10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

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

For the quarterly period ended June 30, 2014

OR

¨ 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 033-44202

Prudential Annuities Life Assurance

Corporation

(Exact Name of Registrant as Specified in its Charter)

Arizona	06-1241288
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

One Corporate Drive

Shelton, Connecticut 06484

(203) 926-1888

(Address and Telephone Number of Registrant’s Principal Executive Offices)

Indicate by check mark 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.    Yes  x    No  ¨

Indicate by check mark 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 the Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark 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. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of August 13, 2014, 25,000 shares of the registrant’s Common Stock (par value $100) consisting of 100 voting shares and 24,900 non-voting shares, were outstanding. As of such date, Prudential Annuities, Inc., an indirect wholly owned subsidiary of Prudential Financial, Inc., a New Jersey corporation, owned all of the Registrant’s Common Stock.

Prudential Annuities Life Assurance Corporation meets the conditions set

forth in General Instruction (H) (1) (a) and (b) on Form 10-Q and

is therefore filing this Form 10-Q in the reduced disclosure format.

TABLE OF CONTENTS

			Page
PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements:
		Unaudited Interim Statements of Financial Position As of June 30, 2014 and December 31, 2013		4
		Unaudited Interim Statements of Operations and Comprehensive Income Three and Six Months Ended June 30, 2014 and 2013		5
		Unaudited Interim Statements of Equity Six Months Ended June 30, 2014 and 2013		6
		Unaudited Interim Statements of Cash Flows Six Months Ended June 30, 2014 and 2013		7
		Notes to Unaudited Interim Financial Statements		8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		37
	Item 4.	Controls and Procedures		43
PART II	OTHER INFORMATION			44
	Item 1.	Legal Proceedings		44
	Item 1A.	Risk Factors		44
	Item 6.	Exhibits		45
SIGNATURES				46

2

FORWARD LOOKING STATEMENTS

Certain of the statements included in this Quarterly Report on Form 10-Q, including but not limited to those in Management’s Discussion and Analysis of Financial Condition and Results of Operations, constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “includes,” “plans,” “assumes,” “estimates,” “projects,” “intends,” “should,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Prudential Annuities Life Assurance Corporation. There can be no assurance that future developments affecting Prudential Annuities Life Assurance Corporation will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (1) general economic, market and political conditions, including the performance and fluctuations of fixed income, equity, real estate and other financial markets; (2) the availability and cost of additional debt or equity capital or external financing for our operations; (3) interest rate fluctuations or prolonged periods of low interest rates; (4) the degree to which we choose not to hedge risks, or the potential ineffectiveness or insufficiency of hedging or risk management strategies we do implement, with regard to variable annuity or other product guarantees; (5) any inability to access our credit facilities; (6) reestimates of our reserves for future policy benefits and claims; (7) differences between actual experience regarding mortality, longevity, morbidity, persistency, surrender experience, interest rates, or market returns and the assumptions we use in pricing our products, establishing liabilities and reserves or for other purposes; (8) changes in our assumptions related to deferred policy acquisition costs or value of business acquired; (9) changes in our financial strength or credit ratings; (10) investment losses, defaults and counterparty non-performance; (11) competition in our product lines and for personnel; (12) changes in tax law; (13) regulatory or legislative changes, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; (14) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (15) adverse determinations in litigation or regulatory matters and our exposure to contingent liabilities; (16) domestic or international military actions, natural or man-made disasters including terrorist activities or pandemic disease, or other events resulting in catastrophic loss of life; (17) ineffectiveness of risk management policies and procedures in identifying, monitoring and managing risks; (18) interruption in telecommunication, information technology or other operational systems or failure to maintain the security, confidentiality or privacy of sensitive data on such systems; and (19) changes in statutory or accounting principles generally accepted in the United States of America (“U.S. GAAP”), practices or policies. Prudential Annuities Life Assurance Corporation does not intend, and is under no obligation, to update any particular forward-looking statement included in this document. See “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of certain risks relating to our business and investment in our securities.

3

Prudential Annuities Life Assurance Corporation

Unaudited Interim Statements of Financial Position

As of June 30, 2014 and December 31, 2013 (in thousands, except share amounts)

	June 30, 2014		December 31, 2013
ASSETS
Fixed maturities, available-for-sale, at fair value (amortized cost, 2014: $2,784,393; 2013: $3,079,002)	$	3,015,527	$	3,264,216
Trading account assets, at fair value		6,053		6,677
Equity securities, available-for-sale, at fair value (cost, 2014: $14; 2013: $206)		17		208
Commercial mortgage and other loans, net of valuation allowance		414,676		398,991
Policy loans		12,884		12,454
Short-term investments		54,509		118,188
Other long-term investments		85,601		60,585
Total investments		3,589,267		3,861,319
Cash and cash equivalents		602		1,417
Deferred policy acquisition costs		1,242,288		1,345,504
Accrued investment income		27,009		32,169
Reinsurance recoverables		1,595,250		748,690
Value of business acquired		39,726		43,500
Deferred sales inducements		740,832		809,247
Receivables from parent and affiliates		56,936		35,594
Other assets		8,498		16,994
Separate account assets		46,311,872		46,626,828
TOTAL ASSETS	$	53,612,280	$	53,521,262
LIABILITIES AND EQUITY
LIABILITIES
Policyholders’ account balances	$	2,847,945	$	3,191,215
Future policy benefits and other policyholder liabilities		2,042,370		1,127,342
Payables to parent and affiliates		57,308		111,403
Cash collateral for loaned securities		37,404		47,896
Income taxes		379,598		358,818
Short-term debt		215,000		205,000
Other liabilities		90,070		113,125
Separate account liabilities		46,311,872		46,626,828
Total Liabilities		51,981,567		51,781,627
Commitments and Contingent Liabilities (See Note 6)
EQUITY
Common stock, $100 par value; 25,000 shares, authorized, issued and outstanding		2,500		2,500
Additional paid-in capital		901,422		901,422
Retained earnings		632,775		764,846
Accumulated other comprehensive income (loss)		94,016		70,867
Total Equity		1,630,713		1,739,635
TOTAL LIABILITIES AND EQUITY	$	53,612,280	$	53,521,262

See Notes to Unaudited Interim Financial Statements

4

Prudential Annuities Life Assurance Corporation

Unaudited Interim Statements of Operations and Comprehensive Income

Three and Six Months Ended June 30, 2014 and 2013 (in thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
REVENUES
Premiums	$	10,791	$	8,615	$	18,933	$	15,108
Policy charges and fee income		203,696		201,497		405,363		400,361
Net investment income		41,458		58,934		85,959		117,474
Asset administration fees and other income		58,036		57,893		115,146		122,668
Realized investment gains (losses), net:
Other-than-temporary impairments on fixed maturity securities		-		-		-		-
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income		-		-		-		-
Other realized investment gains (losses), net		(4,195)		(43,415)		(4,366)		(81,511)
Total realized investment gains (losses), net		(4,195)		(43,415)		(4,366)		(81,511)
Total revenues		309,786		283,524		621,035		574,100
BENEFITS AND EXPENSES
Policyholders’ benefits		27,973		27,685		56,916		46,303
Interest credited to policyholders’ account balances		54,358		5,313		102,327		14,776
Amortization of deferred policy acquisition costs		62,155		(36,580)		101,138		(71,614)
General, administrative and other expenses		97,884		100,302		198,885		200,445
Total benefits and expenses		242,370		96,720		459,266		189,910
INCOME FROM OPERATIONS BEFORE INCOME TAXES		67,416		186,804		161,769		384,190
Income tax expense		9,985		43,134		26,840		93,132
NET INCOME		57,431		143,670		134,929		291,058
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments		(3)		-		(4)		(15)
Net unrealized investment gains (losses):
Unrealized investment gains (losses) for the period		16,305		(81,560)		36,495		(92,858)
Reclassification adjustment for (gains) losses included in net income		(71)		(5,096)		(877)		(7,809)
Net unrealized investment gains (losses)		16,234		(86,656)		35,618		(100,667)
Other comprehensive income (loss), before tax:		16,231		(86,656)		35,614		(100,682)
Less: Income tax expense (benefit) related to other comprehensive income (loss)
Foreign currency translation adjustments		(1)		-		(2)		(5)
Net unrealized income (losses)		5,682		(30,329)		12,467		(35,233)
Total		5,681		(30,329)		12,465		(35,238)
Other comprehensive income (loss), net of taxes		10,550		(56,327)		23,149		(65,444)
COMPREHENSIVE INCOME	$	67,981	$	87,343	$	158,078	$	225,614

See Notes to Unaudited Interim Financial Statements

5

Prudential Annuities Life Assurance Corporation

Unaudited Interim Statements of Equity

Six Months Ended June 30, 2014 and 2013 (in thousands)

	Common   stock		Additional   paid-in capital		Retained   earnings		Accumulated other   comprehensive   income (loss)		Total equity
Balance, December 31, 2013	$	2,500	$	901,422	$	764,846	$	70,867	$	1,739,635
Distribution to parent		-		-		(267,000)		-		(267,000)
Comprehensive income:
Net income		-		-		134,929		-		134,929
Other comprehensive income (loss), net of taxes		-		-		-		23,149		23,149
Total comprehensive income										158,078
Balance, June 30, 2014	$	2,500	$	901,422	$	632,775	$	94,016	$	1,630,713
	Common   stock		Additional   paid-in capital		Retained   earnings		Accumulated other   comprehensive   income (loss)		Total equity
Balance, December 31, 2012	$	2,500	$	893,336	$	200,754	$	147,287	$	1,243,877
Contributed capital		-		8,086		-		-		8,086
Distribution to parent		-		-		(184,000)		-		(184,000)
Comprehensive income:
Net income		-		-		291,058		-		291,058
Other comprehensive income (loss), net of taxes		-		-		-		(65,444)		(65,444)
Total comprehensive income										225,614
Balance, June 30, 2013	$	2,500	$	901,422	$	307,812	$	81,843	$	1,293,577

See Notes to Unaudited Interim Financial Statements

6

Prudential Annuities Life Assurance Corporation

Unaudited Interim Statements of Cash Flows

Six Months Ended June 30, 2014 and 2013 (in thousands)

	2014		2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	134,929	$	291,058
Adjustments to reconcile net income to net cash provided by operating activities:
Policy charges and fee income		2,625		7,526
Realized investment (gains) losses, net		4,366		81,511
Depreciation and amortization		3,640		10,804
Interest credited to policyholders’ account balances		102,327		14,776
Change in:
Future policy benefit reserves		152,066		139,943
Accrued investment income		5,160		4,894
Net receivable/payable to affiliates		(34,965)		(60,530)
Deferred sales inducements		(8,221)		(17,675)
Deferred policy acquisition costs		99,462		(74,037)
Income taxes		8,314		135,073
Reinsurance recoverables		(137,944)		(137,900)
Other, net		(36,028)		(46,238)
Cash flows from operating activities	$	295,731	$	349,205
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	$	670,328	$	712,921
Commercial mortgage and other loans		11,661		8,767
Trading account assets		3,364		3,596
Policy loans		412		171
Other long-term investments		1,542		1,190
Short-term investments		1,546,430		1,466,651
Payments for the purchase/origination of:
Fixed maturities, available-for-sale		(377,179)		(347,147)
Commercial mortgage and other loans		(27,344)		(41,806)
Trading account assets		(2,534)		(3,163)
Policy loans		(516)		(448)
Other long-term investments		(9,233)		(4,790)
Short-term investments		(1,482,751)		(1,609,953)
Notes receivable from parent and affiliates, net		(15,565)		2,450
Other, net		200		24
Cash flows from investing activities	$	318,815	$	188,463
CASH FLOWS USED IN FINANCING ACTIVITIES:
Cash collateral for loaned securities		(10,493)		(1,190)
Net increase in short-term borrowing		10,000		-
Drafts outstanding		5,184		5,192
Distribution to parent		(267,000)		(184,000)
Contributed capital		-		12,439
Policyholders’ account balances
Deposits		607,249		662,074
Withdrawals		(960,301)		(1,032,196)
Cash flows used in financing activities	$	(615,361)	$	(537,681)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(815)		(13)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		1,417		266
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	602	$	253

See Notes to Unaudited Interim Financial Statements

7

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements

1.    BUSINESS AND BASIS OF PRESENTATION

Prudential Annuities Life Assurance Corporation (the “Company” or “PALAC”), with its principal offices in Shelton, Connecticut, is an indirect wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”), a New Jersey corporation. The Company is a wholly-owned subsidiary of Prudential Annuities, Inc. (“PAI”), which in turn is an indirect wholly-owned subsidiary of Prudential Financial.

The Company developed long-term savings and retirement products, which were distributed through its affiliated broker/dealer company, Prudential Annuities Distributors, Incorporated (“PAD”). The Company issued variable deferred and immediate annuities for individuals and groups in the United States of America, District of Columbia and Puerto Rico. In addition, the Company has a relatively small inforce block of variable life insurance policies, but it no longer actively sells such policies.

Beginning in March 2010, the Company ceased offering its variable annuity products (and where offered, the companion market value adjustment option) to new investors upon the launch of a new product line by each of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey (which are affiliates of the Company). These initiatives were implemented to create operational and administrative efficiencies by offering a single product line of annuity products from a more limited group of legal entities. During 2012, the Company suspended additional customer deposits for variable annuities with certain optional living benefit riders. However, subject to applicable contract provisions and administrative rules, the Company continues to accept additional customer deposits on certain inforce contracts.

The Company is engaged in a business that is highly competitive because of the large number of stock and mutual life insurance companies and other entities engaged in marketing long-term savings and retirement products, including insurance products, and individual and group annuities.

On August 30, 2013, the Company received approval from the Arizona and Connecticut Departments of Insurance to redomesticate the Company from Connecticut to Arizona effective August 31, 2013.

As a result of the redomestication, the Company is now an Arizona insurance company and its principal insurance regulatory authority is the Arizona Department of Insurance. Additionally, the Company is now domiciled in the same jurisdiction as the primary reinsurer of the Company’s living benefits, Pruco Reinsurance, Ltd. (“Pruco Re”), which is also regulated by the Arizona Department of Insurance. This change enables the Company to claim statutory reserve credit for business ceded to Pruco Re without the need for Pruco Re to collateralize its obligations under the reinsurance agreement.

Basis of Presentation

The Unaudited Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”).

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 disclosure of contingent assets and liabilities as of 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 deferred policy acquisition costs and related amortization; value of business acquired and its amortization; amortization of deferred sales inducements; valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters.

2.    SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

This section supplements, and should be read in conjunction with, Note 2 to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Adoption of New Accounting Pronouncements

In December 2013, the Financial Accounting Standards Board (“FASB”) issued updated guidance establishing a single definition of a public entity for use in financial accounting and reporting guidance. This new guidance is effective for all current and future reporting periods and did not have a significant effect on the Company’s financial position, results of operations, or financial statement disclosures.

In July 2013, the FASB issued new guidance regarding derivatives. The guidance permits the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) to be used as a U.S. benchmark interest rate for hedge accounting, in addition to the United States Treasury rate and London Inter-Bank Offered Rate (“LIBOR”). The guidance also removes the restriction on using different benchmark rates for similar hedges. The guidance is effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s financial position, results of operations or financial statement disclosures.

8

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

In July 2013, the FASB issued updated guidance regarding the presentation of unrecognized tax benefits when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. This new guidance became effective for interim or annual reporting periods that began after December 15, 2013, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s financial position, results of operations or financial statement disclosures.

In February 2013, the FASB issued updated guidance regarding the presentation of comprehensive income. Under the guidance, an entity is required to separately present information about significant items reclassified out of accumulated other comprehensive income (“AOCI”) by component as well as changes in AOCI balances by component in either the financial statements or the notes to the financial statements. The guidance does not change the items that are reported in other comprehensive income, does not change when an item of other comprehensive income must be reclassified to net income, and does not amend any existing requirements for reporting net income or other comprehensive income. The guidance became effective for interim or annual reporting periods that began after December 15, 2012 and was applied prospectively. The disclosures required by this guidance are included in Note 3.

In December 2011 and January 2013, the FASB issued updated guidance regarding the disclosure of recognized derivative instruments (including bifurcated embedded derivatives), repurchase agreements and securities borrowing/lending transactions that are offset in the statement of financial position or are subject to an enforceable master netting arrangement or similar agreement (irrespective of whether they are offset in the statement of financial position). This new guidance requires an entity to disclose information on both a gross and net basis about instruments and transactions within the scope of this guidance. This new guidance became effective for interim or annual reporting periods that began on or after January 1, 2013, and was applied retrospectively for all comparative periods presented. The disclosures required by this guidance are included in Note 5.

Future Adoption of New Accounting Pronouncements

In January 2014, the FASB issued updated guidance for troubled debt restructurings clarifying when an in substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2014. This guidance can be elected for prospective adoption or by using a modified retrospective transition method. This guidance is not expected to have a significant effect on the Company’s financial position, results of operations or financial statement disclosures.

In May 2014, the FASB issued updated guidance on accounting for revenue recognition. The guidance is based on the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from cost incurred to obtain or fulfill a contract. Revenue recognition for insurance contracts is explicitly scoped out of the guidance. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2016, and must be applied using one of two retrospective application methods. Early adoption is not permitted. The Company is currently assessing the impact of the guidance on the Company’s financial position, results of operations and financial statement disclosures.

In August 2014, the FASB issued updated guidance for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity. Under the guidance, an entity within scope is permitted to measure both the financial assets and financial liabilities of a consolidated collateralized financing entity based on either the fair value of the financial assets or the financial liabilities, whichever is more observable. If elected, the guidance will eliminate the measurement difference that exists when both are measured at fair value. The new guidance is effective for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2015. Early adoption will be permitted. This guidance can be elected for modified retrospective or full retrospective adoption. The Company is currently assessing the impact of the guidance on the Company’s financial position, results of operations and financial statement disclosures.

9

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

3.    INVESTMENTS

Fixed Maturities and Equity Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:

	June 30, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI (3)
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	6,337	$	18	$	10	$	6,345	$	-
Obligations of U.S. states and their political subdivisions		68,339		2,353		360		70,332		-
Foreign government bonds		25,270		6,946		-		32,216		-
Public utilities		239,759		25,945		638		265,066		-
All other corporate securities		1,823,344		172,542		1,404		1,994,482		-
Asset-backed securities (1)		165,680		7,043		220		172,503		(40)
Commercial mortgage-backed securities		316,199		11,799		255		327,743		-
Residential mortgage-backed securities (2)		139,465		7,375		-		146,840		(38)
Total fixed maturities, available-for-sale	$	2,784,393	$	234,021	$	2,887	$	3,015,527	$	(78)
Equity securities, available-for-sale
Common Stocks:
Public utilities	$	-	$	-	$	-	$	-
Mutual funds		14		3		-		17
Total equity securities, available-for-sale	$	14	$	3	$	-	$	17

(1) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.

(2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(3) Represents the amount of other-than-temporary impairment losses in “AOCI,” which were not included in earnings. Amount excludes $0.1 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.

	December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI (3)
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	6,382	$	36	$	34	$	6,384	$	-
Obligations of U.S. states and their political subdivisions		67,225		2,911		1,570		68,566		-
Foreign government bonds		25,437		5,717		-		31,154		-
Public utilities		229,807		17,048		3,190		243,665		-
All other corporate securities		2,029,720		158,360		9,103		2,178,977		-
Asset-backed securities (1)		182,888		6,513		1,509		187,892		(1,351	)
Commercial mortgage-backed securities		384,764		11,387		5,518		390,633		-
Residential mortgage-backed securities (2)		152,779		5,138		972		156,945		(40	)
Total fixed maturities, available-for-sale	$	3,079,002	$	207,110	$	21,896	$	3,264,216	$	(1,391)
Equity securities, available-for-sale
Common Stocks:
Public utilities	$	192	$	-	$	-	$	192
Mutual funds		14		2		-		16
Total equity securities, available-for-sale	$	206	$	2	$	-	$	208

(1) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.

(2) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(3) Represents the amount of other-than-temporary impairment losses in “AOCI,” which were not included in earnings. Amount excludes $1.7 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.

10

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

The amortized cost and fair value of fixed maturities by contractual maturities at June 30, 2014, are as follows:

	Available-for-Sale
	Amortized Cost		Fair Value
	(in thousands)
Due in one year or less	$	250,546	$	257,895
Due after one year through five years		951,580		1,025,776
Due after five years through ten years		549,906		608,317
Due after ten years		411,017		476,453
Asset-backed securities		165,680		172,503
Commercial mortgage-backed securities		316,199		327,743
Residential mortgage-backed securities		139,465		146,840
Total	$	2,784,393	$	3,015,527

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed, and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

The following table depicts the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(in thousands)
Fixed maturities, available-for-sale
Proceeds from sales	$	120,393		$	6,501		$	172,423		$	121,428
Proceeds from maturities/repayments		186,089			386,663			493,702			593,078
Gross investment gains from sales, prepayments, and maturities		2,992			5,113			4,124			7,905
Gross investment losses from sales and maturities		(2,921	)		(17	)		(3,247	)		(97	)
Equity securities, available-for-sale
Proceeds from sales	$	-		$	-		$	-		$	1
Gross investment gains from sales		-			(1	)		1			-

As discussed in Note 2 to the Company’s Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2013, a portion of certain other-than-temporary-impairment (“OTTI”) losses on fixed maturity securities are recognized in “Other comprehensive income (loss)” (“OCI”). For these securities, the net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following tables set forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts.

Credit losses recognized in earnings on fixed maturity securities held by the Company for which a portion of the OTTI loss was recognized in OCI

	Three Months Ended June 30, 2014		Six Months Ended June 30, 2014
	(in thousands)
Balance, beginning of period	$	119	$	1,800
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period		(4)		(1,677)
Increases due to the passage of time on previously recorded credit losses		-		-
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected		(12)		(20)
Balance, end of period	$	103	$	103

	Three Months Ended June 30, 2013		Six Months Ended June 30, 2013
	(in thousands)
Balance, beginning of period	$	1,726	$	3,381
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period		(5)		(1,619)
Increases due to the passage of time on previously recorded credit losses		28		55
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected		-		(68)
Balance, end of period	$	1,749	$	1,749

11

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

Trading Account Assets

The following table sets forth the composition of “Trading account assets” as of the dates indicated:

	June 30, 2014				December 31, 2013
	Cost		Fair Value		Cost		Fair Value
	(in thousands)
Total trading account assets—Equity securities	$	5,045	$	6,053	$	5,164	$	6,677

The net change in unrealized gains (losses) from trading account assets still held at period end, recorded within “Asset administration fees and other income”, was ($0.6) million and ($0.1) million during the three months ended June 30, 2014 and 2013, respectively, and ($0.5) million and $0.4 million during the six months ended June 30, 2014 and 2013, respectively.

Commercial Mortgage and Other Loans

The Company’s commercial mortgage and other loans are comprised as follows, as of the dates indicated:

	June 30, 2014					December 31, 2013
	Amount (in thousands)		% of Total			Amount (in thousands)		% of Total
Commercial and agricultural mortgage loans by property type:
Apartments/Multi-Family	$	136,519		33.0	%	$	125,045		31.5	%
Industrial		85,798		20.8			88,009		22.1
Retail		71,310		17.3			72,325		18.2
Office		44,818		10.8			40,976		10.3
Other		14,479		3.6			13,796		3.5
Hospitality		5,110		1.2			5,133		1.3
Total commercial mortgage loans		358,034		86.7			345,284		86.9
Agricultural property loans		55,158		13.3			52,223		13.1
Total commercial and agricultural mortgage loans by property type		413,192		100.0	%		397,507		100.0	%
Valuation allowance		(1,256)					(1,256)
Total net commercial and agricultural mortgage loans by property type		411,936					396,251
Other Loans
Uncollateralized loans		2,740					2,740
Total other loans		2,740					2,740
Total commercial mortgage and other loans	$	414,676				$	398,991

The commercial mortgage and agricultural property loans are geographically dispersed throughout the United States with the largest concentrations in California (17%), Texas (11%) and Ohio (8%) at June 30, 2014.

Activity in the allowance for losses for all commercial mortgage and other loans, as of the dates indicated, is as follows:

	June 30, 2014		December 31, 2013
	(in thousands)
Allowance for losses, beginning of year	$	1,256	$	2,177
Addition to / (release of) allowance for losses		-		(921)
Total ending balance (1)	$	1,256	$	1,256

(1) Agricultural loans represent $0.1 million of the ending allowance at both June 30, 2014 and December 31, 2013.

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated:

	June 30, 2014		December 31, 2013
	(in thousands)
Allowance for Credit Losses:
Ending balance: individually evaluated for impairment (1)	$	-	$	-
Ending balance: collectively evaluated for impairment (2)		1,256		1,256
Total ending balance	$	1,256	$	1,256

12

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

	June 30, 2014		December 31, 2013
	(in thousands)
Recorded Investment (3):
Ending balance gross of reserves: individually evaluated for impairment (1)	$	-	$	-
Ending balance gross of reserves: collectively evaluated for impairment (2)		415,932		400,247
Total ending balance, gross of reserves	$	415,932	$	400,247

(1) There were no loans individually evaluated for impairments at June 30, 2014 and December 31, 2013.

(2) Agricultural loans collectively evaluated for impairment had a recorded investment of $55 million and $52 million at June 30, 2014 and December 31, 2013, respectively, and a related allowance of $0.1 million for both periods. Uncollateralized loans collectively evaluated for impairment had a recorded investment of $3 million at both June 30, 2014 and December 31, 2013 and no related allowance for both periods.

(3) Recorded investment reflects the balance sheet carrying value gross of related allowance.

Impaired loans include those loans for which it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. There were no impaired commercial mortgage and other loans identified in management’s specific review of probable loan losses and no related allowance for losses at June 30, 2014 and December 31, 2013.

Impaired commercial mortgage and other loans with no allowance for losses are loans in which the fair value of the collateral or the net present value of the loans’ expected future cash flows equals or exceeds the recorded investment. The Company had no such loans at June 30, 2014 and December 31, 2013. See Note 2 to the Company’s Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2013, for information regarding the Company’s accounting policies for non-performing loans.

The following table sets forth certain key credit quality indicators as of June 30, 2014, based upon the recorded investment gross of allowance for credit losses.

Total commercial and agricultural mortgage loans

	Debt Service Coverage Ratio - June 30, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in thousands)
Loan-to-Value Ratio
0%-59.99%	$	246,541	$	9,581	$	3,003	$	259,125
60%-69.99%		121,211		-		-		121,211
70%-79.99%		28,262		1,478		-		29,740
Greater than 80%		3,116		-		-		3,116
Total commercial and agricultural mortgage loans	$	399,130	$	11,059	$	3,003	$	413,192

The following table sets forth certain key credit quality indicators as of December 31, 2013, based upon the recorded investment gross of allowance for credit losses.

Total commercial and agricultural mortgage loans

	Debt Service Coverage Ratio - December 31, 2013
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in thousands)
Loan-to-Value Ratio
0%-59.99%	$	251,278	$	7,650	$	1,865	$	260,793
60%-69.99%		102,755		-		-		102,755
70%-79.99%		31,712		2,247		-		33,959
Greater than 80%		-		-		-		-
Total commercial and agricultural mortgage loans	$	385,745	$	9,897	$	1,865	$	397,507

As of June 30, 2014 and December 31, 2013, all commercial mortgage and other loans were in current status. The Company defines current in its aging of past due commercial mortgage and agricultural loans as less than 30 days past due.

There were no commercial mortgage and other loans in nonaccrual status as of June 30, 2014 and December 31, 2013. Nonaccrual loans are those on which the accrual of interest has been suspended after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability and loans for which a loan-specific reserve has been established. See Note 2 to the Company’s Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2013, for further discussion regarding nonaccrual status loans.

13

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

For the three and six months ended both June 30, 2014 and 2013, there were no new commercial mortgage and other loans acquired, other than those through direct origination.

The Company’s commercial mortgage and other loans may occasionally be involved in a troubled debt restructuring. As of both June 30, 2014 and December 31, 2013, the Company had no significant commitments to fund to borrowers that have been involved in a troubled debt restructuring. During the three and six months ended June 30, 2014 and 2013, respectively, there were no new troubled debt restructurings related to commercial mortgage and other loans, and no payment defaults on commercial mortgage and other loans that were modified as a troubled debt restructuring within the 12 months preceding each respective period. For additional information relating to the accounting for troubled debt restructurings, see Note 2 to the Company’s Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2013.

Net Investment Income

Net investment income for the three and six months ended June 30, 2014 and 2013, was from the following sources:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in thousands)
Fixed maturities, available-for-sale	$	35,805	$	49,240	$	74,181	$	102,534
Trading account assets		21		29		30		61
Commercial mortgage and other loans		5,236		10,274		11,402		16,403
Policy loans		223		225		350		339
Short-term investments		72		96		130		179
Other long-term investments		1,577		739		2,791		1,429
Gross investment income		42,934		60,603		88,884		120,945
Less: investment expenses		(1,476)		(1,669)		(2,925)		(3,471)
Net investment income	$	41,458	$	58,934	$	85,959	$	117,474

Realized Investment Gains (Losses), Net 

Realized investment gains (losses), net, for the three and six months ended June 30, 2014 and 2013, were from the following sources:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in thousands)
Fixed maturities	$	71	$	5,096	$	877	$	7,808
Equity securities		-		-		1		1
Commercial mortgage and other loans		-		330		-		368
Derivatives		(4,266)		(48,839)		(5,244)		(89,665)
Other		-		(2)		-		(23)
Realized investment gains (losses), net	$	(4,195)	$	(43,415)	$	(4,366)	$	(81,511)

Accumulated Other Comprehensive Income (Loss)

The balance of and changes in each component of “Accumulated other comprehensive income (loss)” for the six months ended June 30, 2014 and 2013 are as follows:

	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2013	$	10	$	70,857	$	70,867
Change in other comprehensive income before reclassifications		(4)		36,495		36,491
Amounts reclassified from AOCI		-		(877)		(877)
Income tax benefit (expense)		2		(12,467)		(12,465)
Balance, June 30, 2014	$	8	$	94,008	$	94,016

14

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

	Accumulated Other Comprehensive Income (Loss)
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Total Accumulated Other Comprehensive Income (Loss)
	(in thousands)
Balance, December 31, 2012	$	7	$	147,280	$	147,287
Change in other comprehensive income before reclassifications		(15)		(92,858)		(92,873)
Amounts reclassified from AOCI		-		(7,809)		(7,809)
Income tax benefit (expense)		5		35,233		35,238
Balance, June 30, 2013	$	(3)	$	81,846	$	81,843

(1) Includes cash flow hedges of ($4) million as of both June 30, 2014 and December 31, 2013 and ($1) million and ($3) million as of June 30, 2013 and December 31, 2012, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended June 30, 2014		Six Months Ended June 30, 2014
	(in thousands)
Amounts reclassified from AOCI (1)(2):
Net unrealized investment gains (losses):
Cash flow hedges—Currency/Interest rate (3)	$	(19)	$	(34)
Net unrealized investment gains (losses) on available-for-sale securities		90		911
Total net unrealized investment gains (losses) (4)		71		877
Total reclassifications for the period	$	71	$	877

(1) All amounts are shown before tax.

(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3) See Note 5 for additional information on cash flow hedges.

(4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs and future policy benefits.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains and losses on securities classified as available-for-sale and certain other long-term investments and other assets are included in the Company’s Unaudited Interim Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

	Net Unrealized Gains (Losses) on Investments (1)		Deferred Policy Acquisition Costs and Other Costs		Future Policy Benefits		Deferred Income Tax (Liability) Benefit		Accumulated Other Comprehensive Income (Loss) Related to  Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2013	$	323	$	(116)	$	(14)	$	(51)	$	142
Net investment gains (losses) on investments arising during the period		5		-		-		(2)		3
Reclassification adjustment for (gains) losses included in net income		(295)		-		-		102		(193)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs		-		105		-		(38)		67
Impact of net unrealized investment (gains) losses on future policy benefits		-		-		13		(4)		9
Balance, June 30, 2014	$	33	$	(11)	$	(1)	$	7	$	28

(1) Includes cash flow hedges. See Note 5 for information on cash flow hedges.

15

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

All Other Net Unrealized Investment Gains and Losses in AOCI

	Net Unrealized Gains (Losses) on Investments (1)		Deferred Policy Acquisition Costs and Other Costs		Future Policy Benefits		Deferred Income Tax (Liability) Benefit		Accumulated Other Comprehensive Income (Loss) Related To  Net Unrealized Investment Gains (Losses)
	(in thousands)
Balance, December 31, 2013	$	184,727	$	(66,452)	$	(8,187)	$	(39,363)	$	70,725
Net investment gains (losses) on investments arising during the period		46,314		-		-		(16,215)		30,099
Reclassification adjustment for (gains) losses included in net income		(582)		-		-		203		(379)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs		-		(7,638)		-		2,671		(4,967)
Impact of net unrealized investment (gains) losses on future policy benefits		-		-		(2,303)		805		(1,498)
Balance, June 30, 2014	$	230,459	$	(74,090)	$	(10,490)	$	(51,899)	$	93,980

(1) Includes cash flow hedges. See Note 5 for information on cash flow hedges.

Net Unrealized Gains (Losses) on Investments by Asset Class

The table below presents net unrealized gains / (losses) on investments by asset class as of the dates indicated:

	June 30, 2014		December 31, 2013
	(in thousands)
Fixed maturity securities on which an OTTI loss has been recognized	$	33	$	323
Fixed maturity securities, available-for-sale—all other		231,101		184,891
Equity securities, available-for-sale		3		2
Affiliated notes		2,779		3,113
Derivatives designated as cash flow hedges (1)		(4,076)		(3,653)
Other investments		652		374
Net unrealized gains (losses) on investments	$	230,492	$	185,050

(1) See Note 5 for more information on cash flow hedges.

Duration of Gross Unrealized Loss Positions for Fixed Maturities and Equity Securities

The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, as of the dates indicated:

	June 30, 2014
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross   Unrealized   Losses		Fair Value		Gross   Unrealized   Losses		Fair Value		Gross   Unrealized   Losses
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	2,692	$	10	$	-	$	-	$	2,692	$	10
Obligations of U.S. States and their political subdivisions		-		-		6,995		360		6,995		360
Corporate securities		94,815		1,001		47,798		1,041		142,613		2,042
Asset-backed securities		15,070		139		17,832		81		32,902		220
Commercial mortgage-backed securities		-		-		7,223		255		7,223		255
Residential mortgage-backed securities		-		-		-		-		-		-
Total	$	112,577	$	1,150	$	79,848	$	1,737	$	192,425	$	2,887
Equity securities, available-for-sale	$	-	$	-	$	-	$	-	$	-	$	-

16

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

	December 31, 2013
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross   Unrealized   Losses		Fair Value		Gross   Unrealized   Losses		Fair Value		Gross   Unrealized   Losses
	(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	3,347	$	34	$	-	$	-	$	3,347	$	34
Obligations of U.S. States and their political subdivisions		5,420		588		6,402		982		11,822		1,570
Corporate securities		351,306		11,923		2,704		370		354,010		12,293
Asset-backed securities		97,575		1,509		-		-		97,575		1,509
Commercial mortgage-backed securities		86,132		5,249		2,941		269		89,073		5,518
Residential mortgage-backed securities		100,150		972		-		-		100,150		972
Total	$	643,930	$	20,275	$	12,047	$	1,621	$	655,977	$	21,896
Equity securities, available-for-sale	$	-	$	-	$	-	$	-	$	-	$	-

The gross unrealized losses on fixed maturity securities at June 30, 2014 and December 31, 2013, are composed of $2.2 million and $20.4 million, respectively, related to high or highest quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $0.7 million and $1.5 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. At June 30, 2014, $1.7 million of gross unrealized losses of twelve months or more were concentrated in U.S. obligations, commercial mortgage-backed securities, and the consumer non-cyclical and utility sectors of the Company’s corporate securities. At December 31, 2013, $1.6 million of gross unrealized losses of twelve months or more were concentrated in U.S. obligations and the consumer non-cyclical sector of the Company’s corporate securities.

In accordance with its policy described in Note 2 to the Company’s Financial Statements included in its 2013 Annual Report on Form 10-K, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at June 30, 2014 or December 31, 2013. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to credit spread widening and increased liquidity discounts. At June 30, 2014, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of its remaining amortized cost basis.

4.    FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement – Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. The Company’s Level 1 assets and liabilities primarily include short term investments and equity securities that trade on an active exchange market.

Level 2 - Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. The Company’s Level 2 assets and liabilities include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities (mutual funds, which do not actively trade and are priced based on a net asset value), certain short term investments and certain over-the-counter derivatives.

Level 3 - Fair value is based on at least one or more significant unobservable inputs for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value. The Company’s Level 3 assets and liabilities primarily include: certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly structured over-the-counter derivative contracts, and embedded derivatives resulting from certain products with guaranteed benefits.

17

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

Assets and Liabilities by Hierarchy Level – The tables below present the balances of assets and liabilities measured at fair value on a recurring basis, as of the dates indicated.

