-62

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (continued)

The following table presents prior accident years reserve development:

	For the years ended December 31,
	2011			2010			2009
Auto liability	$	(97	)	$	(169	)	$	(124	)
Professional liability		29			(88	)		(127	)
Workers’ compensation		171			(70	)		(92	)
General liability		(40	)		(108	)		(112	)
Package business		(76	)		(19	)		38
Commercial property		(4	)		(16	)		—
Fidelity and surety		(7	)		(5	)		28
Homeowners		(1	)		23			18
Net environmental reserves		26			67			75
Net asbestos reserves		294			189			138
All other non-A&E		—			11			35
Uncollectible reinsurance		—			(30	)		(40	)
Change in workers’ compensation discount, including accretion		38			26			24
Catastrophes		37			11			(23	)
Other reserve re-estimates, net		(3	)		(18	)		(24	)
Total prior accident years development	$	367		$	(196	)	$	(186	)

Net unfavorable reserve development in 2011 primarily included the following:

• a strengthening of reserves for workers’ compensation reserves, for accident years 2008 to 2010;

• a strengthening of asbestos and environmental reserves;

• partially offset by a release of auto liability claims for accident years 2006 to 2010; and

• also offset by a release of package business liability coverages in accident years 2005 to 2009.

Net favorable reserve development in 2010 primarily included the following:

• a release of reserves for auto liability, claims, for accident years 2002 to 2009;

• a release of reserves for professional liability claims, for accident years 2004 to 2008;

• a release of general liability claims, primarily related to accident years 2005 to 2008;

• a release of workers’ compensation reserves related to accident years 2006 and 2007; and

• partially offset by a strengthening of asbestos and environmental reserves.

Net favorable reserve development in 2009 primarily included the following:

• a release of reserves for professional liability claims, for accident years 2003 to 2008;

• a release of general liability claims, primarily related to accident years 2003 to 2007;

• a release of workers’ compensation reserves; and

• partially offset by a strengthening of asbestos and environmental reserves.

F-63

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. Commitments and Contingencies

Accounting Policy

Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable. Management establishes reserves for these contingencies at its “best estimate,” or, if no one number within the range of possible losses is more probable than any other, the Company records an estimated reserve at the low end of the range of losses.

Litigation

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves. Subject to the uncertainties discussed below under the caption “Asbestos and Environmental Claims,” management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.

The Hartford is also involved in other kinds of legal actions, some of which assert claims for substantial amounts. These actions include, among others, and in addition to the matters described below, putative state and federal class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, underpayment of claims or improper underwriting practices in connection with various kinds of insurance policies, such as personal and commercial automobile, property, life and inland marine; improper sales practices in connection with the sale of life insurance and other investment products; and improper fee arrangements in connection with investment products. The Hartford also is involved in individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims. Like many other insurers, The Hartford also has been joined in actions by asbestos plaintiffs asserting, among other things, that insurers had a duty to protect the public from the dangers of asbestos and that insurers committed unfair trade practices by asserting defenses on behalf of their policyholders in the underlying asbestos cases. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to the consolidated financial condition of The Hartford. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, the outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.

Apart from the inherent difficulty of predicting litigation outcomes, particularly those that will be decided by a jury, many of the matters specifically identified below purport to seek substantial damages for unsubstantiated conduct spanning a multi-year period based on novel and complex legal theories and damages models. The alleged damages typically are not quantified or factually supported in the complaint, and, in any event, the Company’s experience shows that demands for damages often bear little relation to a reasonable estimate of potential loss. Most are in the earliest stages of litigation, with few or no substantive legal decisions by the court defining the scope of the claims, the class (if any), or the potentially available damages. In many, the Company has not yet answered the complaint or asserted its defenses, and fact discovery is still in progress or has not yet begun. Accordingly, unless otherwise specified below, management cannot reasonably estimate the possible loss or range of loss, if any, or predict the timing of the eventual resolution of these matters.

Broker Compensation Litigation — Following the New York Attorney General’s filing of a civil complaint against Marsh & McLennan Companies, Inc., and Marsh, Inc. (collectively, “Marsh”) in October 2004 alleging that certain insurance companies, including The Hartford, participated with Marsh in arrangements to submit inflated bids for business insurance and paid contingent commissions to ensure that Marsh would direct business to them, private plaintiffs brought several lawsuits against the Company predicated on the allegations in the Marsh complaint, to which the Company was not party. Among these is a multidistrict litigation in the United States District Court for the District of New Jersey. Two consolidated amended complaints were filed in the multidistrict litigation, one related to conduct in connection with the sale of property-casualty insurance and the other related to alleged conduct in connection with the sale of group benefits products. The Company and various of its subsidiaries are named in both complaints. The complaints assert, on behalf of a putative class of persons who purchased insurance through broker defendants, claims under the Sherman Act, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), state law, and in the case of the group benefits complaint, claims under the Employee Retirement Income Security Act of 1974 (“ERISA”). The claims are predicated upon allegedly undisclosed or otherwise improper payments of contingent commissions to the broker defendants to steer business to the insurance company defendants. The district court dismissed the Sherman Act and RICO claims in both complaints for failure to state a claim and has granted the defendants’ motions for summary judgment on the ERISA claims in the group-benefits products complaint. The district court further declined to exercise supplemental jurisdiction over the state law claims and dismissed those claims without prejudice. The plaintiffs appealed the dismissal of the claims in both consolidated amended complaints, except the ERISA claims. In August 2010, the United States Court of Appeals for the Third Circuit affirmed the dismissal of the Sherman Act and RICO claims against the Company. The Third Circuit vacated the dismissal of the Sherman Act and RICO claims against some defendants in the property casualty insurance case and vacated the dismissal of the state-law claims as to all defendants in light of the reinstatement of the federal claims. In September 2010, the district court entered final judgment for the defendants in the group benefits case. In March 2011, the Company reached an agreement in principle to settle on a class basis the property casualty insurance case for an immaterial amount. The settlement was preliminarily approved by the court in June 2011, and is contingent upon final court approval.

F-64

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. Commitments and Contingencies (continued)

Investment and Savings Plan ERISA and Shareholder Securities Class Action Litigation — In November and December 2008, following a decline in the share price of the Company’s common stock, seven putative class action lawsuits were filed in the United States District Court for the District of Connecticut on behalf of certain participants in the Company’s Investment and Savings Plan (the “Plan”), which offers the Company’s common stock as one of many investment options. These lawsuits have been consolidated, and a consolidated amended class-action complaint was filed on March 23, 2009, alleging that the Company and certain of its officers and employees violated ERISA by allowing the Plan’s participants to invest in the Company’s common stock and by failing to disclose to the Plan’s participants information about the Company’s financial condition. The lawsuit seeks restitution or damages for losses arising from the investment of the Plan’s assets in the Company’s common stock during the period from December 10, 2007 to the present. In January 2010, the district court denied the Company’s motion to dismiss the consolidated amended complaint. In February 2011, the parties reached an agreement in principle to settle on a class basis for an immaterial amount. The settlement was preliminarily approved by the court in January 2012, and is contingent upon final court approval.

The Company and certain of its present or former officers were defendants in a putative securities class action lawsuit filed in the United States District Court for the Southern District of New York in March 2010. The operative complaint, filed in October 2010, was brought on behalf of persons who acquired Hartford common stock during the period of July 28, 2008 through February 5, 2009, and alleged that the defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, by making false or misleading statements during the alleged class period about the Company’s valuation of certain asset-backed securities and its effect on the Company’s capital position. In September 2011, the district court dismissed the lawsuit with prejudice. The plaintiffs did not appeal.

Fair Credit Reporting Act Class Action — In February 2007, the United States District Court for the District of Oregon gave final approval of the Company’s settlement of a lawsuit brought on behalf of a class of homeowners and automobile policy holders alleging that the Company willfully violated the Fair Credit Reporting Act by failing to send appropriate notices to new customers whose initial rates were higher than they would have been had the customer had a more favorable credit report. The Company paid approximately $84.3 to eligible claimants and their counsel in connection with the settlement, sought reimbursement from the Company’s Excess Professional Liability Insurance Program for the portion of the settlement in excess of the Company’s $10 self-insured retention, and booked an insurance recoverable for the amount paid under the settlement plus the cost of settlement administration, less the self-insured retention. Certain insurance carriers participating in that program disputed coverage for the settlement, and one of the excess insurers commenced an arbitration that resulted in an award in the Company’s favor and payments to the Company of approximately $30.1, thereby exhausting the primary and first-layer excess policies. As a result, the Company’s insurance recoverable was reduced to $45.5. In June 2009, the second-layer excess carriers commenced an arbitration to resolve the dispute over coverage for the remainder of the amounts paid by the Company. The Company counterclaimed for coverage. In September 2011, the arbitrators ruled in the Company’s favor and awarded approximately $50 plus interest of $3.

Mutual Funds Litigation — In October 2010, a derivative action was brought on behalf of six Hartford retail mutual funds in the United States District Court for the District of Delaware, alleging that Hartford Investment Financial Services, LLC (“HIFSCO”), an indirect subsidiary of the Company, received excessive advisory and distribution fees in violation of its statutory fiduciary duty under Section 36(b) of the Investment Company Act of 1940. In February 2011, a nearly identical derivative action was brought against HIFSCO in the United States District Court for the District of New Jersey on behalf of six additional Hartford retail mutual funds. Both actions were assigned to the Honorable Renee Marie Bumb, a judge in the District of New Jersey who was sitting by designation with respect to the Delaware action. Plaintiffs in each action seek to rescind the investment management agreements and distribution plans between HIFSCO and the Hartford mutual funds and to recover the total fees charged thereunder or, in the alternative, to recover any improper compensation HIFSCO received. In addition, plaintiffs in the New Jersey action seek recovery of lost earnings. HIFSCO moved to dismiss both actions and, in September 2011, the motions to dismiss were granted in part and denied in part, with leave to amend the complaints. In November 2011, a stipulation of voluntary dismissal was filed in the Delaware action and plaintiffs in the New Jersey action filed an amended complaint on behalf of six Hartford mutual funds, seeking the same relief as in their original complaint. HIFSCO disputes the allegations and has filed a partial motion to dismiss.

F-65

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. Commitments and Contingencies (continued)

Asbestos and Environmental Claims

The Company continues to receive asbestos and environmental claims. Asbestos claims relate primarily to bodily injuries asserted by people who came in contact with asbestos or products containing asbestos. Environmental claims relate primarily to pollution and related clean-up costs.

The Company wrote several different categories of insurance contracts that may cover asbestos and environmental claims. First, the Company wrote primary policies providing the first layer of coverage in an insured’s liability program. Second, the Company wrote excess policies providing higher layers of coverage for losses that exhaust the limits of underlying coverage. Third, the Company acted as a reinsurer assuming a portion of those risks assumed by other insurers writing primary, excess and reinsurance coverages. Fourth, subsidiaries of the Company participated in the London Market, writing both direct insurance and assumed reinsurance business.

Significant uncertainty limits the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and expenses related to environmental and particularly asbestos claims. The degree of variability of reserve estimates for these exposures is significantly greater than for other more traditional exposures.

In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. Furthermore, over time, insurers, including the Company, have experienced significant changes in the rate at which asbestos claims are brought, the claims experience of particular insureds, and the value of claims, making predictions of future exposure from past experience uncertain. Plaintiffs and insureds also have sought to use bankruptcy proceedings, including “pre-packaged” bankruptcies, to accelerate and increase loss payments by insurers. In addition, some policyholders have asserted new classes of claims for coverages to which an aggregate limit of liability may not apply. Further uncertainties include insolvencies of other carriers and unanticipated developments pertaining to the Company’s ability to recover reinsurance for asbestos and environmental claims. Management believes these issues are not likely to be resolved in the near future.

In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liability and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims, and uncertainty as to the monetary amount being sought by the claimant from the insured.

The reporting pattern for assumed reinsurance claims, including those related to asbestos and environmental claims, is much longer than for direct claims. In many instances, it takes months or years to determine that the policyholder’s own obligations have been met and how the reinsurance in question may apply to such claims. The delay in reporting reinsurance claims and exposures adds to the uncertainty of estimating the related reserves.

It is also not possible to predict changes in the legal and legislative environment and their effect on the future development of asbestos and environmental claims.

Given the factors described above, the Company believes the actuarial tools and other techniques it employs to estimate the ultimate cost of claims for more traditional kinds of insurance exposure are less precise in estimating reserves for certain of its asbestos and environmental exposures. For this reason, the Company principally relies on exposure-based analysis to estimate the ultimate costs of these claims and regularly evaluates new account information in assessing its potential asbestos and environmental exposures. The Company supplements this exposure-based analysis with evaluations of the Company’s historical direct net loss and expense paid and reported experience, and net loss and expense paid and reported experience by calendar and/or report year, to assess any emerging trends, fluctuations or characteristics suggested by the aggregate paid and reported activity.

As of December 31, 2011 and December 31, 2010, the Company reported $1.9 billion and $1.8 billion of net asbestos reserves and $328 and $339 of net environmental reserves, respectively. The Company believes that its current asbestos and environmental reserves are appropriate. However, analyses of future developments could cause The Hartford to change its estimates and ranges of its asbestos and environmental reserves, and the effect of these changes could be material to the Company’s consolidated operating results, financial condition, and liquidity.

F-66

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. Commitments and Contingencies (continued)

Lease Commitments

The total rental expense on operating leases was $122, $132, and $154 in 2011, 2010, and 2009, respectively, which excludes sublease rental income of $13, $4, and $2 in 2011, 2010 and 2009, respectively. Future minimum lease commitments are as follows:

Years ending December 31,	Operating Leases
2012	$	58
2013		47
2014		34
2015		26
2016		21
Thereafter		56
Total minimum lease payments [1]	$	242

[1] Excludes expected future minimum sublease income of approximately $7and $3 in 2012 and 2013, respectively.

The Company’s lease commitments consist primarily of lease agreements on office space, data processing, furniture and fixtures, office equipment, and transportation equipment that expire at various dates. Capital lease assets are included in property and equipment.

Unfunded Commitments

As of December 31, 2011, the Company has outstanding commitments totaling $1.4 billion, of which $700 is committed to fund limited partnership and other alternative investments, which may be called by the partnership during the commitment period (on average two to four years) to fund the purchase of new investments and partnership expenses. Once the commitment period expires, the Company is under no obligation to fund the remaining unfunded commitment but may elect to do so. Additionally, $553 is largely related to commercial whole loans expected to fund in the first half of 2012. The remaining outstanding commitments are related to various funding obligations associated with private placement securities. These have a commitment period of one month to one year.

Guaranty Fund and Other Insurance-related Assessments

In all states, insurers licensed to transact certain classes of insurance are required to become members of a guaranty fund. In most states, in the event of the insolvency of an insurer writing any such class of insurance in the state, members of the funds are assessed to pay certain claims of the insolvent insurers. A particular state’s fund assesses its members based on their respective written premiums in the state for the classes of insurance in which the insolvent insurer was engaged. Assessments are generally limited for any year to one or two percent of the premiums written per year depending on the state.

The Hartford accounts for guaranty fund and other related assessments in accordance with Accounting Standards Codification 405-30, “Insurance-Related Assessments.” Liabilities for guaranty fund and other insurance-related assessments are accrued when an assessment is probable, when it can be reasonably estimated, and when the event obligating the Company to pay an imposed or probable assessment has occurred. Liabilities for guaranty funds and other insurance-related assessments are not discounted and are included as part of other liabilities in the Consolidated Balance Sheets. As of December 31, 2011 and 2010, the liability balance was $145 and $118 respectively. As of December 31, 2011 and 2010, $31 and $14 related to premium tax offsets were included in other assets. In 2011, The Company recognized $22 for expected assessments related to the Executive Life Insurance Company of New York (ELNY) insolvency.

Derivative Commitments

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings of the individual legal entity that entered into the derivative agreement as set by nationally recognized statistical rating agencies. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could demand immediate and ongoing full collateralization and in certain instances demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement. The settlement amount is determined by netting the derivative positions transacted under each agreement. If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of December 31, 2011, is $725. Of this $725 the legal entities have posted collateral of $716 in the normal course of business. Based on derivative market values as of December 31, 2011, a downgrade of one level below the current financial strength ratings by either Moody’s or S&P could require approximately an additional $37 to be posted as collateral. Based on derivative market values as of December 31, 2011, a downgrade by either Moody’s or S&P of two levels below the legal entities’ current financial strength ratings could require approximately an additional $48 of assets to be posted as collateral. These collateral amounts could change as derivative market values change, as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated. The nature of the collateral that we would post, if required, would be primarily in the form of U.S. Treasury bills and U.S. Treasury notes.

F-67

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13. Income Tax

The Company recognizes taxes payable or refundable for the current year and deferred taxes for the tax consequences of differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse.

Income (loss) from continuing operations before income taxes included income (loss) from domestic operations of $466, $2,133 and $(1,365) for 2011, 2010 and 2009, and income (loss) from foreign operations of $(236), $224 and $(356) for 2011, 2010 and 2009. Substantially all of the income (loss) from foreign operations is earned by a Japanese subsidiary.

The provision (benefit) for income taxes consists of the following:

	For the years ended December 31,
	2011			2010		2009
Income Tax Expense (Benefit)
Current - U.S. Federal	$	(495	)	$	106	$	509
- International		22			69		—
Total current		(473	)		175		509
Deferred - U.S. Federal Excluding NOL Carryforward		900			133		(1,584	)
- Net Operating Loss Carryforward		(652	)		1		712
- International		(121	)		303		(475	)
Total deferred		127			437		(1,347	)
Total income tax expense (benefit)	$	(346	)	$	612	$	(838	)

Deferred tax assets (liabilities) include the following as of December 31:

Deferred Tax Assets	2011			2010
Tax discount on loss reserves	$	632		$	647
Tax basis deferred policy acquisition costs		528			579
Unearned premium reserve and other underwriting related reserves		421			401
Investment-related items		1,159			1,454
Insurance product derivatives		913			1,792
Employee benefits		523			555
Net unrealized losses on investments		—			4
Minimum tax credit		868			1,183
Net operating loss carryover		747			88
Other		149			63
Total Deferred Tax Assets		5,940			6,766
Valuation Allowance		(95	)		(173	)
Deferred Tax Assets, Net of Valuation Allowance		5,845			6,593
Deferred Tax Liabilities
Financial statement deferred policy acquisition costs and reserves		(3,094	)		(2,721	)
Net unrealized gains on investments		(1,210	)		—
Other depreciable & amortizable assets		(104	)		(42	)
Other		(39	)		(105	)
Total Deferred Tax Liabilities		(4,447	)		(2,868	)
Net Deferred Tax Asset	$	1,398		$	3,725

As of December 31, 2011 and 2010, the net deferred tax asset included the expected tax benefit attributable to net operating losses of $2,239 and $327, respectively, consisting of U.S. losses of $1,880 and $17, respectively, and foreign losses of $359 and $310. The U.S. losses expire from 2013-2031 and the foreign losses have no expiration.

F-68

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13. Income Tax (continued)

The Company has recorded a deferred tax asset valuation allowance that is adequate to reduce the total deferred tax asset to an amount that will be more likely than not realized. The deferred tax asset valuation allowance was $95, relating mostly to foreign net operating losses as of December 31, 2011 and was $173 as of December 31, 2010. In assessing the need for a valuation allowance, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in open carry back years, as well as other tax planning strategies. These tax planning strategies include holding a portion of debt securities with market value losses until recovery, altering the level of tax exempt securities, selling appreciated securities to offset capital losses, business considerations such as asset-liability matching, and the sales of certain corporate assets. Management views such tax planning strategies as prudent and feasible, and would implement them, if necessary, to realize the deferred tax asset. Based on the availability of additional tax planning strategies identified in the second quarter of 2011, the Company released $86, or 100% of the valuation allowance associated with investment realized capital losses. Future economic conditions and debt market volatility, including increases in interest rates, can adversely impact the Company’s tax planning strategies and in particular the Company’s ability to utilize tax benefits on previously recognized realized capital losses.

Included in the Company’s December 31, 2011 $1.4 billion net deferred tax asset is $1.8 billion relating to items treated as ordinary for federal income tax purposes, and a $361 net deferred tax liability for items classified as capital in nature. The $361 capital items are comprised of $847 of gross deferred tax assets related to realized capital losses and $1,208 of gross deferred tax liabilities related to net unrealized capital gains.

As of December 31, 2011 the Company had a current income tax receivable of $459, which is net of a $46 payable related to Japan and due to a foreign jurisdiction. As of December 31, 2010 the company had a current income tax payable of $78, of which $30 was related to Japan and payable to a foreign jurisdiction.

The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years prior to 2007. The audit of the years 2007-2009 commenced during 2010 and is expected to conclude by the end of 2012, with no material impact on the consolidated financial condition or results of operations. In addition, in the second quarter of 2011 the Company recorded a tax benefit of $52 as a result of a resolution of a tax matter with the IRS for the computation of the dividends-received deduction (“DRD”) for years 1998, 2000 and 2001. Management believes that adequate provision has been made in the financial statements for any potential assessments that may result from tax examinations and other tax-related matters for all open tax years.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	For the years ended December 31,
	2011		2010		2009
Balance, at January 1	$	48	$	48		91
Additions based on tax positions related to the current year		—		—		—
Additions for tax positions for prior years		—		—		—
Reductions for tax positions for prior years		—		—		(35	)
Settlements		—		—		(8	)
Balance, at December 31	$	48	$	48		48

The entire balance of the unrecognized tax benefit, if it were recognized, would affect the effective tax rate in the period it is released.

The Company classifies interest and penalties (if applicable) as income tax expense in the financial statements. During the year ended December 31, 2011, the Company recognized interest income of $5, and during the years ended December 31, 2010 and 2009, the Company recognized interest expense of $2, and $7, respectively. The Company had approximately $6 and $1 of interest receivable accrued at December 31, 2011 and 2010, respectively. The Company does not believe it would be subject to any penalties in any open tax years and, therefore, has not booked any accrual for penalties.

A reconciliation of the tax provision at the U.S. Federal statutory rate to the provision for income taxes is as follows:

	For the years ended December 31,
	2011			2010			2009
Tax provision at U.S. Federal statutory rate	$	81			825			(602	)
Tax-exempt interest		(148	)		(152	)		(149	)
Dividends received deduction		(206	)		(154	)		(188	)
Nondeductible costs associated with warrants		—			—			78
Valuation allowance		(78	)		87			30
Goodwill		—			—			12
Other		5			6			(19	)
Provision for income taxes	$	(346	)		612			(838	)

F-69

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

14. Debt

The Hartford’s long-term debt securities are issued by either The Hartford Financial Services Group, Inc. (“HFSG Holding Company”) or Hartford Life, Inc. (“HLI”), an indirect wholly owned subsidiary, and are unsecured obligations of HFSG Holding Company or HLI and rank on a parity with all other unsecured and unsubordinated indebtedness of HFSG Holding Company or HLI.

Debt is carried net of discount. The following table presents short-term and long-term debt by issuance as of December 31, 2011 and 2010.

Short-Term Debt	2011		2010
Current maturities of long-term debt and capital lease obligations	$	—	$	400
Total Short-Term Debt	$	—	$	400
Long-Term Debt
Senior Notes and Debentures
4.625% Notes, due 2013		320		320
4.75% Notes, due 2014		200		200
4.0% Notes, due 2015		300		300
7.3% Notes, due 2015		200		200
5.5% Notes, due 2016		300		300
5.375% Notes, due 2017		499		499
6.3% Notes, due 2018		500		500
6.0% Notes, due 2019		500		500
5.5% Notes, due 2020		499		499
7.65% Notes, due 2027		149		149
7.375% Notes, due 2031		92		92
5.95% Notes, due 2036		298		298
6.625% Notes, due 2040		299		299
6.1% Notes, due 2041		325		324
Total Senior Notes and Debentures		4,481		4,480
Junior Subordinated Debentures
3 month LIBOR plus 295 basis points, Notes due 2033		—		5
8.125% Notes, due 2068		500		500
10.0% Notes, due 2068		1,235		1,222
Total Junior Subordinated Debentures		1,735		1,727
Total Long-Term Debt	$	6,216	$	6,207

The effective interest rates on the 6.1% senior notes due 2041 and the 10.0% junior subordinated debentures due 2068 are 7.9% and 15.3%, respectively. The effective interest rate on the remaining notes does not differ materially from the stated rate.

Interest Expense

The following table presents interest expense incurred for 2011, 2010, and 2009, respectively.

	For the years ended December 31,
	2011		2010		2009
Short-term debt	$	—	$	—	$	3
Long-term debt		508		508		473
Total interest expense	$	508	$	508	$	476

Short-Term Debt

Hartford Life Insurance Company (“HLIC”), an indirect wholly owned subsidiary, became a member of the Federal Home Loan Bank of Boston (“FHLBB”) in May 2011. Membership allows HLIC access to collateralized advances, which may be used to support various spread-based business and enhance liquidity management. The Connecticut Department of Insurance (“CTDOI”) will permit HLIC to pledge up to $1.48 billion in qualifying assets to secure FHLBB advances for 2012. The amount of advances that can be taken are dependent on the asset types pledged to secure the advances. The pledge limit is recalculated annually based on statutory admitted assets and capital and surplus. HLIC would need to seek the prior approval of the CTDOI if there were a desire to exceed these limits. As of December 31, 2011, HLIC had no advances outstanding under the FHLBB facility.

F-70

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

14. Debt (continued)

Senior Notes

On October 17, 2011, The Hartford repaid its $400, 5.25% senior notes at maturity.

Junior Subordinated Debentures

On June 6, 2008, the Company issued $500 aggregate principal amount of 8.125% fixed-to-floating rate junior subordinated debentures (the “8.125% debentures”) due June 15, 2068 for net proceeds of approximately $493, after deducting underwriting discounts and expenses from the offering. The debentures bear interest at an annual fixed rate of 8.125% from the date of issuance to, but excluding, June 15, 2018, payable semi-annually in arrears on June 15 and December 15. From and including June 15, 2018, the debentures will bear interest at an annual rate, reset quarterly, equal to three-month LIBOR plus 4.6025%, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year. The Company has the right, on one or more occasions, to defer the payment of interest on the debentures. The Company may defer interest for up to ten consecutive years without giving rise to an event of default. Deferred interest will accumulate additional interest at an annual rate equal to the annual interest rate then applicable to the 8.125% debentures. If the Company defers interest for five consecutive years or, if earlier, pays current interest during a deferral period, which may be paid from any source of funds, the Company will be required to pay deferred interest from proceeds from the sale of certain qualifying securities.

The 8.125% debentures carry a scheduled maturity date of June 15, 2038 and a final maturity date of June 15, 2068. During the 180-day period ending on a notice date not more than fifteen and not less than ten business days prior to the scheduled maturity date, the Company is required to use commercially reasonable efforts to sell certain qualifying replacement securities sufficient to permit repayment of the debentures at the scheduled maturity date. If any 8.125% debentures remain outstanding after the scheduled maturity date, the unpaid amount will remain outstanding until the Company has raised sufficient proceeds from the sale of qualifying replacement securities to permit the repayment in full of the debentures. If there are remaining 8.125% debentures at the final maturity date, the Company is required to redeem the 8.125% debentures using any source of funds.

Subject to the replacement capital covenant described below, the Company can redeem the 8.125% debentures at its option, in whole or in part, at any time on or after June 15, 2018 at a redemption price of 100% of the principal amount being redeemed plus accrued but unpaid interest. The Company can redeem the 8.125% debentures at its option prior to June 15, 2018 (a) in whole at any time or in part from time to time or (b) in whole, but not in part, in the event of certain tax or rating agency events relating to the 8.125% debentures, at a redemption price equal to the greater of 100% of the principal amount being redeemed and the applicable make-whole amount, in each case plus any accrued and unpaid interest.

In connection with the offering of the 8.125% debentures, the Company entered into a “replacement capital covenant” for the benefit of holders of one or more designated series of the Company’s indebtedness, initially the Company’s 6.1% notes due 2041. Under the terms of the replacement capital covenant, if the Company redeems the 8.125% debentures at any time prior to June 15, 2048 it can only do so with the proceeds from the sale of certain qualifying replacement securities.

On October 17, 2008, the Company entered into an Investment Agreement (the “Investment Agreement”), with Allianz SE (“Allianz”) under which, among other things, the Company agreed to issue and sell $1.75 billion of the Company’s 10% Fixed-to-Floating Rate Junior Subordinated Debentures due 2068 (the “10% debentures”) in a private placement to Allianz.

The 10% debentures due 2068 bear interest at an annual fixed rate of 10% from the date of issuance to, but excluding, October 15, 2018, payable semi-annually in arrears on April 15 and October 15. From and including October 15, 2018, the 10% debentures will bear interest at an annual rate, reset quarterly, equal to three-month LIBOR plus 6.824%, payable quarterly in arrears. The Company has the right, on one or more occasions, to defer the payment of interest on the 10% debentures. The Company may defer interest for up to ten consecutive years without giving rise to an event of default. Deferred interest will accumulate additional interest at an annual rate equal to the annual interest rate then applicable to the 10% debentures. If the Company defers interest for five consecutive years or, if earlier, pays current interest during a deferral period, which may be paid from any source of funds, the Company will be required to pay deferred interest from proceeds from the sale of certain qualifying securities.

In connection with the offering of the 10% debentures, the Company entered into a “Replacement Capital Covenant” for the benefit of holders of one or more designated series of the Company’s indebtedness, initially the Company’s 6.1% notes due 2041. Under the terms of the Replacement Capital Covenant, if the Company redeems the 10% debentures at any time prior to October 15, 2048 it can only do so with the proceeds from the sale of certain qualifying replacement securities. Subject to the Replacement Capital Covenant, the Company can redeem the 10% debentures at its option, in whole or in part, at any time on or after October 15, 2018 at a redemption price of 100% of the principal amount being redeemed plus accrued but unpaid interest.

F-71

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

14. Debt (continued)

Long-Term Debt Maturities

The following table reflects the Company’s long-term debt maturities.

2012	$	—
2013		320
2014		200
2015		500
2016		300
Thereafter		5,500

Shelf Registrations

On August 4, 2010, The Hartford filed with the Securities and Exchange Commission (the “SEC”) an automatic shelf registration statement (Registration No. 333-168532) for the potential offering and sale of debt and equity securities. The registration statement allows for the following types of securities to be offered: debt securities, junior subordinated debt securities, preferred stock, common stock, depositary shares, warrants, stock purchase contracts, and stock purchase units. In that The Hartford is a well-known seasoned issuer, as defined in Rule 405 under the Securities Act of 1933, the registration statement went effective immediately upon filing and The Hartford may offer and sell an unlimited amount of securities under the registration statement during the three-year life of the registration statement.

Contingent Capital Facility

The Hartford is party to a put option agreement that provides The Hartford with the right to require the Glen Meadow ABC Trust, a Delaware statutory trust, at any time and from time to time, to purchase The Hartford’s junior subordinated notes in a maximum aggregate principal amount not to exceed $500. Under the Put Option Agreement, The Hartford will pay the Glen Meadow ABC Trust premiums on a periodic basis, calculated with respect to the aggregate principal amount of Notes that The Hartford had the right to put to the Glen Meadow ABC Trust for such period. The Hartford has agreed to reimburse the Glen Meadow ABC Trust for certain fees and ordinary expenses. The Company holds a variable interest in the Glen Meadow ABC Trust where the Company is not the primary beneficiary. As a result, the Company did not consolidate the Glen Meadow ABC Trust. As of December 31, 2011, The Hartford has not exercised its right to require Glen Meadow ABC Trust to purchase the Notes. As a result, the Notes remain a source of capital for the HFSG Holding Company.

Commercial Paper and Revolving Credit Facility

The table below details the Company’s short-term debt programs and the applicable balances outstanding.

					Maximum Available As of				Outstanding As of
	Effective		Expiration		December 31,				December 31,
Description	Date		Date		2011		2010		2011		2010
Commercial Paper
The Hartford		11/10/86		N/A	$	2,000	$	2,000	$	—	$	—
Revolving Credit Facility
5-year revolving credit facility		8/9/07		8/9/12		1,900		1,900		—		—
Total Commercial Paper and Revolving Credit Facility					$	3,900	$	3,900	$	—	$	—

While the Company’s maximum borrowings available under its commercial paper program are $2.0 billion, the Company is dependent upon market conditions to access short-term financing through the issuance of commercial paper to investors. As of December 31, 2011, the Company has no commercial paper outstanding.

In January 2012, the Company entered into a senior unsecured revolving credit facility (the “Credit Facility”) that provides for borrowing capacity up to $1.75 billion (which is available in U.S. dollars, and in Euro, Sterling, Canadian dollars and Japanese Yen) through January 6, 2016 and terminated its $1.9 billion unsecured revolving credit facility due August 9, 2012. As of December 31, 2011, the Company was in compliance with all financial covenants under the terminated credit facility.

Of the total availability under the Credit Facility, up to $250 is available to support letters of credit issued on behalf of the Company or subsidiaries of the Company. Under the Credit Facility, the Company must maintain a minimum level of consolidated net worth of $16 billion. The minimum level of consolidated net worth, as defined, will be adjusted, upon the adoption of new DAC guidance, see Note 1, in the first quarter of 2012, by the lesser of approximately $1.0 billion, after-tax representing 70% of the adoption-related estimated DAC charge or $1.7 billion. The definition of consolidated net worth under the terms of the Credit Facility, excludes AOCI and includes the Company’s outstanding junior subordinated debentures and perpetual preferred securities, net of discount. In addition, the Company’s maximum ratio of consolidated total debt to consolidated total capitalization is 35%, and the ratio of consolidated total debt of subsidiaries to consolidated total capitalization is limited to 10%. The Company will certify compliance with the financial covenants for the syndicate of participating financial institutions on a quarterly basis.

The Hartford’s Japan operations also maintain two lines of credit in support of the subsidiary operations. Both lines of credit are in the amount of $65, or ¥5 billion, and individually have expiration dates of September 30, 2012 and January 3, 2013.

F-72

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

14. Debt (continued)

Consumer Notes

The Company issued consumer notes through its Retail Investor Notes Program prior to 2009. A consumer note is an investment product distributed through broker-dealers directly to retail investors as medium-term, publicly traded fixed or floating rate, or a combination of fixed and floating rate, notes. Consumer notes are part of the Company’s spread-based business and proceeds are used to purchase investment products, primarily fixed rate bonds. Proceeds are not used for general operating purposes. Consumer notes maturities may extend up to 30 years and have contractual coupons based upon varying interest rates or indexes (e.g. consumer price index) and may include a call provision that allows the Company to extinguish the notes prior to its scheduled maturity date. Certain Consumer notes may be redeemed by the holder in the event of death. Redemptions are subject to certain limitations, including calendar year aggregate and individual limits. The aggregate limit is equal to the greater of $1 or 1% of the aggregate principal amount of the notes as of the end of the prior year. The individual limit is $250 thousand per individual. Derivative instruments are utilized to hedge the Company’s exposure to market risks in accordance with Company policy. As of December 31, 2011, these consumer notes have interest rates ranging from 4% to 5% for fixed notes and, for variable notes, based on December 31, 2011 rates, either consumer price index plus 100 to 260 basis points, or indexed to the S&P 500, Dow Jones Industrials, foreign currency, or the Nikkei 225. The aggregate maturities of Consumer Notes are as follows: $155 in 2012, $78 in 2013, $13 in 2014, $30 in 2015, $18 in 2016, and $20 thereafter. For 2011, 2010 and 2009, interest credited to holders of consumer notes was $15, $25, and $51, respectively.

15. Equity

Issuance of Common Stock

On March 23, 2010, The Hartford issued approximately 59.6 million shares of common stock at a price to the public of $27.75 per share and received net proceeds of $1.6 billion.

Issuance of Series F Preferred Stock

On March 23, 2010, The Hartford issued 23 million depositary shares, each representing a 1/40th interest in The Hartford’s 7.25% mandatory convertible preferred stock, Series F, at a price of $25 per depositary share and received net proceeds of approximately $556. The Company will pay cumulative dividends on each share of the mandatory convertible preferred stock at a rate of 7.25% per annum on the initial liquidation preference of $1,000 per share. Dividends will accrue and cumulate from the date of issuance and, to the extent that the Company is legally permitted to pay dividends and its board of directors declares a dividend payable, the Company will, from July 1, 2010 until and including January 1, 2013 pay dividends on each January 1, April 1, July 1 and October 1, in cash and (whether or not declared prior to that date) on April 1, 2013 will pay or deliver, as the case may be, dividends in cash, shares of its common stock, or a combination thereof, at its election. Dividends on and repurchases of the Company’s common stock will be subject to restrictions in the event that the Company fails to declare and pay, or set aside for payment, dividends on the Series F preferred stock.

The 575,000 shares of mandatory convertible preferred stock, Series F, will automatically convert into shares of common stock on April 1, 2013, if not earlier converted at the option of the holder, at any time, or upon the occurrence of a fundamental change. The number of shares issuable upon mandatory conversion of each share of mandatory convertible preferred stock will be a variable amount based on the average of the daily volume weighted average price per share of the Company’s common stock during a specified period of 20 consecutive trading days with the number of shares of common stock ranging from 29.536 to 36.036 per share of mandatory convertible preferred stock, subject to anti-dilution adjustments.

Preferred Stock

The Company has 50,000,000 shares of preferred stock authorized. See discussion below on the Company’s participation in the Capital Purchase Program.

In connection with the Company’s investment agreement with Allianz SE, Allianz was issued 6,048,387 shares of the Company’s Series D Non-Voting Contingent Convertible Preferred Stock. Each share of preferred stock was initially convertible into four shares of common stock. On January 9, 2009, Allianz converted its 6,048,387 shares of Series D Preferred Stock into 24,193,548 shares of common stock.

F-73

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Equity (continued)

Allianz SE Warrants

In connection with the Company’s October 17, 2008 investment agreement with Allianz SE, Allianz was issued warrants, with an initial term of seven years, to purchase the Company’s Series B Non-Voting Contingent Convertible Preferred Stock and Series C Non-Voting Contingent Convertible Preferred Stock, structured to entitle Allianz, upon receipt of necessary approvals, to purchase 69,115,324 shares of common stock at an initial exercise price of $25.32 per share.

The warrants were immediately exercisable, pending the receipt of specified regulatory approvals, for the Series B Preferred Stock, which were initially convertible, in the aggregate, into 34,806,452 shares of common stock.

In addition to the receipt of specified regulatory approvals, the conversion into 34,308,872 shares of common stock of the Series C Preferred Stock underlying certain of the warrants was subject to the approval of the Company’s stockholders in accordance with applicable regulations of the New York Stock Exchange. Under the investment agreement, the Company was obligated to pay a cash payment to Allianz if such stockholder approval was not obtained at the first or second stockholder meetings to consider such approval. Because the conversion of the Series C Preferred Stock was subject to stockholder approval and the related payment provision represents a form of net cash settlement outside the Company’s control, the warrants to purchase the Series C Preferred Stock and the stockholder approval payment were recorded as a derivative liability at issuance.

On March 26, 2009, the Company’s shareholders approved the conversion of the Series C Preferred Stock. As a result of this shareholder approval, the Company was not obligated to pay Allianz any cash payment related to these warrants and therefore these warrants no longer provide for any form of net cash settlement outside the Company’s control. As such, the warrants to purchase the Series C Preferred Stock were reclassified from other liabilities to equity at their fair value. As of March 26, 2009, the fair value of these warrants was $93. For the year ended December 31, 2009, the Company recognized a gain of $70, representing the change in fair value of the warrants through March 26, 2009.

The discretionary equity issuance program that the Company announced on June12, 2009 triggered an anti-dilution provision in the investment agreement with Allianz, which resulted in an adjustment of the warrant exercise price to $25.25 from $25.32 and to the number of shares that may be purchased to 69,314,987 from 69,115,324. The exercise price under the warrants is subject to adjustment in certain circumstances.

The issuance of warrants to the U.S. Department of the Treasury triggered a contingency payment in the investment agreement related to additional investors. Upon receipt of preliminary approval to participate in the Capital Purchase Program, The Hartford negotiated with Allianz to modify the form of the contingency payment. The settlement of the contingency payment was negotiated to allow Allianz a one-time extension of the exercise period of its outstanding warrants from seven to ten years and a $200 cash payment on October 15, 2009. The Hartford recorded a liability for the cash payment and an adjustment to additional paid-in capital for the warrant modification resulting in a net realized capital loss of approximately $300 for the year ended December 31, 2009.

Additionally, the issuance of common and preferred stock during the first quarter of 2010 triggered an anti-dilution provision in investment agreement with Allianz, which resulted in an adjustment to the warrant exercise price to $25.23 from $25.25 and to the number of shares that may be purchased to 69,351,806 from 69,314,987.

The Company’s Participation in the Capital Purchase Program

On June 26, 2009, as part of the Capital Purchase Program (“CPP”) established by the U.S. Department of the Treasury (“Treasury”) under the Emergency Economic Stabilization Act of 2008 (the “EESA”), the Company entered into a Private Placement Purchase Agreement with Treasury pursuant to which the Company issued and sold to Treasury 3,400,000 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series E, having a liquidation preference of $1,000 per share (the “Series E Preferred Stock”), and a ten-year warrant to purchase up to 52,093,973 shares of the Company’s common stock, par value $0.01 per share, at an exercise price of $9.79 per share, for an aggregate purchase price of $3.4 billion.

Cumulative dividends on the Series E Preferred Stock accrued on the liquidation preference at a rate of 5% per annum. The Series E Preferred Stock had no maturity date and ranked senior to the Company’s common stock. The Series E Preferred Stock was non-voting.

Upon issuance, the fair values of the Series E Preferred Stock and the associated warrants were computed as if the instruments were issued on a stand alone basis. The fair value of the Series E Preferred stock was estimated based on a five-year holding period and cash flows discounted at a rate of 13% resulting in a fair value estimate of approximately $2.5 billion. The Company used a Black-Scholes options pricing model including an adjustment for American-style options to estimate the fair value of the warrants, resulting in a stand alone fair value of approximately $400. The most significant and unobservable assumption in this valuation was the Company’s share price volatility. The Company used a long-term realized volatility of the Company’s stock of 62%. In addition, the Company assumed a dividend yield of 1.72%.

F-74

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Equity (continued)

The individual fair values were then used to record the Preferred Stock and associated warrants on a relative fair value basis of $2.9 billion and $480, respectively. The warrants of $480 were recorded to additional paid-in capital as permanent equity. The preferred stock amount was recorded at the liquidation value of $1,000 per share or $3.4 billion, net of discount of $480. The discount was amortized from the date of issuance, using the effective yield method and recorded as a direct reduction to retained earnings and deducted from income available to common stockholders in the calculation of earnings per share. The amortization of discount totaled $40 for the year ended December 31, 2009.

On March 31, 2010, the Company repurchased all 3.4 million shares of Series E preferred stock issued to the Treasury for an aggregate purchase price of $3.4 billion and made a final dividend payment of $22 on the Series E preferred stock. The Company recorded a $440 charge to retained earnings representing the acceleration of the accretion of the remaining discount on the Series E preferred stock.

On September 27, 2010, the Treasury sold its warrants to purchase approximately 52 million shares of The Hartford’s common stock in a secondary public offering for net proceeds of approximately $706. The Hartford did not receive any proceeds from this sale. The warrants are exercisable, in whole or in part, at any time and from time to time until June 26, 2019 at an initial exercise price of $9.79. The exercise price will be paid by the withholding by The Hartford of a number of shares of common stock issuable upon exercise of the warrants equal to the value of the aggregate exercise price of the warrants so exercised determined by reference to the closing price of The Hartford’s common stock on the trading day on which the warrants are exercised and notice is delivered to the warrant agent. The Hartford did not purchase any of the warrants sold by the Treasury.

Subsequently, the declaration of a quarterly common stock dividend of $0.10 during the first, second, third and fourth quarters of 2011 triggered a provision in The Hartford’s Warrant Agreement with The Bank of New York Mellon, resulting in an adjustment to the warrant exercise price. The warrant exercise price was $9.699 at December 31, 2011.

Stock Repurchase Program

On July 27, 2011 the Company’s Board of Directors authorized a $500 stock repurchase program. The Company’s repurchase authorization, which expires on August 5, 2014, permits purchases of common stock, as well as warrants or other derivative securities. Repurchases may be made in the open market, through derivative, accelerated share repurchase and other privately negotiated transactions, and through plans designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. The timing of any future repurchases will be dependent upon several factors, including the market price of the Company’s securities, the Company’s capital position, consideration of the effect of any repurchases on the Company’s financial strength or credit ratings, and other corporate considerations. The repurchase program may be modified, extended or terminated by the Board of Directors at any time. The Hartford repurchased $51 of its common stock, or 3.2 million shares, under this program for the year ended December 31, 2011.

Increase in Authorized Common Shares

On May 27, 2009, at the Company’s annual meeting of shareholders, shareholders approved an increase in the aggregate authorized number of shares of common stock from 750 million to 1.5 billion.

Discretionary Equity Issuance Program

On June 12, 2009, the Company announced that it had commenced a discretionary equity issuance program, and in accordance with that program entered into an equity distribution agreement pursuant to which it would offer up to 60 million shares of its common stock from time to time for aggregate sales proceeds of up to $750.

On August 5, 2009, the Company increased the aggregate sales proceeds from $750 to $900.

On August 6, 2009, the Company announced the completion of the discretionary equity issuance program. The Hartford issued 56.1 million shares of common stock and received net proceeds of $887 under this program.

Noncontrolling Interests

Noncontrolling interest includes VIEs in which the Company has concluded that it is the primary beneficiary, see Note 5 for further discussion of the Company’s involvement in VIEs, and general account mutual funds where the Company holds the majority interest due to seed money investments.

In 2009, the Company recorded noncontrolling interest as a component of equity. The noncontrolling interest within these entities is likely to change, as these entities represent investment vehicles whereby investors may frequently redeem or contribute to these investments. As such, the change in noncontrolling ownership interest represented in the Company’s Consolidated Statement of Changes in Equity will primarily represent redemptions and additional subscriptions within these investment vehicles.

In 2010, the Company recognized the noncontrolling interest in these entities in other liabilities since these entities represent investment vehicles whereby the noncontrolling interests may redeem these investments at any time.

F-75

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Equity (continued)

Statutory Results (Unaudited)

The domestic insurance subsidiaries of The Hartford prepare their statutory financial statements in conformity with statutory accounting practices prescribed or permitted by the applicable state insurance department which vary materially from U.S. GAAP. Prescribed statutory accounting practices include publications of the National Association of Insurance Commissioners (“NAIC”), as well as state laws, regulations and general administrative rules. The differences between statutory financial statements and financial statements prepared in accordance with U.S. GAAP vary between domestic and foreign jurisdictions. The principal differences are that statutory financial statements do not reflect deferred policy acquisition costs and limit deferred income taxes, life benefit reserves predominately use interest rate and mortality assumptions prescribed by the NAIC, bonds are generally carried at amortized cost and reinsurance assets and liabilities are presented net of reinsurance.

The statutory net income amounts for the years ended December 31, 2011, 2010 and 2009, and the statutory surplus amounts as of December 31, 2011 and 2010 in the table below are based on actual statutory filings with the applicable U.S. regulatory authorities.

	For the years ended December 31,
Statutory Net Income (Loss)	2011			2010			2009
U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries	$	(1,272	)	$	(140	)	$	1,714
Property and casualty insurance subsidiaries		514			1,477			889
Total	$	(758	)	$	1,337		$	2,603

	As of December 31,
Statutory Surplus	2011		2010
U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries	$	7,388	$	7,731
Property and casualty insurance subsidiaries		7,412		7,721
Total	$	14,800	$	15,452

The Company also holds regulatory capital and surplus for its operations in Japan. Under the accounting practices and procedures governed by Japanese regulatory authorities, the Company’s statutory capital and surplus was $1.3 billion, as of December 31, 2011 and 2010.

Dividends from Insurance Subsidiaries

Dividends to the HFSG Holding Company from its insurance subsidiaries are restricted. The payment of dividends by Connecticut-domiciled insurers is limited under the insurance holding company laws of Connecticut. These laws require notice to and approval by the state insurance commissioner for the declaration or payment of any dividend, which, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (i) 10% of the insurer’s policyholder surplus as of December 31 of the preceding year or (ii) net income (or net gain from operations, if such company is a life insurance company) for the twelve-month period ending on the thirty-first day of December last preceding, in each case determined under statutory insurance accounting principles. In addition, if any dividend of a Connecticut-domiciled insurer exceeds the insurer’s earned surplus, it requires the prior approval of the Connecticut Insurance Commissioner. The insurance holding company laws of the other jurisdictions in which The Hartford’s insurance subsidiaries are incorporated (or deemed commercially domiciled) generally contain similar (although in certain instances somewhat more restrictive) limitations on the payment of dividends. Dividends paid to HFSG Holding Company by its life insurance subsidiaries are further dependent on cash requirements of HLI and other factors. The Company’s property-casualty insurance subsidiaries are permitted to pay up to a maximum of approximately $1.4 billion in dividends to HFSG Holding Company in 2012 without prior approval from the applicable insurance commissioner. The Company’s life insurance subsidiaries are permitted to pay up to a maximum of approximately $625 in dividends to HLI in 2012 without prior approval from the applicable insurance commissioner. The aggregate of these amounts is the maximum the insurance subsidiaries could pay to HFSG Holding Company in 2012 without prior approval from the applicable insurance commissioner. In addition to statutory limitations on paying dividends, the Company also takes other items into consideration when determining dividends from subsidiaries. These considerations include, but are not limited to expected earnings and capitalization of the subsidiary, regulatory capital requirements and liquidity requirements of the individual operating company. In 2012, HFSG Holding Company anticipates receiving $800 in dividends from its property-casualty insurance subsidiaries, net of dividends to fund interest payments on an intercompany note between Hartford Holdings, Inc. and Hartford Fire Insurance Company, and no dividends from the life insurance subsidiaries. In 2011, HFSG Holding Company and HLI received $80 in dividends from the life insurance subsidiaries, and HFSG Holding Company received $1.1 billion in dividends from its property-casualty insurance subsidiaries, including $150 reflecting the net realized capital gain on the sale of SRS, $160 related to funding interest payments on an intercompany note between Hartford Holdings Inc. and Hartford Fire Insurance Company and $800 used in conjunction with other resources at the HFSG Holding Company principally to fund dividends, interest, capital contributions to subsidiaries and debt maturities.

F-76

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

16. Accumulated Other Comprehensive Income (Loss), Net of Tax

The components of AOCI were as follows:

				Net Gain						Pension and
				(Loss) on			Foreign			Other			Accumulated
	Unrealized			Cash-Flow			Currency			Postretirement			Other
	Gain (Loss)			Hedging			Translation			Plan			Comprehensive
	on Securities			Instruments			Adjustments			Adjustment			Income (Loss)
For the year ended December 31, 2011
Balance, beginning of year	$	(696	)	$	385		$	488		$	(1,178	)	$	(1,001	)
Unrealized gain on securities [1] [2]		1,979			—			—			—			1,979
Change in other-than-temporary impairment losses recognized in other comprehensive income [1]		9			—			—			—			9
Change in net loss on cash-flow hedging instruments [1] [3]		—			131			—			—			131
Change in foreign currency translation adjustments [1]		—			—			112			—			112
Change in pension and other postretirement plan adjustment [1]		—			—			—			(73	)		(73	)
Balance, end of year	$	1,292		$	516		$	600		$	(1,251	)	$	1,157
For the year ended December 31, 2010
Balance, beginning of year	$	(2,713	)	$	257		$	199		$	(1,055	)	$	(3,312	)
Unrealized gain on securities [1] [2]		1,707			—			—			—			1,707
Change in other-than-temporary impairment losses recognized in other comprehensive income [1]		116			—			—			—			116
Cumulative effect of accounting change		194			—			—			—			194
Change in net loss on cash-flow hedging instruments [1] [3]		—			128			—			—			128
Change in foreign currency translation adjustments [1]		—			—			289			—			289
Change in pension and other postretirement plan adjustment [1]		—			—			—			(123	)		(123	)
Balance, end of year	$	(696	)	$	385		$	488		$	(1,178	)	$	(1,001	)
For the year ended December 31, 2009
Balance, beginning of year	$	(7,486	)	$	644		$	222		$	(900	)	$	(7,520	)
Unrealized gain on securities [1] [2]		5,909			—			—			—			5,909
Change in other-than-temporary impairment losses recognized in other comprehensive income [1]		(224	)		—			—			—			(224	)
Cumulative effect of accounting change		(912	)		—			—			—			(912	)
Change in net loss on cash-flow hedging instruments [1] [3]		—			(387	)		—			—			(387	)
Change in foreign currency translation adjustments [1]		—			—			(23	)		—			(23	)
Change in pension and other postretirement plan adjustment [1]		—			—			—			(155	)		(155	)
Balance, end of year	$	(2,713	)	$	257		$	199		$	(1,055	)	$	(3,312	)

[1] Included in the unrealized gain (loss) balance as of December 31, 2011, 2010 and 2009 was net unrealized gains (losses) credited to policyholders of $(65), $(87), and $(82), respectively. Included in the AOCI components were the following:

• Unrealized gain (loss) on securities is net of tax and deferred acquisition costs of $1,217, $3,574, and $2,358, for the years ended December 31, 2011, 2010 and 2009, respectively.

• Change in other-than-temporary impairment losses recognized in other comprehensive income is net of changes in the fair value of non-credit impaired securities of $112, $647 and $244 for the years ended December 31, 2011, 2010 and 2009, respectively, and net of tax and deferred acquisition costs of $(14). $(113) and $215 for the years ended December 31, 2011, 2010 and 2009, respectively.

• Net gain (loss) on cash-flow hedging instruments is net of tax of $71, $69, and $(208) for the years ended December 31, 2011, 2010 and 2009, respectively.

• Changes in foreign currency translation adjustments are net of tax of $60, $156 and $(12) for the years ended December 31, 2011, 2010 and 2009, respectively.

• Change in pension and other postretirement plan adjustment is net of tax of $(39), $(66), and $(86) for the years ended December 31, 2011, 2010 and 2009, respectively.

[2]	Net of reclassification adjustment for gains (losses) realized in net income of $88, $(78), and $(1,202) for the years ended for the years ended December 31, 2011, 2010 and 2009, respectively.
[3]	Net of amortization adjustment of $125, $94, and $49 to net investment income for the years ended December 31, 2011, 2010 and 2009, respectively.

F-77

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Employee Benefit Plans

The Company maintains a qualified defined benefit pension plan (the “Plan”) that covers substantially all employees. Effective for all employees who joined the Company on or after January 1, 2001, a new component or formula was applied under the Plan referred to as the “cash balance formula”. The Company began using the cash balance formula to calculate future pension benefits for services rendered on or after January 1, 2009 for all employees hired before January 1, 2001. These amounts are in addition to amounts earned by those employees through December 31, 2008 under the traditional final average pay formula.

The Company also maintains non-qualified pension plans to accrue retirement benefits in excess of Internal Revenue Code limitations.

The Company provides certain health care and life insurance benefits for eligible retired employees. The Company’s contribution for health care benefits will depend upon the retiree’s date of retirement and years of service. In addition, the plan has a defined dollar cap for certain retirees which limits average Company contributions. The Hartford has prefunded a portion of the health care obligations through a trust fund where such prefunding can be accomplished on a tax effective basis. Effective January 1, 2002, Company-subsidized retiree medical, retiree dental and retiree life insurance benefits were eliminated for employees with original hire dates with the Company on or after January 1, 2002.

Assumptions

Pursuant to accounting principles related to the Company’s pension and other postretirement obligations to employees under its various benefit plans, the Company is required to make a significant number of assumptions in order to calculate the related liabilities and expenses each period. The two economic assumptions that have the most impact on pension and other postretirement expense are the discount rate and the expected long-term rate of return on plan assets. In determining the discount rate assumption, the Company utilizes a discounted cash flow analysis of the Company’s pension and other postretirement obligations and currently available market and industry data. The yield curve utilized in the cash flow analysis is comprised of bonds rated Aa or higher with maturities primarily between zero and thirty years. Based on all available information, it was determined that 4.75% and 4.50% were the appropriate discount rates as of December 31, 2011 to calculate the Company’s pension and other postretirement obligations, respectively. Accordingly, the 4.75% and 4.50% discount rates will also be used to determine the Company’s 2012 pension and other postretirement expense, respectively.

The Company determines the expected long-term rate of return assumption based on an analysis of the Plan portfolio’s historical compound rates of return since 1979 (the earliest date for which comparable portfolio data is available) and over 5 year and 10 year periods. The Company selected these periods, as well as shorter durations, to assess the portfolio’s volatility, duration and total returns as they relate to pension obligation characteristics, which are influenced by the Company’s workforce demographics. In addition, the Company also applies long-term market return assumptions to an investment mix that generally anticipates 60% fixed income securities, 20% equity securities and 20% alternative assets to derive an expected long-term rate of return. Based upon these analyses, management maintained the long-term rate of return assumption at 7.30% as of December 31, 2011. This assumption will be used to determine the Company’s 2012 expense.

Weighted average assumptions used in calculating the benefit obligations and the net amount recognized for the years ended December 31, 2011 and 2010 were as follows:

	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011			2010
Discount rate		4.75	%		5.50	%		4.50	%		5.25	%
Rate of increase in compensation levels		3.75	%		4.00	%		N/A			N/A

F-78

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Employee Benefit Plans (continued)

Weighted average assumptions used in calculating the net periodic benefit cost for the Company’s pension plans were as follows:

	For the years ended December 31,
	2011			2010			2009
Discount rate		5.50	%		6.00	%		6.25	%
Expected long-term rate of return on plan assets		7.30	%		7.30	%		7.30	%
Rate of increase in compensation levels		4.00	%		4.00	%		4.25	%

Weighted average assumptions used in calculating the net periodic benefit cost for the Company’s other postretirement plans were as follows:

	For the years ended December 31,
	2011			2010			2009
Discount rate		5.25	%		5.75	%		6.25	%
Expected long-term rate of return on plan assets		7.30	%		7.30	%		7.30	%

Assumed health care cost trend rates were as follows:

	As of December 31,
	2011			2010			2009
Pre-65 health care cost trend rate		8.95	%		9.70	%		9.05	%
Post-65 health care cost trend rate		7.75	%		8.25	%		7.60	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.00	%		5.00	%		5.00	%
Year that the rate reaches the ultimate trend rate		2019			2018			2018

A one-percentage point change in assumed health care cost trend rates would have an insignificant effect on the amounts reported for other postretirement plans.

F-79

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Employee Benefit Plans (continued)

Obligations and Funded Status

The following tables set forth a reconciliation of beginning and ending balances of the benefit obligation and fair value of plan assets, as well as the funded status of The Hartford’s defined benefit pension and postretirement health care and life insurance benefit plans for the years ended December 31, 2011 and 2010. International plans represent an immaterial percentage of total pension assets, liabilities and expense and, for reporting purposes, are combined with domestic plans.

During 2010 the amount of lump sum benefit payments exceeded the amount of service and interest cost in the Company’s non-qualified pension plan resulting in a settlement. The settlement below represents lump sum payments made from the non-qualified pension plan in 2010.

In addition to the discount rate change, the Company’s benefit obligation also increased due to the use of an updated mortality table.

							Other Postretirement
	Pension Benefits						Benefits
Change in Benefit Obligation	2011			2010			2011			2010
Benefit obligation — beginning of year	$	4,795		$	4,283		$	408		$	401
Service cost (excluding expenses)		102			102			5			7
Interest cost		259			252			20			22
Plan participants’ contributions		—			—			18			15
Actuarial loss (gain)		43			86			(15	)		(7	)
Settlements		—			(43	)		—			—
Change in assumptions		497			348			37			17
Benefits paid		(230	)		(234	)		(52	)		(49	)
Retiree drug subsidy		—			—			3			2
Foreign exchange adjustment		(1	)		1						—
Benefit obligation — end of year	$	5,465		$	4,795		$	424		$	408

							Other Postretirement
	Pension Benefits						Benefits
Change in Plan Assets	2011			2010			2011			2010
Fair value of plan assets — beginning of year	$	3,922		$	3,526		$	190		$	175
Actual return on plan assets		613			434			13			15
Employer contributions		201			201			—			—
Benefits paid		(210	)		(228	)		—			—
Expenses paid		(12	)		(12	)		—			—
Foreign exchange adjustment		(1	)		1			—			—
Fair value of plan assets — end of year	$	4,513		$	3,922		$	203		$	190
Funded status — end of year	$	(952	)	$	(873	)	$	(221	)	$	(218	)

F-80

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Employee Benefit Plans (continued)

The fair value of assets for pension benefits, and hence the funded status, presented in the table above exclude assets of $109 and $107 held in rabbi trusts and designated for the non-qualified pension plans as of December 31, 2011 and 2010, respectively. The assets do not qualify as plan assets; however, the assets are available to pay benefits for certain retired, terminated and active participants. Such assets are available to the Company’s general creditors in the event of insolvency. The assets consist of equity and fixed income investments. To the extent the fair value of these rabbi trusts were included in the table above, pension plan assets would have been $4,622 and $4,029 as of December 31, 2011 and 2010, respectively, and the funded status of pension benefits would have been $(843) and $(766) as of December 31, 2011 and 2010, respectively.

The accumulated benefit obligation for all defined benefit pension plans was $5,413 and $4,753 as of December 31, 2011 and 2010, respectively.

The following table provides information for The Hartford’s defined benefit pension plans with an accumulated benefit obligation in excess of plan assets as of December 31, 2011 and 2010.

	December 31,
	2011		2010
Projected benefit obligation	$	5,441	$	4,771
Accumulated benefit obligation		5,394		4,733
Fair value of plan assets		4,492		3,901

Amounts recognized in the Consolidated Balance Sheets consist of:

	Pension Benefits				Other Postretirement Benefits
	2011		2010		2011		2010
Other Assets
Noncurrent assets	$	—	$	—	$	—	$	—
Other Liabilities
Current liabilities		21		19		34		34
Noncurrent liabilities		931		854		187		184
Total	$	952	$	873	$	221	$	218

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income (Loss)

In the Company’s non-qualified pension plan the amount of lump sum benefit payments exceeded the amount of service and interest cost for the year ended December 31, 2010. As a result, the Company recorded settlement expense of $20 to recognize the actuarial loss associated with the pro-rata portion of the obligation that has been settled.

Total net periodic benefit cost for the years ended December 31, 2011, 2010 and 2009 include the following components:

	Pension Benefits									Other Postretirement Benefits
	2011			2010			2009			2011			2010			2009
Service cost	$	102		$	102		$	105		$	5		$	7		$	6
Interest cost		259			252			243			20			22			24
Expected return on plan assets		(298	)		(286	)		(276	)		(14	)		(13	)		(11	)
Amortization of prior service credit		(9	)		(9	)		(9	)		(1	)		(1	)		(1	)
Amortization of actuarial loss		159			107			74			—			—			—
Settlements		—			20			—			—			—			—
Net periodic benefit cost	$	213		$	186		$	137		$	10		$	15		$	18

Amounts recognized in other comprehensive income (loss) for the years ended December 31, 2011 and 2010 were as follows:

	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011		2010
Amortization of actuarial loss	$	(159	)	$	(107	)	$	—	$	—
Settlement loss		—			(20	)		—		—
Amortization of prior service credit		9			9			1		1
Net loss arising during the year		237			298			24		7
Total	$	87		$	180		$	25	$	8

F-81

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Employee Benefit Plans (continued)

Amounts in accumulated other comprehensive income (loss) on a before tax basis that have not yet been recognized as components of net periodic benefit cost consist of:

	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011		2010
Net loss	$	1,930		$	1,852		$	39	$	17
Prior service credit		(21	)		(30	)		1		—
Transition obligation		—			—			2		—
Total	$	1,909		$	1,822		$	42	$	17

The estimated net loss and prior service credit for the defined benefit pension plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost during 2012 are $216 and $(9), respectively. The estimated net loss for the other postretirement benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost during 2012 is $(1). The estimated prior service credit for the other postretirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost during 2012 is an insignificant amount.

Plan Assets

Investment Strategy and Target Allocation

The overall investment strategy of the Plan is to maximize total investment returns to provide sufficient funding for present and anticipated future benefit obligations within the constraints of a prudent level of portfolio risk and diversification. With respect to asset management, the oversight responsibility of the Plan rests with The Hartford’s Pension Fund Trust and Investment Committee composed of individuals whose responsibilities include establishing overall objectives and the setting of investment policy; selecting appropriate investment options and ranges; reviewing the asset allocation mix and asset allocation targets on a regular basis; and monitoring performance to determine whether or not the rate of return objectives are being met and that policy and guidelines are being followed. The Company believes that the asset allocation decision will be the single most important factor determining the long-term performance of the Plan.

The Company’s pension plan and other postretirement benefit plans’ target allocation by asset category is presented in the table below.

	Target Asset Allocation
	Pension Plans			Other Postretirement Plans
Equity securities		10% – 32	%		15% – 35	%
Fixed income securities		50% – 70	%		55% – 85	%
Alternative assets		10% – 25	%		—

Divergent market performance among different asset classes may, from time to time, cause the asset allocation to deviate from the desired asset allocation ranges. The asset allocation mix is reviewed on a periodic basis. If it is determined that an asset allocation mix rebalancing is required, future portfolio additions and withdrawals will be used, as necessary, to bring the allocation within tactical ranges.

The Company’s pension plan and other postretirement benefit plans’ weighted average asset allocation at December 31, 2011 and 2010 is presented in the table below.

	Percentage of Pension Plans Assets						Percentage of Other Postretirement Plans
	At Fair Value as of December 31,						Assets at Fair Value as of December 31,
	2011			2010			2011			2010
Equity securities		20	%		22	%		22	%		22	%
Fixed income securities		62	%		61	%		78	%		78	%
Alternative Assets		18	%		17	%		—			—
Total		100	%		100	%		100	%		100	%

The Plan assets are invested primarily in separate portfolios managed by HIMCO, a wholly-owned subsidiary of the Company. These portfolios encompass multiple asset classes reflecting the current needs of the Plan, the investment preferences and risk tolerance of the Plan and the desired degree of diversification. These asset classes include publicly traded equities, bonds and alternative investments and are made up of individual investments in cash and cash equivalents, equity securities, debt securities, asset-backed securities and hedge funds. Hedge fund investments represent a diversified portfolio of partnership investments in absolute-return investment strategies.

In addition, the Company uses U.S. Treasury bond futures contracts and U.S. Treasury STRIPS in a duration overlay program to adjust the duration of Plan assets to better match the duration of the benefit obligation.

Investment Valuation

For further discussion on the valuation of investments, see Note 4.

F-82

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Employee Benefit Plans (continued)

Pension Plan Assets

The fair values of the Company’s pension plan assets at December 31, 2011, by asset category are as follows:

	Pension Plan Assets at Fair Value as of December 31, 2011
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments:	$	119	$	549	$	—	$	668
Fixed Income Securities:
Corporate		—		741		3		744
RMBS		—		334		11		345
U.S. Treasuries		59		819		—		878
Foreign government		—		53		3		56
CMBS		—		117		—		117
Other fixed income [1]		—		70		4		74
Equity Securities:
Large-cap domestic		—		570		—		570
Mid-cap domestic		52		—		—		52
Small-cap domestic		38		—		—		38
International		217		—		—		217
Other equities		—		1		—		1
Other investments:
Hedge funds		—		—		759		759
Total pension plan assets at fair value [2]	$	485	$	3,254	$	780	$	4,519

[1]	Includes ABS and municipal bonds.
[2]	Excludes approximately $43 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $37 of interest receivable carried at fair value.

The fair values of the Company’s pension plan assets at December 31, 2010, by asset category are as follows:

	Pension Plan Assets at Fair Value as of December 31, 2010
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments: [1]	$	75	$	406	$	—	$	481
Fixed Income Securities:
Corporate		—		882		3		885
RMBS		—		450		9		459
U.S. Treasuries		7		330		—		337
Foreign government		—		61		2		63
CMBS		—		174		1		175
Other fixed income [2]		—		56		7		63
Equity Securities:
Large-cap domestic		—		496		—		496
Mid-cap domestic		62		—		—		62
Small-cap domestic		47		—		—		47
International		248		—		—		248
Other investments:
Hedge funds		—		—		635		635
Total pension plan assets at fair value [3]	$	439	$	2,855	$	657	$	3,951

[1]	Includes $30 of initial margin requirements related to the Plan’s duration overlay program.
[2]	Includes ABS and municipal bonds.
[3]	Excludes approximately $61 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $32 of interest receivable carried at fair value.

F-83

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Employee Benefit Plans (continued)

The tables below provide a fair value level 3 roll forward for the twelve months ended December 31, 2011 and 2010 for the Pension Plan Assets for which significant unobservable inputs (Level 3) are used in the fair value measurement on a recurring basis. The Plan classifies the fair value of financial instruments within Level 3 if there are no observable markets for the instruments or, in the absence of active markets, if one or more of the significant inputs used to determine fair value are based on the Plan’s own assumptions. Therefore, the gains and losses in the tables below include changes in fair value due partly to observable and unobservable factors.

Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
							Foreign			Other fixed			Hedge
Assets	Corporate			RMBS			government			income			funds			Totals
Fair Value as of January 1, 2011	$	3		$	9		$	2		$	8		$	635		$	657
Actual return on plan assets
Relating to assets still held at the reporting date		1			—			—			2			21			24
Purchases		2			10			3			1			223			239
Sales		(1	)		(9	)		(2	)		(4	)		(120	)		(136	)
Transfers into Level 3		1			1			6			2			—			10
Transfers out of Level 3		(3	)		—			(6	)		(5	)		—			(14	)
Fair Value as of December 31, 2011	$	3		$	11		$	3		$	4		$	759		$	780

The transfers in and out of level 3 were due to a change in the pricing source.

Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
										Other fixed
							Foreign			income and			Hedge
Assets	Corporate			RMBS			government			CMBS			funds			Totals
Fair Value as of January 1, 2010	$	12		$	24		$	2		$	8		$	501		$	547
Actual return on plan assets
Relating to assets still held at the reporting date		(1	)		—			—			1			29			29
Relating to assets sold during the period		1			—			—			—			4			5
Purchases		6			62			2			9			200			279
Sales		(12	)		(77	)		—			(5	)		(99	)		(193	)
Transfers into Level 3		2			—			—			2			—			4
Transfers out of Level 3		(5	)		—			(2	)		(7	)		—			(14	)
Fair Value as of December 31, 2010	$	3		$	9		$	2		$	8		$	635		$	657

There was no Company common stock included in the Plan’s assets as of December 31, 2011 and 2010.

F-84

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Employee Benefit Plans (continued)

Other Postretirement Plan Assets

The fair value of the Company’s other postretirement plan assets at December 31, 2011, by asset category are as follows:

	Other Postretirement Plan Assets
	at Fair Value as of December 31, 2011
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments	$	—	$	9	$	—	$	9
Fixed Income Securities:
Corporate		—		53		—		53
RMBS		—		48		—		48
U.S. Treasuries		—		28		—		28
Foreign government		—		2		—		2
CMBS		—		18		—		18
Other fixed income		—		4		—		4
Equity Securities:
Large-cap		—		43		—		43
Total other postretirement plan assets at fair value [1]	$	—	$	205	$	—	$	205

[1] Excludes approximately $3 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $1 of interest receivable carried at fair value.

The fair value of the Company’s other postretirement plan assets at December 31, 2010, by asset category are as follows:

	Other Postretirement Plan Assets
	at Fair Value as of December 31, 2010
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments	$	—	$	10	$	—	$	10
Fixed Income Securities:
Corporate		—		57		—		57
RMBS		—		44		—		44
U.S. Treasuries		—		19		—		19
CMBS		—		17		—		17
Other fixed income		—		6		—		6
Equity Securities:
Large-cap		—		43		—		43
Total other postretirement plan assets at fair value [1]	$	—	$	196	$	—	$	196

[1] Excludes approximately $7 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $1 of interest receivable carried at fair value.

There was no Company common stock included in the other postretirement benefit plan assets as of December 31, 2011 and 2010.

Concentration of Risk

In order to minimize risk, the Plan maintains a listing of permissible and prohibited investments. In addition, the Plan has certain concentration limits and investment quality requirements imposed on permissible investment options. Permissible investments include U.S. equity, international equity, alternative asset and fixed income investments including derivative instruments. Derivative instruments include future contracts, options, swaps, currency forwards, caps or floors and will be used to control risk or enhance return but will not be used for leverage purposes.

Securities specifically prohibited from purchase include, but are not limited to: shares or fixed income instruments issued by The Hartford, short sales of any type within long-only portfolios, non-derivative securities involving the use of margin, leveraged floaters and inverse floaters, including money market obligations, natural resource real properties such as oil, gas or timber and precious metals.

Other than U.S. government and certain U.S. government agencies backed by the full faith and credit of the U.S. government, the Plan does not have any material exposure to any concentration risk of a single issuer.

F-85

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17. Employee Benefit Plans (continued)

Cash Flows

The following table illustrates the Company’s prior contributions.

Employer Contributions	Pension Benefits		Other Postretirement Benefits
2011	$	201	$	—
2010	$	201		—

In 2011, the Company, at its discretion, made $200 in contributions to the U.S. qualified defined benefit pension plan. The Company presently anticipates contributing approximately $200 to its U.S. qualified defined benefit pension plan in 2012 based upon certain economic and business assumptions. These assumptions include, but are not limited to, equity market performance, changes in interest rates and the Company’s other capital requirements. For 2012, the Company does not have a required minimum funding contribution for the Plan and the funding requirements for all of the pension plans are expected to be immaterial.

Employer contributions in 2011 and 2010 were made in cash and did not include contributions of the Company’s common stock.

Benefit Payments

The following table sets forth amounts of benefits expected to be paid over the next ten years from the Company’s pension and other postretirement plans as of December 31, 2011:

	Pension Benefits		Other Postretirement Benefits
2012	$	272	$	38
2013		291		40
2014		309		40
2015		325		40
2016		341		39
2017-2021		1,888		183
Total	$	3,426	$	380

In addition, the following table sets forth amounts of other postretirement benefits expected to be received under the Medicare Part D Subsidy over the next ten years as of December 31, 2011:

2012	$	4
2013		4
2014		5
2015		4
2016		5
2017-2021		31
Total	$	53

Investment and Savings Plan

Substantially all U.S. employees are eligible to participate in The Hartford’s Investment and Savings Plan under which designated contributions may be invested in common stock of The Hartford or certain other investments. These contributions are matched, up to 3% of base salary, by the Company. In 2011, employees who had earnings of less than $110,000 in the preceding year received a contribution of 1.5% of base salary and employees who had earnings of $110,000 or more in the preceding year received a contribution of 0.5% of base salary. The cost to The Hartford for this plan was approximately $59, $62, and $64 for 2011, 2010, and 2009, respectively. Additionally, The Hartford has established defined contribution pension plans for certain employees of the Company’s international subsidiaries. Under this plan, the Company contributes 5% of base salary to the participant accounts. The cost to The Hartford in 2011, 2010, and 2009 for this plan was $1, $1 and $2, respectively.

F-86

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

18. Stock Compensation Plans

The Company has three primary stock-based compensation plans which are described below. Shares issued in satisfaction of stock-based compensation may be made available from authorized but unissued shares, shares held by the Company in treasury or from shares purchased in the open market. In 2011 and 2010, the Company issued shares from treasury in satisfaction of stock-based compensation.

	For the year ended December 31,
	2011			2010			2009
Stock-based compensation plans expense	$	53		$	94		$	72
Income tax benefit		(19	)		(33	)		(20	)
Total stock-based compensation plans expense, after-tax	$	34		$	61		$	52

The Company did not capitalize any cost of stock-based compensation. As of December 31, 2011, the total compensation cost related to non-vested awards not yet recognized was $60, which is expected to be recognized over a weighted average period of 1.5 years.

Stock Plan

On May 19, 2010 at the Company’s Annual Meeting of Shareholders, the shareholders of The Hartford approved The Hartford 2010 Incentive Stock Plan (the “2010 Stock Plan”), which supersedes and replaces The Hartford 2005 Incentive Stock Plan. The terms of the 2010 Stock Plan are substantially similar to the terms of the superseded plan. However, the 2010 Stock Plan provides for an increased maximum number of shares that may be awarded to employees of the Company, to non-employee members of the Board of Directors of the Company and also permits awards to be made to third party service providers, and permits additional forms of stock-based awards.

The 2010 Stock Plan provides for awards to be granted in the form of non-qualified or incentive stock options qualifying under Section 422 of the Internal Revenue Code, stock appreciation rights, performance shares, restricted stock or restricted stock units, or any other form of stock-based award. The aggregate number of shares of stock, which may be awarded, is subject to a maximum limit of 18,000,000 shares applicable to all awards for the ten-year duration of the 2010 Stock Plan. If any award under the prior The Hartford Incentive Stock Plan (as approved by the Company’s shareholders in 2000) or under the prior The Hartford 2005 Incentive Stock Plan (as approved by the Company’s shareholders in 2005) that was outstanding as of March 31, 2010, is forfeited, terminated, surrendered, exchanged, expires unexercised, or is settled in cash in lieu of stock (including to effect tax withholding) or for the net issuance of a lesser number of shares than the number subject to the award, the shares of stock subject to such award (or the relevant portion thereof) shall be available for awards under the 2010 Stock Plan and such shares shall be added to the maximum limit. As of December 31, 2011, there were 14,652,180 shares available for future issuance.

The fair values of awards granted under the 2010 Stock Plan are measured as of the grant date and expensed ratably over the awards’ vesting periods, generally three years. For stock option awards granted or modified in 2006 and later, the Company began expensing awards to retirement-eligible employees immediately or over a period shorter than the stated vesting period because the employees receive accelerated vesting upon retirement and therefore the vesting period is considered non-substantive. All awards provide for accelerated vesting upon a change in control of the Company as defined in the 2010 Stock Plan.

F-87

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

18. Stock Compensation Plans (continued)

Stock Option Awards

Under the 2010 Stock Plan, all options granted have an exercise price at least equal to the market price of the Company’s common stock on the date of grant, and an option’s maximum term is not to exceed ten years. Under the 2010 Stock Plan, options will generally become exercisable as determined at the time of grant. For any year, no individual employee may receive an award of options for more than 2,000,000 shares under the 2010 Stock Plan. Under the 2005 Stock Plan, certain options become exercisable over a three year period commencing one year from the date of grant, while certain other options become exercisable at the later of three years from the date of grant or upon specified market appreciation of the Company’s common shares.

The Company uses a hybrid lattice/Monte-Carlo based option valuation model (the “valuation model”) that incorporates the possibility of early exercise of options into the valuation. The valuation model also incorporates the Company’s historical termination and exercise experience to determine the option value.

The valuation model incorporates ranges of assumptions for inputs, and therefore, those ranges are disclosed below. The term structure of volatility is generally constructed utilizing implied volatilities from exchange-traded options and CPP warrants related to the Company’s stock, historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercise and employee termination within the valuation model, and accommodates variations in employee preference and risk-tolerance by segregating the grantee pool into a series of behavioral cohorts and conducting a fair valuation for each cohort individually. The expected term of options granted is derived from the output of the option valuation model and represents, in a mathematical sense, the period of time that options are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Constant Maturity Treasury yield curve in effect at the time of grant. There were no stock option awards granted in 2010.

	For the year ended December 31,
	2011	2009
Expected dividend yield	1.3%	3.2%
Expected annualized spot volatility	35.8% – 47.1%	57.8% – 57.8%
Weighted average annualized volatility	41.7%	57.8%
Risk-free spot rate	0.1% – 3.5%	0.3% – 4.2%
Expected term	5.7 years	7.3 years

A summary of the status of non-qualified stock options included in the Company’s Stock Plans as of December 31, 2011 and changes during the year ended December 31, 2011 is presented below:

						Weighted
						Average
				Weighted		Remaining
	Number of Options			Average		Contractual		Aggregate
	(in thousands)			Exercise Price		Term		Intrinsic Value
Outstanding at beginning of year		5,279		$	52.90		2.9	$	—
Granted		1,189			27.90
Exercised		(232	)		15.41
Forfeited		(537	)		44.09
Expired		(860	)		62.11
Outstanding at end of year		4,839			47.89		3.7		—
Exercisable at end of year		3,641		$	55.52		2.0		—

The weighted average grant-date fair value of options granted during the years ended December 31, 2011, 2010 and 2009 was $10.76, $0 and $3.06, respectively. The total intrinsic value of options exercised during the years ended December 31, 2011, 2010 and 2009 was $2, $1, and $0, respectively.

F-88

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

18. Stock Compensation Plans (continued)

Share Awards

Share awards are valued equal to the market price of the Company’s common stock on the date of grant, less a discount for those awards that do not provide for dividends during the vesting period. Share awards granted under the Stock Plans and outstanding include restricted stock units, restricted stock and performance shares. Generally, restricted stock units vest at or over three years and restricted stock vests in three to five years. Performance shares become payable within a range of 0% to 200% of the number of shares initially granted based upon the attainment of specific performance goals achieved over a specified period, generally three years. The maximum award of restricted stock units, restricted stock or performance shares for any individual employee in any year under the 2010 Stock Plan is 500,000 shares or units.

A summary of the status of the Company’s non-vested share awards as of December 31, 2011, and changes during the year ended December 31, 2011, is presented below:

	Shares			Weighted-Average
Non-vested Shares	(in thousands)			Grant-Date Fair Value
Non-vested at beginning of year		1,889		$	35.83
Granted		3,400			28.22
Decrease for change in estimated performance factors		(232	)		—
Vested		(637	)		46.00
Forfeited		(256	)		34.14
Non-vested at end of year		4,164		$	27.60

The total fair value of shares vested during the years ended December 31, 2011, 2010 and 2009 was $20, $13 and $8, respectively, based on estimated performance factors. The Company did not make cash payments in settlement of stock compensation during the years ended December 31, 2011 and 2010 and 2009.

Restricted Unit awards

In 2010 and 2009, The Hartford issued restricted units as part of The Hartford’s 2005 Stock Plan. Restricted stock unit awards under the plan have historically been settled in shares, but under this award will be settled in cash and are thus referred to as “Restricted Units”. The economic value recipients will ultimately realize will be identical to the value that would have been realized if the awards had been settled in shares, i.e., upon settlement, recipients will receive cash equal to The Hartford’s share price multiplied by the number of restricted units awarded. Because Restricted Units will be settled in cash, the awards are remeasured at the end of each reporting period until settlement. Awards granted in 2009 vest after a three year period. Awards granted in 2010 include both graded and cliff vesting restricted units which vest over a three year period. The graded vesting attribution method is used to recognize the expense of the award over the requisite service period. For example, the graded vesting attribution method views one three-year grant with annual graded vesting as three separate sub-grants, each representing one third of the total number of awards granted. The first sub-grant vests over one year, the second sub-grant vests over two years and the third sub-grant vests over three years.

There were no restricted units awarded for 2011. For the year ended December 31, 2010, 2,983 restricted units were granted, and the weighted-average grant-date fair value was $24.34. As of December 31, 2011 and 2010, 5,319 and 6,812 were non-vested, respectively.

Deferred Stock Unit Plan

Effective July 31, 2009, the Compensation and Management Development Committee of the Board authorized The Hartford Deferred Stock Unit Plan (“Deferred Stock Unit Plan”), and, on October 22, 2009, it was amended. The Deferred Stock Unit Plan provides for contractual rights to receive cash payments based on the value of a specified number of shares of stock. The Deferred Stock Unit Plan provides for two award types, Deferred Units and Restricted Units. Deferred Units are earned ratably over a year, based on the number of regular pay periods occurring during such year. Deferred Units are credited to the participants account on a quarterly basis based on the market price of the Company’s common stock on the date of grant and are fully vested at all times. Deferred Units credited to employees prior to January 1, 2010 (other than senior executive officers hired on or after October 1, 2009) are not paid until after two years from their grant date. Deferred Units credited on or after January 1, 2010 (and any credited to senior executive officers hired on or after October 1, 2009) are paid in three equal installments after the first, second and third anniversaries of their grant date. Restricted Units are intended to be incentive compensation and unlike Deferred Units, vest over time, generally three years, and are subject to forfeiture. The Deferred Stock Unit Plan is structured consistent with the limitations and restrictions on employee compensation arrangements imposed by the Emergency Economic Stabilization Act of 2008 and the TARP Standards for Compensation and Corporate Governance Interim Final Rule issued by the U.S. Department of Treasury on June 10, 2009.

There were no deferred stock units awarded in 2011.

F-89

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

18. Stock Compensation Plans (continued)

A summary of the status of the Company’s non-vested awards under the Deferred Stock Unit Plan as of December 31, 2011, is presented below:

	Restricted Units			Weighted-Average
Non-vested Units	(in thousands)			Grant-Date Fair Value
Non-vested at beginning of year		648		$	24.70
Granted		—			—
Vested		(49	)		24.27
Forfeited		(108	)		24.31
Non-vested at end of year		491		$	24.84

Employee Stock Purchase Plan

In 1996, the Company established The Hartford Employee Stock Purchase Plan (“ESPP”). Beginning in 2010 under this plan, eligible employees of The Hartford purchased common stock of the Company at a discount rate of 5% of the market price per share on the last trading day of the offering period. In 2009 and prior years, eligible employees of The Hartford purchased common stock of the Company at a 15% discount from the lower of the closing market price at the beginning or end of the offering period. Employees purchase a variable number of shares of stock through payroll deductions elected as of the beginning of the offering period. The Company may sell up to 15,400,000 shares of stock to eligible employees under the ESPP. As of December 31, 2011, there were 6,472,280 shares available for future issuance. During the years ended December 31, 2011, 2010 and 2009, 768,380, 729,598, and 2,557,893 shares were sold, respectively. The weighted average per share fair value of the discount under the ESPP was $1.03, $1.24 and $5.99 during the years ended December 31, 2011, 2010 and 2009, respectively. In 2011 and 2010, the fair value is estimated based on the 5% discount off the market price per share on the last trading day of the offering period. In 2009 and prior years, the fair value was estimated based on the 15% discount off of the beginning stock price plus the value of six-month European call and put options on shares of stock at the beginning stock price calculated using the Black-Scholes model and the following weighted average valuation assumptions:

	For the year ended
	December 31,
	2009
Dividend yield		1.4	%
Implied volatility		91.4	%
Risk-free spot rate		0.3	%
Expected term	6 months

Implied volatility was derived from exchange-traded options on the Company’s stock. The risk-free rate is based on the U.S. Constant Maturity Treasury yield curve in effect at the time of grant. The total intrinsic value of the discounts at purchase was $5 for the year ended December 31, 2009. Additionally, The Hartford has established employee stock purchase plans for certain employees of the Company’s international subsidiaries. Under these plans, participants may purchase common stock of The Hartford at a fixed price. The activity under these programs is not material.

F-90

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

19. Sale of Assets, Joint Venture and Subsidiary

Servicing Agreement of Hartford Life Private Placement LLC

On November 22, 2011, the Company entered into an agreement with Philadelphia Financial Group, Inc. (“Philadelphia Financial”) whereby Philadelphia Financial will acquire certain assets that are used to administer the Company’s private placement life insurance (“PPLI”) businesses currently administered by Hartford Life Private Placement, LLC (“HLPP”), a subsidiary of the Company. The PPLI business administered by HLPP includes life insurance owned by banks, corporations and high net worth individuals, and group annuity policies. The transaction is expected to close in the second quarter of 2012, subject to regulatory approvals and closing conditions. Upon closing, Philadelphia Financial and the Company will enter into a servicing agreement whereby Philadelphia Financial will service the PPLI businesses administered by HLPP. The Company will retain certain corporate functions associated with this business as well as the mortality risk on the insurance policies. Under the terms of the transaction, Philadelphia Financial will receive certain future income from the policies and pay the Company $118 at closing, resulting in an estimated deferred gain between $65and $75 after-tax, which will be amortized over the estimated life of the underlying insurance policies. The actual amount may be different. The deferred gain is not expected to have a material impact on the Company’s results of operations in future periods. The assets and liabilities of the PPLI business are included in the Life Other Operations segment.

Sale of Joint Venture Interest in ICATU Hartford Seguros, S.A.

On November 23, 2009, the Company entered into a Share Purchase Agreement to sell its joint venture interest in ICATU Hartford Seguros, S.A. (“IHS”), its Brazilian insurance operation, to its partner, ICATU Holding S.A., for $135. The transaction closed in 2010, and the Company received cash proceeds of $130, which was net of capital gains tax withheld of $5. The investment in IHS was reported as an equity method investment in Other assets. As a result of the Share Purchase Agreement, the Company recorded in 2009, an asset impairment charge, net of unrealized capital gains and foreign currency translation adjustments, in net realized capital losses of $44, after-tax.

Sale of First State Management Group

On March 31, 2009, the Company sold First State Management Group, Inc. (“FSMG”), its core excess and surplus lines property business, to Beazley Group PLC (“Beazley”) for $27, resulting in a gain on sale of $12, after-tax. Included in the sale was approximately $4 in net assets of FSMG. The net assets sold to Beazley did not include invested assets, unearned premium or deferred policy acquisition costs related to the in-force book of business. Rather, the in-force book of business was ceded to Beazley under a separate reinsurance agreement, whereby the Company ceded $26 of unearned premium, net of $10 in ceding commission. Under the terms of the purchase and sale agreement, the Company continues to be obligated for all losses and loss adjustment expenses incurred on or before March 31, 2009. The retained net loss and loss adjustment expense reserves totaled $66 and $87 as of December 31, 2011 and 2010, respectively.

See Note 20 for sale of subsidiaries that met the criteria for discontinued operations.

F-91

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

20. Discontinued Operations

On November 1, 2011, the Company completed a merger with CenterState Banks, Inc. (“CBI”), pursuant to which Federal Trust Corporation (“FTC”), a wholly owned subsidiary of the Company, was merged with and into CBI, and Federal Trust Bank (“FTB”), a federally chartered, FDIC-insured thrift and wholly owned subsidiary of FTC, was merged with and into CenterState Bank of Florida, N.A. (“CenterState Bank”), a wholly owned subsidiary of CBI. At the time of the mergers, FTC and FTB held net assets including cash, certain mortgage loans, property and other assets equivalent to liabilities assumed including deposits and other liabilities, totaling approximately $200. The Company recorded an after-tax charge of $74 to net realized capital losses in the second quarter of 2011 for the estimated loss on disposal, including the write off of remaining goodwill of $10, after-tax, and losses on certain FTC and FTB assets and liabilities, which were not transferred to CenterState Bank. Upon final closing with CBI, the Company recorded a benefit of $6, after tax, in the fourth quarter of 2011 related to the divestiture. The Company purchased certain assets and assumed certain liabilities from FTC and FTB that were not part of the transactions with CBI and CenterState Bank on November 1, 2011. As of December 31, 2011, the carrying value of those assets and liabilities were $3, and $19, respectively and included in other assets and other liabilities. The Company anticipates disposing of these assets and liabilities within twelve months after closing, and thus any income or expense related to these assets and liabilities will be temporary in nature. FTC is included in the Corporate category for segment reporting.

In the first quarter of 2011, the Company completed the sale of its wholly-owned subsidiary Specialty Risk Services (“SRS”) and recorded a net realized capital gain of $150, after-tax. SRS is a third-party claims administration business that provides self-insured, insured, and alternative market clients with customized claims services. The Company is required to provide certain services to SRS for up to 24 months under a Transition Services Agreement. During the fourth quarter 2011 the Company recorded a charge of $4, after-tax, attributed to asset disposals. SRS is included in the Property & Casualty Commercial reporting segment.

In addition, during the fourth quarter of 2010, the Company completed the sales of its indirect wholly-owned subsidiaries Hartford Investments Canada Corporation (“HICC”) and Hartford Advantage Investment, Ltd. (“HAIL”) and recorded net realized gains (losses) of $41 and $(4), respectively. HICC and HAIL were transferred from Mutual Funds to Life Other Operations, effective January 1, 2009. HICC was transferred from Life Other Operations to Mutual Funds, effective January 1, 2010.

The following table summarizes the amounts related to discontinued operations in the Consolidated Statements of Operations.

	For the years ended December 31,
	2011			2010			2009
Revenues
Fee income and other	$	—		$	36		$	29
Net investment income		17			28			14
Net realized capital gains (losses)		(6	)		(5	)		(6	)
Other revenues		48			213			231
Total revenues		59			272			268
Benefits, losses and expenses
Amortization of deferred policy acquisition costs and present value of future profits		—			17			10
Insurance operating and other expenses		54			256			265
Goodwill Impairment		—			153			—
Total benefits, losses and expenses		54			426			275
Income (loss) before income taxes		5			(154	)		(7	)
Income tax expense (benefit)		1			(53	)		(3	)
Income (loss) from operations of discontinued operations, net of tax		4			(101	)		(4	)
Net realized capital gain on disposal, net of tax		82			37			—
Income (loss) from discontinued operations, net of tax	$	86		$	(64	)	$	(4	)

F-92

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

21. Restructuring, Severance and Other Costs

During the year ended December 31, 2011, the Company implemented restructuring activities across several areas aimed at reducing overall expense levels.

During the year ended December 31, 2009, the Company completed a review of several strategic alternatives with a goal of preserving capital, reducing risk and stabilizing its ratings. These alternatives included the potential restructuring, discontinuation or disposition of various business lines. Following that review, the Company announced that it would suspend all new sales in the Japanese and European operations currently included in the Life Other Operations segment. The Company has also executed on plans to change the management structure of the organization and reorganized the nature and focus of certain of the Company’s operations. These activities resulted in termination benefits to current employees, costs to terminate leases and other contracts and asset impairment charges. The Company completed these restructuring activities and executed final payment during the year ended December 31, 2010.

The following pre-tax charges were incurred during the years ended December 31, 2011, 2010 and 2009 in connection with these restructuring activities:

	2011		2010		2009
Severance benefits	$	17	$	25	$	52
Asset impairment charges		—		1		53
Other contract termination charges		8		—		34
Total restructuring, severance and other costs	$	25	$	26	$	139

The amounts incurred during the year ended December 31, 2011, 2010 and 2009 were recorded in Insurance operating costs and other expenses within Corporate.

22. Quarterly Results For 2011 and 2010 (Unaudited)

	Three Months Ended
	March 31,					June 30,						September 30,					December 31,
	2011		2010			2011			2010			2011			2010		2011		2010
Revenues	$	6,308	$	6,257		$	5,401		$	3,265		$	4,520		$	6,602	$	5,638	$	5,930
Benefits, losses and expenses		5,898		5,722			5,566			3,121			4,624			5,685		5,546		5,171
Income (loss) from continuing operations, net of tax		351		319			104			175			(3	)		665		126		584
Income (loss) from discontinued operations, net of tax		160		—			(80	)		(99	)		3			1		1		35
Net income (loss) [1]		511		319			24			76			—			666		127		619
Less: Preferred stock dividends and accretion of discount		10		483			11			11			10			10		11		11
Net income (loss) available to common shareholders	$	501	$	(164	)	$	13		$	65		$	(10	)	$	656	$	116	$	608
Basic earnings (losses) per common share	$	1.13	$	(0.42	)	$	0.03		$	0.15		$	(0.02	)	$	1.48	$	0.26	$	1.37
Diluted earnings (losses) per common share [1]	$	1.01	$	(0.42	)	$	0.03		$	0.14		$	(0.02	)	$	1.34	$	0.25	$	1.24
Weighted average common shares outstanding, basic		444.6		393.7			445.1			443.9			445.3			444.1		445.1		444.3
Weighted average shares outstanding and dilutive potential common shares		508.2		393.7			482.4			480.2			445.3			495.3		468.9		497.8

[1] In periods of a net loss available to common shareholders, the Company uses basic weighted average common shares outstanding in the calculation of diluted loss per common share, since the inclusion of shares for warrants, stock compensation plans and the assumed conversion of the preferred shares to common would have been antidilutive to the earnings per common share calculation. In the absence of the net loss available to common shareholders, weighted average common shares outstanding and dilutive potential common shares would have totaled 428.5 million and 473.4 million for the three months ended March 31, 2010 and September 30, 2011, respectively. In addition, assuming the impact of mandatory convertible preferred shares was not antidilutive, weighted average common shares outstanding and dilutive potential common shares would have totaled 431.9 million, 503.1 million, 501.0 million, 494.1 million, and 489.6 for the three months ended March 31, 2010, June 30, 2011, June 30, 2010, September 30, 2011 and December 31, 2011, respectively.

F-93

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE I

SUMMARY OF INVESTMENTS — OTHER THAN INVESTMENTS IN AFFILIATES

(In millions)

	As of December 31, 2011
					Amount at
					which shown on
Type of Investment	Cost		Fair Value		Balance Sheet
Fixed Maturities
Bonds and notes
U.S. government and government agencies and authorities (guaranteed and sponsored)	$	8,901	$	9,364	$	9,364
States, municipalities and political subdivisions		12,557		13,260		13,260
Foreign governments		2,030		2,161		2,161
Public utilities		8,236		9,055		9,055
All other corporate bonds		32,925		34,956		34,956
All other mortgage-backed and asset-backed securities		14,329		13,013		13,013
Total fixed maturities, available-for-sale		78,978		81,809		81,809
Fixed maturities, at fair value using fair value option		1,501		1,328		1,328
Total fixed maturities		80,479		83,137		83,137
Equity Securities
Common stocks
Industrial, miscellaneous and all other		420		443		443
Non-redeemable preferred stocks		636		478		478
Total equity securities, available-for-sale		1,056		921		921
Equity securities, trading		32,928		30,499		30,499
Total equity securities		33,984		31,420		31,420
Mortgage loans		5,728		5,977		5,728
Policy loans		2,001		2,153		2,001
Investments in partnerships and trusts		2,532		2,532		2,532
Futures, options and miscellaneous		1,316		2,394		2,394
Short-term investments		7,736		7,736		7,736
Total investments	$	133,776	$	135,349	$	134,948

S-1

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

(Registrant)

(In millions)

	As of December 31,
Condensed Balance Sheets	2011		2010
Assets
Fixed maturities, available-for-sale, at fair value	$	152	$	251
Other investments		28		31
Short-term investments		1,425		1,762
Investment in affiliates		27,575		25,227
Deferred income taxes		1,109		885
Unamortized Issue Costs		51		55
Other assets		31		22
Total assets	$	30,371	$	28,233
Liabilities and Stockholders’ Equity
Net payable to affiliates	$	283	$	430
Short-term debt (includes current maturities of long-term debt)		—		400
Long-term debt		5,975		5,961
Other liabilities		1,203		1,131
Total liabilities		7,461		7,922
Total stockholders’ equity		22,910		20,311
Total liabilities and stockholders’ equity	$	30,371	$	28,233

	For the years ended December 31,
Condensed Statements of Operations	2011			2010			2009
Net investment income	$	2		$	5		$	8
Net realized capital gains (losses)		(5	)		(5	)		(231	)
Total revenues		(3	)		—			(223	)
Interest expense		490			489			457
Other expenses		(41	)		11			8
Total expenses		449			500			465
Loss before income taxes and earnings (losses) of subsidiaries		(452	)		(500	)		(688	)
Income tax benefit		(154	)		(170	)		(157	)
Loss before earnings (losses)of subsidiaries		(298	)		(330	)		(531	)
Earnings (losses) of subsidiaries		960			2,010			(356	)
Net income (loss)	$	662		$	1,680		$	(887	)

The condensed financial statements should be read in conjunction with
the consolidated financial statements and notes thereto.

S-2

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF
THE HARTFORD FINANCIAL SERVICES GROUP, INC. (continued)
(Registrant)
(In millions)

	For the years ended December 31,
Condensed Statements of Cash Flows	2011			2010			2009
Operating Activities
Net income (loss)	$	662		$	1,680		$	(887	)
Undistributed earnings (losses) of subsidiaries		(961	)		(1,004	)		1,307
Change in operating assets and liabilities		625			(21	)		(590	)
Cash provided by (used for) operating activities		326			655			(170	)
Investing Activities
Net sales (purchases) of short-term investments		432			233			(412	)
Purchase price of business acquired		—			—			(10	)
Capital contributions to subsidiaries		(126	)		(311	)		(3,115	)
Cash provided by (used for) investing activities		306			(78	)		(3,537	)
Financing Activities
Issuance of long-term debt		—			1,090			—
Repayments at maturity of long-term debt		(400	)		(275	)		—
Change in commercial paper		—			—			(375	)
Net proceeds from issuance of mandatory convertible preferred stock		—			556			—
Net proceeds from issuance of common shares under public offering		—			1,600			—
Proceeds from net issuance of preferred stock and warrants to U.S. Treasury		—			—			3,400
Redemption of preferred stock issued to the U.S. Treasury		—			(3,400	)		—
Net proceeds from issuance of common shares under discretionary equity issuance plan		—			—			887
Treasury stock acquired		(46	)		—			—
Proceeds from net issuances of common shares under incentive and stock compensation plans and excess tax benefits		9			22			17
Dividends paid — Preferred shares		(42	)		(85	)		(73	)
Dividends paid — Common Shares		(153	)		(85	)		(149	)
Cash provided by (used for) financing activities		(632	)		(577	)		3,707
Net change in cash		—			—			—
Cash — beginning of year		—			—			—
Cash — end of year	$	—		$	—		$	—
Supplemental Disclosure of Cash Flow Information
Interest Paid	$	483		$	465		$	454
Dividends Received from Subsidiaries	$	976		$	1,006		$	243

The condensed financial statements should be read in conjunction with
the consolidated financial statements and notes thereto.

S-3

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION

(In millions)

	Deferred Policy
	Acquisition Costs							Other
	and Present		Future Policy Benefits,					Policyholder
	Value of Future		Unpaid Losses and Loss			Unearned		Funds and
Segment	Profits		Adjustment Expenses			Premiums		Benefits Payable
As of December 31, 2011
Property & Casualty Commercial	$	611	$	15,438		$	3,235	$	—
Group Benefits		60		6,796			76		266
Consumer Markets		650		2,060			1,803		—
Individual Annuity		2,802		2,538			29		17,017
Individual Life		2,558		1,061			1		7,413
Retirement Plans		714		436			2		7,959
Mutual Funds		27		—			—		4
Life Other Operations		1,322		8,635			74		43,414
Property & Casualty Other Operations		—		4,053			1		—
Corporate		—		(1	)		1		—
Consolidated	$	8,744	$	41,016		$	5,222	$	76,073
As of December 31, 2010
Property & Casualty Commercial	$	603		14,727			3,126		—
Group Benefits		67		6,640			76		320
Consumer Markets		660		2,177			1,875		—
Individual Annuity		3,216		2,270			22		16,871
Individual Life		2,627		898			1		6,765
Retirement Plans		842		458			3		6,841
Mutual Funds		43		—			—		4
Life Other Operations		1,799		8,307			72		46,542
Property & Casualty Other Operations		—		4,122			1		—
Corporate		—		(1	)		—		—
Consolidated	$	9,857	$	39,598		$	5,176	$	77,343

S-4

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE III

SUPPLEMENTARY INSURANCE INFORMATION (continued)

(In millions)

									Amortization of			Insurance
									Deferred Policy			Operating
	Earned					Benefits, Losses			Acquisition Costs			Costs and
	Premiums,		Net			and Loss			and Present			Other
	Fee Income		Investment			Adjustment			Value of Future			Expenses		Net Written
Segment	and Other		Income			Expenses			Profits			[1]		Premiums
For the year ended December 31, 2011
Property & Casualty Commercial	$	6,224	$	910		$	4,584		$	1,356		$	726	$	6,176
Group Benefits		4,147		411			3,306			55			1,104		N/A
Consumer Markets		3,903		187			2,886			639			578		3,675
Individual Annuity		1,660		768			1,106			483			536		N/A
Individual Life		899		456			816			221			182		N/A
Retirement Plans		380		396			308			134			354		N/A
Mutual Funds		649		(3	)		—			47			448		N/A
Life Other Operations		1,020		(386	)		(54	)		492			274		N/A
Property & Casualty Other Operations		—		151			317			—			24		1
Corporate		209		23			(3	)		—			710		N/A
Consolidated	$	19,091	$	2,913		$	13,266		$	3,427		$	4,936	$	9,852
For the year ended December 31, 2010
Property & Casualty Commercial	$	5,840	$	935		$	3,370		$	1,353		$	665	$	5,796
Group Benefits		4,278		429			3,331			61			1,111		N/A
Consumer Markets		4,119		187			2,951			667			493		3,886
Individual Annuity		1,716		814			1,054			(56	)		542		N/A
Individual Life		856		400			644			119			181		N/A
Retirement Plans		359		364			278			27			340		N/A
Mutual Funds		664		(8	)		—			51			458		N/A
Life Other Operations		1,049		225			374			305			262		N/A
Property & Casualty Other Operations		1		163			251			—			30		2
Corporate		188		81			(2	)		—			833		1
Consolidated	$	19,070	$	3,590		$	12,251		$	2,527		$	4,915	$	9,685
For the year ended December 31, 2009
Property & Casualty Commercial	$	6,006	$	755		$	3,266			1,393			645		5,715
Group Benefits		4,350		403			3,196			61			1,120		N/A
Consumer Markets		4,113		178			2,902			674			475		3,995
Individual Annuity		1,465		771			1,310			1,339			505		N/A
Individual Life		940		335			640			314			188		N/A
Retirement Plans		324		315			269			56			346		N/A
Mutual Funds		518		(21	)		—			50			395		N/A
Life Other Operations		1,293		4,135			5,042			370			350		N/A
Property & Casualty Other Operations		—		161			241			—			23		4
Corporate		223		173			153			—			831		(3	)
Consolidated	$	19,232	$	7,205		$	17,019		$	4,257		$	4,878	$	9,711

[1]	Includes interest expense and goodwill impairment.
N/A	— Not applicable to life insurance pursuant to Regulation S-X.

S-5

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE IV

REINSURANCE

(In millions)

									Percentage
					Assumed				of Amount
	Gross		Ceded to Other		From Other		Net		Assumed
	Amount		Companies		Companies		Amount		to Net
For the year ended December 31, 2011
Life insurance in-force	$	992,921	$	139,590	$	47,365	$	900,696		5	%
Insurance revenues
Property and casualty insurance	$	10,337		688		225		9,874		2	%
Life insurance and annuities		7,220		463		71		6,828		1	%
Accident and health insurance		2,122		61		63		2,124		3	%
Total insurance revenues	$	19,679	$	1,212	$	359	$	18,826		2	%
For the year ended December 31, 2010
Life insurance in-force	$	987,104	$	135,269	$	43,999	$	895,834		5	%
Insurance revenues
Property and casualty insurance	$	10,105		668		256		9,693		3	%
Life insurance and annuities		7,261		518		128		6,871		2	%
Accident and health insurance		2,221		58		64		2,227		3	%
Total insurance revenues	$	19,587	$	1,244	$	448	$	18,791		2	%
For the year ended December 31, 2009
Life insurance in-force	$	970,455	$	128,144	$	49,273	$	891,584		6	%
Insurance revenues
Property and casualty insurance	$	10,386	$	778	$	253	$	9,861		3	%
Life insurance and annuities		7,216		433		91		6,874		1	%
Accident and health insurance		2,203		51		71		2,223		3	%
Total insurance revenues	$	19,805	$	1,262	$	415	$	18,958		2	%

S-6

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE V

VALUATION AND QUALIFYING ACCOUNTS

(In millions)

			Charged to					Write-offs/
	Balance		Costs and			Translation		Payments/			Balance
	January 1,		Expenses			Adjustment		Other			December 31,
2011
Allowance for doubtful accounts and other	$	119	$	45		$	—	$	(45	)	$	119
Allowance for uncollectible reinsurance		290		5			—		(5	)		290
Valuation allowance on mortgage loans		155		26			—		(79	)		102
Valuation allowance for deferred taxes		173		(78	)		—		—			95
2010
Allowance for doubtful accounts and other	$	121	$	53		$	—	$	(55	)	$	119
Allowance for uncollectible reinsurance		335		11			—		(56	)		290
Valuation allowance on mortgage loans		366		157			—		(368	)		155
Valuation allowance for deferred taxes		86		87			—		—			173
2009
Allowance for doubtful accounts and other	$	125	$	53		$	—	$	(57	)	$	121
Allowance for uncollectible reinsurance		379		11			—		(55	)		335
Valuation allowance on mortgage loans		26		408			—		(68	)		366
Valuation allowance for deferred taxes		75		11			—		—			86

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE VI

SUPPLEMENTAL INFORMATION CONCERNING

PROPERTY AND CASUALTY INSURANCE OPERATIONS

(In millions)

	Discount		Losses and Loss Adjustment					Paid Losses and
	Deducted From		Expenses Incurred Related to:					Loss Adjustment
	Liabilities [1]		Current Year		Prior Year			Expenses
Years ended December 31,
2011	$	542	$	7,420	$	367		$	7,218
2010	$	524	$	6,768	$	(196	)	$	6,834
2009	$	511	$	6,596	$	(186	)	$	6,547

[1] Reserves for permanently disabled claimants and certain structured settlement contracts that fund loss run-offs have been discounted using the weighted average interest rates of 4.4%, 4.8%, and 5.0% for 2011, 2010, and 2009, respectively.

S-7

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
By:	/s/ Beth A. Bombara
	Beth A. Bombara
	Senior Vice President and Controller (Chief Accounting Officer and duly authorized signatory)

Date: February 24, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	Signature	Title	Date
	/s/ Liam E. McGee	Chairman, Chief Executive Officer and Director	February 24, 2012
	Liam E. McGee	(Principal Executive Officer)
	/s/ Christopher J. Swift	Executive Vice President and Chief Financial Officer	February 24, 2012
	Christopher J. Swift	(Principal Financial Officer)
	/s/ Beth A. Bombara	Senior Vice President and Controller	February 24, 2012
	Beth A. Bombara	(Principal Accounting Officer)
	*	Director	February 24, 2012
	Robert B. Allardice III
	*	Director	February 24, 2012
	Trevor Fetter
	*	Director	February 24, 2012
	Paul G. Kirk, Jr.
	*	Director	February 24, 2012
	Kathryn A. Mikells
	*	Director	February 24, 2012
	Michael G. Morris
	*	Director	February 24, 2012
	Thomas A. Renyi
	*	Director	February 24, 2012
	Charles B. Strauss
	*	Director	February 24, 2012
	H. Patrick Swygert
*By:	/s/ Alan J. Kreczko
	Alan J. Kreczko
	As Attorney-in-Fact

II-1

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011

FORM 10-K

EXHIBITS INDEX

The exhibits attached to this Form 10-K are those that are required by Item 601 of Regulation S-K.

Exhibit No.		Description
	3.01	Amended and Restated Certificate of Incorporation of The Hartford Financial Services Group, Inc. (“The Hartford”), (as amended by Certificate of Designations with respect to 7.25% Mandatory Convertible Preferred Stock Series F dated March 23, 2010 and the Certificate of Elimination of the Series A Participating Cumulative Preferred Stock, Series D Non-Voting Contingent Convertible Preferred Stock and Fixed Rate Cumulative Perpetual Preferred Stock, Series E, dated April 26, 2010), incorporated by reference to Exhibit 3.01 to The Hartford’s Quarterly Report on Form 10-Q for the fiscal period ended March 31, 2010.
	3.04	Amended and Restated By-Laws of The Hartford, amended effective October 21, 2010 (incorporated herein by reference to Exhibit 3.1 to The Hartford’s Current Report on Form 8-K, filed October 27, 2010).
	4.01	Amended and Restated Certificate of Incorporation and Amended and Restated By-Laws of The Hartford (incorporated by reference as indicated in Exhibits 3.01 and 3.04 hereto, respectively).
	4.02	Senior Indenture, dated as of October 20, 1995, between The Hartford and The Chase Manhattan Bank (National Association) as Trustee (incorporated herein by reference to Exhibit 4.03 to the Registration Statement on Form S-3 (Registration No. 333-103915) of The Hartford, Hartford Capital IV, Hartford Capital V and Hartford Capital VI).
	4.03	Supplemental Indenture No. 1, dated as of December 27, 2000, to the Senior Indenture filed as Exhibit 4.02 hereto, between The Hartford and The Chase Manhattan Bank, as Trustee (incorporated herein by reference to Exhibit 4.30 to The Hartford’s Registration Statement on Form S-3 (Amendment No. 1) (Registration No. 333-49666) dated December 27, 2000).
	4.04	Supplemental Indenture No. 2, dated as of September 13, 2002, to the Senior Indenture filed as Exhibit 4.02 hereto, between The Hartford and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.1 to The Hartford’s Current Report on Form 8-K, filed September 17, 2002).
	4.05	Supplemental Indenture No. 3, dated as of May 23, 2003, to the Senior Indenture filed as Exhibit 4.02 hereto, between The Hartford and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.1 of The Hartford’s Current Report on Form 8-K, filed May 30, 2003).
	4.06	Senior Indenture, dated as of March 9, 2004, between The Hartford and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4.1 to The Hartford’s Current Report on Form 8-K, filed March 12, 2004).
	4.07	Junior Subordinated Indenture, dated as of February 12, 2007, between The Hartford and LaSalle Bank, N.A., as Trustee (incorporated herein by reference to Exhibit 4.1 to The Hartford’s Current Report on Form 8-K, filed February 16, 2007).
	4.08	Senior Indenture, dated as of April 11, 2007, between The Hartford and The Bank of New York Trust Company, N.A., as Trustee (incorporated herein by reference to Exhibit 4.03 to the Registration Statement on Form S-3 (Registration No. 333-142044) of The Hartford, Hartford Capital IV, Hartford Capital V and Hartford Capital VI, filed on April 11, 2007).
	4.09	Junior Subordinated Indenture, dated as of June 6, 2008, between The Hartford Financial Services Group, Inc. and The Bank of New York Trust Company, N.A., as Trustee (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 6, 2008).
	4.10	First Supplemental Indenture, dated as of June 6, 2008, between The Hartford Financial Services Group, Inc. and The Bank of New York Trust Company, N.A., as Trustee (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on June 6, 2008).
	4.11	Replacement Capital Covenant, dated as of June 6, 2008 (incorporated herein by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on June 6, 2008).
	4.12	Second Supplemental Indenture, dated as of October 17, 2008, between The Hartford and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the 10% Fixed-to-Floating Rate Junior Subordinated Debentures due 2068, including form of Debenture (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K/A filed on October 17, 2008).
	4.13	Form of Series B Warrant to Purchase Shares of Non-Voting Contingent Convertible Preferred Stock (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K/A filed on October 17, 2008).

II-2

Exhibit No.		Description
	4.14	Form of Series C Warrant to Purchase Shares of Non-Voting Contingent Convertible Preferred Stock (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K/A filed on October 17, 2008).
	4.15	Registration Rights Agreement, dated as of October 17, 2008, between The Hartford and Allianz SE (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K/A filed on October 17, 2008).
	4.16	Deposit Agreement, dated as of March 23, 2010, among The Hartford Financial Services Group, Inc., The Bank of New York Mellon, as Depository, and holders from time to time of the Receipt issued thereunder (including form of Depository Receipt) (incorporated herein by reference to (incorporated by reference to Exhibit 4.6 to The Hartford’s Current Report on Form 8-K, filed March 23, 2010).
	4.17	Warrant to Purchase Shares of Common Stock of The Hartford Financial Services Group, Inc., dated June 26, 2009 (incorporated herein by reference to Exhibit 4.1 to The Hartford’s Current Report on Form 8-K, filed June 26, 2009).
	10.01	Form of Depository Receipt for the Depositary Shares (included as Exhibit A to Exhibit 4.06) (incorporated herein by reference to Exhibit 4.7 to The Hartford’s Current Report on Form 8-K, filed on March 9, 2010).
	10.02	Letter Agreement, dated as of March 13, 2010, by and between The Hartford Financial Services Group, Inc., Allianz SE (including letter of Allianz SE of March 12, 2010 attached thereto) (incorporated herein by reference to Exhibit 10.1 to The Hartford’s Current Report on Form 8-K, filed March 16, 2010).
	10.03	Letter Agreement, dated as of June 9, 2009, by and between The Hartford Financial Services Group, Inc., Allianz SE and Allianz Finance II Luxembourg S.a.r.l. (incorporated herein by reference to Exhibit 10.1 to The Hartford’s Current Report on Form 8-K, filed June 12, 2009).
	10.04	Preferred Partnership Agreement dated December 5, 2011 by and between The Hartford Financial Services Group, Inc., Hartford Life, Inc., Hartford Investment Financial Services, LLC, HL Investment Advisors, LLC and Wellington Management Company, LLP. †**
	10.05	Four-Year Revolving Credit Facility Agreement, dated January 6, 2012, among The Hartford Financial Services Group, Inc., Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A. and Citibank, N.A., as syndication agents, and the lenders referred to therein (incorporated herein by reference to Exhibit 10.1 to The Hartford’s Current Report on Form 8-K, filed January 6, 2012).
	10.06	Investment Agreement, dated as of October 17, 2008 between The Hartford and Allianz SE (incorporated herein by reference to Exhibit 10.1 to The Hartford’s Current Report on Form 8-K, filed October 17, 2008).
	10.07	Written Summary of Compensation-related Arrangement with a Named Executive Officer effective May 18, 2011 (incorporated by reference to Exhibit 10.01 to The Hartford’s Quarterly Report on Form 10-Q for the second quarter ended June 30, 2011).
	*10.08	The Hartford Senior Executive Officer Severance Pay Plan (incorporated by reference to Exhibit 10.07 of The Hartford’s Annual Report on Form 10-K for the fiscal year ended 2010).
	*10.09	Amended and Restated The Hartford Senior Executive Severance Pay Plan, amended effective February 22, 2011 (incorporated by reference to Exhibit 10.08 of The Hartford’s Annual Report on Form 10-K for the fiscal year ended 2010).
	*10.10	2010 Incentive Stock Plan, as amended effective January 27, 2011 (incorporated by reference to Exhibit 10.09 of The Hartford’s Annual Report on Form 10-K for the fiscal year ended 2010).
	*10.11	The Hartford 2010 Incentive Stock Plan Administrative Rules Related to Awards for Key Employees, as amended effective December 15, 2010 (incorporated by reference to Exhibit 10.10 of The Hartford’s Annual Report on Form 10-K for the fiscal year ended 2010).
	*10.12	The Hartford 2010 Incentive Stock Plan Administrative Rules Related to Awards for Non-Employee Directors, as amended effective December 15, 2010 (incorporated by reference to Exhibit 10.11 of The Hartford’s Annual Report on Form 10-K for the fiscal year ended 2010).
	*10.13	The Hartford 2010 Incentive Stock Plan Forms of Individual Award Agreements (incorporated by reference to Exhibit 10.12 of The Hartford’s Quarterly Report on Form 10-Q for the second quarter ended June 30, 2010).
	*10.14	Summary of Annual Executive Bonus Program (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed on May 25, 2010).
	*10.15	Written Summary of Compensation-related Arrangement with a Named Executive Officer effective May 18, 2011 (incorporated by reference to Exhibit 10.01 of The Hartford’s Quarterly Report on Form 10-Q for the second quarter ended June 30, 2011)
	*10.16	The Hartford 2005 Incentive Stock Plan, as amended (incorporated by reference to Exhibit 10.10 of The Hartford’s Annual Report on Form 10-K for the fiscal year ended 2009).
	*10.17	Employment Agreement between The Hartford and Christopher J. Swift dated February 14, 2010 (incorporated by reference to Exhibit 10.16 of The Hartford’s Annual Report on Form 10-K for the fiscal year ended 2009).

