Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2012

Fair Value Measurements [Abstract]

Assets and (liabilities) carried at fair value by hierarchy level

	March 31, 2012
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	3,087		$	—		$	2,788		$	299
CDOs		3,043			—			2,140			903
CMBS		6,774			—			5,773			1,001
Corporate		43,329			—			41,335			1,994
Foreign government/government agencies		3,352			—			3,297			55
States, municipalities and political subdivisions (“Municipal”)		13,838			—			13,213			625
RMBS		6,595			—			5,486			1,109
U.S. Treasuries		3,139			802			2,337			—
Total fixed maturities		83,157			802			76,369			5,986
Fixed maturities, FVO		1,291			—			783			508
Equity securities, trading		30,722			2,041			28,681			—
Equity securities, AFS		938			369			480			89
Derivative assets
Credit derivatives		5			—			(17	)		22
Equity derivatives		10			—			—			10
Foreign exchange derivatives		370			—			370			—
Interest rate derivatives		—			—			42			(42	)
U.S. guaranteed minimum withdrawal benefit (“GMWB”) hedging instruments		421			—			(13	)		434
U.S. macro hedge program		133			—			—			133
International program hedging instruments		227			—			94			133
Other derivative contracts		27			—			—			27
Total derivative assets [1]		1,193			—			476			717
Short-term investments		5,256			727			4,529			—
Reinsurance recoverable for U.S. GMWB		308			—			—			308
Separate account assets [2]		148,127			109,213			37,568			1,346
Total assets accounted for at fair value on a recurring basis	$	270,992		$	113,152		$	148,886		$	8,954
Percentage of level to total		100	%		42	%		55	%		3	%
Liabilities accounted for at fair value on a recurring basis Other policyholder funds and benefits payable
U.S guaranteed withdrawal benefits	$	(1,683	)	$	—		$	—		$	(1,683	)
International guaranteed withdrawal benefits		(37	)		—			—			(37	)
International other guaranteed living benefits		(1	)		—			—			(1	)
Equity linked notes		(10	)		—			—			(10	)
Total other policyholder funds and benefits payable		(1,731	)		—			—			(1,731	)
Derivative liabilities
Credit derivatives		(522	)		—			(26	)		(496	)
Equity derivatives		29			—			—			29
Foreign exchange derivatives		54			—			54			—
Interest rate derivatives		(447	)		—			(432	)		(15	)
U.S. GMWB hedging instruments		104			—			(56	)		160
U.S. macro hedge program		40			—			—			40
International program hedging instruments		(26	)		—			(8	)		(18	)
Total derivative liabilities [3]		(768	)		—			(468	)		(300	)
Other Liabilities		(21	)		—			—			(21	)
Consumer notes [4]		(4	)		—			—			(4	)
Total liabilities accounted for at fair value on a recurring basis	$	(2,524	)	$	—		$	(468	)	$	(2,056	)

	December 31, 2011
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (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	%

	December 31, 2011
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 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	)

[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 March 31, 2012 and December 31, 2011, $97 and $1.4 billion, respectively, of cash collateral liability was netted against the derivative asset value in the Condensed Consolidated Balance Sheet and is excluded from the table above. See footnote 3 below for derivative liabilities.

[2] Approximately $4.3 billion and $4.0 billion of investment sales receivable that are not subject to fair value accounting are excluded as of March 31, 2012 and December 31, 2011, 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.

Information about significant unobservable inputs used in Level 3 assets measured at fair value

Securities	As of March 31, 2012
Assets accounted for at fair value on a recurring basis	Fair Value			Predominant Valuation Method	Significant Unobservable Input	Range of Values – Unobservable Inputs (Weighted Average) [1]	Impact of Increase in Input on Fair Value [2]
CMBS	$	1,001		Discounted cash flows	Spread (encompasses prepayment, default risk and loss severity)	317 – 3,771 bps (1,087 bps)	Decrease
Corporate		1,204	[3]	Discounted cash flows	Spread	87 – 800 bps (342 bps)	Decrease
Municipal		625		Discounted cash flows	Treasury yield beyond 30 years	3.3% (3.3%)	Decrease
RMBS		1,109		Discounted cash flows	Spread	60 – 1,976 bps (691 bps)	Decrease
					Constant prepayment rate	0% – 12% (2%)	Decrease [4]
					Constant default rate	1% – 28% (8%)	Decrease
					Loss severity	45% – 100% (75%)	Decrease

[1] The weighted average is determined based on the fair value of the securities.