	As of June 30, 2014
	Level 1		Level 2		Level 3		Netting (2)		Total
	(in thousands)
Fixed maturities, available-for-sale:
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	6,345	$	-	$	-	$	6,345
Obligations of U.S. states and their political subdivisions		-		70,332		-		-		70,332
Foreign government bonds		-		32,216		-		-		32,216
Corporate securities		-		2,157,540		102,008		-		2,259,548
Asset-backed securities		-		98,202		74,301		-		172,503
Commercial mortgage-backed securities		-		327,743		-		-		327,743
Residential mortgage-backed securities		-		146,840		-		-		146,840
Sub-total		-		2,839,218		176,309		-		3,015,527
Trading account assets:
Equity securities		6,053		-		-		-		6,053
Sub-total		6,053		-		-		-		6,053
Equity securities, available-for-sale		-		17		-		-		17
Short-term investments		54,509		-		-		-		54,509
Cash equivalents		-		-		400		-		400
Other long-term investments		-		87,728		536		(67,715)		20,549
Reinsurance recoverables		-		-		1,594,311		-		1,594,311
Receivables from parent and affiliates		-		16,751		27,762		-		44,513
Sub-total excluding separate account assets		60,562		2,943,714		1,799,318		(67,715)		4,735,879
Separate account assets (1)		1,042,511		45,269,361		-		-		46,311,872
Total assets	$	1,103,073	$	48,213,075	$	1,799,318	$	(67,715)	$	51,047,751
Future policy benefits (3)	$	-	$	-	$	1,662,957	$	-	$	1,662,957
Payables to parent and affiliates		-		57,131		-		(57,131)		0
Total liabilities	$	-	$	57,131	$	1,662,957	$	(57,131)	$	1,662,957

	As of December 31, 2013
	Level 1		Level 2		Level 3		Netting (2)		Total
	(in thousands)
Fixed maturities, available-for-sale:
U.S Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	6,384	$	-	$	-	$	6,384
Obligations of U.S. states and their political subdivisions		-		68,566		-		-		68,566
Foreign government securities		-		31,154		-		-		31,154
Corporate securities		-		2,325,846		96,796		-		2,422,642
Asset-backed securities		-		124,103		63,789		-		187,892
Commercial mortgage-backed securities		-		390,633		-		-		390,633
Residential mortgage-backed securities		-		156,945		-		-		156,945
Sub-total		-		3,103,631		160,585		-		3,264,216
Trading account assets:
Equity securities		6,364		-		313		-		6,677
Sub-total		6,364		-		313		-		6,677
Equity securities, available-for-sale		-		16		192		-		208
Short-term investments		118,188		-		-		-		118,188
Other long-term investments		-		73,535		486		(73,535)		486
Reinsurance recoverables		-		-		748,005		-		748,005
Receivables from parent and affiliates		-		19,071		6,347		-		25,418
Sub-total excluding separate account assets		124,552		3,196,253		915,928		(73,535)		4,163,198
Separate account assets (1)		1,190,903		45,435,925		-		-		46,626,828
Total assets	$	1,315,455	$	48,632,178	$	915,928	$	(73,535)	$	50,790,026
Future policy benefits (3)	$	-	$	-	$	778,226	$	-	$	778,226
Payables to parent and affiliates		-		94,580		-		(72,822)		21,758
Total liabilities	$	-	$	94,580	$	778,226	$	(72,822)	$	799,984

18

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

(1) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Statements of Financial Position.

(2) “Netting” amounts represent cash collateral of $10.6 million and $0.7 million as of June 30, 2014 and December 31, 2013, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.

(3) As of June 30, 2014, the net embedded derivative liability position of $1,663 million includes $138 million of embedded derivatives in an asset position and $1,801 million of embedded derivatives in a liability position. As of December 31, 2013, the net embedded derivative liability position of $778 million includes $245 million of embedded derivatives in an asset position and $1,023 million of embedded derivatives in a liability position.

The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below.

Fixed Maturity Securities – The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Prices for each security are generally sourced from multiple pricing vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. The pricing hierarchy is updated for new financial products and recent pricing experience. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. If the pricing information received from third party pricing services is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service. If the pricing service updates the price to be more consistent with the presented market observations, the security remains within Level 2.

Internally-developed valuations or indicative broker quotes are also used to determine fair value in circumstances where vendor pricing is not available, or where the Company ultimately concludes that pricing information received from the independent pricing service is not reflective of market activity. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may over-ride the information with an internally developed valuation. As of June 30, 2014 and December 31, 2013 over-rides on a net basis were not material. Pricing service over-rides, internally developed valuations and indicative broker quotes are generally included in Level 3 in the fair value hierarchy.

The fair value of private fixed maturities, which are comprised of investments in private placement securities, originated by internal private asset managers, are primarily determined using a discounted cash flow model. If the fair value is determined using pricing inputs that are observable in the market, the securities have been reflected within Level 2; otherwise a Level 3 classification is used.

Trading Account Assets – Trading account assets consist primarily of equity securities whose fair values are determined consistent with similar instruments described below under “Equity Securities.”

Equity Securities – Equity securities consist principally of investments in common stock of publicly traded companies, perpetual preferred stock, privately traded securities, as well as mutual fund shares. The fair values of most publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using discounted cash flow, earnings multiple and other valuation models that require a substantial level of judgment around inputs and therefore are classified within Level 3. The fair values of mutual fund shares that transact regularly (but do not trade in active markets because they are not publicly available) are based on transaction prices of identical fund shares and are classified within Level 2 in the fair value hierarchy. The fair values of perpetual preferred stock are based on inputs obtained from independent pricing services that are primarily based on indicative broker quotes. As a result, the fair values of perpetual preferred stock are classified as Level 3.

Derivative Instruments – Derivatives are recorded at fair value either as assets, within “Other long-term investments,” or as liabilities, within “Payables to parent and affiliates,” except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, credit spreads, market volatility, expected returns, non-performance risk (“NPR”), liquidity and other factors. Liquidity valuation adjustments are made to reflect the cost of exiting significant risk positions, and consider the bid-ask spread, maturity, complexity, and other specific attributes of the underlying derivative position.

The majority of the Company’s derivative positions are traded in the over-the-counter (“OTC”) derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models that utilize actively quoted or observable market input values from external market data providers, third-party pricing vendors and/or recent trading activity. The Company’s policy is to use mid-market pricing in determining its best estimate of fair value. The fair values of most OTC derivatives, including interest rate and cross currency swaps and single name credit default swaps are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models’ key inputs include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, NPR, volatility, and other factors.

The Company’s cleared interest rate swaps and credit derivatives linked to an index are valued using models that utilize actively quoted or observable market inputs, including overnight indexed swap discount rates, obtained from external market data providers, third-party pricing vendors, and/or recent trading activity. These derivatives are classified as Level 2 in the fair value hierarchy.

To reflect the market’s perception of its own and the counterparty’s NPR, the Company incorporates additional spreads over LIBOR into the discount rate used in determining the fair value of OTC derivative assets and liabilities that are not otherwise collateralized.

19

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

Derivatives classified as Level 3 include structured products. These derivatives are valued based upon models, such as Monte Carlo simulation models and other techniques, that utilize significant unobservable inputs. Level 3 methodologies are validated through periodic comparison of the Company’s fair values to external broker-dealer values. As of June 30, 2014 and December 31, 2013, there were no internally valued derivatives with the fair value classified within Level 3, and all other derivatives were classified within Level 2. See Note 5 for more details on the fair value of derivative instruments by primary underlying.

Short-Term Investments – Short-term investments include money market instruments and other highly liquid debt instruments. Certain money market instruments are valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1.

Separate Account Assets – Separate Account Assets include fixed maturity securities, treasuries, and equity securities for which values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and “Equity Securities.”

Receivables from Parent and Affiliates – Receivables from Parent and Affiliates carried at fair value include affiliated bonds within the Company’s legal entity whose fair value are determined consistent with similar securities described above under “Fixed Maturity Securities” managed by affiliated asset managers.

Reinsurance Recoverables – Reinsurance recoverables carried at fair value include the reinsurance of the Company’s living benefit guarantees on certain of its variable annuities. These guarantees are accounted for as embedded derivatives and are described below in “Future Policy Benefits.” The reinsurance agreements covering these guarantees are derivatives with fair value determined in the same manner as the living benefit guarantees.

Future Policy Benefits – The liability for future policy benefits primarily includes general account liabilities for the optional living benefit features of the Company’s variable annuity contracts, including guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”), accounted for as embedded derivatives. The fair values of the GMAB, GMWB, and GMIWB liabilities are calculated as the present value of future expected benefit payments to contractholders less the present value of assessed rider fees attributable to the optional living benefit feature. This methodology could result in either a liability or contra-liability balance, given changing capital market conditions and various actuarial assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management judgment.

The significant inputs to the valuation models for these embedded derivatives include capital market assumptions, such as interest rate levels and volatility assumptions, the Company’s market-perceived NPR, as well as actuarially determined assumptions, including contractholder behavior, such as lapse rates, benefit utilization rates, withdrawal rates, and mortality rates. Since many of these assumptions are unobservable and are considered to be significant inputs to the liability valuation, the liability included in future policy benefits has been reflected within Level 3 in the fair value hierarchy.

Capital market inputs and actual policyholders’ account values are updated each quarter based on capital market conditions as of the end of the quarter, including interest rates, equity markets, and volatility. In the risk neutral valuation, the initial swap curve drives the total return used to grow the policyholders’ account value. The Company’s discount rate assumption is based on the LIBOR swap curve, adjusted for an additional spread relative to LIBOR to reflect NPR.

Actuarial assumptions, including contractholder behavior and mortality, are reviewed at least annually, and updated based upon emerging experience, future expectations, and other data, including any observable market data. These assumptions are generally updated in the third quarter of each year unless a material change that the Company feels is indicative of a long term trend is observed in an interim period.

Transfers between Levels 1 and 2 – Transfers between levels are generally reported at the values as of the beginning of the period in which the transfers occur. Periodically there are transfers between Level 1 and Level 2 for assets held in the Company’s Separate Account. The classification of Separate Account funds may vary dependent on the availability of information to the public. Should a fund’s net asset value become publicly observable, the fund would be transferred from Level 2 to Level 1. During the six months ended June 30, 2014, $7 million was transferred from Level 1 to Level 2. During both the three months ended June 30, 2014 and the three and six months ended June 30, 2013, there were no transfers between Level 1 and Level 2.

20

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

Level 3 Assets and Liabilities by Price Source – The tables below present the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources.

	As of June 30, 2014
	Internal (1)		External (2)		Total
	(in thousands)
Corporate securities	$	100,129	$	1,879	$	102,008
Asset-backed securities		-		74,301		74,301
Cash equivalents		400		-		400
Other long-term investments		-		536		536
Reinsurance recoverables		1,594,311		-		1,594,311
Receivables from parent and affiliates		-		27,762		27,762
Total assets	$	1,694,840	$	104,478	$	1,799,318
Future policy benefits		1,662,957		-		1,662,957
Total liabilities	$	1,662,957	$	-	$	1,662,957
	As of December 31, 2013
	Internal (1)		External (2)		Total
	(in thousands)
Corporate securities	$	94,730	$	2,066	$	96,796
Asset-backed securities		-		63,789		63,789
Equity securities		192		313		505
Other long-term investments		-		486		486
Reinsurance recoverables		748,005		-		748,005
Receivables from parent and affiliates		-		6,347		6,347
Total assets	$	842,927	$	73,001	$	915,928
Future policy benefits		778,226		-		778,226
Total liabilities	$	778,226	$	-	$	778,226

(1) Represents valuations which could incorporate internally-derived and market inputs. See below for additional information related to internally-developed valuation for significant items in the above table.

(2) Represents unadjusted prices from independent pricing services and independent non-binding broker quotes where pricing inputs are not readily available.

Quantitative Information Regarding Internally Priced Level 3 Assets and Liabilities – The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities (see narrative below for quantitative information for separate account assets).

	As of June 30, 2014
	Fair     Value		Primary Valuation     Techniques	Unobservable     Inputs	Minimum			Maximum			Weighted     Average			Impact of Increase in     Input on Fair     Value (1)
	(in thousands)
Assets:
Corporate securities	$	100,129	Discounted cash flow	Discount rate		3.50	%		10.91	%		4.20	%		Decrease
Reinsurance recoverables	$	1,594,311	Fair values are determined in the same manner as future policy benefits
Liabilities:
Future policy benefits (2)	$	1,662,957	Discounted cash flow	Lapse rate (3)		0	%		11	%					Decrease
				NPR spread (4)		0.02	%		1.03	%					Decrease
				Utilization rate (5)		70	%		94	%					Increase
				Withdrawal rate (6)		86	%		100	%					Increase
				Mortality rate (7)		0	%		13	%					Decrease
				Equity Volatility curve		14	%		28	%					Increase

21

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

	As of December 31, 2013
	Fair     Value		Primary Valuation     Techniques	Unobservable     Inputs	Minimum			Maximum			Weighted     Average			Impact of Increase in     Input on Fair     Value (1)
	(in thousands)
Assets:
Corporate securities	$	94,730	Discounted cash flow	Discount rate		3.73	%		12.06	%		3.90	%		Decrease
Reinsurance recoverables	$	748,005	Fair values are determined in the same manner as future policy benefits
Liabilities:
Future policy benefits (2)	$	778,226	Discounted cash flow	Lapse rate (3)		0	%		11	%					Decrease
				NPR spread (4)		0.08	%		1.09	%					Decrease
				Utilization rate (5)		70	%		94	%					Increase
				Withdrawal rate (6)		86	%		100	%					Increase
				Mortality rate (7)		0	%		13	%					Decrease
				Equity Volatility curve		15	%		28	%					Increase

(1) Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table.

(2) Future policy benefits primarily represent general account liabilities for the optional living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(3) Base lapse rates are adjusted at the contract level based on a comparison of the benefit amount and the policyholder account value and reflect other factors, such as the applicability of any surrender charges. A dynamic lapse adjustment reduces the base lapse rate when the benefit amount is greater than the account value, as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(4) To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. In determining the NPR spread, the Company reflects the financial strength ratings of the Company and its affiliates as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements adjusted for any illiquidity risk premium.

(5) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. These assumptions vary based on the product type, the age of the contractholder, and the age of the contract. The impact of changes in these assumptions is highly dependent on the contract type and age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal.

(6) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%.

(7) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Interrelationships Between Unobservable Inputs – In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another, or multiple, inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:

Corporate Securities – The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term, and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors.

Future Policy Benefits – The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.

Valuation Process for Fair Value Measurements Categorized within Level 3 – The Company has established an internal control infrastructure over the valuation of financial instruments that requires ongoing oversight by its various Business Groups. These management control functions are segregated from the trading and investing functions. For invested assets, the Company has established oversight teams, often in the form of Pricing Committees within each asset management group. The teams, which typically include representation from investment, accounting, operations, legal and other disciplines are responsible for overseeing and monitoring the pricing of the Company’s investments and performing periodic due diligence reviews of independent pricing services. An actuarial valuation team oversees the valuation of optional living benefit features of the Company’s variable annuity contracts.

22

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

The Company has also established policies and guidelines that require the establishment of valuation methodologies and consistent application of such methodologies. These policies and guidelines govern the use of inputs and price source hierarchies and provide controls around the valuation processes. These controls include appropriate review and analysis of investment prices against market activity or indicators of reasonableness, approval of price source changes, price overrides, methodology changes and classification of fair value hierarchy levels. For optional living benefit features of the Company’s variable annuity products, the actuarial valuation unit periodically performs baseline testing of contract input data and actuarial assumptions are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data, such as available industry studies. The valuation policies and guidelines are reviewed and updated as appropriate.

Within the trading and investing functions, the Company has established policies and procedures that relate to the approval of all new transaction types, transaction pricing sources and fair value hierarchy coding within the financial reporting system. For variable annuity product changes or new launches of optional living benefit features, the actuarial valuation unit validates input logic and new product features and agrees new input data directly to source documents.

Changes in Level 3 assets and liabilities – The following tables provide summaries of the changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.

	Three Months Ended June 30, 2014
	Fixed Maturities Available-For-Sale
	Corporate Securities		Asset- Backed Securities		Commercial Mortgage- Backed Securities		Trading Account Assets - Equity Securities		Equity Securities Available-for - Sale
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	99,255	$	102,725	$	45,365	$	328	$	192
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		-		-		-		-		-
Asset management fees and other income		-		-		-		-		-
Included in other comprehensive income (loss)		236		122		-		-		-
Net investment income		1,249		38		-		-		-
Purchases		1,751		-		-		-		-
Sales		-		-		-		-		(192)
Issuances		-		-		-		-		-
Settlements		(483)		(25,458)		-		(328)		-
Transfers into Level 3 (1)		-		489		-		-		-
Transfers out of Level 3 (1)		-		(3,615)		(45,365)		-		-
Fair Value, end of period assets/(liabilities)	$	102,008	$	74,301	$	-	$	-	$	-
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (2):
Included in earnings:
Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	-
Asset management fees and other income	$	-	$	-	$	-	$	-	$	-
		Three Months Ended June 30, 2014
	Cash Equivalents		Other Long-term Investments		Reinsurance Recoverables		Receivables from parent and affiliates		Future Policy Benefits
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	400	$	520	$	1,344,587	$	8,344	$	(1,402,029)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		-		-		191,020		-		(199,363)
Asset management fees and other income		-		7		-		-		-
Included in other comprehensive income (loss)		-		-		-		68		-
Net investment income		-		-		-		19,350		-
Purchases		-		14		58,704		-		-
Sales		-		-		-		-		-
Issuances		-		-		-		-		(61,565)
Settlements		-		(5)		-		-		-
Transfers into Level 3 (1)		-		-		-		-		-
Transfers out of Level 3 (1)		-		-		-		-		-
Fair Value, end of period assets/(liabilities)	$	400	$	536	$	1,594,311	$	27,762	$	(1,662,957)

23

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

		Three Months Ended June 30, 2014
	Cash Equivalents		Other Long-term Investments		Reinsurance Recoverables		Receivables from parent and affiliates		Future Policy Benefits
	(in thousands)
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (2):
Included in earnings:
Realized investment gains (losses), net	$	-	$	-	$	204,298	$	-	$	(213,148)
Asset management fees and other income	$	-	$	-	$	-	$	-	$	-
	Six Months Ended June 30, 2014
	Fixed Maturities Available-For-Sale
	Corporate Securities		Asset- Backed Securities		Commercial Mortgage- Backed Securities		Trading Account Assets - Equity Securities		Equity Securities Available-for - Sale
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	96,796	$	63,789	$	-	$	313	$	192
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		-		-		-		-		-
Asset management fees and other income		-		-		-		15		-
Included in other comprehensive income (loss)		483		300		(83)		-		-
Net investment income		2,473		82		-		-		-
Purchases		3,240		14,933		45,448		-		-
Sales		-		-		-		-		(192)
Issuances		-		-		-		-		-
Settlements		(984)		(29,340)		-		(328)		-
Transfers into Level 3 (1)		-		28,152		-		-		-
Transfers out of Level 3 (1)		-		(3,615)		(45,365)		-		-
Fair Value, end of period assets/(liabilities)	$	102,008	$	74,301	$	-	$	-	$	-
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (2):
Included in earnings:
Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	-
Asset management fees and other income	$	-	$	-	$	-	$	15	$	-
	Six Months Ended June 30, 2014
	Cash Equivalents		Other Long-term Investments		Reinsurance Recoverables		Receivables from parent and affiliates		Future Policy Benefits
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	-	$	486	$	748,005	$	6,347	$	(778,226)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		-		-		728,874		1		(761,582)
Asset management fees and other income		-		(2)		-		-		-
Included in other comprehensive income (loss)		-		-		-		79		-
Net investment income		-		-		-		-		-
Purchases		400		57		117,432		19,350		-
Sales		-		-		-		-		-
Issuances		-		-		-		-		(123,149)
Settlements		-		(5)		-		-		-
Transfers into Level 3 (1)		-		-		-		1,985		-
Transfers out of Level 3 (1)		-		-		-		-		-
Fair Value, end of period assets/(liabilities)	$	400	$	536	$	1,594,311	$	27,762	$	(1,662,957)

24

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

	Six Months Ended June 30, 2014
	Cash Equivalents		Other Long-term Investments		Reinsurance Recoverables		Receivables from parent and affiliates		Future Policy Benefits
	(in thousands)
Unrealized gains (losses) for the period relating to those
Level 3 assets that were still held at the end of the period (2):
Included in earnings:
Realized investment gains (losses), net	$	-	$	-	$	749,020	$	-	$	(782,440)
Asset management fees and other income	$	-	$	-	$	-	$	-	$	-
	Three Months Ended June 30, 2013
	Fixed Maturities Available-For-Sale
	Corporate Securities		Asset Backed Securities		Commercial Mortgage- Backed		Trading Account Assets - Equity Securities		Other Long Term Investments
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	95,575	$	72,740	$	9,106	$	267	$	463
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		45		-		1		-		(97)
Asset management fees and other income		-		-		-		12		4
Included in other comprehensive income (loss)		(3,789)		(151)		-		-		-
Net investment income		1,176		181		-		-		-
Purchases		643		18,922		-				37
Sales		-		-		-		-		-
Issuances		-		-		-		-		-
Settlements		(2,434)		(5,606)		-		-		-
Transfers into Level 3 (1)		4,976		-		-		-		-
Transfers out of Level 3 (1)		-		-		(9,107)		-		-
Fair Value, end of period assets/(liabilities)	$	96,192	$	86,086	$	-	$	279	$	407
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (2):
Included in earnings:
Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	(97)
Asset management fees and other income	$	-	$	-	$	-	$	11	$	4
	Three Months Ended June 30, 2013
	Reinsurance Recoverables		Receivables from parent and affiliates		Future Policy Benefits
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	1,191,409	$	2,000	$	(1,230,323)
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		(596,967)		-		622,798
Asset management fees and other income		-		-		-
Included in other comprehensive income (loss)		-		(4)		-
Net investment income		-		-		-
Purchases		59,616		3,254		-
Sales		-		-		-
Issuances		-		-		(62,464)
Settlements		-		-		-
Transfers into Level 3 (1)		-		-		-
Transfers out of Level 3 (1)		-		-		-
Fair Value, end of period assets/(liabilities)	$	654,058	$	5,250	$	(669,989)
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (2):
Included in earnings:
Realized investment gains (losses), net	$	(588,372)	$	-	$	614,035

25

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

	Six Months Ended June 30, 2013
	Fixed Maturities Available-For-Sale
	Corporate Securities			Asset Backed Securities		Commercial Mortgage- Backed Securities		Trading Account Assets - Equity Securities		Other Long Term Investments
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	95,555		$	69,298	$	-	$	207	$	1,054
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		49			-		-		-		(721)
Asset management fees and other income		-			-		-		72		37
Included in other comprehensive income (loss)		(4,060)			11		-		-		-
Net investment income		2,330			316		17		-		-
Purchases		1,243			25,980		9,090		-		37
Sales		-			-		-		-		-
Issuances		-			-		-		-		-
Settlements		(3,901	)		(9,519)		-		-		-
Transfers into Level 3 (1)		4,976			-		-		-		-
Transfers out of Level 3 (1)		-			-		(9,107)		-		-
Fair Value, end of period assets/(liabilities)	$	96,192		$	86,086	$	-	$	279	$	407
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (2):
Included in earnings:
Realized investment gains (losses), net	$	-		$	-	$	-	$	-	$	(721)
Asset management fees and other income	$	-		$	-	$	-	$	72	$	37
	Six Months Ended June 30, 2013
	Reinsurance Recoverables			Other Assets		Future Policy Benefits
	(in thousands)
Fair Value, beginning of period assets/(liabilities)	$	1,732,094		$	1,995	$	(1,793,136)
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		(1,195,788)			-		1,246,584
Asset management fees and other income		-			-		-
Included in other comprehensive income (loss)		-			1		-
Net investment income		-			-		-
Purchases		117,752			3,254		-
Sales		-			-		-
Issuances		-			-		(123,437)
Settlements		-			-		-
Transfers into Level 3 (1)					-		-
Transfers out of Level 3 (1)		-			-		-
Fair Value, end of period assets/(liabilities)	$	654,058		$	5,250	$	(669,989)
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (2):
Included in earnings:
Realized investment gains (losses), net	$	(1,173,117)		$	-	$	1,223,615
Asset management fees and other income	$	-		$	-	$	-

(1) Transfers into or out of Level 3 are reported as the value as of the beginning of the quarter in which the transfer occurs.

(2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

Transfers – Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company is able to validate.

26

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. However, in some cases, as described below, the carrying amount equals or approximates fair value.

	June 30, 2014
	Fair Value								Carrying Amount (1)
	Level 1		Level 2		Level 3		Total		Total
	(in thousands)
Assets:
Commercial mortgage and other loans	$	-	$	2,680	$	441,931	$	444,611	$	414,676
Policy loans		-		-		12,884		12,884		12,884
Other long term investments		-		-		2,166		2,166		1,780
Cash and cash equivalents		202		-		-		202		202
Accrued investment income		-		27,009		-		27,009		27,009
Receivables from parent and affiliates		-		12,423		-		12,423		12,423
Other assets		-		2,935		-		2,935		2,935
Total assets	$	202	$	45,047	$	456,981	$	502,230	$	471,909
Liabilities:
Policyholders’ account balances - investment contracts	$	-	$	-	$	88,865	$	88,865	$	89,746
Cash collateral for loaned securities		-		37,404		-		37,404		37,404
Short-term debt		-		218,897		-		218,897		215,000
Payables to parent and affiliates		-		32,154		-		32,154		32,154
Other liabilities		-		88,040		-		88,040		88,040
Separate account liabilities - investment contracts		-		609		-		609		609
Total liabilities	$	-	$	377,104	$	88,865	$	465,969	$	462,953

	December 31, 2013
	Fair Value								Carrying Amount (1)
	Level 1		Level 2		Level 3		Total		Total
	(in thousands)
Assets:
Commercial mortgage and other loans	$	-	$	-	$	422,584	$	422,584	$	398,991
Policy loans		-		-		12,454		12,454		12,454
Other long term investments		-		-		1,623		1,623		1,440
Cash and cash equivalents		1,417		-		-		1,417		1,417
Accrued investment income		-		32,169		-		32,169		32,169
Receivables from parent and affiliates		-		10,177		-		10,177		10,177
Other assets		-		11,190		-		11,190		11,190
Total assets	$	1,417	$	53,536	$	436,661	$	491,614	$	467,838
Liabilities:
Policyholders’ account balances - investment contracts	$	-	$	-	$	84,153	$	84,153	$	85,672
Cash collateral for loaned securities		-		47,896		-		47,896		47,896
Short-term debt		-		218,488		-		218,488		205,000
Payables to parent and affiliates		-		85,204		-		85,204		85,204
Other liabilities		-		101,656		-		101,656		101,656
Separate account liabilities - investment contracts		-		796		-		796		796
Total liabilities	$	-	$	454,040	$	84,153	$	538,193	$	526,224

(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.

27

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

The fair values presented above have been determined by using available market information and by applying market valuation methodologies, as described in more detail below.

Commercial Mortgage and Other Loans

The fair value of most commercial mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate plus an appropriate credit spread for similar quality loans. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology.

Policy Loans

Policy loans carrying value approximates fair value.

Other Long-term Investments

Other long-term investments include investments in joint ventures and limited partnerships. The estimated fair values of these cost method investments are generally based on the Company’s share of the net asset value (“NAV”) as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. No such adjustments were made as of June 30, 2014 and December 31, 2013.

Cash and Cash Equivalents, Accrued Investment Income, Receivables from Parent and Affiliates, and Other Assets

The Company believes that due to the short-term nature of certain assets, the carrying value approximates fair value. These assets include: cash, accrued investment income, and other assets that meet the definition of financial instruments, including receivables such as unsettled trades and accounts receivable.

Policyholders’ Account Balances - Investment Contracts

Only the portion of policyholders’ account balances related to products that are investment contracts (those without significant mortality or morbidity risk) are reflected in the table above. For fixed deferred annuities and payout annuities and other similar contracts without life contingencies, fair values are derived using discounted projected cash flows based on interest rates that are representative of the Company’s financial strength ratings, and hence reflect the Company’s own NPR. For those balances that can be withdrawn by the customer at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value.

Cash Collateral for Loaned Securities

Cash collateral for loaned securities represents the collateral received or paid in connection with loaning or borrowing securities. For these transactions, the carrying value of the related asset/liability approximates fair value as they equal the amount of cash collateral received or paid.

Debt

The fair value of short term and long-term debt is generally determined by either prices obtained from independent pricing services, which are validated by the Company, or discounted cash flow models. These fair values consider the Company’s own NPR. Discounted cash flow models predominately use market observable inputs such as the borrowing rates currently available to the Company for debt and financial instruments with similar terms and remaining maturities.

Other Liabilities and Payables to Parent and Affiliates

Other liabilities and Payables to Parent and Affiliates are primarily payables, such as unsettled trades, drafts, escrow deposits and accrued expense payables. Due to the short term until settlement of most of these liabilities, the Company believes that carrying value approximates fair value.

Separate Account Liabilities - Investment Contracts

Only the portion of separate account liabilities related to products that are investments contracts are reflected in the table above. Separate account liabilities are recorded at the amount credited to the contractholder, which reflects the change in fair value of the corresponding separate account assets including contractholder deposits less withdrawals and fees. Therefore, carrying value approximates fair value.

28

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

5.    DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

Interest Rate Contracts

Interest rate swaps are used by the Company to reduce risks from changes in interest rates, manage interest rate exposures arising from mismatches between assets and liabilities (including duration mismatches) and to hedge against changes in the value of assets it owns or anticipates acquiring or selling. Swaps may be attributed to specific assets or liabilities or may be used on a portfolio basis. Under interest rate swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty at each due date.

Equity Contracts

Equity index options are contracts which will settle in cash based on differentials in the underlying indices at the time of exercise and the strike price. The Company uses combinations of purchases and sales of equity index options to hedge the effects of adverse changes in equity indices within a predetermined range.

Total return swaps are contracts whereby the Company agrees with other parties to exchange, at specified intervals, the difference between the return on an asset (or market index) and LIBOR based on a notional amount. The Company generally uses total return swaps to hedge the effect of adverse changes in equity indices.

Foreign Exchange Contracts

Currency derivatives, including currency swaps, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell.

Under currency swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date.

Credit Contracts

Credit derivatives are used by the Company to enhance the return on the Company’s investment portfolio by creating credit exposure similar to an investment in public fixed maturity cash instruments. With credit derivatives the Company sells credit protection on an identified name, and in return receives a quarterly premium. With credit default derivatives, this premium or credit spread generally corresponds to the difference between the yield on the referenced name’s public fixed maturity cash instruments and swap rates, at the time the agreement is executed. If there is an event of default by the referenced name, as defined by the agreement, then the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced defaulted security or similar security or pay the referenced amount less the auction recovery rate. See credit derivatives written section for discussion of guarantees related to credit derivatives written. In addition to selling credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio.

Embedded Derivatives

The Company sells variable annuity products, which may include guaranteed benefit features that are accounted for as embedded derivatives. The Company has reinsurance agreements to transfer the risk related to certain of these benefit features to affiliates, Pruco Re and The Prudential Insurance Company of America (“Prudential Insurance”). The embedded derivatives related to the living benefit features and the related reinsurance agreements are carried at fair value. These embedded derivatives are marked to market through “Realized investment gains (losses), net” based on the change in value of the underlying contractual guarantees, which are determined using valuation models, as described in Note 4.

The fair value of the living benefit feature embedded derivatives included in “Future policy benefits” was a liability of $1,663 million and $778 million as of June 30, 2014 and December 31, 2013, respectively. The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re and Prudential Insurance included in “Reinsurance recoverables” was an asset of $1,595 million and $748 million as of June 30, 2014 and December 31, 2013, respectively.

29

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

The table below provides a summary of the gross notional amount and fair value of derivatives contracts used in a non-broker-dealer capacity, excluding embedded derivatives which are recorded with the associated host, by the primary underlying. Many derivative instruments contain multiple underlyings.

	June 30, 2014						December 31, 2013
	Notional		Gross Fair Value				Notional		Gross Fair Value
	Amount		Assets		Liabilities		Amount		Assets		Liabilities
	(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Currency/Interest Rate	$	82,247	$	739	$	(4,852)	$	72,747	$	940	$	(4,635)
Total Qualifying Hedges	$	82,247	$	739	$	(4,852)	$	72,747	$	940	$	(4,635)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	1,792,750	$	77,502	$	(49,373)	$	1,533,750	$	59,872	$	(80,601)
Interest Rate Options		100,000		8,780		-		100,000		6,534		-
Currency/Interest Rate
Foreign Currency Swaps		57,015		29		(1,723)		55,919		19		(1,349)
Credit
Credit Default Swaps		1,200		-		(71)		6,050		-		(115)
Equity
Total Return Swaps		210,652		232		(1,004)		219,896		-		(4,712)
Equity Options		11,567,467		446		(108)		13,170,805		6,170		(3,168)
Total Non-Qualifying Hedges	$	13,729,084	$	86,989	$	(52,279)	$	15,086,420	$	72,595	$	(89,945)
Total Derivatives (1)	$	13,811,331	$	87,728	$	(57,131)	$	15,158,667	$	73,535	$	(94,580)

(1) Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a liability of $1,663 million and $778 million as of June 30, 2014 and December 31, 2013, respectively, included in “Future policy benefits.” The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re and Prudential Insurance included in “Reinsurance recoverables” was an asset of $1,595 million and $748 million as of June 30, 2014 and December 31, 2013, respectively.

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (including bifurcated embedded derivatives) that are offset in the balance sheet, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the balance sheet.

	June 30, 2014
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Financial Instruments/ Collateral		Net Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	87,728	$	(67,715)	$	20,013	$	(18,099)	$	1,914
Offsetting of Financial Liabilities:
Derivatives	$	57,131	$	(57,131)	$	-	$	-	$	-
	December 31, 2013
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Financial Instruments/ Collateral		Net Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	73,535	$	(73,535)	$	-	$	-	$	-
Offsetting of Financial Liabilities:
Derivatives	$	94,580	$	(72,822)	$	21,758	$	(24,491)	$	(2,733)

30

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above see “Credit Risk” below.

Cash Flow Hedges

The primary derivative instruments used by the Company in its cash flow hedge accounting relationships are currency swaps. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its cash flow hedge accounting relationships.

The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship:

	Three Months Ended June 30, 2014
	Realized Investment Gains/(Losses)			Net Investment Income			Other Income			Accumulated Other Comprehensive Income (Loss) (1)
	(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
Currency/Interest Rate	$	-		$	(5)		$	(15	)	$	(1,060	)
Total cash flow hedges		-			(5	)		(15	)		(1,060	)
Derivatives Not Qualifying as Hedging Instruments:
Interest Rate		26,012			-			-			-
Currency		-			-			-			-
Currency/Interest Rate		(1,038	)		-			(9	)		-
Credit		(4	)		-			-			-
Equity		(11,334	)		-			-			-
Embedded Derivatives		(17,902	)		-			-			-
Total non-qualifying hedges		(4,266	)		-			(9	)		-
Total	$	(4,266	)	$	(5	)	$	(24	)	$	(1,060	)
	Six Months Ended June 30, 2014
	Realized Investment Gains/(Losses)			Net Investment Income			Other Income			Accumulated Other Comprehensive Income (Loss) (1)
	(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
Currency/Interest Rate	$	-		$	(17	)	$	(17	)	$	(423	)
Total cash flow hedges		-			(17	)		(17	)		(423	)
Derivatives Not Qualifying as Hedging Instruments:
Interest Rate		63,598			-			-			-
Currency		-			-			-			-
Currency/Interest Rate		(214	)		-			8			-
Credit		(11	)		-			-			-
Equity		(15,982	)		-			-			-
Embedded Derivatives		(52,635	)		-			-			-
Total non-qualifying hedges		(5,244	)		-			8			-
Total	$	(5,244	)	$	(17	)	$	(9	)	$	(423	)

31

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

	Three Months Ended June 30, 2013
	Realized Investment Gains/(Losses)			Net Investment Income			Other Income		Accumulated Other Comprehensive Income (Loss) (1)
	(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
Currency/Interest Rate	$	-		$	(16	)	$	27	$	598
Total cash flow hedges		-			(16	)		27		598
Derivatives Not Qualifying as Hedging Instruments:
Interest Rate		(56,393	)		-			-		-
Currency		-			-			-		-
Currency/Interest Rate		474			-			46		-
Credit		(22	)		-			-		-
Equity		(10,976	)		-			-		-
Embedded Derivatives		18,078			-			-		-
Total non-qualifying hedges		(48,839	)		-			46		-
Total	$	(48,839	)	$	(16	)	$	73	$	598
	Six Months Ended June 30, 2013
	Realized Investment Gains/(Losses)			Net Investment Income			Other Income		Accumulated Other Comprehensive Income (Loss) (1)
	(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
Currency/Interest Rate	$	-		$	(50	)	$	32	$	2,343
Total cash flow hedges		-			(50	)		32		2,343
Derivatives Not Qualifying as Hedging Instruments:
Interest Rate		(82,230	)		-			-		-
Currency		-			-			-		-
Currency/Interest Rate		1,784			-			41		-
Credit		(59	)		-			-		-
Equity		(41,427	)		-			-		-
Embedded Derivatives		32,267			-			-		-
Total non-qualifying hedges		(89,665	)		-			41		-
Total	$	(89,665	)	$	(50	)	$	73	$	2,343

(1) Amounts deferred in “Accumulated other comprehensive income (loss).”

For the three months ended June 30, 2014 and 2013, the ineffective portion of derivatives accounted for using hedge accounting was not material to the Company’s results of operations and there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging.