II-3

Exhibit No.		Description
	*10.18	The Hartford Deferred Stock Unit Plan, as amended on October 22, 2009 (incorporated by reference to Exhibit 10.02 to The Hartford’s Current Report on Form 8-K, filed October 22, 2009).
	*10.19	Form of Award Letters for Deferred Unit and Restricted Units under The Hartford’s Deferred Stock Unit Plan (incorporated by reference to Exhibit 10.03 to The Hartford’s Quarterly Report on Form 10-Q for the third quarter ended September 30, 2009).
	*10.20	Letter Agreement between The Hartford Financial Services Group, Inc. and Liam E McGee, dated September 23, 2009 (incorporated herein by reference to Exhibit 10.01 to The Hartford Current Report on Form 8-K, filed September 30, 2009).
	*10.21	Form of Key Executive Employment Protection Agreement between The Hartford and certain executive officers of The Hartford, as amended (incorporated herein by reference to Exhibit 10.06 to The Hartford’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	*10.22	The Hartford 2005 Incentive Stock Plan Forms of Individual Award Agreements (incorporated herein by reference to Exhibit 10.2 to The Hartford’s Current Report on Form 8-K, filed May 24, 2005).
	*10.23	The Hartford Incentive Stock Plan, as amended (incorporated herein by reference to Exhibit 10.09 to The Hartford’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	*10.24	The Hartford Deferred Restricted Stock Unit Plan, as amended (incorporated herein by reference to Exhibit 10.12 to The Hartford’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005).
	*10.25	The Hartford Deferred Compensation Plan, as amended (incorporated herein by reference to Exhibit 10.12 to The Hartford’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	*10.26	The Hartford Planco Non-Employee Option Plan, as amended (incorporated herein by reference to Exhibit 10.19 to The Hartford’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002).
	*10.27	The Hartford Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit 10.16 of The Hartford’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
	*10.28	The Hartford Investment and Savings Plan, as amended effective February 1, 2012. **
	10.29	Put Option Agreement, dated February 12, 2007, among The Hartford, Glen Meadow ABC Trust and LaSalle Bank, N.A. (incorporated herein by reference to Exhibit 10.1 to The Hartford’s Current Report on Form 8-K, filed February 16, 2007).
	18.01	Preferability letter from Deloitte & Touche LLP regarding change in accounting principle.**
	12.01	Statement Re: Computation of Ratio of Earnings to Fixed Charges. **
	21.01	Subsidiaries of The Hartford Financial Services Group, Inc. **
	23.01	Consent of Deloitte & Touche LLP to the incorporation by reference into The Hartford’s Registration Statements on Form S-8 and Form S-3 of the report of Deloitte & Touche LLP contained in this Form 10-K regarding the audited financial statements is filed herewith. **
	24.01	Power of Attorney. **
	31.01	Certification of Liam E. McGee pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. **
	31.02	Certification of Christopher J. Swift pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. **
	32.01	Certification of Liam E. McGee pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **
	32.02	Certification of Christopher J. Swift pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **
	101.INS	XBRL Instance Document.
	101.SCH	XBRL Taxonomy Extension Schema.
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
	101.DEF	XBRL Taxonomy Extension Definition Linkbase.
	101.LAB	XBRL Taxonomy Extension Label Linkbase.
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

*	Management contract, compensatory plan or arrangement.
**	Filed with the Securities and Exchange Commission as an exhibit to this report.
†	Confidential treatment has been requested for the redacted portions of this agreement. A complete copy of this agreement, including the redacted portions, has been filed separately with the Securities and Exchange Commission.

II-4

EX-10.04

EXHIBIT 10.04

CONFIDENTIAL TREATMENT REQUESTED — Confidential portions of this document have been redacted and filed separately with the Commission.

PREFERRED PARTNERSHIP

AGREEMENT

by and among

THE HARTFORD FINANCIAL SERVICES GROUP, INC.,

HARTFORD LIFE, INC.,

HARTFORD INVESTMENT FINANCIAL SERVICES, LLC,

HL INVESTMENT ADVISORS, LLC

and

WELLINGTON MANAGEMENT COMPANY, LLP

Dated as of December 5, 2011

	TABLE OF CONTENTS
	ARTICLE I
	DEFINITIONS
Section 1.1	Definitions	1
	ARTICLE II
	PREFERRED PARTNERSHIP
Section 2.1	Preferred Subadviser	11
Section 2.2	Preferred Partner	11
Section 2.3	Certain Restrictions on Wellington Subadvisory Business	12
Section 2.4	Wellington Portfolio Managers	12
Section 2.5	Fixed Income Hartford Funds	13
Section 2.6	Wellington Termination Right	13
Section 2.7	Hartford Termination Right	13
Section 2.8	No Further Restrictions on HIMCO	13
Section 2.9	Fiduciary Duties	13
Section 2.10	Update of Certain Schedules	14
	ARTICLE III
	FEES
Section 3.1	Agreement With Respect to Fees	14
Section 3.2	Fee Waivers for Fixed Income Mandates	15
	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF HARTFORD
Section 4.1	Organization and Standing	16
Section 4.2	Power and Authority	16
Section 4.3	Non-Contravention; Consents	16
	ARTICLE V
	REPRESENTATIONS AND WARRANTIES OF WELLINGTON
Section 5.1	Organization and Standing	17
Section 5.2	Power and Authority	17
Section 5.3	Non-Contravention; Consents	17

i

	ARTICLE VI
	COVENANTS
Section 6.1	Brand	18
Section 6.2	Periodic Certifications	18
Section 6.3	Notice of a Hartford Sale	18
Section 6.4	Right of First Refusal	20
Section 6.5	Notice of Wellington Change of Control Event	21
Section 6.6	Notice of HIG Change of Control Event	21
Section 6.7	IPO or Spin Out	22
	ARTICLE VII
	CONFIDENTIALITY
Section 7.1	Treatment of Confidential Information	22
Section 7.2	Permitted Disclosure	22
Section 7.3	Effect of Termination	23
Section 7.4	Ownership of Confidential Information	23
Section 7.5	Disclosure Related to Sale	23
Section 7.6	Equitable Relief	23
	ARTICLE VIII
	DISPUTE RESOLUTION
Section 8.1	Disputes; Resolution by Executive Officers	24
Section 8.2	Injunctive Relief	24
	ARTICLE IX
	TERM AND TERMINATION OF PREFERRED
	PARTNERSHIP; MAKE-WHOLE PAYMENT
Section 9.1	Term	24
Section 9.2	Termination	24
Section 9.3	Effect of Termination	25
Section 9.4	Make-Whole Payment	26
Section 9.5	Determination of Total Enterprise Value	26
	ARTICLE X
	MISCELLANEOUS
Section 10.1	Amendments; Extension; Waiver	27
Section 10.2	Entire Agreement	27
Section 10.3	Interpretation	28

ii

Section 10.4	Severability	28
Section 10.5	Notices	28
Section 10.6	Binding Effect; Persons Benefiting; No Assignment	29
Section 10.7	Disclaimers	29
Section 10.8	Specific Performance	30
Section 10.9	Counterparts	30
Section 10.10	Governing Law; Waiver of Jury Trial	30
Section 10.11	Certain Understandings	30

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TABLE OF SCHEDULES

SCHEDULE A	EXECUTIVE OFFICERS
SCHEDULE B	HARTFORD HLS FUNDS
SCHEDULE C	BROKER-DEALERS*
SCHEDULE D	INTENTIONALLY OMITTED
SCHEDULE E	WELLINGTON PORTFOLIO MANAGERS*
SCHEDULE F	FIXED INCOME FUND MANDATES
SCHEDULE G	FEE REVISIONS ON EXISTING HARTFORD FUNDS*
SCHEDULE H	ALLOCATION SERVICES FEES*

* Portions of this exhibit have been omitted pursuant to a Confidential Treatment Request submitted to the Securities and Exchange Commission on the date hereof. Redacted information has been filed separately with the Securities and Exchange Commission.

iv

PREFERRED PARTNERSHIP AGREEMENT

This PREFERRED PARTNERSHIP AGREEMENT, dated as of December 5, 2011 (as amended from time to time, the “Agreement”), is by and among The Hartford Financial Services Group, Inc., a Delaware corporation (together with any successor thereto or permitted assignee thereof, “Hartford”), Hartford Life, Inc., a Delaware corporation (“HLI”), Hartford Investment Financial Services, LLC, a Delaware limited liability company, HL Investment Advisors, LLC, a Connecticut limited liability company, and Wellington Management Company, LLP, a Massachusetts limited liability partnership (together with any successor thereto or permitted assignee thereof, “Wellington”).

RECITALS:

WHEREAS, the Hartford Parties (as defined below) and Wellington seek to establish a relationship pursuant to which Wellington will serve as preferred subadviser to the Hartford Funds (as defined below), and Hartford will serve as Wellington’s preferred partner with respect to the Covered Funds (as defined below), on the terms and conditions set forth in this Agreement;

WHEREAS, the Hartford Parties and Wellington desire to make certain representations, warranties, covenants and agreements in connection with the arrangements contemplated by this Agreement; and

WHEREAS, the parties hereto desire to enter into this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. For all purposes in this Agreement, the following terms shall have the following respective meanings (which shall apply equally to the singular and plural form of any such term as the context requires):

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such first Person; provided, however, that, for the avoidance of doubt, Wellington is not an Affiliate of Hartford or any of its Affiliates and vice versa for purposes of this Agreement or any other purpose. “Control,” when used with respect to any specified Person, means the possession, directly or indirectly, of the power to direct (or cause the direction of) the management and policies of such Person, whether through the ownership of voting securities or other voting interests, by contract or otherwise; and the terms “controlling” and “controlled” have correlative meanings to the foregoing. For purposes of the definition of “Control,” a general partner, managing member or managing partner of a Person shall always be considered to control such Person. Notwithstanding the foregoing sentences of this definition, (i) neither Allianz SE nor any of its Affiliates shall be deemed to be an Affiliate of Hartford or any of its Affiliates for purposes of this Agreement and (ii) no natural person that is a partner of Wellington shall be deemed to be an Affiliate of Wellington.

“Agreement” shall have the meaning set forth in the Preamble.

“Applicable Law” means, with respect to any Person, any statute, law, ordinance, rule, regulation, order writ, injunction, directive, judgment, decree or other requirement of any Governmental Authority (including any applicable requirements of any SRO) to the extent applicable to such Person or any of its properties, assets, officers, directors, members, partners, employees or agents.

“Appraiser” means a nationally recognized investment bank that (a) is listed as one of the top twenty such investment banks in the “League Table of Financial Advisors to Americas M&A: Value” as published by The Mergermarket Group (www.mergermarket.com) for the most recent calendar quarter preceding the date on which such investment bank is hired and (b) has not provided material investment banking services to any Party or any of its Affiliates within the 12-month period immediately preceding the date on which such investment bank is hired in connection with Section 9.5, nor is expected to do so in the subsequent 12-month period.

“Bankruptcy Event” means, with respect to the applicable Person, the occurrence of any of the following events: (i) such Person makes a general assignment for the benefit of creditors; (ii) such Person files a voluntary petition in bankruptcy; (iii) such Person is adjudged bankrupt or insolvent, or has entered against him an order for relief in any bankruptcy or insolvency proceeding or vacated within 90 days of such order; (iv) such Person files a petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, regulation or law; (v) such Person files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in any proceeding of this nature; (vi) such Person seeks, consents to, or acquiesces in the appointment of, a trustee, receiver, or liquidator of all or any substantial part of such Person’s properties; (vii) if 60 days after the commencement of any proceeding against such Person seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation or the entry of any order for relief, the proceeding has not been dismissed or stayed, or the order vacated or stayed; or (viii) if within 90 days after the appointment without his consent or acquiescence of a trustee, receiver or liquidator of such Person or of all or any substantial part of his properties, the appointment is not vacated or stayed, or if within 90 days after the expiration of any such stay, the appointment is not vacated.

“Business Day” means any day other than a Saturday, Sunday or a day on which the New York Stock Exchange is closed.

“Closing AUM Percentage” shall equal the quotient (expressed as a percentage) of (i) the total assets under management of the Legacy Hartford Funds that are subadvised by Wellington immediately prior to consummation of a Hartford Sale or HIG Change of Control Event (as applicable) divided by (ii) the total assets under management of all of the Legacy Hartford Funds as of such time.

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“Confidential Information” means any and all information, materials and know-how, whether disclosed prior to, on or after the date of this Agreement, regardless of the form in which it is communicated or maintained, whether oral, electronic, visual, written or in any other form or medium, together with all tangible and intangible embodiments and copies thereof, that are delivered or disclosed by any Party or its representatives or agents to the other Party or its representatives or agents or otherwise obtained by any Party or its representatives or agents under this Agreement. The term “Confidential Information” shall (i) include (a) any extracts, derivatives or summaries that contain or otherwise reflect any such information and (b) the existence and terms of this Agreement and (ii) not include any information (excluding the existence and terms of this Agreement) that:

(a) is or becomes publicly known without fault on the part of the disclosing Party or its representatives;

(b) has been received by a Party at any time from a source (other than another Party) that, to the knowledge of the receiving Party, has the right to disclose such Confidential Information;

(c) was otherwise known by the disclosing Party prior to disclosure to such Party by another Party; or

(d) is developed by the disclosing Party independently from and without use of or reference to any Confidential Information.

“Consolidator” means any Person that is engaged, directly or through a subsidiary or Affiliate, in the business of managing publicly traded liquid securities with total assets under management of $[***] billion or more for third parties (whether via mutual funds, managed accounts or otherwise). For the avoidance of doubt, any registered mutual fund sponsored or advised by any Person shall be third party assets for purposes of calculating the assets under management under this definition.

“Covered Fund” means an open-end, closed-end or actively managed exchange-traded fund registered under the Investment Company Act (i) for which Wellington serves as the sole investment adviser or subadviser, (ii) the shares of which are offered and sold primarily to retail investors in the United States through one or more broker-dealers that are not Affiliates of the sponsor or manager of the applicable fund and (iii) that is offered on a stand-alone basis. The term “Covered Fund” shall not include (i) a fund registered under the Investment Company Act that is sponsored or managed by The Vanguard Group, Inc. (or any successor thereto) or its Affiliates, (ii) a fund registered under the Investment Company Act or a Sleeve that, in either case, represents one of multiple investment approaches in a bundled investment option to the end investor (e.g., the fund or Sleeve is part of a multi-Sleeve or multi-

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

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manager fund or suite of funds, fund of funds or target date fund that includes funds or Sleeves for which parties other than Wellington serve as investment adviser or sub-adviser), (iii) any portion of a fund registered under the Investment Company Act that represents one of multiple investment approaches offered by multiple managers or investment advisers in a bundled investment option to the end investor, (iv) a fund registered under the Investment Company Act sold primarily in conjunction with a variable insurance product and (v) any money market fund.

“Cure Period” shall have the meaning set forth in Section 9.2(b)(ii).

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval system.

“Encumbrance” means any lien, pledge, security interest, claim, charge, easement, limitation, commitment, encroachment, restriction or encumbrance of any kind or nature whatsoever.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and all rules and regulations of the SEC thereunder.

“Executive Officers” means the individuals listed on Schedule A and any successor to any such individual. Hartford and Wellington may update the individuals listed as Executive Officers of them on Schedule A by written notice to the other, provided any such individual shall be an executive officer of Hartford or Wellington.

“FINRA” means the Financial Industry Regulatory Authority or any successor thereto.

“Fixed Income Fund Mandates” shall have the meaning set forth in Section 2.5.

“Governmental Authority” means any nation, state, territory, province, county, city or other unit or subdivision thereof or any entity, authority, agency, department, board, commission, instrumentality, court or other judicial body authorized on behalf of any of the foregoing to exercise legislative, judicial, regulatory or administrative functions of or pertaining to government, and any governmental or non-governmental self-regulatory organization.

“Hartford” shall have the meaning set forth in the Preamble.

“Hartford Adviser” means Hartford Investment Financial Services, LLC, HL Investment Advisors, LLC or any Affiliate of Hartford that may, from time to time, act as investment adviser to any Hartford Fund, together with any successor thereto or permitted assignee thereof.

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“Hartford Funds” means all open-end, closed-end and actively managed exchange-traded funds registered under the Investment Company Act and advised by Hartford or any of its Affiliates (including the Hartford Advisers). Notwithstanding the foregoing, the term Hartford Funds shall not include:

(i) any open-end fund registered under the Investment Company Act organized after the date of this Agreement that is sponsored by and offered exclusively to and through Hartford’s variable annuity, variable life or retirement plan businesses,

(ii) Hartford Portfolio Diversifier HLS Fund,

(iii) American Funds Growth-Income HLS Fund,

(iv) American Funds Bond HLS Fund,

(v) American Funds New World HLS Fund,

(vi) American Funds International HLS Fund,

(vii) American Funds Global Bond HLS Fund,

(viii) American Funds Global Growth and Income HLS Fund,

(ix) American Funds Blue Chip Income & Growth HLS Fund,

(x) American Funds Growth-Income HLS Fund,

(xi) American Funds Growth HLS Fund,

(xii) American Funds Asset Allocation HLS Fund,

(xiii) American Funds Global Growth HLS Fund, (xiv) American Funds Global Small Capitalization HLS Fund, (xv) The Hartford Money Market Fund,

(xvi) Hartford Money Market HLS Fund (or any other money market fund sponsored by Hartford),

(xvii) Hartford Index HLS Fund, and

(xviii) any other American Fund that satisfies clause (i) of this definition.

“Hartford Funds Board” means the boards of directors or trustees, as the case may be, of each of the Hartford Funds.

“Hartford HLS Funds” means the funds set forth on Schedule B hereto.

“Hartford Parties” means Hartford, HLI, Hartford Investment Financial Services, LLC and HL Investment Advisors, LLC.

“Hartford Sale” means an HMF Sale or a Non-HMF Sale.

5

“HIG Change of Control Event” means (a) any event (or series of related events consummated pursuant to a common plan or arrangement) where any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be deemed to have “beneficial ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or in the future), directly or indirectly, of more than 50% of the voting power of the outstanding voting stock of Hartford (other than with respect to one or more Persons beneficially owning proxies to vote more than 50% of the voting stock of Hartford at an annual or special meeting which is not for the purpose of approving a merger or other acquisition transaction or, where such proxies are held by a Consolidator, to replace a majority of the directors) or (b) any transaction (including any merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar transaction, including a joint venture or obtaining a majority interest through contractual arrangements) (or series of related transactions implemented pursuant to a common plan or arrangement) pursuant to which (i) more than 50% of the voting stock of Hartford is converted into or exchanged for cash, securities or other property or Hartford conveys, transfers, leases or otherwise disposes of all or substantially all of the assets of Hartford (other than (x) a transfer of such assets to one or more controlled, wholly-owned Affiliates of Hartford or (y) any such transaction where the Persons who were the beneficial owners of the outstanding voting stock of Hartford immediately prior to such transaction beneficially own immediately following such transaction, directly or indirectly (including, without limitation, through one or more holding companies or subsidiaries), 50% or more of the outstanding voting stock of the corporation or other entity resulting from such transaction) or (ii) without limitation of clause (i)with respect to mergers and consolidations, Persons who were the beneficial owners of the outstanding voting stock of Hartford immediately prior to such transaction beneficially do not own, immediately following such transaction, directly or indirectly (including, without limitation, through one or more holding companies or subsidiaries), 50% or more of the outstanding voting stock of the corporation or other entity resulting from such transaction immediately following such transaction).

“HIG Change of Control Notice” shall have the meaning set forth in Section 6.6.

“HIMCO” means Hartford Investment Management Company.

“HLI” shall have the meaning set forth in the Preamble.

“HMF Business” means the business, assets and operations of the mutual fund business of Hartford and its Affiliates (including the Hartford Advisers), including the sponsoring and management of the Hartford Funds. By way of example, the HMF Business as of the date of this Agreement shall be deemed to include the business, assets and operations of the mutual fund business described in the Confidential Information Memorandum prepared by Hartford and its representatives, dated March 31, 2011.

6

“HMF Sale” means any direct or indirect sale, issuance, conveyance, transfer or other disposition (whether occurring in a single transaction or as part of a series of related transactions consummated pursuant to a common plan or arrangement) of or an interest in 25% or more of the voting, equity or economics rights or assets (by market value) of the HMF Business (including via the sale, issuance, conveyance, transfer or other disposition of the equity of any direct or indirect owner of the HMF Business), other than (i) any such transaction solely involving a controlled, wholly-owned Affiliate of Hartford, (ii) an initial public offering or spin out of the HMF Business, (iii) a HIG Change of Control Event or, for the avoidance of doubt, any indirect sale, issuance, conveyance, transfer or other disposition involving Hartford or any successor of Hartford (but no other Hartford Affiliate) where the Persons who were the beneficial owners of the outstanding voting stock of Hartford or any successor of Hartford immediately prior to such transaction beneficially own, immediately following such transaction, directly or indirectly (including, without limitation, through one or more holding companies or subsidiaries) 50% or more of the outstanding voting stock of the corporation or other entity resulting from such transaction immediately following such transaction or (iv) a Non-HMF Sale; provided that, solely for purposes of Section 6.4, the reference in this definition to “25%” shall be replaced with “50%”.

“Investment Company Act” means the Investment Company Act of 1940, as amended, and all rules and regulations of the SEC thereunder.

“Legacy Hartford Funds” means the Hartford Funds existing at the closing of the Hartford Sale or HIG Change of Control Event, as applicable.

“Make-Whole Payment” shall have the meaning set forth in Section 9.4(a).

“Material Adverse Effect” means with respect to Hartford or Wellington, as applicable, any change, effect, event, occurrence, state of facts or development that could reasonably be expected to cause the applicable Party to be unable to perform its obligations hereunder in any material respect.

“Non-Hartford Covered Fund AUM” shall equal the total assets under management of Wellington in Covered Funds not sponsored or managed by Hartford or one of its Affiliates, calculated as of the specified measurement date.

“Non-HMF Sale” means any HMF Sale (applied without giving effect to clause (iv) of such definition for purposes of this definition) that satisfies each of the following: (i) the transaction (or series of related transactions consummated pursuant to a common plan or arrangement) involves the sale, issuance, conveyance, transfer or other disposition of one or more Hartford businesses in addition to, or that includes, the HMF Business (including a business of which the HMF Business may be a business line or unit (e.g., Hartford’s Wealth Management Division), (ii) the net income of the HMF Business represents [***]% or more of the total net income of the Hartford businesses (including the HMF Business) involved in the applicable transaction and (iii) the HMF Business was not offered as being available for separate purchase (provided that, in the event that the HMF Business was offered as being available for separate purchase and Hartford thereafter determines that it will sell the HMF Business only as part of the larger sale of the Hartford businesses, such larger sale shall continue to be a Non-HMF-Sale and Wellington shall not have a right to participate in such larger sale under Section 6.3 or have a right of first refusal under Section 6.4 with respect to such larger sale). For purposes of this definition, net income shall be the net income for the 12 month period ended at the end of the calendar quarter ending immediately prior to the date on which the applicable Preliminary Hartford Sale Notice is required to be delivered as provided in or derived from Hartford’s financial statements for the applicable period filed with the SEC.

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

7

“Party” means each Person identified on the signature page hereto.

“Person” means any natural person, corporation, company, limited liability company, partnership (limited or general), limited liability partnership, joint venture, association, trust, unincorporated organization or other entity.

“Preliminary Hartford Sale Notice” shall have the meaning set forth in Section 6.3(a).

“Restricted Broker-Dealer” means any of the following: (i) any Person set forth on Schedule C hereto for so long as such Person is one of the top 25 (based on gross sales for all Hartford Funds using the most recently available reliable sales data) broker-dealers that has a written selling agreement with respect to Hartford Funds; (ii) any Person that, after the date hereof, becomes one of the top 25 (based on gross sales for all Hartford Funds using the most recently available reliable sales data) broker-dealers with a written selling agreement with respect to Hartford Funds; or (iii) any Person set forth on Schedule C by mutual agreement of Hartford and Wellington. Notwithstanding the foregoing clause (ii), no Person with whom Wellington is in active discussions with regarding a subadvisory engagement shall be a Restricted Broker-Dealer to the extent that such Person is not set forth on Schedule C in effect as of the date of the commencement of such discussions.

“ROFR Election Period” shall have the meaning set forth in Section 6.4(a).

“ROFR Exercise Notice” shall have the meaning set forth in Section 6.4(a).

“ROFR Notice” shall have the meaning set forth in Section 6.4(a).

“ROFR Sale” means an HMF Sale where a Consolidator will, after the consummation of the HMF Sale, own (or have a right to acquire) a direct or indirect interest in the HMF Business. For the avoidance of doubt, (i) a direct or indirect interest held by a Consolidator in its capacity as a limited partner (or similar passive investor) of a third party fund or “sidecar” fund investment solely for investment purposes shall not be a ROFR Sale and (ii) in the case of an HMF Sale where a Consolidator only provides debt financing (which may include a de minimus amount of an equity “kicker” in respect of such debt financing in a customary amount, as applicable), to a purchaser in connection therewith, such HMF Sale shall not be a ROFR Sale.

“SEC” means the Securities and Exchange Commission.

“Sleeve” means that portion of the assets of a fund registered under the Investment Company Act that is managed pursuant to a particular investment strategy within the broader investment strategy of the fund as a whole.

8

“SRO” shall mean any industry self-regulatory organization, agency, or authority or stock exchange, including FINRA, each national securities exchange in the U.S. and any other commission, board, agency or body, whether in the U.S. or foreign, that is charged with the supervision or regulation of brokers, dealers, securities underwriting or trading, stock exchanges, commodities exchanges, investment companies or investment advisers.

“TER” shall have the meaning set forth in Section 3.1(b).

“Term” shall have the meaning set forth in Section 9.1.

“Total Enterprise Value” means the total enterprise value of the HMF Business derived from a Hartford Sale or HIG Change of Control Event, as applicable, measured as of the closing of such Hartford Sale or HIG Change of Control Event, all as determined pursuant to Section 9.5. Total Enterprise Value shall take into account (i) any debt or equity instruments or assets received by Hartford and its Affiliates (including any equity interest in the purchaser), (ii) the net present value of any earn-out, contingent consideration or other future payment (determined using an appropriate discount rate in light of prevailing market conditions at the time, the conditions to the payment of such contingent amounts, and any other material factors relevant to the timing and likelihood of such future payments being made, including indemnity obligations) and (iii) the net debt for borrowed money (less all cash and cash equivalents), if any, of Hartford and its Affiliates allocable to the HMF Business as is determined by the Appraiser(s) to be appropriate. For the avoidance of doubt, in the case of a Hartford Sale or HIG Change of Control Event (as applicable) that involves, directly or indirectly, less than 100% of the HMF Business, Total Enterprise Value shall be determined as if 100% of the HMF Business had been sold in the Hartford Sale or HIG Change of Control Event (as applicable).

“Trigger Event” means (i) the termination or replacement, in whole or in part, of Wellington as subadviser to a Hartford Fund (including as a result of a fund merger or appointment of a co-manager for a Hartford Fund that was previously subadvised only by Wellington) or (ii) any Person other than Wellington (including any Affiliate of Hartford or internal management function) serving as subadviser for any portion of a Hartford Fund, or as adviser for a Hartford Fund with no subadviser, other than, (A) in either case, in connection with a Voluntary Resignation or (B) in the case of clause (ii), any Person acting in such capacity on the date of this Agreement but solely in respect of the Hartford Fund which such Person advises or subadvises on the date of this Agreement.

“Voluntary Resignation” means any resignation or other voluntary termination initiated by Wellington of its role as subadviser to a Legacy Hartford Fund, other than a resignation or other voluntary termination that results from Hartford or the Hartford Advisers recommending to the Hartford Funds Board any reduction in the rate of any subadvisory fee payable by any Hartford Fund.

“WAUM” shall equal the total assets under management of Wellington in Covered Funds (including Non-Hartford Covered Fund AUM), including assets managed through subadvisory relationships, calculated as of the specified measurement date.

“Wellington” shall have the meaning set forth in the Preamble.

9

“Wellington Change of Control Event” means (a) any event (or series of related events consummated pursuant to a common plan or arrangement) where any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be deemed to have “beneficial ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or in the future), directly or indirectly, of more than 50% of the voting power of the outstanding voting equity of Wellington (other than with respect to one or more Persons beneficially owning proxies to vote more than 50% of the voting stock of Hartford at an annual or special meeting which is not for the purpose of approving a merger or other acquisition transaction) or (b) any transaction (including any merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar transaction, including a joint venture or obtaining a majority interest through contractual arrangements) (or series of related transactions implemented pursuant to a common plan or arrangement) pursuant to which (i) more than 50% of the voting equity of Wellington is converted into or exchanged for cash, securities or other property or Wellington conveys, transfers, leases or otherwise disposes of all or substantially all of the assets of Wellington (other than (x) a transfer of such assets to one or more Affiliates of Wellington or (y) any such transaction where the Persons who were the beneficial owners of the outstanding voting equity of Wellington immediately prior to such transaction beneficially own, directly or indirectly (including, without limitation, through one or more holding companies or subsidiaries), 50% or more of the outstanding voting stock of the corporation or other entity resulting from such transaction) or (ii) without limitation of clause (i), Persons who were the beneficial owners of the outstanding voting equity of Wellington immediately prior to such transaction beneficially do not own, immediately following such transaction directly or indirectly (including, without limitation, through one or more holding companies or subsidiaries), 50% or more of the outstanding voting stock of the corporation or other entity resulting from such transaction). Notwithstanding the foregoing, (x) the admittance and withdrawal of partners of Wellington in the ordinary course shall not be a Wellington Change of Control Event and (y) the partners of Wellington shall not be deemed to be a “group” solely as a result of their status as partners.

“Wellington Subadvised Percentage” shall equal:

(i) the Closing AUM Percentage, less

(ii) with respect to any Legacy Hartford Fund (or portion thereof) where a Trigger Event occurs following the consummation of the Hartford Sale or HIG Change of Control Event (as applicable), the quotient (expressed as a percentage) of (A) the assets under management of such Legacy Hartford Fund (or portion thereof) that were subadvised by Wellington immediately prior to the Trigger Event divided by (B) the total assets under management of all Legacy Hartford Funds at such time, plus

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(iii) with respect to any Hartford Fund not subadvised by Wellington at the consummation of the Hartford Sale or HIG Change of Control Event (as applicable) that engages Wellington as subadviser following the consummation of the Hartford Sale or HIG Change of Control Event (as applicable), the quotient (expressed as a percentage) of (A) the assets under management of such Hartford Fund at the time of engagement that will be subadvised by Wellington divided by (B) the total assets under management of all Legacy Hartford Funds at such time. Any Hartford Fund (other than a Legacy Hartford Fund) that engages Wellington as subadviser after the date of consummation of a Hartford Sale or HIG Change of Control Event (as applicable) shall be treated as a Legacy Hartford Fund solely for purposes of applying clauses (ii) and (iii) of this definition (including in the case of a subsequent Trigger Event with respect to any such Hartford Fund).

It is understood and agreed that any Legacy Hartford Fund in respect of which there is a Voluntary Resignation by Wellington, at any time, shall be deemed to continue to be advised by Wellington solely for purposes of the calculation of the Wellington Subadvised Percentage.

ARTICLE II

PREFERRED PARTNERSHIP

Section 2.1 Preferred Subadviser. (a) Subject to the terms and conditions of this Agreement (including Section 2.9), Wellington shall be the preferred subadviser to the Hartford Funds. Subject to the terms and conditions of this Agreement, each Hartford Adviser shall, and Hartford shall cause it to, recommend Wellington to the Hartford Funds Boards as subadviser to the Hartford Funds on terms substantially similar to the existing subadvisory agreements with Wellington (other than fee rates, which shall be reasonably acceptable to Hartford and Wellington), and Wellington shall serve in such capacity in each instance approved by the Hartford Funds Boards.

(b) Following the occurrence of a Trigger Event, no Hartford Adviser shall, and Hartford shall not permit any of them to, enter into any agreement for a new advisory or subadvisory engagement with respect to any Hartford Fund with any Person other than Wellington (including any Affiliate of Hartford or internal management function) if, after giving effect to the applicable Trigger Event and such new advisory or subadvisory agreement, Hartford believes in good faith that Wellington would serve as subadviser to less than [***]% of the total assets under management of all of the Hartford Funds (with such determination based upon the most recently reliable assets under management data and with it being understood and agreed that any Hartford Fund in respect of which there is a Voluntary Resignation by Wellington shall be deemed to continue to be advised by Wellington solely for purposes of such calculation).

Section 2.2 Preferred Partner. Subject to the terms and conditions of this Agreement, Hartford shall be the preferred partner of Wellington with respect to Covered Funds. Subject to the terms and conditions of this Agreement, Hartford shall, and shall cause Hartford Investment Financial Services, LLC, Hartford Securities Distribution Company, Inc., Hartford Life Distributors, LLC and any other registered broker-dealer Affiliate who serves as a principal underwriter for a Hartford Fund or is primarily engaged in wholesale distribution of the Hartford Funds to, use its good faith and commercially reasonable efforts to promote the distribution in the U.S. broker-sold mutual fund market of the Hartford Funds for which Wellington acts as subadviser.

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

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Section 2.3 Certain Restrictions on Wellington Subadvisory Business.

(a) Wellington shall not, without the prior written consent of Hartford, enter into any agreement for a new engagement to (i) serve as the sole adviser or subadviser to any Covered Fund or (ii) serve as the sole adviser to any separately managed account or unified management account offered primarily to retail investors in the U.S. where, in the case of clauses (i) and (ii), such Covered Fund or account is (A) sponsored by a Restricted Broker-Dealer and (B) offered on a stand-alone basis to the end investor (i.e., the fund or account does not represent one of multiple investment approaches in a bundled investment option).

(b) Wellington shall not enter into any agreement for a new engagement to subadvise any Covered Fund that is not sponsored or managed by Hartford or a Hartford Adviser if, at the time of entering into such an agreement, Wellington believes in good faith that the assets under management of the new engagement at the time of initial funding will cause the Non-Hartford Covered Fund AUM to exceed [***]% of WAUM (with such determination based upon the most recently available reliable assets under management data).

(c) Prior to June 30, 2016, Wellington shall not enter into any agreement for a new engagement to subadvise any fixed-income Covered Fund other than a Covered Fund sponsored or managed by Hartford or a Hartford Adviser without the prior written consent of Hartford.

Section 2.4 Wellington Portfolio Managers. Wellington shall not assign an individual lead portfolio manager of any Hartford Fund(s) (or any portion of any other Hartford Fund with a substantially similar investment approach managed by the same individual) whose assets under management subadvised or otherwise managed by such individual exceeds $[***] billion (with such determination based upon the most recently available reliable assets under management data and determined, in the case of a lead portfolio manager that contributes to any other Hartford Fund with a substantially similar investment approach and for which the portfolio manager is not the lead portfolio manger, without regard to such other Hartford Fund, i.e., to avoid any double-counting of assets under management) to serve as a lead portfolio manager for a Covered Fund with a substantially similar investment approach to the applicable Hartford Fund(s) not sponsored or managed by Hartford or one of its Affiliates; provided, however, that an individual lead portfolio manager shall be permitted to manage a Covered Fund where such individual acted as portfolio manager to such Covered Fund at the time the assets under management of such Hartford Fund(s) exceeded $[***] billion. In addition, Wellington shall not assign an individual lead portfolio manager responsible for any Hartford Fund(s) listed on Schedule E hereto to serve as a lead portfolio manager for a Covered Fund with a substantially similar investment approach to the applicable Hartford Fund(s) not sponsored by Hartford or one of its Affiliates; provided, however, that this restriction shall cease to apply to the relevant portfolio manager when any milestone set forth on Schedule E for the applicable Covered Fund is not achieved. The list of Hartford Funds on Schedule E may be amended only upon the mutual written agreement of the Parties.

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

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Section 2.5 Fixed Income Hartford Funds. No later than December 31, 2012, each Hartford Adviser shall, and Hartford shall cause it to, recommend to the Hartford Funds Board that Wellington be engaged as subadviser on all existing fixed income funds identified on Schedule F (together with any successor thereto whether by merger or otherwise, the “Fixed Income Fund Mandates”); provided that, if an event involving Wellington occurs after the date hereof that a Hartford Adviser determines prevents it from making a recommendation for any Fixed Income Fund Mandate as a result of the Hartford Adviser’s exercise of its fiduciary duties to the applicable Fixed Income Fund Mandate, the Hartford Adviser shall not be required to make such recommendation.

Section 2.6 Wellington Termination Right. Notwithstanding any other provision of this Agreement, Wellington shall have the right to terminate the provisions of this Article II within 60 days following (i) a breach of 2.1(b) by Hartford or a Hartford Adviser, (ii) the date on which Wellington receives notice from Hartford (or, if earlier, the date on which Wellington discovers) that any Hartford HLS Fund ceases to be offered as an investment option within the variable annuity and variable life contracts issued by Hartford or its Affiliates on the date hereof (including, for the avoidance of doubt, if Hartford or one of its Affiliates obtains a substitution order to replace any such Hartford HLS Fund) or (iii) the five year anniversary of this Agreement. For the avoidance of doubt, this Section 2.6 shall not give Wellington the right to terminate this Agreement under Section 9.2.

Section 2.7 Hartford Termination Right. Notwithstanding any other provision of this Agreement, the obligations of Hartford under Sections 6.4 and 9.4 shall terminate automatically without further action by the Parties if Wellington breaches its obligations under Sections 2.3 or 2.4 of this Agreement. In addition, Hartford shall have the right to terminate the provisions of this Article II within 60 days following (i) a breach by Wellington of its obligations under Section 2.3 or 2.4 or (ii) the five-year anniversary of this Agreement. For the avoidance of doubt, this Section 2.7 shall not give Hartford the right to terminate this Agreement under Section 9.2.

Section 2.8 No Further Restrictions on HIMCO. Subject to the terms of this Agreement (including Sections 2.5, 2.6, 9.2(b)(ii) and 9.4), HIMCO shall not be restricted in its ability to subadvise open-end, closed-end or actively managed exchange-traded funds (regardless of whether such funds are registered under the Investment Company Act).

Section 2.9 Fiduciary Duties.

(a) The Parties acknowledge that, to the extent provided by Applicable Law, (i) Wellington is a fiduciary to the Hartford Funds in its capacity as an investment adviser to the Hartford Funds for which it serves as subadviser and (ii) each Hartford Adviser is a fiduciary to the Hartford Funds for which it serves as investment adviser. Wellington acknowledges and agrees that Hartford shall not be deemed to have breached its obligations under Section 2.1(a) hereof to the extent that a failure to retain, hire or recommend Wellington for any subadvisory assignment under this Agreement is as a result of a Hartford Adviser’s exercise of its fiduciary duties to the applicable Hartford Fund(s) or the exercise by the Hartford Funds Board of its fiduciary duties. For the avoidance of doubt, the

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Parties acknowledge and agree that (A) other than as expressly provided in the immediately preceding sentence, this Section 2.9 is not intended to, and shall not, modify, qualify, limit or in any way affect any of the contractual rights or obligations of the Parties under this Agreement and (B) notwithstanding the immediately preceding sentence, any action or failure to act by Hartford or one of its Affiliates or the Hartford Funds Board (including a decision to terminate or fail to hire Wellington as subadviser to a Hartford Fund) due, in whole or in part, to the exercise (or purported exercise) of a Hartford Adviser’s or the Hartford Funds Board’s fiduciary obligation shall not impact the inclusion or exclusion of the assets under management of or fees payable in respect of any Hartford Fund for any calculation under this Agreement (including for purposes of Sections 2.6, 9.2 and 9.4).

(b) In the event that any Hartford Adviser determines that it is required to recommend the termination of Wellington or is not able to recommend the hiring or continuation of Wellington as a subadviser to any Hartford Fund as a result of a Hartford Adviser’s exercise of its fiduciary duties to the applicable Hartford Fund(s), the Hartford Adviser shall provide notice (which may be oral) of any such determination to Wellington, with such notice containing a detailed explanation of the reasons for such determination. Such notice shall be provided to Wellington a reasonable amount of time prior to the time that the Hartford Funds Board is notified of such determination.

Section 2.10 Update of Certain Schedules. Within 10 Business Days after the end of each calendar year (other than 2011), Hartford shall deliver to Wellington an updated Schedule C that reflects any changes to such schedule as determined pursuant to the definition of “Restricted Broker-Dealer.” Within 30 days after the delivery of any updated Schedule C, Wellington shall inform Hartford if any new Person listed thereon is covered by the last sentence of the definition of “Restricted Broker-Dealer”, each of whom shall be removed from the updated Schedule C. In the event that either party objects to any change or failure to make a change to any updated Schedule C, the provisions of Section 8.1 shall apply.

ARTICLE III

FEES

Section 3.1 Agreement With Respect to Fees.

(a) Fees. Subject to the terms of this Agreement, the Hartford Advisers shall, and Hartford shall cause them to, recommend to the Hartford Funds Board the fee schedule described in Schedule G for each Hartford Fund identified therein.

(b) Certain Fee Reductions. The new subadvisory fees to be implemented for the funds identified in paragraph 2 of Schedule G are contingent on (i) the approval of the Hartford Funds Board and (ii) the Hartford Funds Board and Hartford reducing the Total Expense Ratio (“TER”) on each of these funds as provided in paragraph 2 of Schedule G. If the TER for any such fund increases for any reason (including via increased management fees or fee waiver removal, lapse or modification), Wellington shall be entitled to share pro rata in such increase.

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(c) Prospective Fee Changes. Wellington shall not request that the Hartford Funds Board increase the fee rate payable by any existing Hartford Fund to which Wellington provides subadvisory services. The Hartford Advisers shall not, and Hartford shall not permit them to, recommend to the Hartford Funds Board any reduction in the rate of any subadvisory fee payable by any Hartford Fund (including those described in Section 3.1(f)) to which Wellington provides subadvisory services.

(d) Participation in Fee Reductions. Wellington and Hartford agree to share pro rata in any reduction in the fee rate paid by any existing Hartford Fund initiated by the Hartford Funds Board, including any fee waiver, as a result of any changes to the fee structure or computation implemented by the Hartford Funds Board; provided, however, that Wellington shall have an opportunity to discuss with the Hartford Funds Board any proposed reduction in such fee rate a reasonable amount of time prior to the Hartford Funds Board voting on such reduction. For the avoidance of doubt, Wellington shall not bear any portion of a fee decrease (however occurring) that is not initiated by the Hartford Funds Board.

(e) Participation in Fee Increases. Wellington and Hartford agree to share pro rata in any increase in the fee rate paid by any Hartford Fund, including via a removal, lapse or modification of any fee waiver, as a result of any changes to the fee structure or computation implemented by the Hartford Funds Board.

(f) Allocation Services Fees. The fee rate for asset allocation services to the Hartford Funds and Hartford-managed 529 plans to be provided by Wellington shall be as set forth on Schedule H. Wellington and Hartford agree to share pro rata in any reduction in the fee rate paid by any such Hartford Fund initiated by the Hartford Funds Board, including any fee waiver in excess of the fee waiver in effect as of the date hereof, as a result of any changes to the fee structure or computation implemented by the Hartford Funds Board. For the avoidance of doubt, Wellington shall not bear any portion of a fee decrease (however occurring) that is not initiated by the Hartford Funds Board.

Section 3.2 Fee Waivers for Fixed Income Mandates. Wellington shall implement a fee waiver program for each Fixed Income Fund Mandate that (i) maintains that subadvisory fee in effect as of the date of this Agreement on each of the Fixed Income Fund Mandates for the first two years Wellington subadvises each fund; and (ii) beginning with the first year after the initial two-year period described in clause (i), reduces the fee waiver by one third each year such that at the beginning of the fifth year that Wellington subadvises such funds, the fee waiver shall be equal to zero.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF HARTFORD

Each Hartford Party severally but not jointly represents and warrants to Wellington as follows as of the date hereof, with each Hartford Party representing and warranting to Wellington only as to those items that are specifically applicable to each such entity:

Section 4.1 Organization and Standing. Hartford is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. HLI is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Each of the Hartford Advisers is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware or the State of Connecticut, as applicable. Each Hartford Party is duly qualified to do business and is in good standing in each jurisdiction in which such qualification is required for the conduct of its business, except where the failure to be so qualified is not reasonably likely to have a Material Adverse Effect. Each Hartford Party has in effect all federal, state, local and foreign governmental authorizations required for it to carry on its business, except where the failure to obtain such authorizations is not reasonably likely to have a Material Adverse Effect.

Section 4.2 Power and Authority. Each Hartford Party has full corporate or limited liability power and authority, as the case may be, to carry on its business as presently being conducted and to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement has been duly authorized by all necessary corporate action on the part of each Hartford Party. Assuming the due authorization, execution and delivery of this Agreement by Wellington, this Agreement constitutes a legal, valid and binding obligation of each Hartford Party, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors generally.

Section 4.3 Non-Contravention; Consents.

(a) The execution, delivery and performance of this Agreement by each Hartford Party will not (i) violate, conflict with, or result in a breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration (which is not expressly and permanently waived) under, or result in the creation of any Encumbrance upon any material assets of Hartford (or any of its Affiliates) under any of the terms, conditions or provisions of, (x) the organizational documents of Hartford (or the constituent documents of any of its Affiliates, as applicable), or (y) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which Hartford (or any of its Affiliates) is a party or by or to which it or any of its properties may be bound or subject; or (ii) violate in any material respect any Applicable Law.

(b) No material notice to, filing with, authorization of, exemption by, order or permit from, or consent or approval of, any Governmental Authority is necessary for any Hartford Party to enter into this Agreement or to complete any of the actions contemplated hereunder.

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF WELLINGTON

Wellington represents and warrants to the Hartford Parties as follows as of the date hereof:

Section 5.1 Organization and Standing. Wellington is a limited liability partnership duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts. Wellington is duly qualified to do business and is in good standing in each state in which such qualification is required for the conduct of its business except where the failure to be so qualified is not reasonably likely to have a Material Adverse Effect. Wellington has in effect all federal, state, local and foreign governmental authorizations required for it to carry on its business, except where the failure to obtain such authorizations is not reasonably likely to have a Material Adverse Effect.

Section 5.2 Power and Authority. Wellington has full power and authority to carry on its business as presently being conducted. Wellington has all requisite limited liability partnership power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement has been duly authorized by all requisite action on the part of Wellington. Assuming the due authorization, execution and delivery of this Agreement by Hartford, this Agreement constitutes a valid and binding obligation of Wellington, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors generally.

Section 5.3 Non-Contravention; Consents.

(a) The execution, delivery and performance of this Agreement by Wellington will not (i) violate, conflict with, or result in a breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration (which is not expressly and permanently waived) under, or result in the creation of any Encumbrance upon any material assets of Wellington (or any of its Affiliates) under any of the terms, conditions or provisions of, (x) the organizational documents of Wellington (or the constituent documents of any of its Affiliates, as applicable), or (y) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which Wellington (or any of its Affiliates) is a party or by or to which it or any of its properties may be bound or subject; or (ii) violate in any material respect any Applicable Law.

(b) No material notice to, filing with, authorization of, exemption by, order or permit from, or consent or approval of, any Governmental Authority is necessary for Wellington to enter into this Agreement or to complete any of the actions contemplated hereunder.

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ARTICLE VI

COVENANTS

Section 6.1 Brand.

(a) Subject to mutually agreed documentation between Wellington and the Hartford Funds, Wellington shall permit the Hartford Funds to use the term “WMC” in the name of any fund so long as it is (i) subadvised solely by Wellington and (ii) the applicable Hartford Fund name also includes the name of the Hartford Fund family (e.g., “Hartford”). Hartford hereby acknowledges and agrees that it and its Affiliates shall not acquire any right, title or interest in or to and shall not register (or cause the Hartford Funds to register) the term “WMC” (either alone or in connection with other words or terms), which term “WMC” is and shall remain the exclusive property of Wellington. The foregoing permitted use is subject to compliance by the Hartford Funds with such use and quality control requirements and guidelines as may be reasonably requested by Wellington.

(b) No Party shall use any written materials that include the other Party’s name or brand or any variation thereof or that are otherwise supplied by the other Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned.

Section 6.2 Periodic Certifications

(a) No later than five Business days following the date on which Wellington enters into an agreement with respect to an engagement described in Section 2.3(b), Wellington shall deliver a certificate to Hartford, signed by an Executive Officer of Wellington, setting forth, to the knowledge of such Executive Officer, the amount of Non-Hartford Covered Fund AUM and WAUM (which the Parties acknowledge will be based upon information obtained from third parties and thus will be subject to any errors or omissions that may be contained therein) and indicating the date(s) as of which such amounts were determined.

(b) No later than five Business days following a Trigger Event, Hartford shall deliver a certificate to Wellington, signed by an Executive Officer of Hartford, setting forth to the knowledge of such Executive Officer (i) for purposes of Section 2.6(i), the amount of assets under management of the Hartford Funds and the amount of such assets under management subadvised by Wellington and indicating the date(s) as of which such amounts were determined and (ii) for purposes of Section 9.4, the assets under management of the applicable Legacy Hartford Fund and the total assets under management for all Legacy Hartford Funds determined as of the specified measurement date.

(c) No later than ten Business days following the end of each calendar year (other than 2011), Wellington and Hartford shall deliver a certificate to the other, signed by an Executive Officer thereof, certifying that (i) in the case of Wellington, it has complied with its obligations under Sections 2.3, 2.4 and 3.1(c) and (ii) in the case of Hartford, it has complied with its obligations under Sections 2.1 (second sentence only) and 3.1(c).

Section 6.3 Notice of a Hartford Sale. (a) Promptly following a decision by Hartford or one of its Affiliates to take substantial steps to explore a potential Hartford Sale, including where Hartford (i) solicits formal interest in a potential Hartford Sale from any Person (other than a controlled, wholly-owned Affiliate of Hartford), (ii) hires an investment banker or broker to explore a potential Hartford Sale or (iii) engages in substantive negotiations with any Person (other than a controlled, wholly-owned Affiliate of Hartford) regarding a potential Hartford Sale, Hartford shall provide written notice to Wellington (a “Preliminary Hartford Sale Notice”), which

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notice shall describe in reasonable detail the nature of the action(s) triggering the notice (including whether a Person who is a Consolidator is a potential purchaser (or other Person participating in or providing equity financing for the ROFR Sale)). Wellington may, at its option, elect to participate as a bidder in any process involving a potential HMF Sale, so long as such potential HMF Sale is to a Consolidator or is part of a common process whereby multiple bidders are solicited, on the same basis afforded to any other third party (which would include any term or condition as to the timing to submit a proposal); provided, however, that this opportunity of Wellington to participate as a bidder excludes any situation where Hartford has elected to negotiate exclusively with a single non-Consolidator bidder. Hartford shall keep Wellington informed on a current basis as to the status of any potential Hartford Sale as well as any material developments related to such proposed Hartford Sale. Within five Business Days of entering into a definitive written agreement that, if consummated would create a Hartford Sale (other than a Hartford Sale to Wellington), Hartford shall provide written notice to Wellington of such Hartford Sale; provided, however, that for the purposes of this Section 6.3, any notice requirement shall be satisfied upon any filing related to such transaction pursuant to the EDGAR system.

(b) In furtherance of Section 6.3(a), in connection with a ROFR Sale, subject to Wellington executing a non-disclosure agreement reasonably acceptable to Hartford and Wellington, from and after the delivery of the applicable Preliminary Hartford Sale Notice until the time, if any, that a potential HMF Sale is no longer a ROFR Sale (which period shall, for the avoidance of doubt, continue after the time, if any, that Wellington ceases to participate in the sales process), Hartford shall (and shall cause its Affiliates and representatives to), in connection with such ROFR Sale:

(i) provide Wellington and its representatives and financing sources with the same level of access to the properties, books and records and employees of Hartford and its Affiliates to conduct its due diligence review of the HMF Business as is provided to other potential purchasers;

(ii) as is reasonably requested by Wellington, discuss the status and timing of the sale process with Wellington and its representatives and financing sources;

(iii) promptly provide Wellington with written information regarding the structure, type and amount of consideration and other material terms related to any proposed ancillary commercial or strategic relationship contained in the bids received by any Consolidators in the second or later round (or first round where there is only one round) of the sales process (provided that the identity and any information that could reasonably be expected to reveal the identity of the Consolidator shall in no event be provided; provided further that such written information shall include a reasonable description of the nature and extent of the business of any Consolidator (without identifying such Consolidator by name) to the extent necessary for Wellington to evaluate the structure, type or amount of consideration or other material terms related to any proposed ancillary commercial or strategic relationship); and

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(iv) promptly provide Wellington with copies of drafts (and mark-ups) of the primary and ancillary transaction agreements provided to or received from a Consolidator described in clause (iii) (provided that (A) the identity and any information that could reasonably be expected to reveal the identity of the Consolidator as well as any information regarding the Consolidator’s intentions with respect to the post-closing operations of the HMF Business to the extent related to Wellington shall be redacted and (B) notwithstanding clause (A), as soon as practicable prior to the delivery of the ROFR Notice (which shall not be later than the time Hartford selects a single Consolidator to pursue the ROFR Sale), Hartford shall disclose the name of the Consolidator who is the winning bidder).

(c) Within five Business Days of the closing of a Hartford Sale to any Person other than Wellington, Hartford shall provide written notice to Wellington of such Hartford Sale.

Section 6.4 Right of First Refusal.

(a) Prior to entering into any definitive agreement for a ROFR Sale, Hartford shall provide written notice to Wellington (the “ROFR Notice”). The ROFR Notice shall describe in reasonable detail the proposed ROFR Sale, including the name of the Consolidator, the structure, type and amount of all consideration to be paid in connection therewith and a copy of the primary transaction agreement and, to the extent necessary for Wellington to evaluate the structure, type or amount of consideration or other material terms related to any proposed ancillary commercial or strategic relationship to be entered into in connection with the proposed HMF Sale, any applicable ancillary agreement (each in substantially agreed form. Wellington shall have the right, exercisable in writing (a “ROFR Exercise Notice”) within ten Business Days of the receipt of the ROFR Notice (the “ROFR Election Period”), to elect to purchase the HMF Business in the place of the potential purchaser(s) on substantially similar material terms and conditions as those set forth in the ROFR Notice; provided that the type of consideration may provide for the substitution of cash in lieu of non-cash consideration (which will include the value of any commercial or strategic relationship to be entered into between Hartford or one of its Affiliates and a Consolidator as part of the ROFR Sale). In the event that Wellington delivers a ROFR Exercise Notice and Wellington and Hartford cannot agree on the valuation of any such relationship on or prior to the end of the 15 Business Day period in Section 6.4(b) (as may be extended), (x) the procedures of Section 9.5 shall apply to the determination of such value and (y) any signing and closing of any transaction between Wellington and Hartford shall not be subject to the agreement by them of such value on or prior to the end of the 15 Business Day period in Section 6.4(b) as may be extended (but subject to payment by Wellington of the amount determined in accordance with the procedures set forth in Section 9.5 at closing). For the avoidance of doubt, Wellington may elect to have one or more third parties (including an equity and/or debt financing provider) participate in the applicable proposed ROFR Sale.

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(b) Following delivery of a ROFR Exercise Notice, Hartford and Wellington shall negotiate in good faith for 15 Business Days (as may be extended pursuant to this Section 6.4(b) in the immediately succeeding sentence) the terms and conditions of the definitive transaction agreements. If Hartford and Wellington do not execute and deliver to one another the definitive transaction agreements within 15 Business Days of the delivery of the ROFR Exercise Notice (which period may be extended upon the mutual written agreement of the Parties for an additional seven Business Days if, at the end of the 15 Business Day period, the Parties are in substantial agreement as to the primary transaction agreement), Hartford shall be free for a period of 45 Business Days thereafter to execute and deliver all of the definitive transaction agreements described in the ROFR Notice for the ROFR Sale, which sale shall be on the same material terms and conditions as were set forth in the ROFR Notice (or on terms and conditions that are no more favorable to the purchaser (or other Person participating in or providing equity financing for the ROFR Sale) than the terms and conditions in the ROFR Notice). If the ROFR Sale is not consummated within 365 days from the execution and delivery of definitive documents in the ROFR Notice for the ROFR Sale, such proposed ROFR Sale shall require a new ROFR Notice and the provisions of this Section 6.4 shall apply anew to such proposed ROFR Sale.

(c) If Wellington has not delivered a ROFR Exercise Notice by the expiration of the ROFR Election Period, Hartford shall be free for a period of 45 Business Days thereafter to execute and deliver all of the definitive agreements described in the ROFR Notice for the ROFR Sale, which sale shall be on the same material terms and conditions as were set forth in the ROFR Notice (or on terms and conditions that are no more favorable to the purchaser (or other Person participating in or providing equity financing for the ROFR Sale) than the terms and conditions in the ROFR Notice). In the case of any proposed ROFR Sale (i) where any material term or condition changes from that term or condition as set forth in the ROFR Notice (other than a term or condition that is not more favorable to the purchaser (or other Person participating in or providing equity financing for the ROFR Sale) than the applicable term or condition in the ROFR Notice) or (ii) in respect of which a ROFR Exercise Notice is not delivered and (A) where all of the definitive agreements described in the ROFR Notice are not executed and delivered within the aforementioned 45 Business Day period or (B) the ROFR Sale is not consummated within 365 days from the execution and delivery of definitive documents, such proposed ROFR Sale shall require a new ROFR Notice and the provisions of this Section 6.4 shall apply anew to such proposed ROFR Sale.

Section 6.5 Notice of Wellington Change of Control Event. In the event that Wellington enters into a definitive written agreement that, if consummated, will create a Wellington Change of Control Event, Wellington shall provide written notice to Hartford promptly following the time that Wellington notifies any client of such Wellington Change of Control Event; provided, however, that for the purposes of this Section 6.5, any notice requirement shall be satisfied upon any filing related to such transaction pursuant to the EDGAR system.

Section 6.6 Notice of HIG Change of Control Event. In the event that Hartford or any Affiliate of Hartford enters into a definitive written agreement that, if consummated, will create a HIG Change of Control Event, Hartford shall provide prompt written notice to Wellington (“HIG Change of Control Notice”); provided, however, that for the purposes of this Section 6.6, any notice requirement shall be satisfied upon any filing related to such transaction pursuant to the EDGAR system.

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Section 6.7 IPO or Spin Out. Promptly following such time, if any, as Hartford or its Affiliates decides to take substantial steps to undertake an initial public offering of the HMF Business or a spin-out transaction of the HMF Business, Hartford shall provide to Wellington notice of such fact (which notice may be oral).

ARTICLE VII

CONFIDENTIALITY

Section 7.1 Treatment of Confidential Information. Subject to Section 7.2, each Party shall, and shall cause its Affiliates to, hold all Confidential Information in strict confidence and shall not disclose any Confidential Information to any Person, except to directors, officers, partners, stockholders, employees and advisors of a Party or its Affiliates who need to know such information solely for the purpose of this Agreement, have been informed of the confidential nature of the Confidential Information and are bound by written agreements with the disclosing Party which contain restrictions regarding disclosure and use of the Confidential Information comparable to and no less restrictive than those set forth herein. Each Party shall take at least the same degree of care that each uses to protect its own confidential and proprietary information and materials of similar nature and importance to protect the confidentiality and avoid the unauthorized use, disclosure, publication or dissemination of any Confidential Information.

Section 7.2 Permitted Disclosure. (a) Notwithstanding Section 7.1, prior to making any regulatory filing with a Governmental Authority of this Agreement or the information contained herein (including a Form 8-K or Form 10-K filed by Hartford), the disclosing Party shall provide the other Party with a reasonable opportunity to comment on such documents and the redacted form of such documents, as applicable.

(b) Notwithstanding Section 7.1, in the event that any Party is requested under Applicable Law (including by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose Confidential Information, it is agreed that the disclosing Party shall provide the other Party with prompt notice of such event (to the extent possible) so that the non-disclosing Party may seek a protective order or other appropriate remedy or waive compliance with the applicable provisions of this Agreement by the disclosing Party; it being understood and agreed that, in the event that any Party, in the reasonable judgment of its counsel, is required under Applicable Law (including by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process), to disclose Confidential Information, the disclosing Party may make such disclosures as required under such Applicable Law. In the event the non-disclosing Party determines to seek such protective order or other remedy, the disclosing Party shall cooperate with the non-disclosing Party in seeking such protective order or other remedy. In the event that such protective order or other remedy is not obtained and disclosure of Confidential Information is required, or the non-disclosing Party grants a waiver hereunder, (i) the disclosing Party (A) may, without liability hereunder furnish that portion (and only that portion) of the Confidential Material which, based upon the written advice of counsel to the disclosing Party, such Party is legally required to disclose and (B) shall exercise its commercially reasonable efforts to have confidential treatment accorded any Confidential Information so furnished and (ii) the Parties agree to consult with each other as to the form and substance of such disclosure and provide the other with a reasonable time to review and comment on such disclosure as and to the extent possible.

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Section 7.3 Effect of Termination. Upon termination of this Agreement, or at any time at any Party’s request, all Parties shall (i) immediately cease any and all use of the other Party’s Confidential Information in any way for any purpose, (ii) promptly, at the other Party’s instruction, either return to the other Party or destroy all materials (in written, electronic or other form) containing or constituting Confidential Information disclosed hereunder, including any and all copies, extracts, summaries and derivatives thereof, except that one copy of each such document or other media may be maintained for archival purposes, subject to protection and non-disclosure in accordance with the terms of this Agreement and (iii) as promptly as is reasonably practicable, cease any and all use of the other Party’s name, brand or any variation thereof. Upon the request of one Party, the other Party shall certify in writing the completion of such return and/or destruction.

Section 7.4 Ownership of Confidential Information. Each Party retains all right, title and interest in and to its own Confidential Information. No Party acquires any license or right to any Confidential Information or any intellectual property rights or other rights owned by the other Party, by implication or otherwise, except the limited right to use such Confidential Information solely for a purpose related to the subject matter of this Agreement but in all cases subject to the provisions of this Agreement (including Section 7.1).

Section 7.5 Disclosure Related to Sale. Notwithstanding any provision of this Agreement to the contrary, in connection with a Hartford Sale or HIG Change of Control Event or Wellington Change of Control Event or as part of any due diligence process related thereto, no Confidential Information of any Party (other than the existence and terms of this Agreement, including an unredacted version of this Agreement, which may not be provided prior to the delivery of a Preliminary Hartford Sale Notice in the case of a Hartford Sale) may be provided by any Party to any Person without the prior written consent of the other Parties.

Section 7.6 Equitable Relief. Each Party understands and agrees that, because of the unique nature of the Confidential Information, the Parties may suffer irreparable harm if the any Party fails to comply with any of its obligations under this Article VII, and monetary damages may be inadequate to compensate the injured Party for such breach. Accordingly, the Parties agree that each Party shall, in addition to any other remedies available to them under this Agreement, be entitled to seek injunctive or equitable relief to enforce the terms of this Article VII without posting a bond or other undertaking.

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ARTICLE VIII

DISPUTE RESOLUTION

Section 8.1 Disputes; Resolution by Executive Officers. The Parties recognize that disputes as to certain matters may from time to time arise during the term of this Agreement. It is the desire of the Parties to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to arbitration or litigation. To accomplish this objective, prior to the commencement of any litigation proceedings the Parties agree that, subject to Section 8.2, any disputes, controversies or differences which may arise between the Parties out of or in relation to or in connection with this Agreement shall be promptly presented to one or more of the Executive Officers for resolution. Upon receipt of notice of such dispute, controversy, or difference, one or more of the Executive Officers may request, and the Parties shall promptly (and in any event within five (5) Business Days) provide, such further information and documentation that is available to each Party and reasonably required to verify and evaluate the dispute, controversy, or difference. If the matter is not resolved within 30 Business Days following receipt by one or more the Executive Officers of all requested information and documentation, then any Party may thereafter pursue litigation proceedings.

Section 8.2 Injunctive Relief. Nothing in this Article VIII will preclude any Party from seeking equitable relief or interim or provisional relief from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction or other interim equitable relief, concerning a dispute either prior to or during any dispute resolution under Section 8.1 if necessary to protect the interests of such Party, prevent material harm to such Party or to preserve the status quo pending the resolution of the dispute.

ARTICLE IX

TERM AND TERMINATION OF PREFERRED
PARTNERSHIP; MAKE-WHOLE PAYMENT

Section 9.1 Term. Subject to the provisions of Section 9.2 below, the term of this Agreement (as extended at any time by the parties in their respective sole discretions by mutual written agreement, the “Term”) shall commence on the date hereof and shall continue through June 5, 2018. No later than June 5, 2016 and, to the extent the Term is extended, no later than June 5 of each year thereafter, one or more Executive Officer of each Party will meet to discuss an extension of the Term; provided that no Party shall have any obligation to extend the Term (which decision will be made by each Party in its sole discretion) or negotiate such an extension in good faith.

Section 9.2 Termination.

(a) This Agreement shall terminate automatically without further action by the Parties upon:

(i) the closing of a Hartford Sale or HIG Change of Control Event; or

(ii) the closing of a Wellington Change of Control Event.

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(b) This Agreement may be terminated by written notice from the terminating Party to the other Parties as follows:

(i) by Wellington, within 90 days following (A) December 31, 2012, if Fixed Income Fund Mandates representing at least [***]% of the total subadvisory revenues from the Fixed Income Fund Mandates for the twelve months ended December 31, 2012 have not entered into subadvisory contracts with Wellington that are in effect on December 31, 2012 or (B) June 30, 2013, if Fixed Income Fund Mandates representing [***]% of the assets under management of the Fixed Income Fund Mandates as of June 30, 2013 have not entered into subadvisory contracts with Wellington that are in effect on June 30, 2013;

(ii) by either Wellington or Hartford, without cost or penalty (including attorneys’ fees and costs), if at any time there is (A) any violation by the other Party of Applicable Law or violation of or default under any authorization of, exemption by, order or permit from any Governmental Authority relating to the HMF Business or Wellington or (B) any formal investigation into the foregoing or (C) any lawsuit or other legal proceeding involving the Hartford Parties or any broker-dealer referred to in Section 2.2, any Hartford Fund or Wellington that, in the case of clauses (A), (B) and (C), is reasonably likely to have a material adverse effect on the Hartford Funds and that, if curable, remains uncured for a period of 180 days (the “Cure Period”) following the earlier of the discovery or receipt of written notification thereof; provided, however, that any termination right under this Section 9.2(b)(ii) shall be deemed waived if not exercised within 60 days following the expiration of the Cure Period, provided that in the case of a formal investigation or pending lawsuit or other legal proceeding the Cure Period shall not commence until the final determination thereof;

(iii) by either Wellington or Hartford, without cost or penalty (including attorneys’ fees and costs) but subject to Section 9.3(d), if a Bankruptcy Event occurs with respect to the other Party; or

(iv) the closing of an initial public offering or spin-out transaction, as applicable, of the HMF Business prior to June 5, 2014, if and only if Wellington has provided written notice to Hartford indicating it has elected to terminate this Agreement upon (and subject to) such consummation.

Section 9.3 Effect of Termination

In the event of termination of this Agreement pursuant to Section 9.2, this Agreement shall forthwith become void and have no effect without any liability on the part of any Party, other than the provisions set forth in

(a) Article VII and Article X;

(b) solely in the case of a termination pursuant to Section 9.2(a)(i), Sections 9.4 and 9.5;

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

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(c) solely in the case of a termination pursuant to Section 9.2(b)(i) if, and only if, Hartford has breached its obligations under Section 2.5 hereof and a definitive agreement for a Hartford Sale or HIG Change of Control Event (as applicable) is entered into within five years of such termination under Section 9.2(b)(i), Sections 9.4 and 9.5; and

(d) solely in the case of a termination pursuant to Section 9.2(b)(iii) if, and only if, a Bankruptcy Event occurs with respect to any Hartford Party other than Hartford (but not, for the avoidance of doubt, upon a Bankruptcy Event of Hartford), Sections 9.4 and 9.5.

The provisions set forth in clauses (a), (b), (c) and (d) above shall survive any termination and remain in full force and effect according to their terms. Notwithstanding the foregoing, no Party shall be relieved or released from any liability arising out of its willful breach of any provision of this Agreement (including reasonable attorneys’ fees and expenses in connection with the enforcement of such Party’s rights under this Agreement).

Section 9.4 Make-Whole Payment.

(a) If, at the time of the closing of a Hartford Sale or HIG Change of Control Event (as applicable) or anytime during the five-year period following such closing, the Wellington Subadvised Percentage is less than [***]% after giving effect to the applicable Trigger Event, Hartford shall make a cash payment to Wellington (a “Make-Whole Payment”) in an amount equal to the product of (i) the Total Enterprise Value in respect of the Hartford Sale or HIG Change of Control Event (as applicable) times (ii)(A) in the case of an HMF Sale or a HIG Change of Control Event, [***] and (B) in the case of a Non-HMF Sale, [***]. The Make-Whole Payment only shall be payable once, with respect to the first to occur of any Hartford Sale or HIG Change of Control Event, as applicable.

(b) A Make-Whole Payment shall be made no later than 15 Business Days following the date on which the applicable Trigger Event occurred (or, if later, the date on which Total Enterprise Value is finally determined). A Make-Whole Payment shall be made by wire transfer of immediately available U.S. federal funds to the account or accounts designated in writing by Wellington no less than two Business Days prior to the Make-Whole Payment date.

(c) For the avoidance of doubt, a Hartford Sale or HIG Change of Control Event (as applicable) and Trigger Event and resulting Make-Whole Payment may occur after the termination of this Agreement solely to the extent provided in Section 9.3, and the obligations of Hartford related to the Make-Whole Payment shall terminate at the time of termination of this Agreement in all other instances. In no event shall a Hartford Sale or HIG Change of Control Event in which Wellington is the purchaser be deemed a Trigger Event or result in a Make Whole Payment.

Section 9.5 Determination of Total Enterprise Value. The Total Enterprise Value in respect of the Hartford Sale or HIG Change of Control Event (as applicable) shall be conclusively determined pursuant to this Section 9.5.

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

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(a) Hartford and Wellington shall negotiate in good faith for a period of 10 Business Days (or such longer period as they may mutually agree in writing) in order to agree in writing on the Total Enterprise Value prior to engaging any Appraiser.

(b) If, at the end of the aforementioned period of negotiation, Hartford and Wellington have not agreed upon the Total Enterprise Value, they shall select an Appraiser by mutual agreement (not to be unreasonably withheld) within 10 Business Days after the expiration of such period of negotiation. In the event that they are unable to agree upon a mutually acceptable Appraiser within such period, each shall select one Appraiser no later than 10 Business Days after the end of such period, which Appraisers shall select a third Appraiser as soon as possible, each of which who shall be instructed to state the Total Enterprise Value (which, for the avoidance of doubt, shall conform to the definition of “Total Enterprise Value” as set forth in this Agreement) in writing as a number and not a range in a written report. The Members shall use commercially reasonable efforts to cause the Appraiser(s) to complete their work and issue their report as soon as possible and in no event more than 30 days after their engagement. If the respective determinations of the Total Enterprise Value vary by less than 10% of the highest Total Enterprise Value determination, the Total Enterprise Value shall be the average of the three Total Enterprise Value values. If the Total Enterprise Value determinations vary by 10% or more, the Total Enterprise Value shall be equal to the average of the two closest of the three Total Enterprise Value values. If any Appraiser is only willing to provide a range for the Total Enterprise Value, the average of the highest and lowest value in such range shall be deemed to be such Appraiser’s determination of the Total Enterprise Value if the range between such highest and lowest value is no more than 20%, otherwise, such range shall be disregarded and only the remaining determination(s) shall be used. The costs of the Appraiser shall be borne (x) if there is one Appraiser, equally by Hartford and Wellington or (y) if there are three Appraisers, by the respective party selecting such Appraiser and the cost of the third Appraiser shall be borne equally by Hartford and Wellington. The determination of the Appraiser(s) shall be final and binding on all of the Parties.

ARTICLE X

MISCELLANEOUS

Section 10.1 Amendments; Extension; Waiver. This Agreement may only be amended, altered or modified by a written instrument executed by each of the Parties hereto. The waiver by any Party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, and no single or partial exercise of such right, power or remedy by such Party shall preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

Section 10.2 Entire Agreement. This Agreement (including the exhibits and schedules hereto) constitutes the entire understanding and agreement of the parties hereto, except as provided herein, and supersedes all prior agreements and understandings, written and oral, among the parties with respect to the subject matter hereof.

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Section 10.3 Interpretation. When a reference is made in this Agreement to a section, exhibit or schedule, such reference shall be to a section, exhibit or schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms and the singular form of nouns and pronouns shall include the plural and vice versa. The exhibits and schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. All exhibits and schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.

Section 10.4 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only as broad as is enforceable.

Section 10.5 Notices. All notices and other communications hereunder shall be in writing (other than via electronic mail) and shall be deemed given and effective (i) when delivered, if delivered in person, (ii) when transmitted by fax (with confirmation of transmission received), (iii) three Business Days after mailing, if mailed by certified or registered mail (return receipt requested and obtained) or (iv) one Business Day after transmitted, if transmitted by a nationally recognized overnight courier to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to any Hartford Party:

Hartford Life, Inc.
200 Hopmeadow Street
Simsbury, CT 06089
Facsimile: 860 547-4721
Telephone: 860 547-5000
Attention: Director of Wealth Management Law

With a copy to:

The Hartford
One Hartford Plaza
Hartford, CT 06155
Attention: General Counsel
Facsimile: 860 547-4721
Telephone: 860 547-5000
Attention: General Counsel

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With a copy to:

Dechert LLP
200 Clarendon Street, 27^th Floor
Boston, Massachusetts 02116-5021
Attention: John O’Hanlon and David Schulman
Facsimile: 617-426-6567

If to Wellington:

Wellington Management Company, LLP
280 Congress Street
Boston, Massachusetts 02210
Attention: General Counsel
Facsimile: 617-790-7760

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Attention: Stephen Arcano and David Hepp
Facsimile: 212-735-3000

Section 10.6 Binding Effect; Persons Benefiting; No Assignment. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns, if any. Nothing in this Agreement is intended or shall be construed to confer upon any Person other than the Parties and their successors and permitted assigns, if any, any right, remedy or claim under or by reason of this Agreement or any part hereof. Without the prior written consent of each Party, neither this Agreement nor any rights or obligations hereunder may be assigned, transferred or delegated by any Party.

Section 10.7 Disclaimers.

(a) Hartford represents and acknowledges that the representations and warranties set forth in Article IV constitute the sole and exclusive representations to Wellington in connection with this Agreement, and Wellington understands, acknowledges and agrees that all other representations and warranties of any kind or nature, express or implied, are specifically disclaimed by Hartford.

(b) Wellington represents and acknowledges that the representations and warranties set forth in Article V constitute the sole and exclusive representations to Hartford in connection with this Agreement, and Hartford understands, acknowledges and agrees that all other representations and warranties of any kind or nature, express or implied, are specifically disclaimed by Wellington.

(c) Notwithstanding the foregoing Sections 10.7(a) and 10.7(b), Hartford recognizes that Wellington does not waive, and Wellington recognizes that Hartford does not waive, any rights they may have based on a fraud claim, whether under statute or common law.

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(d) IN NO EVENT SHALL ANY PARTY OR ITS AFFILIATES BE LIABLE, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, FOR ANY PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST SAVINGS, LOST PROFIT OR BUSINESS INTERRUPTION EVEN IF A PARTY IS NOTIFIED IN ADVANCE OF SUCH POSSIBILITY) ARISING OUT OF OR PERTAINING TO THE SUBJECT MATTER OF THIS AGREEMENT; PROVIDED THAT THE FOREGOING SHALL NOT APPLY IN THE CASE OF (I) A BREACH BY WELLINGTON OF SECTION 2.3 OR 2.4 OR (II) A BREACH BY HARTFORD OF SECTION 6.3 OR 6.4 AND THE PARTIES ACKNOWLEDGE THAT A PARTY SHALL BE ENTITLED TO SEEK SUCH DAMAGES (OTHER THAN PUNITIVE DAMAGES) IN THE CASE OF ANY SUCH BREACH.

(e) This Agreement is not intended to, and shall not, create or result in any legal partnership, relationship of principal and agent, or joint venture among the Parties.

Section 10.8 Specific Performance. The Parties agree that if any of the provisions of this Agreement were not performed by the parties hereto in accordance with their specific terms or were otherwise breached, no adequate remedy at law would exist and damages would be difficult to determine, and that each party hereto will be entitled to specific performance to prevent such breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which it may be entitled at law or in equity.

Section 10.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same agreement, it being understood that all of the parties need not sign the same counterpart.

Section 10.10 Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within the State of New York, without regard to the conflict of law provisions thereof that would result in the application of the laws of any other jurisdiction. Each of the parties hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement.

Section 10.11 Certain Understandings. Each of the Parties is a sophisticated legal entity or person that was advised by experienced counsel and, to the extent it deemed necessary, other advisors in connection with this Agreement. Accordingly, each of the Parties hereby acknowledges that (i) it has not relied or will rely in respect of this Agreement or the transactions contemplated hereby upon any document or written or oral information previously furnished to or discovered by it or its representatives, other than this Agreement and (ii) the parties’ respective rights and obligations with respect to this Agreement and the events giving rise thereto will be solely as set forth in this Agreement.

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*******

31

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

THE HARTFORD FINANCIAL SERVICES
GROUP, INC.
By:	/s/ Liam E. McGee
	Name:	Liam E. McGee
	Title:	Chairman and CEO
HARTFORD LIFE, INC.
By:	/s/ David Levenson
	Name:	David Levenson
	Title:	President
HARTFORD INVESTMENT FINANCIAL
SERVICES, LLC
By:	/s/ James Davey
	Name:	James Davey
	Title:	CEO and President
HL INVESTMENT ADVISORS, LLC
By:	/s/ James Davey
	Name:	James Davey
	Title:	CEO and President
WELLINGTON MANAGEMENT COMPANY,
LLP
By:	/s/ Perry M. Traquina
	Name:	Perry M. Traquina
	Title:	President and Chief Executive Officer

SCHEDULE A

EXECUTIVE OFFICERS

Hartford:

1. Chief Financial Officer, Hartford Financial Services Group, Inc.

2. General Counsel, Hartford Financial Services Group, Inc.

3. Chief Executive Officer, Wealth Management

4. Chief Financial Officer, Wealth Management

5. Chief Executive Officer, Hartford Mutual Funds

6. Director of Wealth Management Law (or successor position)

Wellington:

1. Any Managing Partner

2. Chief Financial Officer

3. General Counsel

4. Director, Global Equity Portfolio Management

5. Director, Global Fixed Income Portfolio Management

6. Director, Global Relationship Group

SCHEDULE B

HARTFORD HLS FUNDS

Hartford Advisers HLS Fund
Hartford Capital Appreciation HLS Fund
Hartford Disciplined Equity HLS Fund
Hartford Dividend and Growth HLS Fund
Hartford Global Growth HLS Fund
Hartford Healthcare HLS Fund
Hartford High Yield HLS Fund
Hartford Global Research HLS Fund
Hartford Growth HLS Fund
Hartford International Opportunities HLS Fund
Hartford MidCap HLS Fund
Hartford MidCap Value HLS Fund
Hartford Small Company HLS Fund
Hartford Small/Mid Cap Equity HLS Fund
Hartford Stock HLS Fund
Hartford Total Return Bond HLS Fund
Hartford Value HLS Fund
Hartford Growth Opportunities HLS Fund
Hartford SmallCap Growth HLS Fund
Hartford U.S. Government Securities HLS Fund

SCHEDULE C

BROKER-DEALERS

[***]

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

SCHEDULE D

INTENTIONALLY OMITTED

SCHEDULE E

WELLINGTON PORTFOLIO MANAGERS

[***]

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

SCHEDULE F

FIXED INCOME FUND MANDATES

The Hartford High Yield Fund
Hartford High Yield HLS Fund
The Hartford Floating Rate Fund
The Hartford Strategic Income Fund
The Hartford Corporate Opportunities Fund
The Hartford Total Return Bond Fund
Hartford Total Return Bond HLS Fund
The Hartford Municipal Opportunities Fund
The Hartford Municipal Real Return Fund
The Hartford Inflation Plus Fund
Hartford US Government Securities HLS Fund
The Hartford Short Duration Fund
The Hartford Floating Rate High Income Fund

SCHEDULE G

FEE REVISIONS ON EXISTING HARTFORD FUNDS

[***]

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

SCHEDULE H

ALLOCATION SERVICES FEES

[***]

Certain information in this exhibit, marked by “[***]” has been redacted and will be filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. Confidential treatment has been requested with respect to the redacted portions.

EX-10.28

Exhibit 10.28

THE HARTFORD
INVESTMENT AND SAVINGS PLAN
(As Amended and Restated as of February 1, 2012)

ARTICLE ONE
INTRODUCTION AND PURPOSE

1.1 Introduction. The Hartford Investment and Savings Plan (the “Plan”) was established effective December 19, 1995 to cover Eligible Employees of The Hartford and Hartford Fire. The Hartford was spun-off from ITT Corporation effective December 19, 1995. The Plan was amended and restated effective January 1, 1997. Effective as of the IPO Date, Hartford Life became a publicly held company, was designated as a Participating Corporation for purposes of the Plan and securities of Hartford Life were made available for investment under the Plan. Effective as of the Merger Date, Hartford Life ceased to be a publicly held company due to its merger with a subsidiary of The Hartford, and its securities ceased to be available for investment under the Plan. Effective April 1, 2002, the Omni Insurance Group 401(k) Retirement Plan was merged into the Plan. Effective July 1, 2003, the Access Coverage Corporation 401(k) Plan was merged into the Plan. Effective January 1, 2009, the Planco Profit Sharing Plan is merged into the Plan. The Planco Profit Sharing Plan’s profit sharing contribution allocation for 2008, if any, will be allocated under this Plan in 2009 to the Members eligible to receive the contributions in accordance with the provisions of the Planco Profit Sharing Plan.

This Plan shall maintain account balances transferred from the ITT Investment and Savings Plan for Salaried Employees (the “Pre-Distribution ITT Plan”) which had been maintained by Pre-Distribution ITT through December 18, 1995 for members who became Eligible Employees of Hartford Fire on the Distribution Date and for certain deferred members whose last services for Pre-Distribution ITT were performed for an insurance business of Pre-Distribution ITT. Certain of these members, prior to May 9, 1989, were members in the Investment and Savings Plan for Salaried Employees of Hartford Fire Insurance Company (the “Hartford Plan”). The Hartford Plan was merged into the Pre-Distribution ITT Plan effective on May 9, 1989.

Effective November 29, 2001, a portion of this Plan was converted into an employee stock ownership plan (“ESOP”) within the meaning of Code Section 4975(e)(7). The ESOP is designed to invest primarily in The Hartford Stock within the meaning of such provision, and more specifically shall be invested entirely in The Hartford Stock except to the extent of such cash equivalent reserves as may be required for liquidity purposes as more fully set forth herein.

Participation in the Plan is available, as set forth herein, to Eligible Employees of The Hartford and Hartford Fire, Hartford Life, and of such other companies affiliated therewith as may become participating companies under the Plan. A quarterly statement is sent to each member of the Plan reflecting the status of his or her Accounts under the Plan as of the end of each calendar quarter.

The Plan is a defined contribution plan under ERISA, and as such is subject to the provisions of Titles I, II and III, but not Title IV, thereof. Titles I, II and III include requirements for covered plans governing reporting, disclosure, participation, vesting, fiduciary responsibility and enforcement. Title IV provides for plan termination insurance by the Federal government’s Pension Benefit Guaranty Corporation. This insurance does not apply to defined contribution plans such as the Plan.

State Street Bank and Trust Company, Boston, Massachusetts, is the Trustee with respect to the Plan.

1.2 Purpose. The purpose of the Plan is to (A) supplement retirement income by encouraging Eligible Employees to save on a regular and long-term basis; (B) provide Eligible Employees with an opportunity to own beneficially The Hartford Stock to the maximum extent permitted under ERISA and without regard to any requirement of diversification applicable to other investments of the Plan, it being intended that the presumption established under applicable law that investment in The Hartford Stock is prudent be given full effect to the maximum extent consistent with applicable law (under which it is recognized that dire circumstances such as an imminent collapse of The Hartford could require curtailment or termination of such investment); (C) provide additional financial resources for emergencies and financial hardships; and (D) offer Eligible Employees additional incentives to continue their careers with The Hartford.

1.3 Prospectus. The Plan (as amended) is included as part of the Prospectus.

1.4 Tax Qualification. For purposes of qualification under Section 401(a) of the Internal Revenue Code, the Plan includes a savings plan portion and a stock bonus portion. Prior to November 29, 2001, the stock bonus portion consisted of assets related to the leveraged employee stock ownership plan in effect from 1989 through the Distribution Date under the Pre-Distribution ITT Plan, and Floor Company Contributions made by The Hartford. Effective November 29, 2001, the stock bonus portion of the Plan (referred to in this Plan as the “ESOP”) consists of the assets invested in The Hartford Stock in The Hartford Stock Fund.

1.5 Eligible Employees Serving in the U.S. Armed Services. If an Eligible Employee serves in the Armed Services of the United States, notwithstanding any provision of the Plan to the contrary, Plan contributions, benefits and Service credit with respect to qualified military service will be provided in accordance with Code Section 414(u).

- 2 -

ARTICLE TWO
DEFINITIONS

“Accounts” means, with respect to any Member or Deferred Member, his or her After-Tax Rollover Investment Account, Before-Tax Rollover Investment Account, Company Contributions Investment Account, Employee Contributions Investment Account, Roth 401(k) Contributions Investment Account, Roth 401(k) Rollover Investment Account, and Roth Conversion Investment Account.

“Actual Contribution Percentage” means, effective January 1, 2006, the average of the ratios, calculated separately for each applicable Employee, of (A) the sum of the After-Tax Savings, Matching Company Contributions, and Planco Profit Sharing Contributions (if applicable) made for the current Plan Year to (B) the Employee’s Compensation for that Plan Year. Effective November 29, 2001 through December 31, 2005, “Actual Contribution Percentage” means the average of the ratios, calculated separately for each applicable Employee, of (A) the sum of the After-Tax Savings other than ESOP Contributions and the Matching Company Contributions other than ESOP Contributions, made for a Plan Year to (B) the Employee’s Compensation for the Plan Year or portion of the Plan Year that the Plan includes the ESOP. Each such Actual Contribution Percentage shall be computed to the nearest one-hundredth of one percent of the Employee’s Compensation. Notwithstanding the above, the Plan Administrator may elect, on and after January 1, 2006, to permissively disaggregate the ESOP and non-ESOP portions of the Plan for purposes of determining Actual Contribution Percentages.

“Actual Deferral Percentage” means, the average of the ratios, calculated separately for each applicable Employee, of (A) the amount of Before-Tax and Roth 401(k) Savings made on the Employee’s behalf for the current Plan Year to (B) the Employee’s Compensation for that Plan Year. Before-Tax Catch-Up Savings and Roth 401(k) Catch-Up Savings shall be included in determining the Actual Deferral Percentage to the extent that the Before-Tax and Roth 401(k) Savings are less than the limitation under Code Section 402(g). Each such Actual Deferral Percentage shall be computed to the nearest one-hundredth of one percent of the Employee’s Compensation. Notwithstanding the above, the Plan Administrator may elect, on and after January 1, 2006, to permissively disaggregate the ESOP and non-ESOP portions of the Plan for purposes of determining Actual Deferral Percentages.

“After-Tax Rollover Investment Account” means that portion of the Trust Fund which, with respect to any Eligible Employee, is attributable to After-Tax Rollovers, and any investment earnings and gains or losses thereon.

“After-Tax Rollovers” means amounts contributed in accordance with Section 4.4 of an Eligible Rollover Distribution (as defined in Section 11.8(B)(ii)) that consist of after-tax contributions to an Eligible Retirement Plan (as defined in Section 11.8(B)(iii)).

“After-Tax Savings” means savings made by a Member under Section 4.3, and includes both Basic After-Tax Savings and Supplemental After-Tax Savings.

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“Basic After-Tax Account” means that portion of the Employee Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to Basic After-Tax Savings and any investment earnings and gains or losses thereon.

“Basic After-Tax Savings” means the contributions made by a Member which are credited to his or her Basic After-Tax Account in accordance with Section 4.3(B)(i).

“Basic Before-Tax Savings” means the contributions made on a Member’s behalf which are credited to his or her Before-Tax Account in accordance with Section 4.1(B)(i).

“Basic Roth 401(k) Savings” means the contributions made on a Member’s behalf which are credited to his or her Roth 401(k) Contributions Investment Account in accordance with Section 4.2(B)(i).

“Basic Savings” means the Basic After-Tax Savings contributed by a Member and the Basic Before-Tax Savings and Basic Roth 401(k) Savings contributed on a Member’s behalf.

“Before-Tax Account” means that portion of the Employee Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to Basic Before-Tax Savings and Supplemental Before-Tax Savings, and any investment earnings and gains or losses thereon.

“Before-Tax Catch-Up Savings” means contributions made on a Member’s behalf which are credited to his or her Supplemental Before-Tax Account for periods prior to January 1, 2006, and which are credited to his or her Catch-Up Contributions Account for periods on and after January 1, 2006, in accordance with Section 4.1(C).

“Before-Tax Rollover Investment Account” means that portion of the Trust Fund which, with respect to any Eligible Employee, is attributable to Before-Tax Rollovers, and any investment earnings and gains or losses thereon.

“Before-Tax Rollovers” means amounts contributed in accordance with Section 4.4 of an Eligible Rollover Distribution (as defined in Section 11.8(B)(ii)) that consist of taxable distributions from an Eligible Retirement Plan (as defined in Section 11.8(B)(iii)).

“Before-Tax Savings” means savings made by a Member under Section 4.1 (other than Before-Tax Catch-Up Savings made on and after January 1, 2006), and includes both Basic Before-Tax Savings and Supplemental Before-Tax Savings (including Before-Tax Catch-Up Savings made prior to January 1, 2006).

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“Beneficiary” means such beneficiary or beneficiaries as may be designated from time to time by the Member or Deferred Member, on a form provided by the Plan Administrator for such purpose, to receive, in the event of the Member’s or Deferred Member’s death, the value of his or her Accounts at the time of death. Except as hereinafter provided, in the case of a Member or Deferred Member who is married, the Beneficiary shall be the Member’s or Deferred Member’s spouse, unless such spouse consents, in writing, on a form witnessed by a notary public to the designation of another person as Beneficiary. A Deferred Member who is an alternate payee designated as such pursuant to a qualified domestic relations order may not, however, name a spouse as a Beneficiary. In the case of a Member or Deferred Member who incurs a divorce under applicable State law prior to commencing benefits under the Plan, such Member’s or Deferred Member’s designation of Beneficiary shall remain valid unless otherwise provided in a qualified domestic relations order (as described in Article Twelve of the Plan) or unless such Member or Deferred Member changes his or her Beneficiary or is subsequently remarried. In the absence of a beneficiary designation, the default Beneficiary will be the Member’s Spouse or, if none, the Member’s estate.

“Board of Directors” means the Board of Directors of Hartford Fire Insurance Company or of any successor, by merger, purchase or otherwise.

“Break in Service” shall mean the 12 consecutive month period commencing on the Severance from Service date during which an Employee does not have any Hours Worked. Severance from Service shall mean the earlier of (a) the date on which an Eligible Employee quits, retires, is discharged or dies; or (b) the first anniversary of the first date of a period in which he or she remains absent from Service (with or without pay) for any reason other than quit, retirement, discharge or death, such as vacation, holiday, sickness, disability, leave of absence or layoff. If Service is interrupted for maternity or paternity reasons addressed in the definition of Service, then the date of Severance from Service shall be the earlier of (a) the date he or she quits, is discharged, retires or dies, or (b) the second anniversary of the date on which he or she is first absent from Service, as provided in such Service definition.

“Catch-Up Contributions Account” means that portion of the Employee Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to Before-Tax Catch-Up Savings made on and after January 1, 2006, and any investment earnings and gains or losses thereon.

“Code” means the Internal Revenue Code of 1986, as amended from time to time. References to any section of the Code shall include any successor provision thereto.

“Company” means The Hartford and Hartford Fire, as constituted on the Distribution Date, or any successor, by merger, purchase or otherwise with respect to their Eligible Employees, any Participating Division with respect to its Eligible Employees and any Participating Corporation with respect to its Eligible Employees.

“Company Contributions” means Matching Company Contributions and Floor Company Contributions made under Article Five, Matching Company Contributions made before 1990 under the Pre-Distribution ITT Plan, ESOP Account and Planco Profit Sharing Contributions. Prior to January 1, 2006, no Company Contributions were made with respect to Employees of Planco Financial Services, Inc.

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“Company Contributions Investment Account” means that portion of the Trust Fund that, with respect to any Member or Deferred Member, consists of his or her ESOP Account, Matching Company Contributions Account, Floor Company Contributions Account, Pre-2004 Floor Company Contributions Account, Prior Plan Transfers Account, Planco Profit Sharing Contributions Account, and Reinvested Dividend Account.

“Compensation” means total wages and other compensation paid to or for the Member as reported on the Member’s Form W-2, Wage and Tax Statement, plus elective contributions under Code Sections 401(k), 414(v), 132(f)(4) and 125, provided that for purposes of Section 6.3, Compensation means Compensation as defined in Code Section 415(c)(3), including elective contributions under Code Sections 401(k), 414(v), 132(f)(4) and 125.

In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, the annual compensation of each Member taken into account under the Plan shall not exceed the OBRA ‘93 annual compensation limit, such compensation to be measured for each individual from the beginning of each calendar year, regardless of whether such individual has become a Member pursuant to Article Three or elects to contribute Savings under Article Four. The OBRA ‘93 annual compensation limit is $200,000 beginning January 1, 2003, as adjusted by the Secretary of the Treasury to reflect cost-of-living adjustments in accordance with Code Section 401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined beginning in such calendar year.

Any reference in this Plan to the limitation under Code Section 401(a)(17) means the OBRA ‘93 annual compensation limit set forth in this provision.

“Deferred Member” means (A) a Member who has terminated employment with the Company and whose Vested Share will be deferred in accordance with Article Eleven, (B) the spouse Beneficiary or Non-Spouse Beneficiary of a deceased Member or Deferred Member, or (C) an alternate payee designated as such pursuant to a domestic relations order as qualified by the Plan.

“Disability” means, with respect to a Member, the total disability of such Member that results in the Member qualifying for benefits under the Hartford Fire Insurance Company Long Term Disability Plan for salaried Employees or a similar disability plan sponsored by the Company. If a Member qualifies for benefits under such plan, then he or she shall be deemed to be totally disabled as determined by the insurance company that administers such plan. If a Member does not qualify for benefits under such plans, then he or she shall be deemed to be totally disabled if his or her disability meets the definition of total disability set forth in such a plan, as determined by the applicable Plan Committee. For purposes of this Plan, the effective date of disability shall be the later of the date of disability as defined in the applicable disability plan or the date on which the applicable insurance company issues its determination of total disability. If a Member is deemed to be totally disabled as provided herein, he or she shall also be deemed to have incurred a Termination of Employment with the Company and its affiliated corporations as of such date.

“Distribution Date” means December 19, 1995.

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“Effective Date” means the Distribution Date with respect to those Participating Corporations and Participating Divisions that began their participation in the Plan on such date; “Effective Date” with respect to any other Participating Corporation or Participating Division shall mean the date as of which such Participating Corporation or Participating Division begins its participation in the Plan. The Pre-Distribution ITT Plan was originally effective as of April 1, 1974. Hartford Life was designated as a Participating Corporation effective as of the IPO Date.

“Eligible Employee” means an Employee employed by the Company; provided, however, that except as the Board of Directors or the Pension Administration Committee, pursuant to authority delegated by the Board of Directors, may otherwise provide on a basis uniformly applicable to all persons similarly situated, “Eligible Employee” shall not include any “Ineligible Person,” which means all of the following:

(A)   a person who is covered for current service under a retirement plan of the Company or any of its affiliated Companies other than The Hartford Retirement Plan for U.S. Employees, or any other Plan specified by the Board of Directors from time to time, or

(B)   a person whose terms and conditions of employment are determined by a collective bargaining agreement with the Company which does not make this Plan applicable to him or her, or

(C)   a person who is eligible for participation in any of the following plans being maintained by certain Canadian affiliates of the Company: the Hartford Fire Insurance Company Retirement Savings Plan, the Hartford Fire Insurance Company Deferred Profit Sharing Plan, and the Hartford Fire Insurance Company Employee Profit Sharing Plan or any successor to the foregoing plans, or

(D)   prior to January 1, 2006, a person who is an employee of Planco Financial Services, Inc., other than a regular hourly or salaried full-time or part-time commissioned wholesaler or a regular hourly or salaried full-time or part-time administrative assistant to such a wholesaler, or

(E)   a person who is a leased employee (within the meaning of Code Section 414(n)(2)) of the Company or is otherwise employed through a temporary help firm, technical help firm, staffing firm, employee leasing firm, or professional employer organization, regardless of whether such person is an Employee of the Company, or

(F)   a person who performs services for the Company as an independent contractor or under any other non-employee classification, or who is classified by the Company as, or determined by the Company to be, an independent contractor, regardless of whether such person is characterized or ultimately determined by the Internal Revenue Service or any other Federal, State or local government authority or regulatory body to be an employee of the Company or its affiliates for income or wage tax purposes or for any other purpose.

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Notwithstanding any provision in the Plan to the contrary, if any person is an Ineligible Person, or otherwise does not qualify as an Eligible Employee, or otherwise is ineligible to participate in the Plan, and such individual is later required by a court or governmental authority or regulatory body to be classified as a person who is eligible to participate in the Plan, such person shall not be eligible to participate in the Plan, notwithstanding such classification, unless and until designated as an Eligible Employee by the Plan Administrator, and if so designated, the participation of such person in the Plan shall be prospective only.

Further, in addition to the foregoing, to the extent that any particular individual is excluded from participation in the Plan for one of the reasons set forth above or any other reason, and such individual is later required by a court or governmental authority or regulatory body to be allowed to participate in the plan for past or future periods because such exclusion is found to be improper, such person shall, to the extent such person would have met the applicable Internal Revenue Code definition of “highly compensated employee,” “highly compensated individual,” or “part-time employee” for any part of such periods, be deemed to have been excluded from the Plan for such periods (including past, present and future periods), and shall continue to be excluded from the Plan for such periods (including past, present and future periods), for the independent reason that such person qualified and/or qualifies as a “highly compensated employee,” a “highly compensated individual,” or a “part-time employee,” as applicable, who properly may be excluded from participation in the Plan.

“Employee” shall mean any person regularly employed by the Company but shall not include any person who performs services for the Company as an independent contractor or under any other non-employee classification, or who is classified by the Company as, or determined by the Company to be, an independent contractor.

“Employee Contributions Investment Account” means that portion of the Trust Fund that, with respect to any Member or Deferred Member, consists of his or her Before-Tax Account, Basic After-Tax Account, Supplemental After-Tax Account, Catch-up Contributions Account, and any qualified non-elective contributions made on his or her behalf.

“Enrollment Date” means the first day of any payroll period that begins on or after the date an Eligible Employee satisfies the membership requirements set forth in Article Three.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ESOP” means the portion of the Plan that consists of assets invested in The Hartford Stock in The Hartford Stock Fund at any time on and after November 29, 2001.

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“ESOP Account” means that portion of the Company Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to allocations made under the employee stock ownership plan portion of the Pre-Distribution ITT Plan.

“ESOP Actual Contribution Percentage” means, for Plan Years prior to 2006, the average of the ratios, calculated separately for each applicable Employee, of (A) the sum of the After-Tax Savings that are ESOP Contributions and the Matching Company Contributions that are ESOP Contributions, made for a Plan Year to (B) the Employee’s Compensation for the Plan Year or portion of the Plan Year that the Plan includes the ESOP. Each such ESOP Actual Contribution Percentage shall be computed to the nearest one-hundredth of one percent of the Employee’s Compensation. Effective December 31, 2001, this test is performed using the current year testing method.

“ESOP Actual Deferral Percentage” means, for Plan Years prior to 2006, the average of the ratios, calculated separately for each applicable Employee, of (A) the amounts of Before-Tax Savings that are ESOP Contributions made on the Employee’s behalf for a Plan Year to (B) the Employee’s Compensation for the Plan Year or portion of the Plan Year that the Plan includes the ESOP. Each such ESOP Actual Deferral Percentage shall be computed to the nearest one-hundredth of one percent of the Employee’s Compensation. Effective December 31, 2001, this test is performed using the current year testing method.

“ESOP Contribution” means a contribution or contributions to the Plan made on or after November 29, 2001, with respect to the Member’s Before-Tax Savings, After-Tax Savings, Roth 401(k) Savings or Catch-Up Savings, or Company Contributions made as Matching Company Contributions or Floor Company Contributions, that are made in The Hartford Stock or made in cash and immediately invested in The Hartford Stock in The Hartford Stock Fund.

“Floor Company Contribution” means a contribution made on or after the Distribution Date pursuant to Section 5.2. Prior to January 1, 2006, no Floor Company Contributions shall be made with respect to Employees of Planco Financial Services, Inc.

“Floor Company Contributions Account” means that portion of the Company Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to Floor Company Contributions, other than Pre-2004 Floor Company Contributions, and any investment earnings and gains or losses thereon.

“Hartford Fire” means Hartford Fire Insurance Company or a successor by merger, purchase or otherwise with respect to its Employees. Hartford Fire is the sponsor of the Plan.

“Hartford Fire Plan” means the Investment and Savings Plan of Hartford Fire Insurance Company as in effect on May 8, 1989.

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“Hartford Life” means Hartford Life, Inc. (a Delaware corporation), as constituted on the IPO Date, and Hartford Life and Accident Insurance Company, or a successor of either of the foregoing by merger, purchase or otherwise with respect to their Employees, both of which are affiliated with The Hartford, and with Hartford Fire, the sponsor of this Plan.

“Highly Compensated Member” shall mean, with respect to any Plan Year, any Member who (A) in the Plan Year or the immediately preceding Plan Year was a five percent owner, or (B) in the immediately preceding Plan Year earned annual Compensation from the Company or an affiliated company which exceeds a dollar amount that is indexed annually and is determined pursuant to Code Section 414(q)(1)(B), which amount shall be adjusted at the same time and in the same manner as the dollar limit on benefits under a defined benefit plan is adjusted pursuant to Code Section 415(d).

“Hours Worked” means hours for which an Employee is compensated whether or not he or she has worked, such as paid holidays, paid vacation, paid sick leave and paid time off, and back pay for the period for which it was awarded, and each such hour shall be computed as only one hour, even though he or she is compensated at more than the straight time rate. With respect to any period for which an Employee is compensated but has not worked, hours counted shall be included on the basis of the Employee’s normal work-day or work-week. This definition of Hours Worked shall be applied in compliance with 29 Code of Federal Regulations Section 2530.200b-2(b) and (c), as promulgated by the United States Department of Labor, in a consistent and nondiscriminatory manner.

“Investment and Savings Plan Investment Committee” means the Committee established hereunder for the purposes of managing the investment of Plan assets as set forth in Article Fifteen.

“Investment Funds” means (A) The Hartford Stock Fund, (B) such other investment funds as may from time to time be expressly referred to in the Plan (such as the Stable Value fund and other fixed income funds named in Section 8.3(C) and the Vanguard Target Retirement Funds named in Section 8.3(G)) so long as such other investment funds continue to be approved by the Investment and Savings Plan Investment Committee, and (C) such other funds as are approved by the Investment and Savings Plan Investment Committee from time to time, in which contributions permitted by the Plan and/or existing Plan assets may be invested.

“IPO” means the initial public offerings of Hartford Life Stock.

“IPO Date” means May 22, 1997, the date of consummation of the IPO.

“IRS” means the Federal Internal Revenue Service.

“Limitation Year” means the calendar year.

“Loan Valuation Date” means the business day on which a Member’s properly completed application for a loan under the Plan is made in the form or manner required by the Plan Administrator.

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“Matching Company Contribution” means a contribution made pursuant to Section 5.1. Prior to January 1, 2006, no Matching Company Contributions shall be made with respect to Employees of Planco Financial Services, Inc.

“Member” shall mean any person who has become a Member as provided in Article Three.

“Merger Date” means June 27, 2000, the date of consummation of the merger between Hartford Life and a wholly owned subsidiary of The Hartford, pursuant to which Hartford Life became a wholly owned subsidiary of The Hartford.

“Non-Spouse Beneficiary” means a Beneficiary who is not the spouse of the Member or Deferred Member.

“Participating Corporation” means any affiliate of Hartford Fire which, by action of the Board of Directors (or by an officer of Hartford Fire under authority delegated by the Board of Directors) has been designated as a Participating Corporation in the Plan as to all of its Employees, or as to the Employees of one or more of its operating or other units, and whose Board of Directors has adopted this Plan.

“Participating Division” means any division or unit of Hartford Fire or an affiliate of Hartford Fire which, by action of the Board of Directors (or by an officer of Hartford Fire under authority delegated by the Board of Directors) has been designated as a Participating Division or Unit in this Plan as to all of its Employees, or as to the employees of one or more of its operating subdivisions or other sub-units, and in the case of a division or unit of an affiliate of Hartford Fire, the Board of Directors of such affiliate has adopted this Plan on behalf of such division or unit.

“Pension Administration Committee” means the Committee established hereunder for the purposes of administering the Plan as provided in Article Fourteen.

“Plan” means The Hartford Investment and Savings Plan, as set forth herein or as amended from time to time.

“Plan Administrator” means the administrator for the Plan as provided in Article Fourteen at its offices at Hartford Plaza, Hartford, CT 06115.

“Plan Year” means the calendar year.

“Planco Profit Sharing Contributions” means the contributions and their investment earnings that are attributable to profit sharing contributions merged into this Plan from the Planco Profit Sharing Plan or that plan’s 2008 profit sharing contribution as may be allocated under this Plan.

“Planco Profit Sharing Contributions Account” means that portion of the Company Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to Planco Profit Sharing Contributions, and any investment earnings and gains or losses thereon.

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“Pre-2004 Floor Company Contributions” means amounts attributable to Floor Company Contributions in the Pre-2004 Floor Company Contributions Account that were made with respect to payroll periods prior to January 1, 2004.

“Pre-2004 Floor Company Contributions Account” means that portion of the Company Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to Pre-2004 Floor Company Contributions, and any investment earnings and gains or losses thereon.

“Pre-Distribution ITT” means ITT Corporation (a Delaware corporation), as constituted on the day before the Distribution Date.

“Pre-Distribution ITT Plan” means the ITT Investment and Savings Plan For Salaried Employees, as in effect on the day before the Distribution Date.

“Principal Employment Date” means the first day of the first payroll period following the date a person becomes principally employed by the Company.

“Prior Plan Transfer” means amounts transferred from the trust of a qualified profit sharing or other defined contribution plan previously in effect at a Participating Corporation or Participating Division to the extent permitted by Article Four.

“Prior Plan Transfers Account” means that portion of the Company Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to a Prior Plan Transfer, and any investment earnings and gains or losses thereon.

“QDRO” means an order determined to be a qualified domestic relations order under Article Twelve.

“Reinvested Dividends Account” means that portion of the Company Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to reinvested dividends of The Hartford Stock Fund.

“Retirement” means:

(A) Certain Members Hired Before 2001. Solely with respect to a Member with an original hire date with the Company before January 1, 2001 who: (i) is covered in whole or in part under the final average pay formula of the Retirement Plan, or (ii) is not eligible for coverage under the Retirement Plan, “Retirement” shall mean satisfaction of the requirements for early or normal retirement under the final average pay formula of the Retirement Plan (assuming such Member were covered under the final average pay formula of the Retirement Plan), provided such event results in such Member’s separation from the employment of the Company; or

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(B)

Certain Members Hired During 2001. Solely with respect to a Member with an original hire date with the Company on or after January 1, 2001 but before January 1, 2002 who: (i) is covered under the cash balance formula of the Retirement Plan, or (ii) is not eligible for coverage under the Retirement Plan, “Retirement” shall mean satisfaction of the requirements for early or normal retirement under the final average pay formula of the Retirement Plan (assuming such Member were covered under the final average pay formula of the Retirement Plan), provided such event results in such Member’s separation from the employment of the Company; or

(C)

Certain Members Hired During 2002 or Later. Solely with respect to a Member with an original hire date with the Company on or after January 1, 2002 who: (i) is covered under the cash balance formula of the Retirement Plan, or (ii) is not eligible for coverage under the Retirement Plan, “Retirement” shall mean, solely for purposes of this Plan, separation from the employment of the Company on or after reaching age 65.

“Retirement Plan” means The Hartford Retirement Plan for U.S. Employees, as it may be amended from time to time.

“Roth 401(k) Catch-Up Contributions Account” means that portion of the Roth 401(k) Contributions Investment Account which, with respect to any Member or Deferred Member, is attributable to Roth 401(k) Catch-Up Savings, and any investment earnings and gains or losses thereon.

“Roth 401(k) Catch-Up Savings” means contributions made on a Member’s behalf which are credited to his or her Roth 401(k) Catch-Up Contributions Account in accordance with Section 4.2(C).

“Roth 401(k) Contributions Account” means that portion of the Roth 401(k) Contributions Investment Account which, with respect to any Member or Deferred Member, consists of his or her Basic Roth 401(k) Savings and Supplemental Roth 401(k) Savings and any investment earnings and gains or losses thereon.

“Roth 401(k) Contributions Investment Account” means that portion of the Trust Fund which, with respect to any Member or Deferred Member, consists of his or her Roth 401(k) Contributions Account and Roth 401(k) Catch-Up Contributions Account.

“Roth 401(k) Rollover Investment Account” means that portion of the Trust Fund which, with respect to any Eligible Employee, is attributable to one or more rollover contributions made in accordance with Section 4.4 of an Eligible Rollover Distribution (as defined in Section 11.8(B)(ii)) of amounts attributable to Roth 401(k) contributions, and any investment earnings and gains or losses thereon.

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“Roth 401(k) Rollovers” means amounts contributed in accordance with Section 4.4 of an Eligible Rollover Distribution (as defined in Section 11.8(B)(ii)) that consist of taxable distributions from an Eligible Retirement Plan (as defined in Section 11.8(B)(iii)).

“Roth Conversion” means an in-plan Roth rollover in accordance with Article 10A.

“Roth Conversion Investment Account” means that portion of the Trust Fund which, with respect to any Member or Deferred Member, is attributable to a Roth Conversion and any investment earnings and gains or losses thereon.

“Salary” means an Eligible Employee’s compensation from the Company at his or her base rate, including any payments made on account of such Eligible Employee’s short-term disability under The Hartford Income Protection Plan, excluding any compensation deferred under a deferred compensation plan, and determined before any election by the Member pursuant to Section 4.1(A) or (C) or 4.2(A) or (C) hereof and before any election by the Member under Code Sections 125 and 132(f)(4), excluding any overtime, bonus, foreign service allowance or any other form of compensation, except to the extent otherwise deemed “Salary” for purposes of the Plan under such nondiscriminatory rules as may be adopted by the Pension Administration Committee with respect to all Members or any particular Participating Company or Participating Division. Salary shall not include severance pay or accrued vacation pay that is paid upon termination of employment. Sales incentive payments and lump sum merit increases shall be included in Salary for purposes of the Plan to the extent they are designated as being so included by the Plan Administrator. Effective from January 1, 2005 to December 31, 2011, Salary shall include rehabilitation pay from the Company paid to a recipient of long term disability benefits.

In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, the annual salary of each Member taken into account under the Plan shall not exceed the OBRA ‘93 annual compensation limit, such compensation to be measured for each individual from the beginning of each calendar year, regardless of whether such individual has become a Member pursuant to Article Three or elects to contribute Savings under Article Four. The OBRA ‘93 annual compensation limit is $200,000 beginning January 1, 2003, as adjusted by the Secretary of the Treasury to reflect cost-of-living adjustments in accordance with Code Section 401(a)(17)(B) ($250,000 effective as of January 1, 2012). The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which salary is determined beginning in such calendar year. Any reference in this Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA ‘93 annual compensation limit set forth in this provision.

“Savings” means Before-Tax Savings, Roth 401(k) Savings, After-Tax Savings and Before-Tax Catch-Up and Roth 401(k) Catch-Up Savings permitted under Article Four.

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“Service” means the period of elapsed time beginning on the date a person becomes an Eligible Employee of the Company or any subsidiary, affiliate or predecessor of the Company, and ending on his or her most recent severance date, which shall be the earlier of (A) the date he or she quits, is discharged, retires or dies or (B) the first anniversary of the date on which he or she is first absent from service, with or without pay, for any reason such as vacation, sickness, disability, layoff or leave of absence. If Service is interrupted for maternity or paternity reasons, meaning an interruption of Service by reason of (i) the pregnancy of the Eligible Employee, (ii) the birth of a child of the Eligible Employee or (iii) the placement of a child with the Eligible Employee by reason of adoption, or for purposes of caring for a newborn child of the Eligible Employee immediately following the birth or adoption of the newborn, then the date of severance from Service shall be the earlier of (a) the date he or she quits, is discharged, retires or dies, or (b) the second anniversary of the date on which he or she is first absent from service. If an Eligible Employee terminates and is later reemployed within 12 months of (I) his or her date of termination or (II), with respect to an individual who does not complete an Hour Worked as an Eligible Employee on or after January 1, 2006, the first day of an absence from service immediately preceding his or her date of termination, if earlier, the period between his or her severance date and his or her date of reemployment shall be included in his or her Service. With respect to Service for purposes of the vesting schedule in Section 5.3, if an Eligible Employee terminates and is later reemployed after 12 or more months have elapsed since his or her severance date, the period of service prior to his or her severance date shall be included in his or her Service.

Under the circumstances hereinafter stated and upon such conditions as the Pension Administration Committee shall determine on a basis uniformly applicable to all Employees similarly situated, the period of Service of an Eligible Employee shall be deemed not to be interrupted by an absence of the type hereinafter stated and the period of such absence shall be included in determining the length of an Eligible Employee’s Service if a leave of absence has been authorized by the Company or any affiliate of the Company (for the period of such authorized leave of absence only), or if an Eligible Employee enters service in the armed forces of the United States and his or her right to reemployment is protected by the Selective Service Act or any similar law then in effect, and the Eligible Employee returns to regular employment within the period during which the right to reemployment is protected by any such law.

As provided in Section 3.5, periods of employment with Pre-Distribution ITT prior to the Distribution Date shall be treated as periods of employment with The Hartford and Hartford Fire.

Periods of employment by an Eligible Employee with The Prudential Insurance Company of America (the “Prudential”) in its AARP Operations Division prior to June 1, 1997 shall be treated as periods of employment with the Company so long as such Eligible Employee becomes employed by the Company during June, 1997 in accordance with and under the terms of the AARP GHIP Management Agreement dated February 26, 1997 immediately following employment with the Prudential. Periods of employment by any Employee with United HealthCare Insurance Company during the period June 1, 1997 through December 31, 1997 shall be treated as periods of employment with the Company so long as such Eligible Employee becomes employed by the Company during 1997 in accordance with and under the terms of the AARP GHIP Management Agreement dated February 26, 1997 immediately following employment with United HealthCare Insurance Company, if such employment with United HealthCare Insurance Company immediately followed employment with the Prudential in its AARP Operations Division.

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Periods of employment by an Eligible Employee with Omni Insurance Company (“Omni”) prior to January 1, 2002 shall be treated as periods of employment with the Company so long as such Eligible Employee remained employed by Omni on December 31, 2001 and became employed by the Company on January 1, 2002.

Periods of employment by an Eligible Employee with Fortis, Inc. and applicable subsidiaries (collectively, “Fortis”) prior to April 1, 2001 shall be treated as periods of employment with the Company so long as such Eligible Employee remained employed by Fortis on March 30, 2001 and became employed by the Company on April 1, 2001.

Periods of employment by an Eligible Employee with Access Coverage Corporation (“Access”) prior to November 5, 2001 shall be treated as periods of employment with the Company so long as such Eligible Employee remained employed by Access on November 4, 2001 and became employed by the Company on November 5, 2001.

Service prior to January 1, 2004 with Planco Financial Services, Inc. or Planco, Incorporated as a commissioned wholesaler or administrative assistant to such a wholesaler shall be treated as Service for an individual who became an Eligible Employee of Planco Financial Services, Inc. on January 1, 2004.

Periods of employment by an Eligible Employee with Planco, LLC prior to January 1, 2009 shall be treated as periods of employment with the Company as long as such Eligible Employee remained employed by Planco, LLC on December 31, 2008 and became employed by the Company on January 1, 2009. Such Service shall be determined in accordance with and under the terms of the Planco Profit Sharing Plan. Eligible Employees who were at any time Members prior to becoming employees of Planco, LLC who will again be Eligible Employees on January 1, 2009 will receive the greater of their Service for the period as an Employee prior to January 1, 2009 determined in accordance with and under the terms of the Planco Profit Sharing Plan or under this Plan.

Eligible Employees who commence employment with the Company on or after January 1, 2007 in connection with the acquisition of a business by the Company, shall be credited with periods of employment under the Plan for periods of employment with the acquired business to the extent so provided by the Plan Administrator.

For an individual who completes an Hour Worked as an Eligible Employee on or after January 1, 2006, service as a leased employee, within the meaning of Code Section 414(n)(2), shall be taken into account solely to the extent provided by Code Section 414(n).

Periods of employment by an Eligible Employee with Xchanging prior to October 1, 2010 shall be treated as periods of employment with the Company so long as such Eligible Employee becomes employed by the Company during October, 2010 in accordance with and under the terms of the sold fees agreement for Oasis Outsourcing dated September 15, 2010 immediately following employment with the Xchanging.

“Supplemental After-Tax Account” means the portion of the Employee Contributions Investment Account that is attributable to Supplemental After-Tax Savings and any investment earnings and gains or losses thereon.

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“Supplemental After-Tax Savings” means contributions credited to the Supplemental After-Tax Account under Section 4.3(B)(ii) or pursuant to a Prior Plan Transfer.

“Supplemental Before-Tax Savings” means contributions credited to the Before-Tax Account under Section 4.1(B)(ii), under Section 4.1(C) with respect to periods prior to January 1, 2006, or pursuant to a Prior Plan Transfer.

“Supplemental Roth 401(k) Savings” means contributions credited to the Roth 401(k) Contributions Account under Section 4.2(B)(ii) or pursuant to a Prior Plan Transfer.