[2] Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table above.

[3] Level 3 corporate securities excludes those for which the Company bases fair value on broker quotations as discussed below.

[4] Decrease for above market rate coupons and increase for below market rate coupons.

Information about significant unobservable inputs used in Level 3 derivative instruments measured at fair value

Freestanding Derivatives	As of March 31, 2012
	Fair Value			Predominant Valuation Method	Significant Unobservable Input	Range of Values – Unobservable Inputs	Impact of Increase in Input on Fair Value [1]
Equity derivatives
Equity options	$	39		Option model	Equity volatility	13% – 24%	Increase
Interest rate derivative
Interest rate swaps		(93	)	Discounted cash flows	Swap curve beyond 30 years	3.0% – 3.1%	Increase
Long interest rate swaptions		36		Option model	Interest rate volatility	25% – 32%	Increase
U.S. GMWB hedging instruments
Equity options		355		Option model	Equity volatility	24% – 32%	Increase
Customized swaps		239		Discounted cash flows	Equity volatility	10% – 50%	Increase
U.S. macro hedge program
Equity options		173		Option model	Equity volatility	22% – 31%	Increase
International program hedging
Equity options		141		Option model	Equity volatility	20% – 28%	Increase
Short interest rate swaptions		(26	)	Option model	Interest rate volatility	22% – 25%	Decrease

[1] Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table. Changes are based on long positions, unless otherwise noted. Changes in fair value will be inversely impacted for short positions.

Information about significant unobservable inputs used in Level 3 living benefits measured at fair value

Significant Unobservable Input	Range of Values-Unobservable Inputs	Impact of Increase in Input on Fair Value Measurement [1]
Withdrawal Utilization[2]	20% to 100%	Increase
Withdrawal Rates [2]	0% to 8%	Increase
Lapse Rates [3]	0% to 75%	Decrease
Reset Elections [4]	20% to 75%	Increase
Equity Volatility [5]	10% to 50%	Increase

[1] Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table.

[2] Ranges represent assumed cumulative percentages of policyholders taking withdrawals and the annual amounts withdrawn.

[3] Range represents assumed annual percentages of full surrender of the underlying variable annuity contracts across all policy durations for in force business.

[4] Range represents assumed cumulative percentages of policyholders that would elect to reset their guaranteed benefit base.

[5] Range represents implied market volatilities for equity indices based on multiple pricing sources.

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 three months from January 1, 2012 to March 31, 2012.

	Fixed Maturities, AFS
Assets	ABS			CDOs			CMBS			Corporate			Foreign govt./govt. agencies			Municipal			RMBS			Total  Fixed Maturities, AFS			Fixed Maturities, FVO
Fair value as of January 1, 2012	$	361		$	368		$	588		$	2,255		$	49		$	437		$	1,063		$	5,121		$	495
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		—			2			(5	)		(3	)		—			—			7			1			27
Included in OCI [3]		9			63			23			10			—			(11	)		26			120			—
Purchases		—			—			12			134			7			212			80			445			—
Settlements		(35	)		(10	)		(32	)		(20	)		(1	)		—			(33	)		(131	)		—
Sales		(12	)		(3	)		—			(53	)		—			—			(34	)		(102	)		(14	)
Transfers into Level 3 [4]		—			483			450			202			—			—			—			1,135			—
Transfers out of Level 3 [4]		(24	)		—			(35	)		(531	)		—			(13	)		—			(603	)		—
Fair value as of March 31, 2012	$	299		$	903		$	1,001		$	1,994		$	55		$	625		$	1,109		$	5,986		$	508
Changes in unrealized gains (losses) included in net income related to financial instruments still held at March 31, 2012 [2] [7]	$	—		$	—		$	(5	)	$	—		$	—		$	—		$	(6	)	$	(11	)	$	18