Presented below is a rollforward of current period cash flow hedges in “Accumulated other comprehensive income (loss)” before taxes:

	(in thousands)
Balance, December 31, 2013	$	(3,653	)
Net deferred gains (losses) on cash flow hedges from January 1 to June 30, 2014		(457	)
Amount reclassified into current period earnings		34
Balance, June 30, 2014	$	(4,076)

As of June 30, 2014 and 2013, the Company did not have any qualifying cash flow hedges of forecasted transactions other than those related to the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. The maximum length of time for which these variable cash flows are hedged is 19 years. Income amounts deferred in “Accumulated other comprehensive income (loss)” as a result of cash flow hedges are included in “Net unrealized investment gains (losses)” in the Unaudited Interim Statements of Equity.

32

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

Credit Derivatives Written

The Company no longer has exposure from credit derivatives where it has written credit protection as of June 30, 2014 and December 31, 2013.

The Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of June 30, 2014 and December 31, 2013, the Company had $1 million and $6 million of outstanding notional amounts, respectively, reported at fair value as a liability of less than $1 million for both periods.

Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by its counterparty to financial derivative transactions.

The Company has credit risk exposure to an affiliate, Prudential Global Funding, LLC (“PGF”), related to its over-the-counter (“OTC”) derivative transactions. PGF manages credit risk with external counterparties by entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties, and by obtaining collateral where appropriate. Additionally, limits are set on single party credit exposures which are subject to periodic management review.

Under fair value measurements, the Company incorporates the market’s perception of its own and the counterparty’s non-performance risk in determining the fair value of the portion of its OTC derivative assets and liabilities that are uncollateralized. Credit spreads are applied to the derivative fair values on a net basis by counterparty. To reflect the Company’s own credit spread a proxy based on relevant debt spreads is applied to OTC derivative net liability positions. Similarly, the Company’s counterparty’s credit spread is applied to OTC derivative net asset positions.

6.     COMMITMENTS, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS

Commitments

The Company had made commitments to fund $4 million of commercial loans as of June 30, 2014. The Company also made commitments to purchase or fund investments, mostly private fixed maturities, of $19 million as of June 30, 2014.

Contingent Liabilities

On an ongoing basis, the Company’s internal supervisory and control functions review the quality of sales, marketing and other customer interface procedures and practices and may recommend modifications or enhancements. From time to time, this review process results in the discovery of product administration, servicing or other errors, including errors relating to the timing or amount of payments or contract values due to customers. In certain cases, if appropriate, the Company may offer customers remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “Litigation and Regulatory Matters” below.

It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain. The following is a summary of certain pending proceedings.

33

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed, including matters discussed below. The Company estimates that as of June 30, 2014, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is $0 to approximately $5 million. This estimate is not an indication of expected loss, if any, or the Company’s maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

In January 2013, a qui tam action on behalf of the State of Florida, Total Asset Recovery Services v. Met Life Inc., et al., Manulife Financial Corporation, et. al., Prudential Financial, Inc., The Prudential Insurance Company of America, and Prudential Insurance Agency, LLC , filed in the Circuit Court of Leon County, Florida, was served on Prudential Insurance. The complaint alleges that Prudential Insurance failed to escheat life insurance proceeds to the State of Florida in violation of the Florida False Claims Act and seeks injunctive relief, compensatory damages, civil penalties, treble damages, prejudgment interest, attorneys’ fees and costs. In March 2013, the Company filed a motion to dismiss the complaint. In August 2013, the court dismissed the complaint with prejudice. In September 2013, plaintiff filed an appeal with Florida’s Circuit Court of the Second Judicial Circuit in Leon County.

In January 2012, a Global Resolution Agreement entered into by the Company and a third party auditor became effective upon its acceptance by the unclaimed property departments of 20 states and jurisdictions. Under the terms of the Global Resolution Agreement, the third party auditor acting on behalf of the signatory states will compare expanded matching criteria to the Social Security Master Death File (“SSMDF”) to identify deceased insureds and contract holders where a valid claim has not been made. In February 2012, a Regulatory Settlement Agreement entered into by the Company to resolve a multi-state market conduct examination regarding its adherence to state claim settlement practices became effective upon its acceptance by the insurance departments of 20 states and jurisdictions. The Regulatory Settlement Agreement applies prospectively and requires the Company to adopt and implement additional procedures comparing its records to the SSMDF to identify unclaimed death benefits and prescribes procedures for identifying and locating beneficiaries once deaths are identified. Substantially all other jurisdictions that are not signatories to the Global Resolution Agreement or the Regulatory Settlement Agreement have entered into similar agreements with the Company.

The Company is one of several companies subpoenaed by the New York Attorney General regarding its unclaimed property procedures. Additionally, the New York State Department of Financial Services (“NYDFS”) has requested that 172 life insurers (including the Company) provide data to the NYDFS regarding use of the SSMDF. The New York Office of Unclaimed Funds is conducting an audit of the Company’s compliance with New York’s unclaimed property laws. In February 2012, the Massachusetts Office of the Attorney General requested information regarding the Company’s unclaimed property procedures. In December 2013, this matter was closed without prejudice.

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position.

7.    RELATED PARTY TRANSACTIONS

The Company has extensive transactions and relationships with Prudential Insurance and other affiliates. Although we seek to ensure that these transactions and relationships are fair and reasonable, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties.

Expense Charges and Allocations

Many of the Company’s expenses are allocations or charges from Prudential Insurance or other affiliates.

The Company’s general and administrative expenses are charged to the Company using allocation methodologies based on business production processes. Management believes that the methodology is reasonable and reflects costs incurred by Prudential Insurance to process transactions on behalf of the Company. The Company operates under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided by Prudential Insurance. The Company reviews its allocation methodology periodically which it may adjust accordingly. General and administrative expenses also include allocations of stock compensation expenses related to a stock option program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock option program and deferred compensation program was less than $1 million for the three months ended June 30, 2014 and 2013, and less than $1 million for the six months ended June 30, 2014 and 2013.

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Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

The Company is charged for its share of employee benefits expenses. These expenses include costs for funded and non-funded contributory and non-contributory defined benefit pension plans. Some of these benefits are based on earnings and length of service. Other benefits are based on an account balance, which takes into consideration age, service and earnings during career. The Company’s share of net expense for the pension plans was less than $1 million and $1 million for the three months ended June 30, 2014 and 2013, and less than $1 million and $2 million for the six months ended June 30, 2014 and 2013, respectively.

Prudential Insurance sponsors voluntary savings plans for the Company’s employees (“401(k) plans”). The 401(k) plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The expense charged to the Company for the matching contribution to the 401(k) plans was less than $1 million for the three months ended June 30, 2014 and 2013, and less than $1 million for the six months ended June 30, 2014 and 2013.

Affiliated Asset Administration Fee Income

In accordance with a revenue sharing agreement with AST Investment Services, Inc. and Prudential Investments LLC, the Company receives fee income calculated on contractholder separate account balances invested in the Advanced Series Trust. Income received from AST Investment Services, Inc. and Prudential Investments LLC related to this agreement was $56 million and $57 million for the three months ended June 30, 2014 and 2013, respectively, and $111 million and $114 million for the six months ended June 30, 2014 and 2013, respectively. These revenues are recorded as “Asset administration fees and other income” in the Unaudited Interim Statements of Operations and Comprehensive Income.

Affiliated Investment Management Expenses

In accordance with an agreement with Prudential Investment Management, Inc. (“PIMI”), the Company pays investment management expenses to PIMI who acts as investment manager to certain Company general account and separate account assets. Investment management expenses paid to PIMI related to this agreement was $1 million and $2 million for the three months ended June 30, 2014 and 2013, respectively, and $3 million for the six months ended June 30, 2014 and 2013. These expenses are recorded as “Net investment income” in the Unaudited Interim Statements of Operations and Comprehensive Income.

Cost Allocation Agreements with Affiliates

Certain operating costs (including rental of office space, furniture, and equipment) have been charged to the Company at cost by Prudential Annuities Information Services and Technology Corporation (“PAIST”), an affiliated company. PALAC signed a written service agreement with PAIST for these services executed and approved by the Connecticut Insurance Department in 1995. This agreement automatically continues in effect from year to year and may be terminated by either party upon 30 days written notice.

Allocated lease expense was less than $1 million and $1 million for the three months ended June 30, 2014 and 2013, respectively, and $1 million and $2 million for the six months ended June 30, 2014 and 2013, respectively. Allocated sub-lease rental income, recorded as a reduction to lease expense was less than $1 million and $1 million for the three months ended June 30, 2014 and 2013, and less than $1 million and $1 million for the six months ended June 30, 2014 and 2013, respectively.

The Company pays commissions and certain other fees to PAD in consideration for PAD’s marketing and underwriting of the Company’s products. Commissions and fees are paid by PAD to broker-dealers who sold and service the Company’s products. Commissions and fees paid by the Company to PAD were $45 million and $43 million for the three months ended June 30, 2014 and 2013, respectively, and $90 million and $85 million for the six months ended June 30, 2014 and 2013, respectively.

Debt Agreements

Short-term Debt

The Company is authorized to borrow funds up to $2 billion from Prudential Financial and its affiliates to meet its capital and other funding needs. The Company had debt of $15 million and $5 million outstanding with Prudential Funding, LLC as of June 30, 2014 and December 31, 2013, respectively. Total interest expense on debt with Prudential Funding, LLC was less than $1 million for the three months ended June 30, 2014 and 2013, and less than $1 million for the six months ended June 30, 2014 and 2013.

The Company had debt of $200 million outstanding with Prudential Financial as of June 30, 2014 and December 31, 2013. This loan has a fixed interest rate of 4.49% and matures on December 29, 2014. In December 2013, a $200 million partial pay down was made on this outstanding debt. Total interest expense on debt with Prudential Financial was $2 million and $5 million for the three months ended June 30, 2014 and 2013, respectively, and $4 million and $9 million for the six months ended June 30, 2014 and 2013, respectively.

35

Prudential Annuities Life Assurance Corporation

Notes to Unaudited Interim Financial Statements—(Continued)

Reinsurance Agreements

The Company uses reinsurance as part of its risk management and capital management strategies for certain of its optional living benefit features. Fees ceded under these agreements are included in “Realized investment gains (losses), net” on the Unaudited Interim Statement of Operations and Comprehensive Income. The Company ceded fees of $69 million and $67 million to Pruco Re for the three months ended June 30, 2014 and 2013, respectively and $138 million and $136 million for the six months ended June 30, 2014 and 2013, respectively. The Company ceded fees of less than $1 million to Prudential Insurance for the three months ended June 30, 2014 and 2013, and less than $1 million for the six months ended June 30, 2014 and 2013. The Company’s reinsurance payables related to affiliated reinsurance were $25 million as of both June 30, 2014 and December 31, 2013.

The Company’s reinsurance recoverables related to affiliated reinsurance were $1,595 million and $748 million as of June 30, 2014 and December 31, 2013, respectively. The assets are reflected in “Reinsurance recoverables” in the Company’s Unaudited Interim Statements of Financial Position. Realized gains (losses) were $181 million and $ (605) million for the three months ended June 30, 2014 and 2013, respectively and $709 million and $(1,214) million for the six months ended June 30, 2014 and 2013, respectively. Changes in realized gains (losses) for the 2014 and 2013 periods were primarily due to changes in market conditions in each respective period.

Derivative Trades

In its ordinary course of business, the Company enters into OTC derivative contracts with an affiliate, PGF.

Purchase/sale of fixed maturities from/to an affiliate

During the first quarter of 2013, the Company sold fixed maturity securities to Prudential Financial. These securities had an amortized cost of $90 million and a fair value of $103 million. The net difference between historic amortized cost and the fair value was accounted for as an increase of $8 million to additional paid-in capital, net of taxes.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the financial condition of Prudential Annuities Life Assurance Corporation (“PALAC” or the “Company”) as of June 30, 2014, compared with December 31, 2013, and its results of operations for the three and six months ended June 30, 2014 and 2013. You should read the following analysis of our financial condition and results of operations in conjunction with the MD&A, the “Risk Factors” section, and the audited Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as well as the statements under “Forward-Looking Statements” and the Unaudited Interim Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Overview

The Company was established in 1969 and has been a provider of variable annuity contracts for the individual market in the United States. The Company’s products have been sold primarily to individuals to provide for long-term savings and retirement needs and to address the economic impact of premature death, estate planning concerns and supplemental retirement income.

The Company has sold a wide array of annuities, including deferred and immediate variable annuities with (1) fixed interest rate allocation options, subject to a market value adjustment, that are registered with the United States Securities and Exchange Commission (the “SEC”), and (2) fixed-rate allocation options not subject to a market value adjustment and not registered with the SEC. In addition, the Company has a relatively small inforce block of variable life insurance policies, but it no longer actively sells such policies.

Beginning in March 2010, the Company ceased offering its variable annuity products (and where offered, the companion market value adjustment option) to new investors upon the launch of a new product line by each of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey (which are affiliates of the Company). These initiatives were implemented to create operational and administrative efficiencies by offering a single product line of annuity products from a more limited group of legal entities. During 2012, the Company suspended additional customer deposits for variable annuities with certain optional living benefit riders. However, subject to applicable contract provisions and administrative rules, the Company continues to accept additional customer deposits on certain inforce contracts.

On August 30, 2013, the Company received approval from the Arizona and Connecticut Departments of Insurance to redomesticate the Company from Connecticut to Arizona effective August 31, 2013. As a result of the redomestication, the Company is now an Arizona insurance company and its principal insurance regulatory authority is the Arizona Department of Insurance. See Note 1 to the Unaudited Interim Financial Statements for additional information.

Regulatory Developments

Prudential Financial is a “Designated Financial Company” under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). As a “Designated Financial Company,” Prudential Financial is subject to supervision and examination by the Federal Reserve Bank of Boston and to prudential regulatory standards under the Dodd-Frank Act. The Financial Stability Board (the “FSB”), consisting of representatives of national financial authorities of the G20 nations, has also identified Prudential Financial as a global systemically important insurer that is to be subject to enhanced regulation.

On June 30, 2014, as a Designated Financial Company, Prudential Financial submitted to the Federal Reserve Board (“FRB”) and the Federal Deposit Insurance Corporation (“FDIC”) an initial annual resolution plan in the event of severe financial distress as required by the rules of the FRB and FDIC.

At the direction of the FSB, the International Association of Insurance Supervisors (the “IAIS”) is currently developing a model framework (“ComFrame”) for the supervision of internationally active insurance groups (“IAIGs”) that contemplates “group wide supervision” across national boundaries. Prudential Financial qualifies as an IAIG. In March 2014, Prudential Financial began participating in field testing to assist the IAIS in its development of ComFrame. Initial field testing has focused on gathering data to inform the development of the first step of ComFrame’s risk-based global insurance capital standard, known as the “Basic Capital Requirement” (“BCR”). The IAIS is scheduled to seek G20 endorsement of the proposed BCR framework in November 2014.

We are a licensed insurance company in New York, but are not domiciled in New York. In February 2014, the New York Department of Financial Services (“NY DFS”) notified us that it does not agree with our calculation of statutory reserves (including the applicable credit for reinsurance) for New York purposes in respect of certain variable annuity products. The Company is continuing discussions with the NY DFS regarding the proper level of statutory reserves (including the applicable credit for reinsurance) for these products. If we are ultimately required to establish material additional reserves on a New York statutory accounting basis or post material amounts of additional collateral with respect to such variable annuity products, our ability to deploy capital for other purposes could be affected and/or we could be required to obtain additional funding from Prudential Financial or its affiliates.

The National Association of Insurance Commissioners (“NAIC”), the NY DFS and other regulators continue to review life insurers’ use of captive reinsurance companies. In addition, in March 2014, a committee of the NAIC proposed changes to the NAIC accreditation standards that would regulate captive reinsurance companies that assume business directly written in more than one state as “multi-state reinsurers” and apply accreditation standards to those captives that historically were applicable only to traditional insurers. For information on our use of captive reinsurance companies and the potential effects of these proposals on us, see “—Liquidity and Capital Resources—Capital—Affiliated Captive Reinsurance Companies” below.

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For additional information on the potential impacts of regulation on the Company, including the topics described above, see “Business—Regulation” and “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Revenues and Expenses

The Company earns revenues from policy charges, fee income, asset administration from insurance and investment products and from net investment income on the investment of general account and other funds. The Company’s operating expenses principally consist of insurance benefits provided and reserves established for anticipated future insurance benefits, general business expenses, commissions and other costs of selling and servicing the various products it sold.

Effective February 25, 2013, the Advanced Series Trust (“AST”) adopted a Rule 12b-1 Plan under the Investment Company Act of 1940 with respect to most of the AST portfolios that are offered through the Company’s variable annuity and variable life investment products. Under the Rule 12b-1 Plan, AST pays an affiliate of the Company for distribution and administrative services. Prior to the adoption of the 12b-1 Plan, the Company received an administrative service fee from AST and incurred expenses associated with administration services provided.

Profitability

The Company’s profitability depends principally on its ability to manage risk on insurance and annuity products. Profitability also depends on, among other items, our actuarial and policyholder behavior experience on insurance and annuity products, our ability to retain customer assets, generate and maintain favorable investment results, and to manage expenses. See “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of risks that have materially affected and may affect in the future the Company’s business, results of operations or financial condition, or cause the Company’s actual results to differ materially from those expected or those expressed in any forward looking statements made by or on behalf of the Company.

Products

The Company’s inforce variable annuities provide its contractholders with tax-deferred asset accumulation together with a base death benefit and a suite of optional guaranteed living benefits (including versions with guaranteed death benefits) and annuitization options. Certain optional living benefit guarantees include, among other features, the ability to make withdrawals based on the highest daily contract value plus a minimum return, credited for a period of time. This guaranteed contract value is a notional amount that forms the basis for determining periodic withdrawals for the life of the contractholder, and cannot be accessed as a lump-sum surrender value. Most contracts also guarantee the contractholder a return of total deposits made to the contract less any partial withdrawals upon death. Our variable annuities generally provide our contractholders with the opportunity to allocate purchase payments to sub-accounts that invest in underlying proprietary and non-proprietary mutual funds, frequently under asset allocation programs, and fixed-rate accounts. The fixed-rate accounts, which are within the general account, are credited with interest at rates we determine, subject to certain minimums. Certain investments made in the fixed-rate accounts of our variable annuities impose a market value adjustment if the contract is not held to maturity.

The primary risk exposures of our variable annuity contracts relate to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility, contractholder longevity/mortality, timing and amount of annuitization and withdrawals, withdrawal efficiency and contract lapses. The return we realize from our variable annuity contracts will vary based on the extent of the differences between our actual experience and the assumptions used in the original pricing of these products. Our returns can also vary due to the impact and effectiveness of our hedging programs for any capital markets movements that we may hedge, the impact of affiliated reinsurance, the impact of that portion of our variable annuity contracts with an asset transfer feature, the impact of risks we have retained and the impact of risks that are not able to be hedged.

Our risk management strategy helps to limit our exposure to certain of these risks primarily through a combination of product design elements, our living benefits hedging program and affiliated reinsurance arrangements. The product design elements we utilize for certain products include, among others, asset allocation restrictions, minimum issuance age requirements, certain limitations on the amount of subsequent contractholder deposits and an asset transfer feature. The objective of the asset transfer feature is to help mitigate our exposure to equity market risk and market volatility by transferring assets between certain variable investment sub-accounts selected by the annuity contractholder, and investments that are expected to be more stable (e.g., a bond fund sub-account within the separate account or a fixed-rate account within the general account). The transfers are based on the static mathematical formula used with the particular optional benefit which considers a number of factors, including, but not limited to, the impact of investment performance on the contractholder’s total account value. This occurs at the contractholder level, rather than at the fund level, which we believe enhances our risk mitigation. As of June 30, 2014 approximately $40.3 billion or 83% of total variable annuity account values contain a living benefit feature, compared to approximately $40.7 billion or 83% as of December 31, 2013. As of June 30, 2014 approximately $31.8 billion or 79% of variable annuity account values with living benefit features included an asset transfer feature in the product design, compared to approximately $32.1 billion or 79% as of December 31, 2013.

As mentioned above, in addition to our asset transfer feature, we also manage certain risks associated with our variable annuity products through our living benefits hedging programs and affiliated reinsurance agreements. We reinsure the majority of our variable annuity living benefit guarantees to an affiliated reinsurance company, Pruco Reinsurance, Ltd. (“Pruco Re”). The living benefits hedging program is primarily executed within Pruco Re to manage capital markets risk associated with the reinsured optional living benefit guarantees. The program is also executed within the Company related to certain non-reinsured optional living benefit guarantees. This program represents a balance among three objectives that seek to: 1) provide severe scenario protection, 2) minimize net income volatility associated with an internally-defined hedge target, and 3) maintain capital efficiency.

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Through the hedge program, derivatives are entered into that seek to replicate the net change in an internally-defined hedge target. In addition to mitigating capital markets risk and income statement volatility, the hedging program is also focused on a long-term goal of accumulating assets that could be used to pay claims under these benefits irrespective of market path, recognizing that, under the terms of the contracts, we do not expect to begin substantial payment of such claims until at least five years in the future.

Application of 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 the application of accounting policies that often involve a significant degree of judgment. Management, on an ongoing basis, reviews estimates and assumptions used in the preparation of financial statements. If management determines that modifications in assumptions and estimates are appropriate given current facts and circumstances, the Company’s results of operations and financial position as reported in the Unaudited Interim Financial Statements could change significantly.

Management believes the accounting policies relating to the following areas are most dependent on the application of estimates and assumptions and require management’s most difficult, subjective, or complex judgments:

— Deferred policy acquisition costs (“DAC”) and other costs, including deferred sales inducements (“DSI”) and value of business acquired (“VOBA”);

— Valuation of investments, including derivatives, and the recognition of other-than-temporary impairments;

— Policyholder liabilities;

— Taxes on income; and

— Reserves for contingencies, including reserves for losses in connection with unresolved legal matters.

DAC and Other Costs

The near-term future rate of return assumptions used in evaluating DAC and deferred sales inducements for our domestic variable annuity and variable life insurance products are derived using a reversion to the mean approach, a common industry practice. Under this approach, we consider historical equity returns over a period of time and initially adjust future projected equity returns over the next four years (the “near-term”) so that the assets are projected to grow at the long-term expected rate of return for the entire period. If the near-term projected future rate of return is greater than our near-term maximum future rate of return of 13%, we use our maximum future rate of return. As of June 30, 2014, we assume an 8.0% long-term equity expected rate of return and a 3.6% near-term mean reversion equity rate of return.

The weighted average rate of return assumptions consider many factors, including asset durations, asset allocations and other factors. We generally update the near term equity rate of return and our estimate of total gross profits each quarter to reflect the result of the reversion to the mean approach, which assumes a convergence to the long-term equity expected rate of return. These market performance related adjustments to our estimate of total gross profits result in cumulative adjustments to prior amortization, reflecting the application of the new required rate of amortization to all prior periods’ gross profits.

For additional information on our policies for DAC and other costs and for the remaining critical accounting estimates listed above, see our Annual Report on Form 10-K for the year ended December 31, 2013, under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Accounting Policies & Pronouncements—Application of Critical Accounting Estimates.”

Adoption of New Accounting Pronouncements

See Note 2 to our Unaudited Interim Financial Statements for a discussion of newly adopted accounting pronouncements.

Changes in Financial Position

June 30, 2014 versus December 31, 2013

Total assets increased by $91 million from $53,521 million at December 31, 2013 to $53,612 million at June 30, 2014. Reinsurance recoverables increased $847 million related to the reinsured liability for living benefit embedded derivatives primarily resulting from an increase in the present value of future expected benefit payments driven by decreases in interest rates. Partially offsetting the above increase was a decline in Separate account assets of $315 million primarily driven by net outflows on the runoff block and policy charges, partially offset by market appreciation and the impact of the asset transfer feature which moved customer account values from the general account to the separate account due to favorable markets in 2014. Total investments decreased $272 million primarily due to asset sales associated with contractholder surrenders and the impact of the asset transfer feature which moved customer account values from the general account to the separate account due to favorable markets in 2014 partially offset by an increase in unrealized gains on fixed maturity securities due to declining interest rates. DAC and DSI decreased $172 million primarily resulting from the base amortization and the impact of the mark-to-market of the reinsured liability for living benefit embedded derivatives and related hedge positions.

Total liabilities increased by $200 million, from $51,782 million at December 31, 2013 to $51,982 million at June 30, 2014. Future policy benefits and other policyholder liabilities increased $915 million primarily driven by an increase in the liability for living benefit embedded derivatives, as discussed above. Policyholders’ account balance decreased $343 million primarily driven by account value runoff due to contractholder surrenders and the impact of the asset transfer feature which moved customer account values from the general account to the separate account, as discussed above. Separate account liabilities decreased $315 million offsetting the decrease in separate accounts assets above.

39

Total equity decreased by $109 million from $1,740 million at December 31, 2013 to $1,631 million at June 30, 2014, primarily driven by dividends of $267 million paid to our parent, Prudential Annuities, Inc., partially offset by net income of $135 million for the first six months of 2014.

Results of Operations

Income (Loss) from Operations before Income Taxes

2014 versus 2013 Three Month Comparison. Income from operations before income taxes decreased $120 million from $187 million in the second quarter of 2013 to $67 million in the second quarter of 2014. Excluding the impact on the amortization of DAC and other costs, and on the reserves for the guaranteed minimum death benefit (“GMDB”) and guaranteed minimum income benefit (“GMIB”) features, of the mark-to-market of the liability for living benefit embedded derivatives and related hedge positions and of changes in the estimated profitability of the business, as discussed in more detail below, income from operations before income taxes increased $49 million. The increase was primarily related to the mark-to-market of our non-reinsured living benefit features and related hedge positions, primarily due to lower interest rate volatility and favorable fund performance.

The impact on the amortization of the mark-to-market of the liability for living benefit embedded derivatives and related hedge positions resulted in a net benefit of $125 million in the second quarter of 2013, primarily due to NPR losses compared to a net charge of $26 million in the second quarter of 2014, primarily due to NPR gains.

2014 versus 2013 Six Month Comparison. Income from operations before income taxes decreased $222 million from $384 million in the first six months of 2013 to $162 million in the first six months of 2014. Excluding the impact on the amortization of DAC and other costs, and on the reserves for the GMDB and GMIB features, of the mark-to-market of the liability for living benefit embedded derivatives and related hedge positions and of changes in the estimated profitability of the business, as discussed in more detail below, income from operations before income taxes increased $82 million. The increase was primarily related to the mark-to-market of our non-reinsured living benefit features and related hedge positions, primarily due to lower interest rate volatility and favorable fund performance.

The impact on the amortization of the mark-to-market of the liability for living benefit embedded derivatives and related hedge positions resulted in a net benefit of $246 million in the first six months of 2013, primarily due to NPR losses compared to a net charge of $23 million in the first six months of 2014, primarily due to NPR gains.

Revenues, Benefits and Expenses

2014 versus 2013 Three Month Comparison. Revenues increased $26 million, primarily driven by a favorable variance in realized gains and losses of $39 million primarily driven by differences between the mark-to-market of the non-reinsured portion of the living benefit embedded derivative liability and related hedge positions. Offsetting this benefit was a decrease in net investment income of $17 million primarily as a result of lower portfolio yields due to lower reinvestment rates and lower average annuity account values in the general account, as discussed above.

Benefits and expenses increased $146 million, primarily driven by an increase of $148 million in DAC amortization and interest credited to policyholders’ account balances, which includes DSI amortization. Changes in DAC and DSI amortization were related to the impact of the mark-to-market of the reinsured liability for living benefit embedded derivatives and related hedge positions and the impact of changes in the estimated profitability of the business, as discussed above.

2014 versus 2013 Six Month Comparison. Revenues increased $47 million, primarily driven by a favorable variance in realized gains and losses of $77 million primarily driven by differences between the mark-to-market of the non-reinsured portion of the living benefit embedded derivative liability and related hedge positions. Offsetting this benefit was a decrease in net investment income of $32 million primarily as a result of lower portfolio yields due to lower reinvestment rates and lower average annuity account values in the general account, as discussed above.

Benefits and expenses increased $269 million, primarily driven by an increase of $260 million in DAC amortization and interest credited to policyholders’ account balances, which includes DSI amortization. Changes in DAC and DSI amortization were related to the impact of the mark-to-market of the reinsured liability for living benefit embedded derivatives and related hedge positions and the impact of changes in the estimated profitability of the business, as discussed above.

Income Taxes

The income tax provision amounted to an expense of $10 million and $43 million for the three months ended June 30, 2014 and 2013, respectively, and $27 million and $93 million for the six months ended June 30, 2014 and 2013, respectively. The decrease in income tax expense was primarily driven by the decrease in pre-tax income.

The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing authorities. Audit periods remain open for review until the statute of limitations has passed. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards (“tax attributes”), the statute of limitations does not close, to the extent of these tax attributes, until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes.

The Company does not anticipate any significant changes within the next 12 months to its total unrecognized tax benefits related to tax years for which the statute of limitations has not expired.

40

As of June 30, 2014, the Company remains subject to examination in the U.S. for tax years 2009 through 2013.

The dividends received deduction (“DRD”) reduces the amount of dividend income subject to U.S. tax and is a significant component of the difference between the Company’s effective tax rate and the federal statutory tax rate of 35%. The DRD for the current period was estimated using information from 2013 and current year results, and was adjusted to take into account the current year’s equity market performance. The actual current year DRD can vary from the estimate based on factors such as, but not limited to, changes in the amount of dividends received that are eligible for the DRD, changes in the amount of distributions received from mutual fund investments, changes in the account balances of variable life and annuity contracts, and the Company’s taxable income before the DRD.

In August 2007, the IRS released Revenue Ruling 2007-54, which included, among other items, guidance on the methodology to be followed in calculating the DRD related to variable life insurance and annuity contracts. In September 2007, the IRS released Revenue Ruling 2007-61. Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54 and informed taxpayers that the U.S. Treasury Department and the IRS intend to address through new guidance the issues considered in Revenue Ruling 2007-54, including the methodology to be followed in determining the DRD related to variable life insurance and annuity contracts. In May 2010, the IRS issued an Industry Director Directive (“IDD”) confirming that the methodology for calculating the DRD set forth in Revenue Ruling 2007-54 should not be followed. The IDD also confirmed that the IRS guidance issued before Revenue Ruling 2007-54, which guidance the Company relied upon in calculating its DRD, should be used to determine the DRD. In February 2014, the IRS released Revenue Ruling 2014-7, which modified and superseded Revenue Ruling 2007-54, by removing the provisions of Revenue Ruling 2007-54 related to the methodology to be followed in calculating the DRD and obsoleting Revenue Ruling 2007-61. These activities had no impact on the Company’s results in 2013 or in the first six months of 2014. However, there remains the possibility that the IRS and the U.S. Treasury will address, through subsequent guidance, the issues related to the calculation of the DRD. For the last several years, the revenue proposals included in the Obama Administration’s budgets included a proposal that would change the method used to determine the amount of the DRD. A change in the DRD, including the possible retroactive or prospective elimination of this deduction through guidance or legislation, could increase actual tax expense and reduce the Company’s consolidated net income.

In 2009, the Company joined in filing the consolidated federal tax return with its parent, Prudential Financial. For tax years 2009 through 2014, the Company is participating in the IRS’s Compliance Assurance Program (“CAP”). Under CAP, the IRS assigns an examination team to review completed transactions as they occur in order to reach agreement with the Company on how they should be reported in the relevant tax return. If disagreements arise, accelerated resolutions programs are available to try to resolve the disagreements in a timely manner before the tax return is filed.

In July 2014, the IRS issued an IDD relating to the hedging of variable annuity guaranteed minimum benefits (“Hedging IDD”). The Hedging IDD provides an elective safe harbor tax accounting method for these hedging activities that can be applied to open years under IRS examination beginning with the earliest open year. The Company is analyzing the potential impact of electing this tax accounting method.

Liquidity and Capital Resources

This section supplements and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Overview

Liquidity refers to the ability to generate sufficient cash resources to meet the payment obligations of the Company. Capital refers to the long term financial resources available to support the operations of our business, fund business growth, and provide a cushion to withstand adverse circumstances. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of our business, general economic conditions and our access to the capital markets through affiliates as described herein.

Effective and prudent liquidity and capital management is a priority across the organization. Management monitors the liquidity of Prudential Financial, Prudential Insurance and the Company on a daily basis and projects borrowing and capital needs over a multi-year time horizon through our quarterly planning process. We believe that cash flows from the sources of funds available to us are sufficient to satisfy the current liquidity requirements of Prudential Financial, and the Company, including under reasonably foreseeable stress scenarios. Prudential Financial has a capital management framework in place that governs the allocation of capital and approval of capital uses, and Prudential Financial forecasts capital sources and uses on a quarterly basis. Prudential Financial also employs a “Capital Protection Framework” to ensure the availability of capital resources to maintain adequate capitalization and competitive risk-based capital ratios under various stress scenarios.

Prudential Financial is a “Designated Financial Company” under the Dodd-Frank Act. As a Designated Financial Company, Prudential Financial is subject to supervision and examination by the Federal Reserve Bank of Boston and to prudential regulatory standards, which include or will include requirements and limitations (some of which are the subject of ongoing rule-making) relating to risk-based capital, leverage, liquidity, stress-testing, overall risk management, resolution plans, early remediation; and may also include additional standards regarding capital, public disclosure, short-term debt limits, and other related subjects. In addition, the Financial Stability Board, consisting of representatives of national financial authorities of the G20 nations, has identified Prudential Financial as a global systemically important insurer. For information on these recent actions and their potential impact on use, see “—Regulatory Developments” above, as well as “Business—Regulation” and “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2013.

41

On December 16, 2013, June 26, 2013 and June 27, 2014 the Company paid dividends of $100 million, $184 million and $267 million, respectively, to our parent, Prudential Annuities, Inc.

Capital

The Risk Based Capital, or RBC, ratio is a primary measure of the capital adequacy of the Company. RBC is calculated based on statutory financial statements and risk formulas consistent with the practices of the NAIC. RBC considers, among other things, risks related to the type and quality of the invested assets, insurance-related risks associated with an insurer’s products and liabilities, interest rate risks and general business risks. RBC ratio calculations are intended to assist insurance regulators in measuring an insurer’s solvency and ability to pay future claims. The reporting of RBC measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities, but is available to the public. The RBC ratio is an annual calculation, however, as of June 30, 2014 we estimate that the Company’s RBC ratio exceeds the minimum level required by applicable insurance regulations.

The regulatory capital level of the Company can be materially impacted by interest rate and equity market fluctuations, changes in the values of derivatives, the level of impairments recorded, and credit quality migration of the investment portfolio, among other items. Further, the recapture of business subject to third-party reinsurance arrangements due to defaults by, or credit quality migration affecting, the third-party reinsurers or for other reasons could negatively impact regulatory capital.

Our regulatory capital levels are also affected by statutory accounting rules, which are subject to change by each applicable insurance regulator. As discussed above in “—Regulatory Developments,” the NY DFS has notified us that it does not agree with our calculation of statutory reserves (including the applicable credit for reinsurance) for New York purposes in respect of certain variable annuity products. If we are ultimately required to establish material additional reserves on a New York statutory accounting basis or post material amounts of additional collateral with respect to such variable annuity products, our ability to deploy capital for other purposes could be affected and/or we could be required to obtain additional funding from Prudential Financial or its affiliates.

In addition the NAIC recently proposed new guidance regarding the calculation of “total adjusted capital”, or TAC, that will directly affect the calculation of the RBC ratio. The new guidance, which is expected to be effective for December 31, 2014, would limit the portion of an insurer’s asset valuation reserve that can be counted as TAC to the amount not utilized in asset adequacy testing. We are currently assessing the impact of this guidance on the Company’s RBC ratio.

We employ a “Capital Protection Framework” to ensure that sufficient capital resources are available to maintain adequate capitalization and a competitive risk based capital ratio, under various stress scenarios. The Capital Protection Framework incorporates the potential impacts from market related stresses, including equity markets, real estate, interest rates, and credit losses. Potential sources of capital include on-balance sheet capital, derivatives, reinsurance and contingent sources of capital. Although we continue to enhance our approach, we believe we currently have access to sufficient resources to maintain adequate capitalization and a competitive RBC ratio under a range of potential stress scenarios.

Affiliated Captive Reinsurance Companies

Prudential Financial and the Company use captive reinsurance companies to more effectively manage its reserves and capital on an economic basis and to enable the aggregation and transfer of risks. The captive reinsurance companies assume business from affiliates only. To support the risks they assume, the captives are capitalized to a level we believe is consistent with the “AA” financial strength rating targets of Prudential Financial’s insurance subsidiaries. All of the captive reinsurance companies are wholly-owned subsidiaries of Prudential Financial and are located domestically, typically in the state of domicile of the direct writing insurance subsidiary that cedes the majority of business to the captive. In addition to state insurance regulation, our captives are subject to internal policies governing their activities. Prudential Financial provides support to these captives, typically through net worth maintenance agreements, and in the normal course of business will contribute capital to the captives to support business growth and other needs. In addition, in connection with financing arrangements, Prudential Financial may guarantee certain of the captives’ obligations.