“Supplemental Savings” means Supplemental Before-Tax Savings, Supplemental Roth 401(k) Savings and Supplemental After-Tax Savings contributed under Article Four, as well as Supplemental Before-Tax and After-Tax Savings made pursuant to a Prior Plan Transfer.

“Termination of Employment” means a voluntary or involuntary separation from employment with the Company for any reason, including, but not limited to, Retirement, death, Disability, resignation or dismissal by the Company, but shall not include a transfer in employment between the Company and any other Participating Corporation. With respect to any leave of absence and any period of service in the armed forces of the United States, the rules contained in the definition of Service contained in the Plan shall apply. Notwithstanding the foregoing, for purposes of Code Section 401(k)(2)(B)(i)(I), a Member is treated as having terminated employment during any period he or she is performing service in the uniformed services described in Code Section 3401(h)(2)(A).

“The Hartford” means The Hartford Financial Services Group, Inc. (a Delaware corporation), which is affiliated with Hartford Fire (the sponsor of the Plan).

“The Hartford Stock” means common stock of The Hartford Financial Services Group Inc., par value $.01 per share.

“The Hartford Stock Fund” means the Investment Fund established pursuant to the Plan which by its terms is invested exclusively in The Hartford Stock, except for such reserves as may be deemed necessary for liquidity and the effecting of transactions with respect thereto.

“Trust Fund” means the aggregate funds held by the Trustee under the trust agreement or agreements established for the purposes of this Plan or the aggregate funds held under an insurance contract or contracts established with The Hartford or its affiliates, consisting of the funds described in Article Eight.

“Trustee” means the Trustee at any time acting as such under the trust agreement established for the purposes of the Plan.

“Valuation Date” means the day the Trust Fund is valued for a particular purpose in accordance with Article Eight.

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“Vested Company Contributions Investment Account” means the portion of a Company Contributions Investment Account that is vested under Article Five.

“Vested Share” means the portion of Accounts that vest under Articles Four and Five and a Member’s Roth Conversion Investment Account.

“Withdrawal Valuation Date” means the business day as of which the Plan Administrator or its designee processes the request for a withdrawal or Roth Conversion (which request must be made in a manner and by the date required by the Plan Administrator).

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ARTICLE THREE
MEMBERSHIP

3.1. Eligibility for Membership. Effective January 1, 2008, an Eligible Employee will be immediately eligible to become a Member for purposes of making contributions to the Plan described in Article III and Article IV of the Plan.

3.2. Becoming a Member by Making an Enrollment Election. An Eligible Employee who is eligible to become a Member shall become a Member by making an enrollment election before an Enrollment Date and in the manner and by the time required by the Plan Administrator. By making an enrollment election, the Eligible Employee: (A) designates the rate of his or her After-Tax Savings, (B) authorizes the Company to make regular payroll deductions of the amount of his or her After-Tax Savings, if any, (C) designates the rate of his or her Before-Tax Savings, Roth 401(k) Savings and any Before-Tax Catch-Up and Roth 401(k) Catch-Up Savings, (D) authorizes the Company to reduce his or her Salary by the amount of his or her Before-Tax Savings and/or Roth 401(k) Savings and Before-Tax Catch-Up and Roth 401(k) Catch-Up Savings, if any, (E) makes an investment election as described in Article Seven, (F) designates a beneficiary for his or her Accounts, and (G) makes a dividend election as described in Section 7.6, if applicable. Alternatively, an Eligible Employee may become a Member by electing to contribute to the Plan After-Tax Rollovers, Before-Tax Rollovers, or Roth 401(k) Rollovers in accordance with Section 4.4 in lieu of the elections identified in (A), (B), (C), and (D) in the preceding sentence.

3.3 Failure to Make Proper Enrollment Election. In the case of an Eligible Employee who is hired on or after January 1, 2008, who is eligible to become a Member but does not make a proper enrollment election, such Eligible Employee shall automatically become a Member hereunder 60 days after the date such Eligible Employee is eligible to become a Member (or as soon as practicable thereafter). Such Eligible Employee shall be deemed to have made elections to: (A) designate a 3% rate of Before-Tax Savings, (B) designate a zero rate of After-Tax Savings, (C) designate a zero rate of Roth 401(k) Savings, (D) designate a zero rate of Before-Tax Catch-Up Savings and Roth 401(k) Catch-Up Savings, (E) invest his or her Savings in the applicable Default Vanguard Target Retirement Fund set forth in Section 8.3(G), and (F) designate his or her Spouse as Beneficiary hereunder if such Member is married, and to designate his or her estate as Beneficiary hereunder if such Member is unmarried. Such an Eligible Employee may elect to change such deemed elections as permitted by the Plan.

Upon completion of six months of Service, an Eligible Employee shall in any event become a Member entitled to Floor Company Contributions under the Plan as of such date.

3.4 Automatic Increase Program. Unless he or she elects otherwise, a Member who is automatically enrolled in the Plan in accordance with Section 3.3 will have his or her rate of Before-Tax Savings increased by one percent each April 1^st; provided that as of April 1^st, it has been at least six months since the date the Member was automatically enrolled in the Plan. Such increased rate will not exceed 10% of such Member’s Salary or cause the Member’s Before-Tax Savings to exceed any Plan limits or limits imposed by the IRS.

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Members who are not automatically enrolled in the Plan may elect to have their rate of Before-Tax Savings automatically increased by a percentage they elect (up to 10%) on April 1^st of each year, or another date they may choose, up to the Plan limit or limits imposed by the IRS.

3.5 Pre-Distribution ITT Plan Participants: Continuity of Membership, Service and Incidents of Participation. Each person who was a “Member” or “Deferred Member” under the Pre-Distribution ITT Plan on the day before the Distribution Date, and whose Accounts were transferred to this Plan, shall be a Member or Deferred Member under this Plan as of the Distribution Date. The Service of such Members or Deferred Members while employed by Pre-Distribution ITT before the Distribution Date shall be treated as service with Hartford Fire under this Plan, except as specifically provided to the contrary in this Plan. All incidents of participation with respect to such Members or Deferred Members under the Pre-Distribution ITT Plan for periods before the Distribution Date, including any elections or designations in effect on the day before the Distribution Date, shall be taken into account for purposes of this Plan, except as specifically provided herein to the contrary.

3.6. Rehired Members.

(A)

Rehired Members Who Make Proper Enrollment Elections. Any rehired Eligible Employee who at the time of Termination of Employment was a Member of this Plan or of the Pre-Distribution ITT Plan will again become a Member as of the first available payroll cycle following the date of such Eligible Employee’s rehire (the “Re-Enrollment Date”), provided that the Eligible Employee makes a proper enrollment election under this Article Three.

(B)

Rehired Members Who Do Not Make Proper Enrollment Elections. In the case of a rehired Eligible Employee who was a Member at the time of Termination of Employment, and who does not make a proper enrollment election with respect to the Re-Enrollment Date, such Eligible Employee shall automatically become a Member as of the first available payroll cycle following the Re-Enrollment Date (or as soon as practicable thereafter). Such a Member shall be entitled to Floor Company Contributions under the Plan as of such date, and shall be deemed to have made elections to: (i) designate a zero rate of After-Tax Savings, (ii) designate a zero rate of Before-Tax Savings and Before-Tax Catch-Up Savings, (iii) designate a zero rate of Roth 401(k) Savings and Roth 401(k) Catch-Up Savings and (iv) designate his or her Spouse as Beneficiary hereunder if such Member is married, and if not married, to designate his or her estate as Beneficiary hereunder. Such an Eligible Employee may change such deemed elections as permitted by the Plan.

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3.7 Transfers between the Company and Associated Companies. Effective January 1, 2004, if an employee is transferred from employment with an Associated Company to employment with the Company, for purposes of eligibility to become a Member and receive Matching Company Contributions and Floor Company Contributions, and for purposes of vesting, his or her service with the Associated Company shall be taken into consideration as “Service” under this Plan. For purposes of this Section, “Associated Company” shall mean any division, subsidiary or affiliated company of the Company not participating in this Plan as a Participating Corporation or a Participating Division which is (a) a component member of a controlled group of corporations (as defined in Section 414(b) of the Code) which includes the Company, (b) any trade or business (whether or not incorporated) which is under common control (as defined in Section 414(c) of the Code) with the Company, (c) any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Section 414(m) of the Code) which includes the Company or (d) any other entity required to be aggregated with the Company pursuant to regulations under Code Section 414(o), during the period it is a division, subsidiary or affiliated company of the Company or during such period as may otherwise be determined by the Board of Directors or the Pension Administration Committee.

If an Eligible Employee is transferred from employment with the Company to employment with an Associated Company, he will not have a Termination of Employment for purposes of this Plan until such time as he is employed neither by the Company nor by an Associated Company. During any such period of employment, such employee will be credited with Service. In no event, however, will such an employee be deemed eligible for contributions to the Plan during any such period of employment.

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ARTICLE FOUR
MEMBER CONTRIBUTIONS

4.1. Member Before-Tax Savings.

(A) Salary Reduction Election for Before-Tax Savings. A Member may elect, subject to the IRS limits described in Article Six and any other Plan limits, to have his or her Salary reduced (by payroll deduction) by a whole percent not exceeding 30%, and to have that amount contributed to the Trust Fund as Before-Tax Savings. Such election shall be made in the manner and by the date required by the Plan Administrator, and shall be effective with the next payroll paid after the election (or as soon as practicable thereafter). A Member’s election shall continue to apply notwithstanding a change in his or her principal employer from one Participating Corporation to another Participating Corporation, unless the Member changes or suspends his or her Salary reduction rate or savings as permitted by the Plan. The Plan Administrator may establish a separate limit on the percentage of Salary that a Highly Compensated Member may contribute to the Trust Fund as Before-Tax Savings.

(B) Types of Before-Tax Savings; Crediting of Before-Tax Savings to Accounts.

(i) Basic Before-Tax Savings. Before-Tax Savings that do not exceed 6% of a Member’s Salary for the period during which such contributions are made shall be known as “Basic Before-Tax Savings,” and shall be credited to the Member’s Before-Tax Account.

(ii) Supplemental Before-Tax Savings. Before-Tax Savings that exceed the maximum allowed under the preceding paragraph shall be known as “Supplemental Before-Tax Savings,” and shall be credited to a Member’s Before-Tax Account. Supplemental Before-Tax Savings includes Catch-Up Savings made prior to January 1, 2006 and amounts credited as Supplemental Before-Tax Savings on a Member’s behalf pursuant to a Prior Plan Transfer.

(C) Before-Tax Catch-Up Savings. All Members who are eligible to make Before-Tax Savings, who will have attained age 50 before the close of the Plan Year, and who have contributed at least 6% of Salary in any combination of Before-Tax, Roth 401(k) or After-Tax Savings, may elect to make Before-Tax Catch-Up Savings which, when taken together with a Member’s Before-Tax Savings, Roth 401(k) Savings, Roth 401(k) Catch-Up Savings and After-Tax Savings, equal up to 75% of a Member’s Salary for a pay period. Such Before-Tax Catch-Up Savings shall be made in accordance with, and subject to, the limitations of Code Section 414(v) and in addition, when combined with any Roth 401(k) Catch-Up Savings, will not exceed 69% of a Member’s Salary. Such Before-Tax Catch-up Savings shall not be taken into account for purposes of the limitations of Code Sections 402(g) and 415. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Code Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416, as applicable, by reason of any Member making such Before-Tax Catch-Up Savings hereunder. Prior to January 1, 2006, Before-Tax Catch-Up Savings shall be credited to a Member’s Before-Tax Account; on and after January 1, 2006, Before-Tax Catch-Up Savings shall be credited to a Member’s Catch-Up Contributions Account.

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(D) Change in Salary Reduction Election for Before-Tax Savings and Before-Tax Catch-Up Savings. A Member may elect to change the rate of his or her Salary reduction for Basic or Supplemental Before-Tax Savings or Before-Tax Catch-Up Savings as of any business day by giving notice to the Company in a manner and by the date required by the Plan Administrator. The changed rate of Salary reduction shall be effective as of the next payroll period (or as soon as practicable thereafter). Notwithstanding the above, Members who are also members in a Hartford Excess Savings Plan may not elect to change their rate of Salary reduction for Basic or Supplemental Before-Tax Savings under this Plan after January 1 of the applicable Plan Year (the Salary reduction rate in effect on January 1 of the Plan Year will continue to apply for that entire Plan Year, except in the case of a suspension of Savings due to a Hardship withdrawal as set forth in Section 4.5(B) below; such an Excess Savings Plan member may nonetheless elect to change his or her rate of Salary reduction for Before-Tax Catch-Up Savings during the Plan Year).

(E) Vesting of Before-Tax Savings and Before-Tax Catch-Up Savings. Before-Tax Savings and Before-Tax Catch-Up Savings credited to a Member’s Accounts shall at all times be fully vested and nonforfeitable.

4.2. Member Roth 401(k) Savings.

(A) Salary Reduction Election for Roth 401(k) Savings. A Member may elect, subject to the IRS limits described in Article Six and any other Plan limits, to have his or her Salary reduced (by payroll deduction) by a whole percent not exceeding 30%, and to have that amount contributed to the Trust Fund as Roth 401(k) Savings, except that a Member may not elect to contribute Roth 401(k) Savings of more than the difference between 30% of Salary and the amount of Before-Tax Savings properly elected. Such election shall be made in the manner and by the date required by the Plan Administrator, and shall be effective with the next payroll paid after the election (or as soon as practicable thereafter). A Member’s election shall continue to apply notwithstanding a change in his or her principal employer from one Participating Corporation to another Participating Corporation, unless the Member changes or suspends his or her Salary reduction rate or savings as permitted by the Plan. The Plan Administrator may establish a separate limit on the percentage of Salary that a Highly Compensated Member may contribute to the Trust Fund as Roth 401(k) Savings.

(B) Types of Roth 401(k) Savings; Crediting of Roth 401(k) Savings to Accounts.

(i) Basic Roth 401(k) Savings. Roth 401(k) Savings that do not exceed the difference between 6% of a Member’s Salary for the period during which such contributions are made and the amount credited as Basic Before-Tax Savings for that period shall be known as “Basic Roth 401(k) Savings,” and shall be credited to the Member’s Roth 401(k) Contributions Account.

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(ii) Supplemental Roth 401(k) Savings. Roth 401(k) Savings that exceed the maximum allowed under the preceding paragraph shall be known as “Supplemental Roth 401(k) Savings,” and shall be credited to a Member’s Roth 401(k) Contributions Account. Supplemental Roth 401(k) Savings may also include amounts credited on a Member’s behalf pursuant to a Prior Plan Transfer.

(C) Roth 401(k) Catch-Up Savings. All Members who are eligible to make Roth 401(k) Savings, who will have attained age 50 before the close of the Plan Year, and who have contributed at least 6% of Salary in any combination of Before-Tax, Roth 401(k) or After-Tax Savings, may elect to make Roth 401(k) Catch-Up Savings which, when taken together with a Member’s Before-Tax Savings, Roth 401(k) Savings, After-Tax Savings, and Before-Tax Catch-Up Savings equal up to 75% of a Member’s Salary for a pay period. Such Roth 401(k) Catch-Up Savings shall be made in accordance with, and subject to, the limitations of Code Section 414(v) and in addition, when combined with any Before-Tax Catch-Up Savings, will not exceed 69% of a Member’s Salary. Such Roth 401(k) Catch-up Savings shall not be taken into account for purposes of the limitations of Code Sections 402(g) and 415. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Code Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416, as applicable, by reason of any Member making such Roth 401(k) Catch-Up Savings hereunder. Roth 401(k) Catch-Up Savings shall be credited to a Member’s Roth 401(k) Catch-Up Contributions Account.

(D) Change in Salary Reduction Election for Roth 401(k) Savings and Roth 401(k) Catch-Up Savings. A Member may elect to change the rate of his or her Salary reduction for Basic or Supplemental Roth 401(k) Savings or Roth 401(k) Catch-Up Savings as of any business day by giving notice to the Company in a manner and by the date required by the Plan Administrator. The changed rate of Salary reduction shall be effective as of the next payroll period (or as soon as practicable thereafter). Notwithstanding the above, Members who are also members in a Hartford Excess Savings Plan may not elect to change their rate of Salary reduction for Basic or Supplemental Roth 401(k) Savings under this Plan after January 1 of the applicable Plan Year (the Salary reduction rate in effect on January 1 of the Plan Year will continue to apply for that entire Plan Year, except in the case of a suspension of Savings due to a Hardship withdrawal as set forth in Section 4.5(B) below; such an Excess Savings Plan member may nonetheless elect to change his or her rate of Salary reduction for Roth 401(k) Catch-Up Savings during the Plan Year).

(E) Vesting of Roth 401(k) Savings and Roth 401(k) Catch-Up Savings. Roth 401(k) Savings and Roth 401(k) Catch-Up Savings credited to a Member’s Accounts shall at all times be fully vested and nonforfeitable.

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4.3 Member After-Tax Savings.

(A) Salary Reduction Election for After-Tax Savings. A Member may elect, subject to the IRS limits described in Article Six and any other Plan limits, to have his or her Salary reduced (by payroll deductions) by a whole percent not exceeding 30%, and to have that amount contributed to the Trust Fund as After-Tax Savings, except that a Member may not elect to contribute After-Tax Savings of more than the difference between 30% of Salary and the amount of Before-Tax Savings plus Roth 401(k) Savings properly elected. Such election shall be made in the manner and by the date required by the Plan Administrator, and shall be effective with the next payroll paid after the election (or as soon as practicable thereafter). A Member’s election shall continue to apply notwithstanding a change in his or her principal employer from one Participating Corporation to another Participating Corporation, unless the Member changes or suspends his or her Salary reduction rate or savings as permitted by the Plan. The Plan Administrator may establish a separate, lower limit on the percentage of Salary that a Highly Compensated Member may contribute to the Trust Fund as After-Tax Savings. The Plan Administrator may also provide for Member elections as to whether After-Tax Savings are to commence automatically when a Member’s Before-Tax and Roth 401(k) Savings reach the maximum allowed under Code Section 402(g) for a Plan Year.

(B) Types of After-Tax Savings; Crediting of After-Tax Savings to Accounts.

(i) Basic After-Tax Savings. After-Tax Savings that do not exceed the difference between 6% of a Member’s Salary for the period during which such contributions are made and the amount credited as Basic Before-Tax Savings and Basic Roth 401(k) Savings for that period shall be known as “Basic After-Tax Savings” and shall be credited to the Member’s Basic After-Tax Account.

(ii) Supplemental After-Tax Savings. After-Tax Savings that exceed the maximum allowed under the preceding paragraph shall be known as “Supplemental After-Tax Savings” and shall be credited to the Member’s Supplemental After-Tax Account. Supplemental After-Tax Savings may also include amounts credited on a Member’s behalf pursuant to a Prior Plan Transfer.

(C) Change in Salary Reduction Election for After-Tax Savings. A Member may elect to change the rate of his or her Salary reduction for After-Tax Savings as of any business day by giving notice to the Company in the manner and by the date required by the Plan Administrator. The changed rate of Salary reduction shall be effective as of the next payroll period (or as soon as practicable thereafter).

(D) Vesting of After-Tax Savings. After-Tax Savings credited to a Member’s Accounts shall at all times be fully vested and nonforfeitable.

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4.4 Member Rollover Contributions.

(A) Contribution of Rollovers. To the extent permitted by the Code, a Member may elect, subject to the IRS limits described in Article Six and any other Plan limits, to contribute any of the following amounts to the Trust Fund: (i) a distribution or proceeds from a sale of distributed property that qualifies as an Eligible Rollover Distribution as defined in Article Eleven hereof from a trust described in Code Section 401(a) and exempt from tax under Code Section 501(a), (ii) a distribution from a “conduit” or traditional individual retirement account or annuity, (iii) a Prior Plan Transfer, which means a direct rollover or transfer from a prior employer’s plan, provided that (a) the Member can establish to the satisfaction of the Plan Administrator that such prior employer’s plan assets meets the qualification requirements under Code Section 401(a), and (b) a trust-to-trust transfer shall not be permitted unless the amount transferred is free of all defined benefit characteristics and does not make the Plan a transferee plan under Code Section 401(a)(11)(B)(iii)(III); or (iv) an annuity contract described in section 403(b) of the Code; or, (v) an eligible plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state. A Member may also roll over to the Trust Fund non-taxable distributions from traditional individual retirement accounts, attributable to deductible contributions, and distributions from SIMPLE individual retirement accounts made more than two years after the date the Member first participated in the SIMPLE individual retirement account, to the extent permitted by the Code and rules established by the Plan Administrator. Any amount so contributed must be paid to the Trustee on or before the sixtieth day after the Member receives such amount (or be transferred directly from a prior plan) and shall be held in the Trust Fund and credited as set forth in (C) below.

While generally only Members who are currently Eligible Employees may elect to roll over amounts to the Trust Fund, Members and Deferred Members who are not currently employed may elect to directly roll over Eligible Rollover Distributions from The Hartford Retirement Plan for U.S. Employees to the Before-Tax Rollover Investment Account under the Plan.

(B) Vesting in Rollovers. Amounts credited to a Member’s After-Tax Rollover Investment Account, Before-Tax Rollover Investment Account or Roth 401(k) Rollover Investment Account shall at all times be fully vested and nonforfeitable.

(C) Crediting to Accounts; Investment. Amounts contributed under this Section 4.4 shall be credited, depending on the character of the rollover contribution, to the following Accounts, as applicable: the Before-Tax Rollover Investment Account, the After-Tax Rollover Investment Account or the Roth 401(k) Rollover Investment Account. Each such Account will be invested in accordance with the Member’s direction pursuant to Article Eight. In the absence of such direction, the applicable Account(s) shall be invested in the applicable Default Vanguard Target Retirement Fund set forth in Section 8.3(G).

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4.5 Suspension and Resumption of Member Savings.

(A) Member Election to Suspend Savings. A Member (other than a Member who is also a member in a Hartford Excess Savings Plan) may elect to suspend or resume his or her Before-Tax, Roth 401(k) or After-Tax Savings or Before-Tax Catch-Up or Roth 401(k) Catch-Up Savings as of any business day by giving notice to the Company in the manner and by the time required by the Plan Administrator. Such suspension or resumption will be effective as of the next payroll period (or as soon as practicable thereafter).

(B) Suspension due to Withdrawal for Hardship. A Member who takes a hardship withdrawal from his or her Basic or Supplemental Before-Tax Savings or Basic or Supplemental Roth 401(k) Savings or Before-Tax Catch-Up or Roth 401(k) Catch-Up Contributions under Section 10.2, which is attributable to a Hardship as defined in that Section, shall have his or her Savings under the Plan suspended for a period of six months. Such suspension will be effective as of the next payroll period after the Valuation Date that applies to the withdrawal (or as soon as practicable thereafter). During such suspension, Floor Company Contributions will continue to be made on behalf of the Member, but no Matching Company Contributions shall be made on his or her behalf. Also, the Member will continue to be considered a Member for purposes of Article Six. Savings may be resumed by giving notice to the Company in the manner and by the date required by the Plan Administrator. Such resumption shall be effective as of the next payroll period following the six month suspension period (or as soon as practicable thereafter). (The resumption of contributions shall be automatic for a Member who is also a member in a Hartford Excess Savings Plan.)

4.6 Member Elective Transfers. A Member may make an elective transfer to the Plan, provided such elective transfer (A) is from a plan qualified under Code Section 401(a), (B) results from the Company’s acquisition of assets or a subsidiary within the meaning of Code Section 401(k)(10), and (C) meets the requirements of Code Section 414(l) and Treasury Regulation 1.411(d)(4), Q&A 3(b).

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ARTICLE FIVE
COMPANY CONTRIBUTIONS

5.1. Matching Company Contributions.

(A) Matching Company Contributions with respect to Basic Savings. Effective January 1, 2008, subject to the IRS limits described in Article Six and any other Plan limits, the Company shall, with respect to each Member principally employed by it who has completed at least six months of Service as an Eligible Employee, contribute to the Trust Fund a Matching Company Contribution in an amount equal to 50% of such Member’s Basic Savings for each payroll period. (No Matching Company Contributions shall be made with respect to a Member’s Supplemental Savings, a Member’s Before-Tax Savings or a Member’s Roth 401(k) Savings that exceed the limits provided in Code Sections 402(g) and 415 or Section 4.1(A), 4.2(A) or 6.1 of the Plan.) Such Matching Company Contribution shall be credited to such Member’s Company Contributions Investment Account, and shall be invested as described in Article 8 hereof. No Matching Company Contributions shall be made with respect to a Member’s Catch-Up Savings.

(B) No Matching Company Contributions Following Certain Withdrawals. Notwithstanding Section 5.1(A), Matching Company Contributions shall not be made in respect of a Member’s Basic Savings during a suspension period that follows a hardship withdrawal under Article Ten.

(C) No Matching Company Contributions for Planco Financial Services, Inc. Employees Before 2006. Notwithstanding Section 5.1(A), Matching Company Contributions shall not be made prior to January 1, 2006 with respect to a Member who is an Employee of Planco Financial Services, Inc.

5.2. Floor Company Contributions. Effective January 1, 2008, subject to the IRS limits described in Article Six and any other Plan limits, the Company shall, with respect to each Eligible Employee principally employed by it who has completed at least six months of Service as an Eligible Employee, contribute to the Trust Fund a Floor Company Contribution in an amount equal to one-half of one percent (0.5%) of such Eligible Employee’s Salary for each payroll period, provided that, for each payroll period commencing on or after January 1, 2004 with respect to such a Member who is not a Highly Compensated Member, the amount of such Floor Company Contribution shall be increased to an amount equal to one and one-half percent (1.5%) of such Member’s Salary for such payroll period. Floor Company Contributions shall be credited to such Member’s Company Contributions Investment Account, and shall be invested as described in Article 8 hereof. Notwithstanding the first sentence of this Section 5.2, no Floor Company Contributions shall be made prior to January 1, 2006 with respect to Eligible Employees who are Employees of Planco Financial Services, Inc.

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5.3 Vesting of Amounts in Company Contributions Investment Account.

(A) Vesting in Matching Company Contributions.

(i) General Rules. A Member shall be fully vested in, and have a nonforfeitable right to, the portion of his or her Company Contributions Investment Account that is attributable to Matching Company Contributions in accordance with the following schedule:

Years of Service Percentage of Company Contributions that is Vested

less than 1 year	0	%
1 but less than 2 years	20	%
2 but less than 3 years	40	%
3 but less than 4 years	60	%
4 but less than 5 years	80	%
5 or more years	100	%

(ii) Earlier Vesting in Certain Circumstances. Notwithstanding the foregoing schedule, a Member shall immediately be fully vested in 100% of his or her Company Contributions Investment Account that is attributable to Matching Company Contributions upon the earliest of: (a) the Member reaching age 65, (b) the Member’s Retirement provided the Member has an original hire date with the Company before January 1, 2002, (c) the Member’s Disability, (d) the Member’s death, (e) the termination of the Plan, or (f) the complete discontinuance of Company contributions under the Plan. In addition, a Member shall be immediately fully vested in all dividends paid on or after November 29, 2001 with respect to any portion of his or her Company Contributions Investment Account that is invested in The Hartford Stock.

(B) Vesting in Floor Company Contributions. Each Member and Deferred Member shall at all times be fully vested in the portion of his or her Company Contributions Investment Account attributable to Floor Company Contributions.

(C) Vesting in Amounts Attributable to a Prior Plan Transfer. Each Member and Deferred Member shall at all times be fully vested in the portion of his or her Company Contributions Investment Account attributable to a Prior Plan Transfer.

(D) Vesting in Planco Profit Sharing Contributions.

(i) General Rules. A Member shall be fully vested in, and have a nonforfeitable right to, the portion of his or her Company Contributions Investment Account that is attributable to Planco Profit Sharing Contributions in accordance with the following schedule:

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Years of Service Percentage of Company Contribution that is Vested

less than 1 year	0	%
1 but less than 2 years	20	%
2 but less than 3 years	40	%
3 but less than 4 years	60	%
4 but less than 5 years	80	%
5 or more years	100	%

(ii) Earlier Vesting in Certain Circumstances. Notwithstanding the foregoing schedule, a Member shall immediately be fully vested in 100% of his or her Company Contributions Investment Account that is attributable to Planco Profit Sharing Contributions upon the earlier of: (a) the Member reaching age 65, (b) the Member’s Disability, (c) the Member’s death, (d) the termination of the Plan, or (e) the complete discontinuance of Company contributions under the Plan.

(E) Special Rules for Certain ESOP and Company Contributions Investment Account Balances.

(i) Members Who Previously Worked for Pre-Distribution ITT. A Member who performed services for Pre-Distribution ITT at any time between June 30, 1995 and the Distribution Date shall be fully vested in the amounts credited to his or her ESOP Account and Company Contributions Investment Account as of the Distribution Date.

(ii) Forfeitures by Members Who Did Not Previously Work for Pre-Distribution ITT. In the case of a Member or Deferred Member who did not perform services for Pre-Distribution ITT between June 30, 1995 and the Distribution Date, any amounts in his or her ESOP Account and Company Contributions Investment Account that were forfeited under Section 5.5(a) of the Pre-Distribution ITT Plan shall remain forfeited, except to the extent restored pursuant to this Article Five on account of subsequent employment with the Company.

(F) Special Vesting Rules for Death While Performing Qualified Military Service.

The vested status of a Member who dies or becomes disabled on or after January 1, 2007 while performing military service shall be determined under this Section 5.3(F).

If a Member leaves employment with the Company to perform qualified military service and dies while performing such qualified military service, to the extent that a Member was not fully vested in his Accounts at the time such Member commenced the period of qualified military service during which his death occurred, such Member shall be fully vested as otherwise required under this Article 5. For purposes of this Section 5.3(F), the term “qualified military service” shall be defined as set forth in Code Section 414(u).

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5.4 Forfeiture of Certain Unvested Amounts in Company Contributions Investment Account.

(A) Forfeiture upon Termination of Employment. In the event of Termination of Employment of a Member for any reason other than one listed in Section 5.3(A)(ii), the unvested portion of the Member’s Company Contributions Investment Account shall be forfeited as of the earlier of the date (i) the Member receives a distribution of the entire vested portion of his or her Accounts, or (ii) the Member incurs five consecutive Breaks in Service.

(B) Restoration of Unvested Amounts in the Event of Rehire. In the case of a Member’s Termination of Employment for any reason other than one listed in Section 5.3(A)(ii), the unvested portion of the Member’s Company Contributions Investment Account shall be restored if the Member again becomes an Eligible Employee of the Company before incurring five consecutive Breaks in Service. The unvested amount shall be restored to the Member’s Account at its value at the time of termination. Any restoration of unvested amounts under this paragraph shall be made as of the Valuation Date following the date the Plan Administrator receives notice of the reemployment. The extent to which the Member vests in amounts restored under this Section shall be determined in accordance with the vesting schedule in this Article Five.

(C) Use of Forfeited Amounts. As soon as practicable after a Member receives a distribution of the entire vested portion of his or her Accounts or incurs five consecutive Breaks in Service, the unvested portion of the Member’s Company Contributions Investment Account shall be forfeited and either used to pay Plan expenses or applied to reduce future Company contributions under the Plan.

(D) Crediting of Forfeited Amounts to Accounts in Certain Circumstances. In the event of the termination of the Plan or complete discontinuance of Company contributions hereunder, any forfeitures not previously applied in accordance with the preceding paragraph shall be credited proportionately to the Accounts of all Members and Deferred Members as described in Article Sixteen.

5.5 Additional Company Contributions if Plan is Top-Heavy.

(A) Additional Contribution. For any Plan Year with respect to which the Plan is Top-Heavy (as defined in the next paragraph), an additional Company contribution shall be allocated on behalf of each Member (or each Eligible Employee eligible to become a Member) who is not a “key employee,” and who has not separated from service as of the last day of the Plan Year, to the extent that the amounts allocated to his or her Accounts as a result of contributions made under Sections 5.1 and 5.2 for that Plan Year are less than 3% of his or her W-2 remuneration for that Plan Year. However, if the greatest percentage of W-2 remuneration for that Plan Year (after being limited to the annually indexed dollar amount under Code Section 401(a)(17)) contributed by a “key employee” under Section 4.1 or allocated to his or her Accounts as a result of contributions made pursuant to Section 5.1 for the Plan Year would be less than 3%, such lesser percentage shall be substituted for “3%” in the preceding sentence. Notwithstanding the foregoing, no minimum contribution shall be made with respect to a Member if the required minimum benefit under Code Section 416(c)(1) is provided by the Retirement Plan.

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(B) Definition of Top-Heavy Plan. The Plan shall be considered Top-Heavy with respect to any Plan Year, if, as of the last day of the preceding Plan Year, the value of the aggregate of the Accounts under the Plan for all “key employees” exceeds 60 percent of the value of the aggregate of the Accounts under the Plan for all Eligible Employees. The value of such Accounts shall be determined as of the Valuation Date on or before the last day of such preceding Plan Year, in accordance with Code Sections 416(g)(3) and (4) and Article Seven of this Plan. Account balances under the Plan will be combined with the account balances or the present value of accrued benefits under any other qualified plan of the Company and its affiliates in which “key employees” participate or which enable the Plan to meet the requirements of Code Section 401(a)(4) or 410. Additionally, provided that the resulting aggregation group satisfies the requirements of Code Sections 401(a)(4) and 410, the Company may elect to combine the account balances under the Plan with the account balances or the present value of accrued benefits under any other qualified plan of the Company or its affiliates not required to be combined with this Plan if all members are non-key employees and the contributions or benefits under the other plan are at least comparable to the benefits provided under this Plan. The determination as to whether an Eligible Employee will be considered a “key employee” shall be made in accordance with the provisions of Code Sections 416(i)(l) and (5), and on the basis of the Eligible Employee’s Forms W-2 remuneration for the applicable Plan Year from the Company, or an affiliate of the Company (if applicable).

For the Plan Years commencing before January 1, 2000, the Plan will be super Top-Heavy if the top-heavy ratio exceeds 90% and a factor of 1.0 will be applied to the dollar limit.

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ARTICLE SIX
IRS LIMITS ON MEMBER SAVINGS
AND COMPANY CONTRIBUTIONS

6.1 IRS Limits on Before-Tax and Roth 401(k) Savings.

(A) Maximum Amount of Before-Tax and Roth 401(k) Savings. The maximum dollar amount of combined Before-Tax and Roth 401(k) Savings that may be made on behalf of any Member for a calendar year shall be the maximum amount determined by the Secretary of the Treasury, pursuant to Section 402(g) of the Code. In the event that the foregoing limitation is exceeded for any calendar year, the excess Before-Tax Savings and Roth 401(k) Savings as adjusted for investment experience will, in the sole discretion of the Plan Administrator, either (i) be deemed to have been distributed to the Member and recontributed to the Plan as After-Tax Savings, or (ii) be returned to the Member on behalf of whom such Before-Tax Savings and/or Roth 401(k) Savings were contributed. Any returned amounts will be returned no later than April 15 following the end of the calendar year that the contributions were made. However, if the Member participated in more than one qualified defined contribution plan to which he or she contributed pursuant to a Salary deferral arrangement, the Member shall notify the Plan Administrator by April 15 of the following calendar year of the amount of the excess deferrals to be allocated to this Plan, and such portion of the excess deferrals so allocated shall be recontributed to the Plan as After-Tax Savings or returned to the Member as provided in the preceding sentence.

Notwithstanding the foregoing, in the case of any Member who (a) ceases to be an Eligible Employee during a Plan Year, (b) is employed during such Plan Year by an employer which is not the Company or an entity within the controlled group of corporations (as defined in Code Section 414(b) and the Regulations thereunder) containing the Company, and (c) exceeds the limitation on elective deferrals enumerated in Code Section 402(g) ($16,500 in 2011) based on the Member’s participation in the Plan and participation in a plan maintained by the subsequent employer, the Plan shall not distribute to such a Member any Before-Tax Savings or Roth 401(k) Savings (or any income thereon) that arise solely as a result of the Member exceeding the Code Section 402(g) limit for the Plan Year, unless such limit was exceeded solely because of the Member’s participation in this Plan, without considering any other plan.

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(B) Limit on Before-Tax Savings and Roth 401(k) Savings for Highly Compensated Members.

(i) Actual Deferral Percentage. With respect to each Plan Year, the Actual Deferral Percentage for Highly Compensated Members shall not exceed the greater of: (i) 125 percent of the Actual Deferral Percentage for all other Members for the Plan Year, or (ii) the lesser of (a) 200 percent of the Actual Deferral Percentage of all other Members for the Plan Year or (b) the Actual Deferral Percentage of all other Members for the Plan Year plus 2 percentage points. Before-Tax Savings and Roth 401(k) Savings must have been allocated to Members’ Accounts during the Plan Year and may only be based on Salary received by a Member during the Plan Year or earned during the Plan Year and received by the Member within 2¹/2 months after the end of the Plan Year. In the event the Actual Deferral Percentage for Highly Compensated Employees for any Plan Year exceeds the limits described above, the Plan Administrator will choose one of the following methods to satisfy the limits:

(a) The Floor Company Contribution will be treated as a qualified nonelective contribution that, in combination with Before-Tax Savings and Roth 401(k) Savings, allows the Plan to satisfy the limits. The Company will make an additional qualified nonelective contribution, if necessary, for the Plan to satisfy the limits. Any qualified nonelective contribution made under this Section 6.1(B)(i)(a) shall be made in accordance with the requirements of Treas. Reg. Section 1.401(k)-2(a)(6).

(b) Excess contributions will be distributed in accordance with the paragraph below.

(c) Excess contributions will be recharacterized in accordance with the following paragraph.

To determine the amount of excess contributions, the Plan Administrator will (1) determine the hypothetical reductions of the Highly Compensated Employees beginning with the highest Actual Deferral Percentage and moving toward lower percentages until one of such limitations is met; (2) then determine the total dollar amount of such reductions; and (3) then reduce the Before-Tax Savings of the Highly Compensated Employees beginning with the highest dollar amount and moving toward lower dollar amounts until the total dollar amount in (2) above is reached. For purposes of the preceding sentence, the “highest amount” is determined after distribution of any excess contributions. Such amount of excess contributions, as adjusted for investment experience, will be distributed to the Members on whose behalf such contributions were made or, under rules adopted by the Plan Administrator, such Members may elect to recharacterize such adjusted contributions as After—Tax Savings. Any such recharacterization or distribution of the adjusted excess contributions will be made to the Highly Compensated Employees on the basis of the respective portion of the adjusted excess contributions attributable to each of such Employees and the recharacterization or the distribution of the adjusted excess contributions will be made to the Employees on whose behalf such contributions were made within 12 months following the end of the Plan Year for which the deferrals were made. The amount of such recharacterization or distribution of any excess contributions shall be reduced by excess deferrals previously distributed for the taxable year ending in the same Plan Year and the amount of such distribution of any excess deferrals shall be reduced by excess contributions previously distributed or recharacterized for the Plan Year beginning in such taxable year. Excess contributions shall be adjusted for any income or loss up to the date of distribution in accordance with IRS regulations; the Plan will not fail to use a reasonable method of computing the income allocable to excess contributions merely because the income allocable to the excess contributions is determined on a date that is no more than seven days before the distribution.

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(ii) ESOP Actual Deferral Percentage. With respect to each Plan Year beginning prior to January 1, 2006, the ESOP Actual Deferral Percentage shall be subject to the limits and corrections for Before-Tax Savings that are ESOP Contributions determined in the same manner as set forth in paragraph (i), above.

(iii) In the event that any portion of a Highly Compensated Employee’s Before-Tax Savings or Roth 401(k) Savings, as adjusted for investment experience, is returned or recharacterized pursuant to Section 6.1(A) as a result of the maximum dollar limit applicable to Before-Tax Savings and Roth 401(k) Savings, the Actual Deferral Percentage, or ESOP Actual Deferral Percentage, as applicable, shall be determined before such excess deferral is returned. Any adjusted excess of a Member’s deferrals that are recharacterized pursuant to Section 6.1(A) shall be treated as (I) annual additions pursuant to Section 6.3 and (II) Before-Tax Savings or Roth 401(k) Savings for purposes of their withdrawability prior to Termination of Employment and shall be subject to the financial hardship requirement provisions of Section 10.2.

(iv) For purposes of determining the Actual Deferral Percentage or ESOP Actual Deferral Percentage for Highly Compensated Employees, all contributions made by Highly Compensated Employees to qualified plans shall be aggregated. The contributions of all Employees under plans that are aggregated with this Plan for purposes of Section 401(a) or 410(b) of the Code shall be aggregated and deemed to have been made under a single plan.

(v) For Plan Years commencing before 1997, in determining the Actual Deferral Percentage of Highly Compensated Employees, the Highly Compensated Employee’s Before-Tax Savings and Compensation shall include the Before-Tax Savings and Compensation of family members (as defined in Section 414(q)(6) of the Code). In the event that recharacterization or distribution of excess deferrals is required, appropriate adjustment shall be made for all family members as provided in the Code.

(C) Additional Limits on Before-Tax and Roth 401(k) Savings. From time to time and in order to comply with Section 401(k)(3) of the Code, the Plan Administrator may impose a limitation on the extent to which a Highly Compensated Member may contribute Before-Tax and Roth 401(k) Savings hereunder, based on a reasonable projection of savings rates of non-Highly Compensated Members.

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6.2 IRS Limits on After-Tax Savings and Matching Company Contributions.

(A) Limit on After-Tax Savings and Matching Company Contributions for Highly Compensated Members.

(i) Actual Contribution Percentage. With respect to each Plan Year, the Actual Contribution Percentage for Highly Compensated Members shall not exceed the greater of (i) 125 percent of the Actual Contribution Percentage for all other Members for the Plan Year or (ii) the lesser of (a) 200 percent of the Actual Contribution Percentage of all other Members for the Plan Year or (b) the Actual Contribution Percentage of all other Members for the Plan Year plus 2 percentage points. In the event the Actual Contribution Percentage for Highly Compensated Members for any Plan Year exceeds the limits described above, the following shall occur: (1) the Plan Administrator shall determine the hypothetical reductions of the Highly Compensated Employees beginning with the highest Actual Contribution Percentage and moving toward lower percentages until one of such limitations is met, (2) the Plan Administrator shall then determine the total dollar amount of such reductions, and (3) the Plan Administrator shall then reduce the After-Tax Savings and Matching Company Contributions of the Highly Compensated Employees beginning with the highest dollar amount and moving toward lower dollar amounts until the total dollar amount in (2) above is reached. A Member’s Actual Contribution Percentage shall be determined after a Member’s excess Before-Tax and Roth 401(k) Savings are either recontributed to the Plan as After-Tax Savings or paid to the Member. Such amount of excess aggregate contributions, as adjusted for investment experience, will be returned to, or paid to, the Members for whom such contributions were made within 12 months following the end of the Plan Year for which the contributions were made. To the extent contributions must be paid or returned to a Member under the preceding sentence, the distribution shall be made from the following categories of contributions (adjusted to reflect earnings or losses attributable thereto): First, Supplemental After—Tax Savings; second, Basic After—Tax Savings (to the extent that associated Matching Company Contributions are vested, they also shall be distributed in this category); third, remaining vested Matching Company Contributions. To the extent that an additional adjustment is required, nonvested Matching Company Contributions shall be forfeited. Excess aggregate contributions shall be adjusted for any income or loss up to the date of distribution in accordance with IRS regulations; the Plan will not fail to use a reasonable method of computing the income allocable to excess aggregate contributions merely because the income allocable to the excess aggregate contributions is determined on a date that is no more than seven days before the distribution.

(ii) ESOP Actual Contribution Percentage. With respect to each Plan Year beginning prior to January 1, 2006, the ESOP Actual Contributions Percentage shall be subject to the limits and corrections for After-Tax Savings that are ESOP Contributions and Matching Company Contributions that are ESOP Contributions determined in the same manner as set forth in paragraph (i), above.

(iii) For purposes of determining the Actual Contribution Percentage or ESOP Actual Contribution Percentage for Highly Compensated Members, all contributions made by them to qualified plans shall be aggregated. The contributions of all Employees under plans that are aggregated with this Plan for purposes of Code Section 401(a) or 410(b) shall be aggregated and deemed to have been made under a single plan.

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(iv) For Plan Years commencing before 1997, in determining the Actual Contribution Percentage of Highly Compensated Members, their After-Tax Savings and Compensation shall include the After-Tax Savings and Compensation of family members (as defined in Section 414(q)(6) of the Code). In the event that distribution of excess contributions is required, appropriate adjustment shall be made for all family members as provided in the Code.

(B) Additional Limits on After-Tax Savings. From time to time and in order to comply with Code Section 401(m) of the Code, the Plan Administrator may impose an additional limit on the amount of After-Tax Savings that a Highly Compensated Member may contribute to the Trust Fund, based on a reasonable projection of savings rates of non- Highly Compensated Members.

6.3 Annual Limits on Additions to Member Accounts.

(A) Definitions. For purposes of this Section, the following definitions shall apply:

(i) Definition of “Annual Addition.” The “Annual Addition” to a Member’s Accounts for any Limitation Year means the sum of (a) the Member’s Before-Tax Savings for such Year, (b) the Member’s Roth 401(k) Savings for such Year, (c) the Member’s After-Tax Savings for such Year, and (d) all Matching Company Contributions, Planco Profit Sharing Contributions, if any, and Floor Company Contributions by the Company or an Affiliate for the Member for such Year.

(ii) Definition of “Affiliate.” The term “Affiliate” means any subsidiary or affiliate within the Company’s controlled group of companies, as determined under Code Section 414, except that the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” where it appears in Code Section 1563(a)(1).

(B) Maximum Annual Addition for this Plan. Notwithstanding any provision of this Plan to the contrary, except as otherwise provided in this Article Six, the Annual Addition to a Member’s Accounts under the Plan for any Limitation Year, when added to the Member’s Annual Addition for that Limitation Year under any other qualified defined contribution plan of the Company or any Affiliate of the Company, shall not exceed the Maximum Annual Addition. The Maximum Annual Addition shall be the lesser of: (i) $46,000 (for 2008), as adjusted for increases in the cost-of-living under Code Section 415(d), or (ii) 100 percent of the Member’s compensation, within the meaning of Code Section 415(c)(3), for the limitation year. For purposes of this Section 6.3, compensation within the meaning of Section 415(c)(3) of the Code for a limitation year shall include payments made by the later of two and a half months after severance from employment or the end of the limitation year that includes the date of severance from employment, provided that absent a severance from employment, such payments would have been paid to

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the employee while the employee continued in employment with the employer and are regular compensation for services during the employee’s regular working hours, compensation for services outside of the employee’s regular working hours (such as overtime or shift differential), commissions, bonuses or other similar compensation. The foregoing limit shall not apply to any contribution for medical benefits after separation from service (within the meaning of Code Sections 401(h) or 419A(f)(2)) which is otherwise treated as an Annual Addition. For purposes of this Section 6.3, compensation within the meaning of Section 415(c)(3) of the Code for a limitation year shall also include differential wage payments made to active duty members of the uniformed services in accordance with Code Section 3401(h). For this purpose, differential wage payments shall mean any payment which:

(i) is made by an employer to an individual with respect to any period during which the individual is performing service in the uniformed services (as defined in chapter 43 of title 38, United States Code) while on active duty for a period of more than 30 days, and

(ii) represents all or a portion of the wages the individual would have received from the employer if the individual were performing service for the employer.

If the limitation on annual additions to a Member’s Accounts is exceeded, such excess annual additions shall be corrected as permitted under applicable law, statute, regulation or procedure.

(C) Maximum Annual Addition for Members Participating in Other Defined Contribution Plans. In the event that a Member is a participant in any other defined contribution plans (whether or not terminated) of the Company or an Affiliate, the total amount added to such Member’s Accounts under this Plan and all such other plans in any Limitation Year shall not exceed the Maximum Annual Addition. If the limitation on annual additions to a Participant’s accounts is exceeded, such excess annual additions shall be corrected as permitted under applicable law, statute, regulation or procedure.

(D) Good Faith Compliance. This Section 6.3 is intended to reflect certain provisions of the final regulations under Section 415 of the Internal Revenue Code which became effective for the Plan Year beginning January 1, 2008. The terms of the Plan, and in particular, this Section 6.3, are intended to be in good faith compliance with the requirements of the 415 Regulations and are to be construed in accordance with the 415 Regulations and guidance issued thereunder.

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ARTICLE SEVEN
CREDITS TO ACCOUNTS;
ASSET VALUATION AND ALLOCATION

7.1. Establishment of Accounts. The Accounts described below shall be established for Members and Deferred Members, as appropriate, to hold contributions under the Plan and earnings thereon:

Type of Contribution	Sub-Account			Account
-Basic Before-Tax Savings	-Before-Tax Account		}	Employee Contributions
-Supplemental Before-Tax Savings	-Before-Tax Account			Investment Account
-Basic After-Tax Savings	-Basic After-Tax Account		}	Employee Contributions
-Supplemental After-Tax Savings -Amounts attributable to qualified non-elective contributions	-Supplemental After-Tax Account			Investment Account
-Before-Tax Catch-Up Savings Prior to January 1, 2006	- Before-Tax Account		}	Employee Contributions
-Before-Tax Catch-Up Savings On and After January 1, 2006	-Catch-up Contributions Account			Investment Account
-Basic Roth 401(k) Savings	-Roth 401(k) Contributions Account		}	Roth 401(k)Contributions
-Supplemental Roth 401(k) Savings	-Roth 401(k) Contributions Account			Investment Account
-Roth 401(k) Catch-Up Savings	-Roth 401(k) Catch-Up Contributions Account
-Before-Tax Rollovers		.		Before-Tax Rollover Investment Account
-After-Tax Rollovers		.		After-Tax Rollover Investment Account
-Roth 401(k) Rollovers		.		Roth 401(k) Rollover Investment Account
-Roth Conversions		.		Roth Conversion Investment Account
-Matching Company Contributions (including pre-Distribution ITT type)	-Matching Company Contributions Account
-Floor Company Contributions	-Floor Company Contributions Account
-Prior Plan Transfer	-Prior Plan Transfers Account		}	Company Contributions
-Pre-2004 Floor Company Contributions	-Pre-2004 Floor Company Contributions Account			Investment Account
-Reinvested Dividends attributable to The Hartford Stock	-Reinvested Dividends Account
-Planco Profit Sharing Contributions	-Planco Profit Sharing Contributions Account			Company Contributions Investment Account
-ESOP Account (from Pre—Distribution ITT Plan)-	-ESOP Account			Company Contributions Investment Account

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7.2. Crediting of Contributions, Rollovers and Roth Conversions. Member Savings, Before-Tax Rollovers, After-Tax Rollovers, Roth 401(k) Rollovers, Company Contributions, and Roth Conversions shall be credited to the appropriate Account as soon as practicable after they are transferred to the Trust Fund or, in the case of Roth Conversions, as soon as practicable following conversion.

7.3. Method of Determining Value of Amounts Credited to Accounts. At the end of each business day in which the Plan is in effect and operation, the amount of credit of a Member or Deferred Member in each of the funds shall be expressed and credited to the Accounts of such Member or Deferred Member using the unit accounting method, a method of participant accounting under which all balances are carried as “units,” which are multiplied by a unit value to give the actual cash value. For purposes of Article Eight, the interest of a Member or Deferred Member in The Hartford Stock Fund and shall be converted into a number of shares of The Hartford Stock as of any particular time, by dividing the value of all shares of Stock in the applicable Fund by the value of the interest of the Member or Deferred Member in the Fund at such time. The resulting number of shares of Stock shall be deemed allocated to such Member.

7.4. Valuation of The Hartford Stock. For the purpose of determining the value of The Hartford Stock hereunder, in the event such Stock is traded on a national securities exchange, such Stock shall be valued at the closing price of such Stock on the New York Stock Exchange composite tape on the business day such Stock is delivered to the Trustee. In the event such Stock is not traded on a national securities exchange, such Stock shall be valued in good faith by an independent appraiser selected by the Trustee and meeting requirements similar to those in the regulations prescribed under Code Section 170(a)(1).

7.5. Asset Valuation; Allocation of Gains and Losses. At the end of each business day, the Trustee shall (A) determine the total fair market value of all assets then held by it in each Investment Fund, (B) determine the gain or loss in the value of such assets, and (C) allocate such gain or loss pro rata by fund to the balances credited to the Accounts of all Members and Deferred Members as of such day.

7.6. Dividends Paid with Respect to The Hartford Stock.

(A) Dividend Election. A Member or Deferred Member may elect, with respect to a dividend paid on The Hartford Stock that is allocated to the Member’s or Deferred Member’s Accounts as of the ex-dividend date of such dividend, to have the dividend either distributed in cash to the Member or Deferred Member or reinvested in shares of The Hartford Stock in The Hartford Stock Fund. The Plan Administrator shall prescribe rules regarding the timing and manner of a dividend election.

(B) Default Election. In the absence of an affirmative dividend election, the Member or Deferred Member shall be deemed to have elected to have the dividend reinvested in The Hartford Stock.

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(C) Effect and Duration of Election. An election made in accordance with subsections (A) or (B), shall remain in effect until changed by the Member or Deferred Member in accordance with the rules established by the Plan Administrator. The election shall apply to all dividends with an ex-dividend date after the election date. A Member or Deferred member may change his or her dividend election at any time in the manner prescribed by the Plan Administrator.

(D) Cash Payment. Dividends elected to be paid in cash shall be distributed to the Member or Deferred Member as soon as administratively practicable after the dividend is received by the Trustee in the Trust Fund. The amount of cash dividends distributed shall be reduced by the amount of any losses attributable to such dividends while held in the Trust Fund. No earnings attributable to such dividends shall be distributed.

7.7. Death While Performing Military Service. If a Member dies on or after January 1, 2007 while performing qualified military service as defined in Section 414(u)(1) of the Code, then in determining any contribution or allocation such Member is otherwise entitled to under the terms of the Plan, such Member will be deemed to have resumed employment with the Employer on the day preceding such death and will be deemed to have a Termination of Employment on the actual date of death.

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ARTICLE EIGHT
INVESTMENT OF SAVINGS AND
CONTRIBUTIONS IN INVESTMENT FUNDS

8.1 Investment Funds Available under the Plan. The investment alternatives available under the Plan shall include (i) The Hartford Stock Fund and (ii) each other Investment Fund approved for the purpose by the Investment and Savings Plan Investment Committee. All contributions to the Plan shall be invested by the Trustee in The Hartford Stock Fund or such other Investment Funds in accordance with the investment elections by Members or Deferred Members made in accordance with the Plan or in the default investment fund provided for in the absence of such an election.

The Investment and Savings Plan Investment Committee may from time to time add Investment Funds to, or eliminate Investment Funds from, the group of Investment Funds available hereunder, provided, however, that such Committee shall have no authority with respect to The Hartford Stock Fund. Notwithstanding the foregoing, the Trustee temporarily may hold cash or make short-term investments in obligations of the United States Government, commercial paper, an interim investment fund for tax-qualified employee benefit plans established by the Trustee, or other investments of a short-term nature, unless otherwise provided by applicable law.

It is the intention of Hartford Fire, the sponsor of the Plan, that The Hartford Stock Fund shall be a permanent feature of the Plan, and shall continue to be invested exclusively in The Hartford Stock (except to the extent of cash in The Hartford Stock Fund necessary to facilitate transactions into and out of The Hartford Stock Fund) without regard to (A) the diversification of assets, (B) the risk profile of investment in The Hartford Stock, to the maximum extent consistent with the presumption of prudence established under applicable law with respect to investments by an eligible individual account plan as defined in ERISA (“EIAP”) and/or ESOP in employer common stock, (C) the amount of income provided by The Hartford Stock, (D) fluctuation in the fair market value of The Hartford Stock, and (E) the relative investment returns of The Hartford Stock Fund in comparison to any investment index, industry peer group, or any other performance measure that might be appropriate to investment options other than The Hartford Stock Fund, in view of the purpose of the Plan as an EIAP, and of The Hartford Stock Fund as an ESOP, provide Members (including Deferred Members) with the opportunity to own beneficially The Hartford Stock. The Company shall appoint an independent named fiduciary and investment manager for the assets of the Plan that consist of The Hartford Stock held in The Hartford Stock Fund (the “Stock Fund Fiduciary”), and it is the intention that the Stock Fund Fiduciary shall maintain The Hartford Stock Fund as a permanent feature of the Plan in accordance with this section to the fullest extent permitted by ERISA (taking into account, without limitation, that Members and Deferred Members have available to them other investment options under the Plan and are able to construct a diversified portfolio of investments consistent with their individual desired level of risk and return). To the extent permitted by law, and to the extent not otherwise paid by the Company, expenses associated with the services provided by the Stock Fund Fiduciary shall be paid from the assets of the Plan.

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8.2 Trustee Investment of Contributions in Investment Funds. Contributions to the Plan shall be invested by the Trustee in the Investment Funds as described below. Accounts shall be established for each Member and Deferred Member in any Investment Fund as to which Savings, Before-Tax Rollovers, After-Tax Rollovers, Roth 401(k) Rollovers, Company Contributions, Roth 401(k) Contributions and Roth Conversions are made, contributed, or otherwise properly allocated, subject to the below paragraphs.

(A) Accounts. A Member or Deferred Member shall direct the investment of each of his or her Employee Contributions Investment Account, Company Contributions Investment Account, Before-Tax Rollover Investment Account, After-Tax Rollover Investment Account, Roth 401(k) Contributions Investment Account, Roth 401(k) Rollover Investment Account, and Roth Conversion Investment Account in multiples of 1% in one or more of the Investment Funds, as properly elected by the Member or Deferred Member. In the event that a proper Investment Fund election is not made with respect to any Account, such account shall be invested in the applicable Default Vanguard Target Retirement Fund set forth in Section 8.3(G). Notwithstanding the previous sentence, in the event that a proper Investment Fund election is not on file for any Member or Deferred Member, the settlement proceeds paid to such Member or Deferred Member as a result of the settlement of In re. Hartford Financial Services Group, Inc. ERISA Litigation, No. 3:08-cv-01708 (D. Conn.), shall be invested in the Stable Value Fund.

(B) Investment of Floor Company Contributions Prior to Allocation. Pending allocation to Member Accounts, Floor Company Contributions may be invested in an investment fund (other than The Hartford Stock Fund) as designated by the Investment and Savings Plan Investment Committee.

8.3 Changes in Investment Elections.

(A) General Rules. A Member or Deferred Member may make changes to his or her investment elections and transfer amounts between Investment Funds to the extent permitted by this Section 8.3. Such changes and transfers may be made by giving notice to the Company in a manner and by the date required by the Plan Administrator. All changes and transfers shall be made in multiples of 1%, except that Members and Deferred Members may also elect to transfer a specific dollar amount of investments between Investment Funds.

(B) Change of Investment Funds for Future Contributions. A Member may elect to change the Investment Funds in which his or her future contributions to his or her After-Tax Rollover Investment Account, Before-Tax Rollover Investment Account, Company Contributions Investment Account, Employee Contributions Investment Account, Roth 401(k) Contributions Investment Account, Roth 401(k) Rollover Investment Account, or Roth Conversion Investment Account shall be invested, in accordance with the rules described in the preceding paragraph.

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(C) Redistribution Among Investment Funds for Past Contributions. A Member or Deferred Member may elect to redistribute amounts attributable to past contributions to his or her After-Tax Rollover Investment Account, Before-Tax Rollover Investment Account, Company Contributions Investment Account, Employee Contributions Investment Account, Roth 401(k) Contributions Investment Account, Roth 401(k) Rollover Investment Account, or Roth Conversion Investment Account among any of the Investment Funds, in accordance with the rules of Section 8.3(A), except that if a Member transfers amounts out of the Stable Value Fund, those amounts may not be transferred to the Hartford Money Market HLS Fund or the Hartford Total Return Bond Fund for a period of 90 days.

(D) Restriction on Electronic Transfers to 20 Per Calendar Year. In addition to the above restrictions, a Member or Deferred Member shall be limited to 20 electronic transfers of amounts between Investment Funds per calendar year. For this purpose, (i) a transfer shall occur on a day as of which any amounts are moved between Investment Funds, regardless of the number of Investment Funds affected by transfers between Investment Funds on that day, and (ii) an electronic transfer includes any transfer initiated online, through an interactive voice recognition system or by telephone to a Plan representative. Once the 20 electronic transfer limit has been reached, the Member or Deferred Member shall initiate any subsequent transfers by mail or overnight courier service to The Hartford HR Service Center, using a transfer request form obtained from The Hartford HR Service Center. Notwithstanding the restriction in this Section 8.3(D), a Member or Deferred Member may elect, after having effected 20 electronic transfers during the applicable time period, to initiate a transfer of amounts from The Hartford Stock Fund to the Stable Value Fund by means of a telephone call to a Plan representative at The Hartford HR Service Center.

(E) “Round Trip” Transaction limit. To prevent excessive trading, a Member or Deferred Member will be restricted on “round trip transactions” between any Hartford HLS mutual funds, the Vanguard Target Retirement funds, and the RS Partners Y Fund. A roundtrip transaction occurs when a Member exchanges in and then out of an investment fund option within 30 days. Exchanges do not include systematic contributions or withdrawals (i.e., regular contributions, loan payments, hardship withdrawals) or exchanges of $1,000 or less.

Members are limited to one roundtrip transaction per investment fund within any rolling 90-day period, subject to an overall limit of four roundtrip transactions across all funds subject to the restrictions over a rolling 12-month period. If a Member has two or more roundtrip transactions with respect to a single fund within a rolling 90- day period, he or she will be blocked from making additional purchases of the fund for 85 days. If a Member has four or more roundtrip transactions across all funds subject to the restrictions during any rolling 12-month period, he or she will be limited to one exchange day per calendar quarter for a one-year period.

Notwithstanding the foregoing rules, the excessive trading rules and other trading limits established or imposed by the Investment Funds and/or the recordkeeper shall govern.

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(F) Rebalancing of Investment Funds. The Plan Administrator may provide Members with the option of rebalancing their investment allocation between Investment Funds, either periodically or at the Member’s election. Such rebalancing is subject to the restrictions described in Sections 8.3(C) and (D).

(G) Default Investment Funds. The applicable Default Vanguard Target Retirement Fund is as follows, depending upon the Member’s or Deferred Member’s date of birth:

For contributions made prior to December 1, 2009:

Member's or Deferred
Member's Date of Birth	Default Target Retirement Fund
Prior to 1940	Vanguard Target Retirement Income Fund
1940 through 1944	Vanguard Target Retirement 2005 Fund
1945 through 1954	Vanguard Target Retirement 2015 Fund
1955 through 1964	Vanguard Target Retirement 2025 Fund
1965 through 1974	Vanguard Target Retirement 2035 Fund
1975 or later	Vanguard Target Retirement 2045 Fund

For contributions made on and after December 1, 2009 but prior to February 1, 2012:

Member's or Deferred
Member's Date of Birth	Default Target Retirement Fund
Prior to 1937	Vanguard Target Retirement Income Fund
1937 through 1942	Vanguard Target Retirement 2005 Fund
1943 through 1947	Vanguard Target Retirement 2010 Fund
1948 through 1952	Vanguard Target Retirement 2015 Fund
1953 through 1957	Vanguard Target Retirement 2020 Fund
1958 through 1962	Vanguard Target Retirement 2025 Fund
1963 through 1967	Vanguard Target Retirement 2030 Fund

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Member's or Deferred
Member's Date of Birth	Default Target Retirement Fund
1968 through 1972	Vanguard Target Retirement 2035 Fund
1973 through 1977	Vanguard Target Retirement 2040 Fund
1978 through 1982	Vanguard Target Retirement 2045 Fund
1983 or Later	Vanguard Target Retirement 2050 Fund

For contributions made on or after February 1, 2012:

Member's or Deferred
Member's Date of Birth	Default Target Retirement Fund
Prior to 1943	Vanguard Target Retirement Income Trust II
1943 through 1947	Vanguard Target Retirement 2010 Trust II
1948 through 1952	Vanguard Target Retirement 2015 Trust II
1953 through 1957	Vanguard Target Retirement 2020 Trust II
1958 through 1962	Vanguard Target Retirement 2025 Trust II
1963 through 1967	Vanguard Target Retirement 2030 Trust II
1968 through 1972	Vanguard Target Retirement 2035 Trust II
1973 through 1977	Vanguard Target Retirement 2040 Trust II
1978 through 1982	Vanguard Target Retirement 2045 Trust II
1983 or Later	Vanguard Target Retirement 2050 Trust II

Existing balances invested in the Default Investment Funds (other than the Vanguard Target Retirement 2005 Fund) as of market close on January 31, 2012 shall be transferred from the applicable Vanguard Target Retirement Fund to the corresponding trust of the same target date identified above; the balance of the Vanguard Target Retirement 2005 Fund shall be transferred to the Vanguard Target Retirement Income Trust II.

In the event that there is no date of birth on record for a participant who has failed to provide investment direction, his or her Accounts shall be invested in the Vanguard Target Retirement Income Trust II.

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(H) Limitation on Contributions and Transfers to The Hartford Stock Fund. Effective September 1, 2006, no more than 10% of a Member or Deferred Member’s own Savings (including any related loan repayments), no more than 10% of Company Contributions made on behalf of a Member or Deferred Member (including any related loan repayments), no more than 10% of any Rollover (including any related loan repayments) and, if applicable, no more than 10% of any Roth Conversion Investment Account (including any related loan repayments) may be invested in The Hartford Stock Fund. Should a Member or Deferred Member as of September 1, 2006 have more than 10% of any of such Member or Deferred Member’s own Savings, Company Contributions and Rollovers (including in each case any related loan repayments) directed to be invested in The Hartford Stock Fund, any amount so directed above the 10% limit shall instead be invested in the applicable Default Vanguard Target Retirement Fund set forth in Section 8.3(G).

In addition, effective September 1, 2006, (i) if more than 10% of a Member or Deferred Member’s total Accounts (excluding any loan balance) is invested in The Hartford Stock Fund, the Member shall not be able to transfer any additional amounts to such Fund, and (ii) no more than 10% of any amount transferred between Investment Funds can be transferred to The Hartford Stock Fund.

8.4 Trustee Purchase of The Hartford Stock. The trustee shall purchase The Hartford Stock from any source. Such Stock purchased from The Hartford shall be purchased at fair market value. Such Stock purchased from The Hartford may be treasury shares or newly issued shares or authorized but unissued shares; provided however, that in no event shall a commission be charged with respect to such a purchase.

8.5 Member Voting of The Hartford Stock. Each Member, Deferred Member and Beneficiary is for the purposes of this Section hereby designated a named fiduciary within the meaning of Section 402(a)(2) of ERISA with respect to any shares of The Hartford Stock allocated to their respective Accounts, and may direct the Trustee as to the manner in which such Stock is to be voted. Before each annual or special meeting of shareholders of The Hartford, there shall be sent to each such person a copy of the proxy solicitation material for such meeting, together with a form requesting instructions to the Trustee on how to vote such Stock. Upon receipt of such instructions, the Trustee shall vote such Stock as instructed. In lieu of voting fractional shares of such Stock as so instructed, the Trustee may vote the combined fractional shares of such Stock to the extent possible to reflect the directions of the Members, Deferred Members and Beneficiaries with allocated fractional shares of each class of such Stock. The Trustee shall vote shares of such Stock allocated to Accounts under the Plan, for which no valid voting instructions were received, in the same manner and in the same proportion that the shares of The Hartford Stock with respect to which the Trustee received valid voting instructions are voted. Instructions to the Trustee shall be in such form and pursuant to such regulations as the Plan Administrator may prescribe. Any instructions received by the Trustee regarding the voting of The Hartford Stock shall be confidential and shall not be divulged by the Trustee to the Company, or to any director, officer, employee or agent of the Company, it being the intent of this Section to ensure that the Company (and its directors, officers, employees and agents) cannot determine the voting instructions given by any person.

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8.6 Procedures in the Event of a Tender Offer for The Hartford. The provisions of this Section shall apply in the event any person, either alone or in conjunction with others, makes a tender offer, makes an exchange offer, or otherwise offers to purchase or solicits an offer to sell to such person one percent or more of the outstanding shares of a class of The Hartford Stock held by a Trustee hereunder (herein jointly and severally referred to as a Tender Offer). As to any Tender Offer, each Member and Deferred Member (or Beneficiary in the event of the death of the Member or Deferred Member) shall have the right to determine confidentially whether shares held subject to the Plan will be tendered.

(A) Instructions to Trustee. In the event a Tender Offer is commenced, the Plan Administrator, promptly after receiving notice of such commencement, shall transfer certain of its record keeping functions to an independent record keeper. The functions so transferred shall be those necessary to preserve the confidentiality of any directions given by the Members and Deferred Members (or Beneficiary in the event of the death of the Member or Deferred Member) in connection with the Tender Offer. A trustee may not take any action in response to a Tender Offer except as otherwise provided in this Section. Each Member is, for all purposes of this Section, hereby designated a named fiduciary within the meaning of Section 402(a)(2) of ERISA, with respect to the shares of The Hartford Stock allocated to his or her Accounts. Each Member and Deferred Member (or Beneficiary in the event of the death of the Member or Deferred Member) may direct the Trustee to sell, offer to sell, exchange or otherwise dispose of The Hartford Stock allocated to any such individual’s Accounts in accordance with the provisions, conditions and terms of such tender offer and the provisions of this Section, provided, however, that such directions shall be confidential and shall not be divulged by the Trustee or independent record keeper to the Company or to any director, officer, employee or agent of the Company, it being the intent to ensure that the Company (and its directors, officers, employees and agents) cannot determine the direction given by any Member, Deferred Member or Beneficiary. Such instructions shall be in such form and shall be filed in such manner and at such time as the Trustee may prescribe.

(B) Trustee Action on Member Instructions. The Trustee shall sell, offer to sell, exchange or otherwise dispose of The Hartford Stock allocated to the Member’s, Deferred Member’s or Beneficiary’s Accounts with respect to which it has received directions to do so under this Section 8.6. The proceeds of a disposition directed by a Member, Deferred Member or Beneficiary from his or her Accounts under this Section 8.6 shall be allocated to such individual’s Accounts and be governed by the provisions of this Section or other applicable provisions of the Plan and the trust agreements related hereto.

(C) Trustee Action With Respect to Members Not Issuing Instructions or Issuing Invalid Instructions. To the extent to which Members, Deferred Members and Beneficiaries do not issue valid directions to the Trustee to sell, offer to sell, exchange or otherwise dispose of The Hartford Stock allocated to their Accounts, such individuals shall be deemed to have directed the Trustee that such shares remain invested in The Hartford Stock subject to all provisions of the Plan, including Section 8.6(D).

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(D) Investment of Plan Assets after Tender Offer. To the extent possible, the Trustee shall reinvest the proceeds of a disposition of The Hartford Stock in an individual’s Accounts in The Hartford Stock as expeditiously as possible in the exercise of the Trustee’s fiduciary responsibility and shall otherwise be held by the Trustee subject to the provisions of the trust agreement and the Plan. In the event that The Hartford Stock is no longer available to be acquired following a tender offer, the Company may direct the substitution of new employer securities for such Stock or for the proceeds of any disposition of such Stock. Pending the substitution of new employer securities or the termination of the Plan and trust, the Trust Fund shall be invested in such securities as the Trustee shall determine; provided, however, that, pending such investment, the Trustee shall invest the cash proceeds in short-term securities issued by the United States of America or any agency or instrumentality thereof or any other investments of a short-term nature, including corporate obligations or participations therein and interim collective or common investment funds.

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ARTICLE NINE
MEMBER LOANS
BEFORE TERMINATION OF EMPLOYMENT

9.1 Request for a Loan; Consequences of Request. At any time before Termination of Employment, a Member may make a request, in a manner and by the date required by the Plan Administrator, for a loan of a whole dollar amount from his or her Accounts. By making such a request, the Member (A) specifies the amount and the term of the loan, (B) agrees to the annual percentage rate of interest, (C) agrees to the finance charge, (D) promises to repay the loan, and (E) authorizes the Company to make regular payroll deductions to repay the loan. Loans will be permitted only if all of the conditions described in the next paragraph are satisfied. Permitted loans will be deducted from Member Accounts as of the Loan Valuation Date, and will be paid in cash as soon as practicable thereafter. Amounts so deducted will not participate in the investment experience of the Plan.

9.2 Conditions for Taking a Loan.

(A) Minimum Loan Amount. The loan must be at least $500, but cannot exceed the lesser of: (a) 50% of the Member’s Vested Share (determined based on the most recent information available to the Plan Administrator), or (b) $50,000 minus the Member’s highest outstanding loan balance (if any) during the preceding one year period.

(B) Order of Sources for Loans. The order of sources for any loan shall be determined according to rules established by the Plan Administrator in a consistent and nondiscriminatory manner.

(C) Required Term and Repayment Schedule. The loan must be repaid no less frequently than on a monthly basis over a period of twelve, twenty-four, thirty-six, forty-eight or sixty months, except that a Member who requests a loan to buy his or her own principal residence may repay the loan over a period of seventy-two through one hundred-eighty months, in twelve month increments. Extensions of loan terms will not be permitted after a loan is made. If a Member is serving in the Armed Services of the United States and loan repayments are suspended pursuant to Section 9.5, the term of the loan will be extended by the period of military service to the extent consistent with Code Section 414(u).

(D) Maximum Number of Loans. A Member may have no more than two loans outstanding at any time. Employees who become Members of the Plan on January 1, 2009 as a result of the merger of the Planco Profit Sharing Plan into this Plan shall be permitted to continue to have three loans outstanding until one of the three is repaid in full, if they have three outstanding at the time of the plan merger.

(E) Other Conditions. The Plan Administrator may make such additional conditions or rules for taking loans as may be determined appropriate in its sole discretion, which conditions shall be in writing and communicated to Members. Such written conditions are incorporated herein by reference.

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9.3 Interest Rates for Loans. The Plan Administrator shall establish and communicate to Members a reasonable rate of interest for loans that it determines to be commensurate with the interest rates charged by persons in the business of lending money for loans in similar circumstances, which interest rate shall remain in effect for the term of the loan. Such rate shall be determined as follows: On the last business day of February, May, August, and November of each Plan Year, 1% shall be added to the prime rate provided by Reuters (the sum of which is the “Applicable Interest Rate”). The Plan Administrator shall then set the Plan loan interest rate for the next calendar quarter equal to the Applicable Interest Rate. The rate of interest on a loan to a Member who is serving in the Armed Services of the United States shall not exceed such rate as may be prescribed by applicable law.

9.4 Other Repayment Terms; Prepayment. Loan repayments will be made to the Accounts from which the loan was taken in reverse order, beginning with the last source in Section 9.3 from which the loan was taken, and working backwards to the first source. Repayments will be invested in the Investment Funds in accordance with the Member’s investment elections at the time of repayment. No loan repayment will be credited with investment experience under the Plan until the date designated by the Plan Administrator. The entire outstanding balance of a loan may be prepaid at any time, with interest through the date of prepayment. The date of prepayment will be date designated by the Plan Administrator. If a Member is serving in the Armed Services of the United States, loan repayments will be suspended during the period of active service. Upon completion of active military service, loan repayments will resume.

9.5 Loan Default during Employment. Under certain circumstances, including, but not limited to, the failure of a Member to make repayment of a loan for ninety (90) days, or the impending bankruptcy of the Member, the Plan Administrator may declare a Member’s loan to be in default. In the event default is declared, the outstanding loan balance and any accrued interest may be treated as a withdrawal before Termination of Employment under Article Ten to the extent that the Member is eligible to make such a withdrawal.

9.6 Outstanding Loan Balance at Termination of Employment.

(A) Certain Members Eligible to Continue Loan Repayments. Upon Termination of Employment of a Member who (i) has a Vested Share of $5,000 or more (effective March 28, 2005, more than $1,000), and (ii) has not elected a distribution of his or her Accounts from the Plan, such Member may elect to continue to make loan repayments on his or her outstanding loan balance in the manner approved by the Plan Administrator. If such a Member fails to make a valid election to continue loan repayments, or elects a distribution of his or her Accounts from the Plan, then the provisions of the next succeeding paragraph shall apply.

(B) Other Members. Upon Termination of Employment of a Member who does not satisfy the requirements of the immediately preceding paragraph, the outstanding loan balance of such a Member shall become due and payable and shall either be canceled or, if the Member so elects, prepaid in full to his or her Accounts with interest to the date of prepayment. Any prepayment must be made by the Valuation Date following Termination of Employment or, if earlier, the Valuation Date that applies to the Member’s distribution or deferral election.

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9.7 Death after Request for Loan. If a Member requests a loan and dies after the issuance of any check for any part of such loan, but before negotiation of such check, then any unpaid part of the loan as represented by the non-negotiated check will be paid to the Member’s estate. If a Member requests a loan and dies before the issuance of any check for any part of such loan, then the request for the loan shall be null and void with respect to the part of the loan represented by the check that was not issued. For purposes of this Section, a check will be considered issued on the earlier of (i) the date of issuance shown on the check, or (ii) the Loan Valuation Date.

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ARTICLE TEN
MEMBER WITHDRAWALS
BEFORE TERMINATION OF EMPLOYMENT

10.1 Non-Hardship Withdrawals.

(A) Request for a Non-Hardship Withdrawal. At any time before Termination of Employment, a Member may make a request, in a manner and by the date required by the Plan Administrator, for a non-hardship withdrawal of a dollar or percentage amount from his or her Accounts. Non-hardship withdrawals will be permitted to the extent that the conditions of Section 10.1(B) are satisfied. Permitted non-hardship withdrawals will be deducted from a Member’s Accounts as of the Withdrawal Valuation Date, and will be distributed as soon as practicable thereafter. Amounts so deducted will not participate in the investment experience of the Plan. A Member who takes a non-hardship withdrawal shall not be required to cease contributing Basic and Supplemental Savings under the Plan.

(B) Conditions for Non-Hardship Withdrawals.

(i) Minimum Amount for Withdrawal. The amount for withdrawal must be at least $500.

(ii) Proration of Withdrawal Among Accounts. Withdrawals by Members with Accounts in more than one Investment Fund must be prorated among such Accounts based on their respective values.

(iii) Order of Sources for Withdrawals. The order of sources for any withdrawal shall be determined according to rules established by the Plan Administrator in a consistent and nondiscriminatory manner, provided, however, that the following limitations shall apply:

(a) In the case of a withdrawal prior to the Member’s attainment of age 59 ¹/2 , the Member’s Before-Tax Account, Catch-Up Contributions Account, Roth 401(k) Contributions Account, Roth 401(k) Catch-Up Contributions Account, Floor Company Contributions Account and amounts attributable to qualified nonelective contributions cannot be withdrawn. Vested Matching Company Contributions in the Matching Company Contributions Account can be withdrawn except that a Member who has completed less than 60 months of Service may only withdraw the vested Matching Company Contributions that were made more than 24 months before the proposed withdrawal date.

(b) In the case of a withdrawal following the Member’s attainment of age 59 ¹/2, the entire balance of the Member’s Accounts shall be available for withdrawal.

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(iv) Other Conditions. The Plan Administrator may make such additional conditions or rules for making non-hardship withdrawals as may be determined appropriate in its sole discretion, which conditions shall be in writing and communicated to Members. Such written conditions are incorporated herein by reference.

10.2 Hardship Withdrawals

(A) Ability to make Hardship Withdrawals. A Member who has not reached age 59 ¹/2 and who satisfies all of the requirements of this Section 10.2 may make a hardship withdrawal of all or a portion of his or her Before-Tax Account, Catch-Up Contributions Account, and Roth 401(k) Contributions Investment Account, other than the portion of each such Account that represents earnings credited to the Account after December 31, 1988. A Member who has reached age 59 ¹/2 may withdraw all or a portion of the foregoing Accounts without regard to financial hardship.

(B) Bona Fide Financial Hardship and Immediate and Heavy Financial Need Required. A hardship withdrawal will not be permitted unless the Member establishes that a bona fide financial hardship exists. For this purpose, a bona fide financial hardship means an immediate and heavy need to draw on financial resources not reasonably available from other sources of the Member. Bona fide financial hardships are (i) costs directly related to the purchase of a principal residence for the Member (excluding mortgage payments), (ii) expenses for (or necessary to obtain) medical care that would be deductible under Code Section 213(d) (determined without regard to whether the expenses exceed 7.5% of adjusted gross income), (iii) payment of tuition, related educational fees, and room and board expenses, for up to the next 12 months of post-secondary education for the Member, or the Member’s spouse, children, or dependents (as defined in Code Section 152, and without regard to Code Section 152(b)(1), (b)(2) and (d)(1)(B)), (iv) payments necessary to prevent the eviction of the Member from his or her principal residence or foreclosure on the mortgage on that residence, (v) payments for burial or funeral expenses for the Member’s deceased parent, spouse, children or dependents (as defined in Code Section 152, and without regard to Code Section 152(d)(1)(B)), and (vi) expenses for the repair of damage to the Member’s principal residence that would qualify for the casualty deduction under Code Section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income) (collectively, “Safe Harbor Hardships”). In order to receive a withdrawal for a Hardship, a Member must agree to suspend all Before-Tax Savings, Roth 401(k) Savings, After-Tax Savings, Before-Tax Catch-Up Savings and Roth 401(k) Catch-Up Savings as well as all stock option, stock purchase or similar plans maintained by the Company for a six month period as described in Article Four. Determinations of Safe Harbor Hardship shall be made in a uniform and nondiscriminatory manner in accordance with applicable tax law under Code Section 401(k). Withdrawals by reason of non-Safe Harbor Hardships will not be approved under the Plan.

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(C) Withdrawal Limited to Financial Need (Plus Taxes). The amount of a hardship withdrawal cannot exceed the amount of the immediate and heavy financial need demonstrated by the Member (plus applicable taxes on the withdrawal). For this purpose, loans and amounts withdrawn from other Accounts will be considered.

(D) All Available Loans and Distributions must be Taken First. A hardship withdrawal will not be permitted unless the Member has obtained (i) all distributions (other than hardship distributions) available under all other retirement plans (including this Plan) maintained by the Company, including, effective November 29, 2001, distribution of all cash dividends currently available to the Member under Section 7.6 of this Plan and (ii) all non-taxable loans available under all retirement plans maintained by the Company, including this Plan, provided that making the payments on such loans does not result in a financial hardship for the Member.

10.3 Penalty for Making Withdrawals from Certain Accounts. Matching Company Contributions under Article 5 will be suspended for three months after the applicable Withdrawal Valuation Date for any Member who has not reached age 59¹/2 and who makes a non-hardship or hardship withdrawal of any amount from his or her Basic After-Tax Account, or any amount of vested Matching Company Contributions from his or her Company Contributions Investment Account. This suspension also applies in the event of a withdrawal of Planco Profit Sharing Contributions or amounts withdrawn from the Reinvested Dividends Account or Roth Conversion Investment Account.

10.4 Form of Payment. Withdrawal payments from The Hartford Stock Fund shall be made in the form of The Hartford Stock, except that: (A) fractional shares will be paid in cash, (B) a recipient may request that such amounts be paid in cash, and (C) hardship withdrawals will be paid in cash. Withdrawal payments from any Investment Fund other than The Hartford Stock Fund shall be paid in cash in a single sum.

10.5 Death after Request for Withdrawal. If a Member dies after requesting a withdrawal, payment of the withdrawn amounts will be made (or will not be made) in accordance with the rules in Article Nine for death after a loan request.

10.6 Direct Rollover of Withdrawals. Hardship Withdrawals do not qualify as “eligible rollover distributions” under Article Eleven.

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ARTICLE 10A
ROTH CONVERSIONS

10A.1 Request for a Roth Conversion.

(A) Generally. Effective October 1, 2011, at any time before or after Termination of Employment, a Member or a Deferred Member (other than a beneficiary or alternate payee who, as defined under federal law, is not a spouse or former spouse) may make a request, in a manner and by the date required by the Plan Administrator, for an in-plan Roth rollover in accordance with Code section 402A(c)(4) of a dollar amount from the vested portion of his or her Accounts. Such request shall be fulfilled to the extent that the conditions of 10A.1(B) and 10A.2 are satisfied, and cannot be reversed. An in-plan Roth rollover shall be known as a Roth Conversion and shall be credited to and held in a separate Roth Conversion Investment Account. A Roth Conversion shall be deducted, in kind, from a Member’s or Deferred Member’s Accounts as of the Withdrawal Valuation Date, and will be converted and deposited in a Roth Conversion Investment Account established for that conversion as soon as practicable thereafter.

(B) Roth Conversion Rules.

(i) Eligible Amount. An amount is eligible for Roth Conversion if it is:

(a)	an eligible rollover distribution (as defined in Section 402(c)(4) of the Code), and
(b)	an Account described in Section 10A.2 below.

(ii)	Proration of Roth Conversion Among Accounts. Roth Conversions by Members or Deferred Members with Accounts in more than one Investment Fund must be prorated among such Accounts based on their respective values.
(iii)	Minimum Amount for Conversion. The amount for a Roth Conversion must be at least $500.
(iv)	Outstanding Loan Balance. Any outstanding loan balance shall not be eligible for Roth Conversion.
(v)	Special Rule for Certain Amounts Attributable to the Planco Profit Sharing Plan. The rules set forth in Section 11.5(E) of the Plan, relating to the application of survivor annuity rules, shall continue to apply, upon a Roth Conversion, to the amounts described in that Section.

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(vi) Other Conditions. The Plan Administrator may make such additional conditions or rules for Roth Conversions as may be determined appropriate in its sole discretion, which conditions shall be in writing and communicated to Members. Such written conditions are incorporated herein by reference.

10A.2 Eligible Accounts and Order of Sources for Roth Conversion. A Member or Deferred Member (other than a beneficiary or alternate payee who, as determined under federal law, is not a spouse or former spouse) may roll over in a Roth Conversion all or a portion of his or her Accounts in accordance with subsections (A) or (B) below, as applicable.

(A) Prior to Age 59¹/2 and Prior to Termination of Employment. A Member who has not attained age 59¹/2 may roll over in a Roth Conversion the following Accounts:

(i)	Supplemental After-Tax Account.
(ii)	After-Tax Rollover Investment Account.
(iii)	Before-Tax Rollover Investment Account.
(iv)	ESOP Account.
(v)	Pre-2004 Floor Company Contributions Account. Amounts attributable to Floor Company Contributions made with respect to payroll periods commencing on or after January 1, 2004 cannot be converted pursuant to this provision.
(vi)	Basic After-Tax Account.
(vii)	Vested Matching Company Contributions in the Company Contributions Investment Account, except that a Member who has completed less than 60 months of Service may only convert the vested Matching Company Contributions that were made more than 24 months before the proposed conversion date.
(viii)	Vested portion of Planco Profit Sharing Contributions Account.
(ix)	Reinvested Dividends Account.
(x)	Prior Plan Transfers Account.

(B) Age 59 ¹/2 or Older or Following Termination of Employment. A Member who is age 59 ¹/2 or older and a Deferred Member (other than a beneficiary or alternate payee who, as determined under federal law, is not a spouse or former spouse) may roll over in a Roth Conversion all or a portion of his or her Accounts. In the event that the Member or Deferred Member elects to roll over a portion of, and not his or her total Accounts, the order of sources from which Roth Conversion amounts will be taken from his/her Accounts will be determined according to procedures established by the Plan Administrator.

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10A.3 Matching Company Contributions Following a Roth Conversion. Matching Company Contributions shall not be suspended for any Member by reason of a Roth Conversion.

10A.4 Roth Conversion Rules. This Article 10A is intended to reflect IRS guidance regarding the Roth Conversion feature. In the event that such guidance is modified, or additional guidance is issued, this Article 10A shall be deemed to be amended to reflect such guidance.

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ARTICLE ELEVEN
DISTRIBUTIONS FROM ACCOUNTS

11.1 Types of Distributions

(A) Distribution or Deferral for Members Under Age 70 ¹/2. Upon Termination of Employment, a Member may request a distribution of the value of his or her Vested Share. If a Member does not make such a request, and the value of such Vested Share is less than $5,000 (effective March 28, 2005, is $1,000 or less), such value will be paid to the Member in a single lump sum payment as soon as practicable. If a Member does not make such a request, and the value of the Member’s Vested share is $5,000 or more (effective March 28, 2005, is greater than $1,000), the Member shall be deemed to request a deferral of the distribution of such Vested Share until such time that the Member reaches age 70 1/2. Such a Member automatically shall become a Deferred Member, and may request a distribution of all or part of the Vested Share at any time before reaching age 70 ¹/2 (subject to a minimum distribution amount of $500 for any partial distribution) in accordance with the Plan.

(B) Distributions to Certain Members who Have Reached Age 70 1/2. Effective January 1, 1998 or such later date as determined by the Plan Administrator, except as provided below, a Member who reaches age 70 ¹/2 on or after January 1, 1997 is not required to commence distribution of his or her Vested Share until Termination of his or her Employment. However, such a Member may request a distribution of all or part of such Vested Share at any time after reaching age 70 ¹/2 (subject to a minimum distribution amount of $500 for any partial distribution). A Member who reaches age 70 ¹/2 on or after January 1, 1988 but before January 1, 1997 must have commenced distribution of his or her Vested Share by no later than the April 1 following the year in which he or she attains age 70 ¹/2. A Deferred Member or a Member who is a “5 percent owner” as defined in Code Section 414(q)(1) and (3) must commence distribution of his or her Vested Share by no later than the April 1 following the year in which he or she reaches age 70 ¹/2. The Vested Share of such Member shall be paid under the payment method described in Section 11.6(A) below assuming the maximum allowable number of payments based upon the Member’s age, if permissible under the terms of that payment method. If payment under the terms of that payment method is not permissible, the Vested Share of the Member shall be paid in an immediate lump sum. Alternatively, the Member may elect that his or her Vested Share be paid under the payment method described in Section 11.6(B) below, if permissible under the terms of that payment method, or in an immediate lump sum. Payment of the Vested Share of a Member who has reached age 70 ¹/2 pursuant to this Section shall be made no less frequently than annually, and once such payment has commenced, the Member may not elect an alternate method for payment of such Vested Share while the Member is still an Eligible Employee.

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Notwithstanding Section 11.1(B) and (C) of the Plan, a Member or Beneficiary who would have been required to receive required minimum distributions for 2009 but for the enactment of section 401(a)(9)(H) of the Code (“2009 RMDs”), and who would have satisfied that requirement by receiving distributions that are equal to the 2009 RMDs, will not receive those distributions for 2009 unless the Member or Beneficiary chooses to receive such distributions. Members and Beneficiaries described in the preceding sentence will be given the opportunity to elect to receive the distributions described in the preceding sentence. A Member who would have satisfied the requirement by receiving one or more payments in a series of substantially equal distributions (that include the 2009 RMDs) made at least annually and expected to last for the life (or life expectancy) of the Member, the joint lives (or joint life expectancy) of the Member and the Member’s designated beneficiary, or for a period of at least 10 years (“Extended 2009 RMDs”) will continue to receive those distributions for 2009. In addition, notwithstanding Section 11.8 of the Plan, and solely for purposes of applying the direct rollover provisions of the Plan, 2009 RMDs may be considered as eligible rollover distributions in 2009 to the extent they otherwise meet the requirements of Section 11.8(B).

(C) Distribution to Beneficiary in the Event of Death. Upon the death of a Member or Deferred Member, the value of such person’s Vested Share shall be distributed in a lump sum to his or her Beneficiary. However, if the value of the Vested Share is $5,000 or more (effective January 1, 2006, is greater than $1,000): ( i ) if the Beneficiary is a spouse, such spouse may elect to defer receipt of the Vested Share until the year in which the Member or Deferred Member would have reached age 70 ¹/2, or (ii) if the Beneficiary is a Non-Spouse Beneficiary, such Beneficiary may elect to defer receipt of the Vested Share for up to five years from the date of death of the Member or Deferred Member or may elect to receive a periodic distribution under Section 11.7(B), subject to such minimum distribution rules as may be required by law or determined appropriate by the Plan Administrator. If the value of the Vested Share to be distributed is $5,000 or more (effective January 1, 2006, is greater than $1,000) and the Beneficiary does not file application for distribution of such Vested Share nor elect to defer receipt of such Vested Share, (i) if the Beneficiary is a spouse, then such Beneficiary shall be deemed to have elected to defer receipt of such Vested Share until the Member or Deferred Member would have reached age 70 ¹/2, or (ii) if the Beneficiary is a Non-Spouse Beneficiary, then such Beneficiary shall be deemed to have elected to defer receipt of such Vested Share until the end of the calendar year following the calendar year in which the death of the Member or Deferred Member occurred. However, any Beneficiary described in the preceding sentence may file application for distribution of all or part of such Vested Share at any time prior to the date when such distribution is required to be made, subject to a minimum distribution amount of $500 for partial distributions to spouses, and subject to such minimum distribution rules as may be required by law or determined appropriate by the Plan Administrator for partial distributions to Non-Spouse Beneficiaries.

(D) ESOP Distributions. Notwithstanding the provisions of (A), (B), or (C), above, and Section 11.5, effective November 29, 2001, a Member or Deferred Member may elect to commence distribution of the value of his or her Vested Share invested in The Hartford Stock Fund not later than one year after the end of the Plan Year—

(i) in which the Member separates from service by reason of (a) Retirement in the case of a Member with an original hire date with the Company before January 1, 2002, (b) separation of service on or after reaching age 65 in the case of a Member with an original hire date with the Company on or after January 1, 2002, (c) Disability, or (d) death; or

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(ii) which is the fifth Plan Year following the Plan Year in which the Member otherwise separates from service, unless the Member is reemployed by the Company or any subsidiary, affiliate or predecessor of the Company before such year.

Unless the Member or Deferred Member or Beneficiary otherwise elects, distribution of the value of a Member’s Vested Share invested in The Hartford Stock Fund will be made in substantially equal periodic payments of a period not longer than the greater of—

(x) five years; or

(y) if the fair market value of the Vested Share invested in The Hartford Stock Fund exceeds $885,000 (in 2006) as of the date distribution is required to begin under this Article Eleven, five years plus an additional one year (up to an additional five years) for each $175,000 increment or fraction thereof by which such value exceeds $885,000. The dollar amounts prescribed in this paragraph shall be adjusted for cost of living increases as prescribed by the Secretary of the Treasury.

11.2 Manner of Requesting Distribution. All requests for any distributions permitted by this Article Eleven shall be made in a manner and by the date required by the Plan Administrator. No distribution will be made unless the procedures prescribed by the Plan Administrator are properly followed.

11.3 Valuation of Distribution; Order of Sources. Distributions will be valued as of the Withdrawal Valuation Date. The order of sources for any distribution shall be determined according to rules established by the Plan Administrator in a consistent and nondiscriminatory manner.

11.4 Time of Distribution. All distributions will be paid to the appropriate payee as soon as practicable following the applicable Valuation Date. If part of a distribution is to be made in the form of stock, the stock will be distributed after the cash part of the distribution. Unless a Member so elects, payment of a Member’s Vested Share shall commence no later than 60 days after the close of the Plan Year in which the latest of the following occurs:

(1)	The Member attains age 65,
(2)	Occurs the 10th anniversary of the date on which the Member commenced participation in the Plan, or
(3)	The Member terminates Service with the Company and its affiliates.

11.5 Form of Distribution. Except as otherwise provided in the Plan, distributions shall be made in a form determined under the rules of this Section.

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(A) Stock and Cash Distributions. Distributions from The Hartford Stock Fund shall be made in the form of The Hartford Stock, except that: (i) fractional shares will be paid in cash, and (ii) a recipient may request that such amounts be paid in cash. Distributions from any Investment Fund other than The Hartford Stock Fund shall be paid in cash.

(B) Lump Sum Distributions. Distributions shall be paid in a single lump sum, unless otherwise permitted by the Plan.

(C) Periodic Distributions. One of the two forms of periodic distribution described in Section 11.6 below may be requested by (i) a Member whose employment terminates after reaching age 55, (ii) a Member whose employment terminates before reaching age 55 due to Retirement provided the Member has an original hire date with the Company before January 1, 2002, (iii) a Member whose employment terminates before reaching age 55 due to Disability, and (iv) a Deferred Member who has reached age 55. Prior to November 29, 2001, periodic distributions shall be made in cash. Periodic distributions that commence or are modified on or after November 29, 2001 shall be made in the form of The Hartford Stock, or cash, or both, as provided in (A), above.

(D) Prior Plan Transfers. Alternative methods of distribution may apply to that portion of an Account attributable to a Prior Plan Transfer.

(E) Special Distribution Rules for Certain Amounts Attributable to the Planco Profit Sharing Plan. Amounts under this Plan attributable to certain defined benefit plan amounts under the Planco Profit Sharing Plan will be subject the survivor annuity requirements of Code Section 401(a)(11) and 417. Any distributions subject to such requirements shall be made in accordance with Sections 16.5 and 16.6 of the Planco Profit Sharing Plan Basic Plan Document as it existed on December 31, 2008.

11.6 Distribution of Periodic Payments. A person described in Section 11.5(C) may request one of the forms of periodic distributions described in this Section.

(A) Annual Installments over a Selected Period of Years. Annual payments may be made over a period of years selected by the recipient that does not exceed the lesser of (i) 30 years, or (ii) the applicable Distribution Period set forth in Appendix A. The first of such payments shall be made as soon as practicable after the applicable Valuation Date, and the remaining payments shall be made annually on each anniversary thereafter. The amount of each payment shall be determined by multiplying the value of the recipient’s Accounts as of the applicable Valuation Date by a fraction, the numerator of which shall be one, and the denominator of which shall be the number of years in the selected period.

(B) Annual Installments over Expected Life. Annual payments may be made to a Member over a period of years in an amount determined under Appendix A. The first of such payments shall be made as soon as practicable after the applicable Valuation Date, and the remaining payments shall be made annually on each anniversary thereafter. The amount of each payment shall be determined by dividing the value of the recipient’s Accounts as of the applicable Valuation Date by the applicable Distribution Period set forth in Appendix A based upon the Member’s attained age in the year of the distribution.

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(C) Later Distribution of Lump Sum Payment. A person who previously requested or is otherwise receiving a distribution of periodic payments under this Section may, at any time thereafter, request a lump sum distribution of the value of any unpaid installments. In addition, once the value of a Member’s or Deferred Member’s vested Accounts falls below $1,000, the balance of the vested Accounts will be distributed to the Member or Deferred Member in a single lump sum payment in lieu of any further installments.

(D) Minimum Required Distributions. Effective January 1, 2003, notwithstanding anything in the Plan to the contrary, all distributions from the Plan shall be made in accordance with Code Section 401(a)(9) and Final Treasury Regulations issued thereunder.

11.7 Distribution in the Event of Death.

(A) Death of Member or Deferred Member after Requesting Non-Periodic Distribution. If a Member or Deferred Member requests a non-periodic distribution and dies after the applicable Valuation Date or the issuance of any check or shares of The Hartford Stock for any part of such distribution, but before negotiating any check comprising all or a portion such distribution, the cash portion of the distribution shall be paid to his or her estate. If such a person dies before the Valuation Date or issuance of a check or shares of The Hartford Stock, then the distribution shall be paid to his or her Beneficiary. For purposes of this paragraph, a check or share of stock will be considered issued on the earlier of (i) the date of issuance shown on the check or stock certificate, or (ii) the Valuation Date.

(B) Death of Member or Deferred Member after Requesting Periodic Distribution. If a Member or Deferred Member requests a periodic distribution permitted by Section 11.6, but dies before all of the installments comprising such distribution are paid, then if the Beneficiary of such Member or Deferred Member is not a spouse, and if an installment is paid with a Valuation Date that occurred before his or her death and before the negotiation of the check comprising all or a portion of such installment, then such cash portion of the installment shall be paid to his or her estate, and the remaining value of the Accounts in question shall be paid to his or her Beneficiary in a single lump sum payment, unless such Beneficiary elects to have payments made over a period not to exceed the Beneficiary’s life expectancy. In the latter case, the first of such payments shall commence no later than the end of the year following the year of the Member’s death, and the remaining payments shall be made annually thereafter. The amount of each payment shall be determined by multiplying the value of the Accounts as of the applicable Valuation Date by a fraction, the numerator of which shall be one, and the denominator of which shall be the number of years remaining in the period. If the sole Beneficiary of the Member or Deferred Member is a spouse, then such spouse Beneficiary may elect to have payments made over a period not to exceed the spouse’s life expectancy recalculated annually. In such case, the first of such payments shall commence no later than the end of the year following the year of the Member’s death, or if the Member had not yet attained age 70 ¹/2, the year in which the Member would have attained age 70¹/2, if later. Alternatively, the spouse may request a lump sum distribution of the value of the Accounts as permitted by the Plan (and no deferral of receipt of such value will be permitted).

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(C) Death of Spouse Beneficiary. If a spouse Beneficiary with Accounts in the Plan dies, payment of the remaining value of such Accounts shall be made to the Beneficiary of such spouse, if any, or if none, to the estate of such spouse, in each case such payment to be made in the form of a single lump sum payment.

(D) Proof of Death and Rights of Beneficiaries; Disputes. The Pension Administration Committee and/or the Plan Administrator may require and rely on such proof of death and such evidence of the right of any Beneficiary or other person to receive the undistributed value of the Accounts of a deceased Member, Deferred Member or Beneficiary as determined appropriate, and the determination of the rights of Beneficiaries or other persons to receive payment shall be conclusive. Payment to any Beneficiary shall be final and shall fully satisfy and discharge the obligation of the Plan with respect to any and all Accounts of a deceased Member or Deferred Member. In the event of a dispute regarding an Account, the Pension Administration Committee may make a final determination, or initiate or participate in any action or proceeding as may be necessary or appropriate to determine any Beneficiary under the Plan. During the pendency of any action or proceeding, the Pension Administration Committee may deposit an amount equal to the disputed payment with a court and such deposit shall relieve the Plan of all of its obligation with respect to any such disputed Accounts. Alternatively such Committee, at its discretion, may direct any disputed Accounts be invested in the Investment Fund involving the least risk of loss of assets (as determined in the sole discretion of such Committee) pending resolution of the dispute regarding such Accounts.

11.8 Direct Rollover of Certain Distributions.

(A) Effective Date. This Section 11.8 shall apply to distributions made on or after December 31, 2001.

(B) Definitions. For purposes of this Section, the following definitions shall apply:

(i) “Distributee” includes a Member or Deferred Member, his or her spouse Beneficiary, and any spouse or former spouse who is an alternate payee under a QDRO pursuant to Article Twelve. On and after May 1, 2007, Distributee will include Beneficiaries to the extent provided by the Code.

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(ii) “Eligible Rollover Distribution” is a distribution of any part of a person’s Vested Share, except: (a) any distribution that is one of a series of substantially equal periodic payments made for the life or life expectancy of the Distributee, or for a specified period of ten years or more, (b) any distribution required under Code Section 401(a)(9), (c) any hardship withdrawal under Section 10.2 of the Plan, (d) any portion of a distribution not includable in gross income, and (e) any other distribution that does not qualify as an eligible rollover distribution under the Code. A portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax contributions or Roth 401(k) contributions which are not includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Code Section 408(a), 408(b) or 408A or to a qualified defined contribution plan described in Code Section 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

(iii) “Eligible Retirement Plan” means, to the extent permitted by the Code, (a) an individual retirement account described in Code Section 408(a), (b) an individual retirement annuity described in Code Section 408(b), (c) an annuity plan described in Code Section 403(a), (d) a qualified plan described in Code Section 401(a) that accepts the Eligible Rollover Distribution, (e) an annuity contract described in Code Section 403(b), (f) an eligible plan under Code Section 457(b) which is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state, and which agrees to separately account for amounts transferred into such plan from this Plan, or (g) a Roth individual retirement account described in Section 408A of the Code (subject to certain income restrictions for Direct Rollovers made before January 1, 2010). The definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p).

(iv) “Direct Rollover” means a payment by the Plan directly to the Eligible Retirement Plan specified by the distributee in cash and/or shares.

(C) Ability to Request a Direct Rollover. If the Plan Administrator determines that a withdrawal or distribution hereunder qualifies as an Eligible Rollover Distribution, the Distributee may request a Direct Rollover of all or part of such withdrawal or distribution to one or two Eligible Retirement Plans that accept such Direct Rollover.

(D) Direct Rollovers Not Permitted in Certain Circumstances. In the event that the provisions of this Section 11.8 or any part hereof ceases to be required by law, than this Section or the part not required automatically shall be of no further force or effect.

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11.9 Elective Transfers From Plan. A distribution or withdrawal from the Plan shall be eligible for an elective transfer to a qualified transferee employee plan, and as such will generally be treated as a distribution of a Member’s accrued benefit under the Plan (but shall not be treated as a distribution for purposes of the minimum distribution requirements of Code Section 401(a)(9)), only if all of the following requirements are satisfied: (A) the transfer must be payable proximate to, and solely on account of, a disposition of assets or a subsidiary described in Code Sections 401(k)(10), (B) the transfer must satisfy the requirements of Code Section 414(l), (C) the transfer must be conditioned upon a voluntary, fully informed election by the Member to make the transfer, and in making such election, the Member must have the option of retaining his or her Account benefits (including all optional forms of benefit) under this Plan, (D) if Code Sections 401(a)(11) and 417 otherwise apply to the Account, the spousal consent requirements of those Section must be met with respect to the transfer, (E) the notice requirement described in Code Section 417, if applicable, must be met with respect to the Member and spousal transfer election, (E) the Accounts to be transferred must be eligible for immediate distribution or withdrawal under the Plan, (F) the amount of the benefit transferred must be equal to the transferor’s entire nonforfeitable Account balance under the Plan, and (G) the Member must be fully vested in the transferred benefit under the transferee plan.

11.10 Procedure where Person is Unable to be Located. If the Plan Administrator is unable to locate any person who is or may become entitled to a benefit under the Plan because the identity or whereabouts of the person cannot be ascertained, the Plan Administrator shall give written notice addressed to such person at his or her last known address as shown on the records of the Company, unless the amount of such benefit is $500.00 or less. This amount shall automatically be forfeited, without notice, if determined appropriate by the Plan Administrator, and such forfeiture shall be applied to reduce future Company Contributions, subject to reinstatement, if a proper application for such amount is subsequently made. Any reinstatement shall be made with interest, which for purposes of this Section means, for any particular year, interest at the January first Federal mid-term interest rate published by the Internal Revenue Service for that year, such January first rate to apply on a prorated basis to all months in such year, and such interest to be compounded annually. If the amount of such benefit is greater than $500.00, the amount of such benefit for such person shall continue to be maintained in the Plan until the earlier of: (A) the date such person makes application therefor, (B) the third anniversary of the date the Plan Administrator first gave notice to such person as provided in this Section, or (C) the day before such benefit would otherwise escheat under any applicable law. If the Plan Administrator, by making reasonably diligent effort, cannot locate such person within the time described in the preceding sentence, the amount of such person’s benefit under the Plan shall be forfeited, and such forfeiture shall be applied to reduce future Company Contributions, subject to reinstatement, upon proper application as stated in this section.

11.11 Claims Procedure. The Pension Administration Committee shall establish claims procedures in accordance with applicable law and shall afford a reasonable opportunity to any person whose claim for benefits has been denied for a full and fair review of the decision denying such claim.

Any individual having a claim for benefits under the Plan shall be required to exhaust the administrative remedies available under the Plan prior to filing a claim for benefits in a court of law. Any such claim must be filed in a court no later than twelve (12) months following the date on which such individual commenced receiving benefits from the Plan, or, if earlier, the date the individual purportedly should have commenced receiving benefits. Such twelve (12) month period (the “limitation period”) shall be measured without regard for any period of time during which a claim for such benefits is pending before the Pension Administration Committee. The limitation period set forth herein is intended to apply without regard for any state or federal statute of limitations that might otherwise apply to an individual’s claim for benefits from the Plan if the Plan were silent on the limitations of claims. Any claim filed after the limitations period set forth herein has lapsed shall be time-barred.

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ARTICLE TWELVE
QUALIFIED DOMESTIC RELATIONS ORDERS

12.1 Procedures for QDROs. The Pension Administration Committee shall establish procedures consistent with Code Section 414(p) to determine the qualified status of any Domestic Relations Order, which shall be referred to herein as a “DRO” and which means a judgment, decree or order or any modification thereof (including approval of a property settlement agreement) that (A) relates to the provision of child support, alimony payments or marital property rights to a spouse, former spouse, child, or other dependent of a Member, and (B) is made pursuant to a state domestic relations law (including a community property law). Such Committee shall also establish procedures to administer any QDRO (as defined below), and to provide all notices required by Code Section 414(p) to the Member, and to the Alternate Payee, which shall mean a spouse, former spouse, child or other dependent of a Member who is recognized by a DRO as having a right to receive all, or a portion of, the benefits payable under the Plan with respect to such Member. All procedures so established shall be binding on all Members, Deferred Members and Alternate Payees. The Pension Administration Committee may charge a fee to the Accounts of a Member, Deferred Member or Alternate Payee for processing of a DRO.

12.3 Determination of QDRO Status. Within a reasonable period of time after the receipt of a DRO (or any modification thereof), the Pension Administration Committee or designee shall determine whether such order qualifies as a qualified domestic relations order under Code Section 414(p). Any DRO that so qualifies shall be considered a “QDRO” for purposes of this Article Twelve. A DRO shall not fail to qualify as a QDRO merely because it provides for payment to the Alternate Payee before the Member’s Termination of Employment.

12.4 Establishment of Temporary Holding Account. If, during any period in which the issue of whether a DRO qualifies as a QDRO is being determined, an Alternate Payee would be entitled to payment if the order were determined to be a QDRO, the Pension Administration or designee shall cause to be segregated in a separate account all amounts that would be payable to the Alternate Payee during such period if the order were determined to be a QDRO. Notwithstanding anything herein to the contrary, (A) any amounts held in such an account shall not be eligible for withdrawal or distribution from the Plan, and (B) such amounts shall not be counted in determining the maximum amount available for a loan under Article Nine.

12.5 Payment from Temporary Holding Account in Certain Cases. If, by the expiration of the 18 month period beginning on the date the first payment would be required to be made to an Alternate Payee under a DRO, either (i) it is determined that the DRO does not qualify as a QDRO, or the issue as to whether the DRO so qualifies has not been resolved, the Pension Administration Committee or designee shall cause to be paid all amounts which have been segregated pursuant to Section 12.4, including any earnings having accrued thereon, to the person who would have been entitled to such amounts if there had been no DRO. Notwithstanding the foregoing, if the Member or his or her Beneficiaries are not yet entitled, or have not elected, to receive benefit payments under the Plan, such segregated amounts, including all earnings having accrued thereon, shall be restored to the Member’s Accounts and invested in accordance with the investment election most recently submitted by the Member under Article Eight.

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12.6 Payment to Alternate Payee of Order if Determined to be a QDRO. If a QDRO is determined to exist, (i) the Trustee shall be instructed to apply, on a prospective basis, the terms and provisions of such QDRO, and (ii) any unpaid amounts segregated under this Article Twelve shall be paid to the applicable Alternate Payee in accordance with the QDRO.

12.7 Subsequent Determination or Order to be Applied Prospectively. If , after the expiration of the 18-month period beginning on the date the first payment would be required to be made to an Alternate Payee under a DRO, such DRO is determined to qualify as a QDRO, such QDRO shall be applied prospectively only.

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ARTICLE THIRTEEN
GENERAL MATTERS
RELATING TO COMMITTEES

13.1 Appointment of Committees. The Board of Directors of Hartford Fire has appointed a Pension Administration Committee and an Investment and Savings Plan Investment Committee, each such Committee to be comprised of the number of members set forth herein. Each Committee in its discretion shall appoint additional members to the respective Committee and accept resignations from existing members, which appointments and acceptances will be final unless otherwise determined by the Board of Directors of Hartford Fire. Each Committee shall have a Chairman as designated by the Board of Directors of Hartford Fire prior to June 1, 2004 (or as subsequently designated by the Committee) from among its regular members, and shall also designate a Secretary who may be, but need not be, one of the members thereof. Any person so appointed may resign at any time by delivering his or her written resignation to the Secretary of Hartford Fire and the Chairman or Secretary of his or her Committee.

The Pension Administration Committee shall be comprised of not less than five persons. The Investment and Savings Plan Investment Committee shall be comprised of not less than four persons. Notwithstanding any vacancies, the Pension Administration Committee and the Investment and Savings Plan Investment Committee each may act as long as there are at least three members thereof.

13.2 Named Fiduciaries. Each Committee appointed pursuant to the Plan, and the Stock Plan Fiduciary appointed under Section 8.1, is designated as a named fiduciary within the meaning of Section 402(a) of ERISA.

13.3 Authority of Committees. Each Committee shall have the authority, powers and responsibilities set forth in the Plan, and shall also have such authority, powers and responsibilities as may from time to time be delegated or allocated to them by resolutions of the Board of Directors, including, but not limited to, powers reserved to the Board of Directors to the extent specifically delegated to a particular Committee by the Board of Directors.

13.4 Action by Committees. Action by each Committee may be taken by majority vote of its members and/or alternate members at a meeting upon such notice, or upon waiver of notice, and at such time and place as each Committee may determine from time to time; or action may be taken by written consent of a majority of the members of the Committee without a meeting with the same effect for all purposes as if assented to at a meeting.

13.5 Policies and Procedures of Committees. Each Committee shall establish such policies, procedures, rules and regulations as such Committees may deem necessary to carry out the provisions of the Plan and transactions of their business.

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13.6 Appointment of Subcommittees. Each Committee may appoint from among their members such subcommittees with such powers as may be determined appropriate by the appointing Committee, and each may authorize one or more of its members or any agent to execute or deliver any instrument, make any payment, or take any other action on behalf of the appointing Committee.

13.7 Delegation of Committee Authority. Each Committee may in its sole discretion delegate to one or more of its members or alternate members, or to an administrator or manager, or to such other individual or agent as may be selected by the Committee, all or a portion of its authority, powers and responsibilities, including the authority to supervise the conduct of the daily affairs of the Committee, or to take any other action on behalf of the delegating Committee as may be determined appropriate by the Committee in its sole discretion (including the execution or delivery of any instrument or the making of any payment on behalf of the Committee), each of which of the foregoing shall be carried out in accordance with the provisions of the Plan and any policies which may from time to time be established by the delegating Committee.

13.8 Use of Experts by Committees. Each Committee may retain counsel and other independent advisors, employ agents and provide for such clerical, accounting and other services as it may require in carrying out its responsibilities under the Plan. To the extent permitted by law, and to the extent not otherwise paid by the Company, expenses associated with such services shall be paid from the assets of the Plan.

13.9 Compensation of Committee Members. No member of any Committee shall receive any compensation for his or her services as such, and except as required by law, no bonds or other security shall be required of him or her in such capacity in any jurisdiction.

13.10 Liability of Committee Members. Each of the members of the Committees shall use that degree of care, skill, prudence and diligence in carrying out their duties that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of a similar situation. Committee members shall not be liable for the breach of fiduciary responsibility of another fiduciary unless: (A) he or she participates knowingly in, or knowingly undertakes to conceal, an act or omission of such other fiduciary, knowing such act or omission is a breach, (B) by his or her failure to discharge his or her duties solely in the interest of the Members and other persons entitled to benefits under the Plan, for the exclusive purpose of providing benefits and defraying reasonable expenses of administering the Plan not met by the Company, he or she has enabled such other fiduciary to commit a breach, (C) he or she has knowledge of a breach by such other fiduciary and does not make reasonable efforts to remedy the breach, or (D) if the Committee of which he or she is a member improperly allocates responsibilities among its members or to others and he or she fails to review prudently such allocation.

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ARTICLE FOURTEEN
ADMINISTRATION OF PLAN -
PENSION ADMINISTRATION COMMITTEE

14.1 Composition of Pension Administration Committee. The Pension Administration Committee shall be comprised of not less than five members. Notwithstanding any vacancies in memberships, the Pension Administration Committee may act so long as at least three memberships are filled.

14.2 Authority and Responsibilities of Pension Administration Committee. The Pension Administration Committee shall be responsible, except with respect to matters that are the responsibility of the Investment and Savings Plan Investment Committee or Stock Fund Fiduciary appointed under Section 8.1 or as otherwise herein expressly provided, for general supervision of the administration of the Plan. Said Committee shall also have such authority, powers and responsibilities as are set forth in the Plan or may be delegated by the Board of Directors as provided in Article Thirteen. Said Committee shall also have the right to exercise powers reserved to the Board of Directors hereunder, including the right to amend the Plan, to the extent that, in the judgment of said Committee, the exercise of such powers does not involve any material cost to the Company.

14.3 Confidentiality of Information. For purposes of the regulations under Section 404(c) of ERISA, the Pension Administration Committee shall be designated the fiduciary responsible for safeguarding the confidentiality of all information relating to the purchase, sale and holding of employer securities and the exercise of shareholder rights appurtenant thereto. The Pension Administration Committee shall safeguard such information pursuant to written procedures providing for such confidentiality. In addition, for purposes of avoiding any situation for undue employer influence in the exercise of any shareholder rights, the Pension Administration Committee shall appoint an independent fiduciary, who shall not be affiliated with any sponsor of the Plan, to ensure the maintenance of confidentiality pursuant to the regulations under Section 404(c) of ERISA.

14.4 Interpretation of the Plan. Except as to matters which are required by law to be determined or performed by the Board of Directors, or which from time to time the Board of Directors may reserve to itself or allocate or delegate to officers of Hartford Fire or to another Committee, the Pension Administration Committee shall have the full discretionary authority to determine all questions and to make all factual determinations regarding any and all matters arising in the administration, interpretation and application of the Plan, including but not limited to the right to remedy possible ambiguities, inequities, inconsistencies or omissions, and including but not limited to questions of interpretation with respect to eligibility to participate, employment status, amount and timing of benefits payable under the Plan and all other definitions and questions of interpretation. Such determinations and interpretations shall be final, conclusive and binding on all parties who have a claim or interest under the Plan.

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14.5 Delegation of Authority to Plan Administrator. The Pension Administration Committee may delegate to the Plan Administrator or other administrator the responsibility of administering and operating the details of the Plan in accordance with the provisions of the Plan and any policies which may from time to time be established by the Pension Administration Committee. The Plan Administrator shall be Hartford Fire’s Vice President, Employee Benefits (or successor or other person holding a similar position). Except as to matters which are required by law to be determined or performed by the Board of Directors, or which from time to time the Board of Directors may reserve to itself or allocate or delegate to officers of Hartford Fire or to another Committee, and except as otherwise provided in the Plan or by the Pension Administration Committee, the Plan Administrator shall have the full discretionary authority to determine all questions and to make all factual determinations regarding any and all matters arising in the administration, interpretation and application of the Plan, including but not limited to the right to remedy possible ambiguities, inequities, inconsistencies or omissions, and including but not limited to questions of interpretation with respect to eligibility to participate, employment status, amount and timing of benefits payable under the Plan and all other definitions and questions of interpretation. Such determinations and interpretations shall be final, conclusive and binding on all parties who have a claim or interest under the Plan.