				Freestanding Derivatives [5]
Assets (Liabilities)	Equity Securities, AFS			Credit			Equity			Interest Rate			U.S. GMWB Hedging			U.S. Macro Hedge Program			Intl. Program Hedging Instr.			Other Contracts			Total Free- Standing Derivatives [5]
Fair value as of January 1, 2012	$	93		$	(561	)	$	40		$	(58	)	$	883		$	357		$	35		$	28		$	724
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		3			92			(17	)		1			(312	)		(184	)		85			(1	)		(336	)
Included in OCI [3]		—			—			—			—			—			—			—			—			—
Purchases		2			—			35			—			—			—			(53	)		—			(18	)
Settlements		—			(5	)		(19	)		—			—			—			40			—			16
Sales		(9	)		—			—			—			—			—			—			—			—
Transfers into Level 3 [4]		—			—			—			—			—			—			—			—			—
Transfers out of Level 3 [4]		—			—			—			—			23			—			8			—			31
Fair value as of March 31, 2012	$	89		$	(474	)	$	39		$	(57	)	$	594		$	173		$	115		$	27		$	417
Changes in unrealized gains (losses) included in net income related to financial instruments still held at March 31, 2012 [2] [7]	$	—		$	80		$	(5	)	$	1		$	(312	)	$	(183	)	$	85		$	(1	)	$	(335	)

Assets	Reinsurance Recoverable for U.S. GMWB			Separate Accounts
Fair value as of January 1, 2012	$	443		$	1,031
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		(143	)		17
Included in OCI [3]		—			—
Purchases		—			215
Settlements		8			—
Sales		—			(342	)
Transfers into Level 3 [4]		—			439
Transfers out of Level 3 [4]		—			(14	)
Fair value as of March 31, 2012	$	308		$	1,346
Changes in unrealized gains (losses) included in net income related to financial instruments still held at March 31, 2012 [2] [7]	$	(143	)	$	6

	Other Policyholder Funds and Benefits Payable
Liabilities	U.S. Guaranteed Withdrawal Benefits			International Guaranteed Living Benefits			International Other Living Benefits			Equity Linked Notes			Total Other Policyholder Funds and Benefits Payable			Other Liabilities			Consumer Notes
Fair value as of January 1, 2012	$	(2,538	)	$	(66	)	$	(5	)	$	(9	)	$	(2,618	)	$	(9	)	$	(4	)
Total realized/unrealized gains (losses)
Included in net income [1], [2], [6]		896			30			5			(1	)		930			(12	)		—
Included in OCI [3]		—			1			—			—			1			—			—
Settlements		(41	)		(2	)		(1	)		—			(44	)		—			—
Fair value as of March 31, 2012	$	(1,683	)	$	(37	)	$	(1	)	$	(10	)	$	(1,731	)	$	(21	)	$	(4	)
Changes in unrealized gains (losses) included in net income related to financial instruments still held at March 31, 2012 [2] [7]	$	896		$	30		$	5		$	(1	)	$	930		$	(12	)	$	—

Roll-forward of Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) for the three months from January 1, 2011 to March 31, 2011.

	Fixed Maturities, AFS
Assets	ABS			CDOs			CMBS			Corporate			Foreign govt./govt. agencies			Municipal		RMBS			Total  Fixed Maturities, AFS			Fixed Maturities, 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]		(5	)		(15	)		(2	)		(22	)		—			—		(9	)		(53	)		58
Included in OCI [3]		20			113			113			(8	)		—			—		41			279			—
Purchases		—			—			—			17			2			—		—			19			—
Settlements		(11	)		(35	)		(10	)		(31	)		(1	)		—		(34	)		(122	)		(1	)
Sales		—			—			(122	)		(73	)		(2	)		—		(16	)		(213	)		—
Transfers into Level 3 [4]		49			30			73			195			11			4		—			362			—
Transfers out of Level 3 [4]		(84	)		—			—			(111	)		(3	)		—		(143	)		(341	)		—
Fair value as of March 31, 2011	$	446		$	2,674		$	741		$	2,096		$	63		$	276	$	1,124		$	7,420		$	579
Changes in unrealized gains (losses) included in net income related to financial instruments still held at March 31, 2011 [2] [7]	$	(5	)	$	(15	)	$	(1	)	$	(17	)	$	—		$	—	$	(3	)	$	(41	)	$	58