We also manage certain risks associated with our variable annuity products through arrangements with an affiliated captive reinsurance company. We reinsure variable annuity living benefit guarantees to Pruco Re. This enables Prudential Financial to aggregate these risks within Pruco Re and manage them more efficiently through a hedging program. We believe Pruco Re currently maintains an adequate level of capital and access to liquidity to support this hedging program. However, Pruco Re’s capital and liquidity needs can vary significantly due to, among other things, changes in equity markets, interest rates, mortality and policyholder behavior. Through our Capital Protection Framework, Prudential Financial holds on-balance sheet capital and maintains access to committed sources of capital that are available to meet these needs as they arise.

The NAIC, the NY DFS and other regulators continue to review life insurers’ use of captive reinsurance companies. In addition, a committee of the NAIC has proposed changes to the NAIC accreditation standards that would regulate captive reinsurance companies that assume business directly written in more than one state as “multi-state reinsurers” and apply accreditation standards to those captives that historically were applicable only to traditional insurers. We cannot predict what, if any, changes may result from these initiatives. If insurance laws are changed in a way that restricts our use of captive reinsurance companies in the future, our ability to write certain products and efficiently manage their associated risks could be adversely affected and we may need to increase prices on certain products, modify certain products or find alternate financing sources, any of which could adversely affect our competitiveness, capital and financial position and results of operations. Given the uncertainty of the ultimate outcome of these initiatives, at this time we are unable to estimate their expected effects on our future capital and financial position and results of operations.

Effective August 31, 2013, the Company re-domesticated from Connecticut to Arizona, and, as a result, PALAC is able to claim reinsurance reserve credit for business ceded to Pruco Re without the need for Pruco Re to post collateral.

42

Liquidity

There have been no material changes to the liquidity position of the Company since December 31, 2013. We continue to believe that cash generated by ongoing operations and the liquidity profile of our assets provide sufficient liquidity under reasonably foreseeable stress scenarios for the Company.

The principal sources of the Company’s liquidity are certain annuity considerations, investment and fee income, investment maturities, as well as internal borrowings. The principal uses of that liquidity include benefits, claims, and payments to policyholders and contractholders in connection with surrenders, withdrawals and net policy loan activity. Other uses of liquidity include commissions, general and administrative expenses, purchases of investments, and payments in connection with financing activities. As discussed above, in March 2010, the Company ceased offering its existing variable annuity products to new investors upon the launch of a new product line by certain affiliates. Therefore, the Company expects to continue to see the overall level of cash flows decrease going forward as the book of business runs off.

Our liquidity is managed to ensure stable, reliable and cost-effective sources of cash flows to meet all of our obligations. Liquidity is provided by a variety of sources, as described more fully below, including portfolios of liquid assets. Our investment portfolios are integral to the overall liquidity of the Company. We use a projection process for cash flows from operations to ensure sufficient liquidity to meet projected cash outflows, including claims. The impact of Prudential Funding, LLC’s financing capacity on liquidity (as described below) is considered in the internal liquidity measures of the Company.

Liquid assets include cash and cash equivalents, short-term investments and fixed maturities that are not designated as held-to-maturity and public equity securities. As of June 30, 2014 and December 31, 2013, the Company had liquid assets of $3.1 billion and $3.4 billion, respectively. The portion of liquid assets comprised of cash and cash equivalents and short-term investments was $0.1 billion and $0.1 billion as of June 30, 2014 and December 31, 2013, respectively. As of June 30, 2014, $2.8 billion, or 91%, of the fixed maturity investments in company general account portfolios were rated high or highest quality based on NAIC or equivalent rating. The remaining $0.3 billion, or 9%, of these fixed maturity investments were rated other than high or highest quality.

Prudential Financial and Prudential Funding, LLC, or Prudential Funding, a wholly-owned subsidiary of Prudential Insurance, borrow funds in the capital markets primarily through the direct issuance of commercial paper. The borrowings serve as an additional source of financing to meet our working capital needs. Prudential Funding operates under a support agreement with Prudential Insurance whereby Prudential Insurance has agreed to maintain Prudential Funding’s positive tangible net worth at all times.

Item 4. Controls and Procedures

In order to ensure that the information we must disclose in our filings with the SEC is recorded, processed, summarized and reported on a timely basis, the Company’s management, including our Principal Executive Officer and Chief Financial Officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the “Exchange Act”, as amended, as of June 30, 2014. Based on such evaluation, the Principal Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2014, our disclosure controls and procedures were effective. No change in our internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), occurred during the quarter ended June 30, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

43

PART II OTHER INFORMATION

Item 1. Legal Proceedings

See Note 6 to the Unaudited Interim Financial Statements under “—Litigation and Regulatory Matters” for a description of material pending litigation and regulatory matters affecting us, and certain risks to our businesses presented by such matters, which is incorporated herein by reference.

Item 1A. Risk Factors

You should carefully consider the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013. These risks could materially affect our business, results of operations or financial condition, or cause our actual results to differ materially from those expected or those expressed in any forward looking statements made by or on behalf of the Company. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Forward-Looking Statements” above and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

44

Item 6. Exhibits

31.1	Section 302 Certification of the Principal Executive Officer.
31.2	Section 302 Certification of the Chief Financial Officer.
32.1	Section 906 Certification of the Principal Executive Officer.
32.2	Section 906 Certification of the Chief Financial Officer.

101.INS	-XBRL Instance Document.
101.SCH	-XBRL Taxonomy Extension Schema Document.
101.CAL	-XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	-XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	-XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	-XBRL Taxonomy Extension Definition Linkbase Document.

45

SIGNATURES

Pursuant to the requirements 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.

PRUDENTIAL ANNUITIES LIFE ASSURANCE CORPORATION
By:	/s/ Yanela C. Frias
	Yanela C. Frias
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

Date: August 13, 2014

46

Exhibit Index

Exhibit Number and Description

31.1	Section 302 Certification of the Principal Executive Officer.
31.2	Section 302 Certification of the Chief Financial Officer.
32.1	Section 906 Certification of the Principal Executive Officer.
32.2	Section 906 Certification of the Chief Financial Officer.

101.INS	-XBRL Instance Document.
101.SCH	-XBRL Taxonomy Extension Schema Document.
101.CAL	-XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	-XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	-XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	-XBRL Taxonomy Extension Definition Linkbase Document.

47

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Stephen Pelletier, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of Prudential Annuities Life Assurance Corporation;

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(s) 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 is made known to us by others within such entity, 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(s) 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: August 13, 2014

/s/    Stephen Pelletier

Stephen Pelletier

Senior Vice President, performing the functions of the

principal executive officer as of the date of this

Quarterly Report on Form 10-Q

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

I, Yanela C. Frias, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of Prudential Annuities Life Assurance Corporation;

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(s) 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 is made known to us by others within such entity, 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(s) 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: August 13, 2014

/s/    Yanela C. Frias

Yanela C. Frias

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

Pursuant to 18 U.S.C. § 1350, I, Stephen Pelletier, Senior Vice President of Prudential Annuities Life Assurance Corporation (the “Company”), hereby certify that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 13, 2014

/s/    Stephen Pelletier

Name:     Stephen Pelletier

Title:       Senior Vice President, performing the functions of the principal executive officer as of the date of this Quarterly Report on Form 10-Q

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. § 1350, I, Yanela C. Frias, Executive Vice President and Chief Financial Officer of Prudential Annuities Life Assurance Corporation (the “Company”), hereby certify that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 13, 2014

/s/    Yanela C. Frias

Name:   Yanela C. Frias

Title:     Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Deferred Policy Acquisition Costs (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
DeferredPolicyAcquisitionCostsDisclosuresAbstract
Balance, beginning of year	$ 1,242,288	$ 1,345,504
Balance, end of year	$ 1,242,288	$ 1,345,504

XML

Derivative Instruments (Current Period Cash Flow Hedges in AOCI (loss) before Taxes) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Derivative Instruments
Beginning Balance	$ (3,653)
Net deferred losses on cash flow hedges for the period	(457)
Amount reclassified into current period earnings	34
Ending Balance	$ (4,076)

XML

Fair Value of Assets and Liabilities (Level 3 by Pricing Source) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Separate account assets	$ 46,311,872		$ 46,626,828
Receivables from parents and affiliates	56,936		35,594
Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Other long-term investments	20,549		486
Reinsurance recoverable	1,594,311		748,005
Subtotal excluding separate account assets	4,735,879		4,163,198
Separate account assets	46,311,872	[1]	46,626,828	[1]
Total assets	51,047,751		50,790,026
Future policy benefits	1,662,957	[2]	778,226	[2]
Total liabilities	1,662,957		799,984
Receivables from parents and affiliates	44,513		25,418
Cash equivalents	400
Fair Value, Inputs, Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable Securities, Equity Securities	0		505
Other long-term investments	536		486
Reinsurance recoverable	1,594,311		748,005
Total assets	1,799,318		915,928
Future policy benefits	1,662,957		778,226
Total liabilities	1,662,957		778,226
Receivables from parents and affiliates	27,762		6,347
Cash equivalents	400
Fair Value, Inputs, Level 3 [Member] | Internal Pricing [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable Securities, Equity Securities	0	[3]	192	[3]
Other long-term investments	0	[3]	0	[3]
Reinsurance recoverable	1,594,311	[3]	748,005	[3]
Total assets	1,694,840	[3]	842,927	[3]
Future policy benefits	1,662,957	[3]	778,226	[3]
Total liabilities	1,662,957	[3]	778,226	[3]
Receivables from parents and affiliates	0	[3]	0	[3]
Cash equivalents	400	[3]
Fair Value, Inputs, Level 3 [Member] | External Priced [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable Securities, Equity Securities	0	[4]	313	[4]
Other long-term investments	536	[4]	486	[4]
Reinsurance recoverable	0	[4]	0	[4]
Total assets	104,478	[4]	73,001	[4]
Future policy benefits	0	[4]	0	[4]
Total liabilities	0	[4]	0	[4]
Receivables from parents and affiliates	27,762	[4]	6,347	[4]
Cash equivalents	0	[4]
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Other long-term investments	536		486
Reinsurance recoverable	1,594,311		748,005
Subtotal excluding separate account assets	1,799,318		915,928
Separate account assets	0	[1]	0	[1]
Total assets	1,799,318		915,928
Future policy benefits	1,662,957	[2]	778,226	[2]
Total liabilities	1,662,957		778,226
Receivables from parents and affiliates	27,762		6,347
Cash equivalents	400
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable Securities, Fixed Maturities	102,008		96,796
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member] | Internal Pricing [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable Securities, Fixed Maturities	100,129	[3]	94,730	[3]
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member] | External Priced [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable Securities, Fixed Maturities	1,879	[4]	2,066	[4]
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable Securities, Fixed Maturities	74,301		63,789
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities [Member] | Internal Pricing [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable Securities, Fixed Maturities	0	[3]	0	[3]
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities [Member] | External Priced [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Marketable Securities, Fixed Maturities	$ 74,301	[4]	$ 63,789	[4]

[1] Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Statements of Financial Position.

[2] As of June 30, 2014, the net embedded derivative liability position of $1,663 million includes $138 million of embedded derivatives in an asset position and $1,801 million of embedded derivatives in a liability position. As of December 31, 2013, the net embedded derivative liability position of $778 million includes $245 million of embedded derivatives in an asset position and $1,023 million of embedded derivatives in a liability position.

[3] Represents valuations which could incorporate internally-derived and market inputs. See below for additional information related to internally-developed valuation for significant items in the above table.

[4] Represents unadjusted prices from independent pricing services and independent non-binding broker quotes where pricing inputs are not readily available.

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Derivative Instruments Offsetting Balance Sheet (Details) (Derivative [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Offsetting Assets [Member]
Offsetting of Financial Assets and Liabilities [Line Items]
Gross Amounts of Recognized Financial Instruments	$ 87,728	$ 73,535
Gross Amounts Offset in Statement of Financial Position	(67,715)	(73,535)
Net Amounts of Assets Presented in Statement of Financial Position	20,013	0
Financial Instruments And Collateral	(18,099)	0
Net Amount	1,914	0
Offsetting Liabilities [Member]
Offsetting of Financial Assets and Liabilities [Line Items]
Gross Amounts of Recognized Financial Instruments	57,131	94,580
Gross Amounts Offset in Statement of Financial Position	(57,131)	(72,822)
Net Amounts of Assets Presented in Statement of Financial Position	0	21,758
Financial Instruments And Collateral	0	(24,491)
Net Amount	$ 0	$ (2,733)

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Fair Value of Assets and Liabilities (Changes in Level 3 Assets and Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Equity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	$ 192				$ 192
Included In Earnings
Realized investment gains (losses), net	0				0
Asset management fees and other income - Assets1	0				0
Included in other comprehensive income (loss)	0				0
Net investment income1	0				0
Purchases	0				0
Sales	(192)				(192)
Issuances	0				0
Settlements	0				0
Transfers into Level 3	0	[1]			0	[1]
Transfers out of Level 3	0	[1]			0	[1]
Fair Value, end of period (Assets)	0				0
Included In Earnings
Realized investment gains (losses), net	0	[2]			0	[2]
Asset management fees and other income	0	[2]			0	[2]
Debt Securities [Member] | Corporate Debt Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	99,255		95,575		96,796		95,555
Included In Earnings
Realized investment gains (losses), net	0		45		0		49
Asset management fees and other income - Assets1	0		0		0		0
Included in other comprehensive income (loss)	236		(3,789)		483		(4,060)
Net investment income1	1,249		1,176		2,473		2,330
Purchases	1,751		643		3,240		1,243
Sales	0		0		0		0
Issuances	0		0		0		0
Settlements	(483)		(2,434)		(984)		(3,901)
Transfers into Level 3	0	[1]	4,976	[1]	0	[1]	4,976	[1]
Transfers out of Level 3	0	[1]	0	[1]	0	[1]	0	[1]
Fair Value, end of period (Assets)	102,008		96,192		102,008		96,192
Included In Earnings
Realized investment gains (losses), net	0	[2]	0	[2]	0	[2]	0	[2]
Asset management fees and other income	0	[2]	0	[2]	0	[2]	0	[2]
Debt Securities [Member] | Asset-backed Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	102,725		72,740		63,789		69,298
Included In Earnings
Realized investment gains (losses), net	0		0		0		0
Asset management fees and other income - Assets1	0		0		0		0
Included in other comprehensive income (loss)	122		(151)		300		11
Net investment income1	38		181		82		316
Purchases	0		18,922		14,933		25,980
Sales	0		0		0		0
Issuances	0		0		0		0
Settlements	(25,458)		(5,606)		(29,340)		(9,519)
Transfers into Level 3	489	[1]	0	[1]	28,152	[1]	0	[1]
Transfers out of Level 3	(3,615)	[1]	0	[1]	(3,615)	[1]	0	[1]
Fair Value, end of period (Assets)	74,301		86,086		74,301		86,086
Included In Earnings
Realized investment gains (losses), net	0	[2]	0	[2]	0	[2]	0	[2]
Asset management fees and other income	0	[2]	0	[2]	0	[2]	0	[2]
Debt Securities [Member] | Commercial Mortgage Backed Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	45,365		9,106		0		0
Included In Earnings
Realized investment gains (losses), net	0		1		0		0
Asset management fees and other income - Assets1	0		0		0		0
Included in other comprehensive income (loss)	0		0		(83)		0
Net investment income1	0		0		0		17
Purchases	0		0		45,448		9,090
Sales	0		0		0		0
Issuances	0		0		0		0
Settlements	0		0		0		0
Transfers into Level 3	0	[1]	0	[1]	0	[1]	0	[1]
Transfers out of Level 3	(45,365)	[1]	(9,107)	[1]	(45,365)	[1]	(9,107)	[1]
Fair Value, end of period (Assets)	0		0		0		0
Included In Earnings
Realized investment gains (losses), net	0	[2]	0	[2]	0	[2]	0	[2]
Asset management fees and other income	0	[2]	0	[2]	0	[2]	0	[2]
Other Long-term Investments [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	520		463		486		1,054
Included In Earnings
Realized investment gains (losses), net	0		(97)		0		(721)
Asset management fees and other income - Assets1	7		4		(2)		37
Included in other comprehensive income (loss)	0		0		0		0
Net investment income1	0		0		0		0
Purchases	14		37		57		37
Sales	0		0		0		0
Issuances	0		0		0		0
Settlements	(5)		0		(5)		0
Transfers into Level 3	0	[1]	0	[1]	0	[1]	0	[1]
Transfers out of Level 3	0	[1]	0	[1]	0	[1]	0	[1]
Fair Value, end of period (Assets)	536		407		536		407
Included In Earnings
Realized investment gains (losses), net	0	[2]	(97)	[2]	0	[2]	(721)	[2]
Asset management fees and other income	0	[2]	4	[2]	0	[2]	37	[2]
Trading Asset [Member] | Equity Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	328		267		313		207
Included In Earnings
Realized investment gains (losses), net	0		0		0		0
Asset management fees and other income - Assets1	0		12		15		72
Included in other comprehensive income (loss)	0		0		0		0
Net investment income1	0		0		0		0
Purchases	0				0		0
Sales	0		0		0		0
Issuances	0		0		0		0
Settlements	(328)		0		(328)		0
Transfers into Level 3	0	[1]	0	[1]	0	[1]	0	[1]
Transfers out of Level 3	0	[1]	0	[1]	0	[1]	0	[1]
Fair Value, end of period (Assets)	0		279		0		279
Included In Earnings
Realized investment gains (losses), net	0	[2]	0	[2]	0	[2]	0	[2]
Asset management fees and other income	0	[2]	11	[2]	15	[2]	72	[2]
Other Assets [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)							1,995
Included In Earnings
Realized investment gains (losses), net							0
Realized investment gains (losses), net							0
Included in other comprehensive income (loss)							1
Net investment income1							0
Purchases							3,254
Sales							0
Issuances							0
Settlements							0
Transfers into Level 3							0	[1]
Transfers out of Level 3							0	[1]
Fair Value, end of period (Assets)			5,250				5,250
Included In Earnings
Realized investment gains (losses), net							0	[2]
Asset management fees and other income							0	[2]
Future Policy Benefits [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	(1,402,029)		(1,230,323)
Fair Value, Beginning of period (Liabilities)					778,226		1,793,136
Included In Earnings
Realized investment gains (losses), net	(199,363)		622,798				1,246,584
Realized investment gains (losses), net					(761,582)		0
Asset management fees and other income - Liabilities			0		0
Asset management fees and other income - Assets1	0
Included in other comprehensive income (loss)	0		0		0		0
Net investment income1	0		0		0		0
Purchases	0		0		0		0
Sales	0		0		0		0
Issuances	(61,565)		(62,464)		(123,149)		(123,437)
Settlements	0		0		0		0
Transfers into Level 3	0	[1]	0	[1]	0	[1]	0	[1]
Transfers out of Level 3	0	[1]	0	[1]	0	[1]	0	[1]
Fair Value, end of period (Assets)	(1,662,957)		(669,989)		(1,662,957)		(669,989)
Fair Value, End of Period (Liabilities)	1,662,957				1,662,957
Included In Earnings
Realized investment gains (losses), net	(213,148)	[2]	614,035	[2]	(782,440)	[2]	1,223,615	[2]
Asset management fees and other income	0	[2]	0	[2]	0	[2]	0	[2]
Cash and Cash Equivalents [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	400				0
Included In Earnings
Realized investment gains (losses), net	0				0
Asset management fees and other income - Assets1	0				0
Included in other comprehensive income (loss)	0				0
Net investment income1	0				0
Purchases	0				400
Sales	0				0
Issuances	0				0
Settlements	0				0
Transfers into Level 3	0	[1]			0	[1]
Transfers out of Level 3	0	[1]			0	[1]
Fair Value, end of period (Assets)	400				400
Included In Earnings
Realized investment gains (losses), net	0	[2]			0	[2]
Asset management fees and other income	0	[2]			0	[2]
Reinsurance Recoverable [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	1,344,587		1,191,409		748,005		1,732,094
Included In Earnings
Realized investment gains (losses), net	191,020		(596,967)		728,874		(1,195,788)
Asset management fees and other income - Liabilities			0				0
Asset management fees and other income - Assets1	0				0
Included in other comprehensive income (loss)	0		0		0		0
Net investment income1	0		0		0		0
Purchases	58,704		59,616		117,432		117,752
Sales	0		0		0		0
Issuances	0		0		0		0
Settlements	0		0		0		0
Transfers into Level 3	0	[1]	0	[1]	0	[1]		[1]
Transfers out of Level 3	0	[1]	0	[1]	0	[1]	0	[1]
Fair Value, end of period (Assets)	1,594,311		654,058		1,594,311		654,058
Included In Earnings
Realized investment gains (losses), net	204,298	[2]	(588,372)	[2]	749,020	[2]	(1,173,117)	[2]
Asset management fees and other income	0	[2]	0	[2]	0	[2]	0	[2]
Receivables From Parents And Affiliates [Member]
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, beginning of period (Assets)	8,344		2,000		6,347
Included In Earnings
Realized investment gains (losses), net	0		0		1
Asset management fees and other income - Liabilities			0		0
Asset management fees and other income - Assets1	0
Included in other comprehensive income (loss)	68		(4)		79
Net investment income1	19,350		0		0
Purchases	0		3,254		19,350
Sales	0		0		0
Issuances	0		0		0
Settlements	0		0		0
Transfers into Level 3	0	[1]	0	[1]	1,985	[1]
Transfers out of Level 3	0	[1]	0	[1]	0	[1]
Fair Value, end of period (Assets)	27,762		5,250		27,762		5,250
Included In Earnings
Realized investment gains (losses), net	0	[2]	0	[2]	0	[2]
Asset management fees and other income	$ 0	[2]	$ 0	[2]	$ 0	[2]

[1]   (1) Transfers into or out of Level 3 are reported as the value as of the beginning of the quarter in which the transfer occurs.

[2]   (2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

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Investments (All Other Net Unrealized Investment Gains and Losses in AOCI) (Details) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Other Net Unrealized Investment Gains and Losses [Member] Accumulated Net Unrealized Investment Gain (Loss) Pre Tax [Member]	Jun. 30, 2014 Other Net Unrealized Investment Gains and Losses [Member] Deferred Costs Policy Acquisition And Sales Inducements And Valuation Of Business Acquired, Pre Tax [Member]	Jun. 30, 2014 Other Net Unrealized Investment Gains and Losses [Member] Policyholders Account Balances Pre Tax [Member]	Jun. 30, 2014 Other Net Unrealized Investment Gains and Losses [Member] Deferred Income Tax Liability Benefit [Member]	Jun. 30, 2014 Other Net Unrealized Investment Gains and Losses [Member] Accumulated Net Unrealized Investment Gain (Loss) [Member]
Balance	$ 94,016	$ 70,867	$ 184,727	$ (66,452)	$ (8,187)	$ (39,363)	$ 70,725
Net investment gains (losses) on investments arising during the period			46,314	0	0	(16,215)	30,099
Reclassification adjustment for (gains) losses included in net income			(582)	0	0	203	(379)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs			0	(7,638)	0	2,671	(4,967)
Impact of net unrealized investment (gains) losses on policyholders' account balance			0	0	(2,303)	805	(1,498)
Balance	$ 94,016	$ 70,867	$ 230,459	$ (74,090)	$ (10,490)	$ (51,899)	$ 93,980

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Commitments, Contingent Liabilities And Litigation And Regulatory Matters (Litigation Narrative) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Minimum [Member]
Litigation [Line Items]
Estimate of possible losses in excess of accruals	$ 0
Maximum [Member]
Litigation [Line Items]
Estimate of possible losses in excess of accruals	$ 5

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Investments (Commercial Mortgage and Other Loans) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Commercial mortgage loans	$ 358,034	$ 345,284
Commercial mortgage loans, Percentage	86.70%	86.90%
Valuation allowance	(1,256)	(1,256)
Total net commercial and agricultural mortgage loans by property type	411,936	396,251
Total commercial mortgage and other loans, net of valuation allowance	414,676	398,991
Total Commercial Mortgage By Propterty Type	413,192	397,507
Other Loans and Leases Receivable	2,740	2,740
Office buildings [Member]
Commercial mortgage loans	44,818	40,976
Commercial mortgage loans, Percentage	10.80%	10.30%
Retail stores [Member]
Commercial mortgage loans	71,310	72,325
Commercial mortgage loans, Percentage	17.30%	18.20%
Apartment Complexes [Member]
Commercial mortgage loans	136,519	125,045
Commercial mortgage loans, Percentage	33.00%	31.50%
Industrial Buildings [Member]
Commercial mortgage loans	85,798	88,009
Commercial mortgage loans, Percentage	20.80%	22.10%
Agricultural Properties [Member]
Commercial mortgage loans	55,158	52,223
Commercial mortgage loans, Percentage	13.30%	13.10%
Hospitality [Member]
Commercial mortgage loans	5,110	5,133
Commercial mortgage loans, Percentage	1.20%	1.30%
Other [Member]
Commercial mortgage loans	14,479	13,796
Commercial mortgage loans, Percentage	3.60%	3.50%
California [Member]
Commercial mortgage loans, Percentage	17.00%
Ohio [Member]
Commercial mortgage loans, Percentage	8.00%
Total Percentage [Member]
Commercial mortgage loans, Percentage	100.00%	100.00%
Uncollateralized Loans [Member]
Other Loans and Leases Receivable	$ 2,740	$ 2,740
Texas [Member]
Commercial mortgage loans, Percentage	11.00%

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Derivative Instruments (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Derivative Instruments
Maximum length of time hedged in cash flow hedge (in years)	19 years
Notional of credit derivative	$ 0	$ 0
Fair value of credit derivative liability	0	0
Maximum exposure to loss from externally-managed investments	0	0
Pruco Re and Prudential Insurance FV of embedded derivatives related to reinsurance recoverables	1,595	748
FV Of Embedded Derivatives Included In Future Policy Benefits	(1,663)	(778)
FV Of Embedded Derivatives Included In Fixed Maturities AFS	0	0
Credit protection purchased notional amounts	1	6
Credit derivative protection purchased fair value	$ (0.1)	$ 0

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Income Taxes (Components of Income Tax Expense (Benefit)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
IncomeTaxExpenseBenefitAbstract
Total income tax expense (benefit) on continuing operations	$ 9,985	$ 43,134	$ 26,840	$ 93,132
IncomeTaxEffectsAllocatedDirectlyToEquityAbstract
Other comprehensive income (loss)	$ 5,681	$ (30,329)	$ 12,465	$ (35,238)

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Investments (Balance of and Changes in AOCI Components) (USD $)	3 Months Ended			6 Months Ended				12 Months Ended
	Jun. 30, 2014		Mar. 31, 2013	Jun. 30, 2014		Jun. 30, 2013		Dec. 31, 2013		Dec. 31, 2012
Accumulated other comprehensive income	$ 94,016,000			$ 94,016,000				$ 70,867,000
AccumulatedTranslationAdjustmentMember
Accumulated other comprehensive income	8,000			8,000		(3,000)		10,000		7,000
Change in Other Comprehensive Income				(4,000)		(15,000)
Amount Reclassified from AOCI				0		0
Income Tax Benefit Expense				2,000		5,000
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated other comprehensive income	94,008,000	[1]		94,008,000	[1]	81,846,000	[1]	70,857,000	[1]	147,280,000	[1]
Change in Other Comprehensive Income				36,495,000	[1]	(92,858,000)	[1]
Amount Reclassified from AOCI	(71,000)	[2],[3],[4]		(877,000)	[1],[2],[3],[4]	(7,809,000)	[1]
Income Tax Benefit Expense				(12,467,000)	[1]	35,233,000	[1]
Cash Flow Hedge Gain Loss To AOCI			(1,000,000)	(4,000,000)				(4,000,000)		(3,000,000)
Accumulated Other Comprehensive Income (loss) [Member]
Accumulated other comprehensive income	94,016,000			94,016,000		81,843,000		70,867,000		147,287,000
Change in Other Comprehensive Income				36,491,000		(92,873,000)
Amount Reclassified from AOCI	(71,000)	[2],[3]		(877,000)	[2],[3]	(7,809,000)
Income Tax Benefit Expense				$ (12,465,000)		$ 35,238,000

[1] Includes cash flow hedges of ($4) million as of both June 30, 2014 and December 31, 2013 and ($1) million and ($3) million as of June 30, 2013 and December 31, 2012, respectively

[2] _____________ All amounts are shown before tax.

[3] Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

[4] See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs and future policy benefits.

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Derivative Instruments (Gross Notional Amount and Fair Value of Derivatives Contracts) (Parenthetical) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Derivative Instruments
Net Embedded Derivative	$ (1,663)	$ (778)
FV Of Embedded Derivatives Included In Future Policy Benefits	(1,663)	(778)
Pruco Re and Prudential Insurance FV of embedded derivatives related to reinsurance recoverables	$ 1,595	$ 748

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Related Party (Debt Agreements) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Related Party Transactions [Abstract]
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,000,000,000		$ 2,000,000,000
Short-term Debt with Pru Funding	15,000,000		15,000,000		5,000,000
Interest Expense, Short-term Borrowings	3,000	900	21,000	84,000
Prudential Financial Debt, Interest Rate			4.49%
Prudential Financial Debt, Repayment Amount	200,000,000		200,000,000		200,000,000
Long-term debt interest expense	$ 2,000,000	$ 5,000,000	$ 4,000,000	$ 9,000,000

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Related Party (Reinsurance With Affiliates Pruco Re Cont) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Related Party Transactions [Abstract]
Pruco Re Realized Gains Losses	$ 181	$ (605)	$ 709	$ (1,214)

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Fair Value of Assets and Liabilities (Financial Instruments where Carrying Amounts and Fair Values May Differ) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Assets:
Policy loans	$ 12,884		$ 12,454
Accrued investment income	27,009		32,169
Receivables from parents and affiliates	56,936		35,594
Other Long-Term Investments	85,601		60,585
Liabilities:
Cash collateral for loaned securities	37,404		47,896
Short-term debt	215,000		205,000
Payables To Parent And Affiliates	57,308		111,403
Fair Value, Inputs, Level 3 [Member]
Assets:
Receivables from parents and affiliates	27,762		6,347
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Assets:
Commercial mortgage and other loans	414,676	[1]	398,991	[1]
Policy loans	12,884	[1]	12,454	[1]
Cash	202	[1]	1,417	[1]
Accrued investment income	27,009	[1]	32,169	[1]
Other assets	2,935	[1]	11,190	[1]
Total Assets Financial Instruments Not Carried At Fair Value	471,909	[1]	467,838	[1]
Receivables from parents and affiliates	12,423	[1]	10,177	[1]
Other Long-Term Investments	1,780	[1]	1,440	[1]
Liabilities:
Investment contracts- policyholders' account balances	89,746	[1]	85,672	[1]
Cash collateral for loaned securities	37,404	[1]	47,896	[1]
Short-term debt	215,000	[1]	205,000	[1]
Other liabilities	88,040	[1]	101,656	[1]
Separate account liabilities - investment contracts	609	[1]	796	[1]
Total Financial Instrument Liabilities Not Carried At Fair Value	462,953	[1]	526,224	[1]
Payables To Parent And Affiliates	32,154	[1]	85,204	[1]
Estimate of Fair Value, Fair Value Disclosure [Member]
Assets:
Commercial mortgage and other loans	444,611		422,584
Policy loans	12,884		12,454
Cash	202		1,417
Accrued investment income	27,009		32,169
Other assets	2,935		11,190
Total Assets Financial Instruments Not Carried At Fair Value	502,230		491,614
Receivables from parents and affiliates	12,423		10,177
Other Long-Term Investments	2,166		1,623
Liabilities:
Investment contracts- policyholders' account balances	88,865		84,153
Cash collateral for loaned securities	37,404		47,896
Short-term debt	218,897		218,488
Other liabilities	88,040		101,656
Separate account liabilities - investment contracts	609		796
Total Financial Instrument Liabilities Not Carried At Fair Value	465,969		538,193
Payables To Parent And Affiliates	32,154		85,204
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 1 [Member]
Assets:
Commercial mortgage and other loans	0		0
Policy loans	0		0
Cash	202		1,417
Accrued investment income	0		0
Other assets	0		0
Total Assets Financial Instruments Not Carried At Fair Value	202		1,417
Receivables from parents and affiliates	0		0
Other Long-Term Investments	0		0
Liabilities:
Investment contracts- policyholders' account balances	0		0
Cash collateral for loaned securities	0		0
Short-term debt	0		0
Other liabilities	0		0
Separate account liabilities - investment contracts	0		0
Total Financial Instrument Liabilities Not Carried At Fair Value	0		0
Payables To Parent And Affiliates	0		0
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]
Assets:
Commercial mortgage and other loans	2,680		0
Policy loans	0		0
Cash	0		0
Accrued investment income	27,009		32,169
Other assets	2,935		11,190
Total Assets Financial Instruments Not Carried At Fair Value	45,047		53,536
Receivables from parents and affiliates	12,423		10,177
Other Long-Term Investments	0		0
Liabilities:
Investment contracts- policyholders' account balances	0		0
Cash collateral for loaned securities	37,404		47,896
Short-term debt	218,897		218,488
Other liabilities	88,040		101,656
Separate account liabilities - investment contracts	609		796
Total Financial Instrument Liabilities Not Carried At Fair Value	377,104		454,040
Payables To Parent And Affiliates	32,154		85,204
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 3 [Member]
Assets:
Commercial mortgage and other loans	441,931		422,584
Policy loans	12,884		12,454
Cash	0		0
Accrued investment income	0		0
Other assets	0		0
Total Assets Financial Instruments Not Carried At Fair Value	456,981		436,661
Receivables from parents and affiliates	0		0
Other Long-Term Investments	2,166		1,623
Liabilities:
Investment contracts- policyholders' account balances	88,865		84,153
Cash collateral for loaned securities	0		0
Short-term debt	0		0
Other liabilities	0		0
Separate account liabilities - investment contracts	0		0
Total Financial Instrument Liabilities Not Carried At Fair Value	88,865		84,153
Payables To Parent And Affiliates	$ 0		$ 0

[1] Carrying values presented herein differ from those in the Company’s Unaudited Interim Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.

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Investments

6 Months Ended

Jun. 30, 2014

Investments [Abstract]

Investments

3. INVESTMENTS

Fixed Maturities and Equity Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:

		June 30, 2014
										Other-than-
					Gross		Gross			temporary
		Amortized			Unrealized		Unrealized	Fair		Impairments
		Cost			Gains		Losses	Value		in AOCI (3)
		(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S.
	government authorities and agencies	$	6,337	$	18	$	10	$	6,345	$	-
Obligations of U.S. states and their political
	subdivisions		68,339		2,353		360		70,332		-
Foreign government bonds			25,270		6,946		-		32,216		-
Public utilities			239,759		25,945		638		265,066		-
All other corporate securities			1,823,344		172,542		1,404		1,994,482		-
Asset-backed securities (1)			165,680		7,043		220		172,503		(40)
Commercial mortgage-backed securities			316,199		11,799		255		327,743		-
Residential mortgage-backed securities (2)			139,465		7,375		-		146,840		(38)
Total fixed maturities, available-for-sale		$	2,784,393	$	234,021	$	2,887	$	3,015,527	$	(78)
Equity securities, available-for-sale
Common Stocks:
	Public utilities	$	-	$	-	$	-	$	-
	Mutual funds		14		3		-		17
Total equity securities, available-for-sale		$	14	$	3	$	-	$	17

_____________

• Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.
• Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
• Represents the amount of other-than-temporary impairment losses in “AOCI,” which were not included in earnings. Amount excludes $0.1million of net unrealized gains on impaired available-for-sale securities relating to changes in thevalue of such securities subsequent to the impairment measurement date.

		December 31, 2013
										Other-than-
					Gross		Gross			temporary
		Amortized			Unrealized		Unrealized	Fair		Impairments
		Cost			Gains		Losses	Value		in AOCI (3)
		(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S.
	government authorities and agencies	$	6,382	$	36	$	34	$	6,384	$	-
Obligations of U.S. states and their political
	subdivisions		67,225		2,911		1,570		68,566		-
Foreign government bonds			25,437		5,717		-		31,154		-
Public utilities			229,807		17,048		3,190		243,665		-
All other corporate securities			2,029,720		158,360		9,103		2,178,977		-
Asset-backed securities (1)			182,888		6,513		1,509		187,892		(1,351)
Commercial mortgage-backed securities			384,764		11,387		5,518		390,633		-
Residential mortgage-backed securities (2)			152,779		5,138		972		156,945		(40)
Total fixed maturities, available-for-sale		$	3,079,002	$	207,110	$	21,896	$	3,264,216	$	(1,391)
Equity securities, available-for-sale
Common Stocks:
	Public utilities	$	192	$	-	$	-	$	192
	Mutual funds		14		2		-		16
Total equity securities, available-for-sale		$	206	$	2	$	-	$	208

_____________

• Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.
• Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
• Represents the amount of other-than-temporary impairment losses in “AOCI,” which were not included in earnings. Amount excludes $1.7million of net unrealized gainson impaired available-for-sale securities relating to changes in the value of such securitiessubsequent to the impairment measurement date.