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ARTICLE FIFTEEN
MANAGEMENT OF INVESTMENT FUNDS -
INVESTMENT AND SAVINGS PLAN INVESTMENT COMMITTEE

15.1 Composition of Investment and Savings Plan Investment Committee. The Investment and Savings Plan Investment Committee shall be comprised of not less than four members. Notwithstanding any vacancies in memberships, the Investment and Savings Plan Investment Committee may act so long as at least three memberships are filled.

15.2 Authority and Responsibilities of Investment and Savings Plan Investment Committee. The Investment and Savings Plan Investment Committee shall be responsible, except as otherwise herein expressly provided, for directing and coordinating all activity relating to the investment management of the assets of the Plan. Said Committee shall also have such authority, powers and responsibilities as are set forth in the Plan or may be delegated by the Board of Directors as provided in Article Thirteen, including, but not limited to the following: (A) Establishment of one or more trusts for the Plan and any funding agreements for the Plan, (B) Selection and appointment of the Trustee and any funding agents, (C) Provision, consistent with the provisions of the Plan and applicable trusts, of direction to the Trustee, which may involve but need not be limited to direction of investment of all or a part of the Plan assets, and (D) Appointment and provision for use of investment advisors and investment managers. In discharging the foregoing responsibilities, the Investment and Savings Plan Investment Committee shall evaluate and monitor the investment performance of the Trustee and investment managers, if any. Where a Stock Fund Fiduciary has been appointed to act in accordance with Section 8.1 of the Plan, the Investment and Savings Plan Investment Committee shall have no responsibility or authority to act with respect to the assets of the Plan that consist of The Hartford Stock held in The Hartford Stock Fund.

15.3 Trust Fund. All of the funds of the Plan shall be held by a Trustee appointed from time to time by the Investment and Savings Plan Investment Committee in one or more trusts under a trust instrument or instruments approved or authorized by said Committee for use in providing the benefits of the Plan; provided that no part of the corpus or income of the Trust Fund shall be used for, or diverted to, purposes other than for the exclusive benefit of Members, Deferred Members and Beneficiaries.

15.4 Reports to Members and Deferred Members. At least annually at a time to be determined by the Pension Administration Committee, each Member and Deferred Member shall be furnished a statement setting forth the value of each of his or her Accounts, together with a statement of the amounts contributed to each such Account by the Member or Deferred Member and by the Company and the vested amount of the Company Contributions Investment Account or the earliest time a portion of the Company Contributions Investment Account will become vested.

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15.5 Fiscal Year. The fiscal year of the Plan and the trust shall end on the 30th day of December in 1997, and shall end on the 31st day of December in years after 1997 or such other date as may be designated by the Investment and Savings Plan Investment Committee.

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ARTICLE SIXTEEN
GENERAL AND ADMINISTRATIVE PROVISIONS

16.1 No Right to Employment. Nothing herein contained nor any action taken under the provisions hereof shall be construed as giving any Employee the right to be retained in the employ of the Company.

16.2 Inalienability of Benefits. Except as specifically provided in the Plan or as may be required under the terms of a QDRO, or pursuant to the requirements of Code Section 401(a)(13)(C), or as applicable law may otherwise require, no benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempts so to do shall be void, nor shall any such benefit be in any manner liable for or subject to debts, contracts, liabilities, engagements or torts of the person entitled to such benefit; and in the event that the Pension Administration Committee shall find that any Member, Deferred Member or Beneficiary who is or may become entitled to benefits hereunder has become bankrupt or that any attempt has been made to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any of his or her benefits under the Plan, except as specifically provided in the Plan or as applicable law may otherwise require, then such benefit shall cease and terminate, and in that event the Pension Administration Committee shall hold or apply the same to or for the benefit of such Member, Deferred Member or Beneficiary who is or may become entitled to benefits hereunder, his or her spouse, children, parents or other blood relatives, or any of them.

16.3 Source of Benefit Payments. Benefits under the Plan shall be payable only out of the Trust Fund, and the Company shall not have any legal obligation, responsibility or liability to make any direct payment of benefits under the Plan. Neither the Company nor the Trustee guarantees the Trust Fund against any loss or depreciation or guarantees the payment of any benefit hereunder. No person shall have any rights under the Plan with respect to the Trust Fund, or against the Company, except as specifically provided for herein.

16.4 Plan Expenses. The expenses of administering the Plan, including but not limited to investment management, Trustee, record keeping and audit fees, fees for legal services, and expenses of the Plan fiduciaries, shall be paid out of the assets of the Trust Fund to the extent they are not paid by the Company. In the event the Company pays any expense of administering the Plan, the Company shall be entitled to be reimbursed for the payment out of the assets of the Trust Fund. All expenses paid out of the Trust Fund shall be allocated among Members pursuant to procedures adopted by the Pension Administration Committee.

16.5 Relief from Liability. The Plan is intended to constitute a Plan as described in Section 404(c) of ERISA and Title 29 of the Code of Federal Regulations Section 2550.404c-1. The Plan fiduciaries are relieved of any liability for any losses that are the direct and necessary result of investment instructions given by any Member, Deferred Member or Beneficiary.

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16.6 Uniform Action. Action by the Pension Administration Committee shall be uniform in nature as applied to all persons similarly situated, and no such action shall be taken which will discriminate in favor of any Members who are Highly Compensated Employees.

16.7 Amendment of Plan. The Board of Directors reserves the right at any time and from time to time, and retroactively if deemed necessary or appropriate to conform with governmental regulations or other policies, to modify or amend in whole or in part any or all of the provisions of the Plan; provided that no such modification or amendment shall (A) make it possible for any part of the funds of the Plan to be used for, or diverted to, purposes other than for the exclusive benefit of Members, Deferred Members and Beneficiaries, or (B) increase the duties of the Trustee without its consent thereto in writing. Except as may be required to conform with governmental regulations, no such amendment shall adversely affect the rights of any Member or Deferred Member with respect to contributions made on his or her behalf prior to the date of such amendment.

16.8 Merger or Consolidation of Plan. The Plan may not be merged or consolidated with, nor may its assets or liabilities be transferred to, any other plan unless each Member or Deferred Member under the Plan would, if the resulting plan were then terminated, receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he or she would have been entitled to receive immediately before the merger, consolidation, or transfer if the Plan had then terminated.

16.9 Termination of Plan. The Plan is entirely voluntary on the part of the Company. The Board of Directors reserves the right at any time to terminate the Plan, the trust agreement and the trust hereunder or to suspend, reduce or partially or completely discontinue contributions thereto. In the event of such termination of the Plan, the interests of Members and Deferred Members shall automatically become nonforfeitable. In the event of such termination, any forfeitures not previously applied in accordance with Article Five shall be credited ratably to the Accounts of all Members and Deferred Members in proportion to the amounts of Matching Company Contributions made under Article Five credited during the current calendar year, or, if no Matching Company Contributions have been made during the current calendar year, then in proportion to such Matching Company Contributions during the last previous calendar year during which such Matching Company Contributions were made. In the event of a partial termination of the Plan or complete discontinuance of contributions, the rights of all affected Members to the amounts credited to their accounts are nonforfeitable.

16.10 Headings and Word Usage. The headings used in this Plan are used for convenience of reference and in the case of any conflict, the text of the Plan, rather than any headings, shall control. Words used in the singular are intended to include the plural, whenever appropriate.

16.11 Construction. The Plan shall be construed, regulated and administered in accordance with the laws of the State of New York, subject to the provisions of applicable Federal laws.

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16.12 Tax Withholding. The Plan Administrator shall have the right, to the extent not prohibited by law, to make such provisions as deemed appropriate in its sole discretion to satisfy any obligation of the Company to withhold federal, state or local income or other taxes incurred by reason of the operation of the Plan or benefits provided under the Plan, including but not limited to at any time (i) requiring a Participant to submit payment to the Company for such taxes before paying benefits under the Plan or making settlement of any amount due under the Plan, (ii) withholding such taxes from wages or other amounts due to a Participant before paying benefits under the Plan or making settlement of any amount due under the Plan, (iii) making settlement of any amount due under the Plan part in shares of common stock of The Hartford and part in cash to facilitate satisfaction of such withholding obligations, or (iv) receiving shares of common stock of the Hartford already owned by a Participant or withholding such shares otherwise due to a Participant in an amount determined necessary to satisfy such withholding obligations.

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APPENDIX A: Distribution Table

Age of the Employee	Distribution Period
70	27.4
71	26.5
72	25.6
73	24.7
74	23.8
75	22.9
76	22.0
77	21.2
78	20.3
79	19.5
80	18.7
81	17.9
82	17.1
83	16.3
84	15.5
85	14.8
86	14.1
87	13.4
88	12.7
89	12.0
90	11.4
91	10.8
92	10.2
93	9.6
94	9.1
95	8.6
96	8.1
97	7.6
98	7.1
99	6.7
100	6.3
101	5.9
102	5.5
103	5.2
104	4.9
105	4.5
106	4.2
107	3.9
108	3.7
109	3.4
110	3.1
111	2.9
112	2.6
113	2.4
114	2.1
115 and older	1.9

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EX-12.01

EXHIBIT 12.01

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES

AND PREFERRED SHARE DIVIDENDS

(In millions)

	Years Ended December 31,
	2011		2010		2009			2008			2007
EARNINGS:
Income (loss) from continuing operations, before income taxes	$	230	$	2,356	$	(1,721	)	$	(4,607	)	$	3,957
Less: Undistributed earnings from limited partnerships and other alternative investments		65		60		(380	)		(539	)		93
Add: Total fixed charges, before interest credited to contractholders		562		566		537			413			332
Total earnings, before interest credited to contractholders		727		2,862		(804	)		(3,655	)		4,196
Interest credited to contractholders [1]		189		763		4,947			(8,533	)		2,022
Total earnings	$	916	$	3,625	$	4,143		$	(12,188	)	$	6,218
FIXED CHARGES:
Interest expense	$	508	$	508	$	476		$	343		$	263
Interest factor attributable to rentals and other [2]		54		58		61			70			69
Total fixed charges, before interest credited to contractholders		562		566		537			413			332
Interest credited to contractholders [1]		189		763		4,947			(8,533	)		2,022
Total fixed charges		751		1,329		5,484			(8,120	)		2,354
Preferred stock dividend requirements [3]		17		694		249			13			—
Total fixed charges and preferred stock dividend requirements, before interest credited to contractholders		579		1,260		786			426			332
Total fixed charges and preferred stock dividend requirements	$	768	$	2,023	$	5,733		$	(8,107	)	$	2,354
RATIOS:
Total earnings to total fixed charges [4]		1.2		2.7	NM			NM				2.6
Total earnings to total fixed charges and preferred stock dividend requirements [4]		1.2		1.8	NM			NM				2.6
Deficiency of total earnings to total fixed charges [5]	$	—	$	—	$	1,341		$	4,068			—
Deficiency of total earnings to total fixed charges and preferred stock dividend requirements [5]	$	—	$	—	$	1,590		$	4,081			—
Ratios before interest credited to contractholders [6]
Total earnings to total fixed charges [4]		1.3		5.1	NM			NM				12.6
Total earnings to total fixed charges and preferred stock dividend requirements [4]		1.3		2.3	NM			NM				12.6

[1]	Interest credited to contractholders includes interest credited on general account assets and interest credited on consumer notes. For the year ended December 31, 2008, the $(8.5) billion in interest credited to contractholders was primarily due to $(10.3) billion in investment income losses and mark-to-market effects of equity securities, trading, supporting the international variable annuity business.
[2]	Interest factor attributable to rental and others includes 1/3 of total rent expense as disclosed in the notes to the financial statements, capitalized interest and amortization of debt issuance costs.
[3]	Preferred stock dividend requirements include preferred stock dividends accrued and accretion of discount on preferred stock issuance.
[4]	Ratios of less than one-to-one are presented as “NM” or not meaningful.
[5]	Represents additional earnings that would be necessary to result in a one-to-one ratio. These amounts are primarily due to before-tax realized losses of $(2.0) billion and $(5.9) billion, which includes before-tax impairments of $(1.5) billion and $(4.0) billion, for the years ended December 31, 2009 and 2008, respectively.
[6]	These secondary ratios are disclosed for the convenience of fixed income investors and the rating agencies that serve them and are more comparable to the ratios disclosed by all issuers of fixed income securities.

EX-18.01

EXHIBIT 18.01

February 24, 2012

The Hartford Financial Services Group, Inc.
One Hartford Plaza
Hartford, CT

Dear Sirs/Madams:

We have audited the consolidated financial statements of The Hartford Financial Services Group, Inc. and its subsidiaries (collectively, the “Company”) as of December 31, 2011 and 2010, and for each of the three years in the period ended December 31, 2011, included in your Annual Report on Form 10-K to the Securities and Exchange Commission and have issued our report thereon dated February 24, 2012, which expresses an unqualified opinion and includes an explanatory paragraph concerning the Company’s change in its method of accounting and reporting for variable interest entities and embedded credit derivatives as required by accounting guidance adopted in 2010, and for other-than-temporary impairments as required by accounting guidance adopted in 2009. Note 8 to such financial statements contains a description of your adoption during the year ended December 31, 2011 of your change in the date for the annual goodwill impairment test. In our judgment, such change is to an alternative accounting principle that is preferable under the circumstances.

Yours truly,

/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

EX-21.01

EXHIBIT 21.01

The Hartford Financial Services Group, Inc.
Organizational List — Domestic and Foreign Subsidiaries

220 Davidson R, LLC (Delaware)
1stAgChoice, Inc. (South Dakota)
Access CoverageCorp, Inc. (North Carolina)
Access CoverageCorp Technologies, Inc. (North Carolina)
American Maturity Life Insurance Company (Connecticut)
Archway 60 R, LLC (Delaware)
Business Management Group, Inc. (Connecticut)
Catalyst360, LLC (Delaware)
Champlain Life Reinsurance Company (Vermont)
CLAIMPLACE, Inc. (Delaware)
DMS R, LLC (Delaware)
Downlands Liability Management Ltd. (United Kingdom)
Eloy R, LLC (Delaware)
Ersatz Corporation (Delaware)
Excess Insurance Company, Limited (United Kingdom)
Fencourt Reinsurance Company, Ltd. (Bermuda)
First State Insurance Company (Connecticut)
FTC Resolution Company, LLC (Delaware)
Hart Re Group, L.L.C. (Connecticut)
Hartford Accident and Indemnity Company (Connecticut)
Hartford Administrative Services Company (Minnesota)
Hartford Casualty General Agency, Inc. (Texas)
Hartford Casualty Insurance Company (Indiana)
Hartford Equity Sales Company, Inc. (Connecticut)
Hartford Financial Products International Limited (United Kingdom)
Hartford Financial Services, LLC (Delaware)
Hartford Fire General Agency, Inc. (Texas)
Hartford Fire Insurance Company (Connecticut)
Hartford Holdings, Inc. (Delaware)
Hartford Insurance Company of Illinois (Illinois)
Hartford Insurance Company of the Midwest (Indiana)
Hartford Insurance Company of the Southeast (Connecticut)
Hartford Insurance, Ltd. (Bermuda)
Hartford Integrated Technologies, Inc. (Connecticut)
Hartford International Global Distribution (Bermuda), Ltd.
Hartford International Life Reassurance Corporation (Connecticut)
Hartford Investment Financial Services, LLC (Delaware)
Hartford Investment Management Company (Delaware)
Hartford Life and Accident Insurance Company (Connecticut)
Hartford Life and Annuity Insurance Company (Connecticut)
Hartford Life Distributors, LLC (Delaware)
Hartford Life Insurance Company (Connecticut)
Hartford Life Insurance KK (Japan)
Hartford Life International, Ltd. (Connecticut)
Hartford Life, Inc. (Delaware)
Hartford Life Limited (Ireland)
Hartford Life, Ltd. (Bermuda)
Hartford Life Private Placement, LLC (Delaware)
Hartford Lloyd’s Corporation (Texas)
Hartford Lloyd’s Insurance Company (Partnership) (Texas)
Hartford Management, Ltd. (Bermuda)
Hartford of Texas General Agency, Inc. (Texas)
Hartford Residual Market, L.L.C. (Connecticut)
Hartford Retirement Services, LLC (Delaware)
Hartford Securities Distribution Company, Inc. (Connecticut)
Hartford Specialty Insurance Services of Texas, LLC (Texas)

II-6

Hartford Strategic Investments, LLC (Delaware)
Hartford Technology Services Company, L.L.C. (Delaware)
Hartford Underwriters General Agency, Inc. (Texas)
Hartford Underwriters Insurance Company (Connecticut)
Hartford-Comprehensive Employee Benefit Service Company (Connecticut)
HARTRE Company, L.L.C. (Connecticut)
Heritage Holdings, Inc. (Connecticut)
Heritage Reinsurance Company, Ltd. (Bermuda)
HLA LLC (Connecticut)
HL Investment Advisors, LLC (Connecticut)
Horizon Management Group, LLC (Delaware)
HRA Brokerage Services, Inc. (Connecticut)
Lanidex Class B, LLC (Delaware)
M-CAP Insurance Agency, LLC (Delaware)
Meridian R, LLC (Delaware)
New England Insurance Company (Connecticut)
New England Reinsurance Corporation (Connecticut)
New Ocean Insurance Company, Ltd. (Bermuda)
Nutmeg Insurance Agency, Inc. (Connecticut)
Nutmeg Insurance Company (Connecticut)
OL R, LLC (Delaware)
Pacific Insurance Company, Limited (Connecticut)
Planco, LLC (Delaware)
Property and Casualty Insurance Company of Hartford (Indiana)
Revere R, LLC (Delaware)
RVR R, LLC (Delaware)
Sentinel Insurance Company, Ltd. (Connecticut)
Sunstone R, LLC (Delaware)
Symphony R., LLC (Delaware)
The Evergreen Group Incorporated (New York)
The Hartford International Asset Management Company Limited (Ireland)
Thesis S.A. (Argentina)
Trumbull Flood Management, L.L.C. (Connecticut)
Trumbull Insurance Company (Connecticut)
Twin City Fire Insurance Company (Indiana)
White River Life Reinsurance Company (Vermont)
Woodbury Financial Services, Inc. (Minnesota)

II-7

EX-23.01

EXHIBIT 23.01

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following registration statements on Form S-3 and Form S-8 of our reports dated February 24, 2012, relating to the consolidated financial statements and financial statement schedules of The Hartford Financial Services Group, Inc. (the “Company”) (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the Company’s change in its method of accounting and reporting for variable interest entities and embedded credit derivatives as required by accounting guidance adopted in 2010, and for other-than-temporary impairments as required by accounting guidance adopted in 2009) and the effectiveness of The Hartford Financial Services Group, Inc.’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of The Hartford Financial Services Group, Inc. for the year ended December 31, 2011

Form S-3 Registration No.	Form S-8 Registration Nos.
333-168532		333-105707
		333-49170
		333-105706
		333-34092
		033-80665
		333-12563
		333-125489
		333-157372
		333-160173
		333-168537

DELOITTE & TOUCHE LLP
Hartford, Connecticut
February 24, 2012

II-8

EX-24.01

EXHIBIT 24.01

POWER OF ATTORNEY

Each person whose signature appears below does hereby make, constitute and appoint CHRISTOPHER J. SWIFT, ALAN J. KREZCKO, BETH A. BOMBARA and DAVID C. ROBINSON, and each of them, with full power to act as his or her true and lawful attorneys-in-fact and agents, in his or her name, place and stead to execute on his or her behalf, as an officer and/or director of The Hartford Financial Services Group, Inc. (the “Company”), an Annual Report on Form 10-K for the year ended December 31, 2011 (the “Annual Report”), and any and all amendments or supplements to the Annual Report, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any applicable securities exchange or securities self-regulatory body, and any and all other instruments which any of said attorneys-in-fact and agents deems necessary or advisable to enable the Company to comply with the Exchange Act and the rules, regulations and requirements of the SEC in respect thereof, giving and granting to each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing whatsoever necessary or appropriate to be done in and about the premises as fully to all intents as he or she might or could do in person, with full power of substitution and resubstitution, hereby ratifying and confirming all that his or her said attorneys-in-fact and agents or substitutes may or shall lawfully do or cause to be done by virtue hereof; provided, however, that the powers granted herein to each of said attorneys-in-fact and agents shall be effective only upon adoption by the Company’s board of directors of a resolution approving the form, substance and filing of the Annual Report.

IN WITNESS WHEREOF, the undersigned has hereunto subscribed this power of attorney this 24th day of February 2012.

/s/ Liam E. McGee  Liam E. McGee	/s/ Kathryn A. Mikells Kathryn A. Mikells
/s/ Christopher J. Swift  Christopher J. Swift	/s/ Michael G. Morris Michael G. Morris
/s/ Beth A. Bombara Beth A. Bombara	/s/ Thomas A. Renyi Thomas A. Renyi
/s/ Robert B. Allardice, III Robert B. Allardice, III	/s/ Charles B. Strauss Charles B. Strauss
/s/ Trevor Fetter Trevor Fetter	/s/ H. Patrick Swygert H. Patrick Swygert
/s/ Paul G. Kirk, Jr. Paul G. Kirk, Jr.

II-9

EX-31.01

EXHIBIT 31.01

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ENACTED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Liam E. McGee, certify that:

1. I have reviewed this Annual Report on Form 10-K of The Hartford Financial Services Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2012	/s/ Liam E. McGee
	Liam E. McGee
	Chairman, President and Chief Executive Officer

II-10

EX-31.02

EXHIBIT 31.02

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ENACTED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher J. Swift, certify that:

1. I have reviewed this Annual Report on Form 10-K of The Hartford Financial Services Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2012	/s/ Christopher J. Swift
	Christopher J. Swift
	Executive Vice President and Chief Financial Officer

II-11

EX-32.01

EXHIBIT 32.01

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the period ended December 31, 2011 of The Hartford Financial Services Group, Inc. (the “Company”), filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. section 1350 as enacted by section 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 24, 2012	/s/ Liam E. McGee
	Liam E. McGee
	Chairman, President and Chief Executive Officer

II-12

EX-32.02

EXHIBIT 32.02

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the period ended December 31, 2011 of The Hartford Financial Services Group, Inc. (the “Company”), filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. section 1350 as enacted by section 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 24, 2012	/s/ Christopher J. Swift
	Christopher J. Swift
	Executive Vice President and Chief Financial Officer

II-13

XML

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2011

Fair Value Measurements - Financial Instruments Excluding Guaranteed Living Benefits

Assets and (liabilities) carried at fair value by hierarchy level

	December 31, 2011
				Quoted Prices in
				Active Markets			Significant			Significant
				for Identical			Observable			Unobservable
				Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	3,153		$	—		$	2,792		$	361
CDOs		2,487			—			2,119			368
CMBS		6,951			—			6,363			588
Corporate		44,011			—			41,756			2,255
Foreign government/government agencies		2,161			—			2,112			49
States, municipalities and political subdivisions (“Municipal”)		13,260			—			12,823			437
RMBS		5,757			—			4,694			1,063
U.S. Treasuries		4,029			750			3,279			—
Total fixed maturities		81,809			750			75,938			5,121
Fixed maturities, FVO		1,328			—			833			495
Equity securities, trading		30,499			1,967			28,532			—
Equity securities, AFS		921			352			476			93
Derivative assets
Credit derivatives		(24	)		—			(11	)		(13	)
Equity derivatives		31			—			—			31
Foreign exchange derivatives		519			—			519			—
Interest rate derivatives		195			—			147			48
U.S. GMWB hedging instruments		494			—			11			483
U.S. macro hedge program		357			—			—			357
International program hedging instruments		731			—			692			39
Other derivative contracts		28			—			—			28
Total derivative assets [1]		2,331			—			1,358			973
Short-term investments		7,736			750			6,986			—
Reinsurance recoverable for U.S. GMWB		443			—			—			443
Separate account assets [2]		139,432			101,644			36,757			1,031
Total assets accounted for at fair value on a recurring basis	$	264,499		$	105,463		$	150,880		$	8,156
Percentage of level to total		100	%		40	%		57	%		3	%
Liabilities accounted for at fair value on a recurring basis
Other policyholder funds and benefits payable
U.S guaranteed withdrawal benefits	$	(2,538	)	$	—		$	—		$	(2,538	)
International guaranteed withdrawal benefits		(66	)		—			—			(66	)
International other guaranteed living benefits		(5	)		—			—			(5	)
Equity linked notes		(9	)		—			—			(9	)
Total other policyholder funds and benefits payable		(2,618	)		—			—			(2,618	)
Derivative liabilities
Credit derivatives		(573	)		—			(25	)		(548	)
Equity derivatives		9			—			—			9
Foreign exchange derivatives		134			—			134			—
Interest rate derivatives		(527	)		—			(421	)		(106	)
U.S. GMWB hedging instruments		400			—			—			400
International program hedging instruments		19			—			23			(4	)
Total derivative liabilities [3]		(538	)		—			(289	)		(249	)
Other Liabilities		(9	)		—			—			(9	)
Consumer notes [4]		(4	)		—			—			(4	)
Total liabilities accounted for at fair value on a recurring basis	$	(3,169	)	$	—		$	(289	)	$	(2,880	)

	December 31, 2010
				Quoted Prices in
				Active Markets			Significant			Significant
				for Identical			Observable			Unobservable
				Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	2,889		$	—		$	2,412		$	477
CDOs		2,611			—			30			2,581
CMBS		7,917			—			7,228			689
Corporate		39,884			—			37,755			2,129
Foreign government/government agencies		1,683			—			1,627			56
Municipal		12,124			—			11,852			272
RMBS		5,683			—			4,398			1,285
U.S. Treasuries		5,029			434			4,595			—
Total fixed maturities		77,820			434			69,897			7,489
Fixed maturities, FVO		649			—			127			522
Equity securities, trading		32,820			2,279			30,541			—
Equity securities, AFS		973			298			521			154
Derivative assets
Credit derivatives		3			—			(18	)		21
Equity derivatives		2			—			—			2
Foreign exchange derivatives		795			—			795			—
Interest rate derivatives		(106	)		—			(70	)		(36	)
U.S. GMWB hedging instruments		339			—			(122	)		461
U.S. macro hedge program		203			—			—			203
International program hedging instruments		256			2			249			5
Other derivative contracts		32			—			—			32
Total derivative assets [1]		1,524			2			834			688
Short-term investments		8,528			541			7,987			—
Reinsurance recoverable for U.S. GMWB		280			—			—			280
Separate account assets [2]		153,727			116,717			35,763			1,247
Total assets accounted for at fair value on a recurring basis	$	276,321		$	120,271		$	145,670		$	10,380
Percentage of level to total		100	%		43	%		53	%		4	%

	December 31, 2010
				Quoted Prices
				in Active			Significant			Significant
				Markets for			Observable			Unobservable
				Identical Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Liabilities accounted for at fair value on a recurring basis
Other policyholder funds and benefits payable
U.S guaranteed withdrawal benefits	$	(1,611	)	$	—		$	—		$	(1,611	)
International guaranteed withdrawal benefits		(36	)		—			—			(36	)
International other guaranteed living benefits		3			—			—			3
Equity linked notes		(9	)		—			—			(9	)
Total other policyholder funds and benefits payable		(1,653	)		—			—			(1,653	)
Derivative liabilities
Credit derivatives		(482	)		—			(71	)		(411	)
Equity derivatives		2			—			—			2
Foreign exchange derivatives		(34	)		—			(34	)		—
Interest rate derivatives		(266	)		—			(249	)		(17	)
U.S. GMWB hedging instruments		128			—			(11	)		139
International program hedging instruments		(2	)		(2	)		—			—
Total derivative liabilities [3]		(654	)		(2	)		(365	)		(287	)
Other liabilities		(37	)		—			—			(37	)
Consumer notes [4]		(5	)		—			—			(5	)
Total liabilities accounted for at fair value on a recurring basis	$	(2,349	)	$	(2	)	$	(365	)	$	(1,982	)

[1]	Includes over-the-counter derivative instruments in a net asset value position which may require the counterparty to pledge collateral to the Company. As of December 31, 2011 and 2010, $1.4 billion and $968, respectively, of cash collateral liability was netted against the derivative asset value in the Consolidated Balance Sheet and is excluded from the table above. See footnote 3 below for derivative liabilities.
[2]	Approximately $4.0 and $6.0 billion of investment sales receivable that are not subject to fair value accounting are excluded as of December 31, 2011 and 2010, respectively.
[3]	Includes over-the-counter derivative instruments in a net negative market value position (derivative liability). In the Level 3 roll-forward table included below in this Note 4, the derivative asset and liability are referred to as “freestanding derivatives” and are presented on a net basis.
[4]	Represents embedded derivatives associated with non-funding agreement-backed consumer equity linked notes.

Roll-forward of Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

Roll-forward of Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) for the twelve months from January 1, 2011 to December 31, 2011.

	Fixed Maturities, AFS
													Foreign									Total Fixed			Fixed
													govt./govt									Maturities,			Maturities,
Assets	ABS			CDOs			CMBS			Corporate			agencies			Municipal			RMBS			AFS			FVO
Fair value as of January 1, 2011	$	477		$	2,581		$	689		$	2,129		$	56		$	272		$	1,285		$	7,489		$	522
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(27	)		(41	)		11			(40	)		—			—			(21	)		(118	)		22
Included in OCI [3]		22			126			52			(31	)		1			48			3			221			—
Purchases		58			—			29			108			3			131			25			354			—
Settlements		(37	)		(151	)		(86	)		(121	)		(4	)		—			(135	)		(534	)		(3	)
Sales		(10	)		(66	)		(317	)		(162	)		(7	)		(2	)		(16	)		(580	)		(42	)
Transfers into Level 3 [4]		82			30			268			774			39			4			82			1,279			—
Transfers out of Level 3 [4]		(204	)		(2,111	)		(58	)		(402	)		(39	)		(16	)		(160	)		(2,990	)		(4	)
Fair value as of December 31, 2011	$	361		$	368		$	588		$	2,255		$	49		$	437		$	1,063		$	5,121		$	495
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	(16	)	$	(41	)	$	(17	)	$	(17	)	$	—		$	—		$	(15	)	$	(106	)	$	19

				Freestanding Derivatives [5]
																U.S.			Intl.
	Equity												U.S.			Macro			Program						Total Free-
	Securities,									Interest			GMWB			Hedge			Hedging			Other			Standing
Assets (Liabilities)	AFS			Credit			Equity			Rate			Hedging			Program			Instr.			Contracts			Derivatives [5]
Fair value as of January 1, 2011	$	154		$	(390	)	$	4		$	(53	)	$	600		$	203		$	5		$	32		$	401
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(12	)		(170	)		(9	)		(21	)		279			(128	)		(3	)		(4	)		(56	)
Included in OCI [3]		(4	)		—			—			—			—			—			—			—			—
Purchases		39			1			45			64			23			347			33			—			513
Settlements		—			(2	)		—			(48	)		(19	)		(65	)		—			—			(134	)
Sales		(10	)		—			—			—			—			—			—			—			—
Transfers into Level 3 [4]		7			—			—			—			—			—			—			—			—
Transfers out of Level 3 [4]		(81	)		—			—			—			—			—			—			—			—
Fair value as of December 31, 2011	$	93		$	(561	)	$	40		$	(58	)	$	883		$	357		$	35		$	28		$	724
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	(10	)	$	(163	)	$	(8	)	$	(19	)	$	278		$	(107	)	$	(5	)	$	(4	)	$	(28	)

	Reinsurance Recoverable
Assets	for U.S. GMWB		Separate Accounts
Fair value as of January 1, 2011	$	280	$	1,247
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		131		25
Included in OCI [3]		—		—
Purchases		—		292
Settlements		32		—
Sales		—		(171	)
Transfers into Level 3 [4]		—		14
Transfers out of Level 3 [4]		—		(376	)
Fair value as of December 31, 2011	$	443	$	1,031
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	131	$	(1	)

	Other Policyholder Funds and Benefits Payable
													Total Other
	U.S.			International									Policyholder
	Guaranteed			Guaranteed			International			Equity			Funds and
	Withdrawal			Living			Other Living			Linked			Benefits			Other			Consumer
Liabilities	Benefits			Benefits			Benefits			Notes			Payable			Liabilities			Notes
Fair value as of January 1, 2011	$	(1,611	)	$	(36	)	$	3		$	(9	)	$	(1,653	)	$	(37	)	$	(5	)
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(780	)		(21	)		(4	)		—			(805	)		28			1
Included in OCI [3]		—			—			—			—			0			—			—
Settlements		(147	)		(9	)		(4	)		—			(160	)		—			—
Fair value as of December 31, 2011	$	(2,538	)	$	(66	)	$	(5	)	$	(9	)	$	(2,618	)	$	(9	)	$	(4	)
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	(780	)	$	(21	)	$	(4	)	$	—		$	(805	)	$	28		$	1

Roll-forward of Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) for the twelve months from January 1, 2010 to December 31, 2010.

	Fixed Maturities, AFS
													Foreign									Total Fixed			Fixed
													govt./govt.									Maturities,			Maturities,
Assets	ABS			CDOs			CMBS			Corporate			agencies			Municipal			RMBS			AFS			FVO
Fair value as of January 1, 2010	$	580		$	2,835		$	307		$	8,027		$	93		$	262		$	1,153		$	13,257		$	—
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(17	)		(151	)		(132	)		(14	)		—			1			(43	)		(356	)		80
Included in OCI [3]		92			533			409			320			5			24			254			1,637			—
Purchases, issuances, and settlements		(74	)		(234	)		(186	)		78			(8	)		14			(161	)		(571	)		(11	)
Transfers into Level 3 [4]		40			42			443			967			8			11			146			1,657			453
Transfers out of Level 3 [4]		(144	)		(444	)		(152	)		(7,249	)		(42	)		(40	)		(64	)		(8,135	)		—
Fair value as of December 31, 2010	$	477		$	2,581		$	689		$	2,129		$	56		$	272		$	1,285		$	7,489		$	522
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	(8	)	$	(158	)	$	(73	)	$	(24	)	$	—		$	—		$	(38	)	$	(301	)	$	76

				Freestanding Derivatives [5]
																U.S.			Intl.
	Equity												U.S.			Macro			Program						Total Free-
	Securities,									Interest			GMWB			Hedge			Hedging			Other			Standing
Assets (Liabilities)	AFS			Credit			Equity			Rate			Hedging			Program			Instr.			Contracts			Derivatives [5]
Fair value as of January 1, 2010	$	58		$	(228	)	$	(2	)	$	5		$	236		$	278		$	12		$	36		$	337
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(6	)		124			6			(4	)		(74	)		(312	)		(29	)		(4	)		(293	)
Included in OCI [3]		9			—			—			1			—			—			—			—			1
Purchases, issuances, and settlements		16			4			—			(44	)		442			237			22			—			661
Transfers into Level 3 [4]		98			(290	)		—			—			—			—			—			—			(290	)
Transfers out of Level 3 [4]		(21	)		—			—			(11	)		(4	)		—			—			—			(15	)
Fair value as of December 31, 2010	$	154		$	(390	)	$	4		$	(53	)	$	600		$	203		$	5		$	32		$	401
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	(8	)	$	116		$	6		$	(24	)	$	(61	)	$	(292	)	$	(29	)	$	(4	)	$	(288	)

	Reinsurance Recoverable
Assets	for U.S. GMWB			Separate Accounts
Fair value as of January 1, 2010	$	347		$	962
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(102	)		142
Purchases, issuances, and settlements		35			314
Transfers into Level 3 [4]		—			14
Transfers out of Level 3 [4]		—			(185	)
Fair value as of December 31, 2010	$	280		$	1,247
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	(102	)	$	20

	Other Policyholder Funds and Benefits Payable
																Total Other
	U.S.			International												Policyholder
	Guaranteed			Guaranteed			International			Equity						Funds and
	Withdrawal			Living			Other Living			Linked			Institutional			Benefits			Other			Consumer
Liabilities	Benefits			Benefits			Benefits			Notes			Notes			Payable			Liabilities			Notes
Fair value as of January 1, 2010	$	(1,957	)	$	(45	)	$	2		$	(10	)	$	(2	)	$	(2,012	)	$	—		$	(5	)
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		486			22			4			—			2			514			(26	)		—
Included in OCI [3]		—			(4	)		—			—			—			(4	)		—			—
Purchases, issuances, and settlements		(140	)		(9	)		(3	)		1			—			(151	)		—			—
Transfers into Level 3 [4]		—			—			—			—			—			—			(11	)		—
Fair value as of December 31, 2010	$	(1,611	)	$	(36	)	$	3		$	(9	)	$	—		$	(1,653	)	$	(37	)	$	(5	)
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	486		$	22		$	4		$	—		$	2		$	514		$	—		$	—

[1]	The Company classifies gains and losses on GMWB reinsurance derivatives and Guaranteed Living Benefit embedded derivatives as unrealized gains (losses) for purposes of disclosure in this table because it is impracticable to track on a contract-by-contract basis the realized gains (losses) for these derivatives and embedded derivatives.
[2]	All amounts in these rows are reported in net realized capital gains/losses. The realized/unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on net income for the Company. All amounts are before income taxes and amortization DAC.
[3]	All amounts are before income taxes and amortization of DAC.
[4]	Transfers in and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.
[5]	Derivative instruments are reported in this table on a net basis for asset/(liability) positions and reported in the Consolidated Balance Sheet in other investments and other liabilities.
[6]	Includes both market and non-market impacts in deriving realized and unrealized gains (losses).
[7]	Amounts presented are for Level 3 only and therefore may not agree to other disclosures included herein.

Fair value of assets and liabilities accounted for using the fair value option

	For the years ended December 31,
	2011			2010
Assets
Fixed maturities, FVO
ABS	$	—		$	(5	)
Corporate		10			(7	)
CRE CDOs		(33	)		83
Foreign government		45			—
RMBS		—			(1	)
Other liabilities
Credit-linked notes		28			(26	)
Total realized capital gains	$	50		$	44

Fair value of assets and liabilities accounted for using the fair value option

	As of December 31,
	2011		2010
Assets
Fixed maturities, FVO
ABS	$	65	$	65
CRE CDOs		225		270
Corporate		272		250
Foreign government		766		64
Total fixed maturities, FVO	$	1,328	$	649
Other liabilities
Credit-linked notes [1]	$	9	$	37

[1] As of December 31, 2011 and 2010, the outstanding principal balance of the notes was $243.

Financial Instruments Not Carried at Fair Value

	December 31, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Assets
Policy loans	$	2,001	$	2,153	$	2,181	$	2,294
Mortgage loans		5,728		5,977		4,489		4,524
Liabilities
Other policyholder funds and benefits payable [1]	$	10,343	$	11,238	$	11,155	$	11,383
Senior notes [2]		4,481		4,623		4,880		5,072
Junior subordinated debentures [2]		1,735		2,430		1,727		2,596
Consumer notes [3]		310		305		377		392

[1]	Excludes guarantees on variable annuities, group accident and health and universal life insurance contracts, including corporate owned life insurance.
[2]	Included in long-term debt in the Consolidated Balance Sheets, except for current maturities, which are included in short-term debt.
[3]	Excludes amounts carried at fair value and included in disclosures above.

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Employee Benefit Plans (Details)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Pension Benefits [Member]
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost Other Postretirement Pension Plans
Discount rate	4.75%	5.50%	6.25%
Rate of increase in compensation levels	3.75%	4.00%	4.25%
Other Postretirement Benefits [Member]
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost Other Postretirement Pension Plans
Discount rate	4.50%	5.25%	6.25%

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Goodwill and Other Intangible Assets (Details Textual 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 Y	Dec. 31, 2010	Dec. 31, 2009 Acquisition
Goodwill and Other Intangible Assets (Textual) [Abstract]
Number of acquisitions completed			2
Capitalized Cost to extend or renew the term of recognized intangible asset	$ 0	$ 0	$ 0
Weighted average amortization period	13
Estimated future net amortization expense for 2012	6
Estimated future net amortization expense for 2013	6
Estimated future net amortization expense for 2014	6
Estimated future net amortization expense for 2015	6
Estimated future net amortization expense for 2016	$ 6

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Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Discontinued operations in Condensed Consolidated Statements of Operations

	For the years ended December 31,
	2011			2010			2009
Revenues
Fee income and other	$	—		$	36		$	29
Net investment income		17			28			14
Net realized capital gains (losses)		(6	)		(5	)		(6	)
Other revenues		48			213			231
Total revenues		59			272			268
Benefits, losses and expenses
Amortization of deferred policy acquisition costs and present value of future profits		—			17			10
Insurance operating and other expenses		54			256			265
Goodwill Impairment		—			153			—
Total benefits, losses and expenses		54			426			275
Income (loss) before income taxes		5			(154	)		(7	)
Income tax expense (benefit)		1			(53	)		(3	)
Income (loss) from operations of discontinued operations, net of tax		4			(101	)		(4	)
Net realized capital gain on disposal, net of tax		82			37			—
Income (loss) from discontinued operations, net of tax	$	86		$	(64	)	$	(4	)

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Employee Benefit Plans (Details 10)	12 Months Ended
	Dec. 31, 2011
Pension Benefits [Member]
Target allocation by asset category
Equity securities, Minimum	10.00%
Equity securities, Maximum	32.00%
Fixed income securities, Minimum	50.00%
Fixed income securities, Maximum	70.00%
Alternative assets, Minimum	10.00%
Alternative assets, Maximum	25.00%
Other Postretirement Benefits [Member]
Target allocation by asset category
Equity securities, Minimum	15.00%
Equity securities, Maximum	35.00%
Fixed income securities, Minimum	55.00%
Fixed income securities, Maximum	85.00%

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Income Tax (Tables)

12 Months Ended

Dec. 31, 2011

Income Tax [Abstract]

Provision benefit for income taxes

	For the years ended December 31,
	2011			2010		2009
Income Tax Expense (Benefit)
Current - U.S. Federal	$	(495	)	$	106	$	509
- International		22			69		—
Total current		(473	)		175		509
Deferred - U.S. Federal Excluding NOL Carryforward		900			133		(1,584	)
- Net Operating Loss Carryforward		(652	)		1		712
- International		(121	)		303		(475	)
Total deferred		127			437		(1,347	)
Total income tax expense (benefit)	$	(346	)	$	612	$	(838	)

Components of deferred tax assets and liabilities

Deferred Tax Assets	2011			2010
Tax discount on loss reserves	$	632		$	647
Tax basis deferred policy acquisition costs		528			579
Unearned premium reserve and other underwriting related reserves		421			401
Investment-related items		1,159			1,454
Insurance product derivatives		913			1,792
Employee benefits		523			555
Net unrealized losses on investments		—			4
Minimum tax credit		868			1,183
Net operating loss carryover		747			88
Other		149			63
Total Deferred Tax Assets		5,940			6,766
Valuation Allowance		(95	)		(173	)
Deferred Tax Assets, Net of Valuation Allowance		5,845			6,593
Deferred Tax Liabilities
Financial statement deferred policy acquisition costs and reserves		(3,094	)		(2,721	)
Net unrealized gains on investments		(1,210	)		—
Other depreciable & amortizable assets		(104	)		(42	)
Other		(39	)		(105	)
Total Deferred Tax Liabilities		(4,447	)		(2,868	)
Net Deferred Tax Asset	$	1,398		$	3,725

Reconciliation amount of unrecognized tax benefits

	For the years ended December 31,
	2011		2010		2009
Balance, at January 1	$	48	$	48		91
Additions based on tax positions related to the current year		—		—		—
Additions for tax positions for prior years		—		—		—
Reductions for tax positions for prior years		—		—		(35	)
Settlements		—		—		(8	)
Balance, at December 31	$	48	$	48		48

Reconciliation of tax provision at Us federal statutory rate to provision for income taxes

	For the years ended December 31,
	2011			2010			2009
Tax provision at U.S. Federal statutory rate	$	81			825			(602	)
Tax-exempt interest		(148	)		(152	)		(149	)
Dividends received deduction		(206	)		(154	)		(188	)
Nondeductible costs associated with warrants		—			—			78
Valuation allowance		(78	)		87			30
Goodwill		—			—			12
Other		5			6			(19	)
Provision for income taxes	$	(346	)		612			(838	)

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Supplementary Insurance Information (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Supplementary Insurance Information
Deferred Policy Acquisition Costs and Present Value of Future Profits	$ 8,744	$ 9,857
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	41,016	39,598
Unearned Premium	5,222	5,176
Other Policyholder Funds and Benefits Payable	76,073	77,343
Earned Premium Fee income and Other	19,091	19,070	19,232
Net Investment Income	2,913	3,590	7,205
Benefits, Losses and Loss Adjustment Expenses	13,266	12,251	17,019
Amortization of Deferred Policy Acquisition Costs and Present Value of Future Profits	3,427	2,527	4,257
Insurance Operating costs and Other Expenses	4,936	4,915	4,878
Net Written Premiums	9,852	9,685	9,711
Property & Casualty Commercial [Member]
Supplementary Insurance Information
Deferred Policy Acquisition Costs and Present Value of Future Profits	611	603
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	15,438	14,727
Unearned Premium	3,235	3,126
Earned Premium Fee income and Other	6,224	5,840	6,006
Net Investment Income	910	935	755
Benefits, Losses and Loss Adjustment Expenses	4,584	3,370	3,266
Amortization of Deferred Policy Acquisition Costs and Present Value of Future Profits	1,356	1,353	1,393
Insurance Operating costs and Other Expenses	726	665	645
Net Written Premiums	6,176	5,796	5,715
Group Benefits [Member]
Supplementary Insurance Information
Deferred Policy Acquisition Costs and Present Value of Future Profits	60	67
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	6,796	6,640
Unearned Premium	76	76
Other Policyholder Funds and Benefits Payable	266	320
Earned Premium Fee income and Other	4,147	4,278	4,350
Net Investment Income	411	429	403
Benefits, Losses and Loss Adjustment Expenses	3,306	3,331	3,196
Amortization of Deferred Policy Acquisition Costs and Present Value of Future Profits	55	61	61
Insurance Operating costs and Other Expenses	1,104	1,111	1,120
Consumer Markets [Member]
Supplementary Insurance Information
Deferred Policy Acquisition Costs and Present Value of Future Profits	650	660
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	2,060	2,177
Unearned Premium	1,803	1,875
Earned Premium Fee income and Other	3,903	4,119	4,113
Net Investment Income	187	187	178
Benefits, Losses and Loss Adjustment Expenses	2,886	2,951	2,902
Amortization of Deferred Policy Acquisition Costs and Present Value of Future Profits	639	667	674
Insurance Operating costs and Other Expenses	578	493	475
Net Written Premiums	3,675	3,886	3,995
Individual Annuity [Member]
Supplementary Insurance Information
Deferred Policy Acquisition Costs and Present Value of Future Profits	2,802	3,216
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	2,538	2,270
Unearned Premium	29	22
Other Policyholder Funds and Benefits Payable	17,017	16,871
Earned Premium Fee income and Other	1,660	1,716	1,465
Net Investment Income	768	814	771
Benefits, Losses and Loss Adjustment Expenses	1,106	1,054	1,310
Amortization of Deferred Policy Acquisition Costs and Present Value of Future Profits	483	(56)	1,339
Insurance Operating costs and Other Expenses	536	542	505
Individual Life [Member]
Supplementary Insurance Information
Deferred Policy Acquisition Costs and Present Value of Future Profits	2,558	2,627
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	1,061	898
Unearned Premium	1	1
Other Policyholder Funds and Benefits Payable	7,413	6,765
Earned Premium Fee income and Other	899	856	940
Net Investment Income	456	400	335
Benefits, Losses and Loss Adjustment Expenses	816	644	640
Amortization of Deferred Policy Acquisition Costs and Present Value of Future Profits	221	119	314
Insurance Operating costs and Other Expenses	182	181	188
Retirement Plans [Member]
Supplementary Insurance Information
Deferred Policy Acquisition Costs and Present Value of Future Profits	714	842
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	436	458
Unearned Premium	2	3
Other Policyholder Funds and Benefits Payable	7,959	6,841
Earned Premium Fee income and Other	380	359	324
Net Investment Income	396	364	315
Benefits, Losses and Loss Adjustment Expenses	308	278	269
Amortization of Deferred Policy Acquisition Costs and Present Value of Future Profits	134	27	56
Insurance Operating costs and Other Expenses	354	340	346
Mutual Funds [Member]
Supplementary Insurance Information
Deferred Policy Acquisition Costs and Present Value of Future Profits	27	43
Other Policyholder Funds and Benefits Payable	4	4
Earned Premium Fee income and Other	649	664	518
Net Investment Income	(3)	(8)	(21)
Amortization of Deferred Policy Acquisition Costs and Present Value of Future Profits	47	51	50
Insurance Operating costs and Other Expenses	448	458	395
Life Other Operations [Member]
Supplementary Insurance Information
Deferred Policy Acquisition Costs and Present Value of Future Profits	1,322	1,799
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	8,635	8,307
Unearned Premium	74	72
Other Policyholder Funds and Benefits Payable	43,414	46,542
Earned Premium Fee income and Other	1,020	1,049	1,293
Net Investment Income	(386)	225	4,135
Benefits, Losses and Loss Adjustment Expenses	(54)	374	5,042
Amortization of Deferred Policy Acquisition Costs and Present Value of Future Profits	492	305	370
Insurance Operating costs and Other Expenses	274	262	350
Property & Casualty Other Operations [Member]
Supplementary Insurance Information
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	4,053	4,122
Unearned Premium	1	1
Earned Premium Fee income and Other		1
Net Investment Income	151	163	161
Benefits, Losses and Loss Adjustment Expenses	317	251	241
Insurance Operating costs and Other Expenses	24	30	23
Net Written Premiums	1	2	4
Corporate [Member]
Supplementary Insurance Information
Future Policy benefits, Unpaid Losses and Loss Adjustment expenses	(1)	(1)
Unearned Premium	1
Earned Premium Fee income and Other	209	188	223
Net Investment Income	23	81	173
Benefits, Losses and Loss Adjustment Expenses	(3)	(2)	153
Insurance Operating costs and Other Expenses	710	833	831
Net Written Premiums		$ 1	$ (3)

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Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (Details 3) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Prior accident years reserve development
Total prior accident years development	$ 367	$ (196)	$ (186)
Auto liability [Member]
Prior accident years reserve development
Total prior accident years development	(97)	(169)	(124)
Professional Liability [Member]
Prior accident years reserve development
Total prior accident years development	29	(88)	(127)
Workers' Compensation [Member]
Prior accident years reserve development
Total prior accident years development	171	(70)	(92)
General liability [Member]
Prior accident years reserve development
Total prior accident years development	(40)	(108)	(112)
Package Business [Member]
Prior accident years reserve development
Total prior accident years development	(76)	(19)	38
Commercial property [Member]
Prior accident years reserve development
Total prior accident years development	(4)	(16)
Fidelity and Surety [Member]
Prior accident years reserve development
Total prior accident years development	(7)	(5)	28
Homeowners [Member]
Prior accident years reserve development
Total prior accident years development	(1)	23	18
Net environmental reserves [Member]
Prior accident years reserve development
Total prior accident years development	26	67	75
Net asbestos reserves [Member]
Prior accident years reserve development
Total prior accident years development	294	189	138
All other non-A&E [Member]
Prior accident years reserve development
Total prior accident years development		11	35
Uncollectible reinsurance [Member]
Prior accident years reserve development
Total prior accident years development		(30)	(40)
Change in workers compensation discount, including accretion [Member]
Prior accident years reserve development
Total prior accident years development	38	26	24
Catastrophes [Member]
Prior accident years reserve development
Total prior accident years development	37	11	(23)
Other reserve re-estimates [Member]
Prior accident years reserve development
Total prior accident years development	$ (3)	$ (18)	$ (24)

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Fair Value Measurements (Details 2) (USD $) In Millions, unless otherwise specified							12 Months Ended
	Dec. 31, 2011 Equity Securities [Member] Available-for-sale Securities [Member]	Dec. 31, 2010 Equity Securities [Member] Available-for-sale Securities [Member]	Dec. 31, 2009 Equity Securities [Member] Available-for-sale Securities [Member]	Dec. 31, 2011 Fixed Maturities, FVO [Member]	Dec. 31, 2010 Fixed Maturities, FVO [Member]	Dec. 31, 2009 Fixed Maturities, FVO [Member]	Dec. 31, 2011 Freestanding Derivatives [Member]	Dec. 31, 2010 Freestanding Derivatives [Member]	Dec. 31, 2011 Freestanding Derivatives [Member] Hedging Derivatives [Member] International [Member]	Dec. 31, 2010 Freestanding Derivatives [Member] Hedging Derivatives [Member] International [Member]	Dec. 31, 2011 Freestanding Derivatives [Member] Hedging Derivatives [Member] Guaranteed Minimum Withdrawal Benefit [Member] U.S. [Member]	Dec. 31, 2010 Freestanding Derivatives [Member] Hedging Derivatives [Member] Guaranteed Minimum Withdrawal Benefit [Member] U.S. [Member]	Dec. 31, 2011 Freestanding Derivatives [Member] US Macro Hedge Program [Member]	Dec. 31, 2010 Freestanding Derivatives [Member] US Macro Hedge Program [Member]	Dec. 31, 2011 Freestanding Derivatives [Member] Credit derivative [Member]	Dec. 31, 2010 Freestanding Derivatives [Member] Credit derivative [Member]	Dec. 31, 2011 Freestanding Derivatives [Member] Equity derivative [Member]	Dec. 31, 2010 Freestanding Derivatives [Member] Equity derivative [Member]	Dec. 31, 2011 Freestanding Derivatives [Member] Interest rate derivatives [Member]	Dec. 31, 2010 Freestanding Derivatives [Member] Interest rate derivatives [Member]	Dec. 31, 2011 Freestanding Derivatives [Member] Other Derivatives Contracts [Member]	Dec. 31, 2010 Freestanding Derivatives [Member] Other Derivatives Contracts [Member]
Roll Forward of Financial Instruments (Assets Netted Against Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	$ 93	$ 154	$ 58	$ 495	$ 522	$ 0
Fair Value of Financial Instruments (Assets Netted Against Liabilities), Measured at Fair Value on a Recurring Basis, Beginning Balance							401	337	5	12	600	236	203	278	(390)	(228)	4	(2)	(53)	5	32	36
Total realized/unrealized gains (losses) on Financial Instruments (Assets Netted Against Liabilities) Measured at Fair Value, Included in Net Income							(56)	(293)	(3)	(29)	279	(74)	(128)	(312)	(170)	124	(9)	6	(21)	(4)	(4)	(4)
Total realized/unrealized gains (losses) on Financial Instruments (Assets Netted Against Liabilities) Measured at Fair Value, Included in OCI								1												1
Purchases of Financial Instruments (Assets Netted Against Liabilities) Measured at Fair Value							513		33		23		347		1		45		64
Settlements of Financial Instruments (Assets Netted Against Liabilities) Measured at Fair Value							(134)				(19)		(65)		(2)				(48)
Purchases, issuances and settlements of Financial Instruments (Assets Netted Against Liabilities) Measured at Fair Value								661		22		442		237		4				(44)
Transfers into Level 3 of Financial Instruments (Assets Netted Against Liabilities) Measured at Fair Value								(290)								(290)
Transfers out of Level 3 of Financial Instruments (Assets Netted Against Liabilities) Measured at Fair Value								(15)				(4)								(11)
Fair Value of Financial Instruments (Assets Netted Against Liabilities), Measured at Fair Value on a Recurring Basis, Ending Balance							724	401	35	5	883	600	357	203	(561)	(390)	40	4	(58)	(53)	28	32
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	93	154	58	495	522	0
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets Netted Against Liabilities) still held at a reporting date							$ (28)	$ (288)	$ (5)	$ (29)	$ 278	$ (61)	$ (107)	$ (292)	$ (163)	$ 116	$ (8)	$ 6	$ (19)	$ (24)	$ (4)	$ (4)

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Commitments and Contingencies (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Commitments and Contingencies (Textual) [Abstract]
Amount paid in connection with Fair Credit Reporting Act class action lawsuit	$ 84,300,000
Company's self insured retention	10,000,000
Award payment to the company resulted from the excess insurers arbitration	30,100,000
Reduced value of insurance recoverable	45,500,000
Award for fair credit reporting act settlement	50,000,000
Interest received on fair credit reporting act settlement	3,000,000
Fair value of all derivative instruments with credit-risk-related contingent features	725,000,000
Collateral posted by insurance operating entities	716,000,000
Asbestos Reserves, Net	1,900,000,000	1,800,000,000
Environmental Reserves, Net	328,000,000	339,000,000
Total rental expenses on operating leases	122,000,000	132,000,000	154,000,000
Sublease rental income	13,000,000	4,000,000	2,000,000
Expected future minimum sublease rental income	7,000,000
Expected future minimum sublease rental income, In year two	3,000,000
Total unfunded commitments	1,400,000,000
Commitments to fund mortgage loans	553,000,000
Commitments to fund limited partnership and other alternative investments	700,000,000
Commitment period of capital commitments	On average two to four years
Minimum percentage of premiums written per year	1.00%
Maximum percentage of premiums written per year	2.00%
Liabilities for guaranty fund and other insurance-related assessments	145,000,000	118,000,000
Premium tax offsets	31,000,000	14,000,000
Expected assessment related to executive insurance plan	22,000,000
Maximum [Member]
Guarantor Obligations [Line Items]
Commitment period of funding obligations related to private placement securities and mortgage loans	1 year
Minimum [Member]
Guarantor Obligations [Line Items]
Commitment period of funding obligations related to private placement securities and mortgage loans	1 month
Single Notch Downgrade [Member]
Guarantor Obligations [Line Items]
Additional assets to be posted as collateral	37,000,000
Double Notch Downgrade [Member]
Guarantor Obligations [Line Items]
Additional assets to be posted as collateral	$ 48,000,000

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Restructuring Severance and Other Costs (Tables)

12 Months Ended

Dec. 31, 2011

Restructuring, Severance and Other Costs [Abstract]

Pre-tax charges incurred in connection with these restructuring activities

	2011		2010		2009
Severance benefits	$	17	$	25	$	52
Asset impairment charges		—		1		53
Other contract termination charges		8		—		34
Total restructuring, severance and other costs	$	25	$	26	$	139

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Stock Compensation Plans (Details Textual) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 Installment Y	Dec. 31, 2010	Dec. 31, 2009
Stock Compensation Plans (Textual) [Abstract]
Total compensation cost related to non-vested awards not yet recognized	$ 60
Weighted average period of compensation cost recognized (in years)	1.5
Condition for Options to become exercisable	over a three year period commencing one year from the date of grant, while certain other options become exercisable at the later of three years from the date of grant or upon specified market appreciation of the Company’s common shares.
Period commencing one year from date of grant	3 years
Period commencing from date of grant	3 years
Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Weighted Average Grant Date Fair Value	$ 10.76	$ 0.00	$ 3.06
Share Based Compensation Arrangement By Share Based Payment Award Options Exercises In Period Total Intrinsic Value	2	1	0
Restricted shares or units granted	3,400,000
Weighted average grant date fair value	$ 27.60	$ 35.83
Restricted shares or units outstanding	4,164,000	1,889,000
Share Based Compensation Arrangement by Share Based Payment Award Vesting Period Maximum	2 years
Number of Equal Installment of Deferred Unit Credited are Paid to Employee	3
Share based compensation arrangement by share based payment award discount from fair value	15% discount off of the beginning stock price plus the value of six month European call and put options
Weighted Average Grant Date fair value for restricted shares or units	$ 28.22
Expected annualized spot volatility minimum	35.80%		57.80%
Expected annualized spot volatility maximum	47.10%		57.80%
Risk-free spot rate minimum	0.10%		0.30%
Risk-free spot rate maximum	3.50%		4.20%
ISOP 2005 [Member]
Stock Compensation Plans (Textual) [Abstract]
Shares available for future issuance	14,652,180
ISOP 2010 [Member]
Stock Compensation Plans (Textual) [Abstract]
Maximum limit of shares awarded	18,000,000
Duration of the Incentive Stock Option Plan	10 years
Option's maximum terms in years	10 years
Maximum Limit of Shares Awarded to any individual employee under 2010 Stock Option Plan	2,000,000
Deferred Stock Unit Plan [Member]
Stock Compensation Plans (Textual) [Abstract]
Deferred Units credited	on or after January 1, 2010 (and any credited to senior executive officers hired on or after October 1, 2009) are paid in three equal installments after the first, second and third anniversaries of their grant date
Number of Award Types Under Deferred Stock Unit Plan	2
Restricted stock vesting period	3
Restricted Stock Unit Awards [Member]
Stock Compensation Plans (Textual) [Abstract]
Graded vesting attribution method	views one three-year grant with annual graded vesting as three separate sub-grants, each representing one third of the total number of awards granted. The first sub-grant vests over one year, the second sub-grant vests over two years and the third sub-grant vests over three years
Restricted shares or units granted	0	2,983
Restricted shares or units outstanding	5,319	6,812
Deferred Stock Unit payment criteria	Deferred Units credited to employees prior to January 1, 2010 (other than senior executive officers hired on or after October 1, 2009) are not paid until after two years from their grant date. Deferred Units credited on or after January 1, 2010 (and any credited to senior executive officers hired on or after October 1, 2009) are paid in three equal installments after the first, second and third anniversaries of their grant date
Performance Based Share Awards [Member]
Stock Compensation Plans (Textual) [Abstract]
Performance shares payable criteria	within a range of 0% to 200% of the number of shares initially granted based upon the attainment of specific performance goals achieved over a specified period, generally three years
Performance goals achievement period.	3 years
Fair value of shares vested based on estimated performance factors	20	13	8
Employee Stock [Member]
Stock Compensation Plans (Textual) [Abstract]
Discount rate on purchase of common stock under Employee Stock Purchase Plan	5.00%	5.00%	15.00%
Shares available for sale to eligible employees	15,400,000
Shares available for future issuance	6,472,280
Number of shares sold	768,380	729,598	2,557,893
Weighted average per share fair value of discount	$ 1.03	$ 1.24	$ 5.99
Net intrinsic value of discounts at purchase			$ 5
Restricted stock units, restricted stock and performance shares [Member] | ISOP 2010 [Member]
Stock Compensation Plans (Textual) [Abstract]
Maximum Limit of Shares Awarded to any individual employee under 2010 Stock Option Plan	500,000

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Investments and Derivative Instruments (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Securities available-for-sale and other	$ 4,272	$ 4,364	$ 4,017
Equity securities, trading	(1,359)	(774)	3,188
Net investment income	2,913	3,590	7,205
Fixed Maturities [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Securities available-for-sale and other	3,396	3,489	3,617
Equity Securities, AFS [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Securities available-for-sale and other	36	53	93
Mortgage Loans [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Securities available-for-sale and other	281	260	307
Policy Loans [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Securities available-for-sale and other	131	132	139
Limited Partnerships and Other Alternative Investments [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Securities available-for-sale and other	243	216	(341)
Other Investments [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Securities available-for-sale and other	301	329	314
Investment Expenses [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Securities available-for-sale and other	$ (116)	$ (115)	$ (112)

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Employee Benefit Plans (Details 13) (Level 3 [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets - beginning of year	$ 657	$ 547
Actual return on plan assets
Relating to assets still held at the reporting date	24	29
Relating to assets sold during the period		5
Purchase	239	279
Sales	(136)	(193)
Transfers into Level 3	10	4
Transfers out of Level 3	(14)	(14)
Defined Benefit Plan, Fair Value of Plan Assets	780	657
Corporate [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets - beginning of year	3	12
Actual return on plan assets
Relating to assets still held at the reporting date	1	(1)
Relating to assets sold during the period		1
Purchase	2	6
Sales	(1)	(12)
Transfers into Level 3	1	2
Transfers out of Level 3	(3)	(5)
Defined Benefit Plan, Fair Value of Plan Assets	3	3
RMBS [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets - beginning of year	9	24
Actual return on plan assets
Purchase	10	62
Sales	(9)	(77)
Transfers into Level 3	1
Defined Benefit Plan, Fair Value of Plan Assets	11	9
Foreign govt./govt. agencies [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets - beginning of year	2	2
Actual return on plan assets
Purchase	3	2
Sales	(2)
Transfers into Level 3	6
Transfers out of Level 3	(6)	(2)
Defined Benefit Plan, Fair Value of Plan Assets	3	2
Other fixed income [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets - beginning of year	8	8
Actual return on plan assets
Relating to assets still held at the reporting date	2	1
Purchase	1	9
Sales	(4)	(5)
Transfers into Level 3	2	2
Transfers out of Level 3	(5)	(7)
Defined Benefit Plan, Fair Value of Plan Assets	4	8
Hedge Funds [Member]
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets - beginning of year	635	501
Actual return on plan assets
Relating to assets still held at the reporting date	21	29
Relating to assets sold during the period		4
Purchase	223	200
Sales	(120)	(99)
Defined Benefit Plan, Fair Value of Plan Assets	$ 759	$ 635

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Investments and Derivative Instruments (Details Textual 4) (USD $)	3 Months Ended							12 Months Ended
	Dec. 31, 2011 Acquisition	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011 Y Acquisition	Dec. 31, 2010	Dec. 31, 2009
Participating Mortgage Loans [Line Items]
Number of company's largest exposures by sector	3							3
Company's exposures in commercial real estate sector, percentage of total invested assets	10.00%			10.00%				10.00%	10.00%
Company's exposures in basic industry sector, percentage of total invested assets	7.00%			9.00%				7.00%	9.00%
Company's Exposures in Municipal Investments Sector Percentage of Invested Assets	10.00%			9.00%				10.00%	9.00%
Number of years to maturity for securities concentrated in the financial services sector								10
Carrying amount of equity method investment	$ 2,532,000,000			$ 1,918,000,000				$ 2,532,000,000	$ 1,918,000,000
Outstanding commitments to fund limited partnership and other alternative investments	700,000,000							700,000,000
Aggregate investment loss percentage of Company's pre-tax consolidated net income, minimum.								10.00%
Notional amount of series of one month forward contracts								0
Variable rate securities								0
Decline in interest rate swaps qualify for cash flow hedge accounting								0
Increase in notional amount related to credit derivatives in offsetting positions								0
Net increase in notional amount								0
Increase in notional amount related to standard market basket of corporate issuer to manage credit spread duration								0
Related Party Transaction [Line Items]
Total assets	304,064,000,000			318,346,000,000				304,064,000,000	318,346,000,000
Total liabilities	281,154,000,000			298,035,000,000				281,154,000,000	298,035,000,000
Net investment income								2,913,000,000	3,590,000,000	7,205,000,000
Net income (loss)	127,000,000	24,000,000	511,000,000	619,000,000	666,000,000	76,000,000	319,000,000	662,000,000	1,680,000,000	(887,000,000)
Concentration Risk [Line Items]
Company's percentage of largest exposure to total invested assets	10.00%			10.00%				10.00%	10.00%
Company's percentage of largest exposure to total invested assets	10.00%			10.00%				10.00%	10.00%
Government of Japan, Government of United Kingdom and AT&T Inc [Member]
Concentration Risk [Line Items]
Company's percentage of largest exposure to total invested assets	8.00%							8.00%
Company's percentage of largest exposure to total invested assets	8.00%							8.00%
J P Morgan Chase & Co.,Wells Fargo & Co. and AT&T Inc [Member]
Concentration Risk [Line Items]
Company's percentage of largest exposure to total invested assets				5.00%					5.00%
Company's percentage of largest exposure to total invested assets				5.00%					5.00%
Limited Partner [Member]
Related Party Transaction [Line Items]
Total assets	91,300,000,000			93,900,000,000				91,300,000,000	93,900,000,000
Total liabilities	20,600,000,000			22,300,000,000				20,600,000,000	22,300,000,000
Net investment income								1,300,000,000	857,000,000,000	(688,000,000,000)
Net income (loss)								9,100,000,000	10,300,000,000	(9,100,000,000)
Consolidated VIEs [Member]
Participating Mortgage Loans [Line Items]
Notional amount of credit default swap	0							0
Fair value of credit default swap	0							0
Equity Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Net unrealized gain (loss) on equity security trading included in net investment income								$ (1,300,000,000)	$ (68,000,000)	$ 3,400,000,000

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Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2011

Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses [Abstract]

Life Insurance Products Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

	For the years ended December 31,
	2011		2010		2009
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	6,388	$	6,131	$	6,066
Reinsurance recoverables		209		213		231
Beginning liabilities for unpaid losses and loss adjustment expenses, net		6,179		5,918		5,835
Add provision for unpaid losses and loss adjustment expenses
Current year		3,196		3,260		3,244
Prior years		98		70		(88	)
Total provision for unpaid losses and loss adjustment expenses		3,294		3,330		3,156
Less payments
Current year		1,524		1,552		1,580
Prior years		1,635		1,517		1,493
Total payments		3,159		3,069		3,073
Ending liabilities for unpaid losses and loss adjustment expenses, net		6,314		6,179		5,918
Reinsurance recoverables		233		209		213
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	6,547	$	6,388	$	6,131

Life Insurance Products Liability for future policy benefits and unpaid losses and loss adjustment expenses

	2011		2010
Group Life Term, Disability and Accident unpaid losses and loss adjustment expenses	$	6,547	$	6,388
Group Life Other unpaid losses and loss adjustment expenses		213		216
Individual Life unpaid losses and loss adjustment expenses		134		110
Future Policy Benefits		12,572		11,859
Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses	$	19,466	$	18,573

Property and Casualty Insurance Products Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

	For the years ended December 31,
	2011		2010			2009
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	21,025	$	21,651		$	21,933
Reinsurance and other recoverables		3,077		3,441			3,586
Beginning liabilities for unpaid losses and loss adjustment expenses, net		17,948		18,210			18,347
Add provision for unpaid losses and loss adjustment expenses
Current year		7,420		6,768			6,596
Prior years		367		(196	)		(186	)
Total provision for unpaid losses and loss adjustment expenses		7,787		6,572			6,410
Less payments
Current year		3,181		2,952			2,776
Prior years		4,037		3,882			3,771
Total payments		7,218		6,834			6,547
Ending liabilities for unpaid losses and loss adjustment expenses, net		18,517		17,948			18,210
Reinsurance and other recoverables		3,033		3,077			3,441
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	21,550	$	21,025		$	21,651

Property and Casualty Insurance Products Prior Accident Years Reserve Development

	For the years ended December 31,
	2011			2010			2009
Auto liability	$	(97	)	$	(169	)	$	(124	)
Professional liability		29			(88	)		(127	)
Workers’ compensation		171			(70	)		(92	)
General liability		(40	)		(108	)		(112	)
Package business		(76	)		(19	)		38
Commercial property		(4	)		(16	)		—
Fidelity and surety		(7	)		(5	)		28
Homeowners		(1	)		23			18
Net environmental reserves		26			67			75
Net asbestos reserves		294			189			138
All other non-A&E		—			11			35
Uncollectible reinsurance		—			(30	)		(40	)
Change in workers’ compensation discount, including accretion		38			26			24
Catastrophes		37			11			(23	)
Other reserve re-estimates, net		(3	)		(18	)		(24	)
Total prior accident years development	$	367		$	(196	)	$	(186	)

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Schedule of Reinsurance

12 Months Ended

Dec. 31, 2011

Reinsurance [ Abstract]

Reinsurance

SCHEDULE IV

REINSURANCE

(In millions)

									Percentage
					Assumed				of Amount
	Gross		Ceded to Other		From Other		Net		Assumed
	Amount		Companies		Companies		Amount		to Net
For the year ended December 31, 2011
Life insurance in-force	$	992,921	$	139,590	$	47,365	$	900,696		5	%
Insurance revenues
Property and casualty insurance	$	10,337		688		225		9,874		2	%
Life insurance and annuities		7,220		463		71		6,828		1	%
Accident and health insurance		2,122		61		63		2,124		3	%
Total insurance revenues	$	19,679	$	1,212	$	359	$	18,826		2	%
For the year ended December 31, 2010
Life insurance in-force	$	987,104	$	135,269	$	43,999	$	895,834		5	%
Insurance revenues
Property and casualty insurance	$	10,105		668		256		9,693		3	%
Life insurance and annuities		7,261		518		128		6,871		2	%
Accident and health insurance		2,221		58		64		2,227		3	%
Total insurance revenues	$	19,587	$	1,244	$	448	$	18,791		2	%
For the year ended December 31, 2009
Life insurance in-force	$	970,455	$	128,144	$	49,273	$	891,584		6	%
Insurance revenues
Property and casualty insurance	$	10,386	$	778	$	253	$	9,861		3	%
Life insurance and annuities		7,216		433		91		6,874		1	%
Accident and health insurance		2,203		51		71		2,223		3	%
Total insurance revenues	$	19,805	$	1,262	$	415	$	18,958		2	%

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Reinsurance (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Reinsurance Premiums for Insurance Companies, by Product Segment, Net Amount
Gross Amount	$ 19,679	$ 19,587	$ 19,805
Ceded to Other Companies	1,212	1,244	1,262
Assumed from Other Companies	359	448	415
Net Amount	18,826	18,791	18,958
Percentage of Amount Assumed to Net	2.00%	2.00%	2.00%
Life Insurance in Force [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment, Net Amount
Gross Amount	992,921	987,104	970,455
Ceded to Other Companies	139,590	135,269	128,144
Assumed from Other Companies	47,365	43,999	49,273
Net Amount	900,696	895,834	891,584
Percentage of Amount Assumed to Net	5.00%	5.00%	6.00%
Property, Liability and Casualty Insurance Segment [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment, Net Amount
Gross Amount	10,337	10,105	10,386
Ceded to Other Companies	688	668	778
Assumed from Other Companies	225	256	253
Net Amount	9,874	9,693	9,861
Percentage of Amount Assumed to Net	2.00%	3.00%	3.00%
Life Insurance and Annuities [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment, Net Amount
Gross Amount	7,220	7,261	7,216
Ceded to Other Companies	463	518	433
Assumed from Other Companies	71	128	91
Net Amount	6,828	6,871	6,874
Percentage of Amount Assumed to Net	1.00%	2.00%	1.00%
Accident and Health Insurance Segment [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment, Net Amount
Gross Amount	2,122	2,221	2,203
Ceded to Other Companies	61	58	51
Assumed from Other Companies	63	64	71
Net Amount	$ 2,124	$ 2,227	$ 2,223
Percentage of Amount Assumed to Net	3.00%	3.00%	3.00%

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Investments and Derivative Instruments (Details 2) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Net Realized Capital Gains (Losses)
Gross gains on sales	$ 693	$ 836	$ 1,056
Gross losses on sales	(384)	(522)	(1,397)
Net OTTI losses recognized in earnings	(174)	(434)	(1,508)
Valuation allowances on mortgage loans	24	(154)	(403)
Japanese fixed annuity contract hedges, net	3	27	47
Periodic net coupon settlements on credit derivatives/Japan	(10)	(17)	(49)
Total results of variable annuity hedge program	162	(345)	619
Other, net	(459)	(2)	(369)
Net realized capital gains (losses), before-tax	(145)	(611)	(2,004)
U.S. [Member]
Net Realized Capital Gains (Losses)
Results of variable annuity hedge program	(613)	(356)	731
International [Member]
Net Realized Capital Gains (Losses)
Results of variable annuity hedge program	775	11	(112)
GMWB derivatives, net [Member] | U.S. [Member]
Net Realized Capital Gains (Losses)
Results of variable annuity hedge program	(397)	89	1,464
Macro Hedge Program [Member] | U.S. [Member]
Net Realized Capital Gains (Losses)
Results of variable annuity hedge program	$ (216)	$ (445)	$ (733)

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Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Reserve Development
Reinsurance recoverables, Beginning Balance	$ 4,862
Add provision for unpaid losses and loss adjustment expenses
Prior years	367	(196)	(186)
Less payment
Reinsurance recoverables, Ending Balance	4,768	4,862
Reserve Development [Member]
Reserve Development
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	6,388	6,131	6,066
Reinsurance recoverables, Beginning Balance	209	213	231
Beginning liabilities for unpaid losses and loss adjustment expenses, net	6,314	6,179	5,918	5,835
Add provision for unpaid losses and loss adjustment expenses
Current year	3,196	3,260	3,244
Prior years	98	70	(88)
Total provision for unpaid losses and loss adjustment expenses	3,294	3,330	3,156
Less payment
Current year	1,524	1,552	1,580
Prior years	1,635	1,517	1,493
Total payments	3,159	3,069	3,073
Ending liabilities for unpaid losses and loss adjustment expenses, net	6,314	6,179	5,918	5,835
Reinsurance recoverables, Ending Balance	233	209	213
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$ 6,547	$ 6,388	$ 6,131

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Income Tax (Details 2) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Reconciliation amount of unrecognized tax benefits
Balance, at January 1	$ 48	$ 48	$ 91
Additions based on tax positions related to the current year
Additions for tax positions for prior years
Reductions for tax positions for prior years			(35)
Settlements			(8)
Balance, at December 31	$ 48	$ 48	$ 48

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Debt (Details 3) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Long-Term Debt Maturities
2012	$ 0
2013	320
2014	200
2015	500
2016	300
Thereafter	5,500
Consumer Notes [Member]
Long-Term Debt Maturities
2012	155
2013	78
2014	13
2015	30
2016	18
Thereafter	$ 20

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Fair Value Measurements (Details 5) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value of assets and liabilities accounted for using the fair value option	$ 50	$ 44
ABS [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value of assets and liabilities accounted for using the fair value option		(5)
Corporate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value of assets and liabilities accounted for using the fair value option	10	(7)
CDOs [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value of assets and liabilities accounted for using the fair value option	(33)	83
RMBS [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value of assets and liabilities accounted for using the fair value option		(1)
Foreign government/government agencies [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value of assets and liabilities accounted for using the fair value option	45
Credit-linked notes [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value of assets and liabilities accounted for using the fair value option	$ 28	$ (26)

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Investments and Derivative Instruments (Details 12) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	$ 5,728	$ 4,489
Percent of Total	100.00%	100.00%
Agricultural [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	249	315
Percent of Total	4.30%	7.00%
Industrial [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	1,747	1,141
Percent of Total	30.50%	25.40%
Lodging [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	93	132
Percent of Total	1.60%	2.90%
Multifamily [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	1,070	713
Percent of Total	18.70%	15.90%
Office [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	1,078	986
Percent of Total	18.80%	22.10%
Retail [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	1,234	669
Percent of Total	21.50%	14.90%
Other [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	257	384
Percent of Total	4.60%	8.50%
Residential [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	$ 0	$ 149
Percent of Total	0.00%	3.30%

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Basis of Presentation and Accounting Policies (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Net Income Impact [Member]
New disclosure approximating the impact of new accounting guidance	$ 45
Net Income Impact Excluding Unlock [Member]
New disclosure approximating the impact of new accounting guidance	10
Stockholders' Equity [Member]
New disclosure approximating the impact of new accounting guidance	$ 1,500

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Goodwill and Other Intangible Assets (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Carrying amount of goodwill allocated to reporting segment
Gross	$ 1,406	$ 1,559
Accumulated Impairments	(385)	(355)
Discontinued Operations	(15)	(153)
Carrying value	1,006	1,051
Wealth Management [Member]
Carrying amount of goodwill allocated to reporting segment
Gross	470	470
Accumulated Impairments	0	0
Carrying value	470	470
Property & Casualty Commercial [Member] | Commercial Market [Member]
Carrying amount of goodwill allocated to reporting segment
Gross	30	30
Accumulated Impairments	(30)	0
Carrying value	0	30
Consumer Markets [Member]
Carrying amount of goodwill allocated to reporting segment
Gross	119	119
Accumulated Impairments	0	0
Carrying value	119	119
Individual Life [Member] | Wealth Management [Member]
Carrying amount of goodwill allocated to reporting segment
Gross	224	224
Accumulated Impairments	0	0
Carrying value	224	224
Retirement Plans [Member] | Wealth Management [Member]
Carrying amount of goodwill allocated to reporting segment
Gross	87	87
Accumulated Impairments	0	0
Carrying value	87	87
Mutual Funds [Member] | Wealth Management [Member]
Carrying amount of goodwill allocated to reporting segment
Gross	159	159
Accumulated Impairments	0	0
Carrying value	159	159
Corporate [Member]
Carrying amount of goodwill allocated to reporting segment
Gross	787	940
Accumulated Impairments	(355)	(355)
Discontinued Operations	(15)	(153)
Carrying value	$ 417	$ 432

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Debt (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Jan. 31, 2012
Commercial Paper and Revolving Credit Facility
Maximum amount available under the line of credit facility	$ 3,900	$ 3,900	$ 1,750
Amount Outstanding	0	0
Commercial Paper [Member]
Commercial Paper and Revolving Credit Facility
Effective Date	11/10/86
Maximum amount available under the line of credit facility	2,000	2,000
Amount Outstanding	0	0
Revolving Credit Facility [Member]
Commercial Paper and Revolving Credit Facility
Effective Date	8/9/07
Expiration Date	8/9/12
Maximum amount available under the line of credit facility	1,900	1,900
Amount Outstanding	$ 0	$ 0

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Fair Value Measurements (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Fair Value Measurements - Financial Instruments Excluding Guaranteed Living Benefits (Textual) [Abstract]
Cash collateral liability	$ 1,400,000,000	$ 968,000,000
Investment sales receivable	4,000,000,000	6,000,000,000
Derivatives priced by valuation models	98.00%	97.00%
Credit standing adjustment	80,000,000
Behavior Risk Margin	419,000,000
Credit-linked notes [Member]
Debt Instrument [Line Items]
Outstanding principal balance of notes	243,000,000	243,000,000
Maximum [Member]
Derivative [Line Items]
Daily analyses identify price	5.00%
Minimum [Member]
Derivative [Line Items]
Daily analyses identify price	3.00%
Percentage difference of sale trade price from prior days price	3.00%
Percentage difference of purchase trade price from current days price	3.00%
Percentage difference of weekly analyses identify price from published bond	5.00%
Percentage change of monthly analyses identify price	3.00%
Credit standing adjustment assumption net of reinsurance [Member]
Derivative [Line Items]
Pre-tax realized gains	55,000,000	(10,000,000)	26,000,000
Policyholder Behavior Assumptions [Member]
Derivative [Line Items]
Pre-tax realized gains	52,000,000	159,000,000	566,000,000
Outperformance (underperformance) of the underlying actively managed fund compared to indices [Member]
Derivative [Line Items]
Pre-tax realized gains	$ (72,000,000)	$ 104,000,000	$ 550,000,000

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Employee Benefit Plans (Details 6) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Pension Benefits [Member]
Other Assets
Noncurrent assets	$ 0
Other Liabilities
Current liabilities	21	19
Noncurrent liabilities	931	854
Total	952	873
Other Postretirement Benefits [Member]
Other Assets
Noncurrent assets	0
Other Liabilities
Current liabilities	34	34
Noncurrent liabilities	187	184
Total	$ 221	$ 218

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Investments and Derivative Instruments (Details 9) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Movement in Valuation allowance and reserves
Balance as of January 1	$ (155)	$ (366)	$ (26)
Additions	(26)	(157)	(408)
Deductions	79	368	68
Balance as of September 30	$ (102)	$ (155)	$ (366)

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Employee Benefit Plans (Details 3) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Settlements	$ (20)
Pension Benefits [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation - beginning of year	4,795	4,283
Service cost (excluding expenses)	102	102	105
Interest cost	259	252	243
Actuarial loss (gain)	43	86
Settlements		(43)
Change in assumptions	497	348
Benefits Paid	(230)	(234)
Foreign exchange adjustment	(1)	1
Benefit obligation - end of year	5,465	4,795	4,283
Other Postretirement Benefits [Member]
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation - beginning of year	408	401
Service cost (excluding expenses)	5	7	6
Interest cost	20	22	24
Plan participants' contributions	18	15
Actuarial loss (gain)	(15)	(7)
Change in assumptions	37	17
Benefits Paid	(52)	(49)
Retiree drug subsidy	3	2
Benefit obligation - end of year	$ 424	$ 408	$ 401

XML

Employee Benefit Plans (Details 7) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Pension Benefits [Member]
Component of periodic benefit cost
Service cost	$ 102	$ 102	$ 105
Interest cost	259	252	243
Expected return on plan assets	(298)	(286)	(276)
Amortization of prior service credit	(9)	(9)	(9)
Amortization of actuarial loss	159	107	74
Settlements		20
Net periodic benefit cost	213	186	137
Other Postretirement Benefits [Member]
Component of periodic benefit cost
Service cost	5	7	6
Interest cost	20	22	24
Expected return on plan assets	(14)	(13)	(11)
Amortization of prior service credit	(1)	(1)	(1)
Net periodic benefit cost	$ 10	$ 15	$ 18

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Investments and Derivative Instruments (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Other-Than-Temporary Impairment Losses
Beginning Balance	$ (2,072)	$ (2,200)
Credit impairments remaining in retained earnings related to adoption of new accounting guidance in 2009			(1,320)
Additions for credit impairments recognized on securities not previously impaired	(56)	(211)	(840)
Additions for credit impairments recognized on securities previously impaired	(69)	(161)	(292)
Securities that matured or were sold during the period	505	468	245
Securities that the Company intends to sell or more likely than not will be required to sell before recovery			3
Securities due to an increase in expected cash flows	16	32	4
Ending Balance	$ (1,676)	$ (2,072)	$ (2,200)

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Investments and Derivative Instruments (Details 10) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Commercial Mortgage Loans Credit Quality
Avg. Debt-Service Coverage Ratio	1.940
Commercial [Member]
Commercial Mortgage Loans Credit Quality
Carrying Value	$ 5,728	$ 4,340
Avg. Debt-Service Coverage Ratio	1.94	1.870
Greater than 80% [Member] | Commercial [Member]
Commercial Mortgage Loans Credit Quality
Carrying Value	707	1,358
Avg. Debt-Service Coverage Ratio	1.45	1.490
65% - 80% [Member] | Commercial [Member]
Commercial Mortgage Loans Credit Quality
Carrying Value	2,384	1,829
Avg. Debt-Service Coverage Ratio	1.60	1.930
Less than 65% [Member] | Commercial [Member]
Commercial Mortgage Loans Credit Quality
Carrying Value	$ 2,637	$ 1,153
Avg. Debt-Service Coverage Ratio	2.40	2.260

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Investments and Derivative Instruments (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Change in non-credit impairments of debt securities recognized in OCI
OTTI losses recognized in OCI	$ (89)	$ (418)	$ (683)
Changes in fair value and/or sales	112	647	244
Tax and deferred acquisition costs	(14)	(113)	215
Change in non-credit impairments recognized in OCI	$ 9	$ 116	$ (224)

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Fair Value Measurements (Details 3) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Reinsurance Recoverable [Member] | Guaranteed Withdrawal Benefits [Member] | U.S. [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	$ 280	$ 347
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	131	(102)
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	0
Purchases of Financial Instruments (Assets) Measured at Fair Value	0
Settlements of Financial Instruments (Assets) Measured at Fair Value	32
Sales of Financial Instruments (Assets) Measured at Fair Value	0
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		35
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	0
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	0
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	443	280
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	131	(102)
Separate Accounts [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	1,247	962
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	25	142
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	0
Purchases of Financial Instruments (Assets) Measured at Fair Value	292
Settlements of Financial Instruments (Assets) Measured at Fair Value	0
Sales of Financial Instruments (Assets) Measured at Fair Value	(171)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		314
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	14	14
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(376)	(185)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	1,031	1,247
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	$ (1)	$ 20

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Stock Compensation Plans

12 Months Ended

Dec. 31, 2011

Stock Compensation Plans [Abstract]

Stock Compensation Plans

18. Stock Compensation Plans

The Company has three primary stock-based compensation plans which are described below. Shares issued in satisfaction of stock-based compensation may be made available from authorized but unissued shares, shares held by the Company in treasury or from shares purchased in the open market. In 2011 and 2010, the Company issued shares from treasury in satisfaction of stock-based compensation.

	For the year ended December 31,
	2011			2010			2009
Stock-based compensation plans expense	$	53		$	94		$	72
Income tax benefit		(19	)		(33	)		(20	)
Total stock-based compensation plans expense, after-tax	$	34		$	61		$	52

The Company did not capitalize any cost of stock-based compensation. As of December 31, 2011, the total compensation cost related to non-vested awards not yet recognized was $60, which is expected to be recognized over a weighted average period of 1.5 years.

Stock Plan

On May 19, 2010 at the Company’s Annual Meeting of Shareholders, the shareholders of The Hartford approved The Hartford 2010 Incentive Stock Plan (the “2010 Stock Plan”), which supersedes and replaces The Hartford 2005 Incentive Stock Plan. The terms of the 2010 Stock Plan are substantially similar to the terms of the superseded plan. However, the 2010 Stock Plan provides for an increased maximum number of shares that may be awarded to employees of the Company, to non-employee members of the Board of Directors of the Company and also permits awards to be made to third party service providers, and permits additional forms of stock-based awards.

The 2010 Stock Plan provides for awards to be granted in the form of non-qualified or incentive stock options qualifying under Section 422 of the Internal Revenue Code, stock appreciation rights, performance shares, restricted stock or restricted stock units, or any other form of stock-based award. The aggregate number of shares of stock, which may be awarded, is subject to a maximum limit of 18,000,000 shares applicable to all awards for the ten-year duration of the 2010 Stock Plan. If any award under the prior The Hartford Incentive Stock Plan (as approved by the Company’s shareholders in 2000) or under the prior The Hartford 2005 Incentive Stock Plan (as approved by the Company’s shareholders in 2005) that was outstanding as of March 31, 2010, is forfeited, terminated, surrendered, exchanged, expires unexercised, or is settled in cash in lieu of stock (including to effect tax withholding) or for the net issuance of a lesser number of shares than the number subject to the award, the shares of stock subject to such award (or the relevant portion thereof) shall be available for awards under the 2010 Stock Plan and such shares shall be added to the maximum limit. As of December 31, 2011, there were 14,652,180 shares available for future issuance.

The fair values of awards granted under the 2010 Stock Plan are measured as of the grant date and expensed ratably over the awards’ vesting periods, generally three years. For stock option awards granted or modified in 2006 and later, the Company began expensing awards to retirement-eligible employees immediately or over a period shorter than the stated vesting period because the employees receive accelerated vesting upon retirement and therefore the vesting period is considered non-substantive. All awards provide for accelerated vesting upon a change in control of the Company as defined in the 2010 Stock Plan.

Stock Option Awards

Under the 2010 Stock Plan, all options granted have an exercise price at least equal to the market price of the Company’s common stock on the date of grant, and an option’s maximum term is not to exceed ten years. Under the 2010 Stock Plan, options will generally become exercisable as determined at the time of grant. For any year, no individual employee may receive an award of options for more than 2,000,000 shares under the 2010 Stock Plan. Under the 2005 Stock Plan, certain options become exercisable over a three year period commencing one year from the date of grant, while certain other options become exercisable at the later of three years from the date of grant or upon specified market appreciation of the Company’s common shares.

The Company uses a hybrid lattice/Monte-Carlo based option valuation model (the “valuation model”) that incorporates the possibility of early exercise of options into the valuation. The valuation model also incorporates the Company’s historical termination and exercise experience to determine the option value.

The valuation model incorporates ranges of assumptions for inputs, and therefore, those ranges are disclosed below. The term structure of volatility is generally constructed utilizing implied volatilities from exchange-traded options and CPP warrants related to the Company’s stock, historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercise and employee termination within the valuation model, and accommodates variations in employee preference and risk-tolerance by segregating the grantee pool into a series of behavioral cohorts and conducting a fair valuation for each cohort individually. The expected term of options granted is derived from the output of the option valuation model and represents, in a mathematical sense, the period of time that options are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Constant Maturity Treasury yield curve in effect at the time of grant. There were no stock option awards granted in 2010.

	For the year ended December 31,
	2011	2009
Expected dividend yield	1.3%	3.2%
Expected annualized spot volatility	35.8% – 47.1%	57.8% – 57.8%
Weighted average annualized volatility	41.7%	57.8%
Risk-free spot rate	0.1% – 3.5%	0.3% – 4.2%
Expected term	5.7 years	7.3 years

A summary of the status of non-qualified stock options included in the Company’s Stock Plans as of December 31, 2011 and changes during the year ended December 31, 2011 is presented below:

						Weighted
						Average
				Weighted		Remaining
	Number of Options			Average		Contractual		Aggregate
	(in thousands)			Exercise Price		Term		Intrinsic Value
Outstanding at beginning of year		5,279		$	52.90		2.9	$	—
Granted		1,189			27.90
Exercised		(232	)		15.41
Forfeited		(537	)		44.09
Expired		(860	)		62.11
Outstanding at end of year		4,839			47.89		3.7		—
Exercisable at end of year		3,641		$	55.52		2.0		—

The weighted average grant-date fair value of options granted during the years ended December 31, 2011, 2010 and 2009 was $10.76, $0 and $3.06, respectively. The total intrinsic value of options exercised during the years ended December 31, 2011, 2010 and 2009 was $2, $1, and $0, respectively.

Share Awards

Share awards are valued equal to the market price of the Company’s common stock on the date of grant, less a discount for those awards that do not provide for dividends during the vesting period. Share awards granted under the Stock Plans and outstanding include restricted stock units, restricted stock and performance shares. Generally, restricted stock units vest at or over three years and restricted stock vests in three to five years. Performance shares become payable within a range of 0% to 200% of the number of shares initially granted based upon the attainment of specific performance goals achieved over a specified period, generally three years. The maximum award of restricted stock units, restricted stock or performance shares for any individual employee in any year under the 2010 Stock Plan is 500,000 shares or units.

A summary of the status of the Company’s non-vested share awards as of December 31, 2011, and changes during the year ended December 31, 2011, is presented below:

	Shares			Weighted-Average
Non-vested Shares	(in thousands)			Grant-Date Fair Value
Non-vested at beginning of year		1,889		$	35.83
Granted		3,400			28.22
Decrease for change in estimated performance factors		(232	)		—
Vested		(637	)		46.00
Forfeited		(256	)		34.14
Non-vested at end of year		4,164		$	27.60

The total fair value of shares vested during the years ended December 31, 2011, 2010 and 2009 was $20, $13 and $8, respectively, based on estimated performance factors. The Company did not make cash payments in settlement of stock compensation during the years ended December 31, 2011 and 2010 and 2009.

Restricted Unit awards

In 2010 and 2009, The Hartford issued restricted units as part of The Hartford’s 2005 Stock Plan. Restricted stock unit awards under the plan have historically been settled in shares, but under this award will be settled in cash and are thus referred to as “Restricted Units”. The economic value recipients will ultimately realize will be identical to the value that would have been realized if the awards had been settled in shares, i.e., upon settlement, recipients will receive cash equal to The Hartford’s share price multiplied by the number of restricted units awarded. Because Restricted Units will be settled in cash, the awards are remeasured at the end of each reporting period until settlement. Awards granted in 2009 vest after a three year period. Awards granted in 2010 include both graded and cliff vesting restricted units which vest over a three year period. The graded vesting attribution method is used to recognize the expense of the award over the requisite service period. For example, the graded vesting attribution method views one three-year grant with annual graded vesting as three separate sub-grants, each representing one third of the total number of awards granted. The first sub-grant vests over one year, the second sub-grant vests over two years and the third sub-grant vests over three years.

There were no restricted units awarded for 2011. For the year ended December 31, 2010, 2,983 restricted units were granted, and the weighted-average grant-date fair value was $24.34. As of December 31, 2011 and 2010, 5,319 and 6,812 were non-vested, respectively.

Deferred Stock Unit Plan

Effective July 31, 2009, the Compensation and Management Development Committee of the Board authorized The Hartford Deferred Stock Unit Plan (“Deferred Stock Unit Plan”), and, on October 22, 2009, it was amended. The Deferred Stock Unit Plan provides for contractual rights to receive cash payments based on the value of a specified number of shares of stock. The Deferred Stock Unit Plan provides for two award types, Deferred Units and Restricted Units. Deferred Units are earned ratably over a year, based on the number of regular pay periods occurring during such year. Deferred Units are credited to the participants account on a quarterly basis based on the market price of the Company’s common stock on the date of grant and are fully vested at all times. Deferred Units credited to employees prior to January 1, 2010 (other than senior executive officers hired on or after October 1, 2009) are not paid until after two years from their grant date. Deferred Units credited on or after January 1, 2010 (and any credited to senior executive officers hired on or after October 1, 2009) are paid in three equal installments after the first, second and third anniversaries of their grant date. Restricted Units are intended to be incentive compensation and unlike Deferred Units, vest over time, generally three years, and are subject to forfeiture. The Deferred Stock Unit Plan is structured consistent with the limitations and restrictions on employee compensation arrangements imposed by the Emergency Economic Stabilization Act of 2008 and the TARP Standards for Compensation and Corporate Governance Interim Final Rule issued by the U.S. Department of Treasury on June 10, 2009.

There were no deferred stock units awarded in 2011.

A summary of the status of the Company’s non-vested awards under the Deferred Stock Unit Plan as of December 31, 2011, is presented below:

	Restricted Units			Weighted-Average
Non-vested Units	(in thousands)			Grant-Date Fair Value
Non-vested at beginning of year		648		$	24.70
Granted		—			—
Vested		(49	)		24.27
Forfeited		(108	)		24.31
Non-vested at end of year		491		$	24.84

Employee Stock Purchase Plan

In 1996, the Company established The Hartford Employee Stock Purchase Plan (“ESPP”). Beginning in 2010 under this plan, eligible employees of The Hartford purchased common stock of the Company at a discount rate of 5% of the market price per share on the last trading day of the offering period. In 2009 and prior years, eligible employees of The Hartford purchased common stock of the Company at a 15% discount from the lower of the closing market price at the beginning or end of the offering period. Employees purchase a variable number of shares of stock through payroll deductions elected as of the beginning of the offering period. The Company may sell up to 15,400,000 shares of stock to eligible employees under the ESPP. As of December 31, 2011, there were 6,472,280 shares available for future issuance. During the years ended December 31, 2011, 2010 and 2009, 768,380, 729,598, and 2,557,893 shares were sold, respectively. The weighted average per share fair value of the discount under the ESPP was $1.03, $1.24 and $5.99 during the years ended December 31, 2011, 2010 and 2009, respectively. In 2011 and 2010, the fair value is estimated based on the 5% discount off the market price per share on the last trading day of the offering period. In 2009 and prior years, the fair value was estimated based on the 15% discount off of the beginning stock price plus the value of six-month European call and put options on shares of stock at the beginning stock price calculated using the Black-Scholes model and the following weighted average valuation assumptions:

	For the year ended
	December 31,
	2009
Dividend yield		1.4	%
Implied volatility		91.4	%
Risk-free spot rate		0.3	%
Expected term	6 months

Implied volatility was derived from exchange-traded options on the Company’s stock. The risk-free rate is based on the U.S. Constant Maturity Treasury yield curve in effect at the time of grant. The total intrinsic value of the discounts at purchase was $5 for the year ended December 31, 2009. Additionally, The Hartford has established employee stock purchase plans for certain employees of the Company’s international subsidiaries. Under these plans, participants may purchase common stock of The Hartford at a fixed price. The activity under these programs is not material.

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Accumulated Other Comprehensive Income (Loss), Net of Tax (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Accumulated Other Comprehensive Income Loss Net of Tax (Textual) [Abstract]
Net unrealized gains (losses) credited to policy holders	$ (65)	$ (87)	$ (82)
Tax and deferred acquisition costs on unrealized gain/loss on securities	1,217	3,574	2,358
Changes in fair value of Non credit impaired securities	112	647	244
Tax and deferred acquisition costs on change in other than temporary losses recognized in other comprehensive income unrealized gain/loss on securities	(14)	(113)	215
Taxes on net gain (losses) on cash flow hedging instruments	71	69	(208)
Taxes on foreign currency translation adjustments	60	156	(12)
Taxes on changes in pension and other postretirement plan adjustment	(39)	(66)	(86)
Reclassification adjustment for gains/losses realized in net income	88	(78)	(1,202)
Amortization adjustment to net investment income	$ 125	$ 94	$ 49

XML

Condensed Financial Information of the Hartford Financial Services Group, Inc. (Registrant) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Assets
Total fixed maturities, AFS	$ 81,809	$ 77,820
Other investments	2,394	1,617
Short-term investments	7,736	8,528
Deferred income taxes	1,398	3,725
Other assets	2,274	1,629
Total assets	304,064	318,346
Liabilities and Stockholder's Equity
Short-term debt (includes current maturities of long-term debt)	0	400
Long-term debt	6,216	6,207
Other liabilities	8,443	9,187
Total liabilities	281,154	298,035
Total stockholders' equity	22,910	20,311	17,894
Total liabilities and stockholders' equity	304,064	318,346
Parent Company [Member]
Assets
Total fixed maturities, AFS	152	251
Other investments	28	31
Short-term investments	1,425	1,762
Investment in affiliates	27,575	25,227
Deferred income taxes	1,109	885
Unamortized Issue Costs	51	55
Other assets	31	22
Total assets	30,371	28,233
Liabilities and Stockholder's Equity
Net payable to affiliates	283	430
Short-term debt (includes current maturities of long-term debt)		400
Long-term debt	5,975	5,961
Other liabilities	1,203	1,131
Total liabilities	7,461	7,922
Total stockholders' equity	22,910	20,311
Total liabilities and stockholders' equity	$ 30,371	$ 28,233

XML

Equity (Tables)

12 Months Ended

Dec. 31, 2011

Equity [Abstract]

Statutory Net Income Loss

	For the years ended December 31,
Statutory Net Income (Loss)	2011			2010			2009
U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries	$	(1,272	)	$	(140	)	$	1,714
Property and casualty insurance subsidiaries		514			1,477			889
Total	$	(758	)	$	1,337		$	2,603

Statutory Surplus

	As of December 31,
Statutory Surplus	2011		2010
U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries	$	7,388	$	7,731
Property and casualty insurance subsidiaries		7,412		7,721
Total	$	14,800	$	15,452

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Employee Benefit Plans (Details 14) (Other Postretirement Benefits [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	$ 205	$ 196
Short-term Investments [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	9	10
Corporate [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	53	57
RMBS [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	48	44
Foreign government [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	2
U.S. Treasuries [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	28	19
CMBS [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	18	17
Other fixed income [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	4	6
Large cap [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	43	43
Level 1 [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 1 [Member] | Short-term Investments [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 1 [Member] | Corporate [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 1 [Member] | RMBS [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 1 [Member] | Foreign government [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0
Level 1 [Member] | U.S. Treasuries [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 1 [Member] | CMBS [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 1 [Member] | Other fixed income [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 1 [Member] | Large cap [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 2 [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	205	196
Level 2 [Member] | Short-term Investments [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	9	10
Level 2 [Member] | Corporate [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	53	57
Level 2 [Member] | RMBS [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	48	44
Level 2 [Member] | Foreign government [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	2
Level 2 [Member] | U.S. Treasuries [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	28	19
Level 2 [Member] | CMBS [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	18	17
Level 2 [Member] | Other fixed income [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	4	6
Level 2 [Member] | Large cap [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	43	43
Level 3 [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 3 [Member] | Short-term Investments [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 3 [Member] | Corporate [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 3 [Member] | RMBS [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 3 [Member] | Foreign government [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0
Level 3 [Member] | U.S. Treasuries [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 3 [Member] | CMBS [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 3 [Member] | Other fixed income [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	0	0
Level 3 [Member] | Large cap [Member]
Fair values of the company's other postretirement plan assets
Total other postretirement plan assets at fair value	$ 0	$ 0

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Deferred Policy Acquisition Costs and Present Value of Future Profits (Tables)

12 Months Ended

Dec. 31, 2011

Deferred Policy Acquisition Costs and Present Value of Future Profits [Abstract]

Changes in deferred policy acquisition costs and present value of future profits

Changes in the DAC balance are as follows:

	2011			2010			2009
Balance, January 1	$	9,857		$	10,686		$	13,248
Deferred Costs		2,608			2,648			2,853
Amortization — DAC		(2,920	)		(2,665	)		(3,247	)
Amortization — DAC from discontinued operations		—			(17	)		(10	)
Amortization — Unlock benefit (charge), pre-tax [1]		(507	)		138			(1,010	)
Adjustments to unrealized gains and losses on securities available-for-sale and other [2]		(377	)		(1,159	)		(1,031	)
Effect of currency translation		83			215			(39	)
Cumulative effect of accounting change, pre-tax [3]		—			11			(78	)
Balance, December 31	$	8,744		$	9,857		$	10,686

[1]	The most significant contributors to the Unlock charge recorded during the year ended December 31, 2011 were assumption changes which reduced expected future gross profits including additional costs associated with implementing the Japan hedging strategy and the U.S. variable annuity macro hedge program, as well as actual separate account returns below our aggregated estimated return.
	The most significant contributors to the Unlock benefit recorded during the year ended December 31, 2010 were actual separate account returns being above our aggregated estimated return. Also included in the benefit are assumption updates related to benefits from withdrawals and lapses, offset by hedging, annuitization estimates on Japan products, and long-term expected rate of return updates.
	The most significant contributors to the Unlock charge recorded during the year ended December 31, 2009 were the results of actual separate account returns being significantly below our aggregated estimated return for the first quarter of 2009, partially offset by actual returns being greater than our aggregated estimated return for the period from April 1, 2009 to December 31, 2009.
[2]	The most significant contributor to the adjustments was the effect of declining interest rates, resulting in unrealized gains on securities classified in AOCI. Other includes a $34 decrease as a result of the disposition of DAC from the sale of the Hartford Investment Canadian Canada in 2010.
[3]	For the year ended December 31, 2010 the effect of adopting new accounting guidance for embedded credit derivatives resulted in a decrease to retained earnings and, as a result, a DAC benefit. In addition, an offsetting amount was recorded in unrealized losses as unrealized losses decreased upon adoption of the new accounting guidance. For the year ended December 31, 2009 the effect of adopting new accounting guidance for investments other- than- temporarily impaired resulted in an increase to retained earnings and, as a result, a DAC charge. In addition, an offsetting amount was recorded in unrealized losses as unrealized losses increased upon adoption of the new accounting guidance.

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Condensed Financial Information of The Hartford Financial Services Group, Inc. (Registrant) (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended							12 Months Ended
	Dec. 31, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating Activities
Net income (loss)	$ 127	$ 24	$ 511	$ 619	$ 666	$ 76	$ 319	$ 662	$ 1,680	$ (887)
Cash provided by (used for) operating activities								2,274	3,309	2,974
Investing Activities
Cash used by (used for) investing activities								(1,182)	(434)	(3,123)
Financing Activities
Proceeds from issuance of long-term debt									1,090
Repayments at maturity for long-term debt and payments on capital lease obligations								(405)	(343)	(24)
Change in commercial paper										(375)
Net proceeds from issuance of mandatory convertible preferred stock									556
Net proceeds from issuance of common shares under public offering									1,600
Net proceeds from issuance of common shares under discretionary equity issuance plan										887
Treasury stock acquired								46
Proceeds from net issuance of shares under incentive and stock compensation plans and excess tax benefit								10	25	17
Dividends paid on preferred stock								(42)	(85)	(73)
Dividends paid on common stock								(153)	(85)	(149)
Cash provided by (used for) financing activities								(609)	(2,955)	523
Net change in cash								519	(80)	331
Cash - beginning of period			2,062				2,142	2,062	2,142	1,811
Cash - end of period	2,581			2,062				2,581	2,062	2,142
Supplemental Disclosure of Cash Flow Information
Interest paid								501	485	475
Parent Company [Member]
Operating Activities
Net income (loss)								662	1,680	(887)
Undistributed earnings (losses) of subsidiaries								(961)	(1,004)	1,307
Change in operating assets and liabilities								625	(21)	(590)
Cash provided by (used for) operating activities								326	655	(170)
Investing Activities
Net sales (purchases) of short-term investments								432	233	(412)
Purchase price of business acquired										(10)
Capital contributions to subsidiaries								(126)	(311)	(3,115)
Cash used by (used for) investing activities								306	(78)	(3,537)
Financing Activities
Proceeds from issuance of long-term debt									1,090
Repayments at maturity for long-term debt and payments on capital lease obligations								(400)	(275)
Change in commercial paper										(375)
Net proceeds from issuance of mandatory convertible preferred stock									556
Net proceeds from issuance of common shares under public offering									1,600
Proceeds from net issuance of preferred stock and warrants to U.S. Treasury										3,400
Redemption of preferred stock issued to the U.S. Treasury									(3,400)
Net proceeds from issuance of common shares under discretionary equity issuance plan										887
Proceeds from net issuance of shares under incentive and stock compensation plans and excess tax benefit								9	22	17
Dividends paid on preferred stock								(42)	(85)	(73)
Dividends paid on common stock								(153)	(85)	(149)
Cash provided by (used for) financing activities								(632)	(577)	3,707
Net change in cash								0	0	0
Cash - beginning of period			0				0	0	0	0
Cash - end of period	0			0				0	0	0
Supplemental Disclosure of Cash Flow Information
Interest paid								483	465	454
Dividends Received from Subsidiaries								$ 976	$ 1,006	$ 243

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Fair Value Measurements (Details 7) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Assets not carried at fair value [Abstract]
Policy loans	$ 2,001	$ 2,181
Mortgage Loans	5,728	4,489
Liabilities not carried at fair value [Abstract]
Other policyholder funds and benefits payable	10,343	11,155
Senior notes	4,481	4,880
Junior subordinated debentures	1,735	1,727
Consumer notes	310	377
Policy loans [Member]
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Loans Receivable, Fair Value Disclosure	2,153	2,294
Mortgage Loans [Member]
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Loans Receivable, Fair Value Disclosure	5,977	4,524
Other policyholder funds and benefits payable [Member]
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
Notes Payable, Fair Value Disclosure	11,238	11,383
Senior Notes [Member]
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
Notes Payable, Fair Value Disclosure	4,623	5,072
Junior Subordinated Debentures [Member]
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
Notes Payable, Fair Value Disclosure	2,430	2,596
Consumer Notes [Member]
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
Notes Payable, Fair Value Disclosure	$ 305	$ 392

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Investments and Derivative Instruments (Details 20) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Derivative Instruments Gain (Loss) [Line Items]
Total	$ 5	$ 471	$ 260
Interest rate swaps, swap options , caps, floors and forwards [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	(22)	45	31
Foreign currency swaps and forwards [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	3	(1)	(49)
3 Win Related Foreign Currency Swaps [Member] | JAPAN [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	31	215	(22)
Fixed annuity hedging instruments [Member] | JAPAN [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	109	385	(12)
Credit Derivatives that Purchase Credit Protection [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	(10)	(23)	(533)
Credit Derivatives that Assume Credit Risk [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	(174)	196	167
Equity index swaps and options [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	(89)	5	(3)
GMWB product derivatives [Member] | U.S. [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	(780)	486	4,686
GMWB Reinsurance [Member] | U.S. [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	131	(102)	(988)
GMWB hedging instruments [Member] | U.S. [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	252	(295)	(2,234)
Macro Hedge Program [Member] | U.S. [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	(216)	(445)	(733)
International program product derivatives [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	(25)	26	67
International program hedging instruments [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	800	(15)	(179)
Contingent Capital Facility Put Option [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total	(5)	(6)	(8)
Warrants [Member]
Derivative Instruments Gain (Loss) [Line Items]
Total			$ 70

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Earnings per share (Tables)

12 Months Ended

Dec. 31, 2011

Earnings Per Share [Abstract]

Earnings (Loss) Per Common Share

	For the years ended December 31,
(In millions, except for per share data)	2011		2010			2009
Earnings
Income (loss) from continuing operations
Income (loss) from continuing operations, net of tax	$	576	$	1,744		$	(883	)
Less: Preferred stock dividends and accretion of discount		42		515			127
Income (loss) from continuing operations, net of tax, available to common shareholders		534		1,229			(1,010	)
Add: Dilutive effect of preferred stock dividends		—		33			—
Income (loss) from continuing operations, net of tax, available to common shareholders and assumed conversion of preferred shares	$	534	$	1,262		$	(1,010	)
Income (loss) from discontinued operations, net of tax	$	86	$	(64	)	$	(4	)
Net income
Net income	$	662	$	1,680		$	(887	)
Less: Preferred stock dividends and accretion of discount		42		515			127
Net income (loss) available to common shareholders		620		1,165			(1,014	)
Add: Dilutive effect of preferred stock dividends		—		33			—
Net income (loss) available to common shareholders and assumed conversion of preferred shares	$	620	$	1,198		$	(1,014	)
Shares
Weighted average common shares outstanding, basic		445.0		431.5			346.3
Dilutive effect of warrants		31.9		32.3			—
Dilutive effect of stock compensation plans		1.1		1.3			—
Dilutive effect of mandatory convertible preferred shares		—		16.4			—
Weighted average shares outstanding and dilutive potential common shares		478.0		481.5			346.3
Earnings (loss) per common share
Basic
Income (loss) from continuing operations, net of tax, available to common shareholders	$	1.20	$	2.85		$	(2.92	)
Income (loss) from discontinued operations, net of tax		0.19		(0.15	)		(0.01	)
Net income (loss) available to common shareholders	$	1.39	$	2.70		$	(2.93	)
Diluted
Income (loss) from continuing operations, net of tax, available to common shareholders	$	1.12	$	2.62		$	(2.92	)
Income (loss) from discontinued operations, net of tax		0.18		(0.13	)		(0.01	)
Net income (loss) available to common shareholders	$	1.30	$	2.49		$	(2.93	)

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans [Abstract]

Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost Other Postretirement Pension Plans

	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011			2010
Discount rate		4.75	%		5.50	%		4.50	%		5.25	%
Rate of increase in compensation levels		3.75	%		4.00	%		N/A			N/A

Weighted average assumptions used in calculating the net periodic benefit cost for the Company pension plans

	For the years ended December 31,
	2011			2010			2009
Discount rate		5.50	%		6.00	%		6.25	%
Expected long-term rate of return on plan assets		7.30	%		7.30	%		7.30	%
Rate of increase in compensation levels		4.00	%		4.00	%		4.25	%

Weighted average assumptions used in calculating the net periodic benefit cost for the Company other postretirement plans

	For the years ended December 31,
	2011			2010			2009
Discount rate		5.25	%		5.75	%		6.25	%
Expected long-term rate of return on plan assets		7.30	%		7.30	%		7.30	%

Assumed health care cost trend rates

	As of December 31,
	2011			2010			2009
Pre-65 health care cost trend rate		8.95	%		9.70	%		9.05	%
Post-65 health care cost trend rate		7.75	%		8.25	%		7.60	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.00	%		5.00	%		5.00	%
Year that the rate reaches the ultimate trend rate		2019			2018			2018

Change in benefit obligation

							Other Postretirement
	Pension Benefits						Benefits
Change in Benefit Obligation	2011			2010			2011			2010
Benefit obligation — beginning of year	$	4,795		$	4,283		$	408		$	401
Service cost (excluding expenses)		102			102			5			7
Interest cost		259			252			20			22
Plan participants’ contributions		—			—			18			15
Actuarial loss (gain)		43			86			(15	)		(7	)
Settlements		—			(43	)		—			—
Change in assumptions		497			348			37			17
Benefits paid		(230	)		(234	)		(52	)		(49	)
Retiree drug subsidy		—			—			3			2
Foreign exchange adjustment		(1	)		1						—
Benefit obligation — end of year	$	5,465		$	4,795		$	424		$	408

Change in plan assets

							Other Postretirement
	Pension Benefits						Benefits
Change in Plan Assets	2011			2010			2011			2010
Fair value of plan assets — beginning of year	$	3,922		$	3,526		$	190		$	175
Actual return on plan assets		613			434			13			15
Employer contributions		201			201			—			—
Benefits paid		(210	)		(228	)		—			—
Expenses paid		(12	)		(12	)		—			—
Foreign exchange adjustment		(1	)		1			—			—
Fair value of plan assets — end of year	$	4,513		$	3,922		$	203		$	190
Funded status — end of year	$	(952	)	$	(873	)	$	(221	)	$	(218	)

Defined benefit pension plans with accumulated benefit obligation in excess of plan assets

	December 31,
	2011		2010
Projected benefit obligation	$	5,441	$	4,771
Accumulated benefit obligation		5,394		4,733
Fair value of plan assets		4,492		3,901

Amounts recognized in consolidated balance sheet

	Pension Benefits				Other Postretirement Benefits
	2011		2010		2011		2010
Other Assets
Noncurrent assets	$	—	$	—	$	—	$	—
Other Liabilities
Current liabilities		21		19		34		34
Noncurrent liabilities		931		854		187		184
Total	$	952	$	873	$	221	$	218

Components of net periodic benefit cost

	Pension Benefits									Other Postretirement Benefits
	2011			2010			2009			2011			2010			2009
Service cost	$	102		$	102		$	105		$	5		$	7		$	6
Interest cost		259			252			243			20			22			24
Expected return on plan assets		(298	)		(286	)		(276	)		(14	)		(13	)		(11	)
Amortization of prior service credit		(9	)		(9	)		(9	)		(1	)		(1	)		(1	)
Amortization of actuarial loss		159			107			74			—			—			—
Settlements		—			20			—			—			—			—
Net periodic benefit cost	$	213		$	186		$	137		$	10		$	15		$	18

Amounts recognized in other comprehensive income (loss)

	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011		2010
Amortization of actuarial loss	$	(159	)	$	(107	)	$	—	$	—
Settlement loss		—			(20	)		—		—
Amortization of prior service credit		9			9			1		1
Net loss arising during the year		237			298			24		7
Total	$	87		$	180		$	25	$	8

Amounts in accumulated other comprehensive income (loss) on a before tax basis that have not yet been recognized as components of net periodic benefit cost

	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011		2010
Net loss	$	1,930		$	1,852		$	39	$	17
Prior service credit		(21	)		(30	)		1		—
Transition obligation		—			—			2		—
Total	$	1,909		$	1,822		$	42	$	17

Target allocation by asset category

	Target Asset Allocation
	Pension Plans			Other Postretirement Plans
Equity securities		10% – 32	%		15% – 35	%
Fixed income securities		50% – 70	%		55% – 85	%
Alternative assets		10% – 25	%		—

Weighted average asset allocation

	Percentage of Pension Plans Assets						Percentage of Other Postretirement Plans
	At Fair Value as of December 31,						Assets at Fair Value as of December 31,
	2011			2010			2011			2010
Equity securities		20	%		22	%		22	%		22	%
Fixed income securities		62	%		61	%		78	%		78	%
Alternative Assets		18	%		17	%		—			—
Total		100	%		100	%		100	%		100	%

Fair values of company pension plan assets

	Pension Plan Assets at Fair Value as of December 31, 2011
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments:	$	119	$	549	$	—	$	668
Fixed Income Securities:
Corporate		—		741		3		744
RMBS		—		334		11		345
U.S. Treasuries		59		819		—		878
Foreign government		—		53		3		56
CMBS		—		117		—		117
Other fixed income [1]		—		70		4		74
Equity Securities:
Large-cap domestic		—		570		—		570
Mid-cap domestic		52		—		—		52
Small-cap domestic		38		—		—		38
International		217		—		—		217
Other equities		—		1		—		1
Other investments:
Hedge funds		—		—		759		759
Total pension plan assets at fair value [2]	$	485	$	3,254	$	780	$	4,519

[1]	Includes ABS and municipal bonds.
[2]	Excludes approximately $43 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $37 of interest receivable carried at fair value.