				Freestanding Derivatives [5]
Assets (Liabilities)	Equity Securities, AFS			Credit			Equity		Interest Rate			U.S. GMWB Hedging			U.S. Macro Hedge Program			Intl. Program Hedging Instr.			Other Contracts			Total Free- Standing 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]		(10	)		11			1		(3	)		(119	)		(80	)		(3	)		(1	)		(194	)
Included in OCI [3]		(1	)		—			—		—			—			—			—			—			—
Purchases		13			1			—		64			23			—			—			—			88
Settlements		—			(4	)		—		1			(16	)		—			—			—			(19	)
Sales		—			—			—		—			—			—			—			—			—
Transfers into Level 3 [4]		—			—			—		—			—			—			—			—			—
Transfers out of Level 3 [4]		(76	)		—			—		—			—			—			—			—			—
Fair value as of March 31, 2011	$	80		$	(382	)	$	5	$	9		$	488		$	123		$	2		$	31		$	276
Changes in unrealized gains (losses) included in net income related to financial instruments still held at March 31, 2011 [2] [7]	$	(10	)	$	11		$	1	$	(1	)	$	(113	)	$	(80	)	$	(2	)	$	(1	)	$	185

Assets	Reinsurance Recoverable 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]		(65	)		19
Included in OCI [3]		—			—
Purchases		—			128
Settlements		9			—
Sales		—			(147	)
Transfers into Level 3 [4]		—			8
Transfers out of Level 3 [4]		—			(48	)
Fair value as of March 31, 2011	$	224		$	1,207
Changes in unrealized gains (losses) included in net income related to financial instruments still held at March 31, 2011 [2] [7]	$	(65	)	$	(3	)

	Other Policyholder Funds and Benefits Payable
Liabilities	U.S. Guaranteed Withdrawal Benefits			International Guaranteed Living Benefits			International Other Living Benefits			Equity Linked Notes			Total Other Policyholder Funds and Benefits Payable			Other Liabilities			Consumer 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]		348			15			1			(1	)		363			(14	)		—
Included in OCI [3]		—			—			—			—			—			—			—
Settlements		(38	)		(2	)		(1	)		—			(41	)		—			—
Fair value as of March 31, 2011	$	(1,301	)	$	(23	)	$	3		$	(10	)	$	(1,331	)	$	(51	)	$	(5	)
Changes in unrealized gains (losses) included in net income related to financial instruments still held at March 31, 2011 [2] [7]	$	348		$	15		$	1		$	(1	)	$	363		$	(14	)	$	—

[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 Condensed 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

	Three Months Ended March 31,
	2012			2011
Assets
Fixed maturities, FVO
Corporate	$	1		$	12
CRE CDOs		19			46
Foreign government		(49	)		(6	)
Other liabilities
Credit-linked notes		(12	)		(14	)
Total realized capital gains (losses)	$	(41	)	$	38

Fair value of assets and liabilities accounted for using the fair value option

	As of
	March 31, 2012		December 31, 2011
Assets
Fixed maturities, FVO
ABS	$	65	$	65
CRE CDOs		240		225
Corporate		270		272
Foreign government		716		766
Total fixed maturities, FVO	$	1,291	$	1,328
Other liabilities
Credit-linked notes [1]	$	21	$	9

[1] As of March 31, 2012 and December 31, 2011, the outstanding principal balance of the notes was $243.

Financial Instruments Not Carried at Fair Value

	March 31, 2012					December 31, 2011
	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets
Policy loans	Level 3	$	1,970	$	2,136	$	2,001	$	2,153
Mortgage loans	Level 3		6,275		6,524		5,728		5,977
Liabilities
Other policyholder funds and benefits payable [1]	Level 3	$	9,888	$	10,725	$	10,343	$	11,238
Senior notes [2]	Level 2		4,481		4,817		4,481		4,623
Junior subordinated debentures [2]	Level 2		500		534		500		498
Private placement junior subordinated debentures [2]	Level 3		1,239		2,125		1,235		1,932
Consumer notes [3]	Level 3		306		313		310		305

[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 Condensed 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.