The amortized cost and fair value of fixed maturitiesby contractual maturities at June 30, 2014,are as follows:

		Available-for-Sale
		Amortized		Fair
		Cost		Value
		(in thousands)
Due in one year or less		$	250,546	$	257,895
Due after one year through five years			951,580		1,025,776
Due after five years through ten years			549,906		608,317
Due after ten years			411,017		476,453
Asset-backed securities			165,680		172,503
Commercial mortgage-backed securities			316,199		327,743
Residential mortgage-backed securities			139,465		146,840
	Total	$	2,784,393	$	3,015,527

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed, and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

The following table depicts the sources of fixed maturity proceedsand relatedinvestment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
		(in thousands)
Fixed maturities, available-for-sale
	Proceeds from sales	$	120,393	$	6,501	$	172,423	$	121,428
	Proceeds from maturities/repayments		186,089		386,663		493,702		593,078
	Gross investment gains from sales, prepayments, and maturities		2,992		5,113		4,124		7,905
	Gross investment losses from sales and maturities		(2,921)		(17)		(3,247)		(97)
Equity securities, available-for-sale
	Proceeds from sales	$	-	$	-	$	-	$	1
	Gross investment gains from sales		-		(1)		1		-

As discussed in Note 2 to the Company's Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2013, a portion of certain other-than-temporary-impairment (“OTTI”) losses on fixed maturity securities are recognized in “Other comprehensive income (loss) (“OCI”)”. For these securities, the net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following tables set forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts.

Credit losses recognized in earnings on fixed maturity securities held by the Company for which a portion of the OTTI loss was recognized in OCI

		Three Months		Six Months
		Ended		Ended
		June 30, 2014		June 30, 2014
			(in thousands)
Balance, beginning of period		$	119	$	1,800
Credit loss impairments previously recognized on securities which matured, paid
	down, prepaid or were sold during the period		(4)		(1,677)
Increases due to the passage of time on previously recorded credit losses			-		-
Accretion of credit loss impairments previously recognized due to an increase in
	cash flows expected to be collected		(12)		(20)
Balance, end of period		$	103	$	103
		Three Months		Six Months
		Ended		Ended
		June 30, 2013		June 30, 2013
			(in thousands)
Balance, beginning of period		$	1,726	$	3,381
Credit loss impairments previously recognized on securities which matured, paid
	down, prepaid or were sold during the period		(5)		(1,619)
Increases due to the passage of time on previously recorded credit losses			28		55
Accretion of credit loss impairments previously recognized due to an increase in
	cash flows expected to be collected		-		(68)
Balance, end of period		$	1,749	$	1,749

Trading Account Assets

The following table sets forth the composition of “Trading account assets” as of the dates indicated:

	June 30, 2014				December 31, 2013
			Fair				Fair
	Cost		Value		Cost		Value
	(in thousands)
Total trading account assets - Equity securities	$	5,045	$	6,053	$	5,164	$	6,677

The net change in unrealized gains (losses) from trading account assets still held at period end, recorded within “Asset administration fees and other income”,was ($0.6) million and ($0.1) million during the three months ended June 30, 2014and 2013, respectively, and ($0.5) million and $0.4million during the six months endedJune 30, 2014and 2013,respectively.

Commercial Mortgage and Other Loans

The Company's commercial mortgage and other loans are comprised as follows, as of the dates indicated:

			June 30, 2014					December 31, 2013
			Amount		% of			Amount		% of
			(in thousands)		Total			(in thousands)		Total
Commercial and agricultural mortgage loans by property type:
Apartments/Multi-Family			$	136,519		33.0	%	$	125,045		31.5	%
Industrial				85,798		20.8			88,009		22.1
Retail				71,310		17.3			72,325		18.2
Office				44,818		10.8			40,976		10.3
Other				14,479		3.6			13,796		3.5
Hospitality				5,110		1.2			5,133		1.3
	Total commercial mortgage loans			358,034		86.7			345,284		86.9
Agricultural property loans				55,158		13.3			52,223		13.1
	Total commercial and agricultural mortgage loans by property
		type		413,192		100.0	%		397,507		100.0	%
Valuation allowance				(1,256)					(1,256)
	Total net commercial and agricultural mortgage loans by property
		type		411,936					396,251
Other Loans
Uncollateralized loans				2,740					2,740
	Total other loans			2,740					2,740
	Total commercial mortgage and other loans		$	414,676				$	398,991

The commercial mortgage and agricultural property loans are geographically dispersed throughout the United States with the largest concentrations in California (17%), Texas (11%) and Ohio (8%)at June 30, 2014.

Activity in the allowance for losses for all commercial mortgage and other loans, as of the dates indicated, is as follows:

	June 30, 2014		December 31, 2013
	(in thousands)
Allowance for losses, beginning of year	$	1,256	$	2,177
Addition to / (release of) allowance for losses		-		(921)
Total ending balance (1)	$	1,256	$	1,256

_____________

• Agricultural loans represent $0.1 million of the ending allowance at both June 30, 2014 and December 31, 2013.

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated:

	June 30, 2014		December 31, 2013
	(in thousands)
Allowance for Credit Losses:
Ending balance: individually evaluated for impairment (1)	$	-	$	-
Ending balance: collectively evaluated for impairment (2)		1,256		1,256
Total ending balance	$	1,256	$	1,256
Recorded Investment (3):
Ending balance gross of reserves: individually evaluated for impairment (1)	$	-	$	-
Ending balance gross of reserves: collectively evaluated for impairment (2)		415,932		400,247
Total ending balance, gross of reserves	$	415,932	$	400,247

_____________

• There were no loans individually evaluated for impairments at June 30, 2014 and December 31, 2013.
• Agricultural loans collectively evaluated for impairment had a recorded investment of $55million and $52million atJune 30, 2014and December 31, 2013, respectively, and a related allowance of $0.1millionfor both periods. Uncollateralized loans collectively evaluated for impairment had a recorded investment of $3 million at both June 30, 2014andDecember 31, 2013 and no related allowance for both periods.
• Recorded investment reflects the balance sheet carrying value gross of related allowance.

Impaired loans include those loans for which it is probable that allamounts due will not be collected according to the contractual terms of the loan agreement. There were no impaired commercial mortgage and other loans identified in management's specific review of probable loan losses and norelated allowancefor losses at June 30, 2014 and December 31, 2013. There were no recorded investments in impaired loans with an allowance recorded, before the allowance for losses,at bothJune 30, 2014and December 31, 2013.

Impaired commercial mortgage and other loans with no allowance for losses are loans in which the fair value of the collateral or the net present value of the loans' expected future cash flows equals or exceeds the recorded investment. The Company had no such loans at June 30, 2014andDecember 31, 2013. See Note 2to the Company's Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2013, for information regarding the Company's accounting policies for non-performing loans.

The following table sets forth certain key credit quality indicators as of June 30, 2014, based upon the recorded investment gross of allowance for credit losses.

Total commercial and agricultural mortgage loans

		Debt Service Coverage Ratio - June 30, 2014
		Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
Loan-to-Value Ratio			(in thousands)
0%-59.99%		$	246,541	$	9,581	$	3,003	$	259,125
60%-69.99%			121,211		-		-		121,211
70%-79.99%			28,262		1,478		-		29,740
Greater than 80%			3,116		-		-		3,116
	Total commercial and agricultural mortgage loans	$	399,130	$	11,059	$	3,003	$	413,192

The following table sets forth certain key credit quality indicators as of December 31, 2013, based upon the recorded investment gross of allowance for credit losses.

Total commercial and agricultural mortgage loans

		Debt Service Coverage Ratio - December 31, 2013
		Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
Loan-to-Value Ratio		(in thousands)
0%-59.99%		$	251,278	$	7,650	$	1,865	$	260,793
60%-69.99%			102,755		-		-		102,755
70%-79.99%			31,712		2,247		-		33,959
Greater than 80%			-		-		-		-
	Total commercial and agricultural mortgage loans	$	385,745	$	9,897	$	1,865	$	397,507

As of June 30, 2014and December 31, 2013, all commercial mortgage and other loans were in current status. The Company defines current in its aging of past due commercial mortgage and agricultural loans as less than 30 days past due.

There were no commercial mortgage and other loans in nonaccrual status as of June 30, 2014and December 31, 2013. Nonaccrual loans are those on which the accrual of interest has been suspended after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability and loans for which a loan-specific reserve has been established. See Note 2 to the Company's Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2013, for further discussion regarding nonaccrual status loans.

For the threeand six months ended both June 30, 2014 and 2013, there were no new commercial mortgage and other loans acquired, other than those through direct origination.

The Company's commercial mortgage and other loans may occasionally be involved in a troubled debt restructuring. As of both June 30, 2014 and December 31, 2013, the Company had no significant commitments to fund to borrowers that have been involved in a troubled debt restructuring. During the three and six months ended June 30, 2014 and 2013, respectively, there were no new troubled debt restructurings related to commercial mortgage and other loans, and no payment defaults on commercial mortgage and other loans that were modified as a troubled debt restructuring within the 12 months preceding each respective period. For additional information relating to the accounting for troubled debt restructurings, see Note 2 to the Company's Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2013.

Net Investment Income

Net investment income for the three and six months ended June 30, 2014 and 2013, was from the following sources:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
		(in thousands)
Fixed maturities, available-for-sale		$	35,805	$	49,240	$	74,181	$	102,534
Trading account assets			21		29		30		61
Commercial mortgage and other loans			5,236		10,274		11,402		16,403
Policy loans			223		225		350		339
Short-term investments			72		96		130		179
Other long-term investments			1,577		739		2,791		1,429
	Gross investment income		42,934		60,603		88,884		120,945
Less: investment expenses			(1,476)		(1,669)		(2,925)		(3,471)
	Net investment income	$	41,458	$	58,934	$	85,959	$	117,474

Realized Investment Gains (Losses), Net

Realized investment gains (losses), net, for the three and six months endedJune 30, 2014 and 2013,were from the following sources:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
		(in thousands)
Fixed maturities		$	71	$	5,096	$	877	$	7,808
Equity securities			-		-		1		1.00
Commercial mortgage and other loans			-		330		-		368
Derivatives			(4,266)		(48,839)		(5,244)		(89,665)
Other			-		(2)		-		(23)
	Realized investment gains (losses), net	$	(4,195)	$	(43,415)	$	(4,366)	$	(81,511)

Accumulated Other Comprehensive Income (Loss)

The balance of and changes in each component of “Accumulated other comprehensive income (loss)” for the six months endedJune 30, 2014 and 2013are as follows:

		Accumulated Other Comprehensive Income (Loss)
			Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Total Accumulated Other Comprehensive Income (Loss)
		(in thousands)
Balance, December 31, 2013		$	10	$	70,857	$	70,867
Change in other comprehensive income
	before reclassifications		(4)		36,495		36,491
Amounts reclassified from AOCI			-		(877)		(877)
Income tax benefit (expense)			2		(12,467)		(12,465)
Balance, June 30, 2014		$	8	$	94,008	$	94,016
		Accumulated Other Comprehensive Income (Loss)
			Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Total Accumulated Other Comprehensive Income (Loss)
		(in thousands)
Balance, December 31, 2012		$	7	$	147,280	$	147,287
Change in other comprehensive income
	before reclassifications		(15)		(92,858)		(92,873)
Amounts reclassified from AOCI			-		(7,809)		(7,809)
Income tax benefit (expense)			5		35,233		35,238
Balance, June 30, 2013		$	(3)	$	81,846	$	81,843

_____________

• Includes cash flow hedges of($4)millionas ofboth June 30, 2014 andDecember 31, 2013and ($1)million and($3)million as of June 30, 2013 and December 31, 2012, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)
				Three Months		Six Months
				Ended		Ended
				June 30, 2014		June 30, 2014
				(in thousands)
Amounts reclassified from AOCI (1)(2):
Net unrealized investment gains (losses):
	Cash flow hedges - Currency/Interest rate (3)			$	(19)	$	(34)
	Net unrealized investment gains (losses) on available-for-sale securities				90		911
		Total net unrealized investment gains (losses) (4)			71		877
			Total reclassifications for the period	$	71	$	877

_____________

• All amounts are shown before tax.
• Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.
• See Note 5 for additional information on cash flow hedges.
• See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs and future policy benefits.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains and losses on securities classified as available-for-sale and certain other long-term investments and other assets are included in the Company'sUnaudited Interim Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from“Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)”in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

		Net Unrealized Gains (Losses) on Investments (1)		Deferred Policy Acquisition Costs and Other Costs		Future Policy Benefits		Deferred Income Tax (Liability) Benefit		Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
		(in thousands)
Balance, December 31, 2013		$	323	$	(116)	$	(14)	$	(51)	$	142
Net investment gains (losses) on investments
	arising during the period		5		-		-		(2)		3
Reclassification adjustment for (gains) losses
	included in net income		(295)		-		-		102		(193)
Impact of net unrealized investment (gains) losses on
	deferred policy acquisition costs
	and other costs		-		105		-		(38)		67
Impact of net unrealized investment (gains) losses on
	future policy benefits		-		-		13		(4)		9
Balance, June 30, 2014		$	33	$	(11)	$	(1)	$	7	$	28

_____________

• Includes cash flow hedges. See Note 5 for information on cash flow hedges.

All Other Net Unrealized Investment Gains and Losses in AOCI

										Accumulated Other
										Comprehensive
								Deferred		Income (Loss) Related
		Net Unrealized		Deferred Policy		Future		Income Tax		To Net Unrealized
		Gains (Losses) on		Acquisition Costs		Policy		(Liability)		Investment
		Investments (1)		and Other Costs		Benefits		Benefit		Gains (Losses)
		(in thousands)
Balance, December 31, 2013		$	184,727	$	(66,452)	$	(8,187)	$	(39,363)	$	70,725
Net investment gains (losses) on investments
	arising during the period		46,314		-		-		(16,215)		30,099
Reclassification adjustment for (gains) losses
	included in net income		(582)		-		-		203		(379)
Impact of net unrealized investment (gains)
	losses on deferred policy acquisition costs
	and other costs		-		(7,638)		-		2,671		(4,967)
Impact of net unrealized investment (gains)
	losses on future policy benefits		-		-		(2,303)		805		(1,498)
Balance, June 30, 2014		$	230,459	$	(74,090)	$	(10,490)	$	(51,899)	$	93,980

_____________

• Includes cash flow hedges. See Note 5 for information on cash flow hedges.

Net Unrealized Gains (Losses) on Investments by Asset Class

The table below presents net unrealized gains / (losses) on investments by asset classas of the dates indicated:

	June 30,		December 31,
	2014		2013
	(in thousands)
Fixed maturity securities on which an OTTI loss has been recognized	$	33	$	323
Fixed maturity securities, available-for-sale - all other		231,101		184,891
Equity securities, available-for-sale		3		2
Affiliated notes		2,779		3,113
Derivatives designated as cash flow hedges (1)		(4,076)		(3,653)
Other investments		652		374
Net unrealized gains (losses) on investments	$	230,492	$	185,050

_____________

• See Note 5 for more information on cash flow hedges.

Duration of Gross Unrealized Loss Positions for Fixed Maturities and Equity Securities

The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, as of the dates indicated:

			June 30, 2014
			Less than twelve months				Twelve months or more				Total
			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
			(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of
	U.S. government authorities and agencies		$	2,692	$	10	$	-	$	-	$	2,692	$	10
Obligations of U.S. States and their
	political subdivisions			-		-		6,995		360		6,995		360
Corporate securities				94,815		1,001		47,798		1,041		142,613		2,042
Asset-backed securities				15,070		139		17,832		81		32,902		220
Commercial mortgage-backed securities				-		-		7,223		255		7,223		255
Residential mortgage-backed securities				-		-		-		-		-		-
		Total	$	112,577	$	1,150	$	79,848	$	1,737	$	192,425	$	2,887
Equity securities, available-for-sale			$	-	$	-	$	-	$	-	$	-	$	-

			December 31, 2013
			Less than twelve months				Twelve months or more				Total
			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
			(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of
	U.S. government authorities and agencies		$	3,347	$	34	$	-	$	-	$	3,347	$	34
Obligations of U.S. States and their
	political subdivisions			5,420		588		6,402		982		11,822		1,570
Corporate securities				351,306		11,923		2,704		370		354,010		12,293
Asset-backed securities				97,575		1,509		-		-		97,575		1,509
Commercial mortgage-backed securities				86,132		5,249		2,941		269		89,073		5,518
Residential mortgage-backed securities				100,150		972		-		-		100,150		972
		Total	$	643,930	$	20,275	$	12,047	$	1,621	$	655,977	$	21,896
Equity securities, available-for-sale			$	-	$	-	$	-	$	-	$	-	$	-

The gross unrealized losses on fixed maturity securities at June 30, 2014 and December 31, 2013, are composed of $2.2million and $20.4 million, respectively,related to high or highest quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $0.7million and $1.5 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. At June 30, 2014,$1.7million of gross unrealized losses of twelve months or more were concentrated in U.S. obligations, commercial mortgage-backed securities, and the consumer non-cyclical and utilitysectors of the Company's corporate securities. At December 31, 2013,$1.6 million of gross unrealized losses of twelve months or more were concentrated in U.S. obligations and the consumer non-cyclical sector of the Company's corporate securities.

In accordance with its policy described in Note 2 to the Company's Financial Statements included in its 2013 Annual Report on Form 10-K, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at June 30, 2014or December 31, 2013. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to credit spread widening and increased liquidity discounts. At June 30, 2014, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of its remaining amortized cost basis.

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Related Party (Reinsurance With Affiliates) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Related Party Transactions [Abstract]
Affiliated Reinsurance Recoverables	$ 1,595	$ 748
Affiliated Reinsurance Payables	$ 25	$ 25

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Income Taxes (Reconciliation To Effective Rate) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
IncomeTaxExpenseBenefitContinuingOperationsIncomeTaxReconciliationAbstract
Income Tax Expense (Benefit)	$ 9,985	$ 43,134	$ 26,840	$ 93,132

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Investments (Other Long Term Investments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Other Long-Term Investments	$ 85,601	$ 60,585

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Investments (Credit Quality Indicators) (Details) (Commercial Mortgage and Agricultural Loans [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Debt Service Coverage Ratio, Greater than One Point Two X [Member] | Loan To Value Ratio Less Than Fifty Nine Point Nine Nine Percent [Member]
Financing Receivable	$ 246,541	$ 251,278
Debt Service Coverage Ratio, Greater than One Point Two X [Member] | Loan To Value Ratio Sixty Percent To Sixty Nine Point Nine Nine Percent [Member]
Financing Receivable	121,211	102,755
Debt Service Coverage Ratio, Greater than One Point Two X [Member] | Loan-to-Value Ratio, Seventy Percent To Seventy Nine Point Nine Nine Percent [Member]
Financing Receivable	28,262	31,712
Debt Service Coverage Ratio, Greater than One Point Two X [Member] | Loan-to-Value Ratio Greater than Eighty Percent [Member]
Financing Receivable	3,116	0
Debt Service Coverage Ratio, Greater than One Point Two X [Member] | Loan To Value Ratio Total [Member]
Financing Receivable	399,130	385,745
Debt Service Coverage Ratio, One Point Zero X to Less Than One Point Two X [Member] | Loan To Value Ratio Less Than Fifty Nine Point Nine Nine Percent [Member]
Financing Receivable	9,581	7,650
Debt Service Coverage Ratio, One Point Zero X to Less Than One Point Two X [Member] | Loan To Value Ratio Sixty Percent To Sixty Nine Point Nine Nine Percent [Member]
Financing Receivable	0	0
Debt Service Coverage Ratio, One Point Zero X to Less Than One Point Two X [Member] | Loan-to-Value Ratio, Seventy Percent To Seventy Nine Point Nine Nine Percent [Member]
Financing Receivable	1,478	2,247
Debt Service Coverage Ratio, One Point Zero X to Less Than One Point Two X [Member] | Loan-to-Value Ratio Greater than Eighty Percent [Member]
Financing Receivable	0	0
Debt Service Coverage Ratio, One Point Zero X to Less Than One Point Two X [Member] | Loan To Value Ratio Total [Member]
Financing Receivable	11,059	9,897
Debt Service Coverage Ratio, Less Than One Point Zero X [Member] | Loan To Value Ratio Less Than Fifty Nine Point Nine Nine Percent [Member]
Financing Receivable	3,003	1,865
Debt Service Coverage Ratio, Less Than One Point Zero X [Member] | Loan To Value Ratio Sixty Percent To Sixty Nine Point Nine Nine Percent [Member]
Financing Receivable	0	0
Debt Service Coverage Ratio, Less Than One Point Zero X [Member] | Loan-to-Value Ratio, Seventy Percent To Seventy Nine Point Nine Nine Percent [Member]
Financing Receivable	0	0
Debt Service Coverage Ratio, Less Than One Point Zero X [Member] | Loan-to-Value Ratio Greater than Eighty Percent [Member]
Financing Receivable	0	0
Debt Service Coverage Ratio, Less Than One Point Zero X [Member] | Loan To Value Ratio Total [Member]
Financing Receivable	3,003	1,865
Debt Service Coverage Ratio Total [Member] | Loan To Value Ratio Less Than Fifty Nine Point Nine Nine Percent [Member]
Financing Receivable	259,125	260,793
Debt Service Coverage Ratio Total [Member] | Loan To Value Ratio Sixty Percent To Sixty Nine Point Nine Nine Percent [Member]
Financing Receivable	121,211	102,755
Debt Service Coverage Ratio Total [Member] | Loan-to-Value Ratio, Seventy Percent To Seventy Nine Point Nine Nine Percent [Member]
Financing Receivable	29,740	33,959
Debt Service Coverage Ratio Total [Member] | Loan-to-Value Ratio Greater than Eighty Percent [Member]
Financing Receivable	3,116	0
Debt Service Coverage Ratio Total [Member] | Loan To Value Ratio Total [Member]
Financing Receivable	$ 413,192	$ 397,507

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Commitments, Contingent Liabilities And Litigation And Regulatory Matters (Narrative Excluding Litigation) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Commitments Guarantees Contingent Liabilities And Litigation [Line Items]
Commitments to fund commercial loans	$ 4
Commitments to fund investments	$ 19

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Fair Value of Assets and Liabilities (Narrative) (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Separate Account assets transferred from Level 2 to Level 1	$ 0	$ 933,000,000
Total commercial mortgage and other loans, net of valuation allowance	414,676,000	398,991,000
Other Long-Term Investments	85,601,000	60,585,000
Other liabilities	90,070,000	113,125,000
Embedded Derivative Fair Value of Embedded Derivative	1,663,000,000	778,000,000
Embedded Derivative Gross Asset	138,000,000	245,000,000
Embedded Derivative Gross Liability	1,801,000,000	1,023,000,000
Fair Value of Level 3 Derivatives	0	0
Separate Account assets transferred from Level 1 to Level 2	7,000,000
MarginDepositAssets	$ 10,600,000	$ 700,000

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Investments (Net Investment Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 42,934	$ 60,603	$ 88,884	$ 120,945
Less: investment expenses	(1,476)	(1,669)	(2,925)	(3,471)
Net Investment Income, Total	41,458	58,934	85,959	117,474
Available For Sale Fixed Maturities [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	35,805	49,240	74,181	102,534
Trading Account Assets [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	21	29	30	61
Commercial Mortgage Loans [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	5,236	10,274	11,402	16,403
Policy Loans [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	223	225	350	339
Short-term Investments [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	72	96	130	179
Other Long-term Investments [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 1,577	$ 739	$ 2,791	$ 1,429

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Investments (Realized Investment Gains Losses Net) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	$ (4,195)	$ (43,415)	$ (4,366)	$ (81,511)
Fixed Maturities [Member]
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	71	5,096	877	7,808
Equity Securities [Member]
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	0	0	1	1
Commercial Mortgage Loans [Member]
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	0	330	0	368
Derivative [Member]
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	(4,266)	(48,839)	(5,244)	(89,665)
Other [Member]
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	$ 0	$ (2)	$ 0	$ (23)

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Significant Accounting Policies and Pronouncements

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Significant Accounting Policies and Pronouncements

2.SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

This section supplements, and should be read in conjunction with, Note 2 to the Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013.

Adoption of New Accounting Pronouncements

In December 2013, the Financial Accounting Standards Board (“FASB”) issued updated guidance establishing a single definition of a public entity for use in financial accounting and reporting guidance. This new guidance is effective for all current and future reporting periods and did not have a significant effect on the Company's financial position, results of operations, or financial statement disclosures.

In July 2013, the FASB issued new guidance regarding derivatives. The guidance permits the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) to be used as a U.S. benchmark interest rate for hedge accounting, in addition to the United States Treasury rate and London Inter-Bank Offered Rate (“LIBOR”). The guidance also removes the restriction on using different benchmark rates for similar hedges. The guidance is effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company's financial position, results of operationsor financial statement disclosures.

In July 2013, the FASB issued updated guidance regarding the presentation of unrecognized tax benefits when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. This new guidance became effective for interim or annual reporting periods that began after December 15, 2013, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company's financial position, results of operations or financial statement disclosures.

In February 2013, the FASB issued updated guidance regarding the presentation of comprehensive income. Under the guidance, an entity is required to separately present information about significant items reclassified out of accumulated other comprehensive income (“AOCI”) by component as well as changes in AOCI balances by component in either the financial statements or the notes to the financial statements. The guidance does not change the items that are reported in other comprehensive income, does not change when an item of other comprehensive income must be reclassified to net income, and does not amend any existing requirements for reporting net income or other comprehensive income. The guidance became effective for interim or annual reporting periods that began after December 15, 2012 and was applied prospectively. The disclosures required by this guidance are included in Note 3.

In December 2011 and January 2013, the FASB issued updated guidance regarding the disclosure of recognized derivative instruments (including bifurcated embedded derivatives), repurchase agreements and securities borrowing/lending transactions that are offset in the statement of financial position or are subject to an enforceable master netting arrangement or similar agreement (irrespective of whether they are offset in the statement of financial position). This new guidance requires an entity to disclose information on both a gross and net basis about instruments and transactions within the scope of this guidance. This new guidance became effective for interim or annual reporting periods that began on or after January 1, 2013, and was applied retrospectively for all comparative periods presented. The disclosures required by this guidance are included in Note 5.

Future Adoption of New Accounting Pronouncements

In January 2014, the FASB issued updated guidance for troubled debt restructurings clarifying when an in substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2014. This guidance can be elected for prospective adoption or by using a modified retrospective transition method. This guidance is not expected to have a significant effect on the Company's financial position, results of operations or financial statement disclosures.

In May 2014, the FASB issued updated guidance on accounting for revenue recognition. The guidance is based on the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from cost incurred to obtain or fulfill a contract. Revenue recognition for insurance contracts is explicitly scoped out of the guidance. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2016, and must be applied using one of two retrospective application methods. Early adoption is not permitted. The Company is currently assessing the impact of the guidance on the Company's financial position, results of operations and financial statement disclosures.

In August 2014, the FASB issued updated guidance for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity. Under the guidance, an entity within scope is permitted to measure both the financial assets and financial liabilities of a consolidated collateralized financing entity based on either the fair value of the financial assets or the financial liabilities, whichever is more observable. If elected, the guidance will eliminate the measurement difference that exists when both are measured at fair value. The new guidance is effective for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2015. Early adoption will be permitted. This guidance can be elected for modified retrospective or full retrospective adoption. The Company is currently assessing the impact of the guidance on the Company's financial position, results of operations and financial statement disclosures.

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Investments (Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss) (Details) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Accumulated Net Unrealized Investment Gain (Loss) Pre Tax [Member] Securities Related to Other Than Temporary Impairments [Member]	Jun. 30, 2014 Deferred Costs Policy Acquisition And Sales Inducements And Valuation Of Business Acquired, Pre Tax [Member] Securities Related to Other Than Temporary Impairments [Member]	Jun. 30, 2014 Policyholders Account Balances Pre Tax [Member] Securities Related to Other Than Temporary Impairments [Member]	Jun. 30, 2014 Deferred Income Tax Liability Benefit [Member] Securities Related to Other Than Temporary Impairments [Member]	Jun. 30, 2014 Accumulated Net Unrealized Investment Gain (Loss) [Member] Securities Related to Other Than Temporary Impairments [Member]
Balance	$ 94,016	$ 70,867	$ 323	$ (116)	$ (14)	$ (51)	$ 142
Net investment gains (losses) on investments arising during the period			5	0	0	(2)	3
Reclassification adjustment for (gains) losses included in net income			(295)	0	0	102	(193)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs			0	105	0	(38)	67
Impact of net unrealized investment (gains) losses on policyholders' account balance			0	0	13	(4)	9
Balance	$ 94,016	$ 70,867	$ 33	$ (11)	$ (1)	$ 7	$ 28

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Certain Nontraditional Long-Duration Contracts (Changes in Deferred Sales Inducements, Reported as "Interest credited to policyholders' account (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
deferredsalesinducements
Deferred Sales Inducements, Beginning Balance	$ 740,832	$ 809,247
Deferred Sales Inducements, Ending Balance	$ 740,832	$ 809,247

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Derivative Instruments (Financial Statement Classification and Impact of Derivatives Used in Qualifying and Non-qualifying Hedge Relationships) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income, Effective Portion, Net					$ (457)
Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(4,266)		(48,839)		(5,244)		(89,665)
Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(5)		(16)		(17)		(50)
Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(24)		73		(9)		73
Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(1,060)	[1]	598	[1]	(423)	[1]	2,343	[1]
Cash Flow Hedging [Member] | Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Cash Flow Hedging [Member] | Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(5)		(16)		(17)		(50)
Cash Flow Hedging [Member] | Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(15)		27		(17)		32
Cash Flow Hedging [Member] | Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(1,060)	[1]	598	[1]	(423)	[1]	2,343	[1]
Cash Flow Hedging [Member] | Cross Currency Interest Rate Contract [Member] | Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Cash Flow Hedging [Member] | Cross Currency Interest Rate Contract [Member] | Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(5)		(16)		(17)		(50)
Cash Flow Hedging [Member] | Cross Currency Interest Rate Contract [Member] | Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(15)		27		(17)		32
Cash Flow Hedging [Member] | Cross Currency Interest Rate Contract [Member] | Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(1,060)	[1]	598	[1]	(423)	[1]	2,343	[1]
Nondesignated [Member] | Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(4,266)		(48,839)		(5,244)		(89,665)
Nondesignated [Member] | Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(9)		46		8		41
Nondesignated [Member] | Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	[1]	0	[1]	0	[1]	0	[1]
Nondesignated [Member] | Interest Rate Contract [Member] | Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	26,012		(56,393)		63,598		(82,230)
Nondesignated [Member] | Interest Rate Contract [Member] | Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Interest Rate Contract [Member] | Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Interest Rate Contract [Member] | Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	[1]	0	[1]	0	[1]	0	[1]
Nondesignated [Member] | Foreign Exchange Contract [Member] | Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Foreign Exchange Contract [Member] | Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Foreign Exchange Contract [Member] | Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Foreign Exchange Contract [Member] | Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	[1]	0	[1]	0	[1]	0	[1]
Nondesignated [Member] | Cross Currency Interest Rate Contract [Member] | Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(1,038)		474		(214)		1,784
Nondesignated [Member] | Cross Currency Interest Rate Contract [Member] | Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Cross Currency Interest Rate Contract [Member] | Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(9)		46		8		41
Nondesignated [Member] | Cross Currency Interest Rate Contract [Member] | Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	[1]	0	[1]	0	[1]	0	[1]
Nondesignated [Member] | Credit Risk Contract [Member] | Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(4)		(22)		(11)		(59)
Nondesignated [Member] | Credit Risk Contract [Member] | Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Credit Risk Contract [Member] | Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Credit Risk Contract [Member] | Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	[1]	0	[1]	0	[1]	0	[1]
Nondesignated [Member] | Equity Contract [Member] | Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(11,334)		(10,976)		(15,982)		(41,427)
Nondesignated [Member] | Equity Contract [Member] | Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Equity Contract [Member] | Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Equity Contract [Member] | Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	[1]	0	[1]	0	[1]	0	[1]
Nondesignated [Member] | Embedded Derivative [Member] | Net Realized Investments Gain Loss [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(17,902)		18,078		(52,635)		32,267
Nondesignated [Member] | Embedded Derivative [Member] | Net Investment Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Embedded Derivative [Member] | Other Income [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0		0		0		0
Nondesignated [Member] | Embedded Derivative [Member] | Accumulated Other Comprehensive Income (loss) [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	$ 0	[1]	$ 0	[1]	$ 0	[1]	$ 0	[1]

[1] (1) Amounts deferred in “Accumulated other comprehensive income (loss).”

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Statements of Financial Position (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Fixed maturities, available for sale, at fair value	$ 3,015,527	$ 3,264,216
Equity securites, available for sale, at fair value	17	208
Trading account assets, at fair value	6,053	6,677
Policy loans	12,884	12,454
Short-term investments	54,509	118,188
Commercial mortgage and other loans, net of valuation allowance	414,676	398,991
Other long-term investments	85,601	60,585
Total investments	3,589,267	3,861,319
Cash and cash equivalents	602	1,417
Deferred policy acquisition costs	1,242,288	1,345,504
Accrued investment income	27,009	32,169
Receivables from parents and affiliates	56,936	35,594
Deferred sales inducements	740,832	809,247
Valuation of business acquired	39,726	43,500
Other assets	8,498	16,994
Separate account assets	46,311,872	46,626,828
Reinsurance recoverables	1,595,250	748,690
TOTAL ASSETS	53,612,280	53,521,262
LIABILITIES
Policyholders' account balances	2,847,945	3,191,215
Future policy benefits and other policyholder liabilities	2,042,370	1,127,342
Cash collateral for loaned securities	37,404	47,896
Income taxes payable	379,598	358,818
Short-term debt	215,000	205,000
Payables to parent and affiliates	57,308	111,403
Other liabilities	90,070	113,125
Separate account liabilities	46,311,872	46,626,828
TOTAL LIABILITIES	51,981,567	51,781,627
EQUITY
Common stock, ($100 par value; 25,000 shares authorized, issued and outstanding)	2,500	2,500
Additional paid-in capital	901,422	901,422
Retained earnings (accumulated deficit)	632,775	764,846
Accumulated other comprehensive income (loss)	94,016	70,867
TOTAL EQUITY	1,630,713	1,739,635
TOTAL LIABILITIES AND EQUITY	$ 53,612,280	$ 53,521,262

XML

Fair Value of Assets and Liabilities (Balances of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	$ 3,015,527		$ 3,264,216
Trading account assets, at fair value	6,053		6,677
Equity securities, available for sale	17		208
Separate account assets	46,311,872		46,626,828
Receivables from parents and affiliates	56,936		35,594
Payables to parent and affiliates	57,308		111,403
Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	3,015,527		3,264,216
Trading account assets, at fair value	6,053		6,677
Equity securities, available for sale	17		208
Short-term investments	54,509		118,188
Cash equivalents	400
Other long-term investments	20,549		486
Reinsurance recoverable	1,594,311		748,005
Subtotal excluding separate account assets	4,735,879		4,163,198
Separate account assets	46,311,872	[1]	46,626,828	[1]
Total assets	51,047,751		50,790,026
Future policy benefits	1,662,957	[2]	778,226	[2]
Total liabilities	1,662,957		799,984
Receivables from parents and affiliates	44,513		25,418
Payables to parent and affiliates	0		21,758
US Treasury And Government [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	6,345		6,384
Obligations of U.S. states and their political subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	70,332		68,566
Foreign Government Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	32,216		31,154
Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	2,259,548		2,422,642
Asset-backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	172,503		187,892
Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	327,743		390,633
Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	146,840		156,945
Equity Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Trading account assets, at fair value	6,053		6,677
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Trading account assets, at fair value	6,053		6,364
Equity securities, available for sale	0		0
Short-term investments	54,509		118,188
Cash equivalents	0
Other long-term investments	0		0
Reinsurance recoverable	0		0
Subtotal excluding separate account assets	60,562		124,552
Separate account assets	1,042,511	[1]	1,190,903	[1]
Total assets	1,103,073		1,315,455
Future policy benefits	0	[2]	0	[2]
Total liabilities	0		0
Receivables from parents and affiliates	0		0
Payables to parent and affiliates	0		0
Fair Value, Inputs, Level 1 [Member] | US Treasury And Government [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 1 [Member] | Obligations of U.S. states and their political subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 1 [Member] | Foreign Government Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 1 [Member] | Asset-backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 1 [Member] | Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 1 [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Trading account assets, at fair value	6,053		6,364
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	2,839,218		3,103,631
Trading account assets, at fair value	0		0
Equity securities, available for sale	17		16
Short-term investments	0		0
Cash equivalents	0
Other long-term investments	87,728		73,535
Reinsurance recoverable	0		0
Subtotal excluding separate account assets	2,943,714		3,196,253
Separate account assets	45,269,361	[1]	45,435,925	[1]
Total assets	48,213,075		48,632,178
Future policy benefits	0	[2]	0	[2]
Total liabilities	57,131		94,580
Receivables from parents and affiliates	16,751		19,071
Payables to parent and affiliates	57,131		94,580
Fair Value, Inputs, Level 2 [Member] | US Treasury And Government [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	6,345		6,384
Fair Value, Inputs, Level 2 [Member] | Obligations of U.S. states and their political subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	70,332		68,566
Fair Value, Inputs, Level 2 [Member] | Foreign Government Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	32,216		31,154
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	2,157,540		2,325,846
Fair Value, Inputs, Level 2 [Member] | Asset-backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	98,202		124,103
Fair Value, Inputs, Level 2 [Member] | Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	327,743		390,633
Fair Value, Inputs, Level 2 [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	146,840		156,945
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Trading account assets, at fair value	0		0
Fair Value, Inputs, Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash equivalents	400
Other long-term investments	536		486
Reinsurance recoverable	1,594,311		748,005
Total assets	1,799,318		915,928
Future policy benefits	1,662,957		778,226
Total liabilities	1,662,957		778,226
Receivables from parents and affiliates	27,762		6,347
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	176,309		160,585
Trading account assets, at fair value	0		313
Equity securities, available for sale	0		192
Short-term investments	0		0
Cash equivalents	400
Other long-term investments	536		486
Reinsurance recoverable	1,594,311		748,005
Subtotal excluding separate account assets	1,799,318		915,928
Separate account assets	0	[1]	0	[1]
Total assets	1,799,318		915,928
Future policy benefits	1,662,957	[2]	778,226	[2]
Total liabilities	1,662,957		778,226
Receivables from parents and affiliates	27,762		6,347
Payables to parent and affiliates	0		0
Fair Value, Inputs, Level 3 [Member] | US Treasury And Government [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 3 [Member] | Obligations of U.S. states and their political subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 3 [Member] | Foreign Government Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	102,008		96,796
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	74,301		63,789
Fair Value, Inputs, Level 3 [Member] | Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 3 [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0		0
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Trading account assets, at fair value	0		313
Netting And Collateral [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0	[3]	0	[3]
Trading account assets, at fair value	0	[3]	0	[3]
Equity securities, available for sale	0	[3]	0	[3]
Short-term investments	0	[3]	0	[3]
Cash equivalents	0	[3]
Other long-term investments	(67,715)	[3]	(73,535)	[3]
Reinsurance recoverable	0	[3]	0	[3]
Subtotal excluding separate account assets	(67,715)	[3]	(73,535)	[3]
Separate account assets	0	[1],[3]	0	[1],[3]
Total assets	(67,715)	[3]	(73,535)	[3]
Future policy benefits	0	[2],[3]	0	[2],[3]
Total liabilities	(57,131)	[3]	(72,822)	[3]
Receivables from parents and affiliates	0	[3]	0	[3]
Payables to parent and affiliates	(57,131)	[3]	(72,822)	[3]
Netting And Collateral [Member] | US Treasury And Government [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0	[3]	0	[3]
Netting And Collateral [Member] | Obligations of U.S. states and their political subdivisions [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0	[3]	0	[3]
Netting And Collateral [Member] | Foreign Government Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0	[3]	0	[3]
Netting And Collateral [Member] | Corporate Debt Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0	[3]	0	[3]
Netting And Collateral [Member] | Asset-backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0	[3]	0	[3]
Netting And Collateral [Member] | Commercial Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0	[3]	0	[3]
Netting And Collateral [Member] | Residential Mortgage Backed Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fixed maturities, available for sale, at fair value	0	[3]	0	[3]
Netting And Collateral [Member] | Equity Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Trading account assets, at fair value	$ 0	[3]	$ 0	[3]

[1] Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Statements of Financial Position.