	Pension Plan Assets at Fair Value as of December 31, 2010
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments: [1]	$	75	$	406	$	—	$	481
Fixed Income Securities:
Corporate		—		882		3		885
RMBS		—		450		9		459
U.S. Treasuries		7		330		—		337
Foreign government		—		61		2		63
CMBS		—		174		1		175
Other fixed income [2]		—		56		7		63
Equity Securities:
Large-cap domestic		—		496		—		496
Mid-cap domestic		62		—		—		62
Small-cap domestic		47		—		—		47
International		248		—		—		248
Other investments:
Hedge funds		—		—		635		635
Total pension plan assets at fair value [3]	$	439	$	2,855	$	657	$	3,951

[1]	Includes $30 of initial margin requirements related to the Plan’s duration overlay program.
[2]	Includes ABS and municipal bonds.
[3]	Excludes approximately $61 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $32 of interest receivable carried at fair value.

Pension plan asset fair value measurements using significant unobservable inputs

Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
							Foreign			Other fixed			Hedge
Assets	Corporate			RMBS			government			income			funds			Totals
Fair Value as of January 1, 2011	$	3		$	9		$	2		$	8		$	635		$	657
Actual return on plan assets
Relating to assets still held at the reporting date		1			—			—			2			21			24
Purchases		2			10			3			1			223			239
Sales		(1	)		(9	)		(2	)		(4	)		(120	)		(136	)
Transfers into Level 3		1			1			6			2			—			10
Transfers out of Level 3		(3	)		—			(6	)		(5	)		—			(14	)
Fair Value as of December 31, 2011	$	3		$	11		$	3		$	4		$	759		$	780

Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
										Other fixed
							Foreign			income and			Hedge
Assets	Corporate			RMBS			government			CMBS			funds			Totals
Fair Value as of January 1, 2010	$	12		$	24		$	2		$	8		$	501		$	547
Actual return on plan assets
Relating to assets still held at the reporting date		(1	)		—			—			1			29			29
Relating to assets sold during the period		1			—			—			—			4			5
Purchases		6			62			2			9			200			279
Sales		(12	)		(77	)		—			(5	)		(99	)		(193	)
Transfers into Level 3		2			—			—			2			—			4
Transfers out of Level 3		(5	)		—			(2	)		(7	)		—			(14	)
Fair Value as of December 31, 2010	$	3		$	9		$	2		$	8		$	635		$	657

Fair value of other postretirement plan assets

	Other Postretirement Plan Assets
	at Fair Value as of December 31, 2011
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments	$	—	$	9	$	—	$	9
Fixed Income Securities:
Corporate		—		53		—		53
RMBS		—		48		—		48
U.S. Treasuries		—		28		—		28
Foreign government		—		2		—		2
CMBS		—		18		—		18
Other fixed income		—		4		—		4
Equity Securities:
Large-cap		—		43		—		43
Total other postretirement plan assets at fair value [1]	$	—	$	205	$	—	$	205

[1] Excludes approximately $3 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $1 of interest receivable carried at fair value.

	Other Postretirement Plan Assets
	at Fair Value as of December 31, 2010
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments	$	—	$	10	$	—	$	10
Fixed Income Securities:
Corporate		—		57		—		57
RMBS		—		44		—		44
U.S. Treasuries		—		19		—		19
CMBS		—		17		—		17
Other fixed income		—		6		—		6
Equity Securities:
Large-cap		—		43		—		43
Total other postretirement plan assets at fair value [1]	$	—	$	196	$	—	$	196

[1] Excludes approximately $7 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $1 of interest receivable carried at fair value.

Company's Prior contributions

The following table illustrates the Company’s prior contributions.

Employer Contributions	Pension Benefits		Other Postretirement Benefits
2011	$	201	$	—
2010	$	201		—

Benefits expected to be paid

	Pension Benefits		Other Postretirement Benefits
2012	$	272	$	38
2013		291		40
2014		309		40
2015		325		40
2016		341		39
2017-2021		1,888		183
Total	$	3,426	$	380

Other postretirement benefits expected to be received under the Medicare Part D Subsidy

2012	$	4
2013		4
2014		5
2015		4
2016		5
2017-2021		31
Total	$	53

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Segment Information (Details Textual) (USD $) In Billions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Supplementary Insurance Information, by Segment [Line Items]
Number of company reporting segments	9
Number of company reporting divisions	4
Personal Lines [Member]
Supplementary Insurance Information, by Segment [Line Items]
AARP earned premiums	$ 2.8	$ 2.9	$ 2.8

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Employee Benefit Plans (Details 16) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Pension Benefits [Member]
Benefits expected to be paid
2012	$ 272
2013	291
2014	309
2015	325
2016	341
2017-2021	1,888
Total	3,426
Other Postretirement Benefits [Member]
Benefits expected to be paid
2012	38
2013	40
2014	40
2015	40
2016	39
2017-2021	183
Total	$ 380

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Goodwill and Other Intangible Assets (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended					3 Months Ended			12 Months Ended			3 Months Ended	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2010 Wealth Management [Member]	Dec. 31, 2010 Property & Casualty Commercial [Member]	Mar. 31, 2011 Individual Life Reporting Unit [Member]	Mar. 31, 2010 Retirement Plans Reporting Unit [Member]	Jun. 30, 2010 Federal Trust Corporation reporting unit within Corporate and Other [Member]	Dec. 31, 2011 Consumer Markets [Member]	Dec. 31, 2010 Consumer Markets [Member]	Dec. 31, 2010 Corporate [Member]	Mar. 31, 2009 Commercial Markets and Wealth Management [Member]	Dec. 31, 2009 Distribution agreements [Member]	Dec. 31, 2009 Other Intangible Assets [Member]	Dec. 31, 2009 Renewal Rights [Member]	Dec. 31, 2011 Goodwill [Member] Federal Trust Corporation [Member]
Acquired Finite Lived Intangible Asset (Textual) [Abstract]
Remaining goodwill being charge off associated with FTC																$ 15
Annual impairment tests margin, in percentage						less than 10%	less than 10%
Goodwill impairment	30	153	32	0	0			153	0	0	0	32
Additional acquired intangible assets in acquisitions	0	(1)	6										1	5
Amortization of intangible assets														$ 14	$ 22

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Employee Benefit Plans (Details 9) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Pension Benefits [Member]
Amounts in accumulated other comprehensive income (loss) on a before tax basis that have not yet been recognized as components of net periodic benefit cost consist of
Net loss	$ 1,930	$ 1,852
Prior service credit	(21)	(30)
Total	1,909	1,822
Other Postretirement Benefits [Member]
Amounts in accumulated other comprehensive income (loss) on a before tax basis that have not yet been recognized as components of net periodic benefit cost consist of
Net loss	39	17
Prior service credit	1
Transition obligation	2
Total	$ 42	$ 17

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Segment Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended							12 Months Ended
	Dec. 31, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Segment Reporting Information [Line Items]
Net income (loss)	$ 127	$ 24	$ 511	$ 619	$ 666	$ 76	$ 319	$ 662	$ 1,680	$ (887)
Property & Casualty Commercial [Member]
Segment Reporting Information [Line Items]
Net income (loss)								528	995	899
Group Benefits [Member]
Segment Reporting Information [Line Items]
Net income (loss)								90	185	193
Consumer Markets [Member]
Segment Reporting Information [Line Items]
Net income (loss)								5	143	140
Individual Annuity [Member]
Segment Reporting Information [Line Items]
Net income (loss)								(14)	527	(444)
Individual Life [Member]
Segment Reporting Information [Line Items]
Net income (loss)								133	229	15
Retirement Plans [Member]
Segment Reporting Information [Line Items]
Net income (loss)								15	47	(222)
Mutual Funds [Member]
Segment Reporting Information [Line Items]
Net income (loss)								98	132	34
Life Other Operations [Member]
Segment Reporting Information [Line Items]
Net income (loss)								358	(90)	(698)
Property and Casualty Other Operations [Member]
Segment Reporting Information [Line Items]
Net income (loss)								(117)	(53)	(78)
Corporate [Member]
Segment Reporting Information [Line Items]
Net income (loss)								$ (434)	$ (435)	$ (726)

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies [Abstract]

Future minimum lease commitments

Years ending December 31,	Operating Leases
2012	$	58
2013		47
2014		34
2015		26
2016		21
Thereafter		56
Total minimum lease payments [1]	$	242

[1] Excludes expected future minimum sublease income of approximately $7and $3 in 2012 and 2013, respectively.

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Discontinued Operations (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenue
Fee income and other		$ 36	$ 29
Net investment income	17	28	14
Net realized capital gains (losses)	(6)	(5)	(6)
Other revenues	48	213	231
Total revenues	59	272	268
Benefits, losses and expenses
Amortization of deferred policy acquisition costs and present value of future profits		17	10
Insurance operating and other expenses	54	256	265
Goodwill impairment	30	153	32
Total benefits, losses and expenses	54	426	275
Income (loss) before income taxes	5	(154)	(7)
Income tax expense (benefit)	1	(53)	(3)
Income (loss) from operations of discontinued operations, net of tax	4	(101)	(4)
Net realized capital gain on disposal, net of tax	82	37
Income (loss) from discontinued operations, net of tax	$ 86	$ (64)	$ (4)

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Earnings Per Share

12 Months Ended

Dec. 31, 2011

Earnings Per Share [Abstract]

Earnings Per Share

2. Earnings (Loss) per Share

The following tables present a reconciliation of net income (loss) and shares used in calculating basic earnings (loss) per common share to those used in calculating diluted earnings (loss) per common share.

	For the years ended December 31,
(In millions, except for per share data)	2011		2010			2009
Earnings
Income (loss) from continuing operations
Income (loss) from continuing operations, net of tax	$	576	$	1,744		$	(883	)
Less: Preferred stock dividends and accretion of discount		42		515			127
Income (loss) from continuing operations, net of tax, available to common shareholders		534		1,229			(1,010	)
Add: Dilutive effect of preferred stock dividends		—		33			—
Income (loss) from continuing operations, net of tax, available to common shareholders and assumed conversion of preferred shares	$	534	$	1,262		$	(1,010	)
Income (loss) from discontinued operations, net of tax	$	86	$	(64	)	$	(4	)
Net income
Net income	$	662	$	1,680		$	(887	)
Less: Preferred stock dividends and accretion of discount		42		515			127
Net income (loss) available to common shareholders		620		1,165			(1,014	)
Add: Dilutive effect of preferred stock dividends		—		33			—
Net income (loss) available to common shareholders and assumed conversion of preferred shares	$	620	$	1,198		$	(1,014	)
Shares
Weighted average common shares outstanding, basic		445.0		431.5			346.3
Dilutive effect of warrants		31.9		32.3			—
Dilutive effect of stock compensation plans		1.1		1.3			—
Dilutive effect of mandatory convertible preferred shares		—		16.4			—
Weighted average shares outstanding and dilutive potential common shares		478.0		481.5			346.3
Earnings (loss) per common share
Basic
Income (loss) from continuing operations, net of tax, available to common shareholders	$	1.20	$	2.85		$	(2.92	)
Income (loss) from discontinued operations, net of tax		0.19		(0.15	)		(0.01	)
Net income (loss) available to common shareholders	$	1.39	$	2.70		$	(2.93	)
Diluted
Income (loss) from continuing operations, net of tax, available to common shareholders	$	1.12	$	2.62		$	(2.92	)
Income (loss) from discontinued operations, net of tax		0.18		(0.13	)		(0.01	)
Net income (loss) available to common shareholders	$	1.30	$	2.49		$	(2.93	)

Basic earnings per share is computed based on the weighted average number of common shares outstanding during the year. Diluted earnings per share includes the dilutive effect of warrants, stock compensation plans, and assumed conversion of preferred shares to common using the treasury stock method. Contingently issuable shares are included for the number of shares issuable assuming the end of the reporting period was the end of the contingency period, if dilutive.

Under the treasury stock method for the warrants issued as a result of the Company’s participation in the Capital Purchase Program, see Note 15, exercise shall be assumed at the beginning of the period. The proceeds from exercise of $9.699 per share in 2011 and 9.790 per share in 2010 and 2009 shall be assumed to be used to purchase common shares at the average market price during the period.

Under the treasury stock method for the warrants issued to Allianz, see Note 15, exercise shall be assumed at the beginning of the period. The proceeds from exercise of $25.23 in 2011, $25.23 in 2010 and $25.25 in 2009 per share shall be assumed to be used to purchase common shares at the average market price during the period.

Under the treasury stock method for stock compensation plans, shares are assumed to be issued and then reduced for the number of shares repurchaseable with theoretical proceeds at the average market price for the period. Theoretical proceeds for the stock compensation plans include option exercise price payments, unamortized stock compensation expense and tax benefits realized in excess of the tax benefit recognized in net income. The difference between the number of shares assumed issued and number of shares purchased represents the dilutive shares. Upon exercise of outstanding options or vesting of other stock compensation plan awards, the additional shares issued and outstanding are included in the calculation of the Company’s weighted average shares from the date of exercise or vesting.

Under the if-converted method for mandatory convertible preferred stock, see Note 15, the conversion to common shares is assumed if the inclusion of these shares and the related dividend adjustment are dilutive to the earnings per share calculation. For the year ended December 31, 2011, 20.7 million shares and the related dividend adjustment would have been antidilutive to the earnings per share calculations and therefore are excluded. Assuming the impact of the mandatory convertible preferred shares was dilutive, weighted average common shares outstanding and dilutive potential common shares would have totaled 498.7 million shares. For the year ended December 31, 2010, these shares and the related dividend adjustment are included in the diluted earnings per share calculation.

As a result of the net loss in the year ended December 31, 2009, the Company used basic weighted average common shares outstanding in the calculation of diluted loss per share, since the inclusion of shares for warrants of 14.6 million, stock compensation plans of 0.9 million, would have been antidilutive to the earnings per share calculation. In the absence of the net loss, weighted average common shares outstanding and dilutive potential common shares would have totaled 361.8 million for the year ended December 31, 2009.

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Equity (Details Textual 2) (USD $)	1 Months Ended			3 Months Ended				12 Months Ended								12 Months Ended				12 Months Ended
	Jul. 31, 2011	Mar. 31, 2010	Jun. 30, 2009	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Sep. 27, 2010	Mar. 23, 2010	Jun. 26, 2009	Jun. 12, 2009	May 27, 2009	Dec. 31, 2011 Treasury Stock [Member]	Dec. 31, 2010 Series F Preferred Stock [Member]	Mar. 23, 2010 Series F Preferred Stock [Member]	Dec. 31, 2011 U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries [Member]	Dec. 31, 2012 U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries [Member]	Dec. 31, 2011 U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries [Member]	Dec. 31, 2012 Property and casualty insurance subsidiaries [Member]	Dec. 31, 2011 Property and casualty insurance subsidiaries [Member]
Disclosure of Restrictions on Dividends by Business Segment [Line Items]
Amount available for dividend distribution without prior approval from regulatory agency																			$ 625,000,000				$ 1,400,000,000
Amount received as dividend distribution from subsidiary																					80,000,000		1,100,000,000
Amount anticipated to be received as dividend distribution from subsidiary																				0		800,000,000
Dividend reflecting net realized capital gain on sale of SRS																							150,000,000
Dividend relating to funding interest payments on intercompany note																							160,000,000
Dividends to fund holding company obligations																							800,000,000
Class of Stock [Line Items]
Preferred Stock, Series E, discount on shares													13.00%
Cumulative dividend on mandatory convertible preferred stock																	7.25%
Preferred stock, liquidation preference per share				$ 1,000				$ 1,000	$ 1,000									$ 1,000
Common stock repurchased, value																(51,000,000)
Equity (Textual) [Abstract]
Common stock, shares issued				469,750,171				469,750,171	469,754,771			59,600,000
Sale of stock price per share												$ 27.75
Sale of stock, consideration received on transaction									1,600,000,000
Depository shares, issued												23,000,000
Interest in mandatory convertible preferred stock series F represented by each depositary share		1/40th
Sale of depository shares price per share												25
Net proceeds from issuance of depository shares									556,000,000
Convertible preferred stock shares, Series F, reserved for future issuance												575,000
Common stock issuable upon conversion of each share of mandatory convertible preferred stock, minimum range									$ 29.536
Common stock issuable upon conversion of each share of mandatory convertible preferred stock, maximum range									$ 36.036
Number of Fixed rate cumulative preferred stock, Series E, issued and sold to treasury			3,400,000
Common stock, par value				$ 0.01				$ 0.01	$ 0.01				$ 0.01
Preferred Stock, Series E Discount On Shares										480,000,000
Estimated fair value of series E preferred stock													2,500,000,000
Estimated fair value of warrants													400,000,000
Long-term realized volatility													62.00%
Assumed dividend yield													1.72%
Fair Value used to record Series E, preferred stock										2,900,000,000
Fair value used to record warrants										480,000,000
Final dividend payment on the Series E preferred stock, repurchased from treasury									22,000,000
Aggregate purchase price of fixed rate cumulative perpetual preferred stock, Series E, repurchased from treasury		3,400,000,000
Charge to retained earnings representing the acceleration of the accretion of the remaining discount on the Series E preferred stock									440,000,000
Sale of warrants to purchase shares of common stock in Secondary public offering											706,000,000
Approximate number of warrants sold by the Treasury									52,000,000
Shares offered under equity issuance program														60,000,000
Aggregate sales proceeds from shares offered under equity issuance program														750,000,000
Issuance of shares upon completion of discretionary equity issuance plan										56,100,000
Net proceeds from issuance of common shares under discretionary equity issuance plan										887,000,000
Holding Period Used to Calculate Fair Value of Series E Preferred Stock													5 years
Amortization of discount										40,000,000
Authorization of stock repurchase program	500,000,000
Common stock repurchased, shares								3,200,000
Common stock, shares authorized				1,500,000,000				1,500,000,000	1,500,000,000						1,500,000,000
Common stock shares authorized prior to increase															750,000,000
Dividends declared				$ 0.10	$ 0.10	$ 0.10	$ 0.10	$ 0.40	$ 0.20	$ 0.20
Increased aggregate sale proceed under equity issuance program										$750 to $900
Threshold for approval of state insurance commissioner for declaration or payment of any dividend								Exceeds the greater of (i) 10% of the insurer’s policyholder surplus as of December 31 of the preceding year or (ii) net income (or net gain from operations, if such company is a life insurance company) for the twelve-month period ending on the thirty-first day of December last preceding
Warrant term			10 years
Aggregate purchase price													3,400,000,000
Number of fixed rate cumulative perpetual preferred stock, Series E, repurchased from treasury		3,400,000
Warrants record to Additional Paid-in Capital as permanent equity								$ 480,000,000
Warrant exercise price				$ 9.699				$ 9.699					$ 9.79

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Separate Accounts, Death Benefits and Other Insurance Benefit Features (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 Y	Dec. 31, 2010
Separate Accounts, Death Benefits and Other Insurance Benefit Features (Textual) [Abstract]
Percentage of GMDB retained net amount of risk reinsured to a Hartford affiliate	55.00%
Percentage of GMIB net amount of risk reinsured to Hartford affiliate	65.00%
Age of insurer up to return of premium and MAV	80
Invested in fixed income securities	17.00%	15.00%
Invested in equity securities	83.00%	85.00%
MAV Only [Member]
Separate Accounts, Death Benefits and Other Insurance Benefit Features (Textual) [Abstract]
Age of insurer up to adjusted for withdrawals	80
With 5% rollup [Member]
Separate Accounts, Death Benefits and Other Insurance Benefit Features (Textual) [Abstract]
Age of insurer up to adjusted for withdrawals	80
Simple interest up to the earlier of age 80	5.00%
Adjusted premiums	100.00%
With Earnings Protection Benefit Rider (EPB) [Member]
Separate Accounts, Death Benefits and Other Insurance Benefit Features (Textual) [Abstract]
Premiums net of withdrawals	200.00%
Asset Protection Benefit ("APB") [Member]
Separate Accounts, Death Benefits and Other Insurance Benefit Features (Textual) [Abstract]
Greater of net premiums and MAV	25.00%
Number of past months adjusted for premiums	P12M
Reset [Member]
Separate Accounts, Death Benefits and Other Insurance Benefit Features (Textual) [Abstract]
Age of insurer up to adjusted for withdrawals	80
Guaranteed Minimum Income Benefit [Member] | JAPAN [Member]
Separate Accounts, Death Benefits and Other Insurance Benefit Features (Textual) [Abstract]
Guaranteed Remaining Balance	34,100	33,900
Minimum deferral period for return initial investment of income benefit	P10Y
Minimum deferral period for earnings liquidity of income benefit	P15Y
Minimum deferral period for fixed annuity of income benefit	P20Y
Guaranteed Minimum Withdrawal Benefit [Member] | JAPAN [Member]
Separate Accounts, Death Benefits and Other Insurance Benefit Features (Textual) [Abstract]
Guaranteed Remaining Balance	701	707

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Segment Information (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									$ 18,838	$ 18,803	$ 18,971
Net investment income:
Securities available-for-sale and other									4,272	4,364	4,017
Equity securities, trading									(1,359)	(774)	3,188
Net investment income									2,913	3,590	7,205
Net realized capital gains (losses)									(145)	(611)	(2,004)
Other revenues									253	267	261
Revenues	5,638	4,520	5,401	6,308	5,930	6,602	3,265	6,257	21,859	22,049	24,433
Property & Casualty Commercial [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									6,127	5,744	5,903
Workers' Compensation [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									2,809	2,387	2,275
Property [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									528	547	597
Automobiles Commercial [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									583	598	646
Package Business [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									1,145	1,124	1,123
Liability [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									540	540	619
Fidelity and Surety [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									215	224	250
Professional Liability [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									307	324	393
Group Benefits [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									4,147	4,278	4,350
Group Disability [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									1,929	2,004	1,975
Group Life and Accident [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									2,024	2,052	2,126
Other Group Benefit [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									194	222	249
Consumer Markets [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									3,747	3,947	3,959
Automobiles Consumer [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									2,619	2,806	2,857
Homeowners [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									1,128	1,141	1,102
Individual Annuity [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									1,660	1,716	1,465
Variable Annuity [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									1,604	1,702	1,468
Fixed / MVA and other annuity [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									56	14	(3)
Individual Life [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									899	856	940
Variable Life [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									396	416	503
Universal Life [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									455	391	390
Term / other life [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									48	49	47
Retirement Plans [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									380	359	324
401(k) [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									332	318	286
Government Plans [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									48	41	38
Mutual Funds [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									649	664	518
Non-proprietary [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									590	603	518
Proprietary [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									59	61
Corporate [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									209	189	219
Life Other Operations [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations									1,020	1,049	1,293
Property and Casualty Other Operations [Member]
Segment Reporting Information [Line Items]
Earned premiums, fees and other considerations										$ 1

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Income Tax (Details 3) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Reconciliation of the tax provision at the U.S. Federal statutory rate to the provision for income taxes
Tax provision at U.S. Federal statutory rate	$ 81	$ 825	$ (602)
Tax-exempt interest	(148)	(152)	(149)
Dividends received deduction	(206)	(154)	(188)
Nondeductible costs associated with warrants			78
Valuation allowance	(78)	87	30
Goodwill			12
Other	5	6	(19)
Total income tax expense (benefit)	$ (346)	$ 612	$ (838)

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Summary of Investments - Other Than Investments in Affiliates (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	$ 133,776
Fair Value	135,349
Amount which shown on Balance Sheet	134,948
U.S. government and government agencies and authorities (guaranteed and sponsored) [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	8,901
Fair Value	9,364
Amount which shown on Balance Sheet	9,364
States, municipalities and political subdivisions [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	12,557
Fair Value	13,260
Amount which shown on Balance Sheet	13,260
Foreign governments [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	2,030
Fair Value	2,161
Amount which shown on Balance Sheet	2,161
Public utilities [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	8,236
Fair Value	9,055
Amount which shown on Balance Sheet	9,055
All other corporate bonds [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	32,925
Fair Value	34,956
Amount which shown on Balance Sheet	34,956
All Other Mortgage Backed and Asset Backed Securities [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	14,329
Fair Value	13,013
Amount which shown on Balance Sheet	13,013
Fixed maturities, AFS [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	78,978
Fair Value	81,809
Amount which shown on Balance Sheet	81,809
Fixed Maturities, FVO [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	1,501
Fair Value	1,328
Amount which shown on Balance Sheet	1,328
Fixed Maturities [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	80,479
Fair Value	83,137
Amount which shown on Balance Sheet	83,137
Industrial, miscellaneous and all other [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	420
Fair Value	443
Amount which shown on Balance Sheet	443
Non-redeemable preferred stocks [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	636
Fair Value	478
Amount which shown on Balance Sheet	478
Total equity securities, available-for-sale [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	1,056
Fair Value	921
Amount which shown on Balance Sheet	921
Equity securities, trading [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	32,928
Fair Value	30,499
Amount which shown on Balance Sheet	30,499
Equity Securities [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	33,984
Fair Value	31,420
Amount which shown on Balance Sheet	31,420
Mortgage loans [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	5,728
Fair Value	5,977
Amount which shown on Balance Sheet	5,728
Policy Loans [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	2,001
Fair Value	2,153
Amount which shown on Balance Sheet	2,001
Investments in partnerships and trusts [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	2,532
Fair Value	2,532
Amount which shown on Balance Sheet	2,532
Futures Options and Miscellaneous [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	1,316
Fair Value	2,394
Amount which shown on Balance Sheet	2,394
Short-term Investments [Member]
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	7,736
Fair Value	7,736
Amount which shown on Balance Sheet	$ 7,736

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Equity (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Statutory Net Income (Loss)
Statutory Net Income (Loss)	$ (758)	$ 1,337	$ 2,603
Statutory surplus
Statutory Capital and surplus	14,800	15,452
U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries [Member]
Statutory Net Income (Loss)
Statutory Net Income (Loss)	(1,272)	(140)	1,714
Statutory surplus
Statutory Capital and surplus	7,388	7,731
Property and casualty insurance subsidiaries [Member]
Statutory Net Income (Loss)
Statutory Net Income (Loss)	514	1,477	889
Statutory surplus
Statutory Capital and surplus	7,412	7,721
JAPAN [Member]
Statutory surplus
Statutory Capital and surplus	$ 1,300	$ 1,300

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2011

Goodwill and Other Intangible Assets [Abstract]

Carrying amount of goodwill allocated to reporting segment

	December 31, 2011										December 31, 2010
			Accumulated			Discontinued			Carrying				Accumulated			Discontinued			Carrying
	Gross		Impairments			Operations[1]			Value		Gross		Impairments			Operations[1]			Value
Commercial Markets
Property & Casualty Commercial	$	30	$	(30	)	$	—		$	—	$	30	$	—		$	—		$	30
Consumer Markets		119		—			—			119		119		—			—			119
Wealth Management
Individual Life		224		—			—			224		224		—			—			224
Retirement Plans		87		—			—			87		87		—			—			87
Mutual Funds		159		—			—			159		159		—			—			159
Total Wealth Management		470		—			—			470		470		—			—			470
Corporate		787		(355	)		(15	)		417		940		(355	)		(153	)		432
Total Goodwill	$	1,406	$	(385	)	$	(15	)	$	1,006	$	1,559	$	(355	)	$	(153	)	$	1,051

[1] Represents goodwill written off related to Federal Trust Corporation which is currently recorded in discontinued operations.

Acquired intangible assets subject to amortization

	For the years ended December 31,
	2011			2010			2009
Gross carrying amount, beginning of year	$	89		$	90		$	121
Accumulated net amortization		25			18			47
Net carrying amount, beginning of year		64			72			74
Acquisition of business		—			(1	)		6
Amortization, net of the accretion of interest		(9	)		(7	)		(8	)
Net carrying amount, end of year		55			64			72
Accumulated net amortization		34			25			18
Gross carrying amount, end of year	$	89		$	89		$	90

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Quarterly Results for 2011 and 2010 (Unaudited)

12 Months Ended

Dec. 31, 2011

Quarterly Results for 2011 and 2010 (Unaudited) [Abstract]

Quarterly Results for 2011 and 2010 (Unaudited)

22. Quarterly Results For 2011 and 2010 (Unaudited)

	Three Months Ended
	March 31,					June 30,						September 30,					December 31,
	2011		2010			2011			2010			2011			2010		2011		2010
Revenues	$	6,308	$	6,257		$	5,401		$	3,265		$	4,520		$	6,602	$	5,638	$	5,930
Benefits, losses and expenses		5,898		5,722			5,566			3,121			4,624			5,685		5,546		5,171
Income (loss) from continuing operations, net of tax		351		319			104			175			(3	)		665		126		584
Income (loss) from discontinued operations, net of tax		160		—			(80	)		(99	)		3			1		1		35
Net income (loss) [1]		511		319			24			76			—			666		127		619
Less: Preferred stock dividends and accretion of discount		10		483			11			11			10			10		11		11
Net income (loss) available to common shareholders	$	501	$	(164	)	$	13		$	65		$	(10	)	$	656	$	116	$	608
Basic earnings (losses) per common share	$	1.13	$	(0.42	)	$	0.03		$	0.15		$	(0.02	)	$	1.48	$	0.26	$	1.37
Diluted earnings (losses) per common share [1]	$	1.01	$	(0.42	)	$	0.03		$	0.14		$	(0.02	)	$	1.34	$	0.25	$	1.24
Weighted average common shares outstanding, basic		444.6		393.7			445.1			443.9			445.3			444.1		445.1		444.3
Weighted average shares outstanding and dilutive potential common shares		508.2		393.7			482.4			480.2			445.3			495.3		468.9		497.8

[1] In periods of a net loss available to common shareholders, the Company uses basic weighted average common shares outstanding in the calculation of diluted loss per common share, since the inclusion of shares for warrants, stock compensation plans and the assumed conversion of the preferred shares to common would have been antidilutive to the earnings per common share calculation. In the absence of the net loss available to common shareholders, weighted average common shares outstanding and dilutive potential common shares would have totaled 428.5 million and 473.4 million for the three months ended March 31, 2010 and September 30, 2011, respectively. In addition, assuming the impact of mandatory convertible preferred shares was not antidilutive, weighted average common shares outstanding and dilutive potential common shares would have totaled 431.9 million, 503.1 million, 501.0 million, 494.1 million, and 489.6 for the three months ended March 31, 2010, June 30, 2011, June 30, 2010, September 30, 2011 and December 31, 2011, respectively.

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Restructuring Severance and Other Costs

12 Months Ended

Dec. 31, 2011

Restructuring, Severance and Other Costs [Abstract]

Restructuring, Severance and Other Costs

21. Restructuring, Severance and Other Costs

During the year ended December 31, 2011, the Company implemented restructuring activities across several areas aimed at reducing overall expense levels.

During the year ended December 31, 2009, the Company completed a review of several strategic alternatives with a goal of preserving capital, reducing risk and stabilizing its ratings. These alternatives included the potential restructuring, discontinuation or disposition of various business lines. Following that review, the Company announced that it would suspend all new sales in the Japanese and European operations currently included in the Life Other Operations segment. The Company has also executed on plans to change the management structure of the organization and reorganized the nature and focus of certain of the Company’s operations. These activities resulted in termination benefits to current employees, costs to terminate leases and other contracts and asset impairment charges. The Company completed these restructuring activities and executed final payment during the year ended December 31, 2010.

The following pre-tax charges were incurred during the years ended December 31, 2011, 2010 and 2009 in connection with these restructuring activities:

	2011		2010		2009
Severance benefits	$	17	$	25	$	52
Asset impairment charges		—		1		53
Other contract termination charges		8		—		34
Total restructuring, severance and other costs	$	25	$	26	$	139

The amounts incurred during the year ended December 31, 2011, 2010 and 2009 were recorded in Insurance operating costs and other expenses within Corporate.

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Investments and Derivative Instruments (Details Textual) (USD $) In Millions, unless otherwise specified			12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Commercial [Member] Security
Property Subject to or Available for Operating Lease [Line Items]
Valuation allowances on mortgage loans held for sale	$ 4	$ 7
Mortgage loans held for sale, carrying value	74	87
Financing Receivable, Recorded Investment, Past Due [Line Items]
Carrying value of two delinquent commercial mortgage loans, both past due by 90 days or more			14
Valuation allowance of loans of two delinquent commercial mortgage loans, both past due by 90 days or more			$ 60
Number of delinquent commercial mortgage loans, both past due by 90 days or more			2
Delinquency period commercial mortgage loans			90 days or more

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Quarterly Results for 2011 and 2010 (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2011

Quarterly Results for 2011 and 2010 (Unaudited) [Abstract]

Schedule of Quarterly Financial Information

	Three Months Ended
	March 31,					June 30,						September 30,					December 31,
	2011		2010			2011			2010			2011			2010		2011		2010
Revenues	$	6,308	$	6,257		$	5,401		$	3,265		$	4,520		$	6,602	$	5,638	$	5,930
Benefits, losses and expenses		5,898		5,722			5,566			3,121			4,624			5,685		5,546		5,171
Income (loss) from continuing operations, net of tax		351		319			104			175			(3	)		665		126		584
Income (loss) from discontinued operations, net of tax		160		—			(80	)		(99	)		3			1		1		35
Net income (loss) [1]		511		319			24			76			—			666		127		619
Less: Preferred stock dividends and accretion of discount		10		483			11			11			10			10		11		11
Net income (loss) available to common shareholders	$	501	$	(164	)	$	13		$	65		$	(10	)	$	656	$	116	$	608
Basic earnings (losses) per common share	$	1.13	$	(0.42	)	$	0.03		$	0.15		$	(0.02	)	$	1.48	$	0.26	$	1.37
Diluted earnings (losses) per common share [1]	$	1.01	$	(0.42	)	$	0.03		$	0.14		$	(0.02	)	$	1.34	$	0.25	$	1.24
Weighted average common shares outstanding, basic		444.6		393.7			445.1			443.9			445.3			444.1		445.1		444.3
Weighted average shares outstanding and dilutive potential common shares		508.2		393.7			482.4			480.2			445.3			495.3		468.9		497.8

[1] In periods of a net loss available to common shareholders, the Company uses basic weighted average common shares outstanding in the calculation of diluted loss per common share, since the inclusion of shares for warrants, stock compensation plans and the assumed conversion of the preferred shares to common would have been antidilutive to the earnings per common share calculation. In the absence of the net loss available to common shareholders, weighted average common shares outstanding and dilutive potential common shares would have totaled 428.5 million and 473.4 million for the three months ended March 31, 2010 and September 30, 2011, respectively. In addition, assuming the impact of mandatory convertible preferred shares was not antidilutive, weighted average common shares outstanding and dilutive potential common shares would have totaled 431.9 million, 503.1 million, 501.0 million, 494.1 million, and 489.6 for the three months ended March 31, 2010, June 30, 2011, June 30, 2010, September 30, 2011 and December 31, 2011, respectively.

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Separate Accounts, Death Benefits and Other Insurance Benefit Features (Tables)

12 Months Ended

Dec. 31, 2011

Separate Accounts, Death Benefits and Other Insurance Benefit Features [Abstract]

Changes in the gross U.S. GMDB, Japan GMDB/GMIB, and UL secondary guarantee benefits

				International			UL Secondary
	U.S. GMDB			GMDB/GMIB			Guarantees
Liability balance as of January 1, 2011	$	1,053		$	696		$	113
Incurred		220			122			53
Paid		(222	)		(165	)		—
Unlock		53			287			62
Currency translation adjustment		—			35			—
Liability balance as of December 31, 2011	$	1,104		$	975		$	228
Reinsurance recoverable asset, as of January 1, 2011	$	686		$	36		$	30
Incurred		128			18			(8	)
Paid		(143	)		(30	)		—
Unlock		53			15			—
Currency translation adjustment		—			1			—
Reinsurance recoverable asset, as of December 31, 2011	$	724		$	40		$	22

				International			UL Secondary
	U.S. GMDB			GMDB/GMIB			Guarantees
Liability balance as of January 1, 2010	$	1,233		$	599		$	76
Incurred		239			103			39
Paid		(294	)		(134	)		—
Unlock		(125	)		39			(2	)
Currency translation adjustment		—			89			—
Liability balance as of December 31, 2010	$	1,053		$	696		$	113
Reinsurance recoverable asset, as of January 1, 2010	$	787		$	51		$	22
Incurred		139			(26	)		8
Paid		(176	)		1			—
Unlock		(64	)		5			—
Currency translation adjustment		—			5			—
Reinsurance recoverable asset, as of December 31, 2010	$	686		$	36		$	30

Individual Variable and Group Annuity Account Value By GMDB GMIB Type

Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
					Retained Net
	Account		Net Amount		Amount		Weighted Average
	Value		at Risk		at Risk		Attained Age of
Maximum anniversary value (“MAV”) [1]	(“AV”) [8]		(“NAR”) [10]		(“RNAR”) [10]		Annuitant
MAV only	$	20,718	$	5,998	$	1,500		68
With 5% rollup [2]		1,469		521		181		68
With Earnings Protection Benefit Rider (“EPB”) [3]		5,378		940		104		65
With 5% rollup & EPB		585		169		35		68
Total MAV		28,150		7,628		1,820
Asset Protection Benefit (“APB”) [4]		22,343		3,139		2,042		66
Lifetime Income Benefit (“LIB”) — Death Benefit [5]		1,095		120		120		64
Reset [6] (5-7 years)		3,139		307		304		68
Return of Premium (“ROP”) [7]/Other		21,512		876		850		65
Subtotal U.S. GMDB		76,239		12,070		5,136		67
Less: General Account Value with U.S. GMDB		7,251
Subtotal Separate Account Liabilities with GMDB		68,988
Separate Account Liabilities without U.S. GMDB		74,882
Total Separate Account Liabilities	$	143,870
Japan GMDB [9], [11]	$	29,234	$	10,857	$	9,413		70
Japan GMIB [9], [11]	$	27,282	$	7,502	$	7,502		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 $34.1 billion and $33.9 billion as of December 31, 2011 and December 31, 2010, respectively. The GRB related to the Japan GMAB and GMWB was $701 as of December 31, 2011 and $707 as of December 31, 2010. 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 December 31, 2011, 55% of the GMDB RNAR and 65% 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.

Account balances of contracts with guarantees

Asset type	As of December 31, 2011		As of December 31, 2010
Equity securities (including mutual funds)	$	61,472	$	75,601
Cash and cash equivalents		7,516		8,365
Total	$	68,988	$	83,966

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Summary of Investments - Other Than Investments in Affiliates

12 Months Ended

Dec. 31, 2011

Summary of Investments, Other than Investments in Related Parties [Abstract]

Summary of Investments - Other Than Investments in Affiliates

SCHEDULE I

SUMMARY OF INVESTMENTS — OTHER THAN INVESTMENTS IN AFFILIATES

(In millions)

	As of December 31, 2011
					Amount at
					which shown on
Type of Investment	Cost		Fair Value		Balance Sheet
Fixed Maturities
Bonds and notes
U.S. government and government agencies and authorities (guaranteed and sponsored)	$	8,901	$	9,364	$	9,364
States, municipalities and political subdivisions		12,557		13,260		13,260
Foreign governments		2,030		2,161		2,161
Public utilities		8,236		9,055		9,055
All other corporate bonds		32,925		34,956		34,956
All other mortgage-backed and asset-backed securities		14,329		13,013		13,013
Total fixed maturities, available-for-sale		78,978		81,809		81,809
Fixed maturities, at fair value using fair value option		1,501		1,328		1,328
Total fixed maturities		80,479		83,137		83,137
Equity Securities
Common stocks
Industrial, miscellaneous and all other		420		443		443
Non-redeemable preferred stocks		636		478		478
Total equity securities, available-for-sale		1,056		921		921
Equity securities, trading		32,928		30,499		30,499
Total equity securities		33,984		31,420		31,420
Mortgage loans		5,728		5,977		5,728
Policy loans		2,001		2,153		2,001
Investments in partnerships and trusts		2,532		2,532		2,532
Futures, options and miscellaneous		1,316		2,394		2,394
Short-term investments		7,736		7,736		7,736
Total investments	$	133,776	$	135,349	$	134,948

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Condensed Financial Information of The Hartford Financial Services Group, Inc. (Registrant)

12 Months Ended

Dec. 31, 2011

Condensed Financial Information of The Hartford Financial Services Group, Inc. Registrant [Abstract]

Condensed Financial Information of The Hartford Financial Services Group, Inc. Registrant

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

(Registrant)

(In millions)

	As of December 31,
Condensed Balance Sheets	2011		2010
Assets
Fixed maturities, available-for-sale, at fair value	$	152	$	251
Other investments		28		31
Short-term investments		1,425		1,762
Investment in affiliates		27,575		25,227
Deferred income taxes		1,109		885
Unamortized Issue Costs		51		55
Other assets		31		22
Total assets	$	30,371	$	28,233
Liabilities and Stockholders’ Equity
Net payable to affiliates	$	283	$	430
Short-term debt (includes current maturities of long-term debt)		—		400
Long-term debt		5,975		5,961
Other liabilities		1,203		1,131
Total liabilities		7,461		7,922
Total stockholders’ equity		22,910		20,311
Total liabilities and stockholders’ equity	$	30,371	$	28,233

	For the years ended December 31,
Condensed Statements of Operations	2011			2010			2009
Net investment income	$	2		$	5		$	8
Net realized capital gains (losses)		(5	)		(5	)		(231	)
Total revenues		(3	)		—			(223	)
Interest expense		490			489			457
Other expenses		(41	)		11			8
Total expenses		449			500			465
Loss before income taxes and earnings (losses) of subsidiaries		(452	)		(500	)		(688	)
Income tax benefit		(154	)		(170	)		(157	)
Loss before earnings (losses)of subsidiaries		(298	)		(330	)		(531	)
Earnings (losses) of subsidiaries		960			2,010			(356	)
Net income (loss)	$	662		$	1,680		$	(887	)

The condensed financial statements should be read in conjunction with
the consolidated financial statements and notes thereto.

	For the years ended December 31,
Condensed Statements of Cash Flows	2011			2010			2009
Operating Activities
Net income (loss)	$	662		$	1,680		$	(887	)
Undistributed earnings (losses) of subsidiaries		(961	)		(1,004	)		1,307
Change in operating assets and liabilities		625			(21	)		(590	)
Cash provided by (used for) operating activities		326			655			(170	)
Investing Activities
Net sales (purchases) of short-term investments		432			233			(412	)
Purchase price of business acquired		—			—			(10	)
Capital contributions to subsidiaries		(126	)		(311	)		(3,115	)
Cash provided by (used for) investing activities		306			(78	)		(3,537	)
Financing Activities
Issuance of long-term debt		—			1,090			—
Repayments at maturity of long-term debt		(400	)		(275	)		—
Change in commercial paper		—			—			(375	)
Net proceeds from issuance of mandatory convertible preferred stock		—			556			—
Net proceeds from issuance of common shares under public offering		—			1,600			—
Proceeds from net issuance of preferred stock and warrants to U.S. Treasury		—			—			3,400
Redemption of preferred stock issued to the U.S. Treasury		—			(3,400	)		—
Net proceeds from issuance of common shares under discretionary equity issuance plan		—			—			887
Treasury stock acquired		(46	)		—			—
Proceeds from net issuances of common shares under incentive and stock compensation plans and excess tax benefits		9			22			17
Dividends paid — Preferred shares		(42	)		(85	)		(73	)
Dividends paid — Common Shares		(153	)		(85	)		(149	)
Cash provided by (used for) financing activities		(632	)		(577	)		3,707
Net change in cash		—			—			—
Cash — beginning of year		—			—			—
Cash — end of year	$	—		$	—		$	—
Supplemental Disclosure of Cash Flow Information
Interest Paid	$	483		$	465		$	454
Dividends Received from Subsidiaries	$	976		$	1,006		$	243

The condensed financial statements should be read in conjunction with
the consolidated financial statements and notes thereto.

XML

Basis of Presentation and Accounting Policies

12 Months Ended

Dec. 31, 2011

Basis of Presentation and Accounting Policies [Abstract]

Basis of Presentation and Accounting Policies

1. Basis of Presentation and Accounting Policies

Basis of Presentation

The Hartford Financial Services Group, Inc. is a holding company for insurance and financial services subsidiaries that provide investment products and life and property and casualty insurance to both individual and business customers in the United States (collectively, “The Hartford”, the “Company”, “we” or “our”). Also, The Hartford continues to administer business previously sold in Japan and the U.K.

The Consolidated Financial Statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”), which differ materially from the accounting practices prescribed by various insurance regulatory authorities.

Consolidation

The Consolidated Financial Statements include the accounts of The Hartford Financial Services Group, Inc., companies in which the Company directly or indirectly has a controlling financial interest and those variable interest entities (“VIEs”) in which the Company is required to consolidate. Entities in which the Company has significant influence over the operating and financing decisions but are not required to consolidate are reported using the equity method. For further discussions on VIEs see Note 5 of the Notes to Consolidated Financial Statements. Material intercompany transactions and balances between The Hartford and its subsidiaries and affiliates have been eliminated.

Discontinued Operations

The results of operations of a component of the Company that either has been disposed of or is classified as held-for-sale are reported in discontinued operations if the operations and cash flows of the component have been or will be eliminated from the ongoing operations of the Company as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction.

The Company is presenting the operations of certain businesses that meet the criteria for reporting as discontinued operations. Amounts for prior periods have been retrospectively reclassified. See Note 20 of the Notes to Consolidated Financial Statements for information on the specific subsidiaries and related impacts.

Use of Estimates

The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining property and casualty insurance product reserves, net of reinsurance; estimated gross profits used in the valuation and amortization of assets and liabilities associated with variable annuity and other universal life-type contracts; evaluation of other-than-temporary impairments on available-for-sale securities and valuation allowances on investments; living benefits required to be fair valued; goodwill impairment; valuation of investments and derivative instruments; pension and other postretirement benefit obligations; valuation allowance on deferred tax assets; and contingencies relating to corporate litigation and regulatory matters. Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Consolidated Financial Statements.

Mutual Funds

The Company maintains a retail mutual fund operation whereby the Company, through wholly-owned subsidiaries, provides investment management and administrative services to The Hartford Mutual Funds, Inc. and The Hartford Mutual Funds II, Inc. (collectively, “mutual funds”), consisting of 57 non-proprietary mutual funds, as of December 31, 2011. The Company charges fees to these mutual funds, which are recorded as revenue by the Company. These mutual funds are registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940. The mutual funds are owned by the shareholders of those funds and not by the Company. In the fourth quarter of 2011, the Company entered into a preferred partnership agreement with Wellington Management Company, LLP (“Wellington Management”) and announced that Wellington Management will serve as the sole sub-advisor for The Hartford’s non-proprietary mutual funds, including equity and fixed income funds, pending a fund-by-fund review by The Hartford’s mutual funds board of directors. As of December 31, 2011, Wellington Management served as the sub-advisor for 29 of The Hartford’s non-proprietary mutual funds and has been the primary manager for the Company’s equity funds.

The mutual funds are owned by the shareholders of those funds and not by the Company. As such, the mutual fund assets and liabilities and related investment returns are not reflected in the Company’s Consolidated Financial Statements since they are not assets, liabilities and operations of the Company

Reclassifications

Certain reclassifications have been made to prior year financial information to conform to the current year presentation.

Future Adoption of New Accounting Standards

Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts

In October 2010, the FASB issued a standard clarifying the definition of acquisition costs that are eligible for deferral. Acquisition costs are to include only those costs that are directly related to the successful acquisition or renewal of insurance contracts; incremental direct costs of contract acquisition that are incurred in transactions with either independent third parties or employees; and advertising costs meeting the capitalization criteria for direct-response advertising.

This standard is effective for fiscal years beginning after December 15, 2011, and interim periods within those years. This standard may be applied prospectively upon the date of adoption, with retrospective application permitted, but not required. Early adoption as of the beginning of a fiscal year is permitted.

The Company elected to adopt this standard retrospectively on January 1, 2012, resulting in a write down of the Company’s deferred acquisition costs relating to those costs which no longer meet the revised standard as summarized above. The Company estimates the cumulative effect of the retrospective adoption of this standard, when reflected in future financial statements, will reduce stockholders’ equity as of December 31, 2011 by approximately $1.5 billion, after-tax and increase 2011 net income by approximately $45. Excluding the effects of the DAC Unlock and amortization related to realized gains and losses, the estimated effect would be a decrease to 2011 net income of approximately $10. Future income statement impacts will reflect higher non-deferrable expenses and lower amortization due to the lower DAC balance, before the effect of any DAC Unlock and amortization related to realized gains and losses.

Significant Accounting Policies

The Company’s significant accounting policies are described below or are referenced below to the applicable Note where the description is included.

Accounting Policy	Note
Fair Value Measurements		4
Investments and Derivative Instruments		5
Reinsurance		6
Deferred Policy Acquisition Costs and Present Value of Future Profits		7
Goodwill and Other Intangible Assets		8
Separate Accounts, Death Benefits and Other Insurance Benefit Features		9
Sales Inducements		10
Reserve for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses		11
Commitments and Contingencies		12
Income Taxes		13
Employee Benefit Plans		17

Revenue Recognition

Property and casualty insurance premiums are earned on a pro rata basis over the lives of the policies and include accruals for ultimate premium revenue anticipated under auditable and retrospectively rated policies. Unearned premiums represent the premiums applicable to the unexpired terms of policies in force. An estimated allowance for doubtful accounts is recorded on the basis of periodic evaluations of balances due from insureds, management’s experience and current economic conditions. The Company charges off any balances that are determined to be uncollectible. The allowance for doubtful accounts included in premiums receivable and agents’ balances in the Consolidated Balance Sheets was $119 as of December 31, 2011 and 2010.

Traditional life and group disability products premiums are generally recognized as revenue when due from policyholders.

Fee income for universal life-type contracts consists of policy charges for policy administration, cost of insurance charges and surrender charges assessed against policyholders’ account balances and are recognized in the period in which services are provided. The amounts collected from policyholders for investment and universal life-type contracts are considered deposits and are not included in revenue. Unearned revenue reserves, representing amounts assessed as consideration for origination of a universal life-type contract, are deferred and recognized in income over the period benefited, generally in proportion to estimated gross profits.

Other revenue consists primarily of revenues associated with the Company’s servicing businesses.

Dividends to Policyholders

Policyholder dividends are paid to certain property and casualty and life insurance policyholders. Policies that receive dividends are referred to as participating policies. Such dividends are accrued using an estimate of the amount to be paid based on underlying contractual obligations under policies and applicable state laws.

Net written premiums for participating property and casualty insurance policies represented 9%, 8% and 8% of total net written premiums for the years ended December 31, 2011, 2010 and 2009, respectively. Participating dividends to policyholders were $18, $5 and $10 for the years ended December 31, 2011, 2010 and 2009, respectively.

Total participating policies in-force represented 1% of the total life insurance policies in-force as of December 31, 2011, 2010, and 2009. Dividends to policyholders were $17, $21 and $13 for the years ended December 31, 2011, 2010, and 2009, respectively. There were no additional amounts of income allocated to participating policyholders. If limitations exist on the amount of net income from participating life insurance contracts that may be distributed to stockholder’s, the policyholder’s share of net income on those contracts that cannot be distributed is excluded from stockholder’s equity by a charge to operations and a credit to a liability.

Cash

Cash represents cash on hand and demand deposits with banks or other financial institutions.

Property and Equipment

Property and equipment is carried at cost net of accumulated depreciation. Depreciation is based on the estimated useful lives of the various classes of property and equipment and is determined principally on the straight-line method. Accumulated depreciation was $2.1 billion and $1.9 billion as of December 31, 2011 and 2010, respectively. Depreciation expense was $216, $276, and $253 for the years ended December 31, 2011, 2010, and 2009, respectively.

Other Policyholder Funds and Benefits Payable

Other policyholder funds and benefits payable consist of universal life-type contracts and investment contracts.

Universal life-type contracts consist of fixed and variable annuities, 401(k), certain governmental annuities, private placement life insurance (“PPLI”), variable universal life insurance, universal life insurance and interest sensitive whole life insurance. The liability for universal life-type contracts is equal to the balance that accrues to the benefit of the policyholders as of the financial statement date (commonly referred to as the account value), including credited interest, amounts that have been assessed to compensate the Company for services to be performed over future periods, and any amounts previously assessed against policyholders that are refundable on termination of the contract.

Investment contracts consist of institutional and governmental products, without life contingencies, including funding agreements, certain structured settlements and guaranteed investment contracts. The liability for investment contracts is equal to the balance that accrues to the benefit of the contract holder as of the financial statement date, which includes the accumulation of deposits plus credited interest, less withdrawals and amounts assessed through the financial statement date. Contract holder funds include funding agreements held by Variable Interest Entities issuing medium-term notes.

Foreign Currency Translation

Foreign currency translation gains and losses are reflected in stockholders’ equity as a component of accumulated other comprehensive income (loss). The Company’s foreign subsidiaries’ balance sheet accounts are translated at the exchange rates in effect at each year end and income statement accounts are translated at the average rates of exchange prevailing during the year. The national currencies of the international operations are generally their functional currencies.

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Stock Compensation Plans (Details 1) (Employee Stock Option [Member])	12 Months Ended
	Dec. 31, 2011 Y	Dec. 31, 2009 Y
Employee Stock Option [Member]
The risk-free rate for periods within the contractual life of the option
Expected dividend yield	1.30%	3.20%
Expected Annualized Spot Volatility	35.8%-47.1%	57.8%-57.8%
Weighted average annualized volatility	41.70%	57.80%
Risk Free Spot Rate	0.1%-3.5%	0.3%-4.2%
Expected term	5.7	7.3

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Supplementary Insurance Information

12 Months Ended

Dec. 31, 2011

Supplementary Insurance Information [Abstract]

Supplementary Insurance Information

SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION

(In millions)

	Deferred Policy
	Acquisition Costs							Other
	and Present		Future Policy Benefits,					Policyholder
	Value of Future		Unpaid Losses and Loss			Unearned		Funds and
Segment	Profits		Adjustment Expenses			Premiums		Benefits Payable
As of December 31, 2011
Property & Casualty Commercial	$	611	$	15,438		$	3,235	$	—
Group Benefits		60		6,796			76		266
Consumer Markets		650		2,060			1,803		—
Individual Annuity		2,802		2,538			29		17,017
Individual Life		2,558		1,061			1		7,413
Retirement Plans		714		436			2		7,959
Mutual Funds		27		—			—		4
Life Other Operations		1,322		8,635			74		43,414
Property & Casualty Other Operations		—		4,053			1		—
Corporate		—		(1	)		1		—
Consolidated	$	8,744	$	41,016		$	5,222	$	76,073
As of December 31, 2010
Property & Casualty Commercial	$	603		14,727			3,126		—
Group Benefits		67		6,640			76		320
Consumer Markets		660		2,177			1,875		—
Individual Annuity		3,216		2,270			22		16,871
Individual Life		2,627		898			1		6,765
Retirement Plans		842		458			3		6,841
Mutual Funds		43		—			—		4
Life Other Operations		1,799		8,307			72		46,542
Property & Casualty Other Operations		—		4,122			1		—
Corporate		—		(1	)		—		—
Consolidated	$	9,857	$	39,598		$	5,176	$	77,343

									Amortization of			Insurance
									Deferred Policy			Operating
	Earned					Benefits, Losses			Acquisition Costs			Costs and
	Premiums,		Net			and Loss			and Present			Other
	Fee Income		Investment			Adjustment			Value of Future			Expenses		Net Written
Segment	and Other		Income			Expenses			Profits			[1]		Premiums
For the year ended December 31, 2011
Property & Casualty Commercial	$	6,224	$	910		$	4,584		$	1,356		$	726	$	6,176
Group Benefits		4,147		411			3,306			55			1,104		N/A
Consumer Markets		3,903		187			2,886			639			578		3,675
Individual Annuity		1,660		768			1,106			483			536		N/A
Individual Life		899		456			816			221			182		N/A
Retirement Plans		380		396			308			134			354		N/A
Mutual Funds		649		(3	)		—			47			448		N/A
Life Other Operations		1,020		(386	)		(54	)		492			274		N/A
Property & Casualty Other Operations		—		151			317			—			24		1
Corporate		209		23			(3	)		—			710		N/A
Consolidated	$	19,091	$	2,913		$	13,266		$	3,427		$	4,936	$	9,852
For the year ended December 31, 2010
Property & Casualty Commercial	$	5,840	$	935		$	3,370		$	1,353		$	665	$	5,796
Group Benefits		4,278		429			3,331			61			1,111		N/A
Consumer Markets		4,119		187			2,951			667			493		3,886
Individual Annuity		1,716		814			1,054			(56	)		542		N/A
Individual Life		856		400			644			119			181		N/A
Retirement Plans		359		364			278			27			340		N/A
Mutual Funds		664		(8	)		—			51			458		N/A
Life Other Operations		1,049		225			374			305			262		N/A
Property & Casualty Other Operations		1		163			251			—			30		2
Corporate		188		81			(2	)		—			833		1
Consolidated	$	19,070	$	3,590		$	12,251		$	2,527		$	4,915	$	9,685
For the year ended December 31, 2009
Property & Casualty Commercial	$	6,006	$	755		$	3,266			1,393			645		5,715
Group Benefits		4,350		403			3,196			61			1,120		N/A
Consumer Markets		4,113		178			2,902			674			475		3,995
Individual Annuity		1,465		771			1,310			1,339			505		N/A
Individual Life		940		335			640			314			188		N/A
Retirement Plans		324		315			269			56			346		N/A
Mutual Funds		518		(21	)		—			50			395		N/A
Life Other Operations		1,293		4,135			5,042			370			350		N/A
Property & Casualty Other Operations		—		161			241			—			23		4
Corporate		223		173			153			—			831		(3	)
Consolidated	$	19,232	$	7,205		$	17,019		$	4,257		$	4,878	$	9,711

[1]	Includes interest expense and goodwill impairment.
N/A	— Not applicable to life insurance pursuant to Regulation S-X.

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Employee Benefit Plans (Details 17) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Disclosure of Expected Gross Prescription Drug Subsidy Receipts [Abstract]
2012	$ 4
2013	4
2014	5
2015	4
2016	5
2017-2021	31
Total	$ 53

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Investments and Derivative Instruments (Details 6) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Available-for-sale Securities, Debt Maturities, Amortized Cost [Abstract]
One year or less, Amortized Cost	$ 3,206
Over one year through five years, Amortized Cost	16,140
Over five years through ten years, Amortized Cost	15,041
Over ten years, Amortized Cost	25,189
Subtotal	59,576
Mortgage-backed and asset-backed securities, Amortized Cost	19,402
Total, Amortized Cost, Fixed Maturities, AFS	78,978
Available-for-sale Securities, Debt Maturities, Fair Value [Abstract]
One year or less, Fair Value	3,240
Over one year through five years, Fair Value	16,790
Over five years through ten years, Fair Value	16,111
Over ten years, Fair Value	27,320
Subtotal	63,461
Mortgage-backed and asset-backed securities, Fair Value	18,348
Total fixed maturities, AFS	$ 81,809	$ 77,820

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Separate Accounts, Death Benefits and Other Insurance Benefit Features (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 Age	Dec. 31, 2010
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	$ 28,150
Net Amount at Risk ("NAR")	7,628
Retained Net Amount at Risk ("RNAR")	1,820
Weighted Average Attained Age of Annuitant	0
Less: General Account Value Subject to U.S. GMDB	7,251
Subtotal Separate Account Liabilities with U.S. GMDB	68,988
Separate Account Liabilities without U.S. GMDB	74,882
Total Separate Account Liabilities	143,870	159,742
MAV Only [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	20,718
Net Amount at Risk ("NAR")	5,998
Retained Net Amount at Risk ("RNAR")	1,500
Weighted Average Attained Age of Annuitant	68
With 5% rollup [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	1,469
Net Amount at Risk ("NAR")	521
Retained Net Amount at Risk ("RNAR")	181
Weighted Average Attained Age of Annuitant	68
With Earnings Protection Benefit Rider (EPB) [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	5,378
Net Amount at Risk ("NAR")	940
Retained Net Amount at Risk ("RNAR")	104
Weighted Average Attained Age of Annuitant	65
With 5% rollup & EPB [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	585
Net Amount at Risk ("NAR")	169
Retained Net Amount at Risk ("RNAR")	35
Weighted Average Attained Age of Annuitant	68
Asset Protection Benefit ("APB") [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	22,343
Net Amount at Risk ("NAR")	3,139
Retained Net Amount at Risk ("RNAR")	2,042
Weighted Average Attained Age of Annuitant	66
Lifetime Income Benefit ("LIB") - Death Benefit [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	1,095
Net Amount at Risk ("NAR")	120
Retained Net Amount at Risk ("RNAR")	120
Weighted Average Attained Age of Annuitant	64
Reset [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	3,139
Net Amount at Risk ("NAR")	307
Retained Net Amount at Risk ("RNAR")	304
Weighted Average Attained Age of Annuitant	68
Return of Premium ("ROP")/Other [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	21,512
Net Amount at Risk ("NAR")	876
Retained Net Amount at Risk ("RNAR")	850
Weighted Average Attained Age of Annuitant	65
Guaranteed Minimum Death Benefit [Member] | U.S. [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	76,239
Net Amount at Risk ("NAR")	12,070
Retained Net Amount at Risk ("RNAR")	5,136
Weighted Average Attained Age of Annuitant	67
Guaranteed Minimum Death Benefit [Member] | JAPAN [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	29,234
Net Amount at Risk ("NAR")	10,857
Retained Net Amount at Risk ("RNAR")	9,413
Weighted Average Attained Age of Annuitant	70
Guaranteed Minimum Income Benefit [Member] | JAPAN [Member]
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Account Value ("AV")	27,282
Net Amount at Risk ("NAR")	7,502
Retained Net Amount at Risk ("RNAR")	$ 7,502
Weighted Average Attained Age of Annuitant	69

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Investments and Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2011

Derivative [Line Items]

Change in non-credit impairments of debt securities recognized in OCI

	For the years ended December 31,
	2011			2010			2009
OTTI losses recognized in OCI	$	(89	)	$	(418	)	$	(683	)
Changes in fair value and/or sales		112			647			244
Tax and deferred acquisition costs		(14	)		(113	)		215
Change in non-credit impairments recognized in OCI	$	9		$	116		$	(224	)

Net Investment Income (Loss)

	For the years ended December 31,
(Before-tax)	2011			2010			2009
Fixed maturities	$	3,396		$	3,489		$	3,617
Equity securities, AFS		36			53			93
Mortgage loans		281			260			307
Policy loans		131			132			139
Limited partnerships and other alternative investments		243			216			(341	)
Other investments		301			329			314
Investment expenses		(116	)		(115	)		(112	)
Total securities AFS and other		4,272			4,364			4,017
Equity securities, trading		(1,359	)		(774	)		3,188
Total net investment income (loss)	$	2,913		$	3,590		$	7,205

Net Realized Capital Gains (Losses)

	For the years ended December 31,
	2011			2010			2009
Gross gains on sales	$	693		$	836		$	1,056
Gross losses on sales		(384	)		(522	)		(1,397	)
Net OTTI losses recognized in earnings		(174	)		(434	)		(1,508	)
Valuation allowances on mortgage loans		24			(154	)		(403	)
Japanese fixed annuity contract hedges, net [1]		3			27			47
Periodic net coupon settlements on credit derivatives/Japan		(10	)		(17	)		(49	)
Results of variable annuity hedge program
U.S. GMWB derivatives, net		(397	)		89			1,464
U.S. macro hedge program		(216	)		(445	)		(733	)
Total U.S. program		(613	)		(356	)		731
International program		775			11			(112	)
Total results of variable annuity hedge program		162			(345	)		619
Other, net [2]		(459	)		(2	)		(369	)
Net realized capital losses, before-tax	$	(145	)	$	(611	)	$	(2,004	)

[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.

Sales of Available-for-Sale Securities

	For the years ended December 31,
	2011			2010			2009
Fixed maturities, AFS
Sale proceeds	$	36,956		$	46,482		$	41,973
Gross gains		617			706			755
Gross losses		(381	)		(452	)		(1,272	)
Equity securities, AFS
Sale proceeds	$	239		$	325		$	941
Gross gains		59			24			429
Gross losses		—			(16	)		(151	)

Other Than Temporary Impairment Losses

	For the years ended December 31,
	2011			2010			2009
Balance as of beginning of period	$	(2,072	)	$	(2,200	)	$	—
Credit impairments remaining in retained earnings related to adoption of new accounting guidance in April 2009		—			—			(1,320	)
Additions for credit impairments recognized on [1]:
Securities not previously impaired		(56	)		(211	)		(840	)
Securities previously impaired		(69	)		(161	)		(292	)
Reductions for credit impairments previously recognized on:
Securities that matured or were sold during the period		505			468			245
Securities that the Company intends to sell or more likely than not will be required to sell before recovery		—			—			3
Securities due to an increase in expected cash flows		16			32			4
Balance as of end of period	$	(1,676	)	$	(2,072	)	$	(2,200	)

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

Available For Sale Securities

	December 31, 2011												December 31, 2010
	Cost or		Gross		Gross					Non-			Cost or		Gross		Gross					Non-
	Amortized		Unrealized		Unrealized			Fair		Credit			Amortized		Unrealized		Unrealized			Fair		Credit
	Cost		Gains		Losses			Value		OTTI [1]			Cost		Gains		Losses			Value		OTTI [1]
ABS	$	3,430	$	55	$	(332	)	$	3,153	$	(7	)	$	3,247	$	38	$	(396	)	$	2,889	$	(2	)
CDOs		2,819		16		(348	)		2,487		(44	)		3,088		1		(478	)		2,611		(82	)
CMBS		7,192		271		(512	)		6,951		(31	)		8,297		235		(615	)		7,917		(9	)
Corporate [2]		41,161		3,661		(739	)		44,011		—			38,496		2,174		(747	)		39,884		7
Foreign govt./govt. agencies		2,030		141		(10	)		2,161		—			1,627		73		(17	)		1,683		—
Municipal		12,557		775		(72	)		13,260		—			12,469		150		(495	)		12,124		—
RMBS		5,961		252		(456	)		5,757		(105	)		6,036		109		(462	)		5,683		(124	)
U.S. Treasuries		3,828		203		(2	)		4,029		—			5,159		24		(154	)		5,029		—
Total fixed maturities, AFS		78,978		5,374		(2,471	)		81,809		(187	)		78,419		2,804		(3,364	)		77,820		(210	)
Equity securities, AFS		1,056		68		(203	)		921		—			1,013		92		(132	)		973		—
Total AFS securities	$	80,034	$	5,442	$	(2,674	)	$	82,730	$	(187	)	$	79,432	$	2,896	$	(3,496	)	$	78,793	$	(210	)

[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 December 31, 2011 and 2010.
[2]	Gross unrealized gains (losses) exclude the fair value of bifurcated embedded derivative features of certain securities. Subsequent changes in value will be recorded in net realized capital gains (losses).

Contractual Maturity

	December 31, 2011
Maturity	Amortized Cost		Fair Value
One year or less	$	3,206	$	3,240
Over one year through five years		16,140		16,790
Over five years through ten years		15,041		16,111
Over ten years		25,189		27,320
Subtotal		59,576		63,461
Mortgage-backed and asset-backed securities		19,402		18,348
Total	$	78,978	$	81,809

Securities Unrealized Loss Aging

	December 31, 2011
	Less Than 12 Months							12 Months or More							Total
	Amortized		Fair		Unrealized			Amortized		Fair		Unrealized			Amortized		Fair		Unrealized
	Cost		Value		Losses			Cost		Value		Losses			Cost		Value		Losses
ABS	$	629	$	594	$	(35	)	$	1,169	$	872	$	(297	)	$	1,798	$	1,466	$	(332	)
CDOs		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 [1]		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	)

	December 31, 2010
	Less Than 12 Months							12 Months or More							Total
	Amortized		Fair		Unrealized			Amortized		Fair		Unrealized			Amortized		Fair		Unrealized
	Cost		Value		Losses			Cost		Value		Losses			Cost		Value		Losses
ABS	$	302	$	290	$	(12	)	$	1,410	$	1,026	$	(384	)	$	1,712	$	1,316	$	(396	)
CDOs		321		293		(28	)		2,724		2,274		(450	)		3,045		2,567		(478	)
CMBS		556		530		(26	)		3,962		3,373		(589	)		4,518		3,903		(615	)
Corporate		5,533		5,329		(199	)		4,017		3,435		(548	)		9,550		8,764		(747	)
Foreign govt./govt. agencies		356		349		(7	)		78		68		(10	)		434		417		(17	)
Municipal		7,485		7,173		(312	)		1,046		863		(183	)		8,531		8,036		(495	)
RMBS		1,744		1,702		(42	)		1,567		1,147		(420	)		3,311		2,849		(462	)
U.S. Treasuries		2,436		2,321		(115	)		158		119		(39	)		2,594		2,440		(154	)
Total fixed maturities		18,733		17,987		(741	)		14,962		12,305		(2,623	)		33,695		30,292		(3,364	)
Equity securities		53		52		(1	)		637		506		(131	)		690		558		(132	)
Total securities in an unrealized loss	$	18,786	$	18,039	$	(742	)	$	15,599	$	12,811	$	(2,754	)	$	34,385	$	30,850	$	(3,496	)

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

Mortgage Loans

	December 31, 2011							December 31, 2010
	Amortized		Valuation			Carrying		Amortized		Valuation			Carrying
	Cost [1]		Allowance			Value		Cost [1]		Allowance			Value
Commercial	$	5,830	$	(102	)	$	5,728	$	4,492	$	(152	)	$	4,340
Residential		—		—			—		152		(3	)		149
Total mortgage loans	$	5,830	$	(102	)	$	5,728	$	4,644	$	(155	)	$	4,489

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

Valuation Allowance For Mortgage Loans

	For the years ended December 31,
	2011			2010			2009
Balance as of January 1	$	(155	)	$	(366	)	$	(26	)
Additions		(26	)		(157	)		(408	)
Deductions		79			368			68
Balance as of December 31	$	(102	)	$	(155	)	$	(366	)

Commercial Mortgage Loans Credit Quality

Commercial Mortgage Loans Credit Quality
	December 31, 2011					December 31, 2010
	Carrying		Avg. Debt-Service			Carrying		Avg. Debt-Service
Loan-to-value	Value		Coverage Ratio			Value		Coverage Ratio
Greater than 80%	$	707		1.45	x	$	1,358		1.49	x
65% – 80%		2,384		1.60	x		1,829		1.93	x
Less than 65%		2,637		2.40	x		1,153		2.26	x
Total commercial mortgage loans	$	5,728		1.94	x	$	4,340		1.87	x

Mortgage Loans By Region

Mortgage Loans by Region
	December 31, 2011					December 31, 2010
	Carrying		Percent of			Carrying		Percent of
	Value		Total			Value		Total
East North Central	$	94		1.6	%	$	77		1.7	%
Middle Atlantic		508		8.9	%		428		9.5	%
Mountain		125		2.2	%		109		2.4	%
New England		294		5.1	%		259		5.8	%
Pacific		1,690		29.5	%		1,147		25.6	%
South Atlantic		1,149		20.1	%		1,177		26.3	%
West North Central		30		0.5	%		36		0.8	%
West South Central		224		3.9	%		231		5.1	%
Other [1]		1,614		28.2	%		1,025		22.8	%
Total mortgage loans	$	5,728		100.0	%	$	4,489		100.0	%

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

Mortgage Loans By Property Type

Mortgage Loans by Property Type
	December 31, 2011					December 31, 2010
	Carrying		Percent of			Carrying		Percent of
	Value		Total			Value		Total
Commercial
Agricultural	$	249		4.3	%	$	315		7.0	%
Industrial		1,747		30.5	%		1,141		25.4	%
Lodging		93		1.6	%		132		2.9	%
Multifamily		1,070		18.7	%		713		15.9	%
Office		1,078		18.8	%		986		22.1	%
Retail		1,234		21.5	%		669		14.9	%
Other		257		4.6	%		384		8.5	%
Residential		—		—			149		3.3	%
Total mortgage loans	$	5,728		100.0	%	$	4,489		100.0	%

Variable Interest Entities Primary Beneficiary

	December 31, 2011						December 31, 2010
					Maximum						Maximum
	Total		Total		Exposure		Total		Total		Exposure
	Assets		Liabilities [1]		to Loss [2]		Assets		Liabilities [1]		to Loss [2]
CDOs [3]	$	491	$	471	$	29	$	729	$	393	$	289
Limited partnerships		7		—		7		14		1		13
Total	$	498	$	471	$	36	$	743	$	394	$	302

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

GMWB reinsurance contracts

	Notional Amount				Fair Value
	December 31,		December 31,		December 31,		December 31,
	2011		2010		2011		2010
Customized swaps	$	8,389	$	10,113	$	385	$	209
Equity swaps, options, and futures		5,320		4,943		498		391
Interest rate swaps and futures		2,697		2,800		11		(133	)
Total	$	16,406	$	17,856	$	894	$	467

Derivative Classification by Balance Sheet Location

	Net Derivatives										Asset Derivatives				Liability Derivatives
	Notional Amount				Fair Value						Fair Value				Fair Value
	Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,			Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,
Hedge Designation/ Derivative Type	2011		2010		2011			2010			2011		2010		2011			2010
Cash flow hedges
Interest rate swaps	$	8,652	$	10,290	$	329		$	115		$	329	$	188	$	—		$	(73	)
Foreign currency swaps		291		335		6			6			30		29		(24	)		(23	)
Total cash flow hedges		8,943		10,625		335			121			359		217		(24	)		(96	)
Fair value hedges
Interest rate swaps		1,007		1,120		(78	)		(46	)		—		5		(78	)		(51	)
Foreign currency swaps		677		677		(39	)		(12	)		63		71		(102	)		(83	)
Total fair value hedges		1,684		1,797		(117	)		(58	)		63		76		(180	)		(134	)
Non-qualifying strategies
Interest rate contracts
Interest rate swaps, caps, floors, and futures		10,144		7,938		(583	)		(441	)		531		126		(1,114	)		(567	)
Foreign exchange contracts
Foreign currency swaps and forwards		380		368		(12	)		(18	)		6		1		(18	)		(19	)
Japan 3Win foreign currency swaps		2,054		2,285		184			177			184		177		—			—
Japanese fixed annuity hedging instruments		1,945		2,119		514			608			540		608		(26	)		—
Credit contracts
Credit derivatives that purchase credit protection		1,721		2,559		36			(9	)		56		29		(20	)		(38	)
Credit derivatives that assume credit risk [1]		2,952		2,569		(648	)		(434	)		2		8		(650	)		(442	)
Credit derivatives in offsetting positions		8,189		8,367		(57	)		(75	)		164		98		(221	)		(173	)
Equity contracts
Equity index swaps and options		1,501		189		27			(10	)		40		5		(13	)		(15	)
Variable annuity hedge program
U.S. GMWB product derivatives [2]		34,569		40,255		(2,538	)		(1,611	)		—		—		(2,538	)		(1,611	)
U.S. GMWB reinsurance contracts		7,193		8,767		443			280			443		280		—			—
U.S. GMWB hedging instruments		16,406		17,856		894			467			1,022		647		(128	)		(180	)
U.S. macro hedge program		6,819		13,057		357			203			357		203		—			—
International program product derivatives [2]		2,710		2,730		(71	)		(33	)		—		3		(71	)		(36	)
International program hedging instruments		33,726		14,873		750			254			887		265		(137	)		(11	)
Other
Contingent capital facility put option		500		500		28			32			28		32		—			—
Total non-qualifying strategies		130,809		124,432		(676	)		(610	)		4,260		2,482		(4,936	)		(3,092	)
Total cash flow hedges, fair value hedges, and non-qualifying strategies	$	141,436	$	136,854	$	(458	)	$	(547	)	$	4,682	$	2,775	$	(5,140	)	$	(3,322	)
Balance Sheet Location
Fixed maturities, available-for-sale	$	703	$	728	$	(72	)	$	(39	)	$	—	$	—	$	(72	)	$	(39	)
Other investments		60,227		55,948		2,331			1,524			3,165		2,105		(834	)		(581	)
Other liabilities		35,944		28,333		(538	)		(654	)		1,074		387		(1,612	)		(1,041	)
Consumer notes		35		39		(4	)		(5	)		—		—		(4	)		(5	)
Reinsurance recoverables		7,193		8,767		443			280			443		280		—			—
Other policyholder funds and benefits payable		37,334		43,039		(2,618	)		(1,653	)		—		3		(2,618	)		(1,656	)
Total derivatives	$	141,436	$	136,854	$	(458	)	$	(547	)	$	4,682	$	2,775	$	(5,140	)	$	(3,322	)

[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

Derivatives in Cash Flow Hedging Relationships
									Net Realized Capital Gains (Losses)
	Gain (Loss) Recognized in OCI								Recognized in Income
	on Derivative (Effective Portion)								on Derivative (Ineffective Portion)
	2011			2010		2009			2011			2010			2009
Interest rate swaps	$	337		$	294	$	(461	)	$	(4	)	$	2		$	(3	)
Foreign currency swaps		(3	)		8		(194	)		—			(1	)		75
Total	$	334		$	302	$	(655	)	$	(4	)	$	1		$	72

Derivatives in Cash Flow Hedging Relationships
		Gain (Loss) Reclassified from AOCI
		into Income (Effective Portion)
		2011			2010			2009
Interest rate swaps	Net realized capital gains (losses)	$	9		$	18		$	11
Interest rate swaps	Net investment income (loss)		126			94			47
Foreign currency swaps	Net realized capital gains (losses)		(3	)		(7	)		(119	)
Foreign currency swaps	Net investment income (loss)		—			—			2
Total		$	132		$	105		$	(59	)

Derivatives In Fair Value Hedging Relationships

Derivatives in Fair Value Hedging Relationships
	Gain (Loss) Recognized in Income [1]
	2011					2010						2009
				Hedged					Hedged						Hedged
	Derivative			Item		Derivative			Item			Derivative			Item
Interest rate swaps
Net realized capital gains (losses)	$	(73	)	$	70	$	(43	)	$	36		$	72		$	(68	)
Benefits, losses and loss adjustment expenses		—			—		(1	)		3			(37	)		40
Foreign currency swaps
Net realized capital gains (losses)		(1	)		1		8			(8	)		51			(51	)
Benefits, losses and loss adjustment expenses		(22	)		22		(12	)		12			2			(2	)
Total	$	(96	)	$	93	$	(48	)	$	43		$	88		$	(81	)

[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

Non-qualifying Strategies
Gain (Loss) Recognized within Net Realized Capital Gains (Losses)
	December 31,
	2011			2010			2009
Interest rate contracts
Interest rate swaps, caps, floors, and forwards	$	(22	)	$	45		$	31
Foreign exchange contracts
Foreign currency swaps and forwards		3			(1	)		(49	)
Japan 3Win foreign currency swaps [1]		31			215			(22	)
Japanese fixed annuity hedging instruments [2]		109			385			(12	)
Credit contracts
Credit derivatives that purchase credit protection		(10	)		(23	)		(533	)
Credit derivatives that assume credit risk		(174	)		196			167
Equity contracts
Equity index swaps and options		(89	)		5			(3	)
Warrants		—			—			70
Variable annuity hedge program
U.S. GMWB product derivatives		(780	)		486			4,686
U.S. GMWB reinsurance contracts		131			(102	)		(988	)
U.S. GMWB hedging instruments		252			(295	)		(2,234	)
U.S. macro hedge program		(216	)		(445	)		(733	)
International program product derivatives		(25	)		26			67
International program hedging instruments		800			(15	)		(179	)
Other
Contingent capital facility put option		(5	)		(6	)		(8	)
Total	$	5		$	471		$	260

[1]	The associated liability is adjusted for changes in spot rates through realized capital gains and was ($100), ($273) and $64 for the years ended December 31, 2011, 2010 and 2009, respectively.
[2]	The associated liability is adjusted for changes in spot rates through realized capital gains and losses and was ($129), ($332) and $67 for the years ended December 31, 2011, 2010 and 2009, respectively.

Credit Derivatives Description

As of December 31, 2011
						Weighted	Underlying Referenced
						Average	Credit Obligation(s) [1]			Offsetting
Credit Derivative type by derivative	Notional		Fair			Years to		Average Credit		Notional			Offsetting
risk exposure	Amount [2]		Value			Maturity	Type		Rating	Amount [3]		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

As of December 31, 2010
							Underlying Referenced
						Weighted	Credit Obligation(s) [1]
						Average		Average		Offsetting
Credit Derivative type by derivative	Notional					Years to		Credit		Notional		Offsetting
risk exposure	Amount [2]		Fair Value			Maturity	Type	Rating		Amount [3]		Fair Value [3]
Single name credit default swaps
Investment grade risk exposure	$	1,562	$	(14	)	3 years	Corporate Credit/ Foreign Gov.		A+	$	1,447	$	(41	)
Below investment grade risk exposure		204		(6	)	3 years	Corporate Credit	BB-			168		(13	)
Basket credit default swaps [4]
Investment grade risk exposure		3,145		(1	)	4 years	Corporate Credit	BBB+			2,019		(14	)
Investment grade risk exposure		525		(50	)	6 years	CMBS Credit	BBB+			525		50
Below investment grade risk exposure		767		(381	)	4 years	Corporate Credit	BBB+			25		—
Embedded credit derivatives
Investment grade risk exposure		25		25		4 years	Corporate Credit	BBB-			—		—
Below investment grade risk exposure		525		463		6 years	Corporate Credit	BB+			—		—
Total	$	6,753	$	36						$	4,184	$	(18	)

[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 $4.2 billion and $3.9 billion as of December 31, 2011 and 2010, 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 $553 and $542 as of December 31, 2011 and 2010, respectively, of customized diversified portfolios of corporate issuers referenced through credit default swaps.

Classification and carrying amount of loaned securities and derivative instruments collateral pledged

	December 31, 2011		December 31, 2010
Fixed maturities, AFS	$	1,086	$	823
Short-term investments		199		—
Total collateral pledged	$	1,285	$	823

U.S. [Member]

Derivative [Line Items]

Macro hedge program

	Notional Amount				Fair Value
	December 31,		December 31,		December 31,		December 31,
	2011		2010		2011		2010
Equity futures	$	59	$	166	$	—	$	—
Equity options		6,760		12,891		357		203
Total	$	6,819	$	13,057	$	357	$	203

International [Member]

Derivative [Line Items]

Macro hedge program

	Notional Amount				Fair Value
	December 31,		December 31,		December 31,			December 31,
	2011		2010		2011			2010
Currency forwards	$	8,622	$	4,951	$	446		$	166
Currency options [1]		7,357		5,296		127			62
Equity futures		3,835		1,002		—			—
Equity options		1,565		1,073		74			4
Equity swaps		392		369		(8	)		1
Interest rate futures		739		—		—			—
Interest rate swaps and swaptions		11,216		2,182		111			21
Total	$	33,726	$	14,873	$	750		$	254

[1] As of December 31, 2011 and 2010, notional amounts include $5.3 billion and $3.1 billion, respectively, related to long positions and $2.1 billion and $2.2 billion, respectively, related to short positions.

XML

Stock Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2011

Stock Compensation Plans [Abstract]

Stock based Compensation Plans

	For the year ended December 31,
	2011			2010			2009
Stock-based compensation plans expense	$	53		$	94		$	72
Income tax benefit		(19	)		(33	)		(20	)
Total stock-based compensation plans expense, after-tax	$	34		$	61		$	52

The risk-free rate for periods within the contractual life of the option

	For the year ended December 31,
	2011	2009
Expected dividend yield	1.3%	3.2%
Expected annualized spot volatility	35.8% – 47.1%	57.8% – 57.8%
Weighted average annualized volatility	41.7%	57.8%
Risk-free spot rate	0.1% – 3.5%	0.3% – 4.2%
Expected term	5.7 years	7.3 years

Summary of the status of non-qualified stock options included in the Company's Stock Plans

						Weighted
						Average
				Weighted		Remaining
	Number of Options			Average		Contractual		Aggregate
	(in thousands)			Exercise Price		Term		Intrinsic Value
Outstanding at beginning of year		5,279		$	52.90		2.9	$	—
Granted		1,189			27.90
Exercised		(232	)		15.41
Forfeited		(537	)		44.09
Expired		(860	)		62.11
Outstanding at end of year		4,839			47.89		3.7		—
Exercisable at end of year		3,641		$	55.52		2.0		—

Summary of the status of the Company's non-vested share awards

	Shares			Weighted-Average
Non-vested Shares	(in thousands)			Grant-Date Fair Value
Non-vested at beginning of year		1,889		$	35.83
Granted		3,400			28.22
Decrease for change in estimated performance factors		(232	)		—
Vested		(637	)		46.00
Forfeited		(256	)		34.14
Non-vested at end of year		4,164		$	27.60

Deferred Stock Unit Plan

	Restricted Units			Weighted-Average
Non-vested Units	(in thousands)			Grant-Date Fair Value
Non-vested at beginning of year		648		$	24.70
Granted		—			—
Vested		(49	)		24.27
Forfeited		(108	)		24.31
Non-vested at end of year		491		$	24.84

Weighted average valuation assumptions

	For the year ended
	December 31,
	2009
Dividend yield		1.4	%
Implied volatility		91.4	%
Risk-free spot rate		0.3	%
Expected term	6 months

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Fair Value Measurements (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Other policyholder funds and benefits payable [Member]
Roll Forward of Financial Instruments (Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Beginning Balance	$ (1,653)	$ (2,012)
Total realized/unrealized gains (losses) on Financial Instruments (Liabilities) Measured at Fair Value, Included in Net Income	(805)	514
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI		(4)
Settlements of Financial Instruments (Assets) Measured at Fair Value	(160)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(151)
Transfers into Level 3 of Financial Instruments (Liabilities) Measured at Fair Value	0
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Ending Balance	(2,618)	(1,653)
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Liabilities) still held at a reporting date	(805)	514
Other policyholder funds and benefits payable [Member] | U.S. [Member] | Guaranteed Minimum Withdrawal Benefit [Member]
Roll Forward of Financial Instruments (Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Beginning Balance	(1,611)	(1,957)
Total realized/unrealized gains (losses) on Financial Instruments (Liabilities) Measured at Fair Value, Included in Net Income	(780)	486
Settlements of Financial Instruments (Assets) Measured at Fair Value	(147)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(140)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Ending Balance	(2,538)	(1,611)
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Liabilities) still held at a reporting date	(780)	486
Other policyholder funds and benefits payable [Member] | International [Member] | Guaranteed Minimum Withdrawal Benefit [Member]
Roll Forward of Financial Instruments (Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Beginning Balance	(36)	(45)
Total realized/unrealized gains (losses) on Financial Instruments (Liabilities) Measured at Fair Value, Included in Net Income	(21)	22
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI		(4)
Settlements of Financial Instruments (Assets) Measured at Fair Value	(9)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(9)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Ending Balance	(66)	(36)
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Liabilities) still held at a reporting date	(21)	22
Other policyholder funds and benefits payable [Member] | International [Member] | Other Living Benefits [Member]
Roll Forward of Financial Instruments (Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Beginning Balance	3	2
Total realized/unrealized gains (losses) on Financial Instruments (Liabilities) Measured at Fair Value, Included in Net Income	(4)	4
Settlements of Financial Instruments (Assets) Measured at Fair Value	(4)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(3)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Ending Balance	(5)	3
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Liabilities) still held at a reporting date	(4)	4
Other liabilities [Member]
Roll Forward of Financial Instruments (Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Beginning Balance	(37)	0
Total realized/unrealized gains (losses) on Financial Instruments (Liabilities) Measured at Fair Value, Included in Net Income	28	(26)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		0
Transfers into Level 3 of Financial Instruments (Liabilities) Measured at Fair Value		(11)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Ending Balance	(9)	(37)
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Liabilities) still held at a reporting date	28
Consumer Notes [Member]
Roll Forward of Financial Instruments (Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Beginning Balance	(5)	(5)
Total realized/unrealized gains (losses) on Financial Instruments (Liabilities) Measured at Fair Value, Included in Net Income	1
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		0
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Ending Balance	(4)	(5)
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Liabilities) still held at a reporting date	1
Institutional Notes [Member]
Roll Forward of Financial Instruments (Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Beginning Balance		(2)
Total realized/unrealized gains (losses) on Financial Instruments (Liabilities) Measured at Fair Value, Included in Net Income		2
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		0
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Ending Balance		0
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Liabilities) still held at a reporting date		2
Equity linked notes [Member]
Roll Forward of Financial Instruments (Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Beginning Balance		(10)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		1
Fair Value of Financial Instruments (Liabilities), Measured at Fair Value on a Recurring Basis, Ending Balance	$ (9)	$ (9)

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Consolidated Statements of Operations (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenues
Earned premiums	$ 14,088	$ 14,055	$ 14,424
Fee income	4,750	4,748	4,547
Net investment income:
Securities available-for-sale and other	4,272	4,364	4,017
Equity securities, trading	(1,359)	(774)	3,188
Total net investment income	2,913	3,590	7,205
Net realized capital gains (losses):
Total other-than-temporary impairment ("OTTI") losses	(263)	(852)	(2,191)
OTTI losses recognized in other comprehensive income ("OCI")	89	418	683
Net OTTI losses recognized in earnings	(174)	(434)	(1,508)
Net realized capital gains (losses), excluding net OTTI losses recognized in earnings	29	(177)	(496)
Total net realized capital losses	(145)	(611)	(2,004)
Other revenues	253	267	261
Total revenues	21,859	22,049	24,433
Benefits, losses and expenses
Benefits, losses and loss adjustment expenses	14,625	13,025	13,831
Benefits, losses and loss adjustment expenses - returns credited on international variable annuities	(1,359)	(774)	3,188
Amortization of deferred policy acquisition costs and present value of future profits	3,427	2,527	4,257
Insurance operating costs and other expenses	4,398	4,407	4,370
Interest expense	508	508	476
Goodwill Impairment	30	153	32
Total benefits, losses and expenses	21,629	19,693	26,154
Income (loss) from continuing operations before income taxes	230	2,356	(1,721)
Income tax expense (benefit)	(346)	612	(838)
Income (loss) from continuing operations, net of tax	576	1,744	(883)
Income (loss) from discontinued operations, net of tax	86	(64)	(4)
Net income (loss)	662	1,680	(887)
Preferred stock dividends and accretion of discount	42	515	127
Net income (loss) available to common shareholders	$ 620	$ 1,165	$ (1,014)
Income (loss) from continuing operations, net of tax, available to common shareholders per common share
Basic	$ 1.20	$ 2.85	$ (2.92)
Diluted	$ 1.12	$ 2.62	$ (2.92)
Net income (loss) available to common shareholders per common share
Basic	$ 1.39	$ 2.70	$ (2.93)
Diluted	$ 1.30	$ 2.49	$ (2.93)
Cash dividends declared per common share	$ 0.40	$ 0.20	$ 0.20

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Sales Inducements (Tables)

12 Months Ended

Dec. 31, 2011

Sales Inducements [Abstract]

Changes In Deferred Sales Inducements

	2011			2010			2009
Balance, beginning of year	$	459		$	438		$	553
Sales inducements deferred		20			31			59
Amortization charged to income		(17	)		(8	)		(105	)
Amortization — Unlock		(28	)		(2	)		(69	)
Balance, end of year	$	434		$	459		$	438

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Investments and Derivative Instruments (Details 19) (Fair value hedges [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Derivative Instruments Gain (Loss) [Line Items]
Gain or (Loss) Recognized in Income, Derivative	$ (96)	$ (48)	$ 88
Gain or (Loss) Recognized in Income, Hedged Item	93	43	(81)
Interest rate swaps [Member] | Net realized capital gains (losses) [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain or (Loss) Recognized in Income, Derivative	(73)	(43)	72
Gain or (Loss) Recognized in Income, Hedged Item	70	36	(68)
Interest rate swaps [Member] | Benefits, losses and loss adjustment expenses [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain or (Loss) Recognized in Income, Derivative		(1)	(37)
Gain or (Loss) Recognized in Income, Hedged Item		3	40
Foreign currency swaps [Member] | Net realized capital gains (losses) [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain or (Loss) Recognized in Income, Derivative	(1)	8	51
Gain or (Loss) Recognized in Income, Hedged Item	1	(8)	(51)
Foreign currency swaps [Member] | Benefits, losses and loss adjustment expenses [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain or (Loss) Recognized in Income, Derivative	(22)	(12)	2
Gain or (Loss) Recognized in Income, Hedged Item	$ 22	$ 12	$ (2)

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Debt (Details Textual)	1 Months Ended	12 Months Ended					12 Months Ended								1 Months Ended																				1 Months Ended	3 Months Ended	12 Months Ended	120 Months Ended		12 Months Ended	120 Months Ended
	Jun. 30, 2010 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2008	Jan. 31, 2012 USD ($)	Oct. 17, 2008 USD ($)	Dec. 31, 2011 Consumer Notes [Member] USD ($)	Dec. 31, 2010 Consumer Notes [Member] USD ($)	Dec. 31, 2009 Consumer Notes [Member] USD ($)	Dec. 31, 2011 Commercial Paper [Member] USD ($)	Dec. 31, 2010 Commercial Paper [Member] USD ($)	Dec. 31, 2011 U.S. [Member] USD ($)	Dec. 31, 2011 U.S. [Member] Commercial Paper [Member] USD ($)	Dec. 31, 2011 JAPAN [Member] USD ($)	Jan. 31, 2012 Revolving Credit Facility [Member] USD ($)	Jan. 31, 2012 Revolving Credit Facility [Member] Maximum [Member] USD ($)	Jan. 31, 2012 Revolving Credit Facility [Member] Minimum [Member] USD ($)	Dec. 31, 2011 Revolving Credit Facility [Member] U.S. [Member] USD ($)	Dec. 31, 2011 Revolving Credit Facility [Member] JAPAN [Member] JPY (¥)	Dec. 31, 2011 Letter Of Credit [Member] U.S. [Member] USD ($)	Dec. 31, 2011 Senior Note 4.625% Due 2013 [Member]	Dec. 31, 2011 Senior Note 4.75% Due 2014 [Member]	Dec. 31, 2011 Senior Note 4.0% Due 2015 [Member]	Dec. 31, 2011 Senior Note 7.3% Due 2015 [Member]	Dec. 31, 2011 Senior Note 5.5% Due 2016 [Member]	Dec. 31, 2011 Senior Note 5.375% Due 2017 [Member]	Dec. 31, 2011 Senior Note 6.3% Due 2018 [Member]	Dec. 31, 2011 Senior Note 6.0% Due 2019 [Member]	Dec. 31, 2011 Senior Note 5.5% Due 2020 [Member]	Dec. 31, 2011 Senior Note 7.65% Due 2027 [Member]	Dec. 31, 2011 Senior Note 7.375% Due 2031 [Member]	Dec. 31, 2011 Senior Note 5.95% Due 2036 [Member]	Dec. 31, 2011 Senior Note 6.625% Due 2040 [Member]	Dec. 31, 2011 Senior Note 6.1% Due 2041 [Member]	Jun. 30, 2008 8.125% Notes, due 2068 [Member] USD ($)	Dec. 31, 2011 8.125% Notes, due 2068 [Member]	Dec. 31, 2011 8.125% Notes, due 2068 [Member]	Jun. 14, 2018 8.125% Notes, due 2068 [Member]	Jun. 14, 2018 8.125% Notes, due 2068 [Member] Debentures Subject to Mandatory Redemption [Member]	Dec. 31, 2011 10.0% Notes, due 2068 [Member]	Oct. 14, 2018 10.0% Notes, due 2068 [Member]	Oct. 14, 2018 10.0% Notes, due 2068 [Member] Debentures Subject to Mandatory Redemption [Member]
Debt Instrument [Line Items]
Repayment of 5.25% senior notes	$ 400,000,000
Interest rate on notes																					4.625%	4.75%	4.00%	7.30%	5.50%	5.375%	6.30%	6.00%	5.50%	7.65%	7.375%	5.95%	6.625%	6.10%		8.125%	8.125%			10.00%
Effective interest rate																																		7.90%						15.30%
Collateral for the FHLBB facility, description		up to $1.48 billion in qualifying assets
Maximum amount permitted to be pledged for FHLBB facility		1,480,000,000
Net proceeds of 8.125% fixed-to-floating junior subordinated debentures			1,090,000,000																																493,000,000
Maturity date 8.125% fixed-to-floating junior subordinated debentures				Jun. 15, 2068
Debt Instrument, Frequency of Periodic Payment		The debentures bear interest at an annual fixed rate of 8.125% from the date of issuance to, but excluding, June 15, 2018, payable semi-annually in arrears on June 15 and December 15. From and including June 15, 2018, the debentures will bear interest at an annual rate, reset quarterly, equal to three-month LIBOR plus 4.6025%, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year
Fixed interest rate on debentures, payable during period																																							8.125%			10.00%
Variable interest rate on debentures, payable during period																																						three-month LIBOR plus 4.6025%			three-month LIBOR plus 6.824%
Interest rate spread over three-month LIBOR on debentures																																				4.6025%	4.6025%			6.824%
Deferred interest period under option one		10 years
Deferred interest period under option two		5 years
Scheduled maturity date of debentures		2038-06-15
Final maturity date of debentures		2068-06-15
Redemption price of debentures on or after 15 June 2018																																					Redemption price of 100% of the principal amount being redeemed plus accrued but unpaid interest			Redemption price of 100% of the principal amount being redeemed plus accrued but unpaid interest.
Redemption price of debentures prior to June 15, 2018 in whole																																					100% of the principal amount being redeemed and the applicable make-whole amount, in each case plus any accrued and unpaid interest
Number of days required for notice prior to certain qualifying events																																				180 days
Maximum number of days required for notice before scheduled maturity date																																				15 days
Minimum number of days required for notice before scheduled maturity date																																				10 days
Percentage of redemption price on principal amount																																					100.00%			100.00%
Life of Shelf Registration		3 years
Maximum amount available under the line of credit facility		3,900,000,000	3,900,000,000		1,750,000,000					2,000,000,000	2,000,000,000	3,900,000,000	2,000,000,000	65,000,000	250,000,000			1,900,000,000	5,000,000,000	100,000,000
Line of Credit Facility Termination of Borrowing Capacity															1,900,000,000
Effective Date										11/10/86					2012-01-06
Expiration Date															2012-08-09
Minimum net worth required to be maintained under credit facility															16,000,000,000
Adjustment to minimum net worth as a result of new DAC guidance																1,700,000,000	1,000,000,000
Percentage of adoption related estimated DAC charge															70.00%
Consolidated total debt to consolidated total capitalization ratio		0.16													0.35
Consolidated total debt of subsidiaries to consolidated total capitalization ratio															10.00%
Interest rate on fixed consumer notes, minimum							4.00%
Interest rate on fixed consumer notes, maximum							5.00%
Note indexed to consumer price index							plus 100 to 260 basis points
Interest on Variable Notes Minimum		either consumer price or indexed to the S&P 500, Dow Jones Industrials, foreign currency, or the Nikkei 225.
Interest credited to consumer notes holders							15,000,000	25,000,000	51,000,000
Debt (Textual) [Abstract]
Value of fixed to floating debenture						1,750,000,000
Junior subordinate debt acquired.		$ 500,000,000
Maximum debt to capitalization ratio under Revolving Credit Facility Agreement		40.00%
Debt to capitalization ratio		0.16													0.35
Maximum possible extended period of maturity of consumer notes		30 years
Aggregate redemption limit of consumer notes		equal to the greater of $1 or 1%
Individual redemption limit of consumer notes		$250 thousand per individual

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Separate Accounts, Death Benefits and Other Insurance Benefit Features (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Guaranteed Minimum Death Benefit [Member] | U.S. [Member]
Changes in the gross U.S. GMDB, International GMDB/GMIB, and UL secondary guarantee benefits
Liability, balance as of January 1	$ 1,053	$ 1,233
Incurred	220	239
Paid	(222)	(294)
Unlock	53	(125)
Liability balance as of December 31	1,104	1,053
Reinsurance recoverable asset, as of January 1	686	787
Incurred	128	139
Paid	(143)	(176)
Unlock	53	(64)
Reinsurance recoverable asset, as of December 31	724	686
GMDB/GMIB [Member] | International [Member]
Changes in the gross U.S. GMDB, International GMDB/GMIB, and UL secondary guarantee benefits
Liability, balance as of January 1	696	599
Incurred	122	103
Paid	(165)	(134)
Unlock	287	39
Currency translation adjustment	35	89
Liability balance as of December 31	975	696
Reinsurance recoverable asset, as of January 1	36	51
Incurred	18	(26)
Paid	(30)	1
Unlock	15	5
Currency translation adjustment	1	5
Reinsurance recoverable asset, as of December 31	40	36
Universal Life [Member] | Secondary Guarantees [Member]
Changes in the gross U.S. GMDB, International GMDB/GMIB, and UL secondary guarantee benefits
Liability, balance as of January 1	113	76
Incurred	53	39
Unlock	62	(2)
Liability balance as of December 31	228	113
Reinsurance recoverable asset, as of January 1	30	22
Incurred	(8)	8
Reinsurance recoverable asset, as of December 31	$ 22	$ 30

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Consolidated Statements of Changes in Stockholders' Equity (USD $) In Millions, except Share data in Thousands	Total	Common Stocks	Preferred Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock, at Cost	Accumulated Other Comprehensive Loss, Net of Tax	Noncontrolling Interest	Scenario, Previously Reported Retained Earnings	Scenario, Adjustment Retained Earnings	Scenario, Actual Retained Earnings
Balance at beginning of period at Dec. 31, 2008				$ 7,569		$ (2,120)	$ (7,520)	$ 92	$ 11,336		$ 11,336
Common Shares Outstanding at beginning of period (in thousands) at Dec. 31, 2008		300,579
Preferred Shares Outstanding at beginning of period (in thousands) at Dec. 31, 2008			6,048
Issuance (redemption) of preferred stock to the U.S. Treasury			2,920
Accretion of preferred stock discount on issuance to U.S. Treasury			40		(40)
Common Stock		4
Issuance of Warrants to U.S. Treasury				480
Issuance of shares under discretionary equity issuance plan		56,109		887
Issuance of convertible preferred shares			(6,048)
Issuance of shares under incentive and stock compensation plans				(126)
Reclassification of warrants from other liabilities to equity and extension of warrants term				186
Tax expense on employee stock options and awards				(11)
Cumulative effect of accounting change, net of tax	(912)						(912)				912
Net income (loss)	(887)				(887)
Dividends on preferred stock					(87)
Dividends declared on common stock					(70)
Issuance of shares under incentive and stock compensation plans from treasury stock						187
Return of shares under incentive and stock compensation plans and other to treasury stock						(3)
Total other comprehensive income	5,120						5,120
Change in noncontrolling interest ownership								(56)
Noncontrolling loss								(7)
Issuance of shares to U.S. Treasury			3,400
Treasury stock acquired		(27)
Conversion of preferred to common shares		24,194
Issuance of shares under incentive and stock compensation plans		2,356
Return of shares under incentive and stock compensation plans and other to treasury stock		(204)
Balance at end of period at Dec. 31, 2009	17,894		2,960	8,985	11,164	(1,936)	(3,312)	29	11,164		11,190
Common Shares Outstanding at end of period (in thousands) at Dec. 31, 2009		383,007
Preferred Shares Outstanding at end period (in thousands) at Dec. 31, 2009			3,400
Issuance of mandatory convertible preferred stock			556
Accelerated accretion of discount from redemption of preferred stock issued to U.S. Treasury	440		440		(440)
Issuance (redemption) of preferred stock to the U.S. Treasury			(3,400)
Common Stock	5	5
Issuance of shares under public offering				1,599
Issuance of shares under incentive and stock compensation plans				(130)
Tax expense on employee stock options and awards				(6)
Cumulative effect of accounting change, net of tax	194						194			26	(194)
Net income (loss)	1,680				1,680
Dividends on preferred stock					(75)
Dividends declared on common stock					(84)
Issuance of shares under incentive and stock compensation plans from treasury stock						165
Return of shares under incentive and stock compensation plans and other to treasury stock						(3)
Total other comprehensive income	2,117						2,117
Recognition of noncontrolling interest in other liabilities								(29)
Redemption of shares issued to the U.S. Treasury			(3,400)
Issuance of mandatory convertible preferred shares			575
Issuance of shares under public offering		59,590
Issuance of shares under incentive and stock compensation plans		2,095
Return of shares under incentive and stock compensation plans and other to treasury stock		(143)
Balance at end of period at Dec. 31, 2010	20,311		556	10,448	12,077	(1,774)	(1,001)	0	12,077		12,077
Common Shares Outstanding at end of period (in thousands) at Dec. 31, 2010		444,549
Preferred Shares Outstanding at end period (in thousands) at Dec. 31, 2010			575
Common Stock	5	5
Issuance of shares under incentive and stock compensation plans				(50)
Tax expense on employee stock options and awards				(7)
Net income (loss)	662				662
Dividends on preferred stock					(42)
Dividends declared on common stock					(178)
Treasury stock acquired						(51)
Issuance of shares under incentive and stock compensation plans from treasury stock						115
Return of shares under incentive and stock compensation plans and other to treasury stock						(8)
Total other comprehensive income	2,158						2,158
Treasury stock acquired		3,225
Issuance of shares under incentive and stock compensation plans		1,476
Return of shares under incentive and stock compensation plans and other to treasury stock		(261)
Balance at end of period at Dec. 31, 2011	$ 22,910		$ 556	$ 10,391	$ 12,519	$ (1,718)	$ 1,157	$ 0
Common Shares Outstanding at end of period (in thousands) at Dec. 31, 2011		442,539
Preferred Shares Outstanding at end period (in thousands) at Dec. 31, 2011			575

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Investments and Derivative Instruments (Details 17) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Net Derivatives, Notional Amount	$ 141,436	$ 136,854
Net Derivatives, Fair Value	(458)	(547)
Asset Derivatives, Fair Value	4,682	2,775
Liability Derivatives, Fair Value	(5,140)	(3,322)
Fixed maturities, AFS [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	703	728
Net Derivatives, Fair Value	(72)	(39)
Asset Derivatives, Fair Value	0	0
Liability Derivatives, Fair Value	(72)	(39)
Other Investments [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	60,227	55,948
Net Derivatives, Fair Value	2,331	1,524
Asset Derivatives, Fair Value	3,165	2,105
Liability Derivatives, Fair Value	(834)	(581)
Other liabilities [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	35,944	28,333
Net Derivatives, Fair Value	(538)	(654)
Asset Derivatives, Fair Value	1,074	387
Liability Derivatives, Fair Value	(1,612)	(1,041)
Reinsurance Recoverables [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	7,193	8,767
Net Derivatives, Fair Value	443	280
Asset Derivatives, Fair Value	443	280
Liability Derivatives, Fair Value	0	0
Other policyholder funds and benefits payable [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	37,334	43,039
Net Derivatives, Fair Value	(2,618)	(1,653)
Asset Derivatives, Fair Value	0	3
Liability Derivatives, Fair Value	(2,168)	(1,656)
Consumer Notes [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	35	39
Net Derivatives, Fair Value	(4)	(5)
Asset Derivatives, Fair Value	0	0
Liability Derivatives, Fair Value	$ (4)	$ (5)

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Employee Benefit Plans (Details Textual) (USD $)	12 Months Ended											12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2012 Pension Benefits [Member]	Dec. 31, 2011 Pension Benefits [Member]	Dec. 31, 2010 Pension Benefits [Member]	Dec. 31, 2011 Pension Benefits [Member] U.S. [Member]	Dec. 31, 2010 Pension Benefits [Member] U.S. [Member]	Dec. 31, 2012 Other Postretirement Benefits [Member]	Dec. 31, 2011 Other Postretirement Benefits [Member]	Dec. 31, 2010 Other Postretirement Benefits [Member]	Dec. 31, 2011 Other Postretirement Benefits [Member] U.S. [Member]	Dec. 31, 2010 Other Postretirement Benefits [Member] U.S. [Member]
Pension plans and postretirement health care and life insurance benefit plans (Textual) [Abstract]
Discount rate				4.75%	4.75%				4.50%	4.50%
Accumulated benefit obligation for all defined benefit pension plans	$ 5,394,000,000	$ 4,733,000,000			$ 5,413,000,000	$ 4,753,000,000
Net loss that will be amortized from accumulated other comprehensive income (loss)				216,000,000					(1,000,000)
Prior service credit that will be amortized from accumulated other comprehensive income (loss)										(9,000,000)
Initial margin requirement related to plans duration overlay program					0	30,000,000
Investment payables net of investment receivables					43,000,000	61,000,000				3,000,000	7,000,000
Interest receivables					37,000,000	32,000,000				1,000,000	1,000,000
Contributions to the U.S. qualified defined benefit pension plan					201,000,000	201,000,000	201,000,000	201,000,000				0	0
Employee benefit plans (Additional Textual) [Abstract]
Maturities of bonds rated AA or higher utilized in the cash flow analysis	Between zero and thirty years
Minimum maturity of bonds in benefits obligation	0 years
Maximum maturity of bonds in benefits obligation	30 years
Expected long term rate of return assumption	Based on an analysis of the Plan portfolio’s historical compound rates of return since 1979 (the earliest date for which comparable portfolio data is available) and over 5 year and 10 year periods
Minimum period in long term rate of return assumption	5 years
Maximum period in long term rate of return assumption	10 years
Anticipated portion of fixed income securities in investment mix	60.00%
Anticipated portion of equity securities in investment mix	20.00%
Anticipated portion of alternative assets in investment mix	20.00%
Defined benefit plan assumptions used calculating net periodic benefit cost expected long term return on asset	7.30%
Assets held in rabbi trusts and designated for non qualified pension plans.	109,000,000	107,000,000
Fair value of pension plan assets under rabbi trust	4,622,000,000	4,029,000,000
Funded status of pension benefits including fair value of pension plan assets under rabbi trust	(843,000,000)	(766,000,000)
Settlement expenses to recognize actuarial loss	20,000,000					43,000,000
Expected Contributions by company to its pension plans	200,000,000
Contributions matched to base salary of employee by Company	3.00%
Description of employee Contribution to base salary based on earning	In 2010, employees who had earnings of less than $110,000 in the preceding year received a contribution of 1.5% of base salary and employees who had earnings of $110,000 or more in the preceding year received a contribution of 0.5% of base salary
Earning of employees below and above limit	110,000
Contribution percentage of base salary related to earning of employees below limit	1.50%
Contribution percentage of base salary related to earning of employees above limit	0.50%
Cost to company related to Investment and Saving Plan	59,000,000	62,000,000	64,000,000
Company Contribution of basic Salary Under Defined contribution pension plan	5.00%
Cost to company related to contribution pension plan	$ 1,000,000	$ 1,000,000	$ 2,000,000

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Equity (Details Textual 1) (USD $) In Millions, except Share data, unless otherwise specified					12 Months Ended			12 Months Ended		12 Months Ended			12 Months Ended
	Dec. 31, 2011	Jun. 26, 2009	Jun. 26, 2009 Private Placement Purchase Agreement [Member]	Oct. 17, 2008 Warrants for Series B Preferred Stock [Member] Investment Agreement with Allianz SE [Member]	Dec. 31, 2009 Warrants for Series C Preferred Stock [Member] Investment Agreement with Allianz SE [Member]	Mar. 26, 2009 Warrants for Series C Preferred Stock [Member] Investment Agreement with Allianz SE [Member]	Oct. 17, 2008 Warrants for Series C Preferred Stock [Member] Investment Agreement with Allianz SE [Member]	Dec. 31, 2008 Warrants for Series B and C before anti-dilution provision trigger [Member] Investment Agreement with Allianz SE [Member]	Oct. 17, 2008 Warrants for Series B and C before anti-dilution provision trigger [Member] Investment Agreement with Allianz SE [Member]	Dec. 31, 2009 Warrants for Series B and C after anti-dilution provision trigger [Member] Investment Agreement with Allianz SE [Member]	Mar. 31, 2010 Warrants for Series B and C after anti-dilution provision trigger [Member] Investment Agreement with Allianz SE [Member]	Jun. 12, 2009 Warrants for Series B and C after anti-dilution provision trigger [Member] Investment Agreement with Allianz SE [Member]	Dec. 31, 2009 Warrants issued to Treasury contingency [Member]	Oct. 15, 2009 Warrants issued to Treasury contingency [Member]
Class of Warrant or Right [Line Items]
Warrants to purchase shares			52,093,973	34,806,452			34,308,872	69,115,324			69,351,806	69,314,987
Exercise price of warrant	$ 9.699	$ 9.79	$ 9.79						$ 25.32		$ 25.23	$ 25.25
Warrants and Rights Outstanding						$ 93
Class of Warrant or Right Expense or Revenue Recognized in Income					70
Initial term of warrants, years								7 years
Cash payments settlement contingent to issuance of more then 5% of company stock														200
Net realized capital loss for the warrant modification													$ 300
One-time extension for warrants exercise resulted from contingency settlement										from seven to ten years

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Accumulated Other Comprehensive Income (Loss), Net of Tax (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Balance at the beginning of period, Accumulated Other Comprehensive Income (Loss)	$ (1,001)	$ (3,312)	$ (7,520)
Balance at the beginning of period, Unrealized gain (loss) on securities	(696)	(2,713)	(7,486)
Balance at the beginning of period, Net gain (loss) on cash-flow hedging instruments	385	257	644
Balance at the beginning of period, Foreign currency translation adjustments	488	199	222
Balance at the beginning of period, Pension and other postretirement plan adjustment	(1,178)	(1,055)	(900)
Unrealized gain on securities	1,979	1,707	5,909
Change in other-than-temporary impairment losses recognized in other comprehensive income	9	116	(224)
Cumulative effect of accounting change		194	(912)
Change in net loss on cash-flow hedging instruments	131	128	(387)
Change in foreign currency translation adjustments	112	289	(23)
Change in pension and other postretirement plan adjustment	(73)	(123)	(155)
Balance at the end of period, Pension and other postretirement plan adjustment	(1,251)	(1,178)	(1,055)
Balance at the end of period, Foreign currency translation adjustments	600	488	199
Balance at the end of period, Net gain (loss) on cash-flow hedging instruments	516	385	257
Balance at the end of period, Unrealized gain (loss) on securities	1,292	(696)	(2,713)
Balance at the end of period, Accumulated Other Comprehensive Income (Loss)	$ 1,157	$ (1,001)	$ (3,312)

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Earnings (Loss) Per Common Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income (loss) from continuing operations
Income (loss) from continuing operations, net of tax									$ 576	$ 1,744	$ (883)
Less: Preferred stock dividends and accretion of discount	11	10	11	10	11	10	11	483	42	515	127
Income (loss) from continuing operations, net of tax, available to common shareholders									534	1,229	(1,010)
Add: Dilutive effect of preferred stock dividends										33
Income (loss) from continuing operations, net of tax, available to common shareholders and assumed conversion of preferred shares									534	1,262	(1,010)
Income (loss) from discontinued operations, net of tax	1	3	(80)	160	35	1	(99)		86	(64)	(4)
Net income
Net income (loss)	127		24	511	619	666	76	319	662	1,680	(887)
Less: Preferred stock dividends and accretion of discount	11	10	11	10	11	10	11	483	42	515	127
Net income (loss) available to common shareholders [1]	116	(10)	13	501	608	656	65	(164)	620	1,165	(1,014)
Add: Dilutive effect of preferred stock dividends										33
Net income (loss) available to common shareholders and assumed conversion of preferred shares									$ 620	$ 1,198	$ (1,014)
Shares
Weighted average common shares outstanding	445.1	445.3	445.1	444.6	444.3	444.1	443.9	393.7	445.0	431.5	346.3
Diluted effect of warrants									31.9	32.3	14.6
Diluted effect of stock compensation plans									1.1	1.3	0.9
Diluted effect of mandatory convertible preferred shares									20.7	16.4
Weighted average shares outstanding and dilutive potential common shares	468.9	445.3	482.4	508.2	497.8	495.3	480.2	393.7	478.0	481.5	346.3
Basic
Income (loss) from continuing operations, net of tax, available to common shareholders									$ 1.20	$ 2.85	$ (2.92)
Income (loss) from discontinued operations, net of tax									$ 0.19	$ (0.15)	$ (0.01)
Net income (loss) available to common shareholders	$ 0.26	$ (0.02)	$ 0.03	$ 1.13	$ 1.37	$ 1.48	$ 0.15	$ (0.42)	$ 1.39	$ 2.70	$ (2.93)
Diluted
Income (loss) from continuing operations, net of tax, available to common shareholders									$ 1.12	$ 2.62	$ (2.92)
Income (loss) from discontinued operations, net of tax									$ 0.18	$ (0.13)	$ (0.01)
Net income (loss) available to common shareholders	$ 0.25	$ (0.02)	$ 0.03	$ 1.01	$ 1.24	$ 1.34	$ 0.14	$ (0.42)	$ 1.30	$ 2.49	$ (2.93)

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Investments and Derivative Instruments (Details 22) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Total collateral pledged	$ 1,285	$ 823
Fixed maturities, AFS [Member]
Derivative [Line Items]
Total collateral pledged	1,086	823
Short-term Investments [Member]
Derivative [Line Items]
Total collateral pledged	$ 199	$ 0

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Supplemental Information Concerning Property and Casualty Insurance

12 Months Ended

Dec. 31, 2011

Supplemental Information Concerning Property and Casualty Insurance [Abstract]

Supplemental Information Concerning Property and Casualty Insurance

SCHEDULE VI

SUPPLEMENTAL INFORMATION CONCERNING

PROPERTY AND CASUALTY INSURANCE OPERATIONS

(In millions)

	Discount		Losses and Loss Adjustment					Paid Losses and
	Deducted From		Expenses Incurred Related to:					Loss Adjustment
	Liabilities [1]		Current Year		Prior Year			Expenses
Years ended December 31,
2011	$	542	$	7,420	$	367		$	7,218
2010	$	524	$	6,768	$	(196	)	$	6,834
2009	$	511	$	6,596	$	(186	)	$	6,547

[1] Reserves for permanently disabled claimants and certain structured settlement contracts that fund loss run-offs have been discounted using the weighted average interest rates of 4.4%, 4.8%, and 5.0% for 2011, 2010, and 2009, respectively.