[2] As of June 30, 2014, the net embedded derivative liability position of $1,663 million includes $138 million of embedded derivatives in an asset position and $1,801 million of embedded derivatives in a liability position. As of December 31, 2013, the net embedded derivative liability position of $778 million includes $245 million of embedded derivatives in an asset position and $1,023 million of embedded derivatives in a liability position.

[3] “Netting” amounts represent cash collateral of $10.6 million and $0.7 million as of June 30, 2014 and December 31, 2013, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.

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Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 134,929	$ 291,058
Adjustments to reconcile net income to net cash provided by operating activities:
Policy charges and fee income	2,625	7,526
Interest credited to policyholders' account balances	102,327	14,776
Realized investment (gains) losses, net	4,366	81,511
Amortization and depreciation	3,640	10,804
Change in:
Future policy benefit reserves	152,066	139,943
Reinsurance recoverables	(137,944)	(137,900)
Accrued investment income	5,160	4,894
Receivables from parents and affiliates		(60,530)
Payables to parent and affiliates	(34,965)
Deferred policy acquisition costs	99,462	(74,037)
Income taxes payable	8,314	135,073
Deferred sales inducements	(8,221)	(17,675)
Other, net	(36,028)	(46,238)
Cash flows from (used in) operating activities	295,731	349,205
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	670,328	712,921
Short-term investments	1,546,430	1,466,651
Policy loans	412	171
Commercial mortgage and other loans	11,661	8,767
Trading account assets	3,364	3,596
Other long-term investments	1,542	1,190
Payments for the purchase/origination of:
Fixed maturities, available-for-sale	(377,179)	(347,147)
Short-term investments	(1,482,751)	(1,609,953)
Policy loans	(516)	(448)
Commercial mortgage and other loans	(27,344)	(41,806)
Trading account assets	(2,534)	(3,163)
Other long-term investments	(9,233)	(4,790)
Notes receivable from parent and affiliates, net	(15,565)	2,450
Other, net	200	24
Cash flows used in investing activities	318,815	188,463
CASH FLOWS USED IN FINANCING ACTIVITIES
Distribution to parent	(267,000)	(184,000)
Policyholders' account deposits	607,249	662,074
Policyholders' account withdrawals	(960,301)	(1,032,196)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities	(10,493)	(1,190)
Net increase in short-term borrowing	10,000	0
Drafts outstanding	5,184	5,192
Cash flows from (used in) financing activities	(615,361)	(537,681)
contributed	0	12,439
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(815)	(13)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	1,417	266
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 602	$ 253

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Related Party (Expense Charges and Allocations) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Related Party Transactions [Abstract]
Stock or Unit Option Plan Expense	$ 0.3	$ 0.4	$ 0.6	$ 0.8
Pension Expense	0.4	0.7	0.7	2.0
Defined Contribution Plan Employer Matching Contribution Percent			4.00%
Defined Contribution Plan, Cost Recognized	$ 0.2	$ 0.2	$ 0.3	$ 0.5

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Investments (Fair Value and Losses by Investment Category and Length of Time in a Loss Position) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	$ 112,577	$ 643,930
Less than 12 months Gross Unrealized Losses	1,150	20,275
Twelve months or more Fair Value	79,848	12,047
Twelve months or more Gross Unrealized Losses	1,737	1,621
Total Fair Value	192,425	655,977
Total Gross Unrealized Losses	2,887	21,896
US Treasury And Government [Member]
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	2,692	3,347
Less than 12 months Gross Unrealized Losses	10	34
Twelve months or more Fair Value	0	0
Twelve months or more Gross Unrealized Losses	0	0
Total Fair Value	2,692	3,347
Total Gross Unrealized Losses	10	34
Obligations of U.S. states and their political subdivisions [Member]
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	0	5,420
Less than 12 months Gross Unrealized Losses	0	588
Twelve months or more Fair Value	6,995	6,402
Twelve months or more Gross Unrealized Losses	360	982
Total Fair Value	6,995	11,822
Total Gross Unrealized Losses	360	1,570
Corporate Debt Securities [Member]
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	94,815	351,306
Less than 12 months Gross Unrealized Losses	1,001	11,923
Twelve months or more Fair Value	47,798	2,704
Twelve months or more Gross Unrealized Losses	1,041	370
Total Fair Value	142,613	354,010
Total Gross Unrealized Losses	2,042	12,293
Asset-backed Securities [Member]
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	15,070	97,575
Less than 12 months Gross Unrealized Losses	139	1,509
Twelve months or more Fair Value	17,832	0
Twelve months or more Gross Unrealized Losses	81	0
Total Fair Value	32,902	97,575
Total Gross Unrealized Losses	220	1,509
Commercial Mortgage Backed Securities [Member]
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	0	86,132
Less than 12 months Gross Unrealized Losses	0	5,249
Twelve months or more Fair Value	7,223	2,941
Twelve months or more Gross Unrealized Losses	255	269
Total Fair Value	7,223	89,073
Total Gross Unrealized Losses	255	5,518
Residential Mortgage Backed Securities [Member]
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	0	100,150
Less than 12 months Gross Unrealized Losses	0	972
Twelve months or more Fair Value	0	0
Twelve months or more Gross Unrealized Losses	0	0
Total Fair Value	0	100,150
Total Gross Unrealized Losses	$ 0	$ 972

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Related Party (Affiliated Investment Management Expenses) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Related Party Transactions [Abstract]
Pim Management Expenses	$ 1	$ 2	$ 3	$ 3

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Investments (Fixed Maturities Proceeds)(Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Equity Securities [Member]
Available For Sale
Proceeds from sales	$ 0	$ 0	$ 0	$ 1
Gross investment gains from sales	0	(1)	1	0
Fixed Maturities, Available For Sale [Member]
Available For Sale
Proceeds from sales	120,393	6,501	172,423	121,428
Proceeds from maturities/repayments	186,089	386,663	493,702	593,078
Gross investment gains from sales	2,992	5,113	4,124	7,905
Available-for-sale Securities, Gross Realized Losses	$ 2,921	$ 17	$ 3,247	$ 97

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Investments (Fair Value and Losses by Length of Time in a Continuous Unrealized Loss Position) (Details) (Equity Securities [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Equity Securities [Member]
Duration Of Unrealized Losses On Equity Securities [Line Items]
Less than twelve months Fair Value	$ 0	$ 0
Less than twelve months Gross Unrealized Losses	0	0
Twelve months or more Fair Value	0	0
Twelve months or more Gross Unrealized Losses	0	0
Total Fair Value	0	0
Total Gross Unrealized Losses	$ 0	$ 0

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Investments (Trading Account Assets) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Amortized Cost	$ 5,045	$ 5,164
Fair Value	$ 6,053	$ 6,677

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Business and Basis of Presentation

6 Months Ended

Jun. 30, 2014

Business and Basis of Presentation [Abstract]

Business and Basis of Presentation

1.BUSINESS AND BASIS OF PRESENTATION

Prudential Annuities Life Assurance Corporation (the “Company”or “PALAC”), with its principal offices in Shelton, Connecticut, is an indirect wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”), a New Jersey corporation. The Company is a wholly-owned subsidiary of Prudential Annuities, Inc. (“PAI”), which in turn is an indirect wholly-owned subsidiary of Prudential Financial.

The Company developed long-term savings and retirement products, which were distributed through its affiliated broker/dealer company, Prudential Annuities Distributors, Incorporated (“PAD”). The Company issued variable deferred and immediate annuities for individuals and groups in the United States of America, District of Columbia and Puerto Rico. In addition, the Company has a relatively small inforce block of variable life insurance policies, but it no longer actively sells such policies.

Beginning in March 2010, the Company ceased offering its variable annuity products (and where offered, the companion market value adjustment option) to new investors upon the launch of a new product line by each of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey (which are affiliates of the Company).These initiatives were implemented to create operational and administrative efficiencies by offering a single product line of annuity products from a more limited group of legal entities. During 2012, the Company suspended additional customer deposits for variable annuities with certain optional living benefit riders.However, subject to applicable contract provisions and administrative rules, the Company continues to accept additional customer deposits on certain inforce contracts.

The Company is engaged in a business that is highly competitive because of the large number of stock and mutual life insurance companies and other entities engaged in marketing long-term savings and retirement products, including insurance products, and individual and group annuities.

On August 30, 2013, the Company received approval from the Arizona and Connecticut Departments of Insurance to redomesticate the Company from Connecticut to Arizona effective August 31, 2013.

As a result of the redomestication, the Company is now an Arizona insurance company and its principal insurance regulatory authority is the Arizona Department of Insurance. Additionally, the Company is now domiciled in the same jurisdiction as the primary reinsurer of the Company's living benefits, Pruco Reinsurance, Ltd. (“Pruco Re”), which is also regulated by the Arizona Department of Insurance. This change enables the Company to claim statutory reserve credit for business ceded to Pruco Re without the need for Pruco Re to collateralize its obligations under the reinsurance agreement.

Basis of Presentation

The Unaudited Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”).

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 disclosure of contingent assets and liabilities as of 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 deferred policy acquisition costs and related amortization; value of business acquired and its amortization; amortization of deferred sales inducements; valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters.

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Statements of Financial Position (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fixed maturities, available-for-sale, amortized cost	$ 2,784,393	$ 3,079,002
Available-for-sale equity securities amortized cost basis	$ 14	$ 206
Common stock, par value	$ 100	$ 100
Common stock, shares authorized	25,000	25,000
Common stock, shares issued	25,000	25,000
Common stock, shares outstanding	25,000	25,000

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Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value of Assets and Liabilities [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring Basis

		As of June 30, 2014
		Level 1		Level 2		Level 3			Netting (2)	Total
		(in thousands)
Fixed maturities, available-for-sale:
	U.S Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	6,345	$	-	$	-	$	6,345
	Obligations of U.S. states and their political subdivisions		-		70,332		-		-		70,332
	Foreign government bonds		-		32,216		-		-		32,216
	Corporate securities		-		2,157,540		102,008		-		2,259,548
	Asset-backed securities		-		98,202		74,301		-		172,503
	Commercial mortgage-backed securities		-		327,743		-		-		327,743
	Residential mortgage-backed securities		-		146,840		-		-		146,840
Sub-total			-		2,839,218		176,309		-		3,015,527
Trading account assets:
	Equity securities		6,053		-		-		-		6,053
Sub-total			6,053		-		-		-		6,053
Equity securities, available-for-sale			-		17		-		-		17
Short-term investments			54,509		-		-		-		54,509
Cash equivalents			-		-		400		-		400
Other long-term investments			-		87,728		536		(67,715)		20,549
Reinsurance recoverables			-		-		1,594,311		-		1,594,311
Receivables from parent and affiliates			-		16,751		27,762		-		44,513
Sub-total excluding separate account assets			60,562		2,943,714		1,799,318		(67,715)		4,735,879
Separate account assets (1)			1,042,511		45,269,361		-		-		46,311,872
Total assets		$	1,103,073	$	48,213,075	$	1,799,318	$	(67,715)	$	51,047,751
Future policy benefits (3)		$	-	$	-	$	1,662,957	$	-	$	1,662,957
Payables to parent and affiliates			-		57,131		-		(57,131)		0
Total liabilities		$	-	$	57,131	$	1,662,957	$	(57,131)	$	1,662,957

		As of December 31, 2013
		Level 1		Level 2		Level 3			Netting (2)	Total
		(in thousands)
Fixed maturities, available-for-sale:
	U.S Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	6,384	$	-	$	-	$	6,384
	Obligations of U.S. states and their political subdivisions		-		68,566		-		-		68,566
	Foreign government securities		-		31,154		-		-		31,154
	Corporate securities		-		2,325,846		96,796		-		2,422,642
	Asset-backed securities		-		124,103		63,789		-		187,892
	Commercial mortgage-backed securities		-		390,633		-		-		390,633
	Residential mortgage-backed securities		-		156,945		-		-		156,945
Sub-total			-		3,103,631		160,585		-		3,264,216
Trading account assets:
	Equity securities		6,364		-		313		-		6,677
Sub-total			6,364		-		313		-		6,677
Equity securities, available-for-sale			-		16		192		-		208
Short-term investments			118,188		-		-		-		118,188
Other long-term investments			-		73,535		486		(73,535)		486
Reinsurance recoverables			-		-		748,005		-		748,005
Receivables from parent and affiliates			-		19,071		6,347		-		25,418
Sub-total excluding separate account assets			124,552		3,196,253		915,928		(73,535)		4,163,198
Separate account assets (1)			1,190,903		45,435,925		-		-		46,626,828
Total assets		$	1,315,455	$	48,632,178	$	915,928	$	(73,535)	$	50,790,026
Future policy benefits (3)		$	-	$	-	$	778,226	$	-	$	778,226
Payables to parent and affiliates			-		94,580		-		(72,822)		21,758
Total liabilities		$	-	$	94,580	$	778,226	$	(72,822)	$	799,984

• Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts.Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company'sUnaudited Interim Statements of Financial Position.
• “Netting” amounts representcash collateral of $10.6 million and $0.7 million as of June 30, 2014 and December 31, 2013, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.
• As of June 30, 2014, the net embedded derivative liability position of $1,663million includes $138 millionof embedded derivatives in an asset position and $1,801million of embedded derivatives in a liability position. As of December 31, 2013, the net embedded derivative liability position of $778 million includes $245million of embedded derivatives in an asset position and $1,023million of embedded derivatives in a liability position.

Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

				Three Months Ended June 30, 2014
				Fixed Maturities Available-For-Sale							Trading Account Assets - Equity Securities		Equity Securities Available-for -Sale
				Corporate Securities		Asset- Backed Securities			Commercial Mortgage-Backed Securities
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	99,255	$	102,725	$	45,365	$	328	$	192
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		-		-		-
			Asset management fees and other income		-		-		-		-		-
		Included in other comprehensive income (loss)			236		122		-		-		-
	Net investment income				1,249		38		-		-		-
	Purchases				1,751		-		-		-		-
	Sales				-		-		-		-		(192)
	Issuances				-		-		-		-		-
	Settlements				(483)		(25,458)		-		(328)		-
	Transfers into Level 3 (1)				-		489		-		-		-
	Transfers out of Level 3 (1)				-		(3,615)		(45,365)		-		-
Fair Value, end of period assets/(liabilities)				$	102,008	$	74,301	$	-	$	-	$	-
Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	-
			Asset management fees and other income	$	-	$	-	$	-	$	-	$	-
				Three Months Ended June 30, 2014
				Cash Equivalents		Other Long-term Investments		Reinsurance Recoverables			Receivables from parent and affiliates		Future Policy Benefits
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	400	$	520	$	1,344,587	$	8,344		(1,402,029)
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		191,020		-		(199,363)
			Asset management fees and other income		-		7		-		-		-
		Included in other comprehensive income (loss)			-		-		-		68		-
	Net investment income				-		-		-		19,350		-
	Purchases				-		14		58,704		-		-
	Sales				-		-		-		-		-
	Issuances				-		-		-		-		(61,565)
	Settlements				-		(5)		-		-		-
	Transfers into Level 3 (1)				-		-		-		-		-
	Transfers out of Level 3 (1)				-		-		-		-		-
Fair Value, end of period assets/(liabilities)				$	400	$	536	$	1,594,311	$	27,762		(1,662,957)
					.		.		.
Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	204,298	$	-		(213,148)
			Asset management fees and other income	$	-	$	-	$	-	$	-		-

				Six Months Ended June 30, 2014
				Fixed Maturities Available-For-Sale							Trading Account Assets - Equity Securities		Equity Securities Available-for -Sale
				Corporate Securities		Asset- Backed Securities			Commercial Mortgage-Backed Securities
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	96,796	$	63,789	$	-	$	313	$	192
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		-		-		-
			Asset management fees and other income		-		-		-		15		-
		Included in other comprehensive income (loss)			483		300		(83)		-		-
	Net investment income				2,473		82		-		-		-
	Purchases				3,240		14,933		45,448		-		-
	Sales				-		-		-		-		(192)
	Issuances				-		-		-		-		-
	Settlements				(984)		(29,340)		-		(328)		-
	Transfers into Level 3 (1)				-		28,152		-		-		-
	Transfers out of Level 3 (1)				-		(3,615)		(45,365)		-		-
Fair Value, end of period assets/(liabilities)				$	102,008	$	74,301	$	-	$	-	$	-
Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	-
			Asset management fees and other income	$	-	$	-	$	-	$	15	$	-
				Six Months Ended June 30, 2014
				Cash Equivalents		Other Long-term Investments		Reinsurance Recoverables			Receivables from parent and affiliates		Future Policy Benefits
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	-	$	486	$	748,005	$	6,347		(778,226)
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		728,874		1		(761,582)
			Asset management fees and other income		-		(2)		-		-		-
		Included in other comprehensive income (loss)			-		-		-		79		-
	Net investment income				-		-		-		-		-
	Purchases				400		57		117,432		19,350		-
	Sales				-		-		-		-		-
	Issuances				-		-		-		-		(123,149)
	Settlements				-		(5)		-		-		-
	Transfers into Level 3 (1)				-		-		-		1,985		-
	Transfers out of Level 3 (1)				-		-		-		-		-
Fair Value, end of period assets/(liabilities)				$	400	$	536	$	1,594,311	$	27,762		(1,662,957)
					.		.		.
Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	749,020	$	-		(782,440)
			Asset management fees and other income	$	-	$	-	$	-	$	-		-

					Three Months Ended June 30, 2013
					Fixed Maturities Available-For-Sale							Trading Account Assets - Equity Securities		Other Long Term Investments
					Corporate Securities		Asset Backed Securities		Commercial Mortgage-Backed
					(in thousands)
Fair Value, beginning of period assets/(liabilities)					$	95,575	$	72,740	$	9,106	$	267	$	463
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net			45		-		1		-		(97)
			Asset management fees and other income			-		-		-		12		4
		Included in other comprehensive income (loss)				(3,789)		(151)		-		-		-
	Net investment income					1,176		181		-		-		-
	Purchases					643		18,922		-				37
	Sales					-		-		-		-		-
	Issuances					-		-		-		-		-
	Settlements					(2,434)		(5,606)		-		-		-
	Transfers into Level 3 (1)					4,976		-		-		-		-
	Transfers out of Level 3 (1)					-		-		(9,107)		-		-
Fair Value, end of period assets/(liabilities)					$	96,192	$	86,086	$	-	$	279	$	407
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net		$	-	$	-	$	-	$	-	$	(97)
			Asset management fees and other income		$	-	$	-	$	-	$	11	$	4
					Three Months Ended June 30, 2013
					Reinsurance Recoverables		Receivables from parent and affiliates		Future Policy Benefits
				(in thousands)
Fair Value, beginning of period assets/(liabilities)					$	1,191,409	$	2,000	$	(1,230,323)
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net			(596,967)		-		622,798
			Asset management fees and other income			-		-		-
			Included in other comprehensive income (loss)			-		(4)		-
		Net investment income				-		-		-
		Purchases				59,616		3,254		-
		Sales				-		-		-
		Issuances				-		-		(62,464)
		Settlements				-		-		-
		Transfers into Level 3 (1)				-		-		-
		Transfers out of Level 3 (1)				-		-		-
Fair Value, end of period assets/(liabilities)					$	654,058	$	5,250	$	(669,989)
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net		$	(588,372)	$	-	$	614,035

				Six Months Ended June 30, 2013
				Fixed Maturities Available-For-Sale							Trading Account Assets - Equity Securities		Other Long Term Investments
				Corporate Securities		Asset Backed Securities		Commercial Mortgage-Backed Securities
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	95,555	$	69,298	$	-	$	207	$	1,054
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		49		-		-		-		(721)
			Asset management fees and other income		-		-		-		72		37
		Included in other comprehensive income (loss)			(4,060)		11		-		-		-
	Net investment income				2,330		316		17		-		-
	Purchases				1,243		25,980		9,090		-		37
	Sales				-		-		-		-		-
	Issuances				-		-		-		-		-
	Settlements				(3,901)		(9,519)		-		-		-
	Transfers into Level 3 (1)				4,976		-		-		-		-
	Transfers out of Level 3 (1)				-		-		(9,107)		-		-
Fair Value, end of period assets/(liabilities)				$	96,192	$	86,086	$	-	$	279	$	407
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	(721)
			Asset management fees and other income	$	-	$	-	$	-	$	72	$	37
					Six Months Ended June 30, 2013
					Reinsurance Recoverables		Other Assets		Future Policy Benefits
					(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	1,732,094	$	1,995	$	(1,793,136)
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		(1,195,788)		-		1,246,584
			Asset management fees and other income		-		-		-
			Included in other comprehensive income (loss)		-		1		-
		Net investment income			-		-		-
		Purchases			117,752		3,254		-
		Sales			-		-		-
		Issuances			-		-		(123,437)
		Settlements			-		-		-
		Transfers into Level 3 (1)					-		-
		Transfers out of Level 3 (1)			-		-		-
Fair Value, end of period assets/(liabilities)				$	654,058	$	5,250	$	(669,989)
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	(1,173,117)	$	-	$	1,223,615
			Asset management fees and other income	$	-	$	-	$	-

(1) Transfers into or out of Level 3 are reported as the value as of the beginning of the quarter in which the transfer occurs.

(2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

Fair Value Disclosure Financial Instruments Not Carried at Fair Value

				June 30, 2014
				Fair Value								Carrying Amount (1)
				Level 1		Level 2		Level 3		Total		Total
			(in thousands)
Assets:
	Commercial mortgage and other loans		$	-	$	2,680	$	441,931	$	444,611	$	414,676
	Policy loans			-		-		12,884		12,884		12,884
	Other long term investments			-		-		2,166		2,166		1,780
	Cash and cash equivalents			202		-		-		202		202
	Accrued investment income			-		27,009		-		27,009		27,009
	Receivables from parent and affiliates			-		12,423		-		12,423		12,423
	Other assets			-		2,935		-		2,935		2,935
		Total assets	$	202	$	45,047	$	456,981	$	502,230	$	471,909
Liabilities:
	Policyholders' account balances - investment contracts		$	-	$	-	$	88,865	$	88,865	$	89,746
	Cash collateral for loaned securities			-		37,404		-		37,404		37,404
	Short-term debt			-		218,897		-		218,897		215,000
	Payables to parent and affiliates			-		32,154		-		32,154		32,154
	Other liabilities			-		88,040		-		88,040		88,040
	Separate account liabilities - investment contracts			-		609		-		609		609
		Total liabilities	$	-	$	377,104	$	88,865	$	465,969	$	462,953

				December 31, 2013
				Fair Value								Carrying Amount (1)
				Level 1		Level 2		Level 3		Total		Total
			(in thousands)
Assets:
	Commercial mortgage and other loans		$	-	$	-	$	422,584	$	422,584	$	398,991
	Policy loans			-		-		12,454		12,454		12,454
	Other long term investments			-		-		1,623		1,623		1,440
	Cash and cash equivalents			1,417		-		-		1,417		1,417
	Accrued investment income			-		32,169		-		32,169		32,169
	Receivables from parent and affiliates			-		10,177		-		10,177		10,177
	Other assets			-		11,190		-		11,190		11,190
		Total assets	$	1,417	$	53,536	$	436,661	$	491,614	$	467,838
Liabilities:
	Policyholders' account balances - investment contracts		$	-	$	-	$	84,153	$	84,153	$	85,672
	Cash collateral for loaned securities			-		47,896		-		47,896		47,896
	Short-term debt			-		218,488		-		218,488		205,000
	Payables to parent and affiliates			-		85,204		-		85,204		85,204
	Other liabilities			-		101,656		-		101,656		101,656
	Separate account liabilities - investment contracts			-		796		-		796		796
		Total liabilities	$	-	$	454,040	$	84,153	$	538,193	$	526,224

• Carrying values presented herein differ from those in the Company's Unaudited Interim Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.

Fair Value Inputs Quantitative Information [Table Text Block]

	As of June 30, 2014
		Fair Value	Primary Valuation Techniques	Unobservable Inputs	Minimum	Maximum	Weighted Average	Impact of Increase in Input on Fair Value (1)
	(in thousands)
Assets:
Corporate securities	$	100,129	Discounted cash flow	Discount rate	3.50%	10.91%	4.20%	Decrease
Reinsurance recoverables	$	1,594,311	Fair values are determined in the same manner as future policy benefits
Liabilities:
Future policy benefits (2)	$	1,662,957	Discounted cash flow	Lapse rate (3)	0%	11%		Decrease
				NPR spread (4)	0.02%	1.03%		Decrease
				Utilization rate (5)	70%	94%		Increase
				Withdrawal rate (6)	86%	100%		Increase
				Mortality rate (7)	0%	13%		Decrease
				Equity Volatility curve	14%	28%		Increase
	As of December 31, 2013
		Fair Value	Primary Valuation Techniques	Unobservable Inputs	Minimum	Maximum	Weighted Average	Impact of Increase in Input on Fair Value (1)
	(in thousands)
Assets:
Corporate securities	$	94,730	Discounted cash flow	Discount rate	3.73%	12.06%	3.90%	Decrease
Reinsurance recoverables	$	748,005	Fair values are determined in the same manner as future policy benefits
Liabilities:
Future policy benefits (2)	$	778,226	Discounted cash flow	Lapse rate (3)	0%	11%		Decrease
				NPR spread (4)	0.08%	1.09%		Decrease
				Utilization rate (5)	70%	94%		Increase
				Withdrawal rate (6)	86%	100%		Increase
				Mortality rate (7)	0%	13%		Decrease
				Equity Volatility curve	15%	28%		Increase

• Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table.
• Future policy benefits primarily represent general account liabilities for the optional living benefit features of the Company's variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cashflow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
• Base lapse rates are adjusted at the contract level based on a comparison of the benefit amount and the policyholder account value and reflect other factors, such as the applicability of any surrender charges. A dynamic lapse adjustment reduces the base lapse rate when the benefit amount is greater than the account value, as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.
• To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. In determining the NPR spread, the Company reflects the financial strength ratings of the Company and its affiliates as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements adjusted for any illiquidity risk premium.
• The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. These assumptions vary based on the product type, the age of the contractholder, and the age of the contract. The impact of changes in these assumptions is highly dependent on the contract type and age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal.
• The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%.
• Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Fair Value Level Three Amounts By Pricing Source [Table Text Block]

	As of June 30, 2014
		Internal (1)		External (2)		Total
	(in thousands)
Corporate securities	$	100,129	$	1,879	$	102,008
Asset-backed securities		-		74,301		74,301
Cash equivalents		400		-		400
Other long-term investments		-		536		536
Reinsurance recoverables		1,594,311		-		1,594,311
Receivables from parent and affiliates		-		27,762		27,762
Total assets	$	1,694,840	$	104,478	$	1,799,318
Future policy benefits		1,662,957		-		1,662,957
Total liabilities	$	1,662,957	$	-	$	1,662,957
	As of December 31, 2013
		Internal (1)		External (2)		Total
	(in thousands)
Corporate securities	$	94,730	$	2,066	$	96,796
Asset-backed securities		-		63,789		63,789
Equity securities		192		313		505
Other long-term investments		-		486		486
Reinsurance recoverables		748,005		-		748,005
Receivables from parent and affiliates		-		6,347		6,347
Total assets	$	842,927	$	73,001	$	915,928
Future policy benefits		778,226		-		778,226
Total liabilities	$	778,226	$	-	$	778,226

• Represents valuations which could incorporate internally-derived and market inputs. See below for additional information related to internally-developed valuation for significant items in the above table.
• Represents unadjusted prices from independent pricing services and independent non-binding broker quotes where pricing inputs are not readily available.

XML

Document and Entity Information (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Document And Entity [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Entity Registrant Name	PRUDENTIAL ANNUITIES LIFE ASSURANCE CORP/CT
Entity Central Index Key	0000881453
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	25,000
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Public Float	$ 0
Entity Current Reporting Status	Yes

XML

Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

	June 30, 2014							December 31, 2013
			Notional	Gross Fair Value					Notional	Gross Fair Value
			Amount	Assets		Liabilities			Amount	Assets		Liabilities
		(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Currency/Interest Rate		$	82,247	$	739	$	(4,852)	$	72,747	$	940	$	(4,635)
Total Qualifying Hedges		$	82,247	$	739	$	(4,852)	$	72,747	$	940	$	(4,635)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps		$	1,792,750	$	77,502	$	(49,373)	$	1,533,750	$	59,872	$	(80,601)
Interest Rate Options			100,000		8,780		-		100,000		6,534		-
Currency/Interest Rate
Foreign Currency Swaps			57,015		29		(1,723)		55,919		19		(1,349)
Credit
Credit Default Swaps			1,200		-		(71)		6,050		-		(115)
Equity
Total Return Swaps			210,652		232		(1,004)		219,896		-		(4,712)
Equity Options			11,567,467		446		(108)		13,170,805		6,170		(3,168)
Total Non-Qualifying Hedges		$	13,729,084	$	86,989	$	(52,279)	$	15,086,420	$	72,595	$	(89,945)
Total Derivatives (1)		$	13,811,331	$	87,728	$	(57,131)	$	15,158,667	$	73,535	$	(94,580)

(1) Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a liability of $1,663 million and $778 million as of June 30, 2014and December 31, 2013, respectively, included in “Future policy benefits.” The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re and Prudential Insurance included in "Reinsurance recoverables" was an asset of $1,595 million and $748 million as of June 30, 2014 and December 31, 2013, respectively.

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

		Three Months Ended June 30, 2014
			Realized Investment Gains/(Losses)		Net Investment Income		Other Income		Accumulated Other Comprehensive Income (Loss) (1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
	Currency/Interest Rate	$	-	$	(5)	$	(15)	$	(1,060)
	Total cash flow hedges		-		(5)		(15)		(1,060)
Derivatives Not Qualifying as Hedging Instruments:
	Interest Rate		26,012		-		-		-
	Currency		-		-		-		-
	Currency/Interest Rate		(1,038)		-		(9)		-
	Credit		(4)		-		-		-
	Equity		(11,334)		-		-		-
	Embedded Derivatives		(17,902)		-		-		-
	Total non-qualifying hedges		(4,266)		-		(9)		-
Total		$	(4,266)	$	(5)	$	(24)	$	(1,060)
		Six Months Ended June 30, 2014
			Realized Investment Gains/(Losses)		Net Investment Income		Other Income		Accumulated Other Comprehensive Income (Loss) (1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
	Currency/Interest Rate	$	-		(17)		(17)		(423)
	Total cash flow hedges		-		(17)		(17)		(423)
Derivatives Not Qualifying as Hedging Instruments:
	Interest Rate		63,598		-		-		-
	Currency		-		-		-		-
	Currency/Interest Rate		(214)		-		8		-
	Credit		(11)		-		-		-
	Equity		(15,982)		-		-		-
	Embedded Derivatives		(52,635)		-		-		-
	Total non-qualifying hedges		(5,244)		-		8		-
Total		$	(5,244)		(17)		(9)		(423)
		Three Months Ended June 30, 2013
			Realized Investment Gains/(Losses)		Net Investment Income		Other Income		Accumulated Other Comprehensive Income (Loss) (1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
	Currency/Interest Rate	$	-		(16)		27		598
	Total cash flow hedges		-		(16)		27		598
Derivatives Not Qualifying as Hedging Instruments:
	Interest Rate		(56,393)		-		-		-
	Currency		-		-		-		-
	Currency/Interest Rate		474		-		46		-
	Credit		(22)		-		-		-
	Equity		(10,976)		-		-		-
	Embedded Derivatives		18,078		-		-		-
	Total non-qualifying hedges		(48,839)		-		46		-
Total		$	(48,839)		(16)		73		598
		Six Months Ended June 30, 2013
			Realized Investment Gains/(Losses)		Net Investment Income		Other Income		Accumulated Other Comprehensive Income (Loss) (1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
	Currency/Interest Rate	$	-		(50)		32		2,343
	Total cash flow hedges		-		(50)		32		2,343
Derivatives Not Qualifying as Hedging Instruments:
	Interest Rate		(82,230)		-		-		-
	Currency		-		-		-		-
	Currency/Interest Rate		1,784		-		41		-
	Credit		(59)		-		-		-
	Equity		(41,427)		-		-		-
	Embedded Derivatives		32,267		-		-		-
	Total non-qualifying hedges		(89,665)		-		41		-
Total		$	(89,665)		(50)		73		2,343

(1) Amounts deferred in “Accumulated other comprehensive income (loss).”

Schedule of Derivative Instruments Recognized in Accumulated Other Comprehensive Income(Loss) Before Taxes

	(in thousands)
Balance, December 31, 2013		(3,653)
Net deferred gains (losses) on cash flow hedges from January 1 to June 30, 2014		(457)
Amount reclassified into current period earnings		34
Balance, June 30, 2014	$	(4,076)

Offsetting of Financial Assets and Liabilities

	June 30, 2014
			Gross		Net
	Gross		Amounts		Amounts
	Amounts of		Offset in the		Presented in
	Recognized		Statement of		the Statement		Financial
	Financial		Financial		of Financial		Instruments/		Net
	Instruments		Position		Position		Collateral		Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	87,728	$	(67,715)	$	20,013	$	(18,099)	$	1,914
Offsetting of Financial Liabilities:
Derivatives	$	57,131	$	(57,131)	$	-	$	-	$	-
	December 31, 2013
			Gross		Net
	Gross		Amounts		Amounts
	Amounts of		Offset in the		Presented in
	Recognized		Statement of		the Statement		Financial
	Financial		Financial		of Financial		Instruments/		Net
	Instruments		Position		Position		Collateral		Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	73,535	$	(73,535)	$	-	$	-	$	-
Offsetting of Financial Liabilities:
Derivatives	$	94,580	$	(72,822)	$	21,758	$	(24,491)	$	(2,733)

XML

Statement of Operations (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
REVENUES
Premiums	$ 10,791	$ 8,615	$ 18,933	$ 15,108
Policy charges and fee income	203,696	201,497	405,363	400,361
Net investment income	41,458	58,934	85,959	117,474
Asset management fees and other income	58,036	57,893	115,146	122,668
Realized investment gains (losses), net:
Other-than-temporary impairments on fixed maturity securities	0	0	0	0
Other-than-temporary impairments on fixed maturity securities transferred to Other Comprehensive Income	0	0	0	0
Other realized investment gains (losses), net	(4,195)	(43,415)	(4,366)	(81,511)
Total realized investment gains (losses), net	(4,195)	(43,415)	(4,366)	(81,511)
TOTAL REVENUES	309,786	283,524	621,035	574,100
BENEFITS AND EXPENSES
Policyholders' benefits	27,973	27,685	56,916	46,303
Interest credited to policyholders' account balances	54,358	5,313	102,327	14,776
Amortization of deferred policy acquisition costs	62,155	(36,580)	101,138	(71,614)
General, administrative and other expenses	97,884	100,302	198,885	200,445
TOTAL BENEFITS AND EXPENSES	242,370	96,720	459,266	189,910
INCOME FROM OPERATIONS BEFORE INCOME TAXES	67,416	186,804	161,769	384,190
IncomeTaxExpenseBenefitAbstract
Income tax expense (benefit)	9,985	43,134	26,840	93,132
NET INCOME	57,431	143,670	134,929	291,058
Other Comprehensive Income (Loss), before Tax [Abstract]
Foreign currency translation adjustments	(3)	0	(4)	(15)
Unrealized investment gains (losses) for the period	16,305	(81,560)	36,495	(92,858)
Reclassification adjustment for (gains) losses included in net income	(71)	(5,096)	(877)	(7,809)
Net unrealized investment gains (losses)	16,234	(86,656)	35,618	(100,667)
Other comprehensive income (loss), before tax	16,231	(86,656)	35,614	(100,682)
Other Comprehensive Income (Loss), Tax [Abstract]
Other Comprehensive Income Loss Foreign Currency Translation Adjustment Tax	(1)	0	(2)	(5)
Other Comprehensive Income Loss Available For Sale Securities Tax	5,682	(30,329)	12,467	(35,233)
Other Comprehensive Income (Loss), Tax, Total	5,681	(30,329)	12,465	(35,238)
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other comprehensive income (loss)	10,550	(56,327)	23,149	(65,444)
COMPREHENSIVE INCOME	$ 67,981	$ 87,343	$ 158,078	$ 225,614

XML

Commitments, Contingent Liabilities And Litigation And Regulatory Matters

6 Months Ended

Jun. 30, 2014

Commitments And Guarantees And Contingent Liabilities [Abstract]

Contingent Liabilities and Litigation

6. COMMITMENTS, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS

Commitments

The Company had made commitments to fund $4 million of commercial loans as of June 30, 2014.The Company also made commitments to purchase or fund investments, mostly private fixed maturities, of $19 million as of June 30, 2014.