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Employee Benefit Plans (Details 5) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Defined benefit pension plans with an accumulated benefit obligation in excess of plan assets
Projected benefit obligation	$ 5,441	$ 4,771
Accumulated benefit obligation for all defined benefit pension plans	5,394	4,733
Fair value of plan assets	$ 4,492	$ 3,901

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Debt (Details 1) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Senior Notes and Debentures
Senior Notes and Debentures	$ 4,481	$ 4,480
Junior Subordinated Debentures
Junior Subordinated Debentures	1,735	1,727
Total Long-Term Debt	6,216	6,207
Senior Note 4.625% Due 2013 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	320	320
Senior Note 4.75% Due 2014 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	200	200
Senior Note 4.0% Due 2015 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	300	300
Senior Note 7.3% Due 2015 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	200	200
Senior Note 5.5% Due 2016 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	300	300
Senior Note 5.375% Due 2017 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	499	499
Senior Note 6.3% Due 2018 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	500	500
Senior Note 6.0% Due 2019 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	500	500
Senior Note 5.5% Due 2020 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	499	499
Senior Note 7.65% Due 2027 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	149	149
Senior Note 7.375% Due 2031 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	92	92
Senior Note 5.95% Due 2036 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	298	298
Senior Note 6.625% Due 2040 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	299	299
Senior Note 6.1% Due 2041 [Member]
Senior Notes and Debentures
Senior Notes and Debentures	325	324
3 month LIBOR plus 295 basis points, Notes due 2033 [Member]
Junior Subordinated Debentures
Junior Subordinated Debentures	0	5
8.125% Notes, due 2068 [Member]
Junior Subordinated Debentures
Junior Subordinated Debentures	500	500
10.0% Notes, due 2068 [Member]
Junior Subordinated Debentures
Junior Subordinated Debentures	$ 1,235	$ 1,222

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Segment Information (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Segment Reporting Information [Line Items]
Income tax expense (benefit)	$ (346)	$ 612	$ (838)
Property & Casualty Commercial [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)	40	407	356
Group Benefits [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)		65	59
Consumer Markets [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)	(29)	52	48
Individual Annuity [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)	(274)	124	(481)
Individual Life [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)	33	107	(27)
Retirement Plans [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)	(45)	13	(143)
Mutual Funds [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)	54	52	18
Life Other Operations [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)	150		(343)
Property and Casualty Other Operations [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)	(74)	(40)	(51)
Corporate [Member]
Segment Reporting Information [Line Items]
Income tax expense (benefit)	$ (201)	$ (168)	$ (274)

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Equity

12 Months Ended

Dec. 31, 2011

Equity [Abstract]

Equity

15. Equity

Issuance of Common Stock

On March 23, 2010, The Hartford issued approximately 59.6 million shares of common stock at a price to the public of $27.75 per share and received net proceeds of $1.6 billion.

Issuance of Series F Preferred Stock

On March 23, 2010, The Hartford issued 23 million depositary shares, each representing a 1/40th interest in The Hartford’s 7.25% mandatory convertible preferred stock, Series F, at a price of $25 per depositary share and received net proceeds of approximately $556. The Company will pay cumulative dividends on each share of the mandatory convertible preferred stock at a rate of 7.25% per annum on the initial liquidation preference of $1,000 per share. Dividends will accrue and cumulate from the date of issuance and, to the extent that the Company is legally permitted to pay dividends and its board of directors declares a dividend payable, the Company will, from July 1, 2010 until and including January 1, 2013 pay dividends on each January 1, April 1, July 1 and October 1, in cash and (whether or not declared prior to that date) on April 1, 2013 will pay or deliver, as the case may be, dividends in cash, shares of its common stock, or a combination thereof, at its election. Dividends on and repurchases of the Company’s common stock will be subject to restrictions in the event that the Company fails to declare and pay, or set aside for payment, dividends on the Series F preferred stock.

The 575,000 shares of mandatory convertible preferred stock, Series F, will automatically convert into shares of common stock on April 1, 2013, if not earlier converted at the option of the holder, at any time, or upon the occurrence of a fundamental change. The number of shares issuable upon mandatory conversion of each share of mandatory convertible preferred stock will be a variable amount based on the average of the daily volume weighted average price per share of the Company’s common stock during a specified period of 20 consecutive trading days with the number of shares of common stock ranging from 29.536 to 36.036 per share of mandatory convertible preferred stock, subject to anti-dilution adjustments.

Preferred Stock

The Company has 50,000,000 shares of preferred stock authorized. See discussion below on the Company’s participation in the Capital Purchase Program.

In connection with the Company’s investment agreement with Allianz SE, Allianz was issued 6,048,387 shares of the Company’s Series D Non-Voting Contingent Convertible Preferred Stock. Each share of preferred stock was initially convertible into four shares of common stock. On January 9, 2009, Allianz converted its 6,048,387 shares of Series D Preferred Stock into 24,193,548 shares of common stock.

Allianz SE Warrants

In connection with the Company’s October 17, 2008 investment agreement with Allianz SE, Allianz was issued warrants, with an initial term of seven years, to purchase the Company’s Series B Non-Voting Contingent Convertible Preferred Stock and Series C Non-Voting Contingent Convertible Preferred Stock, structured to entitle Allianz, upon receipt of necessary approvals, to purchase 69,115,324 shares of common stock at an initial exercise price of $25.32 per share.

The warrants were immediately exercisable, pending the receipt of specified regulatory approvals, for the Series B Preferred Stock, which were initially convertible, in the aggregate, into 34,806,452 shares of common stock.

In addition to the receipt of specified regulatory approvals, the conversion into 34,308,872 shares of common stock of the Series C Preferred Stock underlying certain of the warrants was subject to the approval of the Company’s stockholders in accordance with applicable regulations of the New York Stock Exchange. Under the investment agreement, the Company was obligated to pay a cash payment to Allianz if such stockholder approval was not obtained at the first or second stockholder meetings to consider such approval. Because the conversion of the Series C Preferred Stock was subject to stockholder approval and the related payment provision represents a form of net cash settlement outside the Company’s control, the warrants to purchase the Series C Preferred Stock and the stockholder approval payment were recorded as a derivative liability at issuance.

On March 26, 2009, the Company’s shareholders approved the conversion of the Series C Preferred Stock. As a result of this shareholder approval, the Company was not obligated to pay Allianz any cash payment related to these warrants and therefore these warrants no longer provide for any form of net cash settlement outside the Company’s control. As such, the warrants to purchase the Series C Preferred Stock were reclassified from other liabilities to equity at their fair value. As of March 26, 2009, the fair value of these warrants was $93. For the year ended December 31, 2009, the Company recognized a gain of $70, representing the change in fair value of the warrants through March 26, 2009.

The discretionary equity issuance program that the Company announced on June12, 2009 triggered an anti-dilution provision in the investment agreement with Allianz, which resulted in an adjustment of the warrant exercise price to $25.25 from $25.32 and to the number of shares that may be purchased to 69,314,987 from 69,115,324. The exercise price under the warrants is subject to adjustment in certain circumstances.

The issuance of warrants to the U.S. Department of the Treasury triggered a contingency payment in the investment agreement related to additional investors. Upon receipt of preliminary approval to participate in the Capital Purchase Program, The Hartford negotiated with Allianz to modify the form of the contingency payment. The settlement of the contingency payment was negotiated to allow Allianz a one-time extension of the exercise period of its outstanding warrants from seven to ten years and a $200 cash payment on October 15, 2009. The Hartford recorded a liability for the cash payment and an adjustment to additional paid-in capital for the warrant modification resulting in a net realized capital loss of approximately $300 for the year ended December 31, 2009.

Additionally, the issuance of common and preferred stock during the first quarter of 2010 triggered an anti-dilution provision in investment agreement with Allianz, which resulted in an adjustment to the warrant exercise price to $25.23 from $25.25 and to the number of shares that may be purchased to 69,351,806 from 69,314,987.

The Company’s Participation in the Capital Purchase Program

On June 26, 2009, as part of the Capital Purchase Program (“CPP”) established by the U.S. Department of the Treasury (“Treasury”) under the Emergency Economic Stabilization Act of 2008 (the “EESA”), the Company entered into a Private Placement Purchase Agreement with Treasury pursuant to which the Company issued and sold to Treasury 3,400,000 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series E, having a liquidation preference of $1,000 per share (the “Series E Preferred Stock”), and a ten-year warrant to purchase up to 52,093,973 shares of the Company’s common stock, par value $0.01 per share, at an exercise price of $9.79 per share, for an aggregate purchase price of $3.4 billion.

Cumulative dividends on the Series E Preferred Stock accrued on the liquidation preference at a rate of 5% per annum. The Series E Preferred Stock had no maturity date and ranked senior to the Company’s common stock. The Series E Preferred Stock was non-voting.

Upon issuance, the fair values of the Series E Preferred Stock and the associated warrants were computed as if the instruments were issued on a stand alone basis. The fair value of the Series E Preferred stock was estimated based on a five-year holding period and cash flows discounted at a rate of 13% resulting in a fair value estimate of approximately $2.5 billion. The Company used a Black-Scholes options pricing model including an adjustment for American-style options to estimate the fair value of the warrants, resulting in a stand alone fair value of approximately $400. The most significant and unobservable assumption in this valuation was the Company’s share price volatility. The Company used a long-term realized volatility of the Company’s stock of 62%. In addition, the Company assumed a dividend yield of 1.72%.

The individual fair values were then used to record the Preferred Stock and associated warrants on a relative fair value basis of $2.9 billion and $480, respectively. The warrants of $480 were recorded to additional paid-in capital as permanent equity. The preferred stock amount was recorded at the liquidation value of $1,000 per share or $3.4 billion, net of discount of $480. The discount was amortized from the date of issuance, using the effective yield method and recorded as a direct reduction to retained earnings and deducted from income available to common stockholders in the calculation of earnings per share. The amortization of discount totaled $40 for the year ended December 31, 2009.

On March 31, 2010, the Company repurchased all 3.4 million shares of Series E preferred stock issued to the Treasury for an aggregate purchase price of $3.4 billion and made a final dividend payment of $22 on the Series E preferred stock. The Company recorded a $440 charge to retained earnings representing the acceleration of the accretion of the remaining discount on the Series E preferred stock.

On September 27, 2010, the Treasury sold its warrants to purchase approximately 52 million shares of The Hartford’s common stock in a secondary public offering for net proceeds of approximately $706. The Hartford did not receive any proceeds from this sale. The warrants are exercisable, in whole or in part, at any time and from time to time until June 26, 2019 at an initial exercise price of $9.79. The exercise price will be paid by the withholding by The Hartford of a number of shares of common stock issuable upon exercise of the warrants equal to the value of the aggregate exercise price of the warrants so exercised determined by reference to the closing price of The Hartford’s common stock on the trading day on which the warrants are exercised and notice is delivered to the warrant agent. The Hartford did not purchase any of the warrants sold by the Treasury.

Subsequently, the declaration of a quarterly common stock dividend of $0.10 during the first, second, third and fourth quarters of 2011 triggered a provision in The Hartford’s Warrant Agreement with The Bank of New York Mellon, resulting in an adjustment to the warrant exercise price. The warrant exercise price was $9.699 at December 31, 2011.

Stock Repurchase Program

On July 27, 2011 the Company’s Board of Directors authorized a $500 stock repurchase program. The Company’s repurchase authorization, which expires on August 5, 2014, permits purchases of common stock, as well as warrants or other derivative securities. Repurchases may be made in the open market, through derivative, accelerated share repurchase and other privately negotiated transactions, and through plans designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. The timing of any future repurchases will be dependent upon several factors, including the market price of the Company’s securities, the Company’s capital position, consideration of the effect of any repurchases on the Company’s financial strength or credit ratings, and other corporate considerations. The repurchase program may be modified, extended or terminated by the Board of Directors at any time. The Hartford repurchased $51 of its common stock, or 3.2 million shares, under this program for the year ended December 31, 2011.

Increase in Authorized Common Shares

On May 27, 2009, at the Company’s annual meeting of shareholders, shareholders approved an increase in the aggregate authorized number of shares of common stock from 750 million to 1.5 billion.

Discretionary Equity Issuance Program

On June 12, 2009, the Company announced that it had commenced a discretionary equity issuance program, and in accordance with that program entered into an equity distribution agreement pursuant to which it would offer up to 60 million shares of its common stock from time to time for aggregate sales proceeds of up to $750.

On August 5, 2009, the Company increased the aggregate sales proceeds from $750 to $900.

On August 6, 2009, the Company announced the completion of the discretionary equity issuance program. The Hartford issued 56.1 million shares of common stock and received net proceeds of $887 under this program.

Noncontrolling Interests

Noncontrolling interest includes VIEs in which the Company has concluded that it is the primary beneficiary, see Note 5 for further discussion of the Company’s involvement in VIEs, and general account mutual funds where the Company holds the majority interest due to seed money investments.

In 2009, the Company recorded noncontrolling interest as a component of equity. The noncontrolling interest within these entities is likely to change, as these entities represent investment vehicles whereby investors may frequently redeem or contribute to these investments. As such, the change in noncontrolling ownership interest represented in the Company’s Consolidated Statement of Changes in Equity will primarily represent redemptions and additional subscriptions within these investment vehicles.

In 2010, the Company recognized the noncontrolling interest in these entities in other liabilities since these entities represent investment vehicles whereby the noncontrolling interests may redeem these investments at any time.

Statutory Results (Unaudited)

The domestic insurance subsidiaries of The Hartford prepare their statutory financial statements in conformity with statutory accounting practices prescribed or permitted by the applicable state insurance department which vary materially from U.S. GAAP. Prescribed statutory accounting practices include publications of the National Association of Insurance Commissioners (“NAIC”), as well as state laws, regulations and general administrative rules. The differences between statutory financial statements and financial statements prepared in accordance with U.S. GAAP vary between domestic and foreign jurisdictions. The principal differences are that statutory financial statements do not reflect deferred policy acquisition costs and limit deferred income taxes, life benefit reserves predominately use interest rate and mortality assumptions prescribed by the NAIC, bonds are generally carried at amortized cost and reinsurance assets and liabilities are presented net of reinsurance.

The statutory net income amounts for the years ended December 31, 2011, 2010 and 2009, and the statutory surplus amounts as of December 31, 2011 and 2010 in the table below are based on actual statutory filings with the applicable U.S. regulatory authorities.

	For the years ended December 31,
Statutory Net Income (Loss)	2011			2010			2009
U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries	$	(1,272	)	$	(140	)	$	1,714
Property and casualty insurance subsidiaries		514			1,477			889
Total	$	(758	)	$	1,337		$	2,603

	As of December 31,
Statutory Surplus	2011		2010
U.S. life insurance subsidiaries, includes domestic captive insurance subsidiaries	$	7,388	$	7,731
Property and casualty insurance subsidiaries		7,412		7,721
Total	$	14,800	$	15,452

The Company also holds regulatory capital and surplus for its operations in Japan. Under the accounting practices and procedures governed by Japanese regulatory authorities, the Company’s statutory capital and surplus was $1.3 billion, as of December 31, 2011 and 2010.

Dividends from Insurance Subsidiaries

Dividends to the HFSG Holding Company from its insurance subsidiaries are restricted. The payment of dividends by Connecticut-domiciled insurers is limited under the insurance holding company laws of Connecticut. These laws require notice to and approval by the state insurance commissioner for the declaration or payment of any dividend, which, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (i) 10% of the insurer’s policyholder surplus as of December 31 of the preceding year or (ii) net income (or net gain from operations, if such company is a life insurance company) for the twelve-month period ending on the thirty-first day of December last preceding, in each case determined under statutory insurance accounting principles. In addition, if any dividend of a Connecticut-domiciled insurer exceeds the insurer’s earned surplus, it requires the prior approval of the Connecticut Insurance Commissioner. The insurance holding company laws of the other jurisdictions in which The Hartford’s insurance subsidiaries are incorporated (or deemed commercially domiciled) generally contain similar (although in certain instances somewhat more restrictive) limitations on the payment of dividends. Dividends paid to HFSG Holding Company by its life insurance subsidiaries are further dependent on cash requirements of HLI and other factors. The Company’s property-casualty insurance subsidiaries are permitted to pay up to a maximum of approximately $1.4 billion in dividends to HFSG Holding Company in 2012 without prior approval from the applicable insurance commissioner. The Company’s life insurance subsidiaries are permitted to pay up to a maximum of approximately $625 in dividends to HLI in 2012 without prior approval from the applicable insurance commissioner. The aggregate of these amounts is the maximum the insurance subsidiaries could pay to HFSG Holding Company in 2012 without prior approval from the applicable insurance commissioner. In addition to statutory limitations on paying dividends, the Company also takes other items into consideration when determining dividends from subsidiaries. These considerations include, but are not limited to expected earnings and capitalization of the subsidiary, regulatory capital requirements and liquidity requirements of the individual operating company. In 2012, HFSG Holding Company anticipates receiving $800 in dividends from its property-casualty insurance subsidiaries, net of dividends to fund interest payments on an intercompany note between Hartford Holdings, Inc. and Hartford Fire Insurance Company, and no dividends from the life insurance subsidiaries. In 2011, HFSG Holding Company and HLI received $80 in dividends from the life insurance subsidiaries, and HFSG Holding Company received $1.1 billion in dividends from its property-casualty insurance subsidiaries, including $150 reflecting the net realized capital gain on the sale of SRS, $160 related to funding interest payments on an intercompany note between Hartford Holdings Inc. and Hartford Fire Insurance Company and $800 used in conjunction with other resources at the HFSG Holding Company principally to fund dividends, interest, capital contributions to subsidiaries and debt maturities.

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Basis of Presentation and Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2011

Basis of Presentation and Accounting Policies [Abstract]

Basis of Presentation

The Hartford Financial Services Group, Inc. is a holding company for insurance and financial services subsidiaries that provide investment products and life and property and casualty insurance to both individual and business customers in the United States (collectively, “The Hartford”, the “Company”, “we” or “our”). Also, The Hartford continues to administer business previously sold in Japan and the U.K.

The Consolidated Financial Statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”), which differ materially from the accounting practices prescribed by various insurance regulatory authorities.

Consolidation

The Consolidated Financial Statements include the accounts of The Hartford Financial Services Group, Inc., companies in which the Company directly or indirectly has a controlling financial interest and those variable interest entities (“VIEs”) in which the Company is required to consolidate. Entities in which the Company has significant influence over the operating and financing decisions but are not required to consolidate are reported using the equity method. For further discussions on VIEs see Note 5 of the Notes to Consolidated Financial Statements. Material intercompany transactions and balances between The Hartford and its subsidiaries and affiliates have been eliminated.

Discontinued Operations

The results of operations of a component of the Company that either has been disposed of or is classified as held-for-sale are reported in discontinued operations if the operations and cash flows of the component have been or will be eliminated from the ongoing operations of the Company as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction.

The Company is presenting the operations of certain businesses that meet the criteria for reporting as discontinued operations. Amounts for prior periods have been retrospectively reclassified. See Note 20 of the Notes to Consolidated Financial Statements for information on the specific subsidiaries and related impacts.

Use of Estimates

The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining property and casualty insurance product reserves, net of reinsurance; estimated gross profits used in the valuation and amortization of assets and liabilities associated with variable annuity and other universal life-type contracts; evaluation of other-than-temporary impairments on available-for-sale securities and valuation allowances on investments; living benefits required to be fair valued; goodwill impairment; valuation of investments and derivative instruments; pension and other postretirement benefit obligations; valuation allowance on deferred tax assets; and contingencies relating to corporate litigation and regulatory matters. Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Consolidated Financial Statements.

Mutual Funds

The Company maintains a retail mutual fund operation whereby the Company, through wholly-owned subsidiaries, provides investment management and administrative services to The Hartford Mutual Funds, Inc. and The Hartford Mutual Funds II, Inc. (collectively, “mutual funds”), consisting of 57 non-proprietary mutual funds, as of December 31, 2011. The Company charges fees to these mutual funds, which are recorded as revenue by the Company. These mutual funds are registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940. The mutual funds are owned by the shareholders of those funds and not by the Company. In the fourth quarter of 2011, the Company entered into a preferred partnership agreement with Wellington Management Company, LLP (“Wellington Management”) and announced that Wellington Management will serve as the sole sub-advisor for The Hartford’s non-proprietary mutual funds, including equity and fixed income funds, pending a fund-by-fund review by The Hartford’s mutual funds board of directors. As of December 31, 2011, Wellington Management served as the sub-advisor for 29 of The Hartford’s non-proprietary mutual funds and has been the primary manager for the Company’s equity funds.

The mutual funds are owned by the shareholders of those funds and not by the Company. As such, the mutual fund assets and liabilities and related investment returns are not reflected in the Company’s Consolidated Financial Statements since they are not assets, liabilities and operations of the Company

Reclassifications

Certain reclassifications have been made to prior year financial information to conform to the current year presentation.

Future Adoption of New Accounting Standards

Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts

In October 2010, the FASB issued a standard clarifying the definition of acquisition costs that are eligible for deferral. Acquisition costs are to include only those costs that are directly related to the successful acquisition or renewal of insurance contracts; incremental direct costs of contract acquisition that are incurred in transactions with either independent third parties or employees; and advertising costs meeting the capitalization criteria for direct-response advertising.

This standard is effective for fiscal years beginning after December 15, 2011, and interim periods within those years. This standard may be applied prospectively upon the date of adoption, with retrospective application permitted, but not required. Early adoption as of the beginning of a fiscal year is permitted.

The Company elected to adopt this standard retrospectively on January 1, 2012, resulting in a write down of the Company’s deferred acquisition costs relating to those costs which no longer meet the revised standard as summarized above. The Company estimates the cumulative effect of the retrospective adoption of this standard, when reflected in future financial statements, will reduce stockholders’ equity as of December 31, 2011 by approximately $1.5 billion, after-tax and increase 2011 net income by approximately $45. Excluding the effects of the DAC Unlock and amortization related to realized gains and losses, the estimated effect would be a decrease to 2011 net income of approximately $10. Future income statement impacts will reflect higher non-deferrable expenses and lower amortization due to the lower DAC balance, before the effect of any DAC Unlock and amortization related to realized gains and losses.

Fair Value

The following financial instruments are carried at fair value in the Company’s Consolidated Financial Statements: fixed maturity and equity securities, available-for-sale (“AFS”), fixed maturities at fair value using fair value option (“FVO”), equity securities, trading, short-term investments, freestanding and embedded derivatives, separate account assets and certain other liabilities.

The following section applies the fair value hierarchy and disclosure requirements for the Company’s financial instruments that are carried at fair value. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad Levels (Level 1, 2 or 3).

Level 1	Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. Level 1 securities include highly liquid U.S. Treasuries, money market funds and exchange traded equity securities, open-ended mutual funds reported in separate account assets and derivative securities.
Level 2	Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. Most fixed maturities and preferred stocks, including those reported in separate account assets, are model priced by vendors using observable inputs and are classified within Level 2.
Level 3	Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Level 3 securities include less liquid securities, guaranteed product embedded and reinsurance derivatives and other complex derivative securities. Because Level 3 fair values, by their nature, contain one or more significant unobservable inputs as there is little or no observable market for these assets and liabilities, considerable judgment is used to determine the Level 3 fair values. Level 3 fair values represent the Company’s best estimate of an amount that could be realized in a current market exchange absent actual market exchanges.

In many situations, inputs used to measure the fair value of an asset or liability position may fall into different levels of the fair value hierarchy. In these situations, the Company will determine the level in which the fair value falls based upon the lowest level input that is significant to the determination of the fair value. Transfers of securities among the levels occur at the beginning of the reporting period. Transfers between Level 1 and Level 2 were not material for the year ended December 31, 2011. In most cases, both observable (e.g., changes in interest rates) and unobservable (e.g., changes in risk assumptions) inputs are used in the determination of fair values that the Company has classified within Level 3. Consequently, these values and the related gains and losses are based upon both observable and unobservable inputs. The Company’s fixed maturities included in Level 3 are classified as such because these securities are primarily priced by independent brokers and/or within illiquid markets.

Investment Instruments

Overview

The Company’s investments in fixed maturities include bonds, redeemable preferred stock and commercial paper. These investments, along with certain equity securities, which include common and non-redeemable preferred stocks, are classified as AFS and are carried at fair value. The after-tax difference from cost or amortized cost is reflected in stockholders’ equity as a component of Other Comprehensive Income (Loss) (“OCI”), after adjustments for the effect of deducting the life and pension policyholders’ share of the immediate participation guaranteed contracts and certain life and annuity deferred policy acquisition costs and reserve adjustments. Fixed maturities for which the Company elected the fair value option are classified as FVO and are carried at fair value. The equity investments associated with the variable annuity products offered in Japan are recorded at fair value and are classified as trading with changes in fair value recorded in net investment income. Policy loans are carried at outstanding balance. Mortgage loans are recorded at the outstanding principal balance adjusted for amortization of premiums or discounts and net of valuation allowances. Short-term investments are carried at amortized cost, which approximates fair value. Limited partnerships and other alternative investments are reported at their carrying value with the change in carrying value accounted for under the equity method and accordingly the Company’s share of earnings are included in net investment income. Recognition of limited partnerships and other alternative investment income is delayed due to the availability of the related financial information, as private equity and other funds are generally on a three-month delay and hedge funds are on a one-month delay. Accordingly, income for the years ended December 31, 2011, 2010 and 2009 may not include the full impact of current year changes in valuation of the underlying assets and liabilities, which are generally obtained from the limited partnerships and other alternative investments’ general partners. Other investments primarily consist of derivatives instruments which are carried at fair value.

Recognition and Presentation of Other-Than-Temporary Impairments

The Company deems debt securities and certain equity securities with debt-like characteristics (collectively “debt securities”) to be other-than-temporarily impaired (“impaired”) if a security meets the following conditions: a) the Company intends to sell or it is more likely than not the Company will be required to sell the security before a recovery in value, or b) the Company does not expect to recover the entire amortized cost basis of the security. If the Company intends to sell or it is more likely than not the Company will be required to sell the security before a recovery in value, a charge is recorded in net realized capital losses equal to the difference between the fair value and amortized cost basis of the security. For those impaired debt securities which do not meet the first condition and for which the Company does not expect to recover the entire amortized cost basis, the difference between the security’s amortized cost basis and the fair value is separated into the portion representing a credit other-than-temporary impairment (“impairment”), which is recorded in net realized capital losses, and the remaining impairment, which is recorded in OCI. Generally, the Company determines a security’s credit impairment as the difference between its amortized cost basis and its best estimate of expected future cash flows discounted at the security’s effective yield prior to impairment. The remaining non-credit impairment, which is recorded in OCI, is the difference between the security’s fair value and the Company’s best estimate of expected future cash flows discounted at the security’s effective yield prior to the impairment, which typically represents current market liquidity and risk premiums. The previous amortized cost basis less the impairment recognized in net realized capital losses becomes the security’s new cost basis. The Company accretes the new cost basis to the estimated future cash flows over the expected remaining life of the security by prospectively adjusting the security’s yield, if necessary. The following table presents the change in non-credit impairments recognized in OCI as disclosed in the Company’s Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2011 and 2010, respectively.

The Company’s evaluation of whether a credit impairment exists for debt securities includes but is not limited to, the following factors: (a) changes in the financial condition of the security’s underlying collateral, (b) whether the issuer is current on contractually obligated interest and principal payments, (c) changes in the financial condition, credit rating and near-term prospects of the issuer, (d) the extent to which the fair value has been less than the amortized cost of the security and (e) the payment structure of the security. The Company’s best estimate of expected future cash flows used to determine the credit loss amount is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions and judgments regarding the future performance of the security. The Company’s best estimate of future cash flows involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, current and projected delinquency rates, and loan-to-value (“LTV”) ratios. In addition, for structured securities, the Company considers factors including, but not limited to, average cumulative collateral loss rates that vary by vintage year, commercial and residential property value declines that vary by property type and location and commercial real estate delinquency levels. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries which may include estimating the underlying collateral value. In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer and/or underlying collateral such as changes in the projections of the underlying property value estimates.

For equity securities where the decline in the fair value is deemed to be other-than-temporary, a charge is recorded in net realized capital losses equal to the difference between the fair value and cost basis of the security. The previous cost basis less the impairment becomes the security’s new cost basis. The Company asserts its intent and ability to retain those equity securities deemed to be temporarily impaired until the price recovers. Once identified, these securities are systematically restricted from trading unless approved by a committee of investment and accounting professionals (“Committee”). The Committee will only authorize the sale of these securities based on predefined criteria that relate to events that could not have been reasonably foreseen. Examples of the criteria include, but are not limited to, the deterioration in the issuer’s financial condition, security price declines, a change in regulatory requirements or a major business combination or major disposition.

The primary factors considered in evaluating whether an impairment exists for an equity security include, but are not limited to: (a) the length of time and extent to which the fair value has been less than the cost of the security, (b) changes in the financial condition, credit rating and near-term prospects of the issuer, (c) whether the issuer is current on preferred stock dividends and (d) the intent and ability of the Company to retain the investment for a period of time sufficient to allow for recovery.

Mortgage Loan Valuation Allowances

The Company’s security monitoring process reviews mortgage loans on a quarterly basis to identify potential credit losses. Commercial mortgage loans are considered to be impaired when management estimates that, based upon current information and events, it is probable that the Company will be unable to collect amounts due according to the contractual terms of the loan agreement. Criteria used to determine if an impairment exists include, but are not limited to: current and projected macroeconomic factors, such as unemployment rates, and property-specific factors such as rental rates, occupancy levels, LTV ratios and debt service coverage ratios (“DSCR”). In addition, the Company considers historic, current and projected delinquency rates and property values. These assumptions require the use of significant management judgment and include the probability and timing of borrower default and loss severity estimates. In addition, projections of expected future cash flows may change based upon new information regarding the performance of the borrower and/or underlying collateral such as changes in the projections of the underlying property value estimates.

For mortgage loans that are deemed impaired, a valuation allowance is established for the difference between the carrying amount and the Company’s share of either (a) the present value of the expected future cash flows discounted at the loan’s effective interest rate, (b) the loan’s observable market price or, most frequently, (c) the fair value of the collateral. A valuation allowance has been established for either individual loans or as a projected loss contingency for loans with an LTV ratio of 90% or greater and consideration of other credit quality factors, including DSCR. Changes in valuation allowances are recorded in net realized capital gains and losses. Interest income on impaired loans is accrued to the extent it is deemed collectible and the loans continue to perform under the original or restructured terms. Interest income ceases to accrue for loans when it is probable that the Company will not receive interest and principal payments according to the contractual terms of the loan agreement, or if a loan is more than 60 days past due. Loans may resume accrual status when it is determined that sufficient collateral exists to satisfy the full amount of the loan and interest payments, as well as when it is probable cash will be received in the foreseeable future. Interest income on defaulted loans is recognized when received.

Net Realized Capital Gains and Losses

Net realized capital gains and losses from investment sales, after deducting the life and pension policyholders’ share for certain products, are reported as a component of revenues and are determined on a specific identification basis, as well as changes in value associated with fixed maturities for which the fair value option was elected. Net realized capital gains and losses also result from fair value changes in derivatives contracts (both free-standing and embedded) that do not qualify, or are not designated, as a hedge for accounting purposes, and the change in value of derivatives in certain fair-value hedge relationships. Impairments and mortgage loan valuation allowances are recognized as net realized capital losses in accordance with the Company’s impairment and mortgage loan valuation allowance policies previously discussed above. Foreign currency transaction remeasurements are also included in net realized capital gains and losses.

Net Investment Income

Interest income from fixed maturities and mortgage loans is recognized when earned on the constant effective yield method based on estimated timing of cash flows. The amortization of premium and accretion of discount for fixed maturities also takes into consideration call and maturity dates that produce the lowest yield. For securitized financial assets subject to prepayment risk, yields are recalculated and adjusted periodically to reflect historical and/or estimated future repayments using the retrospective method; however, if these investments are impaired, any yield adjustments are made using the prospective method. Prepayment fees on fixed maturities and mortgage loans are recorded in net investment income when earned. For limited partnerships and other alternative investments, the equity method of accounting is used to recognize the Company’s share of earnings. For impaired debt securities, the Company accretes the new cost basis to the estimated future cash flows over the expected remaining life of the security by prospectively adjusting the security’s yield, if necessary. The Company’s non-income producing investments were not material for the years ended December 31, 2011, 2010 and 2009.

Net investment income on equity securities, trading, includes dividend income and the changes in market value of the securities associated with the variable annuity products sold in Japan and the United Kingdom. The returns on these policyholder-directed investments inure to the benefit of the variable annuity policyholders but the underlying funds do not meet the criteria for separate account reporting. Accordingly, these assets are reflected in the Company’s general account and the returns credited to the policyholders are reflected in interest credited, a component of benefits, losses and loss adjustment expenses.

Derivatives Instruments

Overview

The Company utilizes a variety of derivative instruments, including swaps, caps, floors, forwards, futures and options through one of four Company-approved objectives: to hedge risk arising from interest rate, equity market, credit spread and issuer default, price or currency exchange rate risk or volatility; to manage liquidity; to control transaction costs; or to enter into replication transactions.

Interest rate, volatility, dividend, credit default and index swaps involve the periodic exchange of cash flows with other parties, at specified intervals, calculated using agreed upon rates or other financial variables and notional principal amounts. Generally, no cash or principal payments are exchanged at the inception of the contract. Typically, at the time a swap is entered into, the cash flow streams exchanged by the counterparties are equal in value.

Interest rate cap and floor contracts entitle the purchaser to receive from the issuer at specified dates, the amount, if any, by which a specified market rate exceeds the cap strike interest rate or falls below the floor strike interest rate, applied to a notional principal amount. A premium payment is made by the purchaser of the contract at its inception and no principal payments are exchanged.

Forward contracts are customized commitments that specify a rate of interest or currency exchange rate to be paid or received on an obligation beginning on a future start date and are typically settled in cash.

Financial futures are standardized commitments to either purchase or sell designated financial instruments, at a future date, for a specified price and may be settled in cash or through delivery of the underlying instrument. Futures contracts trade on organized exchanges. Margin requirements for futures are met by pledging securities or cash, and changes in the futures’ contract values are settled daily in cash.

Option contracts grant the purchaser, for a premium payment, the right to either purchase from or sell to the issuer a financial instrument at a specified price, within a specified period or on a stated date.

Foreign currency swaps exchange an initial principal amount in two currencies, agreeing to re-exchange the currencies at a future date, at an agreed upon exchange rate. There may also be a periodic exchange of payments at specified intervals calculated using the agreed upon rates and exchanged principal amounts.

The Company’s derivative transactions are used in strategies permitted under the derivative use plans required by the State of Connecticut, the State of Illinois and the State of New York insurance departments.

Accounting and Financial Statement Presentation of Derivative Instruments and Hedging Activities

Derivative instruments are recognized on the Consolidated Balance Sheets at fair value. For balance sheet presentation purposes, the Company offsets the fair value amounts, income accruals, and cash collateral held, related to derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset.

On the date the derivative contract is entered into, the Company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability (“fair value” hedge), (2) a hedge of the variability in cash flows of a forecasted transaction or of amounts to be received or paid related to a recognized asset or liability (“cash flow” hedge), (3) a hedge of a net investment in a foreign operation (“net investment” hedge) or (4) held for other investment and/or risk management purposes, which primarily involve managing asset or liability related risks which do not qualify for hedge accounting.

Fair Value Hedges

Changes in the fair value of a derivative that is designated and qualifies as a fair value hedge, including foreign-currency fair value hedges, along with the changes in the fair value of the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings with any differences between the net change in fair value of the derivative and the hedged item representing the hedge ineffectiveness. Periodic cash flows and accruals of income/expense (“periodic derivative net coupon settlements”) are recorded in the line item of the consolidated statements of operations in which the cash flows of the hedged item are recorded.

Cash Flow Hedges

Changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge, including foreign-currency cash flow hedges, are recorded in AOCI and are reclassified into earnings when the variability of the cash flow of the hedged item impacts earnings. Gains and losses on derivative contracts that are reclassified from AOCI to current period earnings are included in the line item in the consolidated statements of operations in which the cash flows of the hedged item are recorded. Any hedge ineffectiveness is recorded immediately in current period earnings as net realized capital gains and losses. Periodic derivative net coupon settlements are recorded in the line item of the consolidated statements of operations in which the cash flows of the hedged item are recorded.

Net Investment in a Foreign Operation Hedges

Changes in fair value of a derivative used as a hedge of a net investment in a foreign operation, to the extent effective as a hedge, are recorded in the foreign currency translation adjustments account within AOCI. Cumulative changes in fair value recorded in AOCI are reclassified into earnings upon the sale or complete, or substantially complete, liquidation of the foreign entity. Any hedge ineffectiveness is recorded immediately in current period earnings as net realized capital gains and losses. Periodic derivative net coupon settlements are recorded in the line item of the consolidated statements of operations in which the cash flows of the hedged item are recorded.

Other Investment and/or Risk Management Activities

The Company’s other investment and/or risk management activities primarily relate to strategies used to reduce economic risk or replicate permitted investments and do not receive hedge accounting treatment. Changes in the fair value, including periodic derivative net coupon settlements, of derivative instruments held for other investment and/or risk management purposes are reported in current period earnings as net realized capital gains and losses.

Hedge Documentation and Effectiveness Testing

To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in fair value or cash flow of the hedged item. At hedge inception, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking each hedge transaction. The documentation process includes linking derivatives that are designated as fair value, cash flow, or net investment hedges to specific assets or liabilities on the balance sheet or to specific forecasted transactions and defining the effectiveness and ineffectiveness testing methods to be used. The Company also formally assesses both at the hedge’s inception and ongoing on a quarterly basis, whether the derivatives that are used in hedging transactions have been and are expected to continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. Hedge effectiveness is assessed using qualitative and quantitative methods. Qualitative methods may include comparison of critical terms of the derivative to the hedged item. Quantitative methods include regression or other statistical analysis of changes in fair value or cash flows associated with the hedge relationship. Hedge ineffectiveness of the hedge relationships are measured each reporting period using the “Change in Variable Cash Flows Method”, the “Change in Fair Value Method”, the “Hypothetical Derivative Method”, or the “Dollar Offset Method”.

Discontinuance of Hedge Accounting

The Company discontinues hedge accounting prospectively when (1) it is determined that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item; (2) the derivative is de-designated as a hedging instrument; or (3) the derivative expires or is sold, terminated or exercised.

When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair-value hedge, the derivative continues to be carried at fair value on the balance sheet with changes in its fair value recognized in current period earnings.

When hedge accounting is discontinued because the Company becomes aware that it is not probable that the forecasted transaction will occur, the derivative continues to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in AOCI are recognized immediately in earnings.

In other situations in which hedge accounting is discontinued on a cash-flow hedge, including those where the derivative is sold, terminated or exercised, amounts previously deferred in AOCI are reclassified into earnings when earnings are impacted by the variability of the cash flow of the hedged item.

Embedded Derivatives

The Company purchases and issues financial instruments and products that contain embedded derivative instruments. When it is determined that (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host for measurement purposes. The embedded derivative, which is reported with the host instrument in the consolidated balance sheets, is carried at fair value with changes in fair value reported in net realized capital gains and losses.

Credit Risk

Credit risk is measured as the amount owed to the Company based on current market conditions and potential payment obligations between the Company and its counterparties. For each legal entity of the Company, credit exposures are generally quantified daily based on the prior business day’s market value and collateral is pledged to and held by, or on behalf of, the Company to the extent the current value of derivatives exceeds the contractual thresholds for every counterparty. For the company’s domestic derivative programs, the maximum uncollateralized threshold for a derivative counterparty for a single level entity is generally $10. The Company also minimizes the credit risk of derivative instruments by entering into transactions with high quality counterparties rated A or better, which are monitored and evaluated by the Company’s risk management team and reviewed by senior management. In addition, the Company monitors counterparty credit exposure on a monthly basis to ensure compliance with Company policies and statutory limitations. The Company generally requires that derivative contracts, other than exchange traded contracts, certain forward contracts, and certain embedded and reinsurance derivatives, be governed by an International Swaps and Derivatives Association Master Agreement which is structured by legal entity and by counterparty and permits right of offset.

Reinsurance

The Company cedes insurance to affiliated and unaffiliated insurers in order to limit its maximum losses and to diversify its exposures and provide statutory surplus relief. Such arrangements do not relieve the Company of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company also assumes reinsurance from other insurers and is a member of and participates in reinsurance pools and associations. Assumed reinsurance refers to the Company’s acceptance of certain insurance risks that other insurance companies have underwritten.

Reinsurance accounting is followed for ceded and assumed transactions that provide indemnification against loss or liability relating to insurance risk (i.e. risk transfer). To meet risk transfer requirements, a reinsurance agreement must include insurance risk, consisting of underwriting, investment, and timing risk, and a reasonable possibility of a significant loss to the reinsurer. If the ceded and assumed transactions do not meet risk transfer requirements, the Company accounts for these transactions as financing transactions.

Premiums, benefits, losses and loss adjustment expenses reflect the net effects of ceded and assumed reinsurance transactions. Included in other assets are prepaid reinsurance premiums, which represent the portion of premiums ceded to reinsurers applicable to the unexpired terms of the reinsurance contracts. Included in reinsurance recoverables are balances due from reinsurance companies for paid and unpaid losses and loss adjustment expenses and are presented net of an allowance for uncollectible reinsurance.

The Company also is a member of and participates in several reinsurance pools and associations. The Company evaluates the financial condition of its reinsurers and concentrations of credit risk. Reinsurance is placed with reinsurers that meet strict financial criteria established by the Company. As of December 31, 2011, 2010 and 2009, the Company had no reinsurance-related concentrations of credit risk greater than 10% of the Company’s stockholders’ equity.

Deferred policy acquisition costs and present value of future profits policy

The Company capitalizes acquisition costs that vary with and are primarily related to the acquisition of new and renewal insurance business. For life insurance products, the DAC asset, which includes the present value of future profits, related to most universal life-type contracts (including variable annuities) is amortized over the estimated life of the contracts acquired in proportion to the present value of estimated gross profits (“EGPs”). EGPs are also used to amortize other assets and liabilities in the Company’s Consolidated Balance Sheets, such as, sales inducement assets (“SIA”) and unearned revenue reserves (“URR”). Components of EGPs are used to determine reserves for universal life type contracts (including variable annuities) with death or other insurance benefits such as guaranteed minimum death, guaranteed minimum income and universal life secondary guarantee benefits. These benefits are accounted for and collectively referred to as death and other insurance benefit reserves and are held in addition to the account value liability representing policyholder funds.

For most contracts, the Company estimates gross profits over 20 years as EGPs emerging subsequent to that timeframe are immaterial. Products sold in a particular year are aggregated into cohorts. Future gross profits for each cohort are projected over the estimated lives of the underlying contracts, based on future account value projections for variable annuity and variable universal life products. The projection of future account values requires the use of certain assumptions including: separate account returns; separate account fund mix; fees assessed against the contract holder’s account balance; surrender and lapse rates; interest margin; mortality; and the extent and duration of hedging activities and hedging costs.

The Company determines EGPs from a single deterministic reversion to mean (“RTM”) separate account return projection which is an estimation technique commonly used by insurance entities to project future separate account returns. Through this estimation technique, the Company’s DAC model is adjusted to reflect actual account values at the end of each quarter. Through consideration of recent market returns, the Company will unlock, or adjust, projected returns over a future period so that the account value returns to the long-term expected rate of return, providing that those projected returns do not exceed certain caps or floors. This Unlock for future separate account returns is determined each quarter.

In the third quarter of each year, the Company completes a comprehensive non-market related policyholder behavior assumption study and incorporates the results of those studies into its projection of future gross profits. Additionally, throughout the year, the Company evaluates various aspects of policyholder behavior and periodically revises its policyholder assumptions as credible emerging data indicates that changes are warranted. Upon completion of an assumption study or evaluation of credible new information, the Company will revise its assumptions to reflect its current best estimate. These assumption revisions will change the projected account values and the related EGPs in the DAC, SIA and URR amortization models, as well as, the death and other insurance benefit reserving models.

All assumption changes that affect the estimate of future EGPs including the update of current account values, the use of the RTM estimation technique and policyholder behavior assumptions are considered an Unlock in the period of revision. An Unlock adjusts the DAC, SIA, URR and death and other insurance benefit reserve balances in the Consolidated Balance Sheets with an offsetting benefit or charge in the Consolidated Statements of Operations in the period of the revision. An Unlock that results in an after-tax benefit generally occurs as a result of actual experience or future expectations of product profitability being favorable compared to previous estimates. An Unlock that results in an after-tax charge generally occurs as a result of actual experience or future expectations of product profitability being unfavorable compared to previous estimates.

An Unlock revises EGPs to reflect the Company’s current best estimate assumptions. The Company also tests the aggregate recoverability of DAC by comparing the existing DAC balance to the present value of future EGPs.

For property and casualty insurance products, costs are deferred and amortized ratably over the period the related premiums are earned. Deferred acquisition costs are reviewed to determine if they are recoverable from future income, and if not, are charged to expense. Anticipated investment income is considered in the determination of the recoverability of DACs. For the years ended December 31, 2011, 2010 and, 2009 no amount of DAC was charged to expense based on the determination of recoverability.

Goodwill and Intangible Assets

Goodwill represents the excess of costs over the fair value of net assets acquired. Goodwill is not amortized but is reviewed for impairment at least annually or more frequently if events occur or circumstances change that would indicate that a triggering event for a potential impairment has occurred.

The goodwill impairment test follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit’s goodwill exceeds the implied goodwill value, an impairment loss is recognized in an amount equal to that excess.

Net amortization expense for other intangible assets is included in other insurance operating and other expenses in the Consolidated Statement of Operations. Acquired intangible assets primarily consist of distribution agreements and servicing intangibles, and are included in other assets in the Consolidated Balance Sheets. With the exception of Goodwill, the Company has no intangible assets with indefinite useful lives.

Separate Accounts

The Company records the variable portion of individual variable annuities, 401(k), institutional, 403(b)/457, private placement life and variable life insurance products within separate accounts. Separate account assets are reported at fair value and separate account liabilities are reported at amounts consistent with separate account assets. Investment income and gains and losses from those separate account assets accrue directly to the policyholder, who assumes the related investment risk, and are offset by the related liability changes reported in the same line item in the Consolidated Statements of Operations. The Company earns fees for investment management, certain administrative expenses, and mortality and expense risks assumed which are reported in fee income.

Certain contracts classified as universal life-type include death and other insurance benefit features including GMDB and GMIB, offered with variable annuity contracts, or secondary guarantee benefits offered with universal life (“UL”) insurance contracts. GMDBs and GMIBs have been written in various forms as described in this note. UL secondary guarantee benefits ensure that the universal life 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. These death and other insurance benefit features require an additional liability be held above the account value liability representing the policyholders’ funds. This liability is reported in reserve for future policy benefits in the Company’s Consolidated Balance Sheets. Changes in the death and other insurance benefit reserves are recorded in benefits, losses and loss adjustment expenses in the Company’s Consolidated Statements of Operations.

The death and other insurance benefit liability is determined by estimating the expected present value of the benefits in excess of the policyholder’s expected account value in proportion to the present value of total expected assessments. The liability is accrued as actual assessments are recorded. The expected present value of benefits and assessments are generally derived from a set of stochastic scenarios, that have been calibrated to our RTM separate account returns, and assumptions including market rates of return, volatility, discount rates, lapse rates and mortality experience. Consistent with the Company’s policy on the Unlock, the Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefits, losses and loss adjustment expense. For further information on the Unlock, see Note 7 Deferred Policy Acquisition Costs and Present Value of Future Benefits.

The Company reinsures a portion of its in-force GMDB and UL secondary guarantees. The death and other insurance benefit reserves, net of reinsurance, are established by estimating the expected value of net reinsurance costs and death and other insurance benefits in excess of the projected account balance. The additional death and other insurance benefits and net reinsurance costs are recognized ratably over the accumulation period based on total expected assessments.

Sales Inducements

The Company currently offers enhanced crediting rates or bonus payments to contract holders on certain of its individual and group annuity products. The expense associated with offering a bonus is deferred and amortized over the life of the related contract in a pattern consistent with the amortization of deferred policy acquisition costs. Amortization expense associated with expenses previously deferred is recorded over the remaining life of the contract. Consistent with the Unlock, the Company unlocked the amortization of the sales inducement asset. See Note 7 for more information concerning the Unlock.

Life Insurance Products Accounting Policy

Liabilities for future policy benefits are calculated by the net level premium method using interest, withdrawal and mortality assumptions appropriate at the time the policies were issued. The methods used in determining the liability for unpaid losses and future policy benefits are standard actuarial methods recognized by the American Academy of Actuaries. For the tabular reserves, discount rates are based on the Company’s earned investment yield and the morbidity/mortality tables used are standard industry tables modified to reflect the Company’s actual experience when appropriate. In particular, for the Company’s group disability known claim reserves, the morbidity table for the early durations of claim is based exclusively on the Company’s experience, incorporating factors such as gender, elimination period and diagnosis. These reserves are computed such that they are expected to meet the Company’s future policy obligations. Future policy benefits are computed at amounts that, with additions from estimated premiums to be received and with interest on such reserves compounded annually at certain assumed rates, are expected to be sufficient to meet the Company’s policy obligations at their maturities or in the event of an insured’s death. Changes in or deviations from the assumptions used for mortality, morbidity, expected future premiums and interest can significantly affect the Company’s reserve levels and related future operations and, as such, provisions for adverse deviation are built into the long-tailed liability assumptions.

Liabilities for the Company’s group life and disability contracts, as well as its individual term life insurance policies, include amounts for unpaid losses and future policy benefits. Liabilities for unpaid losses include estimates of amounts to fully settle known reported claims, as well as claims related to insured events that the Company estimates have been incurred but have not yet been reported. These reserve estimates are based on known facts and interpretations of circumstances, and consideration of various internal factors including The Hartford’s experience with similar cases, historical trends involving claim payment patterns, loss payments, pending levels of unpaid claims, loss control programs and product mix. In addition, the reserve estimates are influenced by consideration of various external factors including court decisions, economic conditions and public attitudes. The effects of inflation are implicitly considered in the reserving process.

Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses [Policy Text Block]

The Hartford establishes property and casualty insurance products reserves to provide for the estimated costs of paying claims under insurance policies written by the Company. These reserves include estimates for both claims that have been reported and those that have been incurred but not reported, and include estimates of all losses and loss adjustment expenses associated with processing and settling these claims. Estimating the ultimate cost of future losses and loss adjustment expenses is an uncertain and complex process. This estimation process is based significantly on the assumption that past developments are an appropriate predictor of future events, and involves a variety of actuarial techniques that analyze experience, trends and other relevant factors. The uncertainties involved with the reserving process have become increasingly difficult due to a number of complex factors including social and economic trends and changes in the concepts of legal liability and damage awards. Accordingly, final claim settlements may vary from the present estimates, particularly when those payments may not occur until well into the future.

The Hartford regularly reviews the adequacy of its estimated losses and loss adjustment expense reserves by line of business within the various reporting segments. Adjustments to previously established reserves are reflected in the operating results of the period in which the adjustment is determined to be necessary. Such adjustments could possibly be significant, reflecting any variety of new and adverse or favorable trends.

Most of the Company’s property and casualty insurance products insurance reserves are not discounted. However, the Company has discounted liabilities funded through structured settlements and has discounted certain reserves for indemnity payments due to permanently disabled claimants under workers’ compensation policies. Structured settlements are agreements that provide fixed periodic payments to claimants and include annuities purchased to fund unpaid losses for permanently disabled claimants and, prior to 2008, agreements that funded loss run-offs for unrelated parties. Most of the annuities have been issued by the Company and these structured settlements are recorded at present value as annuity obligations, either within the reserve for future policy benefits if the annuity benefits are life-contingent or within other policyholder funds and benefits payable if the annuity benefits are not life-contingent. If not funded through an annuity, reserves for certain indemnity payments due to permanently disabled claimants under workers’ compensation policies are recorded as property and casualty insurance products reserves

Contingencies

Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable. Management establishes reserves for these contingencies at its “best estimate,” or, if no one number within the range of possible losses is more probable than any other, the Company records an estimated reserve at the low end of the range of losses.

Income Taxes

The Company recognizes taxes payable or refundable for the current year and deferred taxes for the tax consequences of differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse.

Employee Benefit Plans

The Company maintains a qualified defined benefit pension plan (the “Plan”) that covers substantially all employees. Effective for all employees who joined the Company on or after January 1, 2001, a new component or formula was applied under the Plan referred to as the “cash balance formula”. The Company began using the cash balance formula to calculate future pension benefits for services rendered on or after January 1, 2009 for all employees hired before January 1, 2001. These amounts are in addition to amounts earned by those employees through December 31, 2008 under the traditional final average pay formula.

The Company also maintains non-qualified pension plans to accrue retirement benefits in excess of Internal Revenue Code limitations.

The Company provides certain health care and life insurance benefits for eligible retired employees. The Company’s contribution for health care benefits will depend upon the retiree’s date of retirement and years of service. In addition, the plan has a defined dollar cap for certain retirees which limits average Company contributions. The Hartford has prefunded a portion of the health care obligations through a trust fund where such prefunding can be accomplished on a tax effective basis. Effective January 1, 2002, Company-subsidized retiree medical, retiree dental and retiree life insurance benefits were eliminated for employees with original hire dates with the Company on or after January 1, 2002.

Revenue Recognition

Property and casualty insurance premiums are earned on a pro rata basis over the lives of the policies and include accruals for ultimate premium revenue anticipated under auditable and retrospectively rated policies. Unearned premiums represent the premiums applicable to the unexpired terms of policies in force. An estimated allowance for doubtful accounts is recorded on the basis of periodic evaluations of balances due from insureds, management’s experience and current economic conditions. The Company charges off any balances that are determined to be uncollectible. The allowance for doubtful accounts included in premiums receivable and agents’ balances in the Consolidated Balance Sheets was $119 as of December 31, 2011 and 2010.

Traditional life and group disability products premiums are generally recognized as revenue when due from policyholders.

Fee income for universal life-type contracts consists of policy charges for policy administration, cost of insurance charges and surrender charges assessed against policyholders’ account balances and are recognized in the period in which services are provided. The amounts collected from policyholders for investment and universal life-type contracts are considered deposits and are not included in revenue. Unearned revenue reserves, representing amounts assessed as consideration for origination of a universal life-type contract, are deferred and recognized in income over the period benefited, generally in proportion to estimated gross profits.

Other revenue consists primarily of revenues associated with the Company’s servicing businesses.

Dividends to Policyholders

Policyholder dividends are paid to certain property and casualty and life insurance policyholders. Policies that receive dividends are referred to as participating policies. Such dividends are accrued using an estimate of the amount to be paid based on underlying contractual obligations under policies and applicable state laws.

Net written premiums for participating property and casualty insurance policies represented 9%, 8% and 8% of total net written premiums for the years ended December 31, 2011, 2010 and 2009, respectively. Participating dividends to policyholders were $18, $5 and $10 for the years ended December 31, 2011, 2010 and 2009, respectively.

Total participating policies in-force represented 1% of the total life insurance policies in-force as of December 31, 2011, 2010, and 2009. Dividends to policyholders were $17, $21 and $13 for the years ended December 31, 2011, 2010, and 2009, respectively. There were no additional amounts of income allocated to participating policyholders. If limitations exist on the amount of net income from participating life insurance contracts that may be distributed to stockholder’s, the policyholder’s share of net income on those contracts that cannot be distributed is excluded from stockholder’s equity by a charge to operations and a credit to a liability.

Cash

Cash represents cash on hand and demand deposits with banks or other financial institutions.

Property and Equipment

Property and equipment is carried at cost net of accumulated depreciation. Depreciation is based on the estimated useful lives of the various classes of property and equipment and is determined principally on the straight-line method. Accumulated depreciation was $2.1 billion and $1.9 billion as of December 31, 2011 and 2010, respectively. Depreciation expense was $216, $276, and $253 for the years ended December 31, 2011, 2010, and 2009, respectively.

Other Policyholder Funds and Benefits Payable

Other policyholder funds and benefits payable consist of universal life-type contracts and investment contracts.

Universal life-type contracts consist of fixed and variable annuities, 401(k), certain governmental annuities, private placement life insurance (“PPLI”), variable universal life insurance, universal life insurance and interest sensitive whole life insurance. The liability for universal life-type contracts is equal to the balance that accrues to the benefit of the policyholders as of the financial statement date (commonly referred to as the account value), including credited interest, amounts that have been assessed to compensate the Company for services to be performed over future periods, and any amounts previously assessed against policyholders that are refundable on termination of the contract.

Investment contracts consist of institutional and governmental products, without life contingencies, including funding agreements, certain structured settlements and guaranteed investment contracts. The liability for investment contracts is equal to the balance that accrues to the benefit of the contract holder as of the financial statement date, which includes the accumulation of deposits plus credited interest, less withdrawals and amounts assessed through the financial statement date. Contract holder funds include funding agreements held by Variable Interest Entities issuing medium-term notes.

Foreign Currency Transactions

Foreign currency translation gains and losses are reflected in stockholders’ equity as a component of accumulated other comprehensive income (loss). The Company’s foreign subsidiaries’ balance sheet accounts are translated at the exchange rates in effect at each year end and income statement accounts are translated at the average rates of exchange prevailing during the year. The national currencies of the international operations are generally their functional currencies.

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Investments and Derivative Instruments (Details 21) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Notional Amount	$ 141,436	$ 136,854
Fair Value	(458)	(547)
Credit [Member]
Derivative [Line Items]
Notional Amount	7,046	6,753
Fair Value	(305)	36
Offsetting Notional Amount	4,094	4,184
Offsetting Fair Value	107	(18)
Basket Credit Default Swaps [Member] | Below Investment Grade Risk Exposure [Member] | Credit [Member]
Derivative [Line Items]
Offsetting Fair Value		0
Corporate Credit/Foreign Gov. [Member] | Single Name Credit Default Swaps [Member] | Investment Grade Risk Exposure [Member] | Credit [Member]
Derivative [Line Items]
Notional Amount	1,628	1,562
Fair Value	(34)	(14)
Weighted Average Years to Maturity	3 years	3 years
Underlying Referenced Credit Obligation Type	Corporate Credit/ Foreign Gov.	Corporate Credit/ Foreign Gov.
Average Credit Rating	A+	A+
Offsetting Notional Amount	1,424	1,447
Offsetting Fair Value	(15)	(41)
Corporate Credit [Member] | Single Name Credit Default Swaps [Member] | Below Investment Grade Risk Exposure [Member] | Credit [Member]
Derivative [Line Items]
Notional Amount	170	204
Fair Value	(7)	(6)
Weighted Average Years to Maturity	2years	3 years
Underlying Referenced Credit Obligation Type	Corporate Credit	Corporate Credit
Average Credit Rating	BB-	BB-
Offsetting Notional Amount	144	168
Offsetting Fair Value	(5)	(13)
Corporate Credit [Member] | Basket Credit Default Swaps [Member] | Investment Grade Risk Exposure [Member] | Credit [Member]
Derivative [Line Items]
Notional Amount	3,645	3,145
Fair Value	(92)	(1)
Weighted Average Years to Maturity	3 years	4 years
Underlying Referenced Credit Obligation Type	Corporate Credit	Corporate Credit
Average Credit Rating	BBB+	BBB+
Offsetting Notional Amount	2,001	2,019
Offsetting Fair Value	29	(14)
Corporate Credit [Member] | Basket Credit Default Swaps [Member] | Below Investment Grade Risk Exposure [Member] | Credit [Member]
Derivative [Line Items]
Notional Amount	553	767
Fair Value	(509)	(381)
Weighted Average Years to Maturity	3 years	4 years
Underlying Referenced Credit Obligation Type	Corporate Credit	Corporate Credit
Average Credit Rating	BBB+	BBB+
Offsetting Notional Amount	0	25
Offsetting Fair Value	0
Corporate Credit [Member] | Embedded Credit Derivatives [Member] | Investment Grade Risk Exposure [Member] | Credit [Member]
Derivative [Line Items]
Notional Amount	25	25
Fair Value	24	25
Weighted Average Years to Maturity	3 years	4 years
Underlying Referenced Credit Obligation Type	Corporate Credit	Corporate Credit
Average Credit Rating	BBB-	BBB-
Offsetting Notional Amount	0	0
Offsetting Fair Value	0	0
Corporate Credit [Member] | Embedded Credit Derivatives [Member] | Below Investment Grade Risk Exposure [Member] | Credit [Member]
Derivative [Line Items]
Notional Amount	500	525
Fair Value	411	463
Weighted Average Years to Maturity	5 years	6 years
Underlying Referenced Credit Obligation Type	Corporate Credit	Corporate Credit
Average Credit Rating	BB+	BB+
Offsetting Notional Amount	0	0
Offsetting Fair Value	0	0
CMBS Credit [Member] | Basket Credit Default Swaps [Member] | Investment Grade Risk Exposure [Member] | Credit [Member]
Derivative [Line Items]
Notional Amount	525	525
Fair Value	(98)	(50)
Weighted Average Years to Maturity	5 years	6 years
Underlying Referenced Credit Obligation Type	CMBS Credit	CMBS Credit
Average Credit Rating	BBB+	BBB+
Offsetting Notional Amount	525	525
Offsetting Fair Value	$ 98	$ 50

XML

Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011
Future minimum lease commitments
2012	$ 58
2013	47
2014	34
2015	26
2016	21
Thereafter	56
Total minimum lease payments [1]	$ 242

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Restructuring Severance and Other Costs (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Pre-tax charges incurred in connection with these restructuring activities
Severance benefits	$ 17	$ 25	$ 52
Asset impairment charges		1	53
Other contract termination charges	8		34
Total restructuring, severance and other costs	$ 25	$ 26	$ 139

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans [Abstract]

Employee Benefit Plans

17. Employee Benefit Plans

The Company maintains a qualified defined benefit pension plan (the “Plan”) that covers substantially all employees. Effective for all employees who joined the Company on or after January 1, 2001, a new component or formula was applied under the Plan referred to as the “cash balance formula”. The Company began using the cash balance formula to calculate future pension benefits for services rendered on or after January 1, 2009 for all employees hired before January 1, 2001. These amounts are in addition to amounts earned by those employees through December 31, 2008 under the traditional final average pay formula.

The Company also maintains non-qualified pension plans to accrue retirement benefits in excess of Internal Revenue Code limitations.

The Company provides certain health care and life insurance benefits for eligible retired employees. The Company’s contribution for health care benefits will depend upon the retiree’s date of retirement and years of service. In addition, the plan has a defined dollar cap for certain retirees which limits average Company contributions. The Hartford has prefunded a portion of the health care obligations through a trust fund where such prefunding can be accomplished on a tax effective basis. Effective January 1, 2002, Company-subsidized retiree medical, retiree dental and retiree life insurance benefits were eliminated for employees with original hire dates with the Company on or after January 1, 2002.

Assumptions

Pursuant to accounting principles related to the Company’s pension and other postretirement obligations to employees under its various benefit plans, the Company is required to make a significant number of assumptions in order to calculate the related liabilities and expenses each period. The two economic assumptions that have the most impact on pension and other postretirement expense are the discount rate and the expected long-term rate of return on plan assets. In determining the discount rate assumption, the Company utilizes a discounted cash flow analysis of the Company’s pension and other postretirement obligations and currently available market and industry data. The yield curve utilized in the cash flow analysis is comprised of bonds rated Aa or higher with maturities primarily between zero and thirty years. Based on all available information, it was determined that 4.75% and 4.50% were the appropriate discount rates as of December 31, 2011 to calculate the Company’s pension and other postretirement obligations, respectively. Accordingly, the 4.75% and 4.50% discount rates will also be used to determine the Company’s 2012 pension and other postretirement expense, respectively.

The Company determines the expected long-term rate of return assumption based on an analysis of the Plan portfolio’s historical compound rates of return since 1979 (the earliest date for which comparable portfolio data is available) and over 5 year and 10 year periods. The Company selected these periods, as well as shorter durations, to assess the portfolio’s volatility, duration and total returns as they relate to pension obligation characteristics, which are influenced by the Company’s workforce demographics. In addition, the Company also applies long-term market return assumptions to an investment mix that generally anticipates 60% fixed income securities, 20% equity securities and 20% alternative assets to derive an expected long-term rate of return. Based upon these analyses, management maintained the long-term rate of return assumption at 7.30% as of December 31, 2011. This assumption will be used to determine the Company’s 2012 expense.

Weighted average assumptions used in calculating the benefit obligations and the net amount recognized for the years ended December 31, 2011 and 2010 were as follows:

	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011			2010
Discount rate		4.75	%		5.50	%		4.50	%		5.25	%
Rate of increase in compensation levels		3.75	%		4.00	%		N/A			N/A

Weighted average assumptions used in calculating the net periodic benefit cost for the Company’s pension plans were as follows:

	For the years ended December 31,
	2011			2010			2009
Discount rate		5.50	%		6.00	%		6.25	%
Expected long-term rate of return on plan assets		7.30	%		7.30	%		7.30	%
Rate of increase in compensation levels		4.00	%		4.00	%		4.25	%

Weighted average assumptions used in calculating the net periodic benefit cost for the Company’s other postretirement plans were as follows:

	For the years ended December 31,
	2011			2010			2009
Discount rate		5.25	%		5.75	%		6.25	%
Expected long-term rate of return on plan assets		7.30	%		7.30	%		7.30	%

Assumed health care cost trend rates were as follows:

	As of December 31,
	2011			2010			2009
Pre-65 health care cost trend rate		8.95	%		9.70	%		9.05	%
Post-65 health care cost trend rate		7.75	%		8.25	%		7.60	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.00	%		5.00	%		5.00	%
Year that the rate reaches the ultimate trend rate		2019			2018			2018

A one-percentage point change in assumed health care cost trend rates would have an insignificant effect on the amounts reported for other postretirement plans.

Obligations and Funded Status

The following tables set forth a reconciliation of beginning and ending balances of the benefit obligation and fair value of plan assets, as well as the funded status of The Hartford’s defined benefit pension and postretirement health care and life insurance benefit plans for the years ended December 31, 2011 and 2010. International plans represent an immaterial percentage of total pension assets, liabilities and expense and, for reporting purposes, are combined with domestic plans.

During 2010 the amount of lump sum benefit payments exceeded the amount of service and interest cost in the Company’s non-qualified pension plan resulting in a settlement. The settlement below represents lump sum payments made from the non-qualified pension plan in 2010.

In addition to the discount rate change, the Company’s benefit obligation also increased due to the use of an updated mortality table.

							Other Postretirement
	Pension Benefits						Benefits
Change in Benefit Obligation	2011			2010			2011			2010
Benefit obligation — beginning of year	$	4,795		$	4,283		$	408		$	401
Service cost (excluding expenses)		102			102			5			7
Interest cost		259			252			20			22
Plan participants’ contributions		—			—			18			15
Actuarial loss (gain)		43			86			(15	)		(7	)
Settlements		—			(43	)		—			—
Change in assumptions		497			348			37			17
Benefits paid		(230	)		(234	)		(52	)		(49	)
Retiree drug subsidy		—			—			3			2
Foreign exchange adjustment		(1	)		1						—
Benefit obligation — end of year	$	5,465		$	4,795		$	424		$	408

							Other Postretirement
	Pension Benefits						Benefits
Change in Plan Assets	2011			2010			2011			2010
Fair value of plan assets — beginning of year	$	3,922		$	3,526		$	190		$	175
Actual return on plan assets		613			434			13			15
Employer contributions		201			201			—			—
Benefits paid		(210	)		(228	)		—			—
Expenses paid		(12	)		(12	)		—			—
Foreign exchange adjustment		(1	)		1			—			—
Fair value of plan assets — end of year	$	4,513		$	3,922		$	203		$	190
Funded status — end of year	$	(952	)	$	(873	)	$	(221	)	$	(218	)

The fair value of assets for pension benefits, and hence the funded status, presented in the table above exclude assets of $109 and $107 held in rabbi trusts and designated for the non-qualified pension plans as of December 31, 2011 and 2010, respectively. The assets do not qualify as plan assets; however, the assets are available to pay benefits for certain retired, terminated and active participants. Such assets are available to the Company’s general creditors in the event of insolvency. The assets consist of equity and fixed income investments. To the extent the fair value of these rabbi trusts were included in the table above, pension plan assets would have been $4,622 and $4,029 as of December 31, 2011 and 2010, respectively, and the funded status of pension benefits would have been $(843) and $(766) as of December 31, 2011 and 2010, respectively.

The accumulated benefit obligation for all defined benefit pension plans was $5,413 and $4,753 as of December 31, 2011 and 2010, respectively.

The following table provides information for The Hartford’s defined benefit pension plans with an accumulated benefit obligation in excess of plan assets as of December 31, 2011 and 2010.

	December 31,
	2011		2010
Projected benefit obligation	$	5,441	$	4,771
Accumulated benefit obligation		5,394		4,733
Fair value of plan assets		4,492		3,901

Amounts recognized in the Consolidated Balance Sheets consist of:

	Pension Benefits				Other Postretirement Benefits
	2011		2010		2011		2010
Other Assets
Noncurrent assets	$	—	$	—	$	—	$	—
Other Liabilities
Current liabilities		21		19		34		34
Noncurrent liabilities		931		854		187		184
Total	$	952	$	873	$	221	$	218

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income (Loss)

In the Company’s non-qualified pension plan the amount of lump sum benefit payments exceeded the amount of service and interest cost for the year ended December 31, 2010. As a result, the Company recorded settlement expense of $20 to recognize the actuarial loss associated with the pro-rata portion of the obligation that has been settled.

Total net periodic benefit cost for the years ended December 31, 2011, 2010 and 2009 include the following components:

	Pension Benefits									Other Postretirement Benefits
	2011			2010			2009			2011			2010			2009
Service cost	$	102		$	102		$	105		$	5		$	7		$	6
Interest cost		259			252			243			20			22			24
Expected return on plan assets		(298	)		(286	)		(276	)		(14	)		(13	)		(11	)
Amortization of prior service credit		(9	)		(9	)		(9	)		(1	)		(1	)		(1	)
Amortization of actuarial loss		159			107			74			—			—			—
Settlements		—			20			—			—			—			—
Net periodic benefit cost	$	213		$	186		$	137		$	10		$	15		$	18

Amounts recognized in other comprehensive income (loss) for the years ended December 31, 2011 and 2010 were as follows:

	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011		2010
Amortization of actuarial loss	$	(159	)	$	(107	)	$	—	$	—
Settlement loss		—			(20	)		—		—
Amortization of prior service credit		9			9			1		1
Net loss arising during the year		237			298			24		7
Total	$	87		$	180		$	25	$	8

Amounts in accumulated other comprehensive income (loss) on a before tax basis that have not yet been recognized as components of net periodic benefit cost consist of:

	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011		2010
Net loss	$	1,930		$	1,852		$	39	$	17
Prior service credit		(21	)		(30	)		1		—
Transition obligation		—			—			2		—
Total	$	1,909		$	1,822		$	42	$	17

The estimated net loss and prior service credit for the defined benefit pension plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost during 2012 are $216 and $(9), respectively. The estimated net loss for the other postretirement benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost during 2012 is $(1). The estimated prior service credit for the other postretirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost during 2012 is an insignificant amount.

Plan Assets

Investment Strategy and Target Allocation

The overall investment strategy of the Plan is to maximize total investment returns to provide sufficient funding for present and anticipated future benefit obligations within the constraints of a prudent level of portfolio risk and diversification. With respect to asset management, the oversight responsibility of the Plan rests with The Hartford’s Pension Fund Trust and Investment Committee composed of individuals whose responsibilities include establishing overall objectives and the setting of investment policy; selecting appropriate investment options and ranges; reviewing the asset allocation mix and asset allocation targets on a regular basis; and monitoring performance to determine whether or not the rate of return objectives are being met and that policy and guidelines are being followed. The Company believes that the asset allocation decision will be the single most important factor determining the long-term performance of the Plan.

The Company’s pension plan and other postretirement benefit plans’ target allocation by asset category is presented in the table below.

	Target Asset Allocation
	Pension Plans			Other Postretirement Plans
Equity securities		10% – 32	%		15% – 35	%
Fixed income securities		50% – 70	%		55% – 85	%
Alternative assets		10% – 25	%		—

Divergent market performance among different asset classes may, from time to time, cause the asset allocation to deviate from the desired asset allocation ranges. The asset allocation mix is reviewed on a periodic basis. If it is determined that an asset allocation mix rebalancing is required, future portfolio additions and withdrawals will be used, as necessary, to bring the allocation within tactical ranges.

The Company’s pension plan and other postretirement benefit plans’ weighted average asset allocation at December 31, 2011 and 2010 is presented in the table below.

	Percentage of Pension Plans Assets						Percentage of Other Postretirement Plans
	At Fair Value as of December 31,						Assets at Fair Value as of December 31,
	2011			2010			2011			2010
Equity securities		20	%		22	%		22	%		22	%
Fixed income securities		62	%		61	%		78	%		78	%
Alternative Assets		18	%		17	%		—			—
Total		100	%		100	%		100	%		100	%

The Plan assets are invested primarily in separate portfolios managed by HIMCO, a wholly-owned subsidiary of the Company. These portfolios encompass multiple asset classes reflecting the current needs of the Plan, the investment preferences and risk tolerance of the Plan and the desired degree of diversification. These asset classes include publicly traded equities, bonds and alternative investments and are made up of individual investments in cash and cash equivalents, equity securities, debt securities, asset-backed securities and hedge funds. Hedge fund investments represent a diversified portfolio of partnership investments in absolute-return investment strategies.

In addition, the Company uses U.S. Treasury bond futures contracts and U.S. Treasury STRIPS in a duration overlay program to adjust the duration of Plan assets to better match the duration of the benefit obligation.

Investment Valuation

For further discussion on the valuation of investments, see Note 4.

Pension Plan Assets

The fair values of the Company’s pension plan assets at December 31, 2011, by asset category are as follows:

	Pension Plan Assets at Fair Value as of December 31, 2011
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments:	$	119	$	549	$	—	$	668
Fixed Income Securities:
Corporate		—		741		3		744
RMBS		—		334		11		345
U.S. Treasuries		59		819		—		878
Foreign government		—		53		3		56
CMBS		—		117		—		117
Other fixed income [1]		—		70		4		74
Equity Securities:
Large-cap domestic		—		570		—		570
Mid-cap domestic		52		—		—		52
Small-cap domestic		38		—		—		38
International		217		—		—		217
Other equities		—		1		—		1
Other investments:
Hedge funds		—		—		759		759
Total pension plan assets at fair value [2]	$	485	$	3,254	$	780	$	4,519

[1]	Includes ABS and municipal bonds.
[2]	Excludes approximately $43 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $37 of interest receivable carried at fair value.

The fair values of the Company’s pension plan assets at December 31, 2010, by asset category are as follows:

	Pension Plan Assets at Fair Value as of December 31, 2010
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments: [1]	$	75	$	406	$	—	$	481
Fixed Income Securities:
Corporate		—		882		3		885
RMBS		—		450		9		459
U.S. Treasuries		7		330		—		337
Foreign government		—		61		2		63
CMBS		—		174		1		175
Other fixed income [2]		—		56		7		63
Equity Securities:
Large-cap domestic		—		496		—		496
Mid-cap domestic		62		—		—		62
Small-cap domestic		47		—		—		47
International		248		—		—		248
Other investments:
Hedge funds		—		—		635		635
Total pension plan assets at fair value [3]	$	439	$	2,855	$	657	$	3,951

[1]	Includes $30 of initial margin requirements related to the Plan’s duration overlay program.
[2]	Includes ABS and municipal bonds.
[3]	Excludes approximately $61 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $32 of interest receivable carried at fair value.

The tables below provide a fair value level 3 roll forward for the twelve months ended December 31, 2011 and 2010 for the Pension Plan Assets for which significant unobservable inputs (Level 3) are used in the fair value measurement on a recurring basis. The Plan classifies the fair value of financial instruments within Level 3 if there are no observable markets for the instruments or, in the absence of active markets, if one or more of the significant inputs used to determine fair value are based on the Plan’s own assumptions. Therefore, the gains and losses in the tables below include changes in fair value due partly to observable and unobservable factors.

Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
							Foreign			Other fixed			Hedge
Assets	Corporate			RMBS			government			income			funds			Totals
Fair Value as of January 1, 2011	$	3		$	9		$	2		$	8		$	635		$	657
Actual return on plan assets
Relating to assets still held at the reporting date		1			—			—			2			21			24
Purchases		2			10			3			1			223			239
Sales		(1	)		(9	)		(2	)		(4	)		(120	)		(136	)
Transfers into Level 3		1			1			6			2			—			10
Transfers out of Level 3		(3	)		—			(6	)		(5	)		—			(14	)
Fair Value as of December 31, 2011	$	3		$	11		$	3		$	4		$	759		$	780

The transfers in and out of level 3 were due to a change in the pricing source.

Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
										Other fixed
							Foreign			income and			Hedge
Assets	Corporate			RMBS			government			CMBS			funds			Totals
Fair Value as of January 1, 2010	$	12		$	24		$	2		$	8		$	501		$	547
Actual return on plan assets
Relating to assets still held at the reporting date		(1	)		—			—			1			29			29
Relating to assets sold during the period		1			—			—			—			4			5
Purchases		6			62			2			9			200			279
Sales		(12	)		(77	)		—			(5	)		(99	)		(193	)
Transfers into Level 3		2			—			—			2			—			4
Transfers out of Level 3		(5	)		—			(2	)		(7	)		—			(14	)
Fair Value as of December 31, 2010	$	3		$	9		$	2		$	8		$	635		$	657

There was no Company common stock included in the Plan’s assets as of December 31, 2011 and 2010.

Other Postretirement Plan Assets

The fair value of the Company’s other postretirement plan assets at December 31, 2011, by asset category are as follows:

	Other Postretirement Plan Assets
	at Fair Value as of December 31, 2011
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments	$	—	$	9	$	—	$	9
Fixed Income Securities:
Corporate		—		53		—		53
RMBS		—		48		—		48
U.S. Treasuries		—		28		—		28
Foreign government		—		2		—		2
CMBS		—		18		—		18
Other fixed income		—		4		—		4
Equity Securities:
Large-cap		—		43		—		43
Total other postretirement plan assets at fair value [1]	$	—	$	205	$	—	$	205

[1] Excludes approximately $3 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $1 of interest receivable carried at fair value.

The fair value of the Company’s other postretirement plan assets at December 31, 2010, by asset category are as follows:

	Other Postretirement Plan Assets
	at Fair Value as of December 31, 2010
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments	$	—	$	10	$	—	$	10
Fixed Income Securities:
Corporate		—		57		—		57
RMBS		—		44		—		44
U.S. Treasuries		—		19		—		19
CMBS		—		17		—		17
Other fixed income		—		6		—		6
Equity Securities:
Large-cap		—		43		—		43
Total other postretirement plan assets at fair value [1]	$	—	$	196	$	—	$	196

[1] Excludes approximately $7 of investment payables net of investment receivables that are not carried at fair value. Also excludes approximately $1 of interest receivable carried at fair value.

There was no Company common stock included in the other postretirement benefit plan assets as of December 31, 2011 and 2010.

Concentration of Risk

In order to minimize risk, the Plan maintains a listing of permissible and prohibited investments. In addition, the Plan has certain concentration limits and investment quality requirements imposed on permissible investment options. Permissible investments include U.S. equity, international equity, alternative asset and fixed income investments including derivative instruments. Derivative instruments include future contracts, options, swaps, currency forwards, caps or floors and will be used to control risk or enhance return but will not be used for leverage purposes.

Securities specifically prohibited from purchase include, but are not limited to: shares or fixed income instruments issued by The Hartford, short sales of any type within long-only portfolios, non-derivative securities involving the use of margin, leveraged floaters and inverse floaters, including money market obligations, natural resource real properties such as oil, gas or timber and precious metals.

Other than U.S. government and certain U.S. government agencies backed by the full faith and credit of the U.S. government, the Plan does not have any material exposure to any concentration risk of a single issuer.

Cash Flows

The following table illustrates the Company’s prior contributions.

Employer Contributions	Pension Benefits		Other Postretirement Benefits
2011	$	201	$	—
2010	$	201		—

In 2011, the Company, at its discretion, made $200 in contributions to the U.S. qualified defined benefit pension plan. The Company presently anticipates contributing approximately $200 to its U.S. qualified defined benefit pension plan in 2012 based upon certain economic and business assumptions. These assumptions include, but are not limited to, equity market performance, changes in interest rates and the Company’s other capital requirements. For 2012, the Company does not have a required minimum funding contribution for the Plan and the funding requirements for all of the pension plans are expected to be immaterial.

Employer contributions in 2011 and 2010 were made in cash and did not include contributions of the Company’s common stock.

Benefit Payments

The following table sets forth amounts of benefits expected to be paid over the next ten years from the Company’s pension and other postretirement plans as of December 31, 2011:

	Pension Benefits		Other Postretirement Benefits
2012	$	272	$	38
2013		291		40
2014		309		40
2015		325		40
2016		341		39
2017-2021		1,888		183
Total	$	3,426	$	380

In addition, the following table sets forth amounts of other postretirement benefits expected to be received under the Medicare Part D Subsidy over the next ten years as of December 31, 2011:

2012	$	4
2013		4
2014		5
2015		4
2016		5
2017-2021		31
Total	$	53

Investment and Savings Plan

Substantially all U.S. employees are eligible to participate in The Hartford’s Investment and Savings Plan under which designated contributions may be invested in common stock of The Hartford or certain other investments. These contributions are matched, up to 3% of base salary, by the Company. In 2011, employees who had earnings of less than $110,000 in the preceding year received a contribution of 1.5% of base salary and employees who had earnings of $110,000 or more in the preceding year received a contribution of 0.5% of base salary. The cost to The Hartford for this plan was approximately $59, $62, and $64 for 2011, 2010, and 2009, respectively. Additionally, The Hartford has established defined contribution pension plans for certain employees of the Company’s international subsidiaries. Under this plan, the Company contributes 5% of base salary to the participant accounts. The cost to The Hartford in 2011, 2010, and 2009 for this plan was $1, $1 and $2, respectively.

XML

Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	$ 81,809	$ 77,820
Fixed maturities, FVO	1,328	649
Equity securities, trading	30,499	32,820
Equity securities, AFS	921	973
Short-term investments	7,736	8,528
Fair Value, Measurements, Recurring [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	81,809	77,820
Fixed maturities, FVO	1,328	649
Equity securities, trading	30,499	32,820
Equity securities, AFS	921	973
Derivative Assets	2,331	1,524
Short-term investments	7,736	8,528
Separate account assets	139,432	153,727
Total assets accounted for at fair value on a recurring basis	264,499	276,321
Percentage of level to total	100.00%	100.00%
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(3,169)	(2,349)
Fair Value, Measurements, Recurring [Member] | Other policyholder funds and benefits payable [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(2,618)	(1,653)
Fair Value, Measurements, Recurring [Member] | Other liabilities [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(9)	(37)
Fair Value, Measurements, Recurring [Member] | Consumer Notes [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(4)	(5)
Fair Value, Measurements, Recurring [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Reinsurance recoverable for U.S. GMWB	443	280
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(2,538)	(1,611)
Fair Value, Measurements, Recurring [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | International [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(66)	(36)
Fair Value, Measurements, Recurring [Member] | Other Guaranteed Living Benefits [Member] | International [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(5)	3
Fair Value, Measurements, Recurring [Member] | Equity linked notes [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(9)	(9)
Fair Value, Measurements, Recurring [Member] | Macro Hedge Program [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	357	203
Fair Value, Measurements, Recurring [Member] | Hedging Derivatives [Member] | International [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	731	256
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	19	(2)
Fair Value, Measurements, Recurring [Member] | Hedging Derivatives [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	494	339
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	400	128
Fair Value, Measurements, Recurring [Member] | Derivative Liabilities [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(538)	(654)
Fair Value, Measurements, Recurring [Member] | Credit derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	(24)	3
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(573)	(482)
Fair Value, Measurements, Recurring [Member] | Equity derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	31	2
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	9	2
Fair Value, Measurements, Recurring [Member] | Foreign exchange derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	519	795
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	134	(34)
Fair Value, Measurements, Recurring [Member] | Interest rate derivatives [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	195	(106)
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(527)	(266)
Fair Value, Measurements, Recurring [Member] | Other Derivatives Contracts [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	28	32
Fair Value, Measurements, Recurring [Member] | ABS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	3,153	2,889
Fair Value, Measurements, Recurring [Member] | CDOs [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	2,487	2,611
Fair Value, Measurements, Recurring [Member] | CMBS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	6,951	7,917
Fair Value, Measurements, Recurring [Member] | Corporate [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	44,011	39,884
Fair Value, Measurements, Recurring [Member] | Foreign govt./govt. agencies [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	2,161	1,683
Fair Value, Measurements, Recurring [Member] | Municipal [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	13,260	12,124
Fair Value, Measurements, Recurring [Member] | RMBS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	5,757	5,683
Fair Value, Measurements, Recurring [Member] | U.S. Treasuries [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	4,029	5,029
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	750	434
Fixed maturities, FVO	0	0
Equity securities, trading	1,967	2,279
Equity securities, AFS	352	298
Derivative Assets	0	2
Short-term investments	750	541
Separate account assets	101,644	116,717
Total assets accounted for at fair value on a recurring basis	105,463	120,271
Percentage of level to total	40.00%	43.00%
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	(2)
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other policyholder funds and benefits payable [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other liabilities [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Consumer Notes [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Reinsurance recoverable for U.S. GMWB	0	0
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | International [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other Guaranteed Living Benefits [Member] | International [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Equity linked notes [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Macro Hedge Program [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Hedging Derivatives [Member] | International [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	2
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	(2)
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Hedging Derivatives [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Derivative Liabilities [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	(2)
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Credit derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Equity derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Foreign exchange derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Interest rate derivatives [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Other Derivatives Contracts [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ABS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | CDOs [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | CMBS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Corporate [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Foreign govt./govt. agencies [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Municipal [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | RMBS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	0	0
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | U.S. Treasuries [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	750	434
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	75,938	69,897
Fixed maturities, FVO	833	127
Equity securities, trading	28,532	30,541
Equity securities, AFS	476	521
Derivative Assets	1,358	834
Short-term investments	6,986	7,987
Separate account assets	36,757	35,763
Total assets accounted for at fair value on a recurring basis	150,880	145,670
Percentage of level to total	57.00%	53.00%
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(289)	(365)
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other policyholder funds and benefits payable [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other liabilities [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Consumer Notes [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Reinsurance recoverable for U.S. GMWB	0	0
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | International [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other Guaranteed Living Benefits [Member] | International [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Equity linked notes [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Macro Hedge Program [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Hedging Derivatives [Member] | International [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	692	249
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	23	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Hedging Derivatives [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	11	(122)
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	(11)
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Derivative Liabilities [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(289)	(365)
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Credit derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	(11)	(18)
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(25)	(71)
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Equity derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Foreign exchange derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	519	795
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	134	(34)
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Interest rate derivatives [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	147	(70)
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(421)	(249)
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Other Derivatives Contracts [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ABS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	2,792	2,412
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | CDOs [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	2,119	30
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | CMBS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	6,363	7,228
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	41,756	37,755
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Foreign govt./govt. agencies [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	2,112	1,627
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Municipal [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	12,823	11,852
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | RMBS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	4,694	4,398
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. Treasuries [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	3,279	4,595
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	5,121	7,489
Fixed maturities, FVO	495	522
Equity securities, trading	0	0
Equity securities, AFS	93	154
Derivative Assets	973	688
Short-term investments	0	0
Separate account assets	1,031	1,247
Total assets accounted for at fair value on a recurring basis	8,156	10,380
Percentage of level to total	3.00%	4.00%
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(2,880)	(1,982)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other policyholder funds and benefits payable [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(2,618)	(1,653)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other liabilities [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(9)	(37)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Consumer Notes [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(4)	(5)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Reinsurance recoverable for U.S. GMWB	443	280
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(2,538)	(1,611)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | International [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(66)	(36)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other Guaranteed Living Benefits [Member] | International [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(5)	3
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Equity linked notes [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(9)	(9)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Macro Hedge Program [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	357	203
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Hedging Derivatives [Member] | International [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	39	5
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(4)	0
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Hedging Derivatives [Member] | Guaranteed Minimum Withdrawal Benefit [Member] | U.S. [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	483	461
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	400	139
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Derivative Liabilities [Member]
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(249)	(287)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Credit derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	(13)	21
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(548)	(411)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Equity derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	31	2
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	9	2
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Foreign exchange derivative [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	0	0
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	0	0
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Interest rate derivatives [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	48	(36)
Liabilities accounted for at fair value on a recurring basis
Total liabilities accounted for at fair value on a recurring basis	(106)	(17)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Other Derivatives Contracts [Member]
Assets accounted for at fair value on a recurring basis
Derivative Assets	28	32
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ABS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	361	477
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | CDOs [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	368	2,581
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | CMBS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	588	689
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Corporate [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	2,255	2,129
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Foreign govt./govt. agencies [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	49	56
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Municipal [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	437	272
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | RMBS [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	1,063	1,285
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | U.S. Treasuries [Member]
Assets accounted for at fair value on a recurring basis
Total fixed maturities, AFS	$ 0	$ 0

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Deferred Policy Acquisition Costs and Present Value of Future Profits (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Deferred Policy Acquisition Costs and Present Value of Future Profits
Gross profit estimates term for most contracts	20 years
Decrease in DAC due to sale of Hartford Investments Canada Corporation		$ 34
Estimated future net amortization expense of present value of future profits in 2012	39
Estimated future net amortization expense of present value of future profits in 2013	58
Estimated future net amortization expense of present value of future profits in 2014	24
Estimated future net amortization expense of present value of future profits in 2015	23
Estimated future net amortization expense of present value of future profits in 2016	$ 22

XML

Employee Benefit Plans (Details 11)	Dec. 31, 2011	Dec. 31, 2010
Pension Benefits [Member]
Weighted average asset allocation
Equity securities	20.00%	22.00%
Fixed income securities	62.00%	61.00%
Alternative assets	18.00%	17.00%
Total	100.00%	100.00%
Other Postretirement Benefits [Member]
Weighted average asset allocation
Equity securities	22.00%	22.00%
Fixed income securities	78.00%	78.00%
Total	100.00%	100.00%

XML

Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating Activities
Net income (loss)	$ 662	$ 1,680	$ (887)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Amortization of deferred policy acquisition costs and present value of future profits	3,427	2,544	4,267
Additions to deferred policy acquisition costs and present value of future profits	(2,608)	(2,648)	(2,853)
Change in reserve for future policy benefits and unpaid losses and loss adjustment expenses and unearned premiums	1,451	(93)	558
Change in reinsurance recoverables	(31)	353	236
Change in receivables and other assets	(211)	437	380
Change in payables and accruals	(491)	(612)	(1,271)
Change in accrued and deferred income taxes	(103)	561	(246)
Net realized capital losses	24	554	2,010
Net receipts (disbursements) from investment contracts related to policyholder funds - international variable annuities	(2,332)	497	1,498
Net (increase) decrease in equity securities, trading	2,321	(499)	(1,501)
Depreciation and amortization	668	596	470
Goodwill impairment	30	153	32
Other operating activities, net	(533)	(214)	281
Net cash provided by operating activities	2,274	3,309	2,974
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	37,914	49,155	53,538
Fixed maturities, fair value option	37	20
Equity securities, available-for-sale	239	325	949
Mortgage loans	515	1,723	629
Partnerships	237	367	391
Payments for the purchase of:
Fixed maturities, available-for-sale	(37,627)	(50,807)	(54,346)
Fixed maturities, fair value option	(664)	(75)
Equity securities, available-for-sale	(270)	(163)	(307)
Mortgage loans	(1,800)	(291)	(233)
Partnerships	(784)	(348)	(274)
Proceeds from business sold	278	241	(7)
Derivatives, net	720	(338)	(561)
Change in policy loans, net	180	(7)	34
Change in payables for collateral under securities lending, net		(46)	(2,925)
Other investing activities, net	(157)	(190)	(11)
Net cash used for investing activities	(1,182)	(434)	(3,123)
Financing Activities
Deposits and other additions to investment and universal life-type contracts	11,531	12,602	14,239
Withdrawals and other deductions from investment and universal life-type contracts	(21,022)	(22,476)	(24,341)
Net transfers from separate accounts related to investment and universal life-type contracts	9,843	8,409	7,203
Proceeds from issuance of long-term debt		1,090
Repayments at maturity for long-term debt and payments on capital lease obligations	(405)	(343)	(24)
Change in commercial paper			(375)
Repayments at maturity or settlement of consumer notes	(68)	(754)	(74)
Net proceeds from issuance of mandatory convertible preferred stock		556
Net proceeds from issuance of common shares under public offering		1,600
Redemption of preferred stock issued to the U.S. Treasury		(3,400)
Proceeds from issuance of preferred stock and warrants to U.S. Treasury			3,400
Net proceeds from issuance of common shares under discretionary equity issuance plan			887
Proceeds from net issuance of shares under incentive and stock compensation plans and excess tax benefit	10	25	17
Treasury stock acquired	(46)
Dividends paid on preferred stock	(42)	(85)	(73)
Dividends paid on common stock	(153)	(85)	(149)
Changes in bank deposits and payments on bank advances	(257)	(94)	(187)
Net cash provided by (used for) financing activities	(609)	(2,955)	523
Foreign exchange rate effect on cash	36		(43)
Net increase (decrease) in cash	519	(80)	331
Cash - beginning of period	2,062	2,142	1,811
Cash - end of period	2,581	2,062	2,142
Supplemental Disclosure of Cash Flow Information
Income taxes paid (received)	179	308	(243)
Interest paid	$ 501	$ 485	$ 475

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Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Comprehensive Income
Net income (loss)	$ 662	$ 1,680	$ (887)
Other comprehensive income
Change in net unrealized gain (loss) on securities	1,979	1,707	5,909
Change in OTTI losses recognized in other comprehensive income	9	116	(224)
Change in net gain / loss on cash-flow hedging instruments	131	128	(387)
Change in foreign currency translation adjustments	112	289	(23)
Change in pension and other postretirement plan adjustment	(73)	(123)	(155)
Total other comprehensive income	2,158	2,117	5,120
Total comprehensive income	$ 2,820	$ 3,797	$ 4,233

XML

Sales Inducements

12 Months Ended

Dec. 31, 2011

Sales Inducements [Abstract]

Sales Inducements

10. Sales Inducements

Accounting Policy

The Company currently offers enhanced crediting rates or bonus payments to contract holders on certain of its individual and group annuity products. The expense associated with offering a bonus is deferred and amortized over the life of the related contract in a pattern consistent with the amortization of deferred policy acquisition costs. Amortization expense associated with expenses previously deferred is recorded over the remaining life of the contract. Consistent with the Unlock, the Company unlocked the amortization of the sales inducement asset. See Note 7 for more information concerning the Unlock.

Changes in deferred sales inducement activity were as follows for the years ended December 31:

	2011			2010			2009
Balance, beginning of year	$	459		$	438		$	553
Sales inducements deferred		20			31			59
Amortization charged to income		(17	)		(8	)		(105	)
Amortization — Unlock		(28	)		(2	)		(69	)
Balance, end of year	$	434		$	459		$	438

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Investments and Derivative Instruments (Details Textual 3) (USD $)	3 Months Ended			9 Months Ended	12 Months Ended
	Dec. 31, 2011 Security	Dec. 31, 2010	Sep. 30, 2010	Sep. 30, 2010	Dec. 31, 2011 Security	Dec. 31, 2010	Dec. 31, 2009
Additional Investments and Derivative Instruments (Textual) [Abstract]
Projected loss contingency for loans with an LTV ratio					90% or greater
Maximum uncollateralized threshold for derivative counterparty for a single level entity					$ 10,000,000
Days after due payment date when interest income ceases to accrue					60 days
Gross gains and losses on sales and impairments previously reported as unrealized losses in AOCI	0	0			0	0
Proceed from sale of AFS securities	0		0	0	0
Number of securities included in AFS securities in an unrealized loss position, primarily related to municipal securities	2,549				2,549
Percentage of gross unrealized losses depressed	75.00%				75.00%
Securities Depressed to Cost or Amortized Cost Lower Limit	20.00%				20.00%
Carrying value of mortgage loans associated with the valuation allowance	621,000,000,000				621,000,000,000
Current weighted average loan to value ratio of commercial mortgage loan	68.00%				68.00%
Original weighted average loan to value ratio of commercial mortgage loan	64.00%				64.00%
Avg. Debt-Service Coverage Ratio	1.940				1.940
Notional amount of interest rate swaps in offsetting relationships	7,800,000,000	7,100,000,000			7,800,000,000	7,100,000,000
Decline in notional amount of product derivative as a result of policyholder lapses and withdrawals					18,900,000,000
Decrease in notional amount of hedging instruments					8,700,000,000
Total increase in macro hedge notional amount	6,200,000,000				6,200,000,000
Deferred net gains on derivative instruments before tax to be reclassified to earnings during next twelve months					111,000,000
Maximum term over for hedging exposure to variability of future cash flows					12 years
Maximum amount of net reclassifications from AOCI to earnings						1,000,000	1,000,000
Amount of standard market indices of diversified portfolios of corporate issuers	4,200,000,000	3,900,000,000			4,200,000,000	3,900,000,000
Amount of customized diversified portfolios of corporate issuers	553,000,000	542,000,000			553,000,000	542,000,000
Fair value collateral pledged	1,100,000,000	790,000,000			1,100,000,000	790,000,000
Collateral received in cash	33,000,000	33,000,000			33,000,000	33,000,000
Fair value of accepted collateral	2,600,000,000	1,500,000,000			2,600,000,000	1,500,000,000
Cash collateral received	2,000,000,000	1,100,000,000			2,000,000,000	1,100,000,000
Fair value of securities on deposit	$ 1,600,000,000	$ 1,400,000,000			$ 1,600,000,000	$ 1,400,000,000

XML

Investments and Derivative Instruments (Details 16) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Net Derivatives, Notional Amount	$ 141,436	$ 136,854
Net Derivatives, Fair Value	(458)	(547)
Asset Derivatives, Fair Value	4,682	2,775
Liability Derivatives, Fair Value	(5,140)	(3,322)
GMWB hedging instruments [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	16,406	17,856
Net Derivatives, Fair Value	894	467
GMWB hedging instruments [Member] | U.S. [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	16,406	17,856
Net Derivatives, Fair Value	894	467
Asset Derivatives, Fair Value	1,022	647
Liability Derivatives, Fair Value	(128)	(180)
Macro Hedge Program [Member] | U.S. [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	6,819	13,057
Net Derivatives, Fair Value	357	203
Asset Derivatives, Fair Value	357	203
Liability Derivatives, Fair Value	0	0
Cash flow hedges [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	8,943	10,625
Net Derivatives, Fair Value	335	121
Asset Derivatives, Fair Value	359	217
Liability Derivatives, Fair Value	(24)	(96)
Cash Flow Hedging Interest Rate Swaps [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	8,652	10,290
Net Derivatives, Fair Value	329	115
Asset Derivatives, Fair Value	329	188
Liability Derivatives, Fair Value	0	(73)
Cash flow hedges foreign currency swaps [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	291	335
Net Derivatives, Fair Value	6	6
Asset Derivatives, Fair Value	30	29
Liability Derivatives, Fair Value	(24)	(23)
Fair value hedges [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	1,684	1,797
Net Derivatives, Fair Value	(117)	(58)
Asset Derivatives, Fair Value	63	76
Liability Derivatives, Fair Value	(180)	(134)
Fair Value Hedging Interest Rate Swaps [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	1,007	1,120
Net Derivatives, Fair Value	(78)	(46)
Asset Derivatives, Fair Value	0	5
Liability Derivatives, Fair Value	(78)	(51)
Fair value hedges - Foreign currency swaps [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	677	677
Net Derivatives, Fair Value	(39)	(12)
Asset Derivatives, Fair Value	63	71
Liability Derivatives, Fair Value	(102)	(83)
Non-qualifying strategies [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	130,809	124,432
Net Derivatives, Fair Value	(676)	(610)
Asset Derivatives, Fair Value	4,260	2,482
Liability Derivatives, Fair Value	(4,936)	(3,092)
Interest Rate Swaps Caps Floors and Futures [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	10,144	7,938
Net Derivatives, Fair Value	(583)	(441)
Asset Derivatives, Fair Value	531	126
Liability Derivatives, Fair Value	(1,114)	(567)
Foreign Currency Swaps and Forwards Non-qualifying as Hedges [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	380	368
Net Derivatives, Fair Value	(12)	(18)
Asset Derivatives, Fair Value	6	1
Liability Derivatives, Fair Value	(18)	(19)
3 Win Related Foreign Currency Swaps [Member] | JAPAN [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	2,054	2,285
Net Derivatives, Fair Value	184	177
Asset Derivatives, Fair Value	184	177
Liability Derivatives, Fair Value	0	0
Fixed annuity hedging instruments [Member] | JAPAN [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	1,945	2,119
Net Derivatives, Fair Value	514	608
Asset Derivatives, Fair Value	540	608
Liability Derivatives, Fair Value	(26)	0
Credit Derivatives that Purchase Credit Protection [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	1,721	2,559
Net Derivatives, Fair Value	36	(9)
Asset Derivatives, Fair Value	56	29
Liability Derivatives, Fair Value	(20)	(38)
Credit Derivatives that Assume Credit Risk [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	2,952	2,569
Net Derivatives, Fair Value	(648)	(434)
Asset Derivatives, Fair Value	2	8
Liability Derivatives, Fair Value	(650)	(442)
Credit Derivatives in Offsetting Positions [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	8,189	8,367
Net Derivatives, Fair Value	(57)	(75)
Asset Derivatives, Fair Value	164	98
Liability Derivatives, Fair Value	(221)	(173)
Equity index swaps options [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	1,501	189
Net Derivatives, Fair Value	27	(10)
Asset Derivatives, Fair Value	40	5
Liability Derivatives, Fair Value	(13)	(15)
GMWB product derivatives [Member] | U.S. [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	34,569	40,255
Net Derivatives, Fair Value	(2,538)	(1,611)
Asset Derivatives, Fair Value	0	0
Liability Derivatives, Fair Value	(2,538)	(1,611)
GMWB Reinsurance [Member] | U.S. [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	7,193	8,767
Net Derivatives, Fair Value	443	280
Asset Derivatives, Fair Value	443	280
Liability Derivatives, Fair Value	0	0
International program product derivatives [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	2,710	2,730
Net Derivatives, Fair Value	(71)	(33)
Asset Derivatives, Fair Value	0	3
Liability Derivatives, Fair Value	(71)	(36)
International program hedging instruments [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	33,726	14,873
Net Derivatives, Fair Value	750	254
Asset Derivatives, Fair Value	887	265
Liability Derivatives, Fair Value	(137)	(11)
Contingent Capital Facility Put Option [Member]
Derivative [Line Items]
Net Derivatives, Notional Amount	500	500
Net Derivatives, Fair Value	28	32
Asset Derivatives, Fair Value	28	32
Liability Derivatives, Fair Value	$ 0	$ 0

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Investments and Derivative Instruments (Details 14) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Notional Amount	$ 141,436	$ 136,854
Fair Value	(458)	(547)
GMWB hedging instruments [Member]
Derivative [Line Items]
Notional Amount	16,406	17,856
Fair Value	894	467
Customized swaps [Member] | GMWB hedging instruments [Member]
Derivative [Line Items]
Notional Amount	8,389	10,113
Fair Value	385	209
Equity swaps, options and futures [Member] | GMWB hedging instruments [Member]
Derivative [Line Items]
Notional Amount	5,320	4,943
Fair Value	498	391
Interest rate swaps and futures [Member] | GMWB hedging instruments [Member]
Derivative [Line Items]
Notional Amount	2,697	2,800
Fair Value	$ 11	$ (133)

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Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (Textual) [Abstract]
Property and casualty insurance products reserves and were discounted to present value at an average interest rate	4.40%	4.80%
Property and casualty reserves discount	$ 542	$ 524
Current accident year benefit from discounting property and casualty reserves	58	46	40
Accretion of discounts for prior accident years	38	26	24
Annuity Obligations	$ 867	$ 896

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Debt (Details 2) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Interest Expense
Interest expense	$ 508	$ 508	$ 476
Short-term Debt [Member]
Interest Expense
Interest expense			3
Long-term Debt [Member]
Interest Expense
Interest expense	$ 508	$ 508	$ 473

XML

Discontinued Operations (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended		3 Months Ended		12 Months Ended	3 Months Ended				3 Months Ended	12 Months Ended		12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Specialty Risk Services [Member]	Mar. 31, 2011 Specialty Risk Services [Member]	Dec. 31, 2011 Specialty Risk Services [Member]	Dec. 31, 2010 HICC [Member]	Dec. 31, 2011 Discontinued Operation Or Asset [Member]	Dec. 31, 2010 HAIL [Member]	Dec. 31, 2011 FTC and FTB [Member]	Jun. 30, 2011 Federal Trust Corporation [Member]	Dec. 31, 2011 Federal Trust Corporation [Member]	Nov. 01, 2011 Federal Trust Corporation [Member]	Dec. 31, 2011 Goodwill [Member] Federal Trust Corporation [Member]
Discontinued Operations (Textual) [Abstract]
Net realized capital gain (loss) on disposal of discontinued operations, net of tax	$ 82	$ 37		$ 150		$ 41	$ 6	$ (4)		$ 74			$ 10
Maximum transition service period					24 months						12 months
Charges attributable to asset disposal after tax			4
Net Assets Liabilities held at Time of Merger												200
Carrying value of assets									3
Carrying value of liabilities									$ 19

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Employee Benefit Plans (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Pension Benefits [Member]
Fair values of the company's pension plan assets
Fair value of plan assets - beginning of year	$ 3,922	$ 3,526
Actual return on plan assets	613	434
Employer contributions	201	201
Benefits paid	(210)	(228)
Expenses paid	(12)	(12)
Foreign exchange adjustment	(1)	1
Fair value of plan assets - end of year	4,513	3,922
Funded status - end of year	(952)	(873)
Other Postretirement Benefits [Member]
Fair values of the company's pension plan assets
Fair value of plan assets - beginning of year	190	175
Actual return on plan assets	13	15
Fair value of plan assets - end of year	203	190
Funded status - end of year	$ (221)	$ (218)

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Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (Details 1) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Liability for future policy benefits and unpaid losses and loss adjustment expenses
Group Life Term, Disability and Accident unpaid losses and loss adjustment expenses	$ 6,547	$ 6,388
Group life other unpaid losses and loss adjustment expenses	213	216
Individual life unpaid losses and loss adjustment expenses	134	110
Future Policy Benefits	12,572	11,859
Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses	$ 19,466	$ 18,573

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Document and Entity Information (USD $) In Billions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Feb. 17, 2012	Jun. 30, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	HARTFORD FINANCIAL SERVICES GROUP INC/DE
Entity Central Index Key	0000874766
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 11.7
Entity Common Stock, Shares Outstanding		440,237,475

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Income Tax (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Tax Expense (Benefit)
Current - U.S. Federal income tax expense (benefit)	$ (495)	$ 106	$ 509
Current - International income tax expense (benefit)	22	69
Total current income tax expense (benefit)	(473)	175	509
Deferred - U.S. Federal income tax expense (benefit) excluding NOL carryforward	900	133	(1,584)
Deferred income tax expense (benefit) - net operating loss carryforward	(652)	1	712
Deferred - International income tax expense (benefit)	(121)	303	(475)
Total deferred income tax expense (benefit)	127	437	(1,347)
Total income tax expense (benefit)	$ (346)	$ 612	$ (838)

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Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses

12 Months Ended

Dec. 31, 2011

Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses [Abstract]

Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses

11. Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses

Life Insurance Products Accounting Policy

Liabilities for future policy benefits are calculated by the net level premium method using interest, withdrawal and mortality assumptions appropriate at the time the policies were issued. The methods used in determining the liability for unpaid losses and future policy benefits are standard actuarial methods recognized by the American Academy of Actuaries. For the tabular reserves, discount rates are based on the Company’s earned investment yield and the morbidity/mortality tables used are standard industry tables modified to reflect the Company’s actual experience when appropriate. In particular, for the Company’s group disability known claim reserves, the morbidity table for the early durations of claim is based exclusively on the Company’s experience, incorporating factors such as gender, elimination period and diagnosis. These reserves are computed such that they are expected to meet the Company’s future policy obligations. Future policy benefits are computed at amounts that, with additions from estimated premiums to be received and with interest on such reserves compounded annually at certain assumed rates, are expected to be sufficient to meet the Company’s policy obligations at their maturities or in the event of an insured’s death. Changes in or deviations from the assumptions used for mortality, morbidity, expected future premiums and interest can significantly affect the Company’s reserve levels and related future operations and, as such, provisions for adverse deviation are built into the long-tailed liability assumptions.

Liabilities for the Company’s group life and disability contracts, as well as its individual term life insurance policies, include amounts for unpaid losses and future policy benefits. Liabilities for unpaid losses include estimates of amounts to fully settle known reported claims, as well as claims related to insured events that the Company estimates have been incurred but have not yet been reported. These reserve estimates are based on known facts and interpretations of circumstances, and consideration of various internal factors including The Hartford’s experience with similar cases, historical trends involving claim payment patterns, loss payments, pending levels of unpaid claims, loss control programs and product mix. In addition, the reserve estimates are influenced by consideration of various external factors including court decisions, economic conditions and public attitudes. The effects of inflation are implicitly considered in the reserving process.

Life Insurance Products Unpaid Losses and Loss Adjustment Expenses

A rollforward of liabilities, primarily from group disability products, for unpaid losses and loss adjustment expenses follows:

	For the years ended December 31,
	2011		2010		2009
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	6,388	$	6,131	$	6,066
Reinsurance recoverables		209		213		231
Beginning liabilities for unpaid losses and loss adjustment expenses, net		6,179		5,918		5,835
Add provision for unpaid losses and loss adjustment expenses
Current year		3,196		3,260		3,244
Prior years		98		70		(88	)
Total provision for unpaid losses and loss adjustment expenses		3,294		3,330		3,156
Less payments
Current year		1,524		1,552		1,580
Prior years		1,635		1,517		1,493
Total payments		3,159		3,069		3,073
Ending liabilities for unpaid losses and loss adjustment expenses, net		6,314		6,179		5,918
Reinsurance recoverables		233		209		213
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	6,547	$	6,388	$	6,131

The unfavorable prior year development in both 2011 and 2010 is a result of lower claim terminations, particularly in long-term disability. The favorable prior year development in 2009 was principally due to continued disability and waiver claims management.

The liability for future policy benefits and unpaid losses and loss adjustment expenses is as follows:

	2011		2010
Group Life Term, Disability and Accident unpaid losses and loss adjustment expenses	$	6,547	$	6,388
Group Life Other unpaid losses and loss adjustment expenses		213		216
Individual Life unpaid losses and loss adjustment expenses		134		110
Future Policy Benefits		12,572		11,859
Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses	$	19,466	$	18,573

Property and Casualty Insurance Products Accounting Policy

The Hartford establishes property and casualty insurance products reserves to provide for the estimated costs of paying claims under insurance policies written by the Company. These reserves include estimates for both claims that have been reported and those that have been incurred but not reported, and include estimates of all losses and loss adjustment expenses associated with processing and settling these claims. Estimating the ultimate cost of future losses and loss adjustment expenses is an uncertain and complex process. This estimation process is based significantly on the assumption that past developments are an appropriate predictor of future events, and involves a variety of actuarial techniques that analyze experience, trends and other relevant factors. The uncertainties involved with the reserving process have become increasingly difficult due to a number of complex factors including social and economic trends and changes in the concepts of legal liability and damage awards. Accordingly, final claim settlements may vary from the present estimates, particularly when those payments may not occur until well into the future.

The Hartford regularly reviews the adequacy of its estimated losses and loss adjustment expense reserves by line of business within the various reporting segments. Adjustments to previously established reserves are reflected in the operating results of the period in which the adjustment is determined to be necessary. Such adjustments could possibly be significant, reflecting any variety of new and adverse or favorable trends.

Most of the Company’s property and casualty insurance products insurance reserves are not discounted. However, the Company has discounted liabilities funded through structured settlements and has discounted certain reserves for indemnity payments due to permanently disabled claimants under workers’ compensation policies. Structured settlements are agreements that provide fixed periodic payments to claimants and include annuities purchased to fund unpaid losses for permanently disabled claimants and, prior to 2008, agreements that funded loss run-offs for unrelated parties. Most of the annuities have been issued by the Company and these structured settlements are recorded at present value as annuity obligations, either within the reserve for future policy benefits if the annuity benefits are life-contingent or within other policyholder funds and benefits payable if the annuity benefits are not life-contingent. If not funded through an annuity, reserves for certain indemnity payments due to permanently disabled claimants under workers’ compensation policies are recorded as property and casualty insurance products reserves and were discounted to present value at an average interest rate of 4.4% in 2011 and 4.8% in 2010. As of December 31, 2011 and 2010, property and casualty insurance products reserves were discounted by a total of $542 and $524, respectively. The current accident year benefit from discounting property and casualty insurance products reserves was $58 in 2011, $46 in 2010 and $40 in 2009. The growth in discounting benefit over the past three years is due to growth in the workers’ compensation line of business, tempered by a reduction in the discount rate, reflecting a lower risk-free rate of return over this period. Accretion of discounts for prior accident years totaled $38 in 2011, $26 in 2010, and $24 in 2009. For annuities issued by the Company to fund certain workers’ compensation indemnity payments where the claimant has not released the Company of its obligation, the Company has recorded annuity obligations totaling $867 as of December 31, 2011 and $896 as of December 31, 2010.

Property and Casualty Insurance products Unpaid Losses and Loss Adjustment Expenses

A rollforward of liabilities for unpaid losses and loss adjustment expenses follows:

	For the years ended December 31,
	2011		2010			2009
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	21,025	$	21,651		$	21,933
Reinsurance and other recoverables		3,077		3,441			3,586
Beginning liabilities for unpaid losses and loss adjustment expenses, net		17,948		18,210			18,347
Add provision for unpaid losses and loss adjustment expenses
Current year		7,420		6,768			6,596
Prior years		367		(196	)		(186	)
Total provision for unpaid losses and loss adjustment expenses		7,787		6,572			6,410
Less payments
Current year		3,181		2,952			2,776
Prior years		4,037		3,882			3,771
Total payments		7,218		6,834			6,547
Ending liabilities for unpaid losses and loss adjustment expenses, net		18,517		17,948			18,210
Reinsurance and other recoverables		3,033		3,077			3,441
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	21,550	$	21,025		$	21,651

In the opinion of management, based upon the known facts and current law, the reserves recorded for The Hartford’s property and casualty insurance products at December 31, 2011 represent the Company’s best estimate of its ultimate liability for losses and loss adjustment expenses related to losses covered by policies written by the Company. Based on information or trends that are not presently known, future reserve re-estimates may result in adjustments to these reserves. Such adjustments could possibly be significant, reflecting any variety of new and adverse or favorable trends. Because of the significant uncertainties surrounding environmental and particularly asbestos exposures, it is possible that management’s estimate of the ultimate liabilities for these claims may change and that the required adjustment to recorded reserves could exceed the currently recorded reserves by an amount that could be material to The Hartford’s results of operations, financial condition and liquidity. For a further discussion, see Note 12.

Examples of current trends affecting frequency and severity include increases in medical cost inflation rates, the changing use of medical care procedures, the introduction of new products and changes in internal claim practices. Other trends include changes in the legislative and regulatory environment over workers’ compensation claims and evolving exposures to claims relating to molestation or abuse and other mass torts. In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liabilities and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims, and uncertainty as to the monetary amount being sought by the claimant from the insured.

The following table presents prior accident years reserve development:

	For the years ended December 31,
	2011			2010			2009
Auto liability	$	(97	)	$	(169	)	$	(124	)
Professional liability		29			(88	)		(127	)
Workers’ compensation		171			(70	)		(92	)
General liability		(40	)		(108	)		(112	)
Package business		(76	)		(19	)		38
Commercial property		(4	)		(16	)		—
Fidelity and surety		(7	)		(5	)		28
Homeowners		(1	)		23			18
Net environmental reserves		26			67			75
Net asbestos reserves		294			189			138
All other non-A&E		—			11			35
Uncollectible reinsurance		—			(30	)		(40	)
Change in workers’ compensation discount, including accretion		38			26			24
Catastrophes		37			11			(23	)
Other reserve re-estimates, net		(3	)		(18	)		(24	)
Total prior accident years development	$	367		$	(196	)	$	(186	)

Net unfavorable reserve development in 2011 primarily included the following:

• a strengthening of reserves for workers’ compensation reserves, for accident years 2008 to 2010;

• a strengthening of asbestos and environmental reserves;

• partially offset by a release of auto liability claims for accident years 2006 to 2010; and

• also offset by a release of package business liability coverages in accident years 2005 to 2009.

Net favorable reserve development in 2010 primarily included the following:

• a release of reserves for auto liability, claims, for accident years 2002 to 2009;

• a release of reserves for professional liability claims, for accident years 2004 to 2008;

• a release of general liability claims, primarily related to accident years 2005 to 2008;

• a release of workers’ compensation reserves related to accident years 2006 and 2007; and

• partially offset by a strengthening of asbestos and environmental reserves.

Net favorable reserve development in 2009 primarily included the following:

• a release of reserves for professional liability claims, for accident years 2003 to 2008;

• a release of general liability claims, primarily related to accident years 2003 to 2007;

• a release of workers’ compensation reserves; and

• partially offset by a strengthening of asbestos and environmental reserves.