Contingent Liabilities

On an ongoing basis, the Company's internal supervisory and control functions review the quality of sales, marketing and other customer interface procedures and practices and may recommend modifications or enhancements. From time to time, this review process results in the discovery of product administration, servicing or other errors, including errors relating to the timing or amount of payments or contract values due to customers. In certain cases, if appropriate, the Company may offer customers remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “Litigation and Regulatory Matters” below.

It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company's financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company's pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain. The following is a summary of certain pending proceedings.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if material, is disclosed, including matters discussed below. The Company estimates that as of June 30, 2014, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is $0 to approximately $5 million. This estimate is not an indication of expected loss, if any, or the Company's maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

In January 2013, a qui tam action on behalf of the State of Florida, Total Asset Recovery Services v. Met Life Inc., et al., Manulife Financial Corporation, et. al., Prudential Financial, Inc., The Prudential Insurance Company of America, and Prudential Insurance Agency, LLC , filed in the Circuit Court of Leon County, Florida, was served on Prudential Insurance. The complaint alleges that Prudential Insurance failed to escheat life insurance proceeds to the State of Florida in violation of the Florida False Claims Act and seeks injunctive relief, compensatory damages, civil penalties, treble damages, prejudgment interest, attorneys' fees and costs. In March 2013, the Company filed a motion to dismiss the complaint. In August 2013, the court dismissed the complaint with prejudice. In September 2013, plaintiff filed an appeal with Florida's Circuit Court of the Second Judicial Circuit in Leon County.

In January 2012, a Global Resolution Agreement entered into by the Company and a third party auditor became effective upon its acceptance by the unclaimed property departments of 20 states and jurisdictions. Under the terms of the Global Resolution Agreement, the third party auditor acting on behalf of the signatory states will compare expanded matching criteria to the Social Security Master Death File (“SSMDF”) to identify deceased insureds and contract holders where a valid claim has not been made. In February 2012, a Regulatory Settlement Agreement entered into by the Company to resolve a multi-state market conduct examination regarding its adherence to state claim settlement practices became effective upon its acceptance by the insurance departments of 20 states and jurisdictions. The Regulatory Settlement Agreement applies prospectively and requires the Company to adopt and implement additional procedures comparing its records to the SSMDF to identify unclaimed death benefits and prescribes procedures for identifying and locating beneficiaries once deaths are identified. Substantially all other jurisdictions that are not signatories to the Global Resolution Agreement or the Regulatory Settlement Agreement have entered into similar agreements with the Company.

The Company is one of several companies subpoenaed by the New York Attorney General regarding its unclaimed property procedures. Additionally, the New York State Department of Financial Services (“NYDFS”) has requested that 172 life insurers (including the Company) provide data to the NYDFS regarding use of the SSMDF. The New York Office of Unclaimed Funds is conducting an audit of the Company's compliance with New York's unclaimed property laws. In February 2012, the Massachusetts Office of the Attorney General requested information regarding the Company's unclaimed property procedures. In December 2013, this matter was closed without prejudice.

The Company's litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company's results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company's litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company's financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company's financial position.

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Derivative Instruments

6 Months Ended

Jun. 30, 2014

Derivative Instruments

Derivative Instruments

5.DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

Interest Rate Contracts 

Interest rate swaps are used by the Company toreduce risks from changes in interest rates, manage interest rate exposures arising from mismatches between assets and liabilities (including duration mismatches) and to hedge against changes in the value of assets it owns or anticipates acquiring or selling. Swaps may be attributed to specific assets or liabilities or may be used on a portfolio basis. Under interest rate swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty at each due date.

Equity Contracts 

Equity index options are contracts which will settle in cash based on differentials in the underlying indices at the time of exercise and the strike price. The Company uses combinations of purchases and sales of equity index options to hedge the effects of adverse changes in equity indices within a predetermined range.

Total return swaps are contracts whereby the Company agrees with other parties to exchange, at specified intervals, the difference between the return on an asset (or market index) and LIBOR based on a notional amount. The Company generally uses total return swaps to hedge the effect of adverse changes in equity indices.

Foreign Exchange Contracts

Currency derivatives, including currency swaps, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell.

Under currency swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date.

Credit Contracts

Credit derivatives are used by the Company to enhance the return on the Company's investment portfolio by creating credit exposure similar to an investment in public fixed maturity cash instruments. With credit derivatives the Company sells credit protection on an identified name, and in return receives a quarterly premium. With credit default derivatives, this premium or credit spread generally corresponds to the difference between the yield on the referenced name's public fixed maturity cash instruments and swap rates, at the time the agreement is executed. If there is an event of default by the referenced name, as defined by the agreement, then the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced defaulted security or similar security or pay the referenced amount less the auction recovery rate. See credit derivatives written section for discussion of guarantees related to credit derivatives written. In addition to selling credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company's investment portfolio.

Embedded Derivatives

The Company sells variable annuity products, which may include guaranteed benefit features that are accounted for as embedded derivatives. The Company has reinsurance agreements to transfer the risk related to certain of these benefit features to affiliates, Pruco Re and The Prudential Insurance Company of America (“Prudential Insurance”). The embedded derivatives related to the living benefit features and the related reinsurance agreements are carried at fair value. These embedded derivatives are marked to market through “Realized investment gains (losses), net” based on the change in value of the underlying contractual guarantees, which are determined using valuation models, as described in Note 4.

The fair value of the living benefit feature embedded derivatives included in "Future policy benefits" was a liability of $1,663 million and $778 million as of June 30, 2014 and December 31, 2013, respectively. The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re and Prudential Insurance included in "Reinsurance recoverables" was an asset of $1,595 million and $748 million as of June 30, 2014 and December 31, 2013, respectively.

The table below provides a summary of the gross notional amount and fair value of derivatives contracts used in a non-broker-dealer capacity, excluding embedded derivatives which are recorded with the associated host, by the primary underlying. Many derivative instruments contain multiple underlyings.

	June 30, 2014							December 31, 2013
			Notional	Gross Fair Value					Notional	Gross Fair Value
			Amount	Assets		Liabilities			Amount	Assets		Liabilities
		(in thousands)
Derivatives Designated as Hedge Accounting Instruments:
Currency/Interest Rate		$	82,247	$	739	$	(4,852)	$	72,747	$	940	$	(4,635)
Total Qualifying Hedges		$	82,247	$	739	$	(4,852)	$	72,747	$	940	$	(4,635)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps		$	1,792,750	$	77,502	$	(49,373)	$	1,533,750	$	59,872	$	(80,601)
Interest Rate Options			100,000		8,780		-		100,000		6,534		-
Currency/Interest Rate
Foreign Currency Swaps			57,015		29		(1,723)		55,919		19		(1,349)
Credit
Credit Default Swaps			1,200		-		(71)		6,050		-		(115)
Equity
Total Return Swaps			210,652		232		(1,004)		219,896		-		(4,712)
Equity Options			11,567,467		446		(108)		13,170,805		6,170		(3,168)
Total Non-Qualifying Hedges		$	13,729,084	$	86,989	$	(52,279)	$	15,086,420	$	72,595	$	(89,945)
Total Derivatives (1)		$	13,811,331	$	87,728	$	(57,131)	$	15,158,667	$	73,535	$	(94,580)

(1) Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a liability of $1,663 million and $778 million as of June 30, 2014and December 31, 2013, respectively, included in “Future policy benefits.” The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re and Prudential Insurance included in "Reinsurance recoverables" was an asset of $1,595 million and $748 million as of June 30, 2014 and December 31, 2013, respectively.

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (including bifurcated embedded derivatives)that are offset in the balance sheet, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the balance sheet.

	June 30, 2014
			Gross		Net
	Gross		Amounts		Amounts
	Amounts of		Offset in the		Presented in
	Recognized		Statement of		the Statement		Financial
	Financial		Financial		of Financial		Instruments/		Net
	Instruments		Position		Position		Collateral		Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	87,728	$	(67,715)	$	20,013	$	(18,099)	$	1,914
Offsetting of Financial Liabilities:
Derivatives	$	57,131	$	(57,131)	$	-	$	-	$	-
	December 31, 2013
			Gross		Net
	Gross		Amounts		Amounts
	Amounts of		Offset in the		Presented in
	Recognized		Statement of		the Statement		Financial
	Financial		Financial		of Financial		Instruments/		Net
	Instruments		Position		Position		Collateral		Amount
	(in thousands)
Offsetting of Financial Assets:
Derivatives	$	73,535	$	(73,535)	$	-	$	-	$	-
Offsetting of Financial Liabilities:
Derivatives	$	94,580	$	(72,822)	$	21,758	$	(24,491)	$	(2,733)

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above see “Credit Risk” below.

Cash Flow Hedges

The primary derivative instruments used by the Company in its cash flow hedge accounting relationships are currency swaps. These instrumentsareonly designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its cash flow hedge accounting relationships.

The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship:

		Three Months Ended June 30, 2014
			Realized Investment Gains/(Losses)		Net Investment Income		Other Income		Accumulated Other Comprehensive Income (Loss) (1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
	Currency/Interest Rate	$	-	$	(5)	$	(15)	$	(1,060)
	Total cash flow hedges		-		(5)		(15)		(1,060)
Derivatives Not Qualifying as Hedging Instruments:
	Interest Rate		26,012		-		-		-
	Currency		-		-		-		-
	Currency/Interest Rate		(1,038)		-		(9)		-
	Credit		(4)		-		-		-
	Equity		(11,334)		-		-		-
	Embedded Derivatives		(17,902)		-		-		-
	Total non-qualifying hedges		(4,266)		-		(9)		-
Total		$	(4,266)	$	(5)	$	(24)	$	(1,060)
		Six Months Ended June 30, 2014
			Realized Investment Gains/(Losses)		Net Investment Income		Other Income		Accumulated Other Comprehensive Income (Loss) (1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
	Currency/Interest Rate	$	-		(17)		(17)		(423)
	Total cash flow hedges		-		(17)		(17)		(423)
Derivatives Not Qualifying as Hedging Instruments:
	Interest Rate		63,598		-		-		-
	Currency		-		-		-		-
	Currency/Interest Rate		(214)		-		8		-
	Credit		(11)		-		-		-
	Equity		(15,982)		-		-		-
	Embedded Derivatives		(52,635)		-		-		-
	Total non-qualifying hedges		(5,244)		-		8		-
Total		$	(5,244)		(17)		(9)		(423)
		Three Months Ended June 30, 2013
			Realized Investment Gains/(Losses)		Net Investment Income		Other Income		Accumulated Other Comprehensive Income (Loss) (1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
	Currency/Interest Rate	$	-		(16)		27		598
	Total cash flow hedges		-		(16)		27		598
Derivatives Not Qualifying as Hedging Instruments:
	Interest Rate		(56,393)		-		-		-
	Currency		-		-		-		-
	Currency/Interest Rate		474		-		46		-
	Credit		(22)		-		-		-
	Equity		(10,976)		-		-		-
	Embedded Derivatives		18,078		-		-		-
	Total non-qualifying hedges		(48,839)		-		46		-
Total		$	(48,839)		(16)		73		598
		Six Months Ended June 30, 2013
			Realized Investment Gains/(Losses)		Net Investment Income		Other Income		Accumulated Other Comprehensive Income (Loss) (1)
		(in thousands)
Derivatives Designated as Hedging Instruments:
Cash flow hedges
	Currency/Interest Rate	$	-		(50)		32		2,343
	Total cash flow hedges		-		(50)		32		2,343
Derivatives Not Qualifying as Hedging Instruments:
	Interest Rate		(82,230)		-		-		-
	Currency		-		-		-		-
	Currency/Interest Rate		1,784		-		41		-
	Credit		(59)		-		-		-
	Equity		(41,427)		-		-		-
	Embedded Derivatives		32,267		-		-		-
	Total non-qualifying hedges		(89,665)		-		41		-
Total		$	(89,665)		(50)		73		2,343

(1) Amounts deferred in “Accumulated other comprehensive income (loss).”

For the three months ended June 30, 2014 and 2013,the ineffective portion of derivatives accounted for using hedge accounting wasnot material to the Company's results of operations and there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecastedtransaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging.

Presented below is a rollforward of current period cash flow hedges in “Accumulated other comprehensive income (loss)” before taxes:

	(in thousands)
Balance, December 31, 2013		(3,653)
Net deferred gains (losses) on cash flow hedges from January 1 to June 30, 2014		(457)
Amount reclassified into current period earnings		34
Balance, June 30, 2014	$	(4,076)

As of June 30, 2014 and 2013, the Company did not have any qualifying cash flow hedges of forecasted transactions other than those related to the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. The maximum length of time for which these variable cash flows are hedged is 19 years. Income amounts deferred in “Accumulated other comprehensive income (loss)” as a result of cash flow hedges are included in “Net unrealized investment gains (losses)” in theUnaudited Interim Statements of Equity.

Credit Derivatives Written

The Company no longer has exposure from credit derivatives where it has written credit protection as of June 30, 2014 and December 31, 2013.

The Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company's investment portfolio. As of June 30, 2014 and December 31, 2013, the Company had $1 million and $6 millionof outstanding notional amounts, respectively, reported at fair value as a liability of less than $1 million for both periods.

Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by itscounterpartyto financial derivative transactions.

The Company has credit risk exposure to an affiliate, Prudential Global Funding, LLC (“PGF”), related to its over-the-counter (“OTC”) derivative transactions. PGF manages credit risk with external counterparties by entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties, and by obtaining collateral where appropriate.Additionally, limits are set on single party credit exposures which are subject to periodic management review.

Under fair value measurements, the Company incorporates the market's perception of its own and the counterparty's non-performance risk in determining the fair value of the portion of its OTC derivative assets and liabilities that are uncollateralized. Credit spreads are applied to the derivative fair values on a net basis by counterparty. To reflect the Company's own credit spread a proxy based on relevant debt spreads is applied to OTC derivative net liability positions. Similarly, the Company's counterparty's credit spread is applied to OTC derivative net asset positions.

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Investments (Credit Losses Recognized In Earnings on Fixed Maturity Securities Held by the Company) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Credit losses recognized in earnings on fixed maturity securities
Credit Losses Recognized In Earnings, BOP	$ 119	$ 1,726	$ 1,800	$ 3,381
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(4)	(5)	(1,677)	(1,619)
Increases due to the passage of time on previously recorded credit losses	0	28	0	55
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(12)	0	(20)	(68)
Credit Losses Recognized In Earnings, EOP	$ 103	$ 1,749	$ 103	$ 1,749

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Investments (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Net change in unrealized gains (losses) from other trading account assets	$ (600,000)	$ (100,000)	$ (500,000)	$ 400,000
Net investment income	41,458,000	58,934,000	85,959,000	117,474,000
Gross unrealized losses related to high or highest quality securities	2,200,000		2,200,000		20,400,000
Gross unrealized losses related to other than high or highest quality securities	700,000		700,000		1,500,000
Gross unrealized losses representing declines in value of greater than 20%	0		0
Gross unrealized losses in a continuous loss position for less than six months	0		0		0
Twelve months or more Unrealized Losses	$ 1,737,000		$ 1,737,000		$ 1,621,000

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Significant Accounting Policies and Pronouncements (Policy)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Impact of Adoption of New Accounting Principles on Financial Statements

Adoption of New Accounting Pronouncements

In December 2013, the Financial Accounting Standards Board (“FASB”) issued updated guidance establishing a single definition of a public entity for use in financial accounting and reporting guidance. This new guidance is effective for all current and future reporting periods and did not have a significant effect on the Company's financial position, results of operations, or financial statement disclosures.

In July 2013, the FASB issued new guidance regarding derivatives. The guidance permits the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) to be used as a U.S. benchmark interest rate for hedge accounting, in addition to the United States Treasury rate and London Inter-Bank Offered Rate (“LIBOR”). The guidance also removes the restriction on using different benchmark rates for similar hedges. The guidance is effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company's financial position, results of operationsor financial statement disclosures.

In July 2013, the FASB issued updated guidance regarding the presentation of unrecognized tax benefits when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. This new guidance became effective for interim or annual reporting periods that began after December 15, 2013, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company's financial position, results of operations or financial statement disclosures.

In February 2013, the FASB issued updated guidance regarding the presentation of comprehensive income. Under the guidance, an entity is required to separately present information about significant items reclassified out of accumulated other comprehensive income (“AOCI”) by component as well as changes in AOCI balances by component in either the financial statements or the notes to the financial statements. The guidance does not change the items that are reported in other comprehensive income, does not change when an item of other comprehensive income must be reclassified to net income, and does not amend any existing requirements for reporting net income or other comprehensive income. The guidance became effective for interim or annual reporting periods that began after December 15, 2012 and was applied prospectively. The disclosures required by this guidance are included in Note 3.

In December 2011 and January 2013, the FASB issued updated guidance regarding the disclosure of recognized derivative instruments (including bifurcated embedded derivatives), repurchase agreements and securities borrowing/lending transactions that are offset in the statement of financial position or are subject to an enforceable master netting arrangement or similar agreement (irrespective of whether they are offset in the statement of financial position). This new guidance requires an entity to disclose information on both a gross and net basis about instruments and transactions within the scope of this guidance. This new guidance became effective for interim or annual reporting periods that began on or after January 1, 2013, and was applied retrospectively for all comparative periods presented. The disclosures required by this guidance are included in Note 5.

Future Adoption of New Accounting Pronouncements

Future Adoption of New Accounting Pronouncements

In January 2014, the FASB issued updated guidance for troubled debt restructurings clarifying when an in substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2014. This guidance can be elected for prospective adoption or by using a modified retrospective transition method. This guidance is not expected to have a significant effect on the Company's financial position, results of operations or financial statement disclosures.

In May 2014, the FASB issued updated guidance on accounting for revenue recognition. The guidance is based on the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from cost incurred to obtain or fulfill a contract. Revenue recognition for insurance contracts is explicitly scoped out of the guidance. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2016, and must be applied using one of two retrospective application methods. Early adoption is not permitted. The Company is currently assessing the impact of the guidance on the Company's financial position, results of operations and financial statement disclosures.

In August 2014, the FASB issued updated guidance for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity. Under the guidance, an entity within scope is permitted to measure both the financial assets and financial liabilities of a consolidated collateralized financing entity based on either the fair value of the financial assets or the financial liabilities, whichever is more observable. If elected, the guidance will eliminate the measurement difference that exists when both are measured at fair value. The new guidance is effective for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2015. Early adoption will be permitted. This guidance can be elected for modified retrospective or full retrospective adoption. The Company is currently assessing the impact of the guidance on the Company's financial position, results of operations and financial statement disclosures.

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Related Party (Reinsurance With Affiliates Pruco Re) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Ceded Rider Fees [Line Items]
Total Fees Ceded to Pruco Reinsurance	$ 69,000,000	$ 67,000,000	$ 138,000,000	$ 136,000,000
Total Fees Ceded to Prudential Insurance	$ 272,000	$ 315,000	$ 557,000	$ 642,000

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Related Party

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

7. RELATED PARTY TRANSACTIONS

The Company has extensive transactions and relationships with Prudential Insurance and other affiliates. Although we seek to ensure that these transactions and relationships are fair and reasonable, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties.

Expense Charges and Allocations

Many of the Company's expenses are allocations or charges from Prudential Insurance or other affiliates.

The Company's general and administrative expenses are charged to the Company using allocation methodologies based on business production processes. Management believes that the methodology is reasonable and reflects costs incurred by Prudential Insurance to process transactions on behalf of the Company. The Company operates under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided by Prudential Insurance. The Company reviews its allocation methodology periodically which it may adjust accordingly. General and administrative expenses also include allocations of stock compensation expenses related to a stock option program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock option program and deferred compensation program was less than$1million for the three months ended June 30, 2014 and 2013, and less than $1 million for the six months endedJune 30, 2014 and 2013.

The Company is charged for its share of employee benefits expenses. These expenses include costs for funded and non-funded contributory and non-contributory defined benefit pension plans. Some of these benefits are based on earnings and length of service. Other benefits are based on an account balance, which takes into consideration age, service and earnings during career. The Company's share of net expense for the pension plans wasless than $1 million and $1 million for the three months endedJune 30, 2014 and 2013, andless than $1 millionand $2 million for thesix months endedJune 30, 2014 and2013, respectively.

Prudential Insurance sponsors voluntary savings plans for the Company's employees (“401(k) plans”). The 401(k) plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The expense charged to the Company for the matching contribution to the 401(k) plans was less than$1 million for the three months endedJune 30, 2014 and 2013, and less than $1 million for the six months endedJune 30, 2014 and 2013.

Affiliated Asset Administration Fee Income

In accordance with a revenue sharing agreement with AST Investment Services, Inc. and Prudential Investments LLC, the Company receives fee income calculated on contractholder separate account balances invested in the Advanced Series Trust. Income received from AST Investment Services, Inc. and Prudential Investments LLC related to this agreement was $56 million and $57 million for the three months ended June 30, 2014 and 2013, respectively, and $111 million and $114 million for the six months ended June 30, 2014 and 2013, respectively. These revenues are recorded as “Asset administration fees and other income” in the Unaudited Interim Statements of Operations and Comprehensive Income.

Affiliated Investment Management Expenses

In accordance with an agreement with Prudential Investment Management, Inc. (“PIMI”), the Company pays investment management expenses to PIMI who acts as investment manager to certain Company general account and separate account assets. Investment management expenses paid to PIMI related to this agreement was $1 million and $2 million for the three months ended June 30, 2014 and 2013, respectively, and $3 million for the six months endedJune 30, 2014 and 2013. These expenses are recorded as “Net investment income” in the Unaudited Interim Statements of Operations and Comprehensive Income.

Cost Allocation Agreements with Affiliates

Certain operating costs (including rental of office space, furniture, and equipment) have been charged to the Company at cost by Prudential Annuities Information Services and Technology Corporation (“PAIST”), an affiliated company. PALAC signed a written service agreement with PAIST for these services executed and approved by the Connecticut Insurance Department in 1995. This agreement automatically continues in effect from year to year and may be terminated by either party upon 30 days written notice.

Allocated lease expense was less than $1 million and $1 million for the three months ended June 30, 2014 and 2013, respectively,and $1 million and $2 millionfor the six months ended June 30, 2014 and 2013, respectively. Allocated sub-lease rental income, recorded as a reduction to lease expense was less than $1 millionand $1million for the three months ended June 30, 2014 and 2013,and less than $1 million and $1 million for the six months ended June 30, 2014 and 2013, respectively.

The Company pays commissions and certain other fees to PAD in consideration for PAD's marketing and underwriting of the Company's products. Commissions and fees are paid by PAD to broker-dealers who sold and service the Company's products. Commissions and fees paid by the Company to PAD were $45 million and $43million for the three months ended June 30, 2014 and 2013, respectively, and $90 million and $85 million for the six months ended June 30, 2014 and 2013, respectively.

Debt Agreements

Short-term Debt

The Company is authorized to borrow funds up to $2 billion from Prudential Financial and its affiliates to meet its capital and other funding needs. The Company had debt of $15 million and $5million outstanding with Prudential Funding, LLC as of June 30, 2014 and December 31, 2013, respectively. Total interest expense on debt with Prudential Funding, LLC was less than $1 million for the three months endedJune 30, 2014 and 2013, and less than $1 millionfor the six months ended June 30, 2014 and 2013.

The Company had debt of $200million outstanding with Prudential Financial as of June 30, 2014 and December 31, 2013. This loan has a fixed interest rate of 4.49% and matures on December 29, 2014. In December 2013, a $200 million partial pay down was made on this outstanding debt.Total interest expense on debt with Prudential Financial was $2 million and $5 millionfor the three months ended June 30, 2014 and 2013, respectively, and $4 million and $9 million for the six months ended June 30, 2014 and 2013, respectively.

Reinsurance Agreements

The Company uses reinsurance as part of its risk management and capital management strategies for certain of its optional living benefit features. Fees ceded under these agreements are included in “Realized investment gains (losses), net” on the Unaudited Interim Statement of Operations and Comprehensive Income. The Company ceded fees of $69 million and $67 million to Pruco Re for the three months endedJune 30, 2014 and 2013, respectively and $138 million and $136 millionfor the six months ended June 30, 2014and 2013, respectively. The Company ceded fees of less than $1 million to Prudential Insurance for the three months ended June 30, 2014 and 2013, and less than $1 million for the six months endedJune 30, 2014 and 2013. The Company's reinsurance payables related to affiliated reinsurance were $25 million as of both June 30, 2014 and December 31, 2013.

The Company's reinsurance recoverables related to affiliated reinsurance were $1,595million and $748millionas of June 30, 2014 and December 31, 2013, respectively. The assets are reflected in “Reinsurancerecoverables” in the Company's Unaudited Interim Statements of Financial Position.Realized gains (losses) were $181 million and $(605) million for the three months ended June 30, 2014 and 2013, respectively and $709 million and $(1,214) million for the six months ended June 30, 2014 and 2013, respectively. Changes in realized gains (losses) for the 2014 and 2013 periods were primarily due to changes in market conditions in each respective period.

Derivative Trades

In its ordinary course of business, the Company enters into OTC derivative contracts with an affiliate, PGF.

Purchase/sale of fixed maturities from/to an affiliate

During the first quarter of 2013, the Company sold fixed maturity securities to Prudential Financial. These securities had an amortized cost of $90 million and a fair value of $103 million. The net difference between historic amortized cost and the fair value was accounted for as an increase of $8 million to additional paid-in capital, net of taxes.

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Business and Basis of Presentation (Policy)

6 Months Ended

Jun. 30, 2014

Business and Basis of Presentation [Abstract]

Basis of Presentation, Policy

Basis of Presentation

The Unaudited Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”).

Use of Estimates, Policy

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 disclosure of contingent assets and liabilities as of 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 deferred policy acquisition costs and related amortization; value of business acquired and its amortization; amortization of deferred sales inducements; valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters.

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Investments (Tables)

6 Months Ended

Jun. 30, 2014

Investments [Abstract]

Fixed Maturities and Equity Securities, Available-for-sale Securities

		June 30, 2014
										Other-than-
					Gross		Gross			temporary
		Amortized			Unrealized		Unrealized	Fair		Impairments
		Cost			Gains		Losses	Value		in AOCI (3)
		(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S.
	government authorities and agencies	$	6,337	$	18	$	10	$	6,345	$	-
Obligations of U.S. states and their political
	subdivisions		68,339		2,353		360		70,332		-
Foreign government bonds			25,270		6,946		-		32,216		-
Public utilities			239,759		25,945		638		265,066		-
All other corporate securities			1,823,344		172,542		1,404		1,994,482		-
Asset-backed securities (1)			165,680		7,043		220		172,503		(40)
Commercial mortgage-backed securities			316,199		11,799		255		327,743		-
Residential mortgage-backed securities (2)			139,465		7,375		-		146,840		(38)
Total fixed maturities, available-for-sale		$	2,784,393	$	234,021	$	2,887	$	3,015,527	$	(78)
Equity securities, available-for-sale
Common Stocks:
	Public utilities	$	-	$	-	$	-	$	-
	Mutual funds		14		3		-		17
Total equity securities, available-for-sale		$	14	$	3	$	-	$	17

_____________

• Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.
• Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
• Represents the amount of other-than-temporary impairment losses in “AOCI,” which were not included in earnings. Amount excludes $0.1million of net unrealized gains on impaired available-for-sale securities relating to changes in thevalue of such securities subsequent to the impairment measurement date.

		December 31, 2013
										Other-than-
					Gross		Gross			temporary
		Amortized			Unrealized		Unrealized	Fair		Impairments
		Cost			Gains		Losses	Value		in AOCI (3)
		(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S.
	government authorities and agencies	$	6,382	$	36	$	34	$	6,384	$	-
Obligations of U.S. states and their political
	subdivisions		67,225		2,911		1,570		68,566		-
Foreign government bonds			25,437		5,717		-		31,154		-
Public utilities			229,807		17,048		3,190		243,665		-
All other corporate securities			2,029,720		158,360		9,103		2,178,977		-
Asset-backed securities (1)			182,888		6,513		1,509		187,892		(1,351)
Commercial mortgage-backed securities			384,764		11,387		5,518		390,633		-
Residential mortgage-backed securities (2)			152,779		5,138		972		156,945		(40)
Total fixed maturities, available-for-sale		$	3,079,002	$	207,110	$	21,896	$	3,264,216	$	(1,391)
Equity securities, available-for-sale
Common Stocks:
	Public utilities	$	192	$	-	$	-	$	192
	Mutual funds		14		2		-		16
Total equity securities, available-for-sale		$	206	$	2	$	-	$	208

_____________

• Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.
• Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
• Represents the amount of other-than-temporary impairment losses in “AOCI,” which were not included in earnings. Amount excludes $1.7million of net unrealized gainson impaired available-for-sale securities relating to changes in the value of such securitiessubsequent to the impairment measurement date.

Investments Classified by Contractual Maturity Date

		Available-for-Sale
		Amortized		Fair
		Cost		Value
		(in thousands)
Due in one year or less		$	250,546	$	257,895
Due after one year through five years			951,580		1,025,776
Due after five years through ten years			549,906		608,317
Due after ten years			411,017		476,453
Asset-backed securities			165,680		172,503
Commercial mortgage-backed securities			316,199		327,743
Residential mortgage-backed securities			139,465		146,840
	Total	$	2,784,393	$	3,015,527

Sources of Fixed Maturity Proceeds, Related Investment Gains (Losses), and Losses on Impairments of Fixed Maturities and Equity Securities

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
		(in thousands)
Fixed maturities, available-for-sale
	Proceeds from sales	$	120,393	$	6,501	$	172,423	$	121,428
	Proceeds from maturities/repayments		186,089		386,663		493,702		593,078
	Gross investment gains from sales, prepayments, and maturities		2,992		5,113		4,124		7,905
	Gross investment losses from sales and maturities		(2,921)		(17)		(3,247)		(97)
Equity securities, available-for-sale
	Proceeds from sales	$	-	$	-	$	-	$	1
	Gross investment gains from sales		-		(1)		1		-

Credit Losses Recognized in Earnings on Fixed Maturity Securities Held by the Company for which a Portion of the OTTI Loss was Recognized in OCI

		Three Months		Six Months
		Ended		Ended
		June 30, 2014		June 30, 2014
			(in thousands)
Balance, beginning of period		$	119	$	1,800
Credit loss impairments previously recognized on securities which matured, paid
	down, prepaid or were sold during the period		(4)		(1,677)
Increases due to the passage of time on previously recorded credit losses			-		-
Accretion of credit loss impairments previously recognized due to an increase in
	cash flows expected to be collected		(12)		(20)
Balance, end of period		$	103	$	103
		Three Months		Six Months
		Ended		Ended
		June 30, 2013		June 30, 2013
			(in thousands)
Balance, beginning of period		$	1,726	$	3,381
Credit loss impairments previously recognized on securities which matured, paid
	down, prepaid or were sold during the period		(5)		(1,619)
Increases due to the passage of time on previously recorded credit losses			28		55
Accretion of credit loss impairments previously recognized due to an increase in
	cash flows expected to be collected		-		(68)
Balance, end of period		$	1,749	$	1,749

Trading Account Assets Disclosure

	June 30, 2014				December 31, 2013
			Fair				Fair
	Cost		Value		Cost		Value
	(in thousands)
Total trading account assets - Equity securities	$	5,045	$	6,053	$	5,164	$	6,677

Commercial Mortgage and Other Loans

			June 30, 2014					December 31, 2013
			Amount		% of			Amount		% of
			(in thousands)		Total			(in thousands)		Total
Commercial and agricultural mortgage loans by property type:
Apartments/Multi-Family			$	136,519		33.0	%	$	125,045		31.5	%
Industrial				85,798		20.8			88,009		22.1
Retail				71,310		17.3			72,325		18.2
Office				44,818		10.8			40,976		10.3
Other				14,479		3.6			13,796		3.5
Hospitality				5,110		1.2			5,133		1.3
	Total commercial mortgage loans			358,034		86.7			345,284		86.9
Agricultural property loans				55,158		13.3			52,223		13.1
	Total commercial and agricultural mortgage loans by property
		type		413,192		100.0	%		397,507		100.0	%
Valuation allowance				(1,256)					(1,256)
	Total net commercial and agricultural mortgage loans by property
		type		411,936					396,251
Other Loans
Uncollateralized loans				2,740					2,740
	Total other loans			2,740					2,740
	Total commercial mortgage and other loans		$	414,676				$	398,991

Allowance for Losses

	June 30, 2014		December 31, 2013
	(in thousands)
Allowance for losses, beginning of year	$	1,256	$	2,177
Addition to / (release of) allowance for losses		-		(921)
Total ending balance (1)	$	1,256	$	1,256

_____________

• Agricultural loans represent $0.1 million of the ending allowance at both June 30, 2014 and December 31, 2013.

Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans

	June 30, 2014		December 31, 2013
	(in thousands)
Allowance for Credit Losses:
Ending balance: individually evaluated for impairment (1)	$	-	$	-
Ending balance: collectively evaluated for impairment (2)		1,256		1,256
Total ending balance	$	1,256	$	1,256
Recorded Investment (3):
Ending balance gross of reserves: individually evaluated for impairment (1)	$	-	$	-
Ending balance gross of reserves: collectively evaluated for impairment (2)		415,932		400,247
Total ending balance, gross of reserves	$	415,932	$	400,247

_____________

• There were no loans individually evaluated for impairments at June 30, 2014 and December 31, 2013.
• Agricultural loans collectively evaluated for impairment had a recorded investment of $55million and $52million atJune 30, 2014and December 31, 2013, respectively, and a related allowance of $0.1millionfor both periods. Uncollateralized loans collectively evaluated for impairment had a recorded investment of $3 million at both June 30, 2014andDecember 31, 2013 and no related allowance for both periods.
• Recorded investment reflects the balance sheet carrying value gross of related allowance.

Net Investment Income

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
		(in thousands)
Fixed maturities, available-for-sale		$	35,805	$	49,240	$	74,181	$	102,534
Trading account assets			21		29		30		61
Commercial mortgage and other loans			5,236		10,274		11,402		16,403
Policy loans			223		225		350		339
Short-term investments			72		96		130		179
Other long-term investments			1,577		739		2,791		1,429
	Gross investment income		42,934		60,603		88,884		120,945
Less: investment expenses			(1,476)		(1,669)		(2,925)		(3,471)
	Net investment income	$	41,458	$	58,934	$	85,959	$	117,474

Realized Gain (Loss) on Investments

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
		(in thousands)
Fixed maturities		$	71	$	5,096	$	877	$	7,808
Equity securities			-		-		1		1.00
Commercial mortgage and other loans			-		330		-		368
Derivatives			(4,266)		(48,839)		(5,244)		(89,665)
Other			-		(2)		-		(23)
	Realized investment gains (losses), net	$	(4,195)	$	(43,415)	$	(4,366)	$	(81,511)

Net Unrealized Investment Gain (Loss) AOCI Rollforward

		Net Unrealized Gains (Losses) on Investments (1)		Deferred Policy Acquisition Costs and Other Costs		Future Policy Benefits		Deferred Income Tax (Liability) Benefit		Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
		(in thousands)
Balance, December 31, 2013		$	323	$	(116)	$	(14)	$	(51)	$	142
Net investment gains (losses) on investments
	arising during the period		5		-		-		(2)		3
Reclassification adjustment for (gains) losses
	included in net income		(295)		-		-		102		(193)
Impact of net unrealized investment (gains) losses on
	deferred policy acquisition costs
	and other costs		-		105		-		(38)		67
Impact of net unrealized investment (gains) losses on
	future policy benefits		-		-		13		(4)		9
Balance, June 30, 2014		$	33	$	(11)	$	(1)	$	7	$	28

All Other Net Unrealized Investment Gain (Loss) AOCI Rollforward

										Accumulated Other
										Comprehensive
								Deferred		Income (Loss) Related
		Net Unrealized		Deferred Policy		Future		Income Tax		To Net Unrealized
		Gains (Losses) on		Acquisition Costs		Policy		(Liability)		Investment
		Investments (1)		and Other Costs		Benefits		Benefit		Gains (Losses)
		(in thousands)
Balance, December 31, 2013		$	184,727	$	(66,452)	$	(8,187)	$	(39,363)	$	70,725
Net investment gains (losses) on investments
	arising during the period		46,314		-		-		(16,215)		30,099
Reclassification adjustment for (gains) losses
	included in net income		(582)		-		-		203		(379)
Impact of net unrealized investment (gains)
	losses on deferred policy acquisition costs
	and other costs		-		(7,638)		-		2,671		(4,967)
Impact of net unrealized investment (gains)
	losses on future policy benefits		-		-		(2,303)		805		(1,498)
Balance, June 30, 2014		$	230,459	$	(74,090)	$	(10,490)	$	(51,899)	$	93,980

Unrealized Gains and (Losses) on Investments

	June 30,		December 31,
	2014		2013
	(in thousands)
Fixed maturity securities on which an OTTI loss has been recognized	$	33	$	323
Fixed maturity securities, available-for-sale - all other		231,101		184,891
Equity securities, available-for-sale		3		2
Affiliated notes		2,779		3,113
Derivatives designated as cash flow hedges (1)		(4,076)		(3,653)
Other investments		652		374
Net unrealized gains (losses) on investments	$	230,492	$	185,050

_____________

• See Note 5 for more information on cash flow hedges.