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Stock Compensation Plans (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2011
Summary of Status of Non Vested Share Awards
Non-Vested at beginning of year, shares	1,889,000
Non-Vested at beginning of year, Weighted-Average Grant-Date Fair Value	$ 35.83
Restricted shares or units granted	3,400,000
Granted, Weighted Average Grant-Date Fair Value	$ 28.22
Decrease for change in estimated performance factors, Shares	(232,000)
Vested, Shares	(637,000)
Vested, Weighted-Average Grant-Date Fair Value	$ 46.00
Forfeited, Shares	(256,000)
Forfeited, Weighted-Average Grant-Date Fair Value	$ 34.14
Non-vested at end of year, Weighted-Average Grant-Date Fair Value	$ 27.60
Non-vested at end of year, Shares	4,164,000
Restricted Stock Unit Plan [Member]
Summary of Status of Non Vested Share Awards
Non-Vested at beginning of year, shares	648,000
Non-Vested at beginning of year, Weighted-Average Grant-Date Fair Value	$ 24.70
Restricted shares or units granted	0
Granted, Weighted Average Grant-Date Fair Value	$ 0
Vested, Shares	(49,000)
Vested, Weighted-Average Grant-Date Fair Value	$ 24.27
Forfeited, Shares	(108,000)
Forfeited, Weighted-Average Grant-Date Fair Value	$ 24.31
Non-vested at end of year, Weighted-Average Grant-Date Fair Value	$ 24.84
Non-vested at end of year, Shares	491,000

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Investments and Derivative Instruments (Details 3) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Fixed maturities, AFS [Member]
Available for-sale-securities, Gross Realized Gain (Loss)
Sale proceeds	$ 36,956	$ 46,482	$ 41,973
Gross gains	617	706	755
Gross losses	(381)	(452)	(1,272)
Equity Securities, AFS [Member]
Available for-sale-securities, Gross Realized Gain (Loss)
Sale proceeds	239	325	941
Gross gains	59	24	429
Gross losses		$ (16)	$ (151)

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Supplemental Information Concerning Property and Casualty Insurance Operations (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Supplemental Information Concerning Property and Casualty Insurance Operations
Discount Deducted From Liabilities	$ 542	$ 524	$ 511
Current Year Claims and Claims Adjustment Expense	7,420	6,768	6,596
Prior Year Claims and Claims Adjustment Expense	367	(196)	(186)
Paid Losses and Loss Adjustment Expense	$ 7,218	$ 6,834	$ 6,547
Supplemental Information Concerning Property and Casualty Insurance Operations (Textual) [Abstract]
Percentage of Weighted Average Interest Rate	4.40%	4.80%	5.00%

XML

Investments and Derivative Instruments (Details 13) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Variable Interest Entity [Line Items]
Total Assets	$ 498	$ 743
Total Liabilities	471	394
Maximum Exposure to Loss	36	302
CDOs [Member]
Variable Interest Entity [Line Items]
Total Assets	491	729
Total Liabilities	471	393
Maximum Exposure to Loss	29	289
Limited partnerships [Member]
Variable Interest Entity [Line Items]
Total Assets	7	14
Total Liabilities	0	1
Maximum Exposure to Loss	$ 7	$ 13

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost of $78,978 and $78,419) (includes variable interest entity assets, at fair value, of $153 and $406)	$ 81,809	$ 77,820
Fixed maturities, at fair value using the fair value option (includes variable interest entity assets, at fair value, of $338 and $323)	1,328	649
Equity securities, trading, at fair value (cost of $32,928 and $33,899)	30,499	32,820
Equity securities, available-for-sale, at fair value (cost of $1,056 and $1,013)	921	973
Mortgage loans (net of allowances for loan losses of $102 and $155)	5,728	4,489
Policy loans, at outstanding balance	2,001	2,181
Limited partnerships and other alternative investments (includes variable interest entity assets of $7 and $14)	2,532	1,918
Other investments	2,394	1,617
Short-term investments	7,736	8,528
Total investments	134,948	130,995
Cash	2,581	2,062
Premiums receivable and agents' balances, net	3,446	3,273
Reinsurance recoverables, net	4,768	4,862
Deferred policy acquisition costs and present value of future profits	8,744	9,857
Deferred income taxes, net	1,398	3,725
Goodwill	1,006	1,051
Property and equipment, net	1,029	1,150
Other assets	2,274	1,629
Separate accounts assets	143,870	159,742
Total assets	304,064	318,346
Liabilities
Reserve for future policy benefits and unpaid losses and loss adjustment expenses	41,016	39,598
Other policyholder funds and benefits payable	45,612	44,550
Other policyholder funds and benefits payable - International variable annuities	30,461	32,793
Unearned premium	5,222	5,176
Short-term debt	0	400
Long-term debt	6,216	6,207
Consumer notes	314	382
Other liabilities (includes variable interest entity liabilities of $471 and $394)	8,443	9,187
Separate account liabilities	143,870	159,742
Total liabilities	281,154	298,035
Commitments and Contingencies (Note 12)
Stockholders' Equity
Preferred stock, $0.01 par value - 50,000,000 shares authorized, 575,000 shares issued, liquidation preference $1,000 per share	556	556
Common stock, $0.01 par value - 1,500,000,000 shares authorized, 469,750,171 and 469,754,771 shares issued	5	5
Additional paid-in capital	10,391	10,448
Retained earnings	12,519	12,077
Treasury stock, at cost - 27,211,115 and 25,205,283 shares	(1,718)	(1,774)
Accumulated other comprehensive income (loss), net of tax	1,157	(1,001)
Total Stockholders' equity	22,910	20,311
Total liabilities and stockholders' equity	$ 304,064	$ 318,346

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Investments and Derivative Instruments

12 Months Ended

Dec. 31, 2011

Investments and Derivative Instruments [Abstract]

Investments and Derivative Instruments

5. Investments and Derivative Instruments

Significant Investment Accounting Policies

Overview

The Company’s investments in fixed maturities include bonds, redeemable preferred stock and commercial paper. These investments, along with certain equity securities, which include common and non-redeemable preferred stocks, are classified as AFS and are carried at fair value. The after-tax difference from cost or amortized cost is reflected in stockholders’ equity as a component of Other Comprehensive Income (Loss) (“OCI”), after adjustments for the effect of deducting the life and pension policyholders’ share of the immediate participation guaranteed contracts and certain life and annuity deferred policy acquisition costs and reserve adjustments. Fixed maturities for which the Company elected the fair value option are classified as FVO and are carried at fair value. The equity investments associated with the variable annuity products offered in Japan are recorded at fair value and are classified as trading with changes in fair value recorded in net investment income. Policy loans are carried at outstanding balance. Mortgage loans are recorded at the outstanding principal balance adjusted for amortization of premiums or discounts and net of valuation allowances. Short-term investments are carried at amortized cost, which approximates fair value. Limited partnerships and other alternative investments are reported at their carrying value with the change in carrying value accounted for under the equity method and accordingly the Company’s share of earnings are included in net investment income. Recognition of limited partnerships and other alternative investment income is delayed due to the availability of the related financial information, as private equity and other funds are generally on a three-month delay and hedge funds are on a one-month delay. Accordingly, income for the years ended December 31, 2011, 2010 and 2009 may not include the full impact of current year changes in valuation of the underlying assets and liabilities, which are generally obtained from the limited partnerships and other alternative investments’ general partners. Other investments primarily consist of derivatives instruments which are carried at fair value.

Recognition and Presentation of Other-Than-Temporary Impairments

The Company deems debt securities and certain equity securities with debt-like characteristics (collectively “debt securities”) to be other-than-temporarily impaired (“impaired”) if a security meets the following conditions: a) the Company intends to sell or it is more likely than not the Company will be required to sell the security before a recovery in value, or b) the Company does not expect to recover the entire amortized cost basis of the security. If the Company intends to sell or it is more likely than not the Company will be required to sell the security before a recovery in value, a charge is recorded in net realized capital losses equal to the difference between the fair value and amortized cost basis of the security. For those impaired debt securities which do not meet the first condition and for which the Company does not expect to recover the entire amortized cost basis, the difference between the security’s amortized cost basis and the fair value is separated into the portion representing a credit other-than-temporary impairment (“impairment”), which is recorded in net realized capital losses, and the remaining impairment, which is recorded in OCI. Generally, the Company determines a security’s credit impairment as the difference between its amortized cost basis and its best estimate of expected future cash flows discounted at the security’s effective yield prior to impairment. The remaining non-credit impairment, which is recorded in OCI, is the difference between the security’s fair value and the Company’s best estimate of expected future cash flows discounted at the security’s effective yield prior to the impairment, which typically represents current market liquidity and risk premiums. The previous amortized cost basis less the impairment recognized in net realized capital losses becomes the security’s new cost basis. The Company accretes the new cost basis to the estimated future cash flows over the expected remaining life of the security by prospectively adjusting the security’s yield, if necessary. The following table presents the change in non-credit impairments recognized in OCI as disclosed in the Company’s Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2011 and 2010, respectively.

	For the years ended December 31,
	2011			2010			2009
OTTI losses recognized in OCI	$	(89	)	$	(418	)	$	(683	)
Changes in fair value and/or sales		112			647			244
Tax and deferred acquisition costs		(14	)		(113	)		215
Change in non-credit impairments recognized in OCI	$	9		$	116		$	(224	)

The Company’s evaluation of whether a credit impairment exists for debt securities includes but is not limited to, the following factors: (a) changes in the financial condition of the security’s underlying collateral, (b) whether the issuer is current on contractually obligated interest and principal payments, (c) changes in the financial condition, credit rating and near-term prospects of the issuer, (d) the extent to which the fair value has been less than the amortized cost of the security and (e) the payment structure of the security. The Company’s best estimate of expected future cash flows used to determine the credit loss amount is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions and judgments regarding the future performance of the security. The Company’s best estimate of future cash flows involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, current and projected delinquency rates, and loan-to-value (“LTV”) ratios. In addition, for structured securities, the Company considers factors including, but not limited to, average cumulative collateral loss rates that vary by vintage year, commercial and residential property value declines that vary by property type and location and commercial real estate delinquency levels. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries which may include estimating the underlying collateral value. In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer and/or underlying collateral such as changes in the projections of the underlying property value estimates.

For equity securities where the decline in the fair value is deemed to be other-than-temporary, a charge is recorded in net realized capital losses equal to the difference between the fair value and cost basis of the security. The previous cost basis less the impairment becomes the security’s new cost basis. The Company asserts its intent and ability to retain those equity securities deemed to be temporarily impaired until the price recovers. Once identified, these securities are systematically restricted from trading unless approved by a committee of investment and accounting professionals (“Committee”). The Committee will only authorize the sale of these securities based on predefined criteria that relate to events that could not have been reasonably foreseen. Examples of the criteria include, but are not limited to, the deterioration in the issuer’s financial condition, security price declines, a change in regulatory requirements or a major business combination or major disposition.

The primary factors considered in evaluating whether an impairment exists for an equity security include, but are not limited to: (a) the length of time and extent to which the fair value has been less than the cost of the security, (b) changes in the financial condition, credit rating and near-term prospects of the issuer, (c) whether the issuer is current on preferred stock dividends and (d) the intent and ability of the Company to retain the investment for a period of time sufficient to allow for recovery.

Mortgage Loan Valuation Allowances

The Company’s security monitoring process reviews mortgage loans on a quarterly basis to identify potential credit losses. Commercial mortgage loans are considered to be impaired when management estimates that, based upon current information and events, it is probable that the Company will be unable to collect amounts due according to the contractual terms of the loan agreement. Criteria used to determine if an impairment exists include, but are not limited to: current and projected macroeconomic factors, such as unemployment rates, and property-specific factors such as rental rates, occupancy levels, LTV ratios and debt service coverage ratios (“DSCR”). In addition, the Company considers historic, current and projected delinquency rates and property values. These assumptions require the use of significant management judgment and include the probability and timing of borrower default and loss severity estimates. In addition, projections of expected future cash flows may change based upon new information regarding the performance of the borrower and/or underlying collateral such as changes in the projections of the underlying property value estimates.

For mortgage loans that are deemed impaired, a valuation allowance is established for the difference between the carrying amount and the Company’s share of either (a) the present value of the expected future cash flows discounted at the loan’s effective interest rate, (b) the loan’s observable market price or, most frequently, (c) the fair value of the collateral. A valuation allowance has been established for either individual loans or as a projected loss contingency for loans with an LTV ratio of 90% or greater and consideration of other credit quality factors, including DSCR. Changes in valuation allowances are recorded in net realized capital gains and losses. Interest income on impaired loans is accrued to the extent it is deemed collectible and the loans continue to perform under the original or restructured terms. Interest income ceases to accrue for loans when it is probable that the Company will not receive interest and principal payments according to the contractual terms of the loan agreement, or if a loan is more than 60 days past due. Loans may resume accrual status when it is determined that sufficient collateral exists to satisfy the full amount of the loan and interest payments, as well as when it is probable cash will be received in the foreseeable future. Interest income on defaulted loans is recognized when received.

Net Realized Capital Gains and Losses

Net realized capital gains and losses from investment sales, after deducting the life and pension policyholders’ share for certain products, are reported as a component of revenues and are determined on a specific identification basis, as well as changes in value associated with fixed maturities for which the fair value option was elected. Net realized capital gains and losses also result from fair value changes in derivatives contracts (both free-standing and embedded) that do not qualify, or are not designated, as a hedge for accounting purposes, and the change in value of derivatives in certain fair-value hedge relationships. Impairments and mortgage loan valuation allowances are recognized as net realized capital losses in accordance with the Company’s impairment and mortgage loan valuation allowance policies previously discussed above. Foreign currency transaction remeasurements are also included in net realized capital gains and losses.

Net Investment Income

Interest income from fixed maturities and mortgage loans is recognized when earned on the constant effective yield method based on estimated timing of cash flows. The amortization of premium and accretion of discount for fixed maturities also takes into consideration call and maturity dates that produce the lowest yield. For securitized financial assets subject to prepayment risk, yields are recalculated and adjusted periodically to reflect historical and/or estimated future repayments using the retrospective method; however, if these investments are impaired, any yield adjustments are made using the prospective method. Prepayment fees on fixed maturities and mortgage loans are recorded in net investment income when earned. For limited partnerships and other alternative investments, the equity method of accounting is used to recognize the Company’s share of earnings. For impaired debt securities, the Company accretes the new cost basis to the estimated future cash flows over the expected remaining life of the security by prospectively adjusting the security’s yield, if necessary. The Company’s non-income producing investments were not material for the years ended December 31, 2011, 2010 and 2009.

Net investment income on equity securities, trading, includes dividend income and the changes in market value of the securities associated with the variable annuity products sold in Japan and the United Kingdom. The returns on these policyholder-directed investments inure to the benefit of the variable annuity policyholders but the underlying funds do not meet the criteria for separate account reporting. Accordingly, these assets are reflected in the Company’s general account and the returns credited to the policyholders are reflected in interest credited, a component of benefits, losses and loss adjustment expenses.

Significant Derivative Instruments Accounting Policies

Overview

The Company utilizes a variety of derivative instruments, including swaps, caps, floors, forwards, futures and options through one of four Company-approved objectives: to hedge risk arising from interest rate, equity market, credit spread and issuer default, price or currency exchange rate risk or volatility; to manage liquidity; to control transaction costs; or to enter into replication transactions.

Interest rate, volatility, dividend, credit default and index swaps involve the periodic exchange of cash flows with other parties, at specified intervals, calculated using agreed upon rates or other financial variables and notional principal amounts. Generally, no cash or principal payments are exchanged at the inception of the contract. Typically, at the time a swap is entered into, the cash flow streams exchanged by the counterparties are equal in value.

Interest rate cap and floor contracts entitle the purchaser to receive from the issuer at specified dates, the amount, if any, by which a specified market rate exceeds the cap strike interest rate or falls below the floor strike interest rate, applied to a notional principal amount. A premium payment is made by the purchaser of the contract at its inception and no principal payments are exchanged.

Forward contracts are customized commitments that specify a rate of interest or currency exchange rate to be paid or received on an obligation beginning on a future start date and are typically settled in cash.

Financial futures are standardized commitments to either purchase or sell designated financial instruments, at a future date, for a specified price and may be settled in cash or through delivery of the underlying instrument. Futures contracts trade on organized exchanges. Margin requirements for futures are met by pledging securities or cash, and changes in the futures’ contract values are settled daily in cash.

Option contracts grant the purchaser, for a premium payment, the right to either purchase from or sell to the issuer a financial instrument at a specified price, within a specified period or on a stated date.

Foreign currency swaps exchange an initial principal amount in two currencies, agreeing to re-exchange the currencies at a future date, at an agreed upon exchange rate. There may also be a periodic exchange of payments at specified intervals calculated using the agreed upon rates and exchanged principal amounts.

The Company’s derivative transactions are used in strategies permitted under the derivative use plans required by the State of Connecticut, the State of Illinois and the State of New York insurance departments.

Accounting and Financial Statement Presentation of Derivative Instruments and Hedging Activities

Derivative instruments are recognized on the Consolidated Balance Sheets at fair value. For balance sheet presentation purposes, the Company offsets the fair value amounts, income accruals, and cash collateral held, related to derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset.

On the date the derivative contract is entered into, the Company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability (“fair value” hedge), (2) a hedge of the variability in cash flows of a forecasted transaction or of amounts to be received or paid related to a recognized asset or liability (“cash flow” hedge), (3) a hedge of a net investment in a foreign operation (“net investment” hedge) or (4) held for other investment and/or risk management purposes, which primarily involve managing asset or liability related risks which do not qualify for hedge accounting.

Fair Value Hedges

Changes in the fair value of a derivative that is designated and qualifies as a fair value hedge, including foreign-currency fair value hedges, along with the changes in the fair value of the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings with any differences between the net change in fair value of the derivative and the hedged item representing the hedge ineffectiveness. Periodic cash flows and accruals of income/expense (“periodic derivative net coupon settlements”) are recorded in the line item of the consolidated statements of operations in which the cash flows of the hedged item are recorded.

Cash Flow Hedges

Changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge, including foreign-currency cash flow hedges, are recorded in AOCI and are reclassified into earnings when the variability of the cash flow of the hedged item impacts earnings. Gains and losses on derivative contracts that are reclassified from AOCI to current period earnings are included in the line item in the consolidated statements of operations in which the cash flows of the hedged item are recorded. Any hedge ineffectiveness is recorded immediately in current period earnings as net realized capital gains and losses. Periodic derivative net coupon settlements are recorded in the line item of the consolidated statements of operations in which the cash flows of the hedged item are recorded.

Net Investment in a Foreign Operation Hedges

Changes in fair value of a derivative used as a hedge of a net investment in a foreign operation, to the extent effective as a hedge, are recorded in the foreign currency translation adjustments account within AOCI. Cumulative changes in fair value recorded in AOCI are reclassified into earnings upon the sale or complete, or substantially complete, liquidation of the foreign entity. Any hedge ineffectiveness is recorded immediately in current period earnings as net realized capital gains and losses. Periodic derivative net coupon settlements are recorded in the line item of the consolidated statements of operations in which the cash flows of the hedged item are recorded.

Other Investment and/or Risk Management Activities

The Company’s other investment and/or risk management activities primarily relate to strategies used to reduce economic risk or replicate permitted investments and do not receive hedge accounting treatment. Changes in the fair value, including periodic derivative net coupon settlements, of derivative instruments held for other investment and/or risk management purposes are reported in current period earnings as net realized capital gains and losses.

Hedge Documentation and Effectiveness Testing

To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in fair value or cash flow of the hedged item. At hedge inception, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking each hedge transaction. The documentation process includes linking derivatives that are designated as fair value, cash flow, or net investment hedges to specific assets or liabilities on the balance sheet or to specific forecasted transactions and defining the effectiveness and ineffectiveness testing methods to be used. The Company also formally assesses both at the hedge’s inception and ongoing on a quarterly basis, whether the derivatives that are used in hedging transactions have been and are expected to continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. Hedge effectiveness is assessed using qualitative and quantitative methods. Qualitative methods may include comparison of critical terms of the derivative to the hedged item. Quantitative methods include regression or other statistical analysis of changes in fair value or cash flows associated with the hedge relationship. Hedge ineffectiveness of the hedge relationships are measured each reporting period using the “Change in Variable Cash Flows Method”, the “Change in Fair Value Method”, the “Hypothetical Derivative Method”, or the “Dollar Offset Method”.

Discontinuance of Hedge Accounting

The Company discontinues hedge accounting prospectively when (1) it is determined that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item; (2) the derivative is de-designated as a hedging instrument; or (3) the derivative expires or is sold, terminated or exercised.

When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair-value hedge, the derivative continues to be carried at fair value on the balance sheet with changes in its fair value recognized in current period earnings.

When hedge accounting is discontinued because the Company becomes aware that it is not probable that the forecasted transaction will occur, the derivative continues to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in AOCI are recognized immediately in earnings.

In other situations in which hedge accounting is discontinued on a cash-flow hedge, including those where the derivative is sold, terminated or exercised, amounts previously deferred in AOCI are reclassified into earnings when earnings are impacted by the variability of the cash flow of the hedged item.

Embedded Derivatives

The Company purchases and issues financial instruments and products that contain embedded derivative instruments. When it is determined that (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host for measurement purposes. The embedded derivative, which is reported with the host instrument in the consolidated balance sheets, is carried at fair value with changes in fair value reported in net realized capital gains and losses.

Credit Risk

Credit risk is measured as the amount owed to the Company based on current market conditions and potential payment obligations between the Company and its counterparties. For each legal entity of the Company, credit exposures are generally quantified daily based on the prior business day’s market value and collateral is pledged to and held by, or on behalf of, the Company to the extent the current value of derivatives exceeds the contractual thresholds for every counterparty. For the company’s domestic derivative programs, the maximum uncollateralized threshold for a derivative counterparty for a single level entity is generally $10. The Company also minimizes the credit risk of derivative instruments by entering into transactions with high quality counterparties rated A or better, which are monitored and evaluated by the Company’s risk management team and reviewed by senior management. In addition, the Company monitors counterparty credit exposure on a monthly basis to ensure compliance with Company policies and statutory limitations. The Company generally requires that derivative contracts, other than exchange traded contracts, certain forward contracts, and certain embedded and reinsurance derivatives, be governed by an International Swaps and Derivatives Association Master Agreement which is structured by legal entity and by counterparty and permits right of offset.

Net Investment Income (Loss)

	For the years ended December 31,
(Before-tax)	2011			2010			2009
Fixed maturities	$	3,396		$	3,489		$	3,617
Equity securities, AFS		36			53			93
Mortgage loans		281			260			307
Policy loans		131			132			139
Limited partnerships and other alternative investments		243			216			(341	)
Other investments		301			329			314
Investment expenses		(116	)		(115	)		(112	)
Total securities AFS and other		4,272			4,364			4,017
Equity securities, trading		(1,359	)		(774	)		3,188
Total net investment income (loss)	$	2,913		$	3,590		$	7,205

The net unrealized gain (loss) on equity securities, trading, included in net investment income during the years ended December 31, 2011, 2010 and 2009, was ($1.3) billion, ($68) and $3.4 billion, respectively, substantially all of which have corresponding amounts credited to policyholders. These amounts were not included in gross unrealized gains (losses).

Net Realized Capital Gains (Losses)

	For the years ended December 31,
	2011			2010			2009
Gross gains on sales	$	693		$	836		$	1,056
Gross losses on sales		(384	)		(522	)		(1,397	)
Net OTTI losses recognized in earnings		(174	)		(434	)		(1,508	)
Valuation allowances on mortgage loans		24			(154	)		(403	)
Japanese fixed annuity contract hedges, net [1]		3			27			47
Periodic net coupon settlements on credit derivatives/Japan		(10	)		(17	)		(49	)
Results of variable annuity hedge program
U.S. GMWB derivatives, net		(397	)		89			1,464
U.S. macro hedge program		(216	)		(445	)		(733	)
Total U.S. program		(613	)		(356	)		731
International program		775			11			(112	)
Total results of variable annuity hedge program		162			(345	)		619
Other, net [2]		(459	)		(2	)		(369	)
Net realized capital losses, before-tax	$	(145	)	$	(611	)	$	(2,004	)

[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.

Sales of Available-for-Sale Securities

	For the years ended December 31,
	2011			2010			2009
Fixed maturities, AFS
Sale proceeds	$	36,956		$	46,482		$	41,973
Gross gains		617			706			755
Gross losses		(381	)		(452	)		(1,272	)
Equity securities, AFS
Sale proceeds	$	239		$	325		$	941
Gross gains		59			24			429
Gross losses		—			(16	)		(151	)

Sales of AFS securities in 2011 were the result of the reinvestment into spread product well-positioned for modest economic growth, as well as the purposeful reduction of certain exposures.

Other-Than-Temporary Impairment Losses

The following table presents a roll-forward of the Company’s cumulative credit impairments on debt securities held as of December 31, 2011, 2010 and 2009.

	For the years ended December 31,
	2011			2010			2009
Balance as of beginning of period	$	(2,072	)	$	(2,200	)	$	—
Credit impairments remaining in retained earnings related to adoption of new accounting guidance in April 2009		—			—			(1,320	)
Additions for credit impairments recognized on [1]:
Securities not previously impaired		(56	)		(211	)		(840	)
Securities previously impaired		(69	)		(161	)		(292	)
Reductions for credit impairments previously recognized on:
Securities that matured or were sold during the period		505			468			245
Securities that the Company intends to sell or more likely than not will be required to sell before recovery		—			—			3
Securities due to an increase in expected cash flows		16			32			4
Balance as of end of period	$	(1,676	)	$	(2,072	)	$	(2,200	)

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

Available-for-Sale Securities

The following table presents the Company’s AFS securities by type.

	December 31, 2011												December 31, 2010
	Cost or		Gross		Gross					Non-			Cost or		Gross		Gross					Non-
	Amortized		Unrealized		Unrealized			Fair		Credit			Amortized		Unrealized		Unrealized			Fair		Credit
	Cost		Gains		Losses			Value		OTTI [1]			Cost		Gains		Losses			Value		OTTI [1]
ABS	$	3,430	$	55	$	(332	)	$	3,153	$	(7	)	$	3,247	$	38	$	(396	)	$	2,889	$	(2	)
CDOs		2,819		16		(348	)		2,487		(44	)		3,088		1		(478	)		2,611		(82	)
CMBS		7,192		271		(512	)		6,951		(31	)		8,297		235		(615	)		7,917		(9	)
Corporate [2]		41,161		3,661		(739	)		44,011		—			38,496		2,174		(747	)		39,884		7
Foreign govt./govt. agencies		2,030		141		(10	)		2,161		—			1,627		73		(17	)		1,683		—
Municipal		12,557		775		(72	)		13,260		—			12,469		150		(495	)		12,124		—
RMBS		5,961		252		(456	)		5,757		(105	)		6,036		109		(462	)		5,683		(124	)
U.S. Treasuries		3,828		203		(2	)		4,029		—			5,159		24		(154	)		5,029		—
Total fixed maturities, AFS		78,978		5,374		(2,471	)		81,809		(187	)		78,419		2,804		(3,364	)		77,820		(210	)
Equity securities, AFS		1,056		68		(203	)		921		—			1,013		92		(132	)		973		—
Total AFS securities	$	80,034	$	5,442	$	(2,674	)	$	82,730	$	(187	)	$	79,432	$	2,896	$	(3,496	)	$	78,793	$	(210	)

[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 December 31, 2011 and 2010.
[2]	Gross unrealized gains (losses) exclude the fair value of bifurcated embedded derivative features of certain securities. Subsequent changes in value will be recorded in net realized capital gains (losses).

The following table presents the Company’s fixed maturities, AFS, by contractual maturity year.

	December 31, 2011
Maturity	Amortized Cost		Fair Value
One year or less	$	3,206	$	3,240
Over one year through five years		16,140		16,790
Over five years through ten years		15,041		16,111
Over ten years		25,189		27,320
Subtotal		59,576		63,461
Mortgage-backed and asset-backed securities		19,402		18,348
Total	$	78,978	$	81,809

Estimated maturities may differ from contractual maturities due to security call or prepayment provisions. Due to the potential for variability in payment spreads (i.e. prepayments or extensions), mortgage-backed and asset-backed securities are not categorized by contractual maturity.

Concentration of Credit Risk

The Company aims to maintain a diversified investment portfolio including issuer, sector and geographic stratification, where applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate credit risk.

As of December 31, 2011 and 2010, the Company was not exposed to any concentration of credit risk of a single issuer greater than 10% of the Company’s stockholders’ equity other than U.S. government and certain U.S. government agencies. As of December 31, 2011, other than U.S. government and certain U.S. government agencies, the Company’s three largest exposures by issuer were the Government of Japan, Government of the United Kingdom and AT&T Inc. which each comprised less than 0.8% of total invested assets. As of December 31, 2010, other than U.S. government and certain U.S. government agencies, the Company’s three largest exposures by issuer were JP Morgan Chase & Co., Wells Fargo & Co. and AT&T Inc. which each comprised less than 0.5% of total invested assets.

The Company’s three largest exposures by sector as of December 31, 2011 were commercial real estate, municipal investments and U.S. Treasuries which comprised approximately 10%, 10% and 7%, respectively, of total invested assets. The Company’s three largest exposures by sector as of December 31, 2010 were commercial real estate, municipal investments and U.S. Treasuries which comprised approximately 10%, 9% and 9%, respectively, of total invested assets.

Security Unrealized Loss Aging

The following tables present the Company’s unrealized loss aging for AFS securities by type and length of time the security was in a continuous unrealized loss position.

	December 31, 2011
	Less Than 12 Months							12 Months or More							Total
	Amortized		Fair		Unrealized			Amortized		Fair		Unrealized			Amortized		Fair		Unrealized
	Cost		Value		Losses			Cost		Value		Losses			Cost		Value		Losses
ABS	$	629	$	594	$	(35	)	$	1,169	$	872	$	(297	)	$	1,798	$	1,466	$	(332	)
CDOs		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 [1]		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	)

	December 31, 2010
	Less Than 12 Months							12 Months or More							Total
	Amortized		Fair		Unrealized			Amortized		Fair		Unrealized			Amortized		Fair		Unrealized
	Cost		Value		Losses			Cost		Value		Losses			Cost		Value		Losses
ABS	$	302	$	290	$	(12	)	$	1,410	$	1,026	$	(384	)	$	1,712	$	1,316	$	(396	)
CDOs		321		293		(28	)		2,724		2,274		(450	)		3,045		2,567		(478	)
CMBS		556		530		(26	)		3,962		3,373		(589	)		4,518		3,903		(615	)
Corporate		5,533		5,329		(199	)		4,017		3,435		(548	)		9,550		8,764		(747	)
Foreign govt./govt. agencies		356		349		(7	)		78		68		(10	)		434		417		(17	)
Municipal		7,485		7,173		(312	)		1,046		863		(183	)		8,531		8,036		(495	)
RMBS		1,744		1,702		(42	)		1,567		1,147		(420	)		3,311		2,849		(462	)
U.S. Treasuries		2,436		2,321		(115	)		158		119		(39	)		2,594		2,440		(154	)
Total fixed maturities		18,733		17,987		(741	)		14,962		12,305		(2,623	)		33,695		30,292		(3,364	)
Equity securities		53		52		(1	)		637		506		(131	)		690		558		(132	)
Total securities in an unrealized loss	$	18,786	$	18,039	$	(742	)	$	15,599	$	12,811	$	(2,754	)	$	34,385	$	30,850	$	(3,496	)

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

As of December 31, 2011, AFS securities in an unrealized loss position, comprised of 2,549 securities, primarily related to corporate securities within the financial services sector, CMBS, and RMBS which have experienced significant price deterioration. As of December 31, 2011, 75% of these securities were depressed less than 20% of cost or amortized cost. The decline in unrealized losses during 2011 was primarily attributable to a decline in interest rates, partially offset by credit spread widening.

Most of the securities depressed for twelve months or more relate to structured securities with exposure to commercial and residential real estate, as well as certain floating rate corporate securities or those securities with greater than 10 years to maturity, concentrated in the financial services sector. Current market spreads continue to be significantly wider for structured securities with exposure to commercial and residential real estate, as compared to spreads at the security’s respective purchase date, largely due to the economic and market uncertainties regarding future performance of commercial and residential real estate. In addition, the majority of securities have a floating-rate coupon referenced to a market index where rates have declined substantially. The Company neither has an intention to sell nor does it expect to be required to sell the securities outlined above.

Mortgage Loans

	December 31, 2011							December 31, 2010
	Amortized		Valuation			Carrying		Amortized		Valuation			Carrying
	Cost [1]		Allowance			Value		Cost [1]		Allowance			Value
Commercial	$	5,830	$	(102	)	$	5,728	$	4,492	$	(152	)	$	4,340
Residential		—		—			—		152		(3	)		149
Total mortgage loans	$	5,830	$	(102	)	$	5,728	$	4,644	$	(155	)	$	4,489

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

As of December 31, 2011, the carrying value of mortgage loans associated with the valuation allowance was $621. Included in the table above are mortgage loans held-for-sale with a carrying value and valuation allowance of $74 and $4, respectively, as of December 31, 2011, and $87 and $7, respectively, as of December 31, 2010. The carrying value of these loans is included in mortgage loans in the Company’s Consolidated Balance Sheets. These amounts do not include mortgage loans related to the divestiture of Federal Trust Corporation. For further information on Federal Trust Corporation, see Note 20. As of December 31, 2011, loans within the Company’s mortgage loan portfolio that have had extensions or restructurings other than what is allowable under the original terms of the contract are immaterial.

The following table presents the activity within the Company’s valuation allowance for mortgage loans. These loans have been evaluated both individually and collectively for impairment. Loans evaluated collectively for impairment are immaterial.

	For the years ended December 31,
	2011			2010			2009
Balance as of January 1	$	(155	)	$	(366	)	$	(26	)
Additions		(26	)		(157	)		(408	)
Deductions		79			368			68
Balance as of December 31	$	(102	)	$	(155	)	$	(366	)

The current weighted-average LTV ratio of the Company’s commercial mortgage loan portfolio was 68% as of December 31, 2011, while the weighted-average LTV ratio at origination of these loans was 64%. LTV ratios compare the loan amount to the value of the underlying property collateralizing the loan. The loan values are updated no less than annually through property level reviews of the portfolio. Factors considered in the property valuation include, but are not limited to, actual and expected property cash flows, geographic market data and capitalization rates. DSCRs compare a property’s net operating income to the borrower’s principal and interest payments. The current weighted average DSCR of the Company’s commercial mortgage loan portfolio was 1.94x as of December 31, 2011. The Company held only two delinquent commercial mortgage loans past due by 90 days or more. The total carrying value and valuation allowance of these loans totaled $14 and $60, respectively, as of December 31, 2011, and are not accruing income.

The following table presents the carrying value of the Company’s commercial mortgage loans by LTV and DSCR.

Commercial Mortgage Loans Credit Quality
	December 31, 2011					December 31, 2010
	Carrying		Avg. Debt-Service			Carrying		Avg. Debt-Service
Loan-to-value	Value		Coverage Ratio			Value		Coverage Ratio
Greater than 80%	$	707		1.45	x	$	1,358		1.49	x
65% – 80%		2,384		1.60	x		1,829		1.93	x
Less than 65%		2,637		2.40	x		1,153		2.26	x
Total commercial mortgage loans	$	5,728		1.94	x	$	4,340		1.87	x

The following tables present the carrying value of the Company’s mortgage loans by region and property type.

Mortgage Loans by Region
	December 31, 2011					December 31, 2010
	Carrying		Percent of			Carrying		Percent of
	Value		Total			Value		Total
East North Central	$	94		1.6	%	$	77		1.7	%
Middle Atlantic		508		8.9	%		428		9.5	%
Mountain		125		2.2	%		109		2.4	%
New England		294		5.1	%		259		5.8	%
Pacific		1,690		29.5	%		1,147		25.6	%
South Atlantic		1,149		20.1	%		1,177		26.3	%
West North Central		30		0.5	%		36		0.8	%
West South Central		224		3.9	%		231		5.1	%
Other [1]		1,614		28.2	%		1,025		22.8	%
Total mortgage loans	$	5,728		100.0	%	$	4,489		100.0	%

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

Mortgage Loans by Property Type
	December 31, 2011					December 31, 2010
	Carrying		Percent of			Carrying		Percent of
	Value		Total			Value		Total
Commercial
Agricultural	$	249		4.3	%	$	315		7.0	%
Industrial		1,747		30.5	%		1,141		25.4	%
Lodging		93		1.6	%		132		2.9	%
Multifamily		1,070		18.7	%		713		15.9	%
Office		1,078		18.8	%		986		22.1	%
Retail		1,234		21.5	%		669		14.9	%
Other		257		4.6	%		384		8.5	%
Residential		—		—			149		3.3	%
Total mortgage loans	$	5,728		100.0	%	$	4,489		100.0	%

Variable Interest Entities

The Company is involved with various special purpose entities and other entities that are deemed to be VIEs primarily as a collateral manager and as an investor through normal investment activities, as well as a means of accessing capital. A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest or lacks sufficient funds to finance its own activities without financial support provided by other entities.

The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Consolidated Financial Statements.

Consolidated VIEs

The following table presents the carrying value of assets and liabilities, and the maximum exposure to loss relating to the VIEs for which the Company is the primary beneficiary. Creditors have no recourse against the Company in the event of default by these VIEs nor does the Company have any implied or unfunded commitments to these VIEs. The Company’s financial or other support provided to these VIEs is limited to its investment management services and original investment.

	December 31, 2011						December 31, 2010
					Maximum						Maximum
	Total		Total		Exposure		Total		Total		Exposure
	Assets		Liabilities [1]		to Loss [2]		Assets		Liabilities [1]		to Loss [2]
CDOs [3]	$	491	$	471	$	29	$	729	$	393	$	289
Limited partnerships		7		—		7		14		1		13
Total	$	498	$	471	$	36	$	743	$	394	$	302

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

CDOs represent structured investment vehicles for which the Company has a controlling financial interest as it provides collateral management services, earns a fee for those services and also holds investments in the securities issued by these vehicles. Limited partnerships represent one hedge fund for which the Company holds a majority interest in the fund as an investment.

Non-Consolidated VIEs

The Company holds a significant variable interest for one VIE for which it is not the primary beneficiary and, therefore, was not consolidated on the Company’s Consolidated Balance Sheets. This VIE represents a contingent capital facility (“facility”) that has been held by the Company since February 2007 for which the Company has no implied or unfunded commitments. Assets and liabilities recorded for the facility were $28 as of December 31, 2011 and $32 as of December 31, 2010. Additionally, the Company has a maximum exposure to loss of $3 as of December 31, 2011 and $4 as of December 31, 2010, which represents the issuance costs that were incurred to establish the facility. The Company does not have a controlling financial interest as it does not manage the assets of the facility nor does it have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the facility, as the asset manager has significant variable interest in the vehicle. The Company’s financial or other support provided to the facility is limited to providing ongoing support to cover the facility’s operating expenses. For further information on the facility, see Note 14.

In addition, the Company, through normal investment activities, makes passive investments in structured securities issued by VIEs for which the Company is not the manager which are included in ABS, CDOs, CMBS and RMBS in the Available-for-Sale Securities table and fixed maturities, FVO, in the Company’s Consolidated Balance Sheets. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits and the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment.

Equity Method Investments

The Company has investments in limited partnerships and other alternative investments which include hedge funds, mortgage and real estate funds, mezzanine debt funds, and private equity and other funds (collectively, “limited partnerships”). These investments are accounted for under the equity method and the Company’s maximum exposure to loss as of December 31, 2011 is limited to the total carrying value of $2.5 billion. In addition, the Company has outstanding commitments totaling $700 to fund limited partnership and other alternative investments as of December 31, 2011. The Company’s investments in limited partnerships are generally of a passive nature in that the Company does not take an active role in the management of the limited partnerships. In 2011, aggregate investment income (losses) from limited partnerships and other alternative investments exceeded 10% of the Company’s pre-tax consolidated net income. Accordingly, the Company is disclosing aggregated summarized financial data for the Company’s limited partnership investments. This aggregated summarized financial data does not represent the Company’s proportionate share of limited partnership assets or earnings. Aggregate total assets of the limited partnerships in which the Company invested totaled $91.3 billion and $93.9 billion as of December 31, 2011 and 2010, respectively. Aggregate total liabilities of the limited partnerships in which the Company invested totaled $20.6 billion and $22.3 billion as of December 31, 2011 and 2010, respectively. Aggregate net investment income (loss) of the limited partnerships in which the Company invested totaled $1.3 billion, $857 and ($688) for the periods ended December 31, 2011, 2010 and 2009, respectively. Aggregate net income (loss) of the limited partnerships in which the Company invested totaled $9.1 billion, $10.3 billion and ($9.1) billion for the periods ended December 31, 2011, 2010 and 2009, respectively. As of, and for the period ended, December 31, 2011, the aggregated summarized financial data reflects the latest available financial information.

Derivative Instruments

The Company utilizes a variety of over-the-counter and exchange traded derivative instruments as a part of its overall risk management strategy, as well as to enter into replication transactions. Derivative instruments are used to manage risk associated with interest rate, equity market, credit spread, issuer default, price, and currency exchange rate risk or volatility. Replication transactions are used as an economical means to synthetically replicate the characteristics and performance of assets that would otherwise be permissible investments under the Company’s investment policies. The Company also purchases and issues financial instruments and products that either are accounted for as free-standing derivatives, such as certain reinsurance contracts, or may contain features that are deemed to be embedded derivative instruments, such as the GMWB rider included with certain variable annuity products.

Cash flow hedges

Interest rate swaps

Interest rate swaps are primarily used to convert interest receipts on floating-rate fixed maturity securities or interest payments on floating-rate guaranteed investment contracts to fixed rates. These derivatives are predominantly used to better match cash receipts from assets with cash disbursements required to fund liabilities.

The Company also enters into forward starting swap agreements to hedge the interest rate exposure related to the purchase of fixed-rate securities. These derivatives are primarily structured to hedge interest rate risk inherent in the assumptions used to price certain liabilities.

Foreign currency swaps

Foreign currency swaps are used to convert foreign currency-denominated cash flows related to certain investment receipts and liability payments to U.S. dollars in order to reduce cash flow fluctuations due to changes in currency rates.

Fair value hedges

Interest rate swaps

Interest rate swaps are used to hedge the changes in fair value of certain fixed rate liabilities and fixed maturity securities due to fluctuations in interest rates.

Foreign currency swaps

Foreign currency swaps are used to hedge the changes in fair value of certain foreign currency-denominated fixed rate liabilities due to changes in foreign currency rates by swapping the fixed foreign payments to floating rate U.S. dollar denominated payments.

Non-qualifying strategies

Interest rate swaps, swaptions, caps, floors, and futures

The Company uses interest rate swaps, swaptions, caps, floors, and futures to manage duration between assets and liabilities in certain investment portfolios. In addition, the Company enters into interest rate swaps to terminate existing swaps, thereby offsetting the changes in value of the original swap. As of December 31, 2011 and 2010, the notional amount of interest rate swaps in offsetting relationships was $7.8 billion and $7.1 billion, respectively.

Foreign currency swaps and forwards

The Company enters into foreign currency swaps and forwards to convert the foreign currency exposures of certain foreign currency-denominated fixed maturity investments to U.S. dollars.

Japan 3Win foreign currency swaps

Prior to the second quarter of 2009, The Company offered certain variable annuity products with a GMIB rider through a wholly-owned Japanese subsidiary. The GMIB rider is reinsured to a wholly-owned U.S. subsidiary, which invests in U.S. dollar denominated assets to support the liability. The U.S. subsidiary entered into pay U.S. dollar, receive yen swap contracts to hedge the currency and interest rate exposure between the U.S. dollar denominated assets and the yen denominated fixed liability reinsurance payments.

Japanese fixed annuity hedging instruments

Prior to the second quarter of 2009, The Company offered a yen denominated fixed annuity product through a wholly-owned Japanese subsidiary and reinsured to a wholly-owned U.S. subsidiary. The U.S. subsidiary invests in U.S. dollar denominated securities to support the yen denominated fixed liability payments and entered into currency rate swaps to hedge the foreign currency exchange rate and yen interest rate exposures that exist as a result of U.S. dollar assets backing the yen denominated liability.

Credit derivatives that purchase credit protection

Credit default swaps are used to purchase credit protection on an individual entity or referenced index to economically hedge against default risk and credit-related changes in value on fixed maturity securities. These contracts require the Company to pay a periodic fee in exchange for compensation from the counterparty should the referenced security issuers experience a credit event, as defined in the contract.

Credit derivatives that assume credit risk

Credit default swaps are used to assume credit risk related to an individual entity, referenced index, or asset pool, as a part of replication transactions. These contracts entitle the Company to receive a periodic fee in exchange for an obligation to compensate the derivative counterparty should the referenced security issuers experience a credit event, as defined in the contract. The Company is also exposed to credit risk due to credit derivatives embedded within certain fixed maturity securities. These securities are primarily comprised of structured securities that contain credit derivatives that reference a standard index of corporate securities.

Credit derivatives in offsetting positions

The Company enters into credit default swaps to terminate existing credit default swaps, thereby offsetting the changes in value of the original swap going forward.

Equity index swaps and options

The Company offers certain equity indexed products, which may contain an embedded derivative that requires bifurcation. The Company enters into S&P index swaps and options to economically hedge the equity volatility risk associated with these embedded derivatives. In addition, during the third quarter of 2011, the Company entered into equity index options and futures with the purpose of hedging the impact of an adverse equity market environment on the investment portfolio.

U.S GMWB product derivatives

The Company offers certain variable annuity products with a GMWB rider in the U.S. The GMWB is a bifurcated embedded derivative that provides the policyholder with a guaranteed remaining balance (“GRB”) if the account value is reduced to zero through a combination of market declines and withdrawals. The GRB is generally equal to premiums less withdrawals. Certain contract provisions can increase the GRB at contractholder election or after the passage of time. The notional value of the embedded derivative is the GRB.

U.S. GMWB reinsurance contracts

The Company has entered into reinsurance arrangements to offset a portion of its risk exposure to the GMWB for the remaining lives of covered variable annuity contracts. Reinsurance contracts covering GMWB are accounted for as free-standing derivatives. The notional amount of the reinsurance contracts is the GRB amount.

U.S. GMWB hedging instruments

The Company enters into derivative contracts to partially hedge exposure associated with a portion of the GMWB liabilities that are not reinsured. These derivative contracts include customized swaps, interest rate swaps and futures, and equity swaps, options, and futures, on certain indices including the S&P 500 index, EAFE index, and NASDAQ index.

The following table represents notional and fair value for U.S. GMWB hedging instruments.

	Notional Amount				Fair Value
	December 31,		December 31,		December 31,		December 31,
	2011		2010		2011		2010
Customized swaps	$	8,389	$	10,113	$	385	$	209
Equity swaps, options, and futures		5,320		4,943		498		391
Interest rate swaps and futures		2,697		2,800		11		(133	)
Total	$	16,406	$	17,856	$	894	$	467

U.S. macro hedge program

The Company utilizes equity options and futures contracts to partially hedge against a decline in the equity markets and the resulting statutory surplus and capital impact primarily arising from guaranteed minimum death benefit (“GMDB”), GMIB and GMWB obligations.

The following table represents notional and fair value for the U.S. macro hedge program.

	Notional Amount				Fair Value
	December 31,		December 31,		December 31,		December 31,
	2011		2010		2011		2010
Equity futures	$	59	$	166	$	—	$	—
Equity options		6,760		12,891		357		203
Total	$	6,819	$	13,057	$	357	$	203

International program product derivatives

The Company formerly offered certain variable annuity products with GMWB or GMAB riders in the U.K. and Japan. The GMWB and GMAB are bifurcated embedded derivatives. The GMWB provides the policyholder with a GRB if the account value is reduced to zero through a combination of market declines and withdrawals. The GRB is generally equal to premiums less withdrawals. Certain contract provisions can increase the GRB at contractholder election or after the passage of time. The GMAB provides the policyholder with their initial deposit in a lump sum after a specified waiting period. The notional amount of the embedded derivatives are the foreign currency denominated GRBs converted to U.S. dollars at the current foreign spot exchange rate as of the reporting period date.

International program hedging instruments

The Company utilizes equity futures, options and swaps, and currency forwards and options to partially hedge against a decline in the debt and equity markets or changes in foreign currency exchange rates and the resulting statutory surplus and capital impact primarily arising from GMDB, GMIB and GMWB obligations issued in the U.K. and Japan. The Company also enters into foreign currency denominated interest rate swaps and swaptions to hedge the interest rate exposure related to the potential annuitization of certain benefit obligations.

The following table represents notional and fair value for the international program hedging instruments.

	Notional Amount				Fair Value
	December 31,		December 31,		December 31,			December 31,
	2011		2010		2011			2010
Currency forwards	$	8,622	$	4,951	$	446		$	166
Currency options [1]		7,357		5,296		127			62
Equity futures		3,835		1,002		—			—
Equity options		1,565		1,073		74			4
Equity swaps		392		369		(8	)		1
Interest rate futures		739		—		—			—
Interest rate swaps and swaptions		11,216		2,182		111			21
Total	$	33,726	$	14,873	$	750		$	254

[1] As of December 31, 2011 and 2010, notional amounts include $5.3 billion and $3.1 billion, respectively, related to long positions and $2.1 billion and $2.2 billion, respectively, related to short positions.

Contingent capital facility put option

The Company entered into a put option agreement that provides the Company the right to require a third-party trust to purchase, at any time, The Hartford’s junior subordinated notes in a maximum aggregate principal amount of $500. Under the put option agreement, The Hartford will pay premiums on a periodic basis and will reimburse the trust for certain fees and ordinary expenses.

Derivative Balance Sheet Classification

The table below summarizes the balance sheet classification of the Company’s derivative related fair value amounts, as well as the gross asset and liability fair value amounts. The fair value amounts presented do not include income accruals or cash collateral held amounts, which are netted with derivative fair value amounts to determine balance sheet presentation. Derivatives in the Company’s separate accounts are not included because the associated gains and losses accrue directly to policyholders. The Company’s derivative instruments are held for risk management purposes, unless otherwise noted in the table below. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and is presented in the table to quantify the volume of the Company’s derivative activity. Notional amounts are not necessarily reflective of credit risk.

	Net Derivatives										Asset Derivatives				Liability Derivatives
	Notional Amount				Fair Value						Fair Value				Fair Value
	Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,			Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,
Hedge Designation/ Derivative Type	2011		2010		2011			2010			2011		2010		2011			2010
Cash flow hedges
Interest rate swaps	$	8,652	$	10,290	$	329		$	115		$	329	$	188	$	—		$	(73	)
Foreign currency swaps		291		335		6			6			30		29		(24	)		(23	)
Total cash flow hedges		8,943		10,625		335			121			359		217		(24	)		(96	)
Fair value hedges
Interest rate swaps		1,007		1,120		(78	)		(46	)		—		5		(78	)		(51	)
Foreign currency swaps		677		677		(39	)		(12	)		63		71		(102	)		(83	)
Total fair value hedges		1,684		1,797		(117	)		(58	)		63		76		(180	)		(134	)
Non-qualifying strategies
Interest rate contracts
Interest rate swaps, caps, floors, and futures		10,144		7,938		(583	)		(441	)		531		126		(1,114	)		(567	)
Foreign exchange contracts
Foreign currency swaps and forwards		380		368		(12	)		(18	)		6		1		(18	)		(19	)
Japan 3Win foreign currency swaps		2,054		2,285		184			177			184		177		—			—
Japanese fixed annuity hedging instruments		1,945		2,119		514			608			540		608		(26	)		—
Credit contracts
Credit derivatives that purchase credit protection		1,721		2,559		36			(9	)		56		29		(20	)		(38	)
Credit derivatives that assume credit risk [1]		2,952		2,569		(648	)		(434	)		2		8		(650	)		(442	)
Credit derivatives in offsetting positions		8,189		8,367		(57	)		(75	)		164		98		(221	)		(173	)
Equity contracts
Equity index swaps and options		1,501		189		27			(10	)		40		5		(13	)		(15	)
Variable annuity hedge program
U.S. GMWB product derivatives [2]		34,569		40,255		(2,538	)		(1,611	)		—		—		(2,538	)		(1,611	)
U.S. GMWB reinsurance contracts		7,193		8,767		443			280			443		280		—			—
U.S. GMWB hedging instruments		16,406		17,856		894			467			1,022		647		(128	)		(180	)
U.S. macro hedge program		6,819		13,057		357			203			357		203		—			—
International program product derivatives [2]		2,710		2,730		(71	)		(33	)		—		3		(71	)		(36	)
International program hedging instruments		33,726		14,873		750			254			887		265		(137	)		(11	)
Other
Contingent capital facility put option		500		500		28			32			28		32		—			—
Total non-qualifying strategies		130,809		124,432		(676	)		(610	)		4,260		2,482		(4,936	)		(3,092	)
Total cash flow hedges, fair value hedges, and non-qualifying strategies	$	141,436	$	136,854	$	(458	)	$	(547	)	$	4,682	$	2,775	$	(5,140	)	$	(3,322	)
Balance Sheet Location
Fixed maturities, available-for-sale	$	703	$	728	$	(72	)	$	(39	)	$	—	$	—	$	(72	)	$	(39	)
Other investments		60,227		55,948		2,331			1,524			3,165		2,105		(834	)		(581	)
Other liabilities		35,944		28,333		(538	)		(654	)		1,074		387		(1,612	)		(1,041	)
Consumer notes		35		39		(4	)		(5	)		—		—		(4	)		(5	)
Reinsurance recoverables		7,193		8,767		443			280			443		280		—			—
Other policyholder funds and benefits payable		37,334		43,039		(2,618	)		(1,653	)		—		3		(2,618	)		(1,656	)
Total derivatives	$	141,436	$	136,854	$	(458	)	$	(547	)	$	4,682	$	2,775	$	(5,140	)	$	(3,322	)

[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.

Change in Notional Amount

The net increase in notional amount of derivatives since December 31, 2010, was primarily due to the following:

• During 2011, the Company significantly strengthened its hedge protection of variable annuity products offered in Japan. As such, the notional amount related to the international program hedging instruments increased by $18.9 billion as the Company entered into additional foreign currency denominated interest rate swaps and swaptions, currency forwards, currency options and equity futures.

• The decrease of $8.7 billion in the combined GMWB hedging program, which includes the GMWB product, reinsurance, and hedging derivatives, was primarily a result of policyholder lapses and withdrawals.

• The U.S. macro hedge program notional decreased $6.2 billion primarily due to the expiration of certain out of the money options in January of 2011.

Change in Fair Value

The improvement in the total fair value of derivative instruments since December 31, 2010, was primarily related to the following:

• The fair value related to the international program hedging instruments increased as a result of the additional notional added during the year, as well as strengthening of the Japanese yen, lower global equity markets, and a decrease in interest rates.

• The decrease in the combined GMWB hedging program, which includes the GMWB product, reinsurance, and hedging derivatives, was primarily a result of a general decrease in long-term interest rates and higher interest rate volatility.

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of OCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in current period earnings. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

The following table presents the components of the gain or loss on derivatives that qualify as cash flow hedges:

Derivatives in Cash Flow Hedging Relationships
									Net Realized Capital Gains (Losses)
	Gain (Loss) Recognized in OCI								Recognized in Income
	on Derivative (Effective Portion)								on Derivative (Ineffective Portion)
	2011			2010		2009			2011			2010			2009
Interest rate swaps	$	337		$	294	$	(461	)	$	(4	)	$	2		$	(3	)
Foreign currency swaps		(3	)		8		(194	)		—			(1	)		75
Total	$	334		$	302	$	(655	)	$	(4	)	$	1		$	72

Derivatives in Cash Flow Hedging Relationships
		Gain (Loss) Reclassified from AOCI
		into Income (Effective Portion)
		2011			2010			2009
Interest rate swaps	Net realized capital gains (losses)	$	9		$	18		$	11
Interest rate swaps	Net investment income (loss)		126			94			47
Foreign currency swaps	Net realized capital gains (losses)		(3	)		(7	)		(119	)
Foreign currency swaps	Net investment income (loss)		—			—			2
Total		$	132		$	105		$	(59	)

As of December 31, 2011, the before-tax deferred net gains on derivative instruments recorded in AOCI that are expected to be reclassified to earnings during the next twelve months are $111. This expectation is based on the anticipated interest payments on hedged investments in fixed maturity securities that will occur over the next twelve months, at which time the Company will recognize the deferred net gains (losses) as an adjustment to interest income over the term of the investment cash flows. The maximum term over which the Company is hedging its exposure to the variability of future cash flows (for forecasted transactions, excluding interest payments on existing variable-rate financial instruments) is approximately two years.

During the year ended December 31, 2011, the Company had no net reclassifications from AOCI to earnings resulting from the discontinuance of cash-flow hedges due to forecasted transactions that were no longer probable of occurring. For the years ended December 31, 2010 and 2009, the Company had less than $1 and $1 of net reclassifications, respectively, from AOCI to earnings resulting from the discontinuance of cash-flow hedges due to forecasted transactions that were no longer probable of occurring.

Fair Value Hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. The Company includes the gain or loss on the derivative in the same line item as the offsetting loss or gain on the hedged item. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

The Company recognized in income gains (losses) representing the ineffective portion of fair value hedges as follows:

Derivatives in Fair Value Hedging Relationships
	Gain (Loss) Recognized in Income [1]
	2011					2010						2009
				Hedged					Hedged						Hedged
	Derivative			Item		Derivative			Item			Derivative			Item
Interest rate swaps
Net realized capital gains (losses)	$	(73	)	$	70	$	(43	)	$	36		$	72		$	(68	)
Benefits, losses and loss adjustment expenses		—			—		(1	)		3			(37	)		40
Foreign currency swaps
Net realized capital gains (losses)		(1	)		1		8			(8	)		51			(51	)
Benefits, losses and loss adjustment expenses		(22	)		22		(12	)		12			2			(2	)
Total	$	(96	)	$	93	$	(48	)	$	43		$	88		$	(81	)

[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.

Non-qualifying Strategies

For non-qualifying strategies, including embedded derivatives that are required to be bifurcated from their host contracts and accounted for as derivatives, the gain or loss on the derivative is recognized currently in earnings within net realized capital gains (losses). The following table presents the gain or loss recognized in income on non-qualifying strategies:

Non-qualifying Strategies
Gain (Loss) Recognized within Net Realized Capital Gains (Losses)
	December 31,
	2011			2010			2009
Interest rate contracts
Interest rate swaps, caps, floors, and forwards	$	(22	)	$	45		$	31
Foreign exchange contracts
Foreign currency swaps and forwards		3			(1	)		(49	)
Japan 3Win foreign currency swaps [1]		31			215			(22	)
Japanese fixed annuity hedging instruments [2]		109			385			(12	)
Credit contracts
Credit derivatives that purchase credit protection		(10	)		(23	)		(533	)
Credit derivatives that assume credit risk		(174	)		196			167
Equity contracts
Equity index swaps and options		(89	)		5			(3	)
Warrants		—			—			70
Variable annuity hedge program
U.S. GMWB product derivatives		(780	)		486			4,686
U.S. GMWB reinsurance contracts		131			(102	)		(988	)
U.S. GMWB hedging instruments		252			(295	)		(2,234	)
U.S. macro hedge program		(216	)		(445	)		(733	)
International program product derivatives		(25	)		26			67
International program hedging instruments		800			(15	)		(179	)
Other
Contingent capital facility put option		(5	)		(6	)		(8	)
Total	$	5		$	471		$	260

[1]	The associated liability is adjusted for changes in spot rates through realized capital gains and was ($100), ($273) and $64 for the years ended December 31, 2011, 2010 and 2009, respectively.
[2]	The associated liability is adjusted for changes in spot rates through realized capital gains and losses and was ($129), ($332) and $67 for the years ended December 31, 2011, 2010 and 2009, respectively.

For the year ended December 31, 2011, the net realized capital gain (loss) related to derivatives used in non-qualifying strategies was primarily comprised of the following:

• The net gain associated with the international program hedging instruments was primarily driven by strengthening of the Japanese yen, lower global equity markets, and a decrease in interest rates.

• The loss related to the combined GMWB hedging program, which includes the GMWB product, reinsurance, and hedging derivatives, was primarily a result of a general decrease in long-term interest rates and higher interest rate volatility.

• The net loss on the U.S. macro hedge program was primarily driven by time decay and a decrease in equity market volatility since the purchase date of certain options during the fourth quarter.

• The loss on credit derivatives that assume credit risk as a part of replication transactions resulted from credit spread widening.

For the year ended December 31, 2010, the net realized capital gain (loss) related to derivatives used in non-qualifying strategies was primarily comprised of the following:

• The net loss associated with the U.S. macro hedge program was primarily due to a higher equity market valuation, time decay, and lower implied market volatility.

• The net gain on the Japanese fixed annuity hedging instruments was primarily due to the strengthening of the Japanese yen in comparison to the U.S. dollar.

• The net gain related to the Japan 3Win foreign currency swaps was primarily due to the strengthening of the Japanese yen in comparison to the U.S. dollar, partially offset by the decrease in long-term U.S. interest rates.

• The net gain associated with credit derivatives that assume credit risk as a part of replication transactions resulted from credit spread tightening.

• The gain related to the combined GMWB hedging program, which includes the GMWB product, reinsurance, and hedging derivatives, was primarily a result of liability model assumption updates during third quarter, lower implied market volatility, and outperformance of the underlying actively managed funds as compared to their respective indices, partially offset by a general decrease in long-term interest rates and rising equity markets.

For the year ended December 31, 2009, the net realized capital gain (loss) related to derivatives used in non-qualifying strategies was primarily due to the following:

• The gain related to the net GMWB product, reinsurance, and hedging derivatives was primarily due to liability model assumption updates given favorable trends in policyholder experience, the relative outperformance of the underlying actively managed funds as compared to their respective indices, and the impact of the Company’s own credit standing. Additional net gains on GMWB related derivatives include lower implied market volatility and a general increase in long-term interest rates, partially offset by rising equity markets.

• The net loss on the U.S. macro hedge program was primarily the result of a higher equity market valuation and the impact of trading activity.

• The net loss on credit derivatives that purchase credit protection to economically hedge fixed maturity securities and the net gain on credit derivatives that assume credit risk as a part of replication transactions resulted from credit spreads tightening.

Refer to Note 12 for additional disclosures regarding contingent credit related features in derivative agreements.

Credit Risk Assumed through Credit Derivatives

The Company enters into credit default swaps that assume credit risk of a single entity, referenced index, or asset pool in order to synthetically replicate investment transactions. The Company will receive periodic payments based on an agreed upon rate and notional amount and will only make a payment if there is a credit event. A credit event payment will typically be equal to the notional value of the swap contract less the value of the referenced security issuer’s debt obligation after the occurrence of the credit event. A credit event is generally defined as a default on contractually obligated interest or principal payments or bankruptcy of the referenced entity. The credit default swaps in which the Company assumes credit risk primarily reference investment grade single corporate issuers and baskets, which include standard and customized diversified portfolios of corporate issuers. The diversified portfolios of corporate issuers are established within sector concentration limits and may be divided into tranches that possess different credit ratings.

The following tables present the notional amount, fair value, weighted average years to maturity, underlying referenced credit obligation type and average credit ratings, and offsetting notional amounts and fair value for credit derivatives in which the Company is assuming credit risk as of December 31, 2011 and 2010.

As of December 31, 2011
						Weighted	Underlying Referenced
						Average	Credit Obligation(s) [1]			Offsetting
Credit Derivative type by derivative	Notional		Fair			Years to		Average Credit		Notional			Offsetting
risk exposure	Amount [2]		Value			Maturity	Type		Rating	Amount [3]		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

As of December 31, 2010
							Underlying Referenced
						Weighted	Credit Obligation(s) [1]
						Average		Average		Offsetting
Credit Derivative type by derivative	Notional					Years to		Credit		Notional		Offsetting
risk exposure	Amount [2]		Fair Value			Maturity	Type	Rating		Amount [3]		Fair Value [3]
Single name credit default swaps
Investment grade risk exposure	$	1,562	$	(14	)	3 years	Corporate Credit/ Foreign Gov.		A+	$	1,447	$	(41	)
Below investment grade risk exposure		204		(6	)	3 years	Corporate Credit	BB-			168		(13	)
Basket credit default swaps [4]
Investment grade risk exposure		3,145		(1	)	4 years	Corporate Credit	BBB+			2,019		(14	)
Investment grade risk exposure		525		(50	)	6 years	CMBS Credit	BBB+			525		50
Below investment grade risk exposure		767		(381	)	4 years	Corporate Credit	BBB+			25		—
Embedded credit derivatives
Investment grade risk exposure		25		25		4 years	Corporate Credit	BBB-			—		—
Below investment grade risk exposure		525		463		6 years	Corporate Credit	BB+			—		—
Total	$	6,753	$	36						$	4,184	$	(18	)

[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 $4.2 billion and $3.9 billion as of December 31, 2011 and 2010, 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 $553 and $542 as of December 31, 2011 and 2010, respectively, of customized diversified portfolios of corporate issuers referenced through credit default swaps.

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 December 31, 2011 and 2010, collateral pledged having a fair value of $1.1 billion and $790, respectively, was included in fixed maturities, AFS, in the Consolidated Balance Sheets.

From time to time, the Company enters into secured borrowing arrangements as a means to increase net investment income. The Company received cash collateral of $33 as of December 31, 2011 and 2010.

The following table presents the classification and carrying amount of loaned securities and derivative instruments collateral pledged.

	December 31, 2011		December 31, 2010
Fixed maturities, AFS	$	1,086	$	823
Short-term investments		199		—
Total collateral pledged	$	1,285	$	823

As of December 31, 2011 and 2010, the Company had accepted collateral with a fair value of $2.6 billion and $1.5 billion, respectively, of which $2.0 billion and $1.1 billion, respectively, was cash collateral which was invested and recorded in the Consolidated Balance Sheets in fixed maturities and short-term investments with corresponding amounts recorded in other assets and other liabilities. The Company is only permitted by contract to sell or repledge the noncash collateral in the event of a default by the counterparty. As of December 31, 2011 and 2010, noncash collateral accepted was held in separate custodial accounts and was not included in the Company’s Consolidated Balance Sheets.

Securities on Deposit with States

The Company is required by law to deposit securities with government agencies in states where it conducts business. As of December 31, 2011 and 2010, the fair value of securities on deposit was approximately $1.6 billion and $1.4 billion, respectively.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The following financial instruments are carried at fair value in the Company’s Consolidated Financial Statements: fixed maturity and equity securities, available-for-sale (“AFS”), fixed maturities at fair value using fair value option (“FVO”), equity securities, trading, short-term investments, freestanding and embedded derivatives, separate account assets and certain other liabilities.

The following section applies the fair value hierarchy and disclosure requirements for the Company’s financial instruments that are carried at fair value. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three broad Levels (Level 1, 2 or 3).

Level 1	Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. Level 1 securities include highly liquid U.S. Treasuries, money market funds and exchange traded equity securities, open-ended mutual funds reported in separate account assets and derivative securities.
Level 2	Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. Most fixed maturities and preferred stocks, including those reported in separate account assets, are model priced by vendors using observable inputs and are classified within Level 2.
Level 3	Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Level 3 securities include less liquid securities, guaranteed product embedded and reinsurance derivatives and other complex derivative securities. Because Level 3 fair values, by their nature, contain one or more significant unobservable inputs as there is little or no observable market for these assets and liabilities, considerable judgment is used to determine the Level 3 fair values. Level 3 fair values represent the Company’s best estimate of an amount that could be realized in a current market exchange absent actual market exchanges.

In many situations, inputs used to measure the fair value of an asset or liability position may fall into different levels of the fair value hierarchy. In these situations, the Company will determine the level in which the fair value falls based upon the lowest level input that is significant to the determination of the fair value. Transfers of securities among the levels occur at the beginning of the reporting period. Transfers between Level 1 and Level 2 were not material for the year ended December 31, 2011. In most cases, both observable (e.g., changes in interest rates) and unobservable (e.g., changes in risk assumptions) inputs are used in the determination of fair values that the Company has classified within Level 3. Consequently, these values and the related gains and losses are based upon both observable and unobservable inputs. The Company’s fixed maturities included in Level 3 are classified as such because these securities are primarily priced by independent brokers and/or within illiquid markets.

These disclosures provide information as to the extent to which the Company uses fair value to measure financial instruments and information about the inputs used to value those financial instruments to allow users to assess the relative reliability of the measurements. The following tables present assets and (liabilities) carried at fair value by hierarchy level.

	December 31, 2011
				Quoted Prices in
				Active Markets			Significant			Significant
				for Identical			Observable			Unobservable
				Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	3,153		$	—		$	2,792		$	361
CDOs		2,487			—			2,119			368
CMBS		6,951			—			6,363			588
Corporate		44,011			—			41,756			2,255
Foreign government/government agencies		2,161			—			2,112			49
States, municipalities and political subdivisions (“Municipal”)		13,260			—			12,823			437
RMBS		5,757			—			4,694			1,063
U.S. Treasuries		4,029			750			3,279			—
Total fixed maturities		81,809			750			75,938			5,121
Fixed maturities, FVO		1,328			—			833			495
Equity securities, trading		30,499			1,967			28,532			—
Equity securities, AFS		921			352			476			93
Derivative assets
Credit derivatives		(24	)		—			(11	)		(13	)
Equity derivatives		31			—			—			31
Foreign exchange derivatives		519			—			519			—
Interest rate derivatives		195			—			147			48
U.S. GMWB hedging instruments		494			—			11			483
U.S. macro hedge program		357			—			—			357
International program hedging instruments		731			—			692			39
Other derivative contracts		28			—			—			28
Total derivative assets [1]		2,331			—			1,358			973
Short-term investments		7,736			750			6,986			—
Reinsurance recoverable for U.S. GMWB		443			—			—			443
Separate account assets [2]		139,432			101,644			36,757			1,031
Total assets accounted for at fair value on a recurring basis	$	264,499		$	105,463		$	150,880		$	8,156
Percentage of level to total		100	%		40	%		57	%		3	%
Liabilities accounted for at fair value on a recurring basis
Other policyholder funds and benefits payable
U.S guaranteed withdrawal benefits	$	(2,538	)	$	—		$	—		$	(2,538	)
International guaranteed withdrawal benefits		(66	)		—			—			(66	)
International other guaranteed living benefits		(5	)		—			—			(5	)
Equity linked notes		(9	)		—			—			(9	)
Total other policyholder funds and benefits payable		(2,618	)		—			—			(2,618	)
Derivative liabilities
Credit derivatives		(573	)		—			(25	)		(548	)
Equity derivatives		9			—			—			9
Foreign exchange derivatives		134			—			134			—
Interest rate derivatives		(527	)		—			(421	)		(106	)
U.S. GMWB hedging instruments		400			—			—			400
International program hedging instruments		19			—			23			(4	)
Total derivative liabilities [3]		(538	)		—			(289	)		(249	)
Other Liabilities		(9	)		—			—			(9	)
Consumer notes [4]		(4	)		—			—			(4	)
Total liabilities accounted for at fair value on a recurring basis	$	(3,169	)	$	—		$	(289	)	$	(2,880	)

	December 31, 2010
				Quoted Prices in
				Active Markets			Significant			Significant
				for Identical			Observable			Unobservable
				Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	2,889		$	—		$	2,412		$	477
CDOs		2,611			—			30			2,581
CMBS		7,917			—			7,228			689
Corporate		39,884			—			37,755			2,129
Foreign government/government agencies		1,683			—			1,627			56
Municipal		12,124			—			11,852			272
RMBS		5,683			—			4,398			1,285
U.S. Treasuries		5,029			434			4,595			—
Total fixed maturities		77,820			434			69,897			7,489
Fixed maturities, FVO		649			—			127			522
Equity securities, trading		32,820			2,279			30,541			—
Equity securities, AFS		973			298			521			154
Derivative assets
Credit derivatives		3			—			(18	)		21
Equity derivatives		2			—			—			2
Foreign exchange derivatives		795			—			795			—
Interest rate derivatives		(106	)		—			(70	)		(36	)
U.S. GMWB hedging instruments		339			—			(122	)		461
U.S. macro hedge program		203			—			—			203
International program hedging instruments		256			2			249			5
Other derivative contracts		32			—			—			32
Total derivative assets [1]		1,524			2			834			688
Short-term investments		8,528			541			7,987			—
Reinsurance recoverable for U.S. GMWB		280			—			—			280
Separate account assets [2]		153,727			116,717			35,763			1,247
Total assets accounted for at fair value on a recurring basis	$	276,321		$	120,271		$	145,670		$	10,380
Percentage of level to total		100	%		43	%		53	%		4	%

	December 31, 2010
				Quoted Prices
				in Active			Significant			Significant
				Markets for			Observable			Unobservable
				Identical Assets			Inputs			Inputs
	Total			(Level 1)			(Level 2)			(Level 3)
Liabilities accounted for at fair value on a recurring basis
Other policyholder funds and benefits payable
U.S guaranteed withdrawal benefits	$	(1,611	)	$	—		$	—		$	(1,611	)
International guaranteed withdrawal benefits		(36	)		—			—			(36	)
International other guaranteed living benefits		3			—			—			3
Equity linked notes		(9	)		—			—			(9	)
Total other policyholder funds and benefits payable		(1,653	)		—			—			(1,653	)
Derivative liabilities
Credit derivatives		(482	)		—			(71	)		(411	)
Equity derivatives		2			—			—			2
Foreign exchange derivatives		(34	)		—			(34	)		—
Interest rate derivatives		(266	)		—			(249	)		(17	)
U.S. GMWB hedging instruments		128			—			(11	)		139
International program hedging instruments		(2	)		(2	)		—			—
Total derivative liabilities [3]		(654	)		(2	)		(365	)		(287	)
Other liabilities		(37	)		—			—			(37	)
Consumer notes [4]		(5	)		—			—			(5	)
Total liabilities accounted for at fair value on a recurring basis	$	(2,349	)	$	(2	)	$	(365	)	$	(1,982	)

[1]	Includes over-the-counter derivative instruments in a net asset value position which may require the counterparty to pledge collateral to the Company. As of December 31, 2011 and 2010, $1.4 billion and $968, respectively, of cash collateral liability was netted against the derivative asset value in the Consolidated Balance Sheet and is excluded from the table above. See footnote 3 below for derivative liabilities.
[2]	Approximately $4.0 and $6.0 billion of investment sales receivable that are not subject to fair value accounting are excluded as of December 31, 2011 and 2010, respectively.
[3]	Includes over-the-counter derivative instruments in a net negative market value position (derivative liability). In the Level 3 roll-forward table included below in this Note 4, the derivative asset and liability are referred to as “freestanding derivatives” and are presented on a net basis.
[4]	Represents embedded derivatives associated with non-funding agreement-backed consumer equity linked notes.

Determination of Fair Values

The valuation methodologies used to determine the fair values of assets and liabilities under the “exit price” notion, reflect market-participant objectives and are based on the application of the fair value hierarchy that prioritizes relevant observable market inputs over unobservable inputs. The Company determines the fair values of certain financial assets and financial liabilities based on quoted market prices where available and where prices represent a reasonable estimate of fair value. The Company also determines fair value based on future cash flows discounted at the appropriate current market rate. Fair values reflect adjustments for counterparty credit quality, the Company’s default spreads, liquidity and, where appropriate, risk margins on unobservable parameters. The following is a discussion of the methodologies used to determine fair values for the financial instruments listed in the above tables.

The fair valuation process is monitored by the Valuation Committee, which is a cross-functional group of senior management within HIMCO that meets at least quarterly. The Valuation Committee is co-chaired by the Heads of Investment Operations and Accounting, and has representation from various investment sector professionals, accounting, operations, legal, compliance and risk management. The purpose of the committee is to oversee the pricing policy and procedures by ensuring objective and reliable valuation practices and pricing of financial instruments, as well as addressing fair valuation issues and approving changes to valuation methodologies and pricing sources. There is also a Fair Value Working Group (“Working Group”) which includes the Heads of Investment Operations and Accounting, as well as other investment, operations, accounting and risk management professionals that meet monthly to review market data trends, pricing and trading statistics and results, and any proposed pricing methodology changes described in more detail in the following paragraphs.

Available-for-Sale Securities, Fixed Maturities, FVO, Equity Securities, Trading, and Short-term Investments

The fair value of AFS securities, fixed maturities, FVO, equity securities, trading, and short-term investments in an active and orderly market (e.g. not distressed or forced liquidation) are determined by management after considering one of three primary sources of information: third-party pricing services, independent broker quotations or pricing matrices. Security pricing is applied using a “waterfall” approach whereby publicly available prices are first sought from third-party pricing services, the remaining unpriced securities are submitted to independent brokers for prices, or lastly, securities are priced using a pricing matrix. Based on the typical trading volumes and the lack of quoted market prices for fixed maturities, third-party pricing services will normally derive the security prices from recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information as outlined above. If there are no recently reported trades, the third-party pricing services and independent brokers may use matrix or model processes to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Included in the pricing of ABS and RMBS are estimates of the rate of future prepayments of principal over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and prepayment speeds previously experienced at the interest rate levels projected for the underlying collateral. Actual prepayment experience may vary from these estimates.

Prices from third-party pricing services are often unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced via independent broker quotations which utilize inputs that may be difficult to corroborate with observable market based data. Additionally, the majority of these independent broker quotations are non-binding.

A pricing matrix is used to price private placement securities for which the Company is unable to obtain a price from a third-party pricing service by discounting the expected future cash flows from the security by a developed market discount rate utilizing current credit spreads. Credit spreads are developed each month using market based data for public securities adjusted for credit spread differentials between public and private securities which are obtained from a survey of multiple private placement brokers. The appropriate credit spreads determined through this survey approach are based upon the issuer’s financial strength and term to maturity, utilizing an independent public security index and trade information and adjusting for the non-public nature of the securities.

The Working Group performs ongoing analysis of the prices and credit spreads received from third parties to ensure that the prices represent a reasonable estimate of the fair value. This process involves quantitative and qualitative analysis and is overseen by investment and accounting professionals. As a part of this analysis, the Company considers trading volume, new issuance activity and other factors to determine whether the market activity is significantly different than normal activity in an active market, and if so, whether transactions may not be orderly considering the weight of available evidence. If the available evidence indicates that pricing is based upon transactions that are stale or not orderly, the Company places little, if any, weight on the transaction price and will estimate fair value utilizing an internal pricing model. In addition, the Company ensures that prices received from independent brokers represent a reasonable estimate of fair value through the use of internal and external cash flow models developed based on spreads, and when available, market indices. As a result of this analysis, if the Company determines that there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly and approved by the Valuation Committee. The Company’s internal pricing model utilizes the Company’s best estimate of expected future cash flows discounted at a rate of return that a market participant would require. The significant inputs to the model include, but are not limited to, current market inputs, such as credit loss assumptions, estimated prepayment speeds and market risk premiums.

The Company conducts other specific activities to monitor controls around pricing. Daily analyses identify price changes over 3-5%, sale trade prices that differ over 3% from the prior day’s price and purchase trade prices that differ more than 3% from the current day’s price. Weekly analyses identify prices that differ more than 5% from published bond prices of a corporate bond index. Monthly analyses identify price changes over 3%, prices that haven’t changed, missing prices and second source validation on most sectors. Analyses are conducted by a dedicated pricing unit who follows up with trading and investment sector professionals and challenges prices with vendors when the estimated assumptions used differ from what the Company feels a market participant would use. Any changes from the identified pricing source are verified by further confirmation of assumptions used. Examples of other procedures performed include, but are not limited to, initial and on-going review of third-party pricing services’ methodologies, review of pricing statistics and trends and back testing recent trades. For a sample of structured securities, a comparison of the vendor’s assumptions to our internal econometric models is also performed; any differences are challenged in accordance with the process described above.

The Company has analyzed the third-party pricing services’ valuation methodologies and related inputs, and has also evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Most prices provided by third-party pricing services are classified into Level 2 because the inputs used in pricing the securities are market observable. Due to a general lack of transparency in the process that brokers use to develop prices, most valuations that are based on brokers’ prices are classified as Level 3. Some valuations may be classified as Level 2 if the price can be corroborated with observable market data.

Derivative Instruments, including embedded derivatives within investments

Derivative instruments are fair valued using pricing valuation models that utilize independent market data inputs, quoted market prices for exchange-traded derivatives, or independent broker quotations. Excluding embedded and reinsurance related derivatives, as of December 31, 2011 and 2010, 98% and 97%, respectively, of derivatives, based upon notional values, were priced by valuation models or quoted market prices. The remaining derivatives were priced by broker quotations.

The Company performs various controls on derivative valuations which include both quantitative and qualitative analysis. Analyses are conducted by a dedicated derivative pricing team that works directly with investment sector professionals to analyze impacts of changes in the market environment and investigate variances. There is a monthly analysis to identify market value changes greater than pre-defined thresholds, stale prices, missing prices and zero prices. Also on a monthly basis, a second source validation, typically to broker quotations, is performed for certain of the more complex derivatives, as well as for all new deals during the month. A model validation review is performed on any new models, which typically includes detailed documentation and validation to a second source. The model validation documentation and results of validation are presented to the Valuation Committee for approval. There is a monthly control to review changes in pricing sources to ensure that new models are not moved to production until formally approved.

The Company utilizes derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instrument may not be classified with the same fair value hierarchy level as the associated assets and liabilities. Therefore the realized and unrealized gains and losses on derivatives reported in Level 3 may not reflect the offsetting impact of the realized and unrealized gains and losses of the associated assets and liabilities.

Valuation Techniques and Inputs for Investments

Generally, the Company determines the estimated fair value of its AFS securities, fixed maturities, FVO, equity securities, trading, and short-term investments using the market approach. The income approach is used for securities priced using a pricing matrix, as well as for derivative instruments. For Level 1 investments, which are comprised of on-the-run U.S. Treasuries, exchange-traded equity securities, short-term investments, and exchange traded futures and option contracts, valuations are based on observable inputs that reflect quoted prices for identical assets in active markets that the Company has the ability to access at the measurement date.

For most of the Company’s debt securities, the following inputs are typically used in the Company’s pricing methods: reported trades, benchmark yields, bids and/or estimated cash flows. For securities except U.S. Treasuries, inputs also include issuer spreads, which may consider credit default swaps. Derivative instruments are valued using mid-market inputs that are predominantly observable in the market.

A description of additional inputs used in the Company’s Level 2 and Level 3 measurements is listed below:

Level 2 The fair values of most of the Company’s Level 2 investments are determined by management after considering prices received from third party pricing services. These investments include most fixed maturities and preferred stocks, including those reported in separate account assets.

• ABS, CDOs, CMBS and RMBS — Primary inputs also include monthly payment information, collateral performance, which varies by vintage year and includes delinquency rates, collateral valuation loss severity rates, collateral refinancing assumptions, credit default swap indices and, for ABS and RMBS, estimated prepayment rates.

• Corporates, including investment grade private placements — Primary inputs also include observations of credit default swap curves related to the issuer.

• Foreign government/government agencies - Primary inputs also include observations of credit default swap curves related to the issuer and political events in emerging markets.

• Municipals — Primary inputs also include Municipal Securities Rulemaking Board reported trades and material event notices, and issuer financial statements.

• Short-term investments — Primary inputs also include material event notices and new issue money market rates.

• Equity securities, trading — Consist of investments in mutual funds. Primary inputs include net asset values obtained from third party pricing services.

• Credit derivatives — Significant inputs primarily include the swap yield curve and credit curves.

• Foreign exchange derivatives — Significant inputs primarily include the swap yield curve, currency spot and forward rates, and cross currency basis curves.

• Interest rate derivatives — Significant input is primarily the swap yield curve.

Level 3 Most of the Company’s securities classified as Level 3 are valued based on brokers’ prices. This includes less liquid securities such as lower quality asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”), commercial real estate (“CRE”) CDOs and residential mortgage-backed securities (“RMBS”) primarily backed by below-prime loans. Primary inputs for these structured securities are consistent with the typical inputs used in Level 2 measurements noted above, but are Level 3 due to their illiquid markets. Additionally, certain long-dated securities are priced based on third party pricing services, including municipal securities, foreign government/government agencies, bank loans and below investment grade private placement securities. Primary inputs for these long-dated securities are consistent with the typical inputs used in Level 1 and Level 2 measurements noted above, but include benchmark interest rate or credit spread assumptions that are not observable in the marketplace. Also included in Level 3 are certain derivative instruments that either have significant unobservable inputs or are valued based on broker quotations. Significant inputs for these derivative contracts primarily include the typical inputs used in the Level 1 and Level 2 measurements noted above, but also may include the following:

• Credit derivatives — Significant unobservable inputs may include credit correlation and swap yield curve and credit curve extrapolation beyond observable limits.

• Equity derivatives — Significant unobservable inputs may include equity volatility.

• Interest rate contracts — Significant unobservable inputs may include swap yield curve extrapolation beyond observable limits and interest rate volatility.

Product Derivatives

The Company currently offers certain variable annuity products with GMWB riders in the U.S., and formerly offered such products in the U.K. and Japan. The GMWB represents an embedded derivative in the variable annuity contract. When it is determined that (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host for measurement purposes. The embedded derivative is carried at fair value, with changes in fair value reported in net realized capital gains and losses. The Company’s GMWB liability is reported in other policyholder funds and benefits payable in the Consolidated Balance Sheets.

In valuing the embedded derivative, the Company attributes to the derivative a portion of the expected fees to be collected over the expected life of the contract from the contract holder equal to the present value of future GMWB claims (the “Attributed Fees”). The excess of fees collected from the contract holder in the current period over the current period’s Attributed Fees are associated with the host variable annuity contract and reported in fee income.

U.S. GMWB Reinsurance Derivative

The Company has reinsurance arrangements in place to transfer a portion of its risk of loss due to GMWB. These arrangements are recognized as derivatives and carried at fair value in reinsurance recoverables. Changes in the fair value of the reinsurance agreements are reported in net realized capital gains and losses.

The fair value of the U.S. GMWB reinsurance derivative is calculated as an aggregation of the components described in the Living Benefits Required to be Fair Valued discussion below and is modeled using significant unobservable policyholder behavior inputs, identical to those used in calculating the underlying liability, such as lapses, fund selection, resets and withdrawal utilization and risk margins.

Separate Account Assets

Separate account assets are primarily invested in mutual funds but also have investments in fixed maturity and equity securities. The separate account investments are valued in the same manner, and using the same pricing sources and inputs, as the fixed maturity, equity security, and short-term investments of the Company.

Living Benefits Required to be Fair Valued (in Other Policyholder Funds and Benefits Payable)

Fair values for GMWB and guaranteed minimum accumulation benefit (“GMAB”) contracts are calculated using the income approach based upon internally developed models because active, observable markets do not exist for those items. The fair value of the Company’s guaranteed benefit liabilities, classified as embedded derivatives, and the related reinsurance and customized freestanding derivatives is calculated as an aggregation of the following components: Best Estimate Claim Payments; Credit Standing Adjustment; and Margins. The resulting aggregation is reconciled or calibrated, if necessary, to market information that is, or may be, available to the Company, but may not be observable by other market participants, including reinsurance discussions and transactions. The Company believes the aggregation of these components, as necessary and as reconciled or calibrated to the market information available to the Company, results in an amount that the Company would be required to transfer or receive, for an asset, to or from market participants in an active liquid market, if one existed, for those market participants to assume the risks associated with the guaranteed minimum benefits and the related reinsurance and customized derivatives. The fair value is likely to materially diverge from the ultimate settlement of the liability as the Company believes settlement will be based on our best estimate assumptions rather than those best estimate assumptions plus risk margins. In the absence of any transfer of the guaranteed benefit liability to a third party, the release of risk margins is likely to be reflected as realized gains in future periods’ net income. Each component described below is unobservable in the marketplace and require subjectivity by the Company in determining their value.

Best Estimate

Claim Payments

The Best Estimate Claim Payments is calculated based on actuarial and capital market assumptions related to projected cash flows, including the present value of benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior such as lapses, fund selection, resets and withdrawal utilization. For the customized derivatives, policyholder behavior is prescribed in the derivative contract. Because of the dynamic and complex nature of these cash flows, best estimate assumptions and a Monte Carlo stochastic process is used in valuation. The Monte Carlo stochastic process involves the generation of thousands of scenarios that assume risk neutral returns consistent with swap rates and a blend of observable implied index volatility levels. Estimating these cash flows involves numerous estimates and subjective judgments regarding a number of variables —including expected market rates of return, market volatility, correlations of market index returns to funds, fund performance, discount rates and assumptions about policyholder behavior which emerge over time.

At each valuation date, the Company assumes expected returns based on:

• risk-free rates as represented by the eurodollar futures, LIBOR deposits and swap rates to derive forward curve rates;

• market implied volatility assumptions for each underlying index based primarily on a blend of observed market “implied volatility” data;

• correlations of historical returns across underlying well known market indices based on actual observed returns over the ten years preceding the valuation date; and

• three years of history for fund indexes compared to separate account fund regression.

As many guaranteed benefit obligations are relatively new in the marketplace, actual policyholder behavior experience is limited. As a result, estimates of future policyholder behavior are subjective and based on analogous internal and external data. As markets change, mature and evolve and actual policyholder behavior emerges, management continually evaluates the appropriateness of its assumptions for this component of the fair value model.

On a daily basis, the Company updates capital market assumptions used in the GMWB liability model such as interest rates, equity indices and the blend of implied equity index volatilities. The Company monitors various aspects of policyholder behavior and may modify certain of its assumptions, including living benefit lapses and withdrawal rates, if credible emerging data indicates that changes are warranted. At a minimum, all policyholder behavior assumptions are reviewed and updated, as appropriate, in conjunction with the completion of the Company’s comprehensive study to refine its estimate of future gross profits during the third quarter of each year.

Credit Standing Adjustment

This assumption makes an adjustment that market participants would make, in determining fair value, to reflect the risk that guaranteed benefit obligations or the GMWB reinsurance recoverables will not be fulfilled (“nonperformance risk”). As a result of sustained volatility in the Company’s credit default spreads, during 2009 the Company changed its estimate of the Credit Standing Adjustment to incorporate a blend of observable Company and reinsurer credit default spreads from capital markets, adjusted for market recoverability. Prior to the first quarter of 2009, the Company calculated the Credit Standing Adjustment by using default rates published by rating agencies, adjusted for market recoverability. The credit standing adjustment assumption, net of reinsurance, resulted in pre-tax realized gains (losses) of $55, ($10) and $26, for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011 the credit standing adjustment was $80.

Margins

The behavior risk margin adds a margin that market participants would require, in determining fair value, for the risk that the Company’s assumptions about policyholder behavior could differ from actual experience. The behavior risk margin is calculated by taking the difference between adverse policyholder behavior assumptions and best estimate assumptions.

Assumption updates, including policyholder behavior assumptions, affected best estimates and margins for total pre-tax realized gains of $52, $159 and $566 for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011 the behavior risk margin was $419.

In addition to the non-market-based updates described above, the Company recognized non-market-based updates driven by the relative outperformance (underperformance) of the underlying actively managed funds as compared to their respective indices resulting in pre-tax realized gains (losses) of approximately $(72), $104 and $550 for the years ended December 31, 2011, 2010 and 2009, respectively.

Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The tables below provide fair value roll-forwards for the year ended December 31, 2011 and 2010, for the financial instruments classified as Level 3.

Roll-forward of Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) for the twelve months from January 1, 2011 to December 31, 2011.

	Fixed Maturities, AFS
													Foreign									Total Fixed			Fixed
													govt./govt									Maturities,			Maturities,
Assets	ABS			CDOs			CMBS			Corporate			agencies			Municipal			RMBS			AFS			FVO
Fair value as of January 1, 2011	$	477		$	2,581		$	689		$	2,129		$	56		$	272		$	1,285		$	7,489		$	522
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(27	)		(41	)		11			(40	)		—			—			(21	)		(118	)		22
Included in OCI [3]		22			126			52			(31	)		1			48			3			221			—
Purchases		58			—			29			108			3			131			25			354			—
Settlements		(37	)		(151	)		(86	)		(121	)		(4	)		—			(135	)		(534	)		(3	)
Sales		(10	)		(66	)		(317	)		(162	)		(7	)		(2	)		(16	)		(580	)		(42	)
Transfers into Level 3 [4]		82			30			268			774			39			4			82			1,279			—
Transfers out of Level 3 [4]		(204	)		(2,111	)		(58	)		(402	)		(39	)		(16	)		(160	)		(2,990	)		(4	)
Fair value as of December 31, 2011	$	361		$	368		$	588		$	2,255		$	49		$	437		$	1,063		$	5,121		$	495
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	(16	)	$	(41	)	$	(17	)	$	(17	)	$	—		$	—		$	(15	)	$	(106	)	$	19

				Freestanding Derivatives [5]
																U.S.			Intl.
	Equity												U.S.			Macro			Program						Total Free-
	Securities,									Interest			GMWB			Hedge			Hedging			Other			Standing
Assets (Liabilities)	AFS			Credit			Equity			Rate			Hedging			Program			Instr.			Contracts			Derivatives [5]
Fair value as of January 1, 2011	$	154		$	(390	)	$	4		$	(53	)	$	600		$	203		$	5		$	32		$	401
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(12	)		(170	)		(9	)		(21	)		279			(128	)		(3	)		(4	)		(56	)
Included in OCI [3]		(4	)		—			—			—			—			—			—			—			—
Purchases		39			1			45			64			23			347			33			—			513
Settlements		—			(2	)		—			(48	)		(19	)		(65	)		—			—			(134	)
Sales		(10	)		—			—			—			—			—			—			—			—
Transfers into Level 3 [4]		7			—			—			—			—			—			—			—			—
Transfers out of Level 3 [4]		(81	)		—			—			—			—			—			—			—			—
Fair value as of December 31, 2011	$	93		$	(561	)	$	40		$	(58	)	$	883		$	357		$	35		$	28		$	724
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	(10	)	$	(163	)	$	(8	)	$	(19	)	$	278		$	(107	)	$	(5	)	$	(4	)	$	(28	)

	Reinsurance Recoverable
Assets	for U.S. GMWB		Separate Accounts
Fair value as of January 1, 2011	$	280	$	1,247
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		131		25
Included in OCI [3]		—		—
Purchases		—		292
Settlements		32		—
Sales		—		(171	)
Transfers into Level 3 [4]		—		14
Transfers out of Level 3 [4]		—		(376	)
Fair value as of December 31, 2011	$	443	$	1,031
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	131	$	(1	)

	Other Policyholder Funds and Benefits Payable
													Total Other
	U.S.			International									Policyholder
	Guaranteed			Guaranteed			International			Equity			Funds and
	Withdrawal			Living			Other Living			Linked			Benefits			Other			Consumer
Liabilities	Benefits			Benefits			Benefits			Notes			Payable			Liabilities			Notes
Fair value as of January 1, 2011	$	(1,611	)	$	(36	)	$	3		$	(9	)	$	(1,653	)	$	(37	)	$	(5	)
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(780	)		(21	)		(4	)		—			(805	)		28			1
Included in OCI [3]		—			—			—			—			0			—			—
Settlements		(147	)		(9	)		(4	)		—			(160	)		—			—
Fair value as of December 31, 2011	$	(2,538	)	$	(66	)	$	(5	)	$	(9	)	$	(2,618	)	$	(9	)	$	(4	)
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2011 [2] [7]	$	(780	)	$	(21	)	$	(4	)	$	—		$	(805	)	$	28		$	1

Roll-forward of Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) for the twelve months from January 1, 2010 to December 31, 2010.

	Fixed Maturities, AFS
													Foreign									Total Fixed			Fixed
													govt./govt.									Maturities,			Maturities,
Assets	ABS			CDOs			CMBS			Corporate			agencies			Municipal			RMBS			AFS			FVO
Fair value as of January 1, 2010	$	580		$	2,835		$	307		$	8,027		$	93		$	262		$	1,153		$	13,257		$	—
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(17	)		(151	)		(132	)		(14	)		—			1			(43	)		(356	)		80
Included in OCI [3]		92			533			409			320			5			24			254			1,637			—
Purchases, issuances, and settlements		(74	)		(234	)		(186	)		78			(8	)		14			(161	)		(571	)		(11	)
Transfers into Level 3 [4]		40			42			443			967			8			11			146			1,657			453
Transfers out of Level 3 [4]		(144	)		(444	)		(152	)		(7,249	)		(42	)		(40	)		(64	)		(8,135	)		—
Fair value as of December 31, 2010	$	477		$	2,581		$	689		$	2,129		$	56		$	272		$	1,285		$	7,489		$	522
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	(8	)	$	(158	)	$	(73	)	$	(24	)	$	—		$	—		$	(38	)	$	(301	)	$	76

				Freestanding Derivatives [5]
																U.S.			Intl.
	Equity												U.S.			Macro			Program						Total Free-
	Securities,									Interest			GMWB			Hedge			Hedging			Other			Standing
Assets (Liabilities)	AFS			Credit			Equity			Rate			Hedging			Program			Instr.			Contracts			Derivatives [5]
Fair value as of January 1, 2010	$	58		$	(228	)	$	(2	)	$	5		$	236		$	278		$	12		$	36		$	337
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(6	)		124			6			(4	)		(74	)		(312	)		(29	)		(4	)		(293	)
Included in OCI [3]		9			—			—			1			—			—			—			—			1
Purchases, issuances, and settlements		16			4			—			(44	)		442			237			22			—			661
Transfers into Level 3 [4]		98			(290	)		—			—			—			—			—			—			(290	)
Transfers out of Level 3 [4]		(21	)		—			—			(11	)		(4	)		—			—			—			(15	)
Fair value as of December 31, 2010	$	154		$	(390	)	$	4		$	(53	)	$	600		$	203		$	5		$	32		$	401
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	(8	)	$	116		$	6		$	(24	)	$	(61	)	$	(292	)	$	(29	)	$	(4	)	$	(288	)

	Reinsurance Recoverable
Assets	for U.S. GMWB			Separate Accounts
Fair value as of January 1, 2010	$	347		$	962
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(102	)		142
Purchases, issuances, and settlements		35			314
Transfers into Level 3 [4]		—			14
Transfers out of Level 3 [4]		—			(185	)
Fair value as of December 31, 2010	$	280		$	1,247
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	(102	)	$	20

	Other Policyholder Funds and Benefits Payable
																Total Other
	U.S.			International												Policyholder
	Guaranteed			Guaranteed			International			Equity						Funds and
	Withdrawal			Living			Other Living			Linked			Institutional			Benefits			Other			Consumer
Liabilities	Benefits			Benefits			Benefits			Notes			Notes			Payable			Liabilities			Notes
Fair value as of January 1, 2010	$	(1,957	)	$	(45	)	$	2		$	(10	)	$	(2	)	$	(2,012	)	$	—		$	(5	)
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		486			22			4			—			2			514			(26	)		—
Included in OCI [3]		—			(4	)		—			—			—			(4	)		—			—
Purchases, issuances, and settlements		(140	)		(9	)		(3	)		1			—			(151	)		—			—
Transfers into Level 3 [4]		—			—			—			—			—			—			(11	)		—
Fair value as of December 31, 2010	$	(1,611	)	$	(36	)	$	3		$	(9	)	$	—		$	(1,653	)	$	(37	)	$	(5	)
Changes in unrealized gains (losses) included in net income related to financial instruments still held at December 31, 2010 [2] [7]	$	486		$	22		$	4		$	—		$	2		$	514		$	—		$	—

[1]	The Company classifies gains and losses on GMWB reinsurance derivatives and Guaranteed Living Benefit embedded derivatives as unrealized gains (losses) for purposes of disclosure in this table because it is impracticable to track on a contract-by-contract basis the realized gains (losses) for these derivatives and embedded derivatives.
[2]	All amounts in these rows are reported in net realized capital gains/losses. The realized/unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on net income for the Company. All amounts are before income taxes and amortization DAC.
[3]	All amounts are before income taxes and amortization of DAC.
[4]	Transfers in and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.
[5]	Derivative instruments are reported in this table on a net basis for asset/(liability) positions and reported in the Consolidated Balance Sheet in other investments and other liabilities.
[6]	Includes both market and non-market impacts in deriving realized and unrealized gains (losses).
[7]	Amounts presented are for Level 3 only and therefore may not agree to other disclosures included herein.

Fair Value Option

The Company elected the fair value option for its investments containing an embedded credit derivative which were not bifurcated as a result of new accounting guidance effective July 1, 2010. The underlying credit risk of these securities is primarily corporate bonds and commercial real estate. The Company elected the fair value option given the complexity of bifurcating the economic components associated with the embedded credit derivative. Additionally, the Company elected the fair value option for purchases of foreign government securities to align with the accounting for yen-based fixed annuity liabilities, which are adjusted for changes in spot rates through realized gains and losses. Similar to other fixed maturities, income earned from these securities is recorded in net investment income. Changes in the fair value of these securities are recorded in net realized capital gains and losses.

The Company previously elected the fair value option for one of its consolidated VIEs in order to apply a consistent accounting model for the VIE’s assets and liabilities. The VIE is an investment vehicle that holds high quality investments, derivative instruments that reference third-party corporate credit and issues notes to investors that reflect the credit characteristics of the high quality investments and derivative instruments. The risks and rewards associated with the assets of the VIE inure to the investors. The investors have no recourse against the Company. As a result, there has been no adjustment to the market value of the notes for the Company’s own credit risk.

The following table presents the changes in fair value of those assets and liabilities accounted for using the fair value option reported in net realized capital gains and losses in the Company’s Consolidated Statements of Operations.

	For the years ended December 31,
	2011			2010
Assets
Fixed maturities, FVO
ABS	$	—		$	(5	)
Corporate		10			(7	)
CRE CDOs		(33	)		83
Foreign government		45			—
RMBS		—			(1	)
Other liabilities
Credit-linked notes		28			(26	)
Total realized capital gains	$	50		$	44

The following table presents the fair value of assets and liabilities accounted for using the fair value option included in the Company’s Consolidated Balance Sheets.

	As of December 31,
	2011		2010
Assets
Fixed maturities, FVO
ABS	$	65	$	65
CRE CDOs		225		270
Corporate		272		250
Foreign government		766		64
Total fixed maturities, FVO	$	1,328	$	649
Other liabilities
Credit-linked notes [1]	$	9	$	37

[1] As of December 31, 2011 and 2010, the outstanding principal balance of the notes was $243.

Financial Instruments Not Carried at Fair Value

The following table presents carrying amounts and fair values of The Hartford’s financial instruments not carried at fair value and not included in the above fair value discussion as of December 31, 2011 and December 31, 2010.

	December 31, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Assets
Policy loans	$	2,001	$	2,153	$	2,181	$	2,294
Mortgage loans		5,728		5,977		4,489		4,524
Liabilities
Other policyholder funds and benefits payable [1]	$	10,343	$	11,238	$	11,155	$	11,383
Senior notes [2]		4,481		4,623		4,880		5,072
Junior subordinated debentures [2]		1,735		2,430		1,727		2,596
Consumer notes [3]		310		305		377		392

[1]	Excludes guarantees on variable annuities, group accident and health and universal life insurance contracts, including corporate owned life insurance.
[2]	Included in long-term debt in the Consolidated Balance Sheets, except for current maturities, which are included in short-term debt.
[3]	Excludes amounts carried at fair value and included in disclosures above.

The Company has not made any changes in its valuation methodologies for the following assets and liabilities since December 31, 2010.

• Fair value for policy loans and consumer notes were estimated using discounted cash flow calculations using current interest rates.

• Fair values for mortgage loans were estimated using discounted cash flow calculations based on current lending rates for similar type loans. Current lending rates reflect changes in credit spreads and the remaining terms of the loans.

• Fair values for other policyholder funds and benefits payable, not carried at fair value, are determined by estimating future cash flows, discounted at the current market rate.

• Fair values for senior notes and junior subordinated debentures are based primarily on market quotations from independent third party pricing services.

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Employee Benefit Plans (Details 2)	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Plan, Assumed Health Care Cost Trend Rates [Abstract]
Pre-65 health care cost trend rate	8.95%	9.70%	9.05%
Post-65 health care cost trend rate	7.75%	8.25%	7.60%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00%	5.00%	5.00%
Year that the rate reaches the ultimate trend rate	2019	2018	2018

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Accumulated Other Comprehensive Income (Loss), Net of Tax

12 Months Ended

Dec. 31, 2011

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss), Net of Tax

16. Accumulated Other Comprehensive Income (Loss), Net of Tax

The components of AOCI were as follows:

				Net Gain						Pension and
				(Loss) on			Foreign			Other			Accumulated
	Unrealized			Cash-Flow			Currency			Postretirement			Other
	Gain (Loss)			Hedging			Translation			Plan			Comprehensive
	on Securities			Instruments			Adjustments			Adjustment			Income (Loss)
For the year ended December 31, 2011
Balance, beginning of year	$	(696	)	$	385		$	488		$	(1,178	)	$	(1,001	)
Unrealized gain on securities [1] [2]		1,979			—			—			—			1,979
Change in other-than-temporary impairment losses recognized in other comprehensive income [1]		9			—			—			—			9
Change in net loss on cash-flow hedging instruments [1] [3]		—			131			—			—			131
Change in foreign currency translation adjustments [1]		—			—			112			—			112
Change in pension and other postretirement plan adjustment [1]		—			—			—			(73	)		(73	)
Balance, end of year	$	1,292		$	516		$	600		$	(1,251	)	$	1,157
For the year ended December 31, 2010
Balance, beginning of year	$	(2,713	)	$	257		$	199		$	(1,055	)	$	(3,312	)
Unrealized gain on securities [1] [2]		1,707			—			—			—			1,707
Change in other-than-temporary impairment losses recognized in other comprehensive income [1]		116			—			—			—			116
Cumulative effect of accounting change		194			—			—			—			194
Change in net loss on cash-flow hedging instruments [1] [3]		—			128			—			—			128
Change in foreign currency translation adjustments [1]		—			—			289			—			289
Change in pension and other postretirement plan adjustment [1]		—			—			—			(123	)		(123	)
Balance, end of year	$	(696	)	$	385		$	488		$	(1,178	)	$	(1,001	)
For the year ended December 31, 2009
Balance, beginning of year	$	(7,486	)	$	644		$	222		$	(900	)	$	(7,520	)
Unrealized gain on securities [1] [2]		5,909			—			—			—			5,909
Change in other-than-temporary impairment losses recognized in other comprehensive income [1]		(224	)		—			—			—			(224	)
Cumulative effect of accounting change		(912	)		—			—			—			(912	)
Change in net loss on cash-flow hedging instruments [1] [3]		—			(387	)		—			—			(387	)
Change in foreign currency translation adjustments [1]		—			—			(23	)		—			(23	)
Change in pension and other postretirement plan adjustment [1]		—			—			—			(155	)		(155	)
Balance, end of year	$	(2,713	)	$	257		$	199		$	(1,055	)	$	(3,312	)

[1] Included in the unrealized gain (loss) balance as of December 31, 2011, 2010 and 2009 was net unrealized gains (losses) credited to policyholders of $(65), $(87), and $(82), respectively. Included in the AOCI components were the following:

• Unrealized gain (loss) on securities is net of tax and deferred acquisition costs of $1,217, $3,574, and $2,358, for the years ended December 31, 2011, 2010 and 2009, respectively.

• Change in other-than-temporary impairment losses recognized in other comprehensive income is net of changes in the fair value of non-credit impaired securities of $112, $647 and $244 for the years ended December 31, 2011, 2010 and 2009, respectively, and net of tax and deferred acquisition costs of $(14). $(113) and $215 for the years ended December 31, 2011, 2010 and 2009, respectively.

• Net gain (loss) on cash-flow hedging instruments is net of tax of $71, $69, and $(208) for the years ended December 31, 2011, 2010 and 2009, respectively.

• Changes in foreign currency translation adjustments are net of tax of $60, $156 and $(12) for the years ended December 31, 2011, 2010 and 2009, respectively.

• Change in pension and other postretirement plan adjustment is net of tax of $(39), $(66), and $(86) for the years ended December 31, 2011, 2010 and 2009, respectively.

[2]	Net of reclassification adjustment for gains (losses) realized in net income of $88, $(78), and $(1,202) for the years ended for the years ended December 31, 2011, 2010 and 2009, respectively.
[3]	Net of amortization adjustment of $125, $94, and $49 to net investment income for the years ended December 31, 2011, 2010 and 2009, respectively.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

Accounting Policy

Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable. Management establishes reserves for these contingencies at its “best estimate,” or, if no one number within the range of possible losses is more probable than any other, the Company records an estimated reserve at the low end of the range of losses.

Litigation

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves. Subject to the uncertainties discussed below under the caption “Asbestos and Environmental Claims,” management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.

The Hartford is also involved in other kinds of legal actions, some of which assert claims for substantial amounts. These actions include, among others, and in addition to the matters described below, putative state and federal class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, underpayment of claims or improper underwriting practices in connection with various kinds of insurance policies, such as personal and commercial automobile, property, life and inland marine; improper sales practices in connection with the sale of life insurance and other investment products; and improper fee arrangements in connection with investment products. The Hartford also is involved in individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims. Like many other insurers, The Hartford also has been joined in actions by asbestos plaintiffs asserting, among other things, that insurers had a duty to protect the public from the dangers of asbestos and that insurers committed unfair trade practices by asserting defenses on behalf of their policyholders in the underlying asbestos cases. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to the consolidated financial condition of The Hartford. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, the outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.

Apart from the inherent difficulty of predicting litigation outcomes, particularly those that will be decided by a jury, many of the matters specifically identified below purport to seek substantial damages for unsubstantiated conduct spanning a multi-year period based on novel and complex legal theories and damages models. The alleged damages typically are not quantified or factually supported in the complaint, and, in any event, the Company’s experience shows that demands for damages often bear little relation to a reasonable estimate of potential loss. Most are in the earliest stages of litigation, with few or no substantive legal decisions by the court defining the scope of the claims, the class (if any), or the potentially available damages. In many, the Company has not yet answered the complaint or asserted its defenses, and fact discovery is still in progress or has not yet begun. Accordingly, unless otherwise specified below, management cannot reasonably estimate the possible loss or range of loss, if any, or predict the timing of the eventual resolution of these matters.

Broker Compensation Litigation — Following the New York Attorney General’s filing of a civil complaint against Marsh & McLennan Companies, Inc., and Marsh, Inc. (collectively, “Marsh”) in October 2004 alleging that certain insurance companies, including The Hartford, participated with Marsh in arrangements to submit inflated bids for business insurance and paid contingent commissions to ensure that Marsh would direct business to them, private plaintiffs brought several lawsuits against the Company predicated on the allegations in the Marsh complaint, to which the Company was not party. Among these is a multidistrict litigation in the United States District Court for the District of New Jersey. Two consolidated amended complaints were filed in the multidistrict litigation, one related to conduct in connection with the sale of property-casualty insurance and the other related to alleged conduct in connection with the sale of group benefits products. The Company and various of its subsidiaries are named in both complaints. The complaints assert, on behalf of a putative class of persons who purchased insurance through broker defendants, claims under the Sherman Act, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), state law, and in the case of the group benefits complaint, claims under the Employee Retirement Income Security Act of 1974 (“ERISA”). The claims are predicated upon allegedly undisclosed or otherwise improper payments of contingent commissions to the broker defendants to steer business to the insurance company defendants. The district court dismissed the Sherman Act and RICO claims in both complaints for failure to state a claim and has granted the defendants’ motions for summary judgment on the ERISA claims in the group-benefits products complaint. The district court further declined to exercise supplemental jurisdiction over the state law claims and dismissed those claims without prejudice. The plaintiffs appealed the dismissal of the claims in both consolidated amended complaints, except the ERISA claims. In August 2010, the United States Court of Appeals for the Third Circuit affirmed the dismissal of the Sherman Act and RICO claims against the Company. The Third Circuit vacated the dismissal of the Sherman Act and RICO claims against some defendants in the property casualty insurance case and vacated the dismissal of the state-law claims as to all defendants in light of the reinstatement of the federal claims. In September 2010, the district court entered final judgment for the defendants in the group benefits case. In March 2011, the Company reached an agreement in principle to settle on a class basis the property casualty insurance case for an immaterial amount. The settlement was preliminarily approved by the court in June 2011, and is contingent upon final court approval.

Investment and Savings Plan ERISA and Shareholder Securities Class Action Litigation — In November and December 2008, following a decline in the share price of the Company’s common stock, seven putative class action lawsuits were filed in the United States District Court for the District of Connecticut on behalf of certain participants in the Company’s Investment and Savings Plan (the “Plan”), which offers the Company’s common stock as one of many investment options. These lawsuits have been consolidated, and a consolidated amended class-action complaint was filed on March 23, 2009, alleging that the Company and certain of its officers and employees violated ERISA by allowing the Plan’s participants to invest in the Company’s common stock and by failing to disclose to the Plan’s participants information about the Company’s financial condition. The lawsuit seeks restitution or damages for losses arising from the investment of the Plan’s assets in the Company’s common stock during the period from December 10, 2007 to the present. In January 2010, the district court denied the Company’s motion to dismiss the consolidated amended complaint. In February 2011, the parties reached an agreement in principle to settle on a class basis for an immaterial amount. The settlement was preliminarily approved by the court in January 2012, and is contingent upon final court approval.

The Company and certain of its present or former officers were defendants in a putative securities class action lawsuit filed in the United States District Court for the Southern District of New York in March 2010. The operative complaint, filed in October 2010, was brought on behalf of persons who acquired Hartford common stock during the period of July 28, 2008 through February 5, 2009, and alleged that the defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, by making false or misleading statements during the alleged class period about the Company’s valuation of certain asset-backed securities and its effect on the Company’s capital position. In September 2011, the district court dismissed the lawsuit with prejudice. The plaintiffs did not appeal.

Fair Credit Reporting Act Class Action — In February 2007, the United States District Court for the District of Oregon gave final approval of the Company’s settlement of a lawsuit brought on behalf of a class of homeowners and automobile policy holders alleging that the Company willfully violated the Fair Credit Reporting Act by failing to send appropriate notices to new customers whose initial rates were higher than they would have been had the customer had a more favorable credit report. The Company paid approximately $84.3 to eligible claimants and their counsel in connection with the settlement, sought reimbursement from the Company’s Excess Professional Liability Insurance Program for the portion of the settlement in excess of the Company’s $10 self-insured retention, and booked an insurance recoverable for the amount paid under the settlement plus the cost of settlement administration, less the self-insured retention. Certain insurance carriers participating in that program disputed coverage for the settlement, and one of the excess insurers commenced an arbitration that resulted in an award in the Company’s favor and payments to the Company of approximately $30.1, thereby exhausting the primary and first-layer excess policies. As a result, the Company’s insurance recoverable was reduced to $45.5. In June 2009, the second-layer excess carriers commenced an arbitration to resolve the dispute over coverage for the remainder of the amounts paid by the Company. The Company counterclaimed for coverage. In September 2011, the arbitrators ruled in the Company’s favor and awarded approximately $50 plus interest of $3.

Mutual Funds Litigation — In October 2010, a derivative action was brought on behalf of six Hartford retail mutual funds in the United States District Court for the District of Delaware, alleging that Hartford Investment Financial Services, LLC (“HIFSCO”), an indirect subsidiary of the Company, received excessive advisory and distribution fees in violation of its statutory fiduciary duty under Section 36(b) of the Investment Company Act of 1940. In February 2011, a nearly identical derivative action was brought against HIFSCO in the United States District Court for the District of New Jersey on behalf of six additional Hartford retail mutual funds. Both actions were assigned to the Honorable Renee Marie Bumb, a judge in the District of New Jersey who was sitting by designation with respect to the Delaware action. Plaintiffs in each action seek to rescind the investment management agreements and distribution plans between HIFSCO and the Hartford mutual funds and to recover the total fees charged thereunder or, in the alternative, to recover any improper compensation HIFSCO received. In addition, plaintiffs in the New Jersey action seek recovery of lost earnings. HIFSCO moved to dismiss both actions and, in September 2011, the motions to dismiss were granted in part and denied in part, with leave to amend the complaints. In November 2011, a stipulation of voluntary dismissal was filed in the Delaware action and plaintiffs in the New Jersey action filed an amended complaint on behalf of six Hartford mutual funds, seeking the same relief as in their original complaint. HIFSCO disputes the allegations and has filed a partial motion to dismiss.

Asbestos and Environmental Claims

The Company continues to receive asbestos and environmental claims. Asbestos claims relate primarily to bodily injuries asserted by people who came in contact with asbestos or products containing asbestos. Environmental claims relate primarily to pollution and related clean-up costs.

The Company wrote several different categories of insurance contracts that may cover asbestos and environmental claims. First, the Company wrote primary policies providing the first layer of coverage in an insured’s liability program. Second, the Company wrote excess policies providing higher layers of coverage for losses that exhaust the limits of underlying coverage. Third, the Company acted as a reinsurer assuming a portion of those risks assumed by other insurers writing primary, excess and reinsurance coverages. Fourth, subsidiaries of the Company participated in the London Market, writing both direct insurance and assumed reinsurance business.

Significant uncertainty limits the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and expenses related to environmental and particularly asbestos claims. The degree of variability of reserve estimates for these exposures is significantly greater than for other more traditional exposures.

In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. Furthermore, over time, insurers, including the Company, have experienced significant changes in the rate at which asbestos claims are brought, the claims experience of particular insureds, and the value of claims, making predictions of future exposure from past experience uncertain. Plaintiffs and insureds also have sought to use bankruptcy proceedings, including “pre-packaged” bankruptcies, to accelerate and increase loss payments by insurers. In addition, some policyholders have asserted new classes of claims for coverages to which an aggregate limit of liability may not apply. Further uncertainties include insolvencies of other carriers and unanticipated developments pertaining to the Company’s ability to recover reinsurance for asbestos and environmental claims. Management believes these issues are not likely to be resolved in the near future.

In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liability and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims, and uncertainty as to the monetary amount being sought by the claimant from the insured.

The reporting pattern for assumed reinsurance claims, including those related to asbestos and environmental claims, is much longer than for direct claims. In many instances, it takes months or years to determine that the policyholder’s own obligations have been met and how the reinsurance in question may apply to such claims. The delay in reporting reinsurance claims and exposures adds to the uncertainty of estimating the related reserves.

It is also not possible to predict changes in the legal and legislative environment and their effect on the future development of asbestos and environmental claims.

Given the factors described above, the Company believes the actuarial tools and other techniques it employs to estimate the ultimate cost of claims for more traditional kinds of insurance exposure are less precise in estimating reserves for certain of its asbestos and environmental exposures. For this reason, the Company principally relies on exposure-based analysis to estimate the ultimate costs of these claims and regularly evaluates new account information in assessing its potential asbestos and environmental exposures. The Company supplements this exposure-based analysis with evaluations of the Company’s historical direct net loss and expense paid and reported experience, and net loss and expense paid and reported experience by calendar and/or report year, to assess any emerging trends, fluctuations or characteristics suggested by the aggregate paid and reported activity.

As of December 31, 2011 and December 31, 2010, the Company reported $1.9 billion and $1.8 billion of net asbestos reserves and $328 and $339 of net environmental reserves, respectively. The Company believes that its current asbestos and environmental reserves are appropriate. However, analyses of future developments could cause The Hartford to change its estimates and ranges of its asbestos and environmental reserves, and the effect of these changes could be material to the Company’s consolidated operating results, financial condition, and liquidity.

Lease Commitments

The total rental expense on operating leases was $122, $132, and $154 in 2011, 2010, and 2009, respectively, which excludes sublease rental income of $13, $4, and $2 in 2011, 2010 and 2009, respectively. Future minimum lease commitments are as follows:

Years ending December 31,	Operating Leases
2012	$	58
2013		47
2014		34
2015		26
2016		21
Thereafter		56
Total minimum lease payments [1]	$	242

[1] Excludes expected future minimum sublease income of approximately $7and $3 in 2012 and 2013, respectively.

The Company’s lease commitments consist primarily of lease agreements on office space, data processing, furniture and fixtures, office equipment, and transportation equipment that expire at various dates. Capital lease assets are included in property and equipment.

Unfunded Commitments

As of December 31, 2011, the Company has outstanding commitments totaling $1.4 billion, of which $700 is committed to fund limited partnership and other alternative investments, which may be called by the partnership during the commitment period (on average two to four years) to fund the purchase of new investments and partnership expenses. Once the commitment period expires, the Company is under no obligation to fund the remaining unfunded commitment but may elect to do so. Additionally, $553 is largely related to commercial whole loans expected to fund in the first half of 2012. The remaining outstanding commitments are related to various funding obligations associated with private placement securities. These have a commitment period of one month to one year.

Guaranty Fund and Other Insurance-related Assessments

In all states, insurers licensed to transact certain classes of insurance are required to become members of a guaranty fund. In most states, in the event of the insolvency of an insurer writing any such class of insurance in the state, members of the funds are assessed to pay certain claims of the insolvent insurers. A particular state’s fund assesses its members based on their respective written premiums in the state for the classes of insurance in which the insolvent insurer was engaged. Assessments are generally limited for any year to one or two percent of the premiums written per year depending on the state.

The Hartford accounts for guaranty fund and other related assessments in accordance with Accounting Standards Codification 405-30, “Insurance-Related Assessments.” Liabilities for guaranty fund and other insurance-related assessments are accrued when an assessment is probable, when it can be reasonably estimated, and when the event obligating the Company to pay an imposed or probable assessment has occurred. Liabilities for guaranty funds and other insurance-related assessments are not discounted and are included as part of other liabilities in the Consolidated Balance Sheets. As of December 31, 2011 and 2010, the liability balance was $145 and $118 respectively. As of December 31, 2011 and 2010, $31 and $14 related to premium tax offsets were included in other assets. In 2011, The Company recognized $22 for expected assessments related to the Executive Life Insurance Company of New York (ELNY) insolvency.

Derivative Commitments

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings of the individual legal entity that entered into the derivative agreement as set by nationally recognized statistical rating agencies. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could demand immediate and ongoing full collateralization and in certain instances demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement. The settlement amount is determined by netting the derivative positions transacted under each agreement. If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of December 31, 2011, is $725. Of this $725 the legal entities have posted collateral of $716 in the normal course of business. Based on derivative market values as of December 31, 2011, a downgrade of one level below the current financial strength ratings by either Moody’s or S&P could require approximately an additional $37 to be posted as collateral. Based on derivative market values as of December 31, 2011, a downgrade by either Moody’s or S&P of two levels below the legal entities’ current financial strength ratings could require approximately an additional $48 of assets to be posted as collateral. These collateral amounts could change as derivative market values change, as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated. The nature of the collateral that we would post, if required, would be primarily in the form of U.S. Treasury bills and U.S. Treasury notes.

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Investments and Derivative Instruments (Details 7) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	$ 7,837	$ 18,786
Less Than 12 Months, Fair Value	7,381	18,039
Less Than 12 Months, Unrealized Losses	(456)	(742)
12 Months or More, Amortized Cost	11,613	15,599
12 Months or More, Fair Value	9,324	12,811
12 Months or More, Unrealized Losses	(2,218)	(2,754)
Amortized Cost	19,450	34,385
Fair Value	16,705	30,850
Unrealized Losses	(2,674)	(3,496)
ABS [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	629	302
Less Than 12 Months, Fair Value	594	290
Less Than 12 Months, Unrealized Losses	(35)	(12)
12 Months or More, Amortized Cost	1,169	1,410
12 Months or More, Fair Value	872	1,026
12 Months or More, Unrealized Losses	(297)	(384)
Amortized Cost	1,798	1,712
Fair Value	1,466	1,316
Unrealized Losses	(332)	(396)
CDOs [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	81	321
Less Than 12 Months, Fair Value	59	293
Less Than 12 Months, Unrealized Losses	(22)	(28)
12 Months or More, Amortized Cost	2,709	2,724
12 Months or More, Fair Value	2,383	2,274
12 Months or More, Unrealized Losses	(326)	(450)
Amortized Cost	2,790	3,045
Fair Value	2,442	2,567
Unrealized Losses	(348)	(478)
CMBS [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	1,297	556
Less Than 12 Months, Fair Value	1,194	530
Less Than 12 Months, Unrealized Losses	(103)	(26)
12 Months or More, Amortized Cost	2,144	3,962
12 Months or More, Fair Value	1,735	3,373
12 Months or More, Unrealized Losses	(409)	(589)
Amortized Cost	3,441	4,518
Fair Value	2,929	3,903
Unrealized Losses	(512)	(615)
Corporate [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	4,388	5,533
Less Than 12 Months, Fair Value	4,219	5,329
Less Than 12 Months, Unrealized Losses	(169)	(199)
12 Months or More, Amortized Cost	3,268	4,017
12 Months or More, Fair Value	2,627	3,435
12 Months or More, Unrealized Losses	(570)	(548)
Amortized Cost	7,656	9,550
Fair Value	6,846	8,764
Unrealized Losses	(739)	(747)
Foreign govt./govt. agencies [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	218	356
Less Than 12 Months, Fair Value	212	349
Less Than 12 Months, Unrealized Losses	(6)	(7)
12 Months or More, Amortized Cost	51	78
12 Months or More, Fair Value	47	68
12 Months or More, Unrealized Losses	(4)	(10)
Amortized Cost	269	434
Fair Value	259	417
Unrealized Losses	(10)	(17)
Municipal [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	299	7,485
Less Than 12 Months, Fair Value	294	7,173
Less Than 12 Months, Unrealized Losses	(5)	(312)
12 Months or More, Amortized Cost	627	1,046
12 Months or More, Fair Value	560	863
12 Months or More, Unrealized Losses	(67)	(183)
Amortized Cost	926	8,531
Fair Value	854	8,036
Unrealized Losses	(72)	(495)
RMBS [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	415	1,744
Less Than 12 Months, Fair Value	330	1,702
Less Than 12 Months, Unrealized Losses	(85)	(42)
12 Months or More, Amortized Cost	1,206	1,567
12 Months or More, Fair Value	835	1,147
12 Months or More, Unrealized Losses	(371)	(420)
Amortized Cost	1,621	3,311
Fair Value	1,165	2,849
Unrealized Losses	(456)	(462)
U.S. Treasuries [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	343	2,436
Less Than 12 Months, Fair Value	341	2,321
Less Than 12 Months, Unrealized Losses	(2)	(115)
12 Months or More, Amortized Cost	0	158
12 Months or More, Fair Value	0	119
12 Months or More, Unrealized Losses	0	(39)
Amortized Cost	343	2,594
Fair Value	341	2,440
Unrealized Losses	(2)	(154)
Fixed maturities, AFS [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	7,670	18,733
Less Than 12 Months, Fair Value	7,243	17,987
Less Than 12 Months, Unrealized Losses	(427)	(741)
12 Months or More, Amortized Cost	11,174	14,962
12 Months or More, Fair Value	9,059	12,305
12 Months or More, Unrealized Losses	(2,044)	(2,623)
Amortized Cost	18,844	33,695
Fair Value	16,302	30,292
Unrealized Losses	(2,471)	(3,364)
Equity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less Than 12 Months, Amortized Cost	167	53
Less Than 12 Months, Fair Value	138	52
Less Than 12 Months, Unrealized Losses	(29)	(1)
12 Months or More, Amortized Cost	439	637
12 Months or More, Fair Value	265	506
12 Months or More, Unrealized Losses	(174)	(131)
Amortized Cost	606	690
Fair Value	403	558
Unrealized Losses	$ (203)	$ (132)

XML

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

8. Goodwill and Other Intangible Assets

Goodwill

Accounting Policy

Goodwill represents the excess of costs over the fair value of net assets acquired. Goodwill is not amortized but is reviewed for impairment at least annually or more frequently if events occur or circumstances change that would indicate that a triggering event for a potential impairment has occurred. During the fourth quarter of 2011, the Company changed the date of its annual impairment test for all reporting units to October 31^st from January 1^st for Wealth Management reporting units, June 30^th for Federal Trust Corporation within Corporate, and October 1^st for Property & Casualty Commercial and Consumer Markets. As a result, all reporting units performed an impairment test on October 31, 2011 in addition to the annual impairment tests performed on January 1^st or October 1^st as applicable. The change was made to be consistent across all reporting units and to more closely align the impairment testing date with the long-range planning and forecasting process. The Company has determined that this change in accounting principle is preferable under the circumstances and does not result in any delay, acceleration or avoidance of impairment. As it was impracticable to objectively determine projected cash flows and related valuation estimates as of each October 31 for periods prior to October 31, 2011, without applying information that has been learned since those periods, the Company has prospectively applied the change in the annual goodwill impairment testing date from October 31, 2011.

The goodwill impairment test follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit’s goodwill exceeds the implied goodwill value, an impairment loss is recognized in an amount equal to that excess.

Management’s determination of the fair value of each reporting unit incorporates multiple inputs into discounted cash flow calculations, including assumptions that market participants would make in valuing the reporting unit. Assumptions include levels of economic capital, future business growth, earnings projections and assets under management for certain Wealth Management reporting units and the weighted average cost of capital used for purposes of discounting. In the case of one business unit a market comparison approach is used to determine fair value. Decreases in the amount of economic capital allocated to a reporting unit, decreases in business growth, decreases in earnings projections and increases in the weighted average cost of capital will all cause a reporting unit’s fair value to decrease.

Goodwill within Corporate is primarily attributed to the Company’s “buy-back” of Hartford Life, Inc. in 2000 and was allocated to each of Hartford Life’s reporting units based on the reporting unit’s fair value of in-force business at the buy-back date. Although this goodwill was allocated to each reporting unit, it is held in Corporate for segment reporting.

Results

The carrying amount of goodwill allocated to reporting segments is as follows:

	December 31, 2011										December 31, 2010
			Accumulated			Discontinued			Carrying				Accumulated			Discontinued			Carrying
	Gross		Impairments			Operations[1]			Value		Gross		Impairments			Operations[1]			Value
Commercial Markets
Property & Casualty Commercial	$	30	$	(30	)	$	—		$	—	$	30	$	—		$	—		$	30
Consumer Markets		119		—			—			119		119		—			—			119
Wealth Management
Individual Life		224		—			—			224		224		—			—			224
Retirement Plans		87		—			—			87		87		—			—			87
Mutual Funds		159		—			—			159		159		—			—			159
Total Wealth Management		470		—			—			470		470		—			—			470
Corporate		787		(355	)		(15	)		417		940		(355	)		(153	)		432
Total Goodwill	$	1,406	$	(385	)	$	(15	)	$	1,006	$	1,559	$	(355	)	$	(153	)	$	1,051

[1] Represents goodwill written off related to Federal Trust Corporation which is currently recorded in discontinued operations.

During the second quarter of 2011, the Company wrote off the remaining $15 of goodwill associated with the Federal Trust Corporation (“FTC”) reporting unit within Corporate due to the announced divestiture of FTC. The write-off of the FTC reporting unit goodwill was recorded as a loss on disposal within discontinued operations.

The Consumer Markets reporting unit completed its annual goodwill assessment on October 1, 2011 and again on October 31, 2011, which resulted in no impairment of goodwill. In both tests, the Consumer Markets reporting unit passed the first step of the annual impairment tests with a significant margin. The annual goodwill assessment for the Property & Casualty Commercial reporting unit that was performed on October 1, 2011 resulted in a write-down of goodwill of $30, pre-tax leaving no remaining goodwill. The results of the discounted cash flow calculations indicated that the fair value of the reporting unit was less than the carrying value; this was due primarily to a decrease in future expected underwriting cash flows. The decrease in future expected underwriting cash flows is driven by an expected reduction in written premium in the short term as the Company maintains pricing discipline in a downward market cycle, while retaining long term capabilities for future opportunities.

The Company completed its annual goodwill assessment for the individual reporting units within the Wealth Management operating segment and Corporate, except for the FTC reporting unit, as noted above, on January 1, 2011 and October 31, 2011, which resulted in no impairment of goodwill. In both tests, the reporting units passed the first step of their annual impairment tests with a significant margin with the exception of the Individual Life reporting unit at the January 1, 2011 test. The Individual Life reporting unit had a margin of less than 10% between fair value and book value on January 1, 2011. As of the October 31, 2011 impairment test, the Individual Life reporting unit had a fair value in excess of book value of approximately 15%, modest improvement from January 1, 2011 results due to improving cost of capital.

The fair value of the Individual Life reporting unit is based on discounted cash flows using earnings projections on in force business and future business growth. There could be a positive or negative impact on the result of step one in future periods if assumptions change about the level of economic capital, future business growth, earnings projections or the weighted average cost of capital.

The annual goodwill assessment for the reporting units within Property & Casualty Commercial and Consumer Markets was completed on October 1, 2010, which resulted in no write-downs of goodwill for the year ended December 31, 2010.

The Company completed its annual goodwill assessment for the individual reporting units within Wealth Management and Corporate, except for the FTC reporting unit, on January 1, 2010, which resulted in no write-downs of goodwill in 2010. The reporting units passed the first step of their annual impairment tests with a significant margin with the exception of the Retirement Plans and Individual Life reporting units.

The Retirement Plans reporting unit passed with a margin of less than 10% between fair value and book value. The fair value is based on discounted cash flows using earnings projections on in force business and future business growth. There could be a positive or negative impact on the result of step one in future periods if assumptions change about the level of economic capital, future business growth assumptions, earnings projections or the weighted average cost of capital.

The Individual Life reporting unit completed the second step of the annual goodwill impairment test resulting in an implied goodwill value that was in excess of its carrying value. Even though the fair value of the reporting unit was lower than its carrying value, the implied level of goodwill in Individual Life exceeded the carrying amount of goodwill. In the hypothetical purchase accounting required by the step two of the goodwill impairment test, the implied present value of future profits was substantially lower than that of the DAC asset removed in purchase accounting. A higher discount rate was used for calculating the present value of future profits as compared to that used for calculating the present value of estimated gross profits for DAC. As a result, in the hypothetical purchase accounting, implied goodwill exceeded the carrying amount of goodwill.

The Company completed its annual goodwill assessment for the Federal Trust Corporation (“FTC”) reporting unit within Corporate on June 30, 2010. Downward pressure on valuations in general and depressed prices in the banking sector in particular resulted in very few unassisted bank deals taking place. Thus, the Company’s annual assessment resulted in an impairment charge of $153 pre-tax. This amount was reclassified to discontinued operations during the second quarter of 2011.

The Company’s goodwill impairment test on January 1, 2009 for the individual reporting units within Wealth Management and Corporate resulted in a write-down of $32. As a result of rating agency downgrades of the Company’s financial strength ratings during the first quarter of 2009 and high credit spreads related to the Company, the Company believed its ability to generate new business in the Institutional reporting unit within Corporate would remain pressured for ratings-sensitive products. The Company believed the associated goodwill was impaired due to the pressure on new sales for ratings-sensitive business and the significant unrealized losses on investment portfolios. In addition, the Company completed its annual goodwill assessment for the individual reporting units within Property & Casualty Commercial and Consumer Markets on October 1, 2009, which resulted in no write-downs of goodwill for the year ended December 31, 2009.

Other Intangible Assets

Accounting Policy

Net amortization expense for other intangible assets is included in other insurance operating and other expenses in the Consolidated Statement of Operations. Acquired intangible assets primarily consist of distribution agreements and servicing intangibles, and are included in other assets in the Consolidated Balance Sheets. With the exception of Goodwill, the Company has no intangible assets with indefinite useful lives.

Results

Activity in acquired intangible assets that are subject to amortization is as follows:

	For the years ended December 31,
	2011			2010			2009
Gross carrying amount, beginning of year	$	89		$	90		$	121
Accumulated net amortization		25			18			47
Net carrying amount, beginning of year		64			72			74
Acquisition of business		—			(1	)		6
Amortization, net of the accretion of interest		(9	)		(7	)		(8	)
Net carrying amount, end of year		55			64			72
Accumulated net amortization		34			25			18
Gross carrying amount, end of year	$	89		$	89		$	90

In 2009, the Company completed two acquisitions that resulted in additional acquired intangible assets of $1 in distribution agreements and $5 in other. In 2009, the Company fully amortized acquired intangible assets for renewal rights and other of $22 and $14, respectively.

For the years ended December 31, 2011, 2010 and 2009, the Company did not capitalize any costs to extend or renew the term of a recognized intangible asset. As of December 31, 2011, the weighted average amortization period was 13 years for total acquired intangible assets. Net amortization expense for other intangibles is expected to be approximately $6 in each of the succeeding five years.

For a discussion of present value of future profits that continue to be subject to amortization and aggregate amortization expense, see Note 7.

XML

Employee Benefit Plans (Details 8) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Pension Benefits [Member]
Amounts recognized in other comprehensive income (loss)
Amortization of actuarial loss	$ (159)	$ (107)
Settlement loss		(20)
Amortization of prior service credit	9	9
Net loss arising during the year	237	298
Total	87	180
Other Postretirement Benefits [Member]
Amounts recognized in other comprehensive income (loss)
Amortization of prior service credit	1	1
Net loss arising during the year	24	7
Total	$ 25	$ 8

XML

Earnings (Loss) Per Common Share (Details Textual) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Jun. 26, 2009
Class of Warrant or Right [Line Items]
Exercise price of warrant	$ 9.699			$ 9.79
Earnings Loss Per Share (Textual) [Abstract]
Diluted effect of mandatory convertible preferred shares	20.7	16.4
Weighted average common shares outstanding and dilutive potential common shares assuming conversion of preferred shares	498.7
Diluted effect of warrants	31.9	32.3	14.6
Stock compensation plans	1.1	1.3	0.9
Weighted average common shares outstanding and dilutive potential common shares in absence of loss			361.8
Capital Purchase Program [Member]
Class of Warrant or Right [Line Items]
Exercise price of warrant	$ 9.699	9.790	9.790
Warrants Issued to Allianz [Member]
Class of Warrant or Right [Line Items]
Exercise price of warrant	$ 25.23	25.23	25.25

XML

Employee Benefit Plans (Details 12) (Pension Benefits [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Fair values of the company's pension plan assets
Total pension plan assets at fair value	$ 4,519	$ 3,951
Short-term Investments [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	668	481
Corporate [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	744	885
RMBS [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	345	459
U.S. Treasuries [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	878	337
Foreign govt./govt. agencies [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	56	63
CMBS [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	117	175
Other fixed income [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	74	63
Large cap domestic [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	570	496
Mid cap domestic [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	52	62
Small cap domestic [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	38	47
International [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	217	248
Other equities [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	1
Hedge Funds [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	759	635
Level 1 [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	485	439
Level 1 [Member] | Short-term Investments [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	119	75
Level 1 [Member] | U.S. Treasuries [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	59	7
Level 1 [Member] | Mid cap domestic [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	52	62
Level 1 [Member] | Small cap domestic [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	38	47
Level 1 [Member] | International [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	217	248
Level 1 [Member] | Hedge Funds [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	0
Level 2 [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	3,254	2,855
Level 2 [Member] | Short-term Investments [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	549	406
Level 2 [Member] | Corporate [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	741	882
Level 2 [Member] | RMBS [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	334	450
Level 2 [Member] | U.S. Treasuries [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	819	330
Level 2 [Member] | Foreign govt./govt. agencies [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	53	61
Level 2 [Member] | CMBS [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	117	174
Level 2 [Member] | Other fixed income [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	70	56
Level 2 [Member] | Large cap domestic [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	570	496
Level 2 [Member] | Other equities [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	1
Level 2 [Member] | Hedge Funds [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	0
Level 3 [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	780	657
Level 3 [Member] | Short-term Investments [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value		0
Level 3 [Member] | Corporate [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	3	3
Level 3 [Member] | RMBS [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	11	9
Level 3 [Member] | Foreign govt./govt. agencies [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	3	2
Level 3 [Member] | CMBS [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value		1
Level 3 [Member] | Other fixed income [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	4	7
Level 3 [Member] | Hedge Funds [Member]
Fair values of the company's pension plan assets
Total pension plan assets at fair value	$ 759	$ 635

XML

Goodwill and Other Intangible Assets (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Acquired intangible assets subject to amortization
Gross carrying amount, beginning of year	$ 89	$ 90	$ 121
Accumulated net amortization	34	25	18	47
Net carrying amount, Beginning of year	64	72	74
Acquisition of business	0	(1)	6
Amortization, net of the accretion of interest	(9)	(7)	(8)
Net carrying amount, end of year	55	64	72
Gross carrying amount, end of year	89	89	90
Accumulated net amortization, end of year	$ 34	$ 25	$ 18	$ 47

XML

Reinsurance

12 Months Ended

Dec. 31, 2011

Reinsurance [Abstract]

Reinsurance

6. Reinsurance

Accounting Policy

The Company cedes insurance to affiliated and unaffiliated insurers in order to limit its maximum losses and to diversify its exposures and provide statutory surplus relief. Such arrangements do not relieve the Company of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company also assumes reinsurance from other insurers and is a member of and participates in reinsurance pools and associations. Assumed reinsurance refers to the Company’s acceptance of certain insurance risks that other insurance companies have underwritten.

Reinsurance accounting is followed for ceded and assumed transactions that provide indemnification against loss or liability relating to insurance risk (i.e. risk transfer). To meet risk transfer requirements, a reinsurance agreement must include insurance risk, consisting of underwriting, investment, and timing risk, and a reasonable possibility of a significant loss to the reinsurer. If the ceded and assumed transactions do not meet risk transfer requirements, the Company accounts for these transactions as financing transactions.

Premiums, benefits, losses and loss adjustment expenses reflect the net effects of ceded and assumed reinsurance transactions. Included in other assets are prepaid reinsurance premiums, which represent the portion of premiums ceded to reinsurers applicable to the unexpired terms of the reinsurance contracts. Included in reinsurance recoverables are balances due from reinsurance companies for paid and unpaid losses and loss adjustment expenses and are presented net of an allowance for uncollectible reinsurance.

The Company also is a member of and participates in several reinsurance pools and associations. The Company evaluates the financial condition of its reinsurers and concentrations of credit risk. Reinsurance is placed with reinsurers that meet strict financial criteria established by the Company. As of December 31, 2011, 2010 and 2009, the Company had no reinsurance-related concentrations of credit risk greater than 10% of the Company’s stockholders’ equity.

Results

The Company is involved in both the cession and assumption of insurance with affiliated and unaffiliated insurers. As of December 31, 2011, 2010 and 2009, the Company’s policy for the largest amount of life insurance retained on any one life by any company was $10.

Life insurance fees, earned premiums and other were comprised of the following:

	For the years ended December 31,
	2011			2010			2009
Gross fee income, earned premiums and other	$	9,342		$	9,482		$	9,419
Reinsurance assumed		134			192			162
Reinsurance ceded		(524	)		(576	)		(484	)
Net fee income, earned premiums and other	$	8,952		$	9,098		$	9,097

The Company reinsures certain of its risks to other reinsurers under yearly renewable term, coinsurance, and modified coinsurance arrangements, and variations thereto. Yearly renewable term and coinsurance arrangements result in passing all or a portion of the risk to the reinsurer. Generally, the reinsurer receives a proportionate amount of the premiums less an allowance for commissions and expenses and is liable for a corresponding proportionate amount of all benefit payments. Modified coinsurance is similar to coinsurance except that the cash and investments that support the liabilities for contract benefits are not transferred to the assuming company, and settlements are made on a net basis between the companies. Coinsurance with funds withheld is a form of coinsurance except that the investment assets that support the liabilities are withheld by the ceding company.

The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. Life insurance recoveries on ceded reinsurance agreements were $224, $275 and $305 for the years ended December 31, 2011, 2010, and 2009, respectively.

In addition, the Company has reinsured a portion of the risk associated with GMDB and GMWB riders of U.S. variable annuities, variable annuity contract and rider benefits of Hartford Life Insurance KK (“HLIKK”), an indirect wholly owned subsidiary, and GMDB and GMWB annuity contract and rider benefits of Hartford Life Limited Ireland (“HLL”), an indirect wholly owned subsidiary.

The effect of reinsurance on property and casualty premiums written and earned was as follows:

	For the years ended December 31,
Premiums Written	2011			2010			2009
Direct	$	10,368		$	10,070		$	10,185
Assumed		226			234			238
Ceded		(742	)		(619	)		(712	)
Net	$	9,852		$	9,685		$	9,711

Premiums Earned
Direct	$	10,337		$	10,105		$	10,386
Assumed		225			256			253
Ceded		(688	)		(668	)		(778	)
Net	$	9,874		$	9,693		$	9,861

Ceded losses, which reduce losses and loss adjustment expenses incurred, were $385, $598, and $286 for the years ended December 31, 2011, 2010, and 2009, respectively.

Reinsurance recoverables include balances due from reinsurance companies for paid and unpaid losses and loss adjustment expenses and are presented net of an allowance for uncollectible reinsurance. The reinsurance recoverables balance includes an estimate of the amount of gross losses and loss adjustment expense reserves that may be ceded under the terms of the reinsurance agreements, including incurred but not reported unpaid losses. The Company’s estimate of losses and loss adjustment expense reserves ceded to reinsurers is based on assumptions that are consistent with those used in establishing the gross reserves for business ceded to the reinsurance contracts. The Company calculates its ceded reinsurance projection based on the terms of any applicable facultative and treaty reinsurance, including an estimate of how incurred but not reported losses will ultimately be ceded by reinsurance agreements. Accordingly, the Company’s estimate of reinsurance recoverables is subject to similar risks and uncertainties as the estimate of the gross reserve for unpaid losses and loss adjustment expenses.

The allowance for uncollectible reinsurance was $290 as of December 31, 2011 and 2010. The allowance for uncollectible reinsurance reflects management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay. The Company analyzes recent developments in commutation activity between reinsurers and cedants, recent trends in arbitration and litigation outcomes in disputes between reinsurers and cedants and the overall credit quality of the Company’s reinsurers. Based on this analysis, the Company may adjust the allowance for uncollectible reinsurance or charge off reinsurer balances that are determined to be uncollectible. Where its contracts permit, the Company secures future claim obligations with various forms of collateral, including irrevocable letters of credit, secured trusts, funds held accounts and group-wide offsets.

Due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables become due, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or cash flows in a particular quarter or annual period.

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Deferred Policy Acquisition Costs and Present Value of Future Profits

12 Months Ended

Dec. 31, 2011

Deferred Policy Acquisition Costs and Present Value of Future Profits [Abstract]

Deferred Policy Acquisition Costs and Present Value of Future Profits

7. Deferred Policy Acquisition Costs and Present Value of Future Profits

Accounting Policy

The Company capitalizes acquisition costs that vary with and are primarily related to the acquisition of new and renewal insurance business. For life insurance products, the DAC asset, which includes the present value of future profits, related to most universal life-type contracts (including variable annuities) is amortized over the estimated life of the contracts acquired in proportion to the present value of estimated gross profits (“EGPs”). EGPs are also used to amortize other assets and liabilities in the Company’s Consolidated Balance Sheets, such as, sales inducement assets (“SIA”) and unearned revenue reserves (“URR”). Components of EGPs are used to determine reserves for universal life type contracts (including variable annuities) with death or other insurance benefits such as guaranteed minimum death, guaranteed minimum income and universal life secondary guarantee benefits. These benefits are accounted for and collectively referred to as death and other insurance benefit reserves and are held in addition to the account value liability representing policyholder funds.

For most contracts, the Company estimates gross profits over 20 years as EGPs emerging subsequent to that timeframe are immaterial. Products sold in a particular year are aggregated into cohorts. Future gross profits for each cohort are projected over the estimated lives of the underlying contracts, based on future account value projections for variable annuity and variable universal life products. The projection of future account values requires the use of certain assumptions including: separate account returns; separate account fund mix; fees assessed against the contract holder’s account balance; surrender and lapse rates; interest margin; mortality; and the extent and duration of hedging activities and hedging costs.

The Company determines EGPs from a single deterministic reversion to mean (“RTM”) separate account return projection which is an estimation technique commonly used by insurance entities to project future separate account returns. Through this estimation technique, the Company’s DAC model is adjusted to reflect actual account values at the end of each quarter. Through consideration of recent market returns, the Company will unlock, or adjust, projected returns over a future period so that the account value returns to the long-term expected rate of return, providing that those projected returns do not exceed certain caps or floors. This Unlock for future separate account returns is determined each quarter.

In the third quarter of each year, the Company completes a comprehensive non-market related policyholder behavior assumption study and incorporates the results of those studies into its projection of future gross profits. Additionally, throughout the year, the Company evaluates various aspects of policyholder behavior and periodically revises its policyholder assumptions as credible emerging data indicates that changes are warranted. Upon completion of an assumption study or evaluation of credible new information, the Company will revise its assumptions to reflect its current best estimate. These assumption revisions will change the projected account values and the related EGPs in the DAC, SIA and URR amortization models, as well as, the death and other insurance benefit reserving models.

All assumption changes that affect the estimate of future EGPs including the update of current account values, the use of the RTM estimation technique and policyholder behavior assumptions are considered an Unlock in the period of revision. An Unlock adjusts the DAC, SIA, URR and death and other insurance benefit reserve balances in the Consolidated Balance Sheets with an offsetting benefit or charge in the Consolidated Statements of Operations in the period of the revision. An Unlock that results in an after-tax benefit generally occurs as a result of actual experience or future expectations of product profitability being favorable compared to previous estimates. An Unlock that results in an after-tax charge generally occurs as a result of actual experience or future expectations of product profitability being unfavorable compared to previous estimates.

An Unlock revises EGPs to reflect the Company’s current best estimate assumptions. The Company also tests the aggregate recoverability of DAC by comparing the existing DAC balance to the present value of future EGPs.

For property and casualty insurance products, costs are deferred and amortized ratably over the period the related premiums are earned. Deferred acquisition costs are reviewed to determine if they are recoverable from future income, and if not, are charged to expense. Anticipated investment income is considered in the determination of the recoverability of DACs. For the years ended December 31, 2011, 2010 and, 2009 no amount of DAC was charged to expense based on the determination of recoverability.

Results

Changes in the DAC balance are as follows:

	2011			2010			2009
Balance, January 1	$	9,857		$	10,686		$	13,248
Deferred Costs		2,608			2,648			2,853
Amortization — DAC		(2,920	)		(2,665	)		(3,247	)
Amortization — DAC from discontinued operations		—			(17	)		(10	)
Amortization — Unlock benefit (charge), pre-tax [1]		(507	)		138			(1,010	)
Adjustments to unrealized gains and losses on securities available-for-sale and other [2]		(377	)		(1,159	)		(1,031	)
Effect of currency translation		83			215			(39	)
Cumulative effect of accounting change, pre-tax [3]		—			11			(78	)
Balance, December 31	$	8,744		$	9,857		$	10,686

[1]	The most significant contributors to the Unlock charge recorded during the year ended December 31, 2011 were assumption changes which reduced expected future gross profits including additional costs associated with implementing the Japan hedging strategy and the U.S. variable annuity macro hedge program, as well as actual separate account returns below our aggregated estimated return.
	The most significant contributors to the Unlock benefit recorded during the year ended December 31, 2010 were actual separate account returns being above our aggregated estimated return. Also included in the benefit are assumption updates related to benefits from withdrawals and lapses, offset by hedging, annuitization estimates on Japan products, and long-term expected rate of return updates.
	The most significant contributors to the Unlock charge recorded during the year ended December 31, 2009 were the results of actual separate account returns being significantly below our aggregated estimated return for the first quarter of 2009, partially offset by actual returns being greater than our aggregated estimated return for the period from April 1, 2009 to December 31, 2009.
[2]	The most significant contributor to the adjustments was the effect of declining interest rates, resulting in unrealized gains on securities classified in AOCI. Other includes a $34 decrease as a result of the disposition of DAC from the sale of the Hartford Investment Canadian Canada in 2010.
[3]	For the year ended December 31, 2010 the effect of adopting new accounting guidance for embedded credit derivatives resulted in a decrease to retained earnings and, as a result, a DAC benefit. In addition, an offsetting amount was recorded in unrealized losses as unrealized losses decreased upon adoption of the new accounting guidance. For the year ended December 31, 2009 the effect of adopting new accounting guidance for investments other- than- temporarily impaired resulted in an increase to retained earnings and, as a result, a DAC charge. In addition, an offsetting amount was recorded in unrealized losses as unrealized losses increased upon adoption of the new accounting guidance.

As of December 31, 2011, estimated future net amortization expense of present value of future profits for the succeeding five years is $39, $58, $24, $23 and $22 in 2012, 2013, 2014, 2015 and 2016, respectively.

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Equity (Details Textual) (USD $)			3 Months Ended		1 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Mar. 31, 2010 Series E Preferred Stock [Member] Private Placement Purchase Agreement [Member]	Jun. 30, 2010 Series E Preferred Stock [Member] Private Placement Purchase Agreement [Member]	Oct. 31, 2008 Series D Non-Voting Preferred Stock [Member] Investment Agreement with Allianz SE [Member]	Oct. 17, 2008 Series D Non-Voting Preferred Stock [Member] Investment Agreement with Allianz SE [Member]	Jan. 09, 2009 Common Stock Contingent to Preferred Stock Series D Conversion [Member] Investment Agreement with Allianz SE [Member]
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, shares authorized	50,000,000	50,000,000
Convertible Preferred Stock, Shares Issued	575,000	575,000				6,048,387
Terms of conversion of Series D Preferred Stock into common stock					one for four
Number of common shares issued upon conversion of Series D Preferred Stock							24,193,548
Cumulative dividend on Series E preferred stock			$ 0.05
Preferred stock, liquidation preference per share	$ 1,000	$ 1,000		$ 1,000

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Condensed Financial Information of The Hartford Financial Services Group, Inc. (Registrant) (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Consolidated Statements of Operations
Net investment income									$ 2,913	$ 3,590	$ 7,205
Net realized capital gains (losses)									145	611	2,004
Total revenues	5,638	4,520	5,401	6,308	5,930	6,602	3,265	6,257	21,859	22,049	24,433
Interest expense									508	508	476
Total benefits, losses and expenses	5,546	4,624	5,566	5,898	5,171	5,685	3,121	5,722	21,629	19,693	26,154
Income tax expense (benefit)									346	(612)	838
Net income (loss)	127		24	511	619	666	76	319	662	1,680	(887)
Parent Company [Member]
Consolidated Statements of Operations
Net investment income									2	5	8
Net realized capital gains (losses)									(5)	(5)	(231)
Total revenues									(3)		(223)
Interest expense									490	489	457
Other expenses									(41)	11	8
Total benefits, losses and expenses									449	500	465
Loss before income taxes and earnings (losses) of subsidiaries									(452)	(500)	(688)
Income tax expense (benefit)									(154)	(170)	(157)
Loss before earnings (losses) of subsidiaries									(298)	(330)	(531)
Earnings (losses) of subsidiaries									960	2,010	(356)
Net income (loss)									$ 662	$ 1,680	$ (887)

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Separate Accounts, Death Benefits and Other Insurance Benefit Features

12 Months Ended

Dec. 31, 2011

Separate Accounts, Death Benefits and Other Insurance Benefit Features [Abstract]

Separate Accounts, Death Benefits and Other Insurance Benefit Features

9. Separate Accounts, Death Benefits and Other Insurance Benefit Features

Accounting Policy

The Company records the variable portion of individual variable annuities, 401(k), institutional, 403(b)/457, private placement life and variable life insurance products within separate accounts. Separate account assets are reported at fair value and separate account liabilities are reported at amounts consistent with separate account assets. Investment income and gains and losses from those separate account assets accrue directly to the policyholder, who assumes the related investment risk, and are offset by the related liability changes reported in the same line item in the Consolidated Statements of Operations. The Company earns fees for investment management, certain administrative expenses, and mortality and expense risks assumed which are reported in fee income.

Certain contracts classified as universal life-type include death and other insurance benefit features including GMDB and GMIB, offered with variable annuity contracts, or secondary guarantee benefits offered with universal life (“UL”) insurance contracts. GMDBs and GMIBs have been written in various forms as described in this note. UL secondary guarantee benefits ensure that the universal life 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. These death and other insurance benefit features require an additional liability be held above the account value liability representing the policyholders’ funds. This liability is reported in reserve for future policy benefits in the Company’s Consolidated Balance Sheets. Changes in the death and other insurance benefit reserves are recorded in benefits, losses and loss adjustment expenses in the Company’s Consolidated Statements of Operations.

The death and other insurance benefit liability is determined by estimating the expected present value of the benefits in excess of the policyholder’s expected account value in proportion to the present value of total expected assessments. The liability is accrued as actual assessments are recorded. The expected present value of benefits and assessments are generally derived from a set of stochastic scenarios, that have been calibrated to our RTM separate account returns, and assumptions including market rates of return, volatility, discount rates, lapse rates and mortality experience. Consistent with the Company’s policy on the Unlock, the Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefits, losses and loss adjustment expense. For further information on the Unlock, see Note 7 Deferred Policy Acquisition Costs and Present Value of Future Benefits.

The Company reinsures a portion of its in-force GMDB and UL secondary guarantees. The death and other insurance benefit reserves, net of reinsurance, are established by estimating the expected value of net reinsurance costs and death and other insurance benefits in excess of the projected account balance. The additional death and other insurance benefits and net reinsurance costs are recognized ratably over the accumulation period based on total expected assessments.

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		220			122			53
Paid		(222	)		(165	)		—
Unlock		53			287			62
Currency translation adjustment		—			35			—
Liability balance as of December 31, 2011	$	1,104		$	975		$	228
Reinsurance recoverable asset, as of January 1, 2011	$	686		$	36		$	30
Incurred		128			18			(8	)
Paid		(143	)		(30	)		—
Unlock		53			15			—
Currency translation adjustment		—			1			—
Reinsurance recoverable asset, as of December 31, 2011	$	724		$	40		$	22

				International			UL Secondary
	U.S. GMDB			GMDB/GMIB			Guarantees
Liability balance as of January 1, 2010	$	1,233		$	599		$	76
Incurred		239			103			39
Paid		(294	)		(134	)		—
Unlock		(125	)		39			(2	)
Currency translation adjustment		—			89			—
Liability balance as of December 31, 2010	$	1,053		$	696		$	113
Reinsurance recoverable asset, as of January 1, 2010	$	787		$	51		$	22
Incurred		139			(26	)		8
Paid		(176	)		1			—
Unlock		(64	)		5			—
Currency translation adjustment		—			5			—
Reinsurance recoverable asset, as of December 31, 2010	$	686		$	36		$	30

The following table provides details concerning GMDB and GMIB exposure as of December 31, 2011:

Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
					Retained Net
	Account		Net Amount		Amount		Weighted Average
	Value		at Risk		at Risk		Attained Age of
Maximum anniversary value (“MAV”) [1]	(“AV”) [8]		(“NAR”) [10]		(“RNAR”) [10]		Annuitant
MAV only	$	20,718	$	5,998	$	1,500		68
With 5% rollup [2]		1,469		521		181		68
With Earnings Protection Benefit Rider (“EPB”) [3]		5,378		940		104		65
With 5% rollup & EPB		585		169		35		68
Total MAV		28,150		7,628		1,820
Asset Protection Benefit (“APB”) [4]		22,343		3,139		2,042		66
Lifetime Income Benefit (“LIB”) — Death Benefit [5]		1,095		120		120		64
Reset [6] (5-7 years)		3,139		307		304		68
Return of Premium (“ROP”) [7]/Other		21,512		876		850		65
Subtotal U.S. GMDB		76,239		12,070		5,136		67
Less: General Account Value with U.S. GMDB		7,251
Subtotal Separate Account Liabilities with GMDB		68,988
Separate Account Liabilities without U.S. GMDB		74,882
Total Separate Account Liabilities	$	143,870
Japan GMDB [9], [11]	$	29,234	$	10,857	$	9,413		70
Japan GMIB [9], [11]	$	27,282	$	7,502	$	7,502		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 $34.1 billion and $33.9 billion as of December 31, 2011 and December 31, 2010, respectively. The GRB related to the Japan GMAB and GMWB was $701 as of December 31, 2011 and $707 as of December 31, 2010. 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 December 31, 2011, 55% of the GMDB RNAR and 65% 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 December 31, 2011		As of December 31, 2010
Equity securities (including mutual funds)	$	61,472	$	75,601
Cash and cash equivalents		7,516		8,365
Total	$	68,988	$	83,966

As of December 31, 2011 and December 31, 2010, approximately 17% and 15%, respectively, of the equity securities above were invested in fixed income securities through these funds and approximately 83% and 85%, respectively, were invested in equity securities.

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

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Segment Information (Details 3) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Segment Reporting Information [Line Items]
Total Amortization of deferred policy acquisition costs and present value of future profits	$ 3,427	$ 2,527	$ 4,257
Property & Casualty Commercial [Member]
Segment Reporting Information [Line Items]
Total Amortization of deferred policy acquisition costs and present value of future profits	1,356	1,353	1,393
Group Benefits [Member]
Segment Reporting Information [Line Items]
Total Amortization of deferred policy acquisition costs and present value of future profits	55	61	61
Consumer Markets [Member]
Segment Reporting Information [Line Items]
Total Amortization of deferred policy acquisition costs and present value of future profits	639	667	674
Individual Annuity [Member]
Segment Reporting Information [Line Items]
Total Amortization of deferred policy acquisition costs and present value of future profits	483	(56)	1,339
Individual Life [Member]
Segment Reporting Information [Line Items]
Total Amortization of deferred policy acquisition costs and present value of future profits	221	119	314
Retirement Plans [Member]
Segment Reporting Information [Line Items]
Total Amortization of deferred policy acquisition costs and present value of future profits	134	27	56
Mutual Funds [Member]
Segment Reporting Information [Line Items]
Total Amortization of deferred policy acquisition costs and present value of future profits	47	51	50
Life Other Operations [Member]
Segment Reporting Information [Line Items]
Total Amortization of deferred policy acquisition costs and present value of future profits	$ 492	$ 305	$ 370

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Reserves for Future Policy Benefits and Unpaid Losses and Loss Adjustment Expenses (Details 2) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Reserve Development
Reinsurance recoverables, Beginning Balance	$ 4,862
Add provision for unpaid losses and loss adjustment expenses
Prior years	367	(196)	(186)
Less payment
Reinsurance recoverables, Ending Balance	4,768	4,862
Property, Liability and Casualty Insurance Segment [Member]
Reserve Development
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	21,025	21,651	21,933
Reinsurance recoverables, Beginning Balance	3,077	3,441	3,586
Beginning liabilities for unpaid losses and loss adjustment expenses, net	18,517	17,948	18,210	18,347
Add provision for unpaid losses and loss adjustment expenses
Current year	7,420	6,768	6,596
Prior years	367	(196)	(186)
Total provision for unpaid losses and loss adjustment expenses	7,787	6,572	6,410
Less payment
Current year	3,181	2,952	2,776
Prior years	4,037	3,882	3,771
Total payments	7,218	6,834	6,547
Ending liabilities for unpaid losses and loss adjustment expenses, net	18,517	17,948	18,210	18,347
Reinsurance recoverables, Ending Balance	3,033	3,077	3,441
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$ 21,550	$ 21,025	$ 21,651

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Investments and Derivative Instruments (Details 8) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Amortized Cost	$ 5,830	$ 4,644
Valuation Allowance	(102)	(155)	(366)	(26)
Mortgage Loans	5,728	4,489
Commercial [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Amortized Cost	5,830	4,492
Valuation Allowance	(102)	(152)
Mortgage Loans	5,728	4,340
Residential [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Amortized Cost	0	152
Valuation Allowance	0	(3)
Mortgage Loans	$ 0	$ 149

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Segment Information (Details 5) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
Total assets	$ 304,064	$ 318,346
Property & Casualty Commercial [Member]
Segment Reporting Information [Line Items]
Total assets	24,692	23,736
Group Benefits [Member]
Segment Reporting Information [Line Items]
Total assets	9,485	9,028
Consumer Markets [Member]
Segment Reporting Information [Line Items]
Total assets	6,513	6,778
Individual Annuity [Member]
Segment Reporting Information [Line Items]
Total assets	87,055	101,144
Individual Life [Member]
Segment Reporting Information [Line Items]
Total assets	17,930	16,538
Retirement Plans [Member]
Segment Reporting Information [Line Items]
Total assets	35,410	34,152
Mutual Funds [Member]
Segment Reporting Information [Line Items]
Total assets	307	301
Life Other Operations [Member]
Segment Reporting Information [Line Items]
Total assets	111,407	113,065
Property and Casualty Other Operations [Member]
Segment Reporting Information [Line Items]
Total assets	4,639	4,733
Corporate [Member]
Segment Reporting Information [Line Items]
Total assets	$ 6,626	$ 8,871

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Investments and Derivative Instruments (Details Textual 2) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Variable Interest Entity [Line Items]
Company's maximum exposure to the loss of the contingent capital facility	$ 36	$ 302
Non-Consolidated VIEs [Member]
Variable Interest Entity [Line Items]
Variable interest entity consolidated carrying amount assets and liabilities	28	32
Company's maximum exposure to the loss of the contingent capital facility	$ 3	$ 4

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Segment Information (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenues From External Customers And Long Lived Assets [Line Items]
Revenues	$ 5,638	$ 4,520	$ 5,401	$ 6,308	$ 5,930	$ 6,602	$ 3,265	$ 6,257	$ 21,859	$ 22,049	$ 24,433
UNITED STATES [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Revenues									21,561	22,140	20,189
JAPAN [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Revenues									135	(329)	3,816
Other [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Revenues									$ 163	$ 238	$ 428

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Stock Compensation Plans (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Stock based Compensation Plans
Stock-based compensation plans expense	$ 53	$ 94	$ 72
Income tax benefit	(19)	(33)	(20)
Total stock-based compensation plans expense, after-tax	$ 34	$ 61	$ 52

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Investments and Derivative Instruments (Details 15) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Notional Amount	$ 141,436	$ 136,854
Fair Value	(458)	(547)
Macro Hedge Program [Member] | U.S. [Member]
Derivative [Line Items]
Notional Amount	6,819	13,057
Fair Value	357	203
Macro Hedge Program [Member] | International [Member]
Derivative [Line Items]
Notional Amount	33,726	14,873
Fair Value	750	254
Currency forwards [Member] | Macro Hedge Program [Member] | International [Member]
Derivative [Line Items]
Notional Amount	8,622	4,951
Fair Value	446	166
Currency options [Member] | Macro Hedge Program [Member] | International [Member]
Derivative [Line Items]
Notional Amount	7,357	5,296
Fair Value	127	62
Equity futures [Member] | Macro Hedge Program [Member] | U.S. [Member]
Derivative [Line Items]
Notional Amount	59	166
Fair Value	0	0
Equity futures [Member] | Macro Hedge Program [Member] | International [Member]
Derivative [Line Items]
Notional Amount	3,835	1,002
Fair Value	0	0
Equity options [Member] | Macro Hedge Program [Member] | U.S. [Member]
Derivative [Line Items]
Notional Amount	6,760	12,891
Fair Value	357	203
Equity options [Member] | Macro Hedge Program [Member] | International [Member]
Derivative [Line Items]
Notional Amount	1,565	1,073
Fair Value	74	4
Equity swaps [Member] | Macro Hedge Program [Member] | International [Member]
Derivative [Line Items]
Notional Amount	392	369
Fair Value	(8)	1
Interest rate futures [Member] | Macro Hedge Program [Member] | International [Member]
Derivative [Line Items]
Notional Amount	739	0
Fair Value	0	0
Interest rate swaps [Member] | Macro Hedge Program [Member] | International [Member]
Derivative [Line Items]
Notional Amount	11,216	2,182
Fair Value	$ 111	$ 21

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Income Tax (Details Textual) (USD $)	3 Months Ended		12 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Tax (Textual) [Abstract]
Current income tax receivable			$ 459,000,000
Current income tax payable				78,000,000
Income Tax (Additional Textual) [Abstract]
Income (loss) from continuing operations before income taxes, domestic			466,000,000	2,133,000,000	(1,365,000,000)
Income (loss) from continuing operations before income taxes, foreign			(236,000,000)	224,000,000	(356,000,000)
Expected tax benefit attributable to net operating losses			2,239,000,000	327,000,000
Expected tax benefit attributable to net operating losses, domestic			1,880,000,000	17,000,000
U.S. NOL carryforward expiration dates			2013-2021
Expected tax benefit attributable to net operating losses, foreign			359,000,000	310,000,000
Valuation Allowance			95,000,000	173,000,000
Amount of valuation allowance released	86,000,000
Percentage of valuation allowance released associated with investment realized capital losses	100.00%
Net Deferred Tax Asset			1,398,000,000	3,725,000,000
Ordinary deferred tax assets			1,800,000,000
Capital deferred tax assets			361,000,000
Gross deferred tax assets realized capital losses			847,000,000
Gross deferred tax liabilities unrealized capital gains			1,208,000,000
Dividends received deduction settlement benefit		52,000,000
Interest income			5,000,000
Interest expense				2,000,000	7,000,000
Interest accrued			6,000,000	1,000,000
JAPAN [Member]
Income Tax (Textual) [Abstract]
Current income tax payable			$ 46,000,000	$ 30,000,000

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Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2011

Valuation and Qualifying Accounts [Abstract]

Valuation and Qualifying Account

SCHEDULE V

VALUATION AND QUALIFYING ACCOUNTS

(In millions)

			Charged to					Write-offs/
	Balance		Costs and			Translation		Payments/			Balance
	January 1,		Expenses			Adjustment		Other			December 31,
2011
Allowance for doubtful accounts and other	$	119	$	45		$	—	$	(45	)	$	119
Allowance for uncollectible reinsurance		290		5			—		(5	)		290
Valuation allowance on mortgage loans		155		26			—		(79	)		102
Valuation allowance for deferred taxes		173		(78	)		—		—			95
2010
Allowance for doubtful accounts and other	$	121	$	53		$	—	$	(55	)	$	119
Allowance for uncollectible reinsurance		335		11			—		(56	)		290
Valuation allowance on mortgage loans		366		157			—		(368	)		155
Valuation allowance for deferred taxes		86		87			—		—			173
2009
Allowance for doubtful accounts and other	$	125	$	53		$	—	$	(57	)	$	121
Allowance for uncollectible reinsurance		379		11			—		(55	)		335
Valuation allowance on mortgage loans		26		408			—		(68	)		366
Valuation allowance for deferred taxes		75		11			—		—			86

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Employee Benefit Plans (Details 1)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Pension Benefits [Member]
Weighted average assumptions used in calculating the net periodic benefit cost for the company's other post retirement plans
Discount rate	4.75%	5.50%	6.25%
Expected long-term rate of return on plan assets	7.30%	7.30%	7.30%
Rate of increase in compensation levels	3.75%	4.00%	4.25%
Other Postretirement Benefits [Member]
Weighted average assumptions used in calculating the net periodic benefit cost for the company's other post retirement plans
Discount rate	4.50%	5.25%	6.25%
Expected long-term rate of return on plan assets	7.30%	7.30%	7.30%

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Valuation and Qualifying Accounts (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Movement in Valuation allowance and reserves
Charged to Cost and Expense	$ 26	$ 157	$ 408
Write-offs/Payment/Other	(79)	(368)	(68)
Allowance for doubtful accounts and other [Member]
Movement in Valuation allowance and reserves
Balance, January 1	119	121	125
Charged to Cost and Expense	45	53	53
Translation Adjustment	0
Write-offs/Payment/Other	(45)	(55)	(57)
Balance, December 31	119	119	121
Allowance for uncollectible reinsurance [Member]
Movement in Valuation allowance and reserves
Balance, January 1	290	335	379
Charged to Cost and Expense	5	11	11
Translation Adjustment	0
Write-offs/Payment/Other	(5)	(56)	(55)
Balance, December 31	290	290	335
Valuation allowance on mortgage loans [Member]
Movement in Valuation allowance and reserves
Balance, January 1	155	366	26
Charged to Cost and Expense	26	157	408
Translation Adjustment	0
Write-offs/Payment/Other	(79)	(368)	(68)
Balance, December 31	102	155	366
Valuation allowance for deferred taxes [Member]
Movement in Valuation allowance and reserves
Balance, January 1	173	86	75
Charged to Cost and Expense	(78)	87	11
Translation Adjustment	0
Balance, December 31	$ 95	$ 173	$ 86

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Accumulated Other Comprehensive Income (Loss), Net of Tax (Tables)

12 Months Ended

Dec. 31, 2011

Equity [Abstract]

Components of Accumulated Other Comprehensive Income (Loss), Net of Tax.

The components of AOCI were as follows:

				Net Gain						Pension and
				(Loss) on			Foreign			Other			Accumulated
	Unrealized			Cash-Flow			Currency			Postretirement			Other
	Gain (Loss)			Hedging			Translation			Plan			Comprehensive
	on Securities			Instruments			Adjustments			Adjustment			Income (Loss)
For the year ended December 31, 2011
Balance, beginning of year	$	(696	)	$	385		$	488		$	(1,178	)	$	(1,001	)
Unrealized gain on securities [1] [2]		1,979			—			—			—			1,979
Change in other-than-temporary impairment losses recognized in other comprehensive income [1]		9			—			—			—			9
Change in net loss on cash-flow hedging instruments [1] [3]		—			131			—			—			131
Change in foreign currency translation adjustments [1]		—			—			112			—			112
Change in pension and other postretirement plan adjustment [1]		—			—			—			(73	)		(73	)
Balance, end of year	$	1,292		$	516		$	600		$	(1,251	)	$	1,157
For the year ended December 31, 2010
Balance, beginning of year	$	(2,713	)	$	257		$	199		$	(1,055	)	$	(3,312	)
Unrealized gain on securities [1] [2]		1,707			—			—			—			1,707
Change in other-than-temporary impairment losses recognized in other comprehensive income [1]		116			—			—			—			116
Cumulative effect of accounting change		194			—			—			—			194
Change in net loss on cash-flow hedging instruments [1] [3]		—			128			—			—			128
Change in foreign currency translation adjustments [1]		—			—			289			—			289
Change in pension and other postretirement plan adjustment [1]		—			—			—			(123	)		(123	)
Balance, end of year	$	(696	)	$	385		$	488		$	(1,178	)	$	(1,001	)
For the year ended December 31, 2009
Balance, beginning of year	$	(7,486	)	$	644		$	222		$	(900	)	$	(7,520	)
Unrealized gain on securities [1] [2]		5,909			—			—			—			5,909
Change in other-than-temporary impairment losses recognized in other comprehensive income [1]		(224	)		—			—			—			(224	)
Cumulative effect of accounting change		(912	)		—			—			—			(912	)
Change in net loss on cash-flow hedging instruments [1] [3]		—			(387	)		—			—			(387	)
Change in foreign currency translation adjustments [1]		—			—			(23	)		—			(23	)
Change in pension and other postretirement plan adjustment [1]		—			—			—			(155	)		(155	)
Balance, end of year	$	(2,713	)	$	257		$	199		$	(1,055	)	$	(3,312	)

[1] Included in the unrealized gain (loss) balance as of December 31, 2011, 2010 and 2009 was net unrealized gains (losses) credited to policyholders of $(65), $(87), and $(82), respectively. Included in the AOCI components were the following:

• Unrealized gain (loss) on securities is net of tax and deferred acquisition costs of $1,217, $3,574, and $2,358, for the years ended December 31, 2011, 2010 and 2009, respectively.

• Change in other-than-temporary impairment losses recognized in other comprehensive income is net of changes in the fair value of non-credit impaired securities of $112, $647 and $244 for the years ended December 31, 2011, 2010 and 2009, respectively, and net of tax and deferred acquisition costs of $(14). $(113) and $215 for the years ended December 31, 2011, 2010 and 2009, respectively.

• Net gain (loss) on cash-flow hedging instruments is net of tax of $71, $69, and $(208) for the years ended December 31, 2011, 2010 and 2009, respectively.

• Changes in foreign currency translation adjustments are net of tax of $60, $156 and $(12) for the years ended December 31, 2011, 2010 and 2009, respectively.

• Change in pension and other postretirement plan adjustment is net of tax of $(39), $(66), and $(86) for the years ended December 31, 2011, 2010 and 2009, respectively.

[2]	Net of reclassification adjustment for gains (losses) realized in net income of $88, $(78), and $(1,202) for the years ended for the years ended December 31, 2011, 2010 and 2009, respectively.
[3]	Net of amortization adjustment of $125, $94, and $49 to net investment income for the years ended December 31, 2011, 2010 and 2009, respectively.

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Debt

12 Months Ended

Dec. 31, 2011

Debt [Abstract]

Debt

14. Debt

The Hartford’s long-term debt securities are issued by either The Hartford Financial Services Group, Inc. (“HFSG Holding Company”) or Hartford Life, Inc. (“HLI”), an indirect wholly owned subsidiary, and are unsecured obligations of HFSG Holding Company or HLI and rank on a parity with all other unsecured and unsubordinated indebtedness of HFSG Holding Company or HLI.

Debt is carried net of discount. The following table presents short-term and long-term debt by issuance as of December 31, 2011 and 2010.

Short-Term Debt	2011		2010
Current maturities of long-term debt and capital lease obligations	$	—	$	400
Total Short-Term Debt	$	—	$	400
Long-Term Debt
Senior Notes and Debentures
4.625% Notes, due 2013		320		320
4.75% Notes, due 2014		200		200
4.0% Notes, due 2015		300		300
7.3% Notes, due 2015		200		200
5.5% Notes, due 2016		300		300
5.375% Notes, due 2017		499		499
6.3% Notes, due 2018		500		500
6.0% Notes, due 2019		500		500
5.5% Notes, due 2020		499		499
7.65% Notes, due 2027		149		149
7.375% Notes, due 2031		92		92
5.95% Notes, due 2036		298		298
6.625% Notes, due 2040		299		299
6.1% Notes, due 2041		325		324
Total Senior Notes and Debentures		4,481		4,480
Junior Subordinated Debentures
3 month LIBOR plus 295 basis points, Notes due 2033		—		5
8.125% Notes, due 2068		500		500
10.0% Notes, due 2068		1,235		1,222
Total Junior Subordinated Debentures		1,735		1,727
Total Long-Term Debt	$	6,216	$	6,207

The effective interest rates on the 6.1% senior notes due 2041 and the 10.0% junior subordinated debentures due 2068 are 7.9% and 15.3%, respectively. The effective interest rate on the remaining notes does not differ materially from the stated rate.

Interest Expense

The following table presents interest expense incurred for 2011, 2010, and 2009, respectively.

	For the years ended December 31,
	2011		2010		2009
Short-term debt	$	—	$	—	$	3
Long-term debt		508		508		473
Total interest expense	$	508	$	508	$	476

Short-Term Debt

Hartford Life Insurance Company (“HLIC”), an indirect wholly owned subsidiary, became a member of the Federal Home Loan Bank of Boston (“FHLBB”) in May 2011. Membership allows HLIC access to collateralized advances, which may be used to support various spread-based business and enhance liquidity management. The Connecticut Department of Insurance (“CTDOI”) will permit HLIC to pledge up to $1.48 billion in qualifying assets to secure FHLBB advances for 2012. The amount of advances that can be taken are dependent on the asset types pledged to secure the advances. The pledge limit is recalculated annually based on statutory admitted assets and capital and surplus. HLIC would need to seek the prior approval of the CTDOI if there were a desire to exceed these limits. As of December 31, 2011, HLIC had no advances outstanding under the FHLBB facility.

Senior Notes

On October 17, 2011, The Hartford repaid its $400, 5.25% senior notes at maturity.

Junior Subordinated Debentures

On June 6, 2008, the Company issued $500 aggregate principal amount of 8.125% fixed-to-floating rate junior subordinated debentures (the “8.125% debentures”) due June 15, 2068 for net proceeds of approximately $493, after deducting underwriting discounts and expenses from the offering. The debentures bear interest at an annual fixed rate of 8.125% from the date of issuance to, but excluding, June 15, 2018, payable semi-annually in arrears on June 15 and December 15. From and including June 15, 2018, the debentures will bear interest at an annual rate, reset quarterly, equal to three-month LIBOR plus 4.6025%, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year. The Company has the right, on one or more occasions, to defer the payment of interest on the debentures. The Company may defer interest for up to ten consecutive years without giving rise to an event of default. Deferred interest will accumulate additional interest at an annual rate equal to the annual interest rate then applicable to the 8.125% debentures. If the Company defers interest for five consecutive years or, if earlier, pays current interest during a deferral period, which may be paid from any source of funds, the Company will be required to pay deferred interest from proceeds from the sale of certain qualifying securities.

The 8.125% debentures carry a scheduled maturity date of June 15, 2038 and a final maturity date of June 15, 2068. During the 180-day period ending on a notice date not more than fifteen and not less than ten business days prior to the scheduled maturity date, the Company is required to use commercially reasonable efforts to sell certain qualifying replacement securities sufficient to permit repayment of the debentures at the scheduled maturity date. If any 8.125% debentures remain outstanding after the scheduled maturity date, the unpaid amount will remain outstanding until the Company has raised sufficient proceeds from the sale of qualifying replacement securities to permit the repayment in full of the debentures. If there are remaining 8.125% debentures at the final maturity date, the Company is required to redeem the 8.125% debentures using any source of funds.

Subject to the replacement capital covenant described below, the Company can redeem the 8.125% debentures at its option, in whole or in part, at any time on or after June 15, 2018 at a redemption price of 100% of the principal amount being redeemed plus accrued but unpaid interest. The Company can redeem the 8.125% debentures at its option prior to June 15, 2018 (a) in whole at any time or in part from time to time or (b) in whole, but not in part, in the event of certain tax or rating agency events relating to the 8.125% debentures, at a redemption price equal to the greater of 100% of the principal amount being redeemed and the applicable make-whole amount, in each case plus any accrued and unpaid interest.

In connection with the offering of the 8.125% debentures, the Company entered into a “replacement capital covenant” for the benefit of holders of one or more designated series of the Company’s indebtedness, initially the Company’s 6.1% notes due 2041. Under the terms of the replacement capital covenant, if the Company redeems the 8.125% debentures at any time prior to June 15, 2048 it can only do so with the proceeds from the sale of certain qualifying replacement securities.

On October 17, 2008, the Company entered into an Investment Agreement (the “Investment Agreement”), with Allianz SE (“Allianz”) under which, among other things, the Company agreed to issue and sell $1.75 billion of the Company’s 10% Fixed-to-Floating Rate Junior Subordinated Debentures due 2068 (the “10% debentures”) in a private placement to Allianz.

The 10% debentures due 2068 bear interest at an annual fixed rate of 10% from the date of issuance to, but excluding, October 15, 2018, payable semi-annually in arrears on April 15 and October 15. From and including October 15, 2018, the 10% debentures will bear interest at an annual rate, reset quarterly, equal to three-month LIBOR plus 6.824%, payable quarterly in arrears. The Company has the right, on one or more occasions, to defer the payment of interest on the 10% debentures. The Company may defer interest for up to ten consecutive years without giving rise to an event of default. Deferred interest will accumulate additional interest at an annual rate equal to the annual interest rate then applicable to the 10% debentures. If the Company defers interest for five consecutive years or, if earlier, pays current interest during a deferral period, which may be paid from any source of funds, the Company will be required to pay deferred interest from proceeds from the sale of certain qualifying securities.

In connection with the offering of the 10% debentures, the Company entered into a “Replacement Capital Covenant” for the benefit of holders of one or more designated series of the Company’s indebtedness, initially the Company’s 6.1% notes due 2041. Under the terms of the Replacement Capital Covenant, if the Company redeems the 10% debentures at any time prior to October 15, 2048 it can only do so with the proceeds from the sale of certain qualifying replacement securities. Subject to the Replacement Capital Covenant, the Company can redeem the 10% debentures at its option, in whole or in part, at any time on or after October 15, 2018 at a redemption price of 100% of the principal amount being redeemed plus accrued but unpaid interest.

Long-Term Debt Maturities

The following table reflects the Company’s long-term debt maturities.

2012	$	—
2013		320
2014		200
2015		500
2016		300
Thereafter		5,500

Shelf Registrations

On August 4, 2010, The Hartford filed with the Securities and Exchange Commission (the “SEC”) an automatic shelf registration statement (Registration No. 333-168532) for the potential offering and sale of debt and equity securities. The registration statement allows for the following types of securities to be offered: debt securities, junior subordinated debt securities, preferred stock, common stock, depositary shares, warrants, stock purchase contracts, and stock purchase units. In that The Hartford is a well-known seasoned issuer, as defined in Rule 405 under the Securities Act of 1933, the registration statement went effective immediately upon filing and The Hartford may offer and sell an unlimited amount of securities under the registration statement during the three-year life of the registration statement.

Contingent Capital Facility

The Hartford is party to a put option agreement that provides The Hartford with the right to require the Glen Meadow ABC Trust, a Delaware statutory trust, at any time and from time to time, to purchase The Hartford’s junior subordinated notes in a maximum aggregate principal amount not to exceed $500. Under the Put Option Agreement, The Hartford will pay the Glen Meadow ABC Trust premiums on a periodic basis, calculated with respect to the aggregate principal amount of Notes that The Hartford had the right to put to the Glen Meadow ABC Trust for such period. The Hartford has agreed to reimburse the Glen Meadow ABC Trust for certain fees and ordinary expenses. The Company holds a variable interest in the Glen Meadow ABC Trust where the Company is not the primary beneficiary. As a result, the Company did not consolidate the Glen Meadow ABC Trust. As of December 31, 2011, The Hartford has not exercised its right to require Glen Meadow ABC Trust to purchase the Notes. As a result, the Notes remain a source of capital for the HFSG Holding Company.

Commercial Paper and Revolving Credit Facility

The table below details the Company’s short-term debt programs and the applicable balances outstanding.

					Maximum Available As of				Outstanding As of
	Effective		Expiration		December 31,				December 31,
Description	Date		Date		2011		2010		2011		2010
Commercial Paper
The Hartford		11/10/86		N/A	$	2,000	$	2,000	$	—	$	—
Revolving Credit Facility
5-year revolving credit facility		8/9/07		8/9/12		1,900		1,900		—		—
Total Commercial Paper and Revolving Credit Facility					$	3,900	$	3,900	$	—	$	—

While the Company’s maximum borrowings available under its commercial paper program are $2.0 billion, the Company is dependent upon market conditions to access short-term financing through the issuance of commercial paper to investors. As of December 31, 2011, the Company has no commercial paper outstanding.

In January 2012, the Company entered into a senior unsecured revolving credit facility (the “Credit Facility”) that provides for borrowing capacity up to $1.75 billion (which is available in U.S. dollars, and in Euro, Sterling, Canadian dollars and Japanese Yen) through January 6, 2016 and terminated its $1.9 billion unsecured revolving credit facility due August 9, 2012. As of December 31, 2011, the Company was in compliance with all financial covenants under the terminated credit facility.

Of the total availability under the Credit Facility, up to $250 is available to support letters of credit issued on behalf of the Company or subsidiaries of the Company. Under the Credit Facility, the Company must maintain a minimum level of consolidated net worth of $16 billion. The minimum level of consolidated net worth, as defined, will be adjusted, upon the adoption of new DAC guidance, see Note 1, in the first quarter of 2012, by the lesser of approximately $1.0 billion, after-tax representing 70% of the adoption-related estimated DAC charge or $1.7 billion. The definition of consolidated net worth under the terms of the Credit Facility, excludes AOCI and includes the Company’s outstanding junior subordinated debentures and perpetual preferred securities, net of discount. In addition, the Company’s maximum ratio of consolidated total debt to consolidated total capitalization is 35%, and the ratio of consolidated total debt of subsidiaries to consolidated total capitalization is limited to 10%. The Company will certify compliance with the financial covenants for the syndicate of participating financial institutions on a quarterly basis.

The Hartford’s Japan operations also maintain two lines of credit in support of the subsidiary operations. Both lines of credit are in the amount of $65, or ¥5 billion, and individually have expiration dates of September 30, 2012 and January 3, 2013.

Consumer Notes

The Company issued consumer notes through its Retail Investor Notes Program prior to 2009. A consumer note is an investment product distributed through broker-dealers directly to retail investors as medium-term, publicly traded fixed or floating rate, or a combination of fixed and floating rate, notes. Consumer notes are part of the Company’s spread-based business and proceeds are used to purchase investment products, primarily fixed rate bonds. Proceeds are not used for general operating purposes. Consumer notes maturities may extend up to 30 years and have contractual coupons based upon varying interest rates or indexes (e.g. consumer price index) and may include a call provision that allows the Company to extinguish the notes prior to its scheduled maturity date. Certain Consumer notes may be redeemed by the holder in the event of death. Redemptions are subject to certain limitations, including calendar year aggregate and individual limits. The aggregate limit is equal to the greater of $1 or 1% of the aggregate principal amount of the notes as of the end of the prior year. The individual limit is $250 thousand per individual. Derivative instruments are utilized to hedge the Company’s exposure to market risks in accordance with Company policy. As of December 31, 2011, these consumer notes have interest rates ranging from 4% to 5% for fixed notes and, for variable notes, based on December 31, 2011 rates, either consumer price index plus 100 to 260 basis points, or indexed to the S&P 500, Dow Jones Industrials, foreign currency, or the Nikkei 225. The aggregate maturities of Consumer Notes are as follows: $155 in 2012, $78 in 2013, $13 in 2014, $30 in 2015, $18 in 2016, and $20 thereafter. For 2011, 2010 and 2009, interest credited to holders of consumer notes was $15, $25, and $51, respectively.

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Separate Accounts, Death Benefits and Other Insurance Benefit Features (Details 2) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Variable separate accounts	$ 68,988	$ 83,966
Equity securities (including mutual funds) [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Variable separate accounts	61,742	75,601
Cash and cash equivalents [Member]
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Variable separate accounts	$ 7,516	$ 8,365

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Sale of Subsidiaries and Joint Venture

12 Months Ended

Dec. 31, 2011

Sale of Subsidiaries and Joint Venture [Abstract]

Sale of Subsidiaries and Joint Venture

19. Sale of Assets, Joint Venture and Subsidiary

Servicing Agreement of Hartford Life Private Placement LLC

On November 22, 2011, the Company entered into an agreement with Philadelphia Financial Group, Inc. (“Philadelphia Financial”) whereby Philadelphia Financial will acquire certain assets that are used to administer the Company’s private placement life insurance (“PPLI”) businesses currently administered by Hartford Life Private Placement, LLC (“HLPP”), a subsidiary of the Company. The PPLI business administered by HLPP includes life insurance owned by banks, corporations and high net worth individuals, and group annuity policies. The transaction is expected to close in the second quarter of 2012, subject to regulatory approvals and closing conditions. Upon closing, Philadelphia Financial and the Company will enter into a servicing agreement whereby Philadelphia Financial will service the PPLI businesses administered by HLPP. The Company will retain certain corporate functions associated with this business as well as the mortality risk on the insurance policies. Under the terms of the transaction, Philadelphia Financial will receive certain future income from the policies and pay the Company $118 at closing, resulting in an estimated deferred gain between $65and $75 after-tax, which will be amortized over the estimated life of the underlying insurance policies. The actual amount may be different. The deferred gain is not expected to have a material impact on the Company’s results of operations in future periods. The assets and liabilities of the PPLI business are included in the Life Other Operations segment.

Sale of Joint Venture Interest in ICATU Hartford Seguros, S.A.

On November 23, 2009, the Company entered into a Share Purchase Agreement to sell its joint venture interest in ICATU Hartford Seguros, S.A. (“IHS”), its Brazilian insurance operation, to its partner, ICATU Holding S.A., for $135. The transaction closed in 2010, and the Company received cash proceeds of $130, which was net of capital gains tax withheld of $5. The investment in IHS was reported as an equity method investment in Other assets. As a result of the Share Purchase Agreement, the Company recorded in 2009, an asset impairment charge, net of unrealized capital gains and foreign currency translation adjustments, in net realized capital losses of $44, after-tax.

Sale of First State Management Group

On March 31, 2009, the Company sold First State Management Group, Inc. (“FSMG”), its core excess and surplus lines property business, to Beazley Group PLC (“Beazley”) for $27, resulting in a gain on sale of $12, after-tax. Included in the sale was approximately $4 in net assets of FSMG. The net assets sold to Beazley did not include invested assets, unearned premium or deferred policy acquisition costs related to the in-force book of business. Rather, the in-force book of business was ceded to Beazley under a separate reinsurance agreement, whereby the Company ceded $26 of unearned premium, net of $10 in ceding commission. Under the terms of the purchase and sale agreement, the Company continues to be obligated for all losses and loss adjustment expenses incurred on or before March 31, 2009. The retained net loss and loss adjustment expense reserves totaled $66 and $87 as of December 31, 2011 and 2010, respectively.

See Note 20 for sale of subsidiaries that met the criteria for discontinued operations.

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Sale of Subsidiaries and Joint Venture (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Sale of Subsidiaries and Joint Venture (Textual) [Abstract]
Sale of core excess and surplus lines property business	$ 278	$ 241	$ (7)
Net realized capital gain on disposal, net of tax	82	37
Unearned premium under separate reinsurance agreement	5,222	5,176
First Stage Management Group [Member]
Sale of Subsidiaries and Joint Venture (Textual) [Abstract]
Sale of core excess and surplus lines property business	27
Net realized capital gain on disposal, net of tax	12
Sale of net other assets	4
Unearned premium under separate reinsurance agreement	26
Net commission under separate reinsurance agreement	10
Retained net loss and ,loss adjustment expense reserves	66	87
ICATU Hartford Seguros, S.A. [Member]
Sale of Subsidiaries and Joint Venture (Textual) [Abstract]
Proceeds from sale of interest in joint venture	135
Cash proceeds, net of capital gain tax	130
Capital Gains Tax on Sale	5
Asset Impairment Charges Net of Unrealized Capital Gains and Foreign Currency Translation Adjustments After Tax	44
Hartford Life Private Placement LLC [Member]
Sale of Subsidiaries and Joint Venture (Textual) [Abstract]
Proceed from sale of subsidiary	118
Hartford Life Private Placement LLC [Member] | Maximum [Member]
Sale of Subsidiaries and Joint Venture (Textual) [Abstract]
Deferred Gain Recognized, after tax	65
Hartford Life Private Placement LLC [Member] | Minimum [Member]
Sale of Subsidiaries and Joint Venture (Textual) [Abstract]
Deferred Gain Recognized, after tax	$ 75

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Investments and Derivative Instruments (Details 18) (Cash flow hedges [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Derivative Instruments Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	$ 334	$ 302	$ (655)
Net Realized Capital Gains (Losses) Recognized in Income on Derivative (Ineffective Portion)	(4)	1	72
Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	132	105	(59)
Interest rate swaps [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	337	294	(461)
Net Realized Capital Gains (Losses) Recognized in Income on Derivative (Ineffective Portion)	(4)	2	(3)
Interest rate swaps [Member] | Net realized capital gains (losses) [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	9	18	11
Interest rate swaps [Member] | Net investment income (loss) [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	126	94	47
Foreign currency swaps [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain (Loss) Recognized in OCI on Derivative (Effective Portion)	(3)	8	(194)
Net Realized Capital Gains (Losses) Recognized in Income on Derivative (Ineffective Portion)		(1)	75
Foreign currency swaps [Member] | Net realized capital gains (losses) [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)	(3)	(7)	(119)
Foreign currency swaps [Member] | Net investment income (loss) [Member]
Derivative Instruments Gain (Loss) [Line Items]
Gain or (Loss) Reclassified from AOCI into Income (Effective Portion)			$ 2

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Debt (Tables)

12 Months Ended

Dec. 31, 2011

Debt [Abstract]

Short-Term Debt

Short-Term Debt	2011		2010
Current maturities of long-term debt and capital lease obligations	$	—	$	400
Total Short-Term Debt	$	—	$	400

Long-Term Debt

Long-Term Debt
Senior Notes and Debentures
4.625% Notes, due 2013		320		320
4.75% Notes, due 2014		200		200
4.0% Notes, due 2015		300		300
7.3% Notes, due 2015		200		200
5.5% Notes, due 2016		300		300
5.375% Notes, due 2017		499		499
6.3% Notes, due 2018		500		500
6.0% Notes, due 2019		500		500
5.5% Notes, due 2020		499		499
7.65% Notes, due 2027		149		149
7.375% Notes, due 2031		92		92
5.95% Notes, due 2036		298		298
6.625% Notes, due 2040		299		299
6.1% Notes, due 2041		325		324
Total Senior Notes and Debentures		4,481		4,480
Junior Subordinated Debentures
3 month LIBOR plus 295 basis points, Notes due 2033		—		5
8.125% Notes, due 2068		500		500
10.0% Notes, due 2068		1,235		1,222
Total Junior Subordinated Debentures		1,735		1,727
Total Long-Term Debt	$	6,216	$	6,207

Interest Expense

	For the years ended December 31,
	2011		2010		2009
Short-term debt	$	—	$	—	$	3
Long-term debt		508		508		473
Total interest expense	$	508	$	508	$	476

Long-Term Debt Maturities

2012	$	—
2013		320
2014		200
2015		500
2016		300
Thereafter		5,500

Commercial Paper and Revolving Credit Facility

					Maximum Available As of				Outstanding As of
	Effective		Expiration		December 31,				December 31,
Description	Date		Date		2011		2010		2011		2010
Commercial Paper
The Hartford		11/10/86		N/A	$	2,000	$	2,000	$	—	$	—
Revolving Credit Facility
5-year revolving credit facility		8/9/07		8/9/12		1,900		1,900		—		—
Total Commercial Paper and Revolving Credit Facility					$	3,900	$	3,900	$	—	$	—

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Reinsurance (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Life insurance fees, earned premiums and other
Gross fee income, earned premiums and other	$ 9,342	$ 9,482	$ 9,419
Reinsurance assumed	134	192	162
Reinsurance ceded	(524)	(576)	(484)
Net fee income, earned premiums and other	8,952	9,098	9,097
Premiums Written
Direct	10,368	10,070	10,185
Assumed	226	234	238
Ceded	(742)	(619)	(712)
Net	9,852	9,685	9,711
Premiums Earned
Direct	10,337	10,105	10,386
Assumed	225	256	253
Ceded	(688)	(668)	(778)
Net	$ 9,874	$ 9,693	$ 9,861

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Reinsurance (Tables)

12 Months Ended

Dec. 31, 2011

Reinsurance [Abstract]

Life insurance fees, earned premiums and other

	For the years ended December 31,
	2011			2010			2009
Gross fee income, earned premiums and other	$	9,342		$	9,482		$	9,419
Reinsurance assumed		134			192			162
Reinsurance ceded		(524	)		(576	)		(484	)
Net fee income, earned premiums and other	$	8,952		$	9,098		$	9,097

Effect of reinsurance on property and casualty premiums written and earned

	For the years ended December 31,
Premiums Written	2011			2010			2009
Direct	$	10,368		$	10,070		$	10,185
Assumed		226			234			238
Ceded		(742	)		(619	)		(712	)
Net	$	9,852		$	9,685		$	9,711

Premiums Earned
Direct	$	10,337		$	10,105		$	10,386
Assumed		225			256			253
Ceded		(688	)		(668	)		(778	)
Net	$	9,874		$	9,693		$	9,861

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Deferred Policy Acquisition Costs and Present Value of Future Profits (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Changes in deferred policy acquisition costs and present value of future profits
Balance, January 1	$ 9,857	$ 10,686	$ 13,248
Deferred Costs	2,608	2,648	2,853
Amortization - DAC	(2,920)	(2,655)	(3,247)
Amortization - DAC from discontinued operations		(17)	(10)
Amortization - Unlock benefit (charge), pre-tax [1]	(507)	138	(1,010)
Adjustments to unrealized gains and losses on securities available-for-sale and other [2]	(377)	(1,159)	(1,031)
Effect of currency translation	83	215	(39)
Cumulative effect of accounting change, pre tax [3]		11	(78)
Balance, December 31	$ 8,744	$ 9,857	$ 10,686

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Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
Fixed maturities, available-for-sale, at amortized cost	$ 78,978	$ 78,419
Fixed maturities, available-for-sale, variable interest entity assets	153	406
Fixed maturities, at fair value using the fair value option, variable interest entity assets	338	323
Equity securities, trading, at cost	32,928	33,899
Equity securities, available-for-sale, at cost	1,056	1,013
Mortgage loans loss, net of allowances	102	155
Limited partnerships and other alternative investments, variable interest entity assets	7	14
Other liabilities, variable interest entity liabilities	$ 471	$ 394
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock authorized	50,000,000	50,000,000
Convertible Preferred Stock, Shares Issued	575,000	575,000
Preferred stock, liquidation preference per share	$ 1,000	$ 1,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,500,000,000	1,500,000,000
Common stock, shares issued	469,750,171	469,754,771
Treasury stock, shares	27,211,115	25,205,283

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Investments and Derivative Instruments (Details 11) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	$ 5,728	$ 4,489
Percent of Total	100.00%	100.00%
East North Central [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	94	77
Percent of Total	1.60%	1.70%
Middle Atlantic [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	508	428
Percent of Total	8.90%	9.50%
Mountain [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	125	109
Percent of Total	2.20%	2.40%
New England [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	294	259
Percent of Total	5.10%	5.80%
Pacific [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	1,690	1,147
Percent of Total	29.50%	25.60%
South Atlantic [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	1,149	1,177
Percent of Total	20.10%	26.30%
West North Central [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	30	36
Percent of Total	0.50%	0.80%
West South Central [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	224	231
Percent of Total	3.90%	5.10%
Other [Member]
Schedule of Available-for-sale Securities Mortgage Loans [Line Items]
Mortgage Loans	$ 1,614	$ 1,025
Percent of Total	28.20%	22.80%

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Segment Information

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Segment Information

3. Segment Information

The Company is organized into four divisions: Commercial Markets, Consumer Markets, Wealth Management and Runoff Operations. In 2011, the Runoff Operations division was formed to reflect the manner in which the Company is currently organized for purposes of making operating decisions and assessing performance. As a result, the Company conducts business principally in nine reporting segments, and segment data for prior reporting periods has been adjusted accordingly.

The Company’s reporting segments, as well as the Corporate category, are as follows:

Commercial Markets

Property & Casualty Commercial

Property & Casualty Commercial provides workers’ compensation, property, automobile, marine, livestock, liability and umbrella coverages primarily throughout the United States (“U.S.”), along with a variety of customized insurance products and risk management services including professional liability, fidelity, surety, and specialty casualty coverages.

Group Benefits

Group Benefits provides employers, associations, affinity groups and financial institutions with group life, accident and disability coverage, along with other products and services, including voluntary benefits, and group retiree health.

Consumer Markets

Consumer Markets provides standard automobile, homeowners and home-based business coverages to individuals across the U.S., including a special program designed exclusively for members of AARP. Consumer Markets also operates a member contact center for health insurance products offered through the AARP Health program.

Wealth Management

Individual Annuity

Individual Annuity offers individual variable, fixed market value adjusted (“fixed MVA”), fixed index and single premium immediate annuities in the U.S.

Individual Life

Individual Life sells a variety of life insurance products, including variable universal life, universal life, and term life.

Retirement Plans

Retirement Plans provides products and services to corporations pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), and products and services to municipalities and not-for-profit organizations under Sections 457 and 403(b) of the Code, collectively referred to as government plans.

Mutual Funds

Mutual Funds offers retail mutual funds, investment-only mutual funds and college savings plans under Section 529 of the Code (collectively referred to as non-proprietary) and proprietary mutual fund supporting insurance products issued by The Hartford.

Runoff Operations

Life Other Operations

Life Other Operations consists of the international annuity business of the former Global Annuity reporting segment as well as certain product offerings previously included in the former Global Annuity and Life Insurance reporting segments. Life Other Operations encompasses the administration of investment retirement savings and other insurance and savings products to individuals and groups outside of the U.S., primarily in Japan and Europe, as well as institutional annuity products and private placement life insurance.

Property & Casualty Other Operations

Property & Casualty Other Operations, previously included in the former Corporate and Other category, includes the Company’s management of certain property and casualty operations that have discontinued writing new business and substantially all of the Company’s asbestos and environmental exposures.

Corporate

The Company includes in the Corporate category the Company’s debt financing and related interest expense, as well as other capital raising activities; banking operations; certain fee income and commission expenses associated with sales of non-proprietary products by broker-dealer subsidiaries; and certain purchase accounting adjustments and other charges not allocated to the segments. The former Corporate and Other category was renamed for 2011 segment reporting due to the inclusion of the Property & Casualty Other Operations as a separate reporting segment in the new Runoff Operations division.

Financial Measures and Other Segment Information

Certain transactions between segments occur during the year that primarily relate to tax settlements, insurance coverage, expense reimbursements, services provided, security transfers and capital contributions. Also, one segment may purchase group annuity contracts from another to fund pension costs and annuities to settle casualty claims. In addition, certain inter-segment transactions occur that relate to interest income on allocated surplus. Consolidated net investment income is unaffected by such transactions.

The following table presents net income (loss) for each reporting segment, as well as the Corporate category.

	For the years ended December 31,
Net income (loss)	2011			2010			2009
Property & Casualty Commercial	$	528		$	995		$	899
Group Benefits		90			185			193
Consumer Markets		5			143			140
Individual Annuity		(14	)		527			(444	)
Individual Life		133			229			15
Retirement Plans		15			47			(222	)
Mutual Funds		98			132			34
Life Other Operations		358			(90	)		(698	)
Property & Casualty Other Operations		(117	)		(53	)		(78	)
Corporate		(434	)		(435	)		(726	)
Net income (loss)	$	662		$	1,680		$	(887	)

The following table presents revenues by product line for each reporting segment, as well as the Corporate category.

	For the years ended December 31,
Revenues	2011			2010			2009
Earned premiums, fees, and other considerations
Property & Casualty Commercial
Workers’ compensation	$	2,809		$	2,387		$	2,275
Property		528			547			597
Automobile		583			598			646
Package business		1,145			1,124			1,123
Liability		540			540			619
Fidelity and surety		215			224			250
Professional liability		307			324			393
Total Property & Casualty Commercial		6,127			5,744			5,903
Group Benefits
Group disability		1,929			2,004			1,975
Group life and accident		2,024			2,052			2,126
Other		194			222			249
Total Group Benefits		4,147			4,278			4,350
Consumer Markets
Automobile		2,619			2,806			2,857
Homeowners		1,128			1,141			1,102
Total Consumer Markets [1]		3,747			3,947			3,959
Individual Annuity
Variable annuity		1,604			1,702			1,468
Fixed / MVA and other annuity		56			14			(3	)
Total Individual Annuity		1,660			1,716			1,465
Individual Life
Variable life		396			416			503
Universal life		455			391			390
Term / Other life		48			49			47
Total Individual Life		899			856			940
Retirement Plans
401(k)		332			318			286
Government plans		48			41			38
Total Retirement Plans		380			359			324
Mutual Funds
Non-Proprietary		590			603			518
Proprietary		59			61			—
Total Mutual Funds		649			664			518
Life Other Operations		1,020			1,049			1,293
Property & Casualty Other Operations		—			1			—
Corporate		209			189			219
Total earned premiums, fees, and other considerations		18,838			18,803			18,971
Net investment income (loss):
Securities available-for-sale and other		4,272			4,364			4,017
Equity securities, trading		(1,359	)		(774	)		3,188
Total net investment income (loss)		2,913			3,590			7,205
Net realized capital gains (losses)		(145	)		(611	)		(2,004	)
Other revenues		253			267			261
Total revenues	$	21,859		$	22,049		$	24,433

[1] For 2011, 2010 and 2009, AARP members accounted for earned premiums of $2.8 billion, $2.9 billion and $2.8 billion, respectively.

Geographical Revenue Information	For the years ended December 31,
Revenues	2011		2010			2009
United States of America	$	21,561	$	22,140		$	20,189
Japan		135		(329	)		3,816
Other		163		238			428
Total revenues	$	21,859	$	22,049		$	24,433

Amortization of deferred policy acquisition costs and	For the years ended December 31,
present value of future profits	2011		2010			2009
Property & Casualty Commercial	$	1,356	$	1,353		$	1,393
Group Benefits		55		61			61
Consumer Markets		639		667			674
Individual Annuity		483		(56	)		1,339
Individual Life		221		119			314
Retirement Plans		134		27			56
Mutual Funds		47		51			50
Life Other Operations		492		305			370
Total amortization of deferred policy acquisition costs and present value of future profits	$	3,427	$	2,527		$	4,257

	For the years ended December 31,
Income tax expense (benefit)	2011			2010			2009
Property & Casualty Commercial	$	40		$	407		$	356
Group Benefits		—			65			59
Consumer Markets		(29	)		52			48
Individual Annuity		(274	)		124			(481	)
Individual Life		33			107			(27	)
Retirement Plans		(45	)		13			(143	)
Mutual Funds		54			52			18
Life Other Operations		150			—			(343	)
Property & Casualty Other Operations		(74	)		(40	)		(51	)
Corporate		(201	)		(168	)		(274	)
Total income tax expense (benefit)	$	(346	)	$	612		$	(838	)

	As of December 31,
Assets	2011		2010
Property & Casualty Commercial	$	24,692	$	23,736
Group Benefits		9,485		9,028
Consumer Markets		6,513		6,778
Individual Annuity		87,055		101,144
Individual Life		17,930		16,538
Retirement Plans		35,410		34,152
Mutual Funds		307		301
Life Other Operations		111,407		113,065
Property & Casualty Other Operations		4,639		4,733
Corporate		6,626		8,871
Total assets	$	304,064	$	318,346

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Quarterly Results for 2011 and 2010 (Unaudited) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Schedule of Quarterly Financial Information
Revenues	$ 5,638	$ 4,520	$ 5,401	$ 6,308	$ 5,930	$ 6,602	$ 3,265	$ 6,257	$ 21,859	$ 22,049	$ 24,433
Benefits, losses and expenses	5,546	4,624	5,566	5,898	5,171	5,685	3,121	5,722	21,629	19,693	26,154
Income (loss) from Continuing Operations, net of tax	126	(3)	104	351	584	665	175	319	576	1,744	(883)
Income (loss) from discontinued operations, net of tax	1	3	(80)	160	35	1	(99)		86	(64)	(4)
Net income (loss)	127		24	511	619	666	76	319	662	1,680	(887)
Less: Preferred stock dividends and accretion of discount	11	10	11	10	11	10	11	483	42	515	127
Net income (loss) available to common shareholders	$ 116	$ (10)	$ 13	$ 501	$ 608	$ 656	$ 65	$ (164)	$ 620	$ 1,165	$ (1,014)
Basic earnings (losses) per common share	$ 0.26	$ (0.02)	$ 0.03	$ 1.13	$ 1.37	$ 1.48	$ 0.15	$ (0.42)	$ 1.39	$ 2.70	$ (2.93)
Diluted earnings (losses) per common share	$ 0.25	$ (0.02)	$ 0.03	$ 1.01	$ 1.24	$ 1.34	$ 0.14	$ (0.42)	$ 1.30	$ 2.49	$ (2.93)
Weighted average common shares outstanding, basic	445.1	445.3	445.1	444.6	444.3	444.1	443.9	393.7	445.0	431.5	346.3
Weighted average common shares outstanding and dilutive potential common shares	468.9	445.3	482.4	508.2	497.8	495.3	480.2	393.7	478.0	481.5	346.3
Quarterly Results Data (Textual) [Abstract]
Weighted average common shares outstanding and dilutive potential common shares, in absence of net loss		473.4						428.5
Weighted average common shares outstanding and dilutive potential common shares, impact of mandatory convertible preferred shares was not antidilutive	489.6	494.1	503.1				501.0	431.9

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Stock Compensation Plans (Details 2) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 Y
Summary of Status of Non Qualified Stock Options Included in Stock Plan
Outstanding at beginning of year, Number of option	5,279
Outstanding at beginning of year, Weighted Average Exercise Price	$ 52.90
Outstanding at beginning of year, Weighted Average Remaining Contractual Term	2.9
Outstanding at beginning of year, Aggregate Intrinsic Value	$ 0
Granted, Number of Options	1,189
Granted, Weighted Average Exercise Price	$ 27.90
Exercised , Number of Options	(232)
Exercised, Weighted Average Exercise Price	$ 15.41
Forfeited, Number of Options	(537)
Forfeited, Weighted Average Exercise Price	$ 44.09
Expired, Number of Options	(860)
Expired, Weighted Average Exercise Price	$ 62.11
Outstanding at end of year, Number of option	4,839
Outstanding at end of year, Weighted Average Exercise Price	$ 47.89
Outstanding at end of year, Weighted Average Remaining Contractual Term	3.7
Outstanding at end of year, Aggregate Intrinsic Value	0
Exercisable at end of year, Number of Options	3,641
Exercisable at end of year, Weighted Average Exercise Price	$ 55.52
Exercisable at end of year, Weighted Average Remaining Contractual Term	2.0
Exercisable at end of year, Aggregate Intrinsic Value	$ 0

XML

Basis of Presentation and Accounting Policies (Details Textual 1) (USD $)	12 Months Ended
	Dec. 31, 2011 Mutual_Fund	Dec. 31, 2010	Dec. 31, 2009
Basis of Presentation and Accounting Policies (Textual) [Abstract]
Allowance for Doubtful Accounts included in Premiums receivables and agents' balances	$ 119,000,000	$ 119,000,000
Percentage of total net premium written represented by participating property and casualty insurance policies	9.00%	8.00%	8.00%
Participating Dividend to Policyholders	18,000,000	5,000,000	10,000,000
Percentage of participating ordinary life insurance in force	1.00%	1.00%	1.00%
Dividend to policyholders	17,000,000	21,000,000	13,000,000
Accumulated Depreciation	2,100,000,000	1,900,000,000
Depreciation	$ 216,000,000	$ 276,000,000	$ 253,000,000
Total number of mutual funds	57
Number of mutual funds under third party management	29

XML

Investments and Derivative Instruments (Details 5) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	$ 80,034	$ 79,432
Gross Unrealized Gains	5,442	2,896
Gross Unrealized Losses	(2,674)	(3,496)
Fair Value	82,730	78,793
Non-Credit OTTI	(187)	(210)
ABS [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	3,430	3,247
Gross Unrealized Gains	55	38
Gross Unrealized Losses	(332)	(396)
Fair Value	3,153	2,889
Non-Credit OTTI	(7)	(2)
CDOs [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	2,819	3,088
Gross Unrealized Gains	16	1
Gross Unrealized Losses	(348)	(478)
Fair Value	2,487	2,611
Non-Credit OTTI	(44)	(82)
CMBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	7,192	8,297
Gross Unrealized Gains	271	235
Gross Unrealized Losses	(512)	(615)
Fair Value	6,951	7,917
Non-Credit OTTI	(31)	(9)
Corporate [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	41,161	38,496
Gross Unrealized Gains	3,661	2,174
Gross Unrealized Losses	(739)	(747)
Fair Value	44,011	39,884
Non-Credit OTTI	0	7
Foreign govt./govt. agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	2,030	1,627
Gross Unrealized Gains	141	73
Gross Unrealized Losses	(10)	(17)
Fair Value	2,161	1,683
Non-Credit OTTI	0	0
Municipal [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	12,557	12,469
Gross Unrealized Gains	775	150
Gross Unrealized Losses	(72)	(495)
Fair Value	13,260	12,124
Non-Credit OTTI	0	0
RMBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	5,961	6,036
Gross Unrealized Gains	252	109
Gross Unrealized Losses	(456)	(462)
Fair Value	5,757	5,683
Non-Credit OTTI	(105)	(124)
U.S. Treasuries [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	3,828	5,159
Gross Unrealized Gains	203	24
Gross Unrealized Losses	(2)	(154)
Fair Value	4,029	5,029
Non-Credit OTTI	0	0
Fixed maturities, AFS [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	78,978	78,419
Gross Unrealized Gains	5,374	2,804
Gross Unrealized Losses	(2,471)	(3,364)
Fair Value	81,809	77,820
Non-Credit OTTI	(187)	(210)
Equity Securities, AFS [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	1,056	1,013
Gross Unrealized Gains	68	92
Gross Unrealized Losses	(203)	(132)
Fair Value	921	973
Non-Credit OTTI	$ 0	$ 0

XML

Reinsurance (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Reinsurance [Abstract]
Max percentage of equity to reinsurance credit risk	10.00%	10.00%	10.00%
Reinsurance concentrations of credit risk greater than 10% of stockholders equity	$ 0	$ 0	$ 0
Largest amount of life insurance retained on any one life by any company comprising of the life	10	10	10
Life insurance recoveries on ceded reinsurance contracts	224	275	305
Property and casualty ceded losses which reduce losses and loss adjustment expenses incurred	385	598	286
Allowance for uncollectible reinsurance	$ 290	$ 290	$ 335

XML

Fair Value Measurements (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Available-for-sale Securities [Member] | ABS [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Purchases of Financial Instruments (Assets) Measured at Fair Value	$ 58
Settlements of Financial Instruments (Assets) Measured at Fair Value	(37)
Sales of Financial Instruments (Assets) Measured at Fair Value	(10)
Available-for-sale Securities [Member] | CDOs [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Settlements of Financial Instruments (Assets) Measured at Fair Value	(151)
Sales of Financial Instruments (Assets) Measured at Fair Value	(66)
Available-for-sale Securities [Member] | CMBS [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Purchases of Financial Instruments (Assets) Measured at Fair Value	29
Settlements of Financial Instruments (Assets) Measured at Fair Value	(86)
Sales of Financial Instruments (Assets) Measured at Fair Value	(317)
Available-for-sale Securities [Member] | Corporate [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Purchases of Financial Instruments (Assets) Measured at Fair Value	108
Settlements of Financial Instruments (Assets) Measured at Fair Value	(121)
Sales of Financial Instruments (Assets) Measured at Fair Value	(162)
Available-for-sale Securities [Member] | Foreign govt./govt. agencies [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Purchases of Financial Instruments (Assets) Measured at Fair Value	3
Settlements of Financial Instruments (Assets) Measured at Fair Value	(4)
Sales of Financial Instruments (Assets) Measured at Fair Value	(7)
Available-for-sale Securities [Member] | States, municipalities and political subdivisions [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Purchases of Financial Instruments (Assets) Measured at Fair Value	131
Settlements of Financial Instruments (Assets) Measured at Fair Value	0
Sales of Financial Instruments (Assets) Measured at Fair Value	(2)
Available-for-sale Securities [Member] | RMBS [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Purchases of Financial Instruments (Assets) Measured at Fair Value	25
Settlements of Financial Instruments (Assets) Measured at Fair Value	(135)
Sales of Financial Instruments (Assets) Measured at Fair Value	(16)
Equity Securities [Member] | Available-for-sale Securities [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	154	58
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	(12)	(6)
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	(4)	9
Purchases of Financial Instruments (Assets) Measured at Fair Value	39
Sales of Financial Instruments (Assets) Measured at Fair Value	(10)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		16
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	7	98
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(81)	(21)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	93	154
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	(10)	(8)
Fixed Maturities [Member] | Available-for-sale Securities [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	7,489	13,257
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	(118)	(356)
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	221	1,637
Purchases of Financial Instruments (Assets) Measured at Fair Value	354
Settlements of Financial Instruments (Assets) Measured at Fair Value	(534)
Sales of Financial Instruments (Assets) Measured at Fair Value	(580)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(571)
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	1,279	1,657
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(2,990)	(8,135)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	5,121	7,489
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	(106)	(301)
Fixed Maturities [Member] | Available-for-sale Securities [Member] | ABS [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	477	580
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	(27)	(17)
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	22	92
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(74)
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	82	40
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(204)	(144)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	361	477
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	(16)	(8)
Fixed Maturities [Member] | Available-for-sale Securities [Member] | CDOs [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	2,581	2,835
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	(41)	(151)
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	126	533
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(234)
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	30	42
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(2,111)	(444)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	368	2,581
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	(41)	(158)
Fixed Maturities [Member] | Available-for-sale Securities [Member] | CMBS [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	689	307
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	11	(132)
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	52	409
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(186)
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	268	443
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(58)	(152)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	588	689
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	(17)	(73)
Fixed Maturities [Member] | Available-for-sale Securities [Member] | Corporate [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	2,129	8,027
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	(40)	(14)
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	(31)	320
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		78
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	774	967
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(402)	(7,249)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	2,255	2,129
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	(17)	(24)
Fixed Maturities [Member] | Available-for-sale Securities [Member] | Foreign govt./govt. agencies [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	56	93
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	1	5
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(8)
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	39	8
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(39)	(42)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	49	56
Fixed Maturities [Member] | Available-for-sale Securities [Member] | States, municipalities and political subdivisions [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	272	262
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income		1
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	48	24
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		14
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	4	11
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(16)	(40)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	437	272
Fixed Maturities [Member] | Available-for-sale Securities [Member] | RMBS [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	1,285	1,153
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	(21)	(43)
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in OCI	3	254
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(161)
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value	82	146
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(160)	(64)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	1,063	1,285
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	(15)	(38)
Fixed Maturities, FVO [Member]
Roll Forward of Financial Instruments (Assets) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Beginning Balance	522	0
Total realized/unrealized gains (losses) on Financial Instruments (Assets) Measured at Fair Value, Included in Net Income	22	80
Settlements of Financial Instruments (Assets) Measured at Fair Value	(3)
Sales of Financial Instruments (Assets) Measured at Fair Value	(42)
Purchases, issuances and settlements of Financial Instruments (Assets) Measured at Fair Value		(11)
Transfers into Level 3 of Financial Instruments (Assets) Measured at Fair Value		453
Transfers out of Level 3 of Financial Instruments (Assets) Measured at Fair Value	(4)
Fair Value of Financial Instruments (Assets), Measured at Fair Value on a Recurring Basis, Ending Balance	495	522
Changes in unrealized gains (losses) included in net income related to Financial Instruments (Assets) still held at a reporting date	$ 19	$ 76

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Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Discontinued Operations

20. Discontinued Operations

On November 1, 2011, the Company completed a merger with CenterState Banks, Inc. (“CBI”), pursuant to which Federal Trust Corporation (“FTC”), a wholly owned subsidiary of the Company, was merged with and into CBI, and Federal Trust Bank (“FTB”), a federally chartered, FDIC-insured thrift and wholly owned subsidiary of FTC, was merged with and into CenterState Bank of Florida, N.A. (“CenterState Bank”), a wholly owned subsidiary of CBI. At the time of the mergers, FTC and FTB held net assets including cash, certain mortgage loans, property and other assets equivalent to liabilities assumed including deposits and other liabilities, totaling approximately $200. The Company recorded an after-tax charge of $74 to net realized capital losses in the second quarter of 2011 for the estimated loss on disposal, including the write off of remaining goodwill of $10, after-tax, and losses on certain FTC and FTB assets and liabilities, which were not transferred to CenterState Bank. Upon final closing with CBI, the Company recorded a benefit of $6, after tax, in the fourth quarter of 2011 related to the divestiture. The Company purchased certain assets and assumed certain liabilities from FTC and FTB that were not part of the transactions with CBI and CenterState Bank on November 1, 2011. As of December 31, 2011, the carrying value of those assets and liabilities were $3, and $19, respectively and included in other assets and other liabilities. The Company anticipates disposing of these assets and liabilities within twelve months after closing, and thus any income or expense related to these assets and liabilities will be temporary in nature. FTC is included in the Corporate category for segment reporting.

In the first quarter of 2011, the Company completed the sale of its wholly-owned subsidiary Specialty Risk Services (“SRS”) and recorded a net realized capital gain of $150, after-tax. SRS is a third-party claims administration business that provides self-insured, insured, and alternative market clients with customized claims services. The Company is required to provide certain services to SRS for up to 24 months under a Transition Services Agreement. During the fourth quarter 2011 the Company recorded a charge of $4, after-tax, attributed to asset disposals. SRS is included in the Property & Casualty Commercial reporting segment.

In addition, during the fourth quarter of 2010, the Company completed the sales of its indirect wholly-owned subsidiaries Hartford Investments Canada Corporation (“HICC”) and Hartford Advantage Investment, Ltd. (“HAIL”) and recorded net realized gains (losses) of $41 and $(4), respectively. HICC and HAIL were transferred from Mutual Funds to Life Other Operations, effective January 1, 2009. HICC was transferred from Life Other Operations to Mutual Funds, effective January 1, 2010.

The following table summarizes the amounts related to discontinued operations in the Consolidated Statements of Operations.

	For the years ended December 31,
	2011			2010			2009
Revenues
Fee income and other	$	—		$	36		$	29
Net investment income		17			28			14
Net realized capital gains (losses)		(6	)		(5	)		(6	)
Other revenues		48			213			231
Total revenues		59			272			268
Benefits, losses and expenses
Amortization of deferred policy acquisition costs and present value of future profits		—			17			10
Insurance operating and other expenses		54			256			265
Goodwill Impairment		—			153			—
Total benefits, losses and expenses		54			426			275
Income (loss) before income taxes		5			(154	)		(7	)
Income tax expense (benefit)		1			(53	)		(3	)
Income (loss) from operations of discontinued operations, net of tax		4			(101	)		(4	)
Net realized capital gain on disposal, net of tax		82			37			—
Income (loss) from discontinued operations, net of tax	$	86		$	(64	)	$	(4	)

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Sales Inducements (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Changes in deferred sales inducement
Balance, January 1	$ 459	$ 438	$ 553
Sales inducements deferred	20	31	59
Amortization charged to income	(17)	(8)	(105)
Amortization - Unlock	(28)	(2)	(69)
Balance, December 31	$ 434	$ 459	$ 438

XML

Stock Compensation Plans (Details 4) (Employee Stock [Member])	12 Months Ended
	Dec. 31, 2009 M
Employee Stock [Member]
Weighted average valuation assumptions
Dividend yield	1.40%
Implied volatility	91.40%
Risk-free spot rate	0.30%
Expected term	6

XML

Debt (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Short-Term Debt
Current maturities of long-term debt and capital lease obligations	$ 0	$ 400
Short-term debt	$ 0	$ 400

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Income Tax (Details 1) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Deferred Tax Assets
Tax discount on loss reserves	$ 632	$ 647
Tax basis deferred policy acquisition costs	528	579
Unearned premium reserve and other underwriting related reserves	421	401
Investment-related items	1,159	1,454
Insurance product derivatives	913	1,792
Employee benefits	523	555
Net unrealized losses on investments	0	4
Minimum tax credit	868	1,183
Net operating loss carryover	747	88
Other	149	63
Total Deferred Tax Assets	5,940	6,766
Valuation Allowance	(95)	(173)
Deferred Tax Assets, Net of Valuation Allowance	5,845	6,593
Deferred Tax Liabilities
Financial statement deferred policy acquisition costs and reserves	(3,094)	(2,721)
Net unrealized gains on investments	(1,210)	0
Other depreciable and amortizable assets	(104)	(42)
Other	(39)	(105)
Total Deferred Tax Liabilities	(4,447)	(2,868)
Net Deferred Tax Asset	$ 1,398	$ 3,725

XML

Fair Value Measurements (Details 6) (USD $) In Millions, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of assets accounted for using fair value option	$ 1,328	$ 649
ABS [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of assets accounted for using fair value option	65	65
CDOs [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of assets accounted for using fair value option	225	270
Corporate [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of assets accounted for using fair value option	272	250
Foreign government/government agencies [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of assets accounted for using fair value option	766	64
Credit-linked notes [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value of liabilities accounted for using fair value option	$ 9	$ 37

XML

Employee Benefit Plans (Details 15) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Employer contributions	$ 201	$ 201
Pension Benefits [Member] | U.S. [Member]
Defined Benefit Plan Disclosure [Line Items]
Employer contributions	201	201
Other Postretirement Benefits [Member] | U.S. [Member]
Defined Benefit Plan Disclosure [Line Items]
Employer contributions	$ 0	$ 0

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Net Income (Loss)

	For the years ended December 31,
Net income (loss)	2011			2010			2009
Property & Casualty Commercial	$	528		$	995		$	899
Group Benefits		90			185			193
Consumer Markets		5			143			140
Individual Annuity		(14	)		527			(444	)
Individual Life		133			229			15
Retirement Plans		15			47			(222	)
Mutual Funds		98			132			34
Life Other Operations		358			(90	)		(698	)
Property & Casualty Other Operations		(117	)		(53	)		(78	)
Corporate		(434	)		(435	)		(726	)
Net income (loss)	$	662		$	1,680		$	(887	)

Financial Measures and Other Segment Information

	For the years ended December 31,
Revenues	2011			2010			2009
Earned premiums, fees, and other considerations
Property & Casualty Commercial
Workers’ compensation	$	2,809		$	2,387		$	2,275
Property		528			547			597
Automobile		583			598			646
Package business		1,145			1,124			1,123
Liability		540			540			619
Fidelity and surety		215			224			250
Professional liability		307			324			393
Total Property & Casualty Commercial		6,127			5,744			5,903
Group Benefits
Group disability		1,929			2,004			1,975
Group life and accident		2,024			2,052			2,126
Other		194			222			249
Total Group Benefits		4,147			4,278			4,350
Consumer Markets
Automobile		2,619			2,806			2,857
Homeowners		1,128			1,141			1,102
Total Consumer Markets [1]		3,747			3,947			3,959
Individual Annuity
Variable annuity		1,604			1,702			1,468
Fixed / MVA and other annuity		56			14			(3	)
Total Individual Annuity		1,660			1,716			1,465
Individual Life
Variable life		396			416			503
Universal life		455			391			390
Term / Other life		48			49			47
Total Individual Life		899			856			940
Retirement Plans
401(k)		332			318			286
Government plans		48			41			38
Total Retirement Plans		380			359			324
Mutual Funds
Non-Proprietary		590			603			518
Proprietary		59			61			—
Total Mutual Funds		649			664			518
Life Other Operations		1,020			1,049			1,293
Property & Casualty Other Operations		—			1			—
Corporate		209			189			219
Total earned premiums, fees, and other considerations		18,838			18,803			18,971
Net investment income (loss):
Securities available-for-sale and other		4,272			4,364			4,017
Equity securities, trading		(1,359	)		(774	)		3,188
Total net investment income (loss)		2,913			3,590			7,205
Net realized capital gains (losses)		(145	)		(611	)		(2,004	)
Other revenues		253			267			261
Total revenues	$	21,859		$	22,049		$	24,433

[1] For 2011, 2010 and 2009, AARP members accounted for earned premiums of $2.8 billion, $2.9 billion and $2.8 billion, respectively.

Geographical Revenue Information

Geographical Revenue Information	For the years ended December 31,
Revenues	2011		2010			2009
United States of America	$	21,561	$	22,140		$	20,189
Japan		135		(329	)		3,816
Other		163		238			428
Total revenues	$	21,859	$	22,049		$	24,433

Amortization of deferred policy acquisition costs and present value of future profits

Amortization of deferred policy acquisition costs and	For the years ended December 31,
present value of future profits	2011		2010			2009
Property & Casualty Commercial	$	1,356	$	1,353		$	1,393
Group Benefits		55		61			61
Consumer Markets		639		667			674
Individual Annuity		483		(56	)		1,339
Individual Life		221		119			314
Retirement Plans		134		27			56
Mutual Funds		47		51			50
Life Other Operations		492		305			370
Total amortization of deferred policy acquisition costs and present value of future profits	$	3,427	$	2,527		$	4,257

Income tax expense (benefit)

	For the years ended December 31,
Income tax expense (benefit)	2011			2010			2009
Property & Casualty Commercial	$	40		$	407		$	356
Group Benefits		—			65			59
Consumer Markets		(29	)		52			48
Individual Annuity		(274	)		124			(481	)
Individual Life		33			107			(27	)
Retirement Plans		(45	)		13			(143	)
Mutual Funds		54			52			18
Life Other Operations		150			—			(343	)
Property & Casualty Other Operations		(74	)		(40	)		(51	)
Corporate		(201	)		(168	)		(274	)
Total income tax expense (benefit)	$	(346	)	$	612		$	(838	)

Assets

	As of December 31,
Assets	2011		2010
Property & Casualty Commercial	$	24,692	$	23,736
Group Benefits		9,485		9,028
Consumer Markets		6,513		6,778
Individual Annuity		87,055		101,144
Individual Life		17,930		16,538
Retirement Plans		35,410		34,152
Mutual Funds		307		301
Life Other Operations		111,407		113,065
Property & Casualty Other Operations		4,639		4,733
Corporate		6,626		8,871
Total assets	$	304,064	$	318,346

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Income Tax

12 Months Ended

Dec. 31, 2011

Income Tax [Abstract]

Income Tax

13. Income Tax

The Company recognizes taxes payable or refundable for the current year and deferred taxes for the tax consequences of differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse.

Income (loss) from continuing operations before income taxes included income (loss) from domestic operations of $466, $2,133 and $(1,365) for 2011, 2010 and 2009, and income (loss) from foreign operations of $(236), $224 and $(356) for 2011, 2010 and 2009. Substantially all of the income (loss) from foreign operations is earned by a Japanese subsidiary.

The provision (benefit) for income taxes consists of the following:

	For the years ended December 31,
	2011			2010		2009
Income Tax Expense (Benefit)
Current - U.S. Federal	$	(495	)	$	106	$	509
- International		22			69		—
Total current		(473	)		175		509
Deferred - U.S. Federal Excluding NOL Carryforward		900			133		(1,584	)
- Net Operating Loss Carryforward		(652	)		1		712
- International		(121	)		303		(475	)
Total deferred		127			437		(1,347	)
Total income tax expense (benefit)	$	(346	)	$	612	$	(838	)

Deferred tax assets (liabilities) include the following as of December 31:

Deferred Tax Assets	2011			2010
Tax discount on loss reserves	$	632		$	647
Tax basis deferred policy acquisition costs		528			579
Unearned premium reserve and other underwriting related reserves		421			401
Investment-related items		1,159			1,454
Insurance product derivatives		913			1,792
Employee benefits		523			555
Net unrealized losses on investments		—			4
Minimum tax credit		868			1,183
Net operating loss carryover		747			88
Other		149			63
Total Deferred Tax Assets		5,940			6,766
Valuation Allowance		(95	)		(173	)
Deferred Tax Assets, Net of Valuation Allowance		5,845			6,593
Deferred Tax Liabilities
Financial statement deferred policy acquisition costs and reserves		(3,094	)		(2,721	)
Net unrealized gains on investments		(1,210	)		—
Other depreciable & amortizable assets		(104	)		(42	)
Other		(39	)		(105	)
Total Deferred Tax Liabilities		(4,447	)		(2,868	)
Net Deferred Tax Asset	$	1,398		$	3,725

As of December 31, 2011 and 2010, the net deferred tax asset included the expected tax benefit attributable to net operating losses of $2,239 and $327, respectively, consisting of U.S. losses of $1,880 and $17, respectively, and foreign losses of $359 and $310. The U.S. losses expire from 2013-2031 and the foreign losses have no expiration.

The Company has recorded a deferred tax asset valuation allowance that is adequate to reduce the total deferred tax asset to an amount that will be more likely than not realized. The deferred tax asset valuation allowance was $95, relating mostly to foreign net operating losses as of December 31, 2011 and was $173 as of December 31, 2010. In assessing the need for a valuation allowance, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in open carry back years, as well as other tax planning strategies. These tax planning strategies include holding a portion of debt securities with market value losses until recovery, altering the level of tax exempt securities, selling appreciated securities to offset capital losses, business considerations such as asset-liability matching, and the sales of certain corporate assets. Management views such tax planning strategies as prudent and feasible, and would implement them, if necessary, to realize the deferred tax asset. Based on the availability of additional tax planning strategies identified in the second quarter of 2011, the Company released $86, or 100% of the valuation allowance associated with investment realized capital losses. Future economic conditions and debt market volatility, including increases in interest rates, can adversely impact the Company’s tax planning strategies and in particular the Company’s ability to utilize tax benefits on previously recognized realized capital losses.

Included in the Company’s December 31, 2011 $1.4 billion net deferred tax asset is $1.8 billion relating to items treated as ordinary for federal income tax purposes, and a $361 net deferred tax liability for items classified as capital in nature. The $361 capital items are comprised of $847 of gross deferred tax assets related to realized capital losses and $1,208 of gross deferred tax liabilities related to net unrealized capital gains.

As of December 31, 2011 the Company had a current income tax receivable of $459, which is net of a $46 payable related to Japan and due to a foreign jurisdiction. As of December 31, 2010 the company had a current income tax payable of $78, of which $30 was related to Japan and payable to a foreign jurisdiction.

The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years prior to 2007. The audit of the years 2007-2009 commenced during 2010 and is expected to conclude by the end of 2012, with no material impact on the consolidated financial condition or results of operations. In addition, in the second quarter of 2011 the Company recorded a tax benefit of $52 as a result of a resolution of a tax matter with the IRS for the computation of the dividends-received deduction (“DRD”) for years 1998, 2000 and 2001. Management believes that adequate provision has been made in the financial statements for any potential assessments that may result from tax examinations and other tax-related matters for all open tax years.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	For the years ended December 31,
	2011		2010		2009
Balance, at January 1	$	48	$	48		91
Additions based on tax positions related to the current year		—		—		—
Additions for tax positions for prior years		—		—		—
Reductions for tax positions for prior years		—		—		(35	)
Settlements		—		—		(8	)
Balance, at December 31	$	48	$	48		48

The entire balance of the unrecognized tax benefit, if it were recognized, would affect the effective tax rate in the period it is released.

The Company classifies interest and penalties (if applicable) as income tax expense in the financial statements. During the year ended December 31, 2011, the Company recognized interest income of $5, and during the years ended December 31, 2010 and 2009, the Company recognized interest expense of $2, and $7, respectively. The Company had approximately $6 and $1 of interest receivable accrued at December 31, 2011 and 2010, respectively. The Company does not believe it would be subject to any penalties in any open tax years and, therefore, has not booked any accrual for penalties.

A reconciliation of the tax provision at the U.S. Federal statutory rate to the provision for income taxes is as follows:

	For the years ended December 31,
	2011			2010			2009
Tax provision at U.S. Federal statutory rate	$	81			825			(602	)
Tax-exempt interest		(148	)		(152	)		(149	)
Dividends received deduction		(206	)		(154	)		(188	)
Nondeductible costs associated with warrants		—			—			78
Valuation allowance		(78	)		87			30
Goodwill		—			—			12
Other		5			6			(19	)
Provision for income taxes	$	(346	)		612			(838	)

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Investments and Derivative Instruments (Details Textual 1) (USD $) In Millions, unless otherwise specified					12 Months Ended					12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011 Contingent Capital Facility Put Option [Member]	Dec. 31, 2010 Contingent Capital Facility Put Option [Member]	Dec. 31, 2009 JAPAN [Member]	Dec. 31, 2011 Currency Options [Member] Long Hedge Position [Member] Macro Hedge Program [Member]	Dec. 31, 2010 Currency Options [Member] Long Hedge Position [Member] Macro Hedge Program [Member]	Dec. 31, 2011 Currency Options [Member] Short Hedge Position [Member] Macro Hedge Program [Member]	Dec. 31, 2010 Currency Options [Member] Short Hedge Position [Member] Macro Hedge Program [Member]	Dec. 31, 2011 3 Win Related Foreign Currency Swaps [Member] JAPAN [Member]	Dec. 31, 2010 3 Win Related Foreign Currency Swaps [Member] JAPAN [Member]	Dec. 31, 2011 Fixed annuity hedging instruments [Member] JAPAN [Member]	Dec. 31, 2010 Fixed annuity hedging instruments [Member] JAPAN [Member]	Dec. 31, 2009 Fixed annuity hedging instruments [Member] JAPAN [Member]	Dec. 31, 2010 Variable Annuity Hedging Instruments [Member] JAPAN [Member]	Sep. 30, 2011 Variable Annuity Hedging Instruments [Member] JAPAN [Member] Long Hedge Position [Member]	Dec. 31, 2010 Variable Annuity Hedging Instruments [Member] JAPAN [Member] Long Hedge Position [Member]	Sep. 30, 2011 Variable Annuity Hedging Instruments [Member] JAPAN [Member] Short Hedge Position [Member]
Derivative [Line Items]
Maximum aggregate principal amount of junior subordinated notes			$ 500
Associated liability adjusted for changes in spot rates through realized capital gain					64					(100)	(273)	(129)	(332)	67
Notional Amount	$ 141,436	$ 136,854	$ 500	$ 500		$ 5,300	$ 3,100	$ 2,100	$ 2,200						$ 1,800	$ 2,400	$ 1,700	$ 582