Duration Of Gross Unrealized Losses On Fixed Maturity Securities Disclosures

			June 30, 2014
			Less than twelve months				Twelve months or more				Total
			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
			(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of
	U.S. government authorities and agencies		$	2,692	$	10	$	-	$	-	$	2,692	$	10
Obligations of U.S. States and their
	political subdivisions			-		-		6,995		360		6,995		360
Corporate securities				94,815		1,001		47,798		1,041		142,613		2,042
Asset-backed securities				15,070		139		17,832		81		32,902		220
Commercial mortgage-backed securities				-		-		7,223		255		7,223		255
Residential mortgage-backed securities				-		-		-		-		-		-
		Total	$	112,577	$	1,150	$	79,848	$	1,737	$	192,425	$	2,887
Equity securities, available-for-sale			$	-	$	-	$	-	$	-	$	-	$	-

			December 31, 2013
			Less than twelve months				Twelve months or more				Total
			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
			(in thousands)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of
	U.S. government authorities and agencies		$	3,347	$	34	$	-	$	-	$	3,347	$	34
Obligations of U.S. States and their
	political subdivisions			5,420		588		6,402		982		11,822		1,570
Corporate securities				351,306		11,923		2,704		370		354,010		12,293
Asset-backed securities				97,575		1,509		-		-		97,575		1,509
Commercial mortgage-backed securities				86,132		5,249		2,941		269		89,073		5,518
Residential mortgage-backed securities				100,150		972		-		-		100,150		972
		Total	$	643,930	$	20,275	$	12,047	$	1,621	$	655,977	$	21,896
Equity securities, available-for-sale			$	-	$	-	$	-	$	-	$	-	$	-

Reclassifications Out Of Accumulated Other Comprehensive Income

Reclassifications out of Accumulated Other Comprehensive Income (Loss)
				Three Months		Six Months
				Ended		Ended
				June 30, 2014		June 30, 2014
				(in thousands)
Amounts reclassified from AOCI (1)(2):
Net unrealized investment gains (losses):
	Cash flow hedges - Currency/Interest rate (3)			$	(19)	$	(34)
	Net unrealized investment gains (losses) on available-for-sale securities				90		911
		Total net unrealized investment gains (losses) (4)			71		877
			Total reclassifications for the period	$	71	$	877

_____________

• All amounts are shown before tax.
• Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.
• See Note 5 for additional information on cash flow hedges.
• See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs and future policy benefits.

Accumulated Other Comprehensive Income Loss Table

		Accumulated Other Comprehensive Income (Loss)
			Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Total Accumulated Other Comprehensive Income (Loss)
		(in thousands)
Balance, December 31, 2013		$	10	$	70,857	$	70,867
Change in other comprehensive income
	before reclassifications		(4)		36,495		36,491
Amounts reclassified from AOCI			-		(877)		(877)
Income tax benefit (expense)			2		(12,467)		(12,465)
Balance, June 30, 2014		$	8	$	94,008	$	94,016
		Accumulated Other Comprehensive Income (Loss)
			Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses) (1)		Total Accumulated Other Comprehensive Income (Loss)
		(in thousands)
Balance, December 31, 2012		$	7	$	147,280	$	147,287
Change in other comprehensive income
	before reclassifications		(15)		(92,858)		(92,873)
Amounts reclassified from AOCI			-		(7,809)		(7,809)
Income tax benefit (expense)			5		35,233		35,238
Balance, June 30, 2013		$	(3)	$	81,846	$	81,843

_____________

• Includes cash flow hedges of($4)millionas ofboth June 30, 2014 andDecember 31, 2013and ($1)million and($3)million as of June 30, 2013 and December 31, 2012, respectively.

Credity Quality Indicators [Text Block]

		Debt Service Coverage Ratio - June 30, 2014
		Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
Loan-to-Value Ratio			(in thousands)
0%-59.99%		$	246,541	$	9,581	$	3,003	$	259,125
60%-69.99%			121,211		-		-		121,211
70%-79.99%			28,262		1,478		-		29,740
Greater than 80%			3,116		-		-		3,116
	Total commercial and agricultural mortgage loans	$	399,130	$	11,059	$	3,003	$	413,192

		Debt Service Coverage Ratio - December 31, 2013
		Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
Loan-to-Value Ratio		(in thousands)
0%-59.99%		$	251,278	$	7,650	$	1,865	$	260,793
60%-69.99%			102,755		-		-		102,755
70%-79.99%			31,712		2,247		-		33,959
Greater than 80%			-		-		-		-
	Total commercial and agricultural mortgage loans	$	385,745	$	9,897	$	1,865	$	397,507

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Related Party (Affiliated Asset Administration Fee Income) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Related Party Transactions [Abstract]
AST Revenue Sharing Income	$ 56	$ 57	$ 111	$ 114

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Related Party (Affiliated Asset Transfers) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Related Party Transactions [Line Items]
Commercial mortgage loans asset transfer amortized cost	$ 90
Commercial mortgage loans asset transfer fair value	103
Realized gain on commerical mortgage loan asset transfer	$ 8

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Related Party (Cost Allocation Agreements with Affiliates) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Related Party Transactions [Abstract]
Allocated Lease Expense	$ 0.7	$ 1.0	$ 1.0	$ 2.0
Allocated Sub-Lease Rental Income	0.2	0.6	0.5	1.0
Commissions and Fees Paid to PAD	$ 45	$ 43	$ 90	$ 85

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Investments (Net Unrealized Gains Losses on Investments by Asset Class) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Net unrealized gains (losses) on investments	$ 230,492		$ 185,050
Fixed Maturities [Member]
Net unrealized gains (losses) on investments	231,101		184,891
Equity Securities [Member]
Net unrealized gains (losses) on investments	3		2
Other Long-term Investments [Member]
Net unrealized gains (losses) on investments	652		374
Affiliated Notes [Member]
Net unrealized gains (losses) on investments	2,779		3,113
Securities Related to Other Than Temporary Impairments [Member] | Fixed Maturities [Member]
Net unrealized gains (losses) on investments	33		323
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Net unrealized gains (losses) on investments	$ (4,076)	[1]	$ (3,653)	[1]

[1] _____________ See Note 5 for more information on cash flow hedges.

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Derivative Instruments (Gross Notional Amount and Fair Value of Derivatives Contracts) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Notional Value
Total Derivatives	$ 13,811,331	[1]	$ 15,158,667	[1]
Fair Value Asset
Total Derivatives	87,728	[1]	73,535	[1]
Fair Value Liability
Total Derivatives	57,131	[1]	94,580	[1]
Designated as Hedging Instrument [Member]
Notional Value
Qualifying Hedge Relationships	82,247		72,747
Fair Value Asset
Derivative Fair Value Of Derivative Asset	739		940
Fair Value Liability
Derivative Fair Value Of Derivative Liability	4,852		4,635
Nondesignated [Member]
Notional Value
Qualifying Hedge Relationships	13,729,084		15,086,420
Fair Value Asset
Derivative Fair Value Of Derivative Asset	86,989		72,595
Fair Value Liability
Derivative Fair Value Of Derivative Liability	52,279		89,945
Interest Rate Contract [Member] | Interest Rate Swap Member | Nondesignated [Member]
Notional Value
Qualifying Hedge Relationships	1,792,750		1,533,750
Fair Value Asset
Derivative Fair Value Of Derivative Asset	77,502		59,872
Fair Value Liability
Derivative Fair Value Of Derivative Liability	49,373		80,601
Interest Rate Contract [Member] | InterestRateOption [Member] | Nondesignated [Member]
Notional Value
Qualifying Hedge Relationships	100,000		100,000
Fair Value Asset
Derivative Fair Value Of Derivative Asset	8,780		6,534
Fair Value Liability
Derivative Fair Value Of Derivative Liability	0		0
Credit Risk Contract [Member] | Credit Default Swap Member | Nondesignated [Member]
Notional Value
Qualifying Hedge Relationships	1,200		6,050
Fair Value Asset
Derivative Fair Value Of Derivative Asset	0		0
Fair Value Liability
Derivative Fair Value Of Derivative Liability	71		115
Cross Currency Interest Rate Contract [Member] | Designated as Hedging Instrument [Member]
Notional Value
Qualifying Hedge Relationships	82,247		72,747
Fair Value Asset
Derivative Fair Value Of Derivative Asset	739		940
Fair Value Liability
Derivative Fair Value Of Derivative Liability	4,852		4,635
Cross Currency Interest Rate Contract [Member] | Currency Swap Member | Nondesignated [Member]
Notional Value
Qualifying Hedge Relationships	57,015		55,919
Fair Value Asset
Derivative Fair Value Of Derivative Asset	29		19
Fair Value Liability
Derivative Fair Value Of Derivative Liability	1,723		1,349
Equity Contract [Member] | Equity Options [Member] | Nondesignated [Member]
Notional Value
Qualifying Hedge Relationships	11,567,467		13,170,805
Fair Value Asset
Derivative Fair Value Of Derivative Asset	446		6,170
Fair Value Liability
Derivative Fair Value Of Derivative Liability	108		3,168
Equity Contract [Member] | Total Return Swap Member | Nondesignated [Member]
Notional Value
Qualifying Hedge Relationships	210,652		219,896
Fair Value Asset
Derivative Fair Value Of Derivative Asset	232		0
Fair Value Liability
Derivative Fair Value Of Derivative Liability	$ 1,004		$ 4,712

[1] (1) Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a liability of $1,663 million and $778 million as of June 30, 2014 and December 31, 2013, respectively, included in “Future policy benefits.” The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re and Prudential Insurance included in "Reinsurance recoverables" was an asset of $1,595 million and $748 million as of June 30, 2014 and December 31, 2013, respectively.

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Investments (Amortized Cost and Fair Value of Fixed Maturities by Contractual Maturities) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Available for Sale Amortized Cost
Due in one year or less	$ 250,546
Due after one year through five years	951,580
Due after five years through ten years	549,906
Due after ten years	411,017
Total	2,784,393	3,079,002
Available for Sale Securities Fair Value
Due in one year or less	257,895
Due after one year through five years	1,025,776
Due after five years through ten years	608,317
Due after ten years	476,453
Total	3,015,527	3,264,216
Residential Mortgage Backed Securities [Member]
Available for Sale Amortized Cost
Debt Maturities, without single maturity date	139,465
Available for Sale Securities Fair Value
Debt Maturities, without Single Maturity Date	146,840
Commercial Mortgage Backed Securities [Member]
Available for Sale Amortized Cost
Debt Maturities, without single maturity date	316,199
Available for Sale Securities Fair Value
Debt Maturities, without Single Maturity Date	327,743
Asset-backed Securities [Member]
Available for Sale Amortized Cost
Debt Maturities, without single maturity date	165,680
Available for Sale Securities Fair Value
Debt Maturities, without Single Maturity Date	$ 172,503

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Investments (Allowance for Losses) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2014		Dec. 31, 2013
Allowance For Losses On Commermcial Mortgage And Other Loans [Line Items]
Allowance for Losses, Beginning Balance	$ 1,256	[1]	$ 2,177	[1]
Addition To / (Release of) Allowance For Losses	0		(921)
Allowance for Losses, Ending Balance	1,256	[1]	1,256	[1]
Agricultural Property Loans [Member]
Allowance For Losses On Commermcial Mortgage And Other Loans [Line Items]
Allowance for Losses, Ending Balance	$ 100		$ 100

[1] Agricultural loans represent $0.1 million of the ending allowance at both June 30, 2014 and December 31, 2013.

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Fair Value of Assets and Liabilities (Quantiative Info for Level 3 Inputs) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2014		Dec. 31, 2013
Fair Value Quantiative Information [Line Items]
Fixed maturities, available for sale, at fair value	$ 3,015,527		$ 3,264,216
Fair Value, Inputs, Level 3 [Member]
Fair Value Quantiative Information [Line Items]
Reinsurance Recoverables	1,594,311		748,005
Future policy benefits	1,662,957		778,226
Maximum [Member]
Fair Value Quantiative Information [Line Items]
Discount Rate	10.91%		12.06%
Volatility Curve	28.00%		28.00%
Lapse Rate	11.00%	[1]	11.00%	[1]
NPR Spread	1.03%	[2]	1.09%	[2]
Utilization Rate	94.00%	[3]	94.00%	[3]
Withdrawal Rate	100.00%	[4]	100.00%	[4]
Mortality Rate	13.00%	[5]	13.00%	[5]
Minimum [Member]
Fair Value Quantiative Information [Line Items]
Discount Rate	3.50%		3.73%
Volatility Curve	14.00%		15.00%
Lapse Rate	0.00%	[1]	0.00%	[1]
NPR Spread	0.02%	[2]	0.08%	[2]
Utilization Rate	70.00%	[3]	70.00%	[3]
Withdrawal Rate	86.00%	[4]	86.00%	[4]
Mortality Rate	0.00%	[5]	0.00%	[5]
Weighted Average[ Member]
Fair Value Quantiative Information [Line Items]
Discount Rate	4.20%		3.90%
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Quantiative Information [Line Items]
Fixed maturities, available for sale, at fair value	100,129		94,730
Future Policy Benefits [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Quantiative Information [Line Items]
Future policy benefits	$ 1,662,957	[6]	$ 778,226	[6]

[1] Base lapse rates are adjusted at the contract level based on a comparison of the benefit amount and the policyholder account value and reflect other factors, such as the applicability of any surrender charges. A dynamic lapse adjustment reduces the base lapse rate when the benefit amount is greater than the account value, as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

[2] To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. In determining the NPR spread, the Company reflects the financial strength ratings of the Company and its affiliates as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements adjusted for any illiquidity risk premium.

[3] The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. These assumptions vary based on the product type, the age of the contractholder, and the age of the contract. The impact of changes in these assumptions is highly dependent on the contract type and age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal.

[4] The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%.

[5] Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

[6] Future policy benefits primarily represent general account liabilities for the optional living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

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Reinsurance (Reinsurance Info) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
EffectsOfReinsurance1[Abstract]
Reinsurance Recoverable, Guarantee Benefits	$ 1,595,250		$ 1,595,250		$ 748,690
Statement [Line Items]
Total realized investment gains (losses), net	(4,195)	(43,415)	(4,366)	(81,511)
Policyholders' benefits	27,973	27,685	56,916	46,303
Operating Expenses Other Than Amortization Of Deferred Policy Acquisition Costs	$ 97,884	$ 100,302	$ 198,885	$ 200,445

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Statements of Equity (USD $) In Thousands, unless otherwise specified	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (loss) [Member]	Total Equity
Balance at Dec. 31, 2012		$ 2,500	$ 893,336	$ 200,754	$ 147,287	$ 1,243,877
Affiliated asset transfers		0	8,086	0	0	8,086
Distribution to parent	184,000	0	0	(184,000)	0	(184,000)
Comprehensive income:
Net income	291,058	0	0	291,058	0	291,058
Other comprehensive income (loss), net of tax	(65,444)	0	0	0	(65,444)	(65,444)
Total comprehensive income (loss)						225,614
Balance at Jun. 30, 2013		2,500	901,422	307,812	81,843	1,293,577
Balance at Dec. 31, 2012		2,500	893,336	200,754	147,287	1,243,877
Comprehensive income:
Other comprehensive income (loss), net of tax
Total comprehensive income (loss)
Balance at Dec. 31, 2013		2,500	901,422	764,846	70,867	1,739,635
Distribution to parent	267,000	0	0	(267,000)	0	(267,000)
Comprehensive income:
Net income	134,929	0	0	134,929	0	134,929
Other comprehensive income (loss), net of tax	23,149	0	0	0	23,149	23,149
Total comprehensive income (loss)						158,078
Balance at Jun. 30, 2014		$ 2,500	$ 901,422	$ 632,775	$ 94,016	$ 1,630,713

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Fair Value of Assets and Liabilities

6 Months Ended

Jun. 30, 2014

Fair Value of Assets and Liabilities [Abstract]

Fair Value of Assets and Liabilities

4.    FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement – Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. The Company's Level 1 assets and liabilities primarily include short term investments and equity securities that trade on an active exchange market.

Level 2 - Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. The Company's Level 2 assets and liabilities include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities (mutual funds, which do not actively trade and are priced based on a net asset value), certain short term investmentsand certain over-the-counter derivatives.

Level 3 - Fair value is based on at least one or more significant unobservable inputs for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value. The Company's Level 3 assets and liabilities primarily include: certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly structured over-the-counter derivative contracts, and embedded derivatives resulting from certain products with guaranteed benefits.

Assets and Liabilities by Hierarchy Level -The tables below present the balances of assets and liabilities measured at fair value on a recurring basis, as of the dates indicated.

		As of June 30, 2014
		Level 1		Level 2		Level 3			Netting (2)	Total
		(in thousands)
Fixed maturities, available-for-sale:
	U.S Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	6,345	$	-	$	-	$	6,345
	Obligations of U.S. states and their political subdivisions		-		70,332		-		-		70,332
	Foreign government bonds		-		32,216		-		-		32,216
	Corporate securities		-		2,157,540		102,008		-		2,259,548
	Asset-backed securities		-		98,202		74,301		-		172,503
	Commercial mortgage-backed securities		-		327,743		-		-		327,743
	Residential mortgage-backed securities		-		146,840		-		-		146,840
Sub-total			-		2,839,218		176,309		-		3,015,527
Trading account assets:
	Equity securities		6,053		-		-		-		6,053
Sub-total			6,053		-		-		-		6,053
Equity securities, available-for-sale			-		17		-		-		17
Short-term investments			54,509		-		-		-		54,509
Cash equivalents			-		-		400		-		400
Other long-term investments			-		87,728		536		(67,715)		20,549
Reinsurance recoverables			-		-		1,594,311		-		1,594,311
Receivables from parent and affiliates			-		16,751		27,762		-		44,513
Sub-total excluding separate account assets			60,562		2,943,714		1,799,318		(67,715)		4,735,879
Separate account assets (1)			1,042,511		45,269,361		-		-		46,311,872
Total assets		$	1,103,073	$	48,213,075	$	1,799,318	$	(67,715)	$	51,047,751
Future policy benefits (3)		$	-	$	-	$	1,662,957	$	-	$	1,662,957
Payables to parent and affiliates			-		57,131		-		(57,131)		0
Total liabilities		$	-	$	57,131	$	1,662,957	$	(57,131)	$	1,662,957

		As of December 31, 2013
		Level 1		Level 2		Level 3			Netting (2)	Total
		(in thousands)
Fixed maturities, available-for-sale:
	U.S Treasury securities and obligations of U.S. government authorities and agencies	$	-	$	6,384	$	-	$	-	$	6,384
	Obligations of U.S. states and their political subdivisions		-		68,566		-		-		68,566
	Foreign government securities		-		31,154		-		-		31,154
	Corporate securities		-		2,325,846		96,796		-		2,422,642
	Asset-backed securities		-		124,103		63,789		-		187,892
	Commercial mortgage-backed securities		-		390,633		-		-		390,633
	Residential mortgage-backed securities		-		156,945		-		-		156,945
Sub-total			-		3,103,631		160,585		-		3,264,216
Trading account assets:
	Equity securities		6,364		-		313		-		6,677
Sub-total			6,364		-		313		-		6,677
Equity securities, available-for-sale			-		16		192		-		208
Short-term investments			118,188		-		-		-		118,188
Other long-term investments			-		73,535		486		(73,535)		486
Reinsurance recoverables			-		-		748,005		-		748,005
Receivables from parent and affiliates			-		19,071		6,347		-		25,418
Sub-total excluding separate account assets			124,552		3,196,253		915,928		(73,535)		4,163,198
Separate account assets (1)			1,190,903		45,435,925		-		-		46,626,828
Total assets		$	1,315,455	$	48,632,178	$	915,928	$	(73,535)	$	50,790,026
Future policy benefits (3)		$	-	$	-	$	778,226	$	-	$	778,226
Payables to parent and affiliates			-		94,580		-		(72,822)		21,758
Total liabilities		$	-	$	94,580	$	778,226	$	(72,822)	$	799,984

• Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts.Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company'sUnaudited Interim Statements of Financial Position.
• “Netting” amounts representcash collateral of $10.6 million and $0.7 million as of June 30, 2014 and December 31, 2013, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.
• As of June 30, 2014, the net embedded derivative liability position of $1,663million includes $138 millionof embedded derivatives in an asset position and $1,801million of embedded derivatives in a liability position. As of December 31, 2013, the net embedded derivative liability position of $778 million includes $245million of embedded derivatives in an asset position and $1,023million of embedded derivatives in a liability position.

The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below.

Fixed Maturity Securities - The fair values of the Company's public fixed maturity securities are generally based on prices obtained from independent pricing services. Prices for each security are generally sourced from multiple pricing vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type.The pricing hierarchy is updated for new financial products and recent pricing experience. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. If the pricing information received from third party pricing services is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service. If the pricing service updates the price to be more consistent with the presented market observations, the security remains within Level 2.

Internally-developed valuations or indicative broker quotes are also used to determine fair value in circumstances where vendor pricing is not available, or where the Company ultimately concludes that pricing information received from the independent pricing service is not reflective of market activity. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may over-ride the information with an internally developed valuation. As of June 30, 2014 and December 31, 2013 over-rides on a net basis were not material. Pricing service over-rides, internally developed valuations and indicative broker quotes are generally included in Level 3 in the fair value hierarchy.

The fair value of private fixed maturities, which are comprised of investments in private placement securities, originated by internal private asset managers, are primarily determined using a discounted cash flow model. If the fair value is determined using pricing inputs that are observable in the market, the securities have been reflected within Level 2; otherwise a Level 3 classification is used.

Trading Account Assets – Trading account assets consist primarily of equity securities whose fair values are determined consistent with similar instruments described below under “Equity Securities.”

Equity Securities - Equity securities consist principally of investments in common stock of publicly traded companies, perpetual preferred stock, privately traded securities, as well asmutual fund shares. The fair values of most publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using discounted cash flow, earnings multiple and other valuation models that require a substantial level of judgment around inputs and therefore are classified within Level 3. The fair values of mutual fund shares that transact regularly (but do not trade in active markets because they are not publicly available) are based on transaction prices of identical fund shares and are classified within Level 2 in the fair value hierarchy. The fair values of perpetual preferred stock are based on inputs obtained from independent pricing services that are primarily based on indicative broker quotes. As a result, the fair values of perpetual preferred stock are classified as Level 3.

Derivative Instruments - Derivatives are recorded at fair value either as assets, within “Other long-term investments,” or as liabilities, within “Payables to parent and affiliates,” except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, credit spreads, market volatility, expected returns, non-performance risk (“NPR”), liquidity and other factors. Liquidity valuation adjustments are made to reflect the cost of exiting significant risk positions, and consider the bid-ask spread, maturity, complexity, and other specific attributes of the underlying derivative position.

The majority of the Company's derivative positions are traded in the over-the-counter (“OTC”) derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models that utilize actively quoted or observable market input values from external market data providers, third-party pricing vendors and/or recent trading activity. The Company's policy is to use mid-market pricing in determining its best estimate of fair value. The fair values of most OTC derivatives, including interest rate and cross currency swaps and single name credit default swaps are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models' key inputs include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, NPR, volatility, and other factors.

The Company's cleared interest rate swaps and credit derivatives linked to an index are valued using models that utilize actively quoted or observable market inputs, including overnight indexed swap discount rates,obtained from external market data providers, third-party pricing vendors, and/or recent trading activity. These derivatives are classified as Level 2 in the fair value hierarchy.

To reflect the market's perception of its own and the counterparty's NPR, the Company incorporates additional spreads over LIBOR into the discount rate used in determining the fair value of OTC derivative assets and liabilities that are not otherwise collateralized.

Derivatives classified as Level 3 include structured products. These derivatives are valued based upon models, such as Monte Carlo simulation models and other techniques,that utilize significant unobservable inputs. Level 3 methodologies are validated through periodic comparison of the Company's fair values to external broker-dealer values.As of June 30, 2014 and December 31, 2013, there were no internally valued derivatives with the fair value classified within Level 3, and all other derivatives were classified within Level 2. See Note 5 for more details on the fair value of derivative instruments by primary underlying.

Short-Term Investments - Short-term investments include money market instrumentsand other highly liquid debt instruments. Certain money market instruments are valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1.

Separate Account Assets – Separate Account Assets include fixed maturity securities, treasuries, and equity securities for which values are determined consistent with similar instruments described above under "Fixed Maturity Securities” and “Equity Securities.”

Receivables from Parent and Affiliates - Receivables from Parent and Affiliates carried at fair value include affiliated bonds within the Company's legal entity whose fair value are determined consistent with similar securities described above under “Fixed Maturity Securities” managed by affiliated asset managers.

Reinsurance Recoverables – Reinsurance recoverables carried at fair value include the reinsurance of the Company's living benefit guarantees on certain of its variable annuities. These guarantees are accounted for as embedded derivatives and are described below in "Future Policy Benefits." The reinsurance agreements covering these guarantees are derivatives with fair value determined in the same manner as the living benefit guarantees.

Future Policy Benefits - The liability for future policy benefits primarily includes general account liabilities for the optional living benefit features of the Company's variable annuity contracts, including guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”), accounted for as embedded derivatives. The fair values of the GMAB, GMWB, and GMIWB liabilities are calculated as the present value of future expected benefit payments to contractholders less the present value of assessed rider fees attributable to the optional living benefit feature. This methodology could result in either a liability or contra-liability balance, given changing capital market conditions and various actuarialassumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management judgment.

The significant inputs to the valuation models for these embedded derivatives include capital market assumptions, such as interest ratelevels and volatility assumptions, the Company's market-perceived NPR, as well as actuarially determined assumptions, includingcontractholder behavior, such as lapse rates, benefit utilization rates, withdrawal rates, and mortality rates. Since many of these assumptions are unobservable and are considered to be significant inputs to the liability valuation, the liability included in future policy benefits has been reflected within Level 3 in the fair value hierarchy.

Capital market inputs and actual policyholders' account values are updated each quarter based on capital market conditions as of the end of the quarter, including interest rates, equity markets, and volatility. In the risk neutral valuation, the initial swap curve drives the total return used to grow the policyholders' account value. The Company's discount rate assumption is based on the LIBOR swap curve, adjusted for an additional spread relative to LIBOR to reflect NPR.

Actuarial assumptions, including contractholder behavior and mortality, are reviewed at least annually, and updated based upon emerging experience, future expectations, and other data, including any observable market data. These assumptions are generally updated in the third quarter of each year unless a material change that the Company feels is indicative of a long term trend is observed in an interim period.

Transfers between Levels 1 and 2–Transfers between levels are generally reported at the values as of the beginning of the period in which the transfers occur.Periodically there are transfers between Level 1 and Level 2 for assets held in the Company's Separate Account. The classification of Separate Account funds may vary dependent on the availability of information to the public. Should a fund's net asset value become publicly observable, the fund would be transferred from Level 2 to Level 1. During the six months ended June 30, 2014, $7million was transferred from Level 1 to Level 2. During both the three months ended June 30, 2014 and the three and six months endedJune 30, 2013, there were no transfers between Level 1 and Level 2.

Level 3 Assets and Liabilities by Price Source –The tables below present the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources.

	As of June 30, 2014
		Internal (1)		External (2)		Total
	(in thousands)
Corporate securities	$	100,129	$	1,879	$	102,008
Asset-backed securities		-		74,301		74,301
Cash equivalents		400		-		400
Other long-term investments		-		536		536
Reinsurance recoverables		1,594,311		-		1,594,311
Receivables from parent and affiliates		-		27,762		27,762
Total assets	$	1,694,840	$	104,478	$	1,799,318
Future policy benefits		1,662,957		-		1,662,957
Total liabilities	$	1,662,957	$	-	$	1,662,957
	As of December 31, 2013
		Internal (1)		External (2)		Total
	(in thousands)
Corporate securities	$	94,730	$	2,066	$	96,796
Asset-backed securities		-		63,789		63,789
Equity securities		192		313		505
Other long-term investments		-		486		486
Reinsurance recoverables		748,005		-		748,005
Receivables from parent and affiliates		-		6,347		6,347
Total assets	$	842,927	$	73,001	$	915,928
Future policy benefits		778,226		-		778,226
Total liabilities	$	778,226	$	-	$	778,226

• Represents valuations which could incorporate internally-derived and market inputs. See below for additional information related to internally-developed valuation for significant items in the above table.
• Represents unadjusted prices from independent pricing services and independent non-binding broker quotes where pricing inputs are not readily available.

Quantitative Information Regarding Internally Priced Level 3 Assets and Liabilities – The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities (see narrative below for quantitative information for separate account assets).

	As of June 30, 2014
		Fair Value	Primary Valuation Techniques	Unobservable Inputs	Minimum	Maximum	Weighted Average	Impact of Increase in Input on Fair Value (1)
	(in thousands)
Assets:
Corporate securities	$	100,129	Discounted cash flow	Discount rate	3.50%	10.91%	4.20%	Decrease
Reinsurance recoverables	$	1,594,311	Fair values are determined in the same manner as future policy benefits
Liabilities:
Future policy benefits (2)	$	1,662,957	Discounted cash flow	Lapse rate (3)	0%	11%		Decrease
				NPR spread (4)	0.02%	1.03%		Decrease
				Utilization rate (5)	70%	94%		Increase
				Withdrawal rate (6)	86%	100%		Increase
				Mortality rate (7)	0%	13%		Decrease
				Equity Volatility curve	14%	28%		Increase
	As of December 31, 2013
		Fair Value	Primary Valuation Techniques	Unobservable Inputs	Minimum	Maximum	Weighted Average	Impact of Increase in Input on Fair Value (1)
	(in thousands)
Assets:
Corporate securities	$	94,730	Discounted cash flow	Discount rate	3.73%	12.06%	3.90%	Decrease
Reinsurance recoverables	$	748,005	Fair values are determined in the same manner as future policy benefits
Liabilities:
Future policy benefits (2)	$	778,226	Discounted cash flow	Lapse rate (3)	0%	11%		Decrease
				NPR spread (4)	0.08%	1.09%		Decrease
				Utilization rate (5)	70%	94%		Increase
				Withdrawal rate (6)	86%	100%		Increase
				Mortality rate (7)	0%	13%		Decrease
				Equity Volatility curve	15%	28%		Increase

• Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table.
• Future policy benefits primarily represent general account liabilities for the optional living benefit features of the Company's variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cashflow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
• Base lapse rates are adjusted at the contract level based on a comparison of the benefit amount and the policyholder account value and reflect other factors, such as the applicability of any surrender charges. A dynamic lapse adjustment reduces the base lapse rate when the benefit amount is greater than the account value, as in-the-money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.
• To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. In determining the NPR spread, the Company reflects the financial strength ratings of the Company and its affiliates as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements adjusted for any illiquidity risk premium.
• The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. These assumptions vary based on the product type, the age of the contractholder, and the age of the contract. The impact of changes in these assumptions is highly dependent on the contract type and age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal.
• The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%.
• Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Interrelationships Between Unobservable Inputs—In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another, or multiple, inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:

Corporate Securities—The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term, and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors.

Future Policy Benefits— The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficientcontractholder behavior results in greater in-the-moneyness at the contract level,lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.

Valuation Process for Fair Value Measurements Categorized within Level 3 - The Company has established an internal control infrastructure over the valuation of financial instruments that requires ongoing oversight by its various Business Groups. These management control functions are segregated from the trading and investing functions. For invested assets, the Company has established oversight teams, often in the form of Pricing Committees within each asset management group. The teams, which typically include representation from investment, accounting, operations, legal and other disciplines are responsible for overseeing and monitoring the pricing of the Company's investments and performing periodic due diligence reviews of independent pricing services. An actuarial valuation team oversees the valuation of optional living benefit features of the Company's variable annuity contracts.

The Company has also established policies and guidelines that require the establishment of valuation methodologies and consistent application of such methodologies. These policies and guidelines govern the use of inputs and price source hierarchies and provide controls around the valuation processes. These controls include appropriate review and analysis of investment prices against market activity or indicators of reasonableness, approval of price source changes, price overrides, methodology changes and classification of fair value hierarchy levels. For optional living benefit features of the Company's variable annuity products, the actuarial valuation unit periodically performs baseline testing of contract input data and actuarial assumptions are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data, such as available industry studies. The valuation policies and guidelines are reviewed and updated as appropriate.

Within the trading and investing functions, the Company has established policies and procedures that relate to the approval of all new transaction types, transaction pricing sources and fair value hierarchy coding within the financial reporting system. For variable annuity product changes or new launches of optional living benefit features, the actuarial valuation unit validates input logic and new product features and agrees new input data directly to source documents.

Changes in Level 3 assets and liabilities- The following tables provide summaries of the changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.

				Three Months Ended June 30, 2014
				Fixed Maturities Available-For-Sale							Trading Account Assets - Equity Securities		Equity Securities Available-for -Sale
				Corporate Securities		Asset- Backed Securities			Commercial Mortgage-Backed Securities
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	99,255	$	102,725	$	45,365	$	328	$	192
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		-		-		-
			Asset management fees and other income		-		-		-		-		-
		Included in other comprehensive income (loss)			236		122		-		-		-
	Net investment income				1,249		38		-		-		-
	Purchases				1,751		-		-		-		-
	Sales				-		-		-		-		(192)
	Issuances				-		-		-		-		-
	Settlements				(483)		(25,458)		-		(328)		-
	Transfers into Level 3 (1)				-		489		-		-		-
	Transfers out of Level 3 (1)				-		(3,615)		(45,365)		-		-
Fair Value, end of period assets/(liabilities)				$	102,008	$	74,301	$	-	$	-	$	-
Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	-
			Asset management fees and other income	$	-	$	-	$	-	$	-	$	-
				Three Months Ended June 30, 2014
				Cash Equivalents		Other Long-term Investments		Reinsurance Recoverables			Receivables from parent and affiliates		Future Policy Benefits
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	400	$	520	$	1,344,587	$	8,344		(1,402,029)
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		191,020		-		(199,363)
			Asset management fees and other income		-		7		-		-		-
		Included in other comprehensive income (loss)			-		-		-		68		-
	Net investment income				-		-		-		19,350		-
	Purchases				-		14		58,704		-		-
	Sales				-		-		-		-		-
	Issuances				-		-		-		-		(61,565)
	Settlements				-		(5)		-		-		-
	Transfers into Level 3 (1)				-		-		-		-		-
	Transfers out of Level 3 (1)				-		-		-		-		-
Fair Value, end of period assets/(liabilities)				$	400	$	536	$	1,594,311	$	27,762		(1,662,957)
					.		.		.
Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	204,298	$	-		(213,148)
			Asset management fees and other income	$	-	$	-	$	-	$	-		-

				Six Months Ended June 30, 2014
				Fixed Maturities Available-For-Sale							Trading Account Assets - Equity Securities		Equity Securities Available-for -Sale
				Corporate Securities		Asset- Backed Securities			Commercial Mortgage-Backed Securities
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	96,796	$	63,789	$	-	$	313	$	192
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		-		-		-
			Asset management fees and other income		-		-		-		15		-
		Included in other comprehensive income (loss)			483		300		(83)		-		-
	Net investment income				2,473		82		-		-		-
	Purchases				3,240		14,933		45,448		-		-
	Sales				-		-		-		-		(192)
	Issuances				-		-		-		-		-
	Settlements				(984)		(29,340)		-		(328)		-
	Transfers into Level 3 (1)				-		28,152		-		-		-
	Transfers out of Level 3 (1)				-		(3,615)		(45,365)		-		-
Fair Value, end of period assets/(liabilities)				$	102,008	$	74,301	$	-	$	-	$	-
Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	-
			Asset management fees and other income	$	-	$	-	$	-	$	15	$	-
				Six Months Ended June 30, 2014
				Cash Equivalents		Other Long-term Investments		Reinsurance Recoverables			Receivables from parent and affiliates		Future Policy Benefits
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	-	$	486	$	748,005	$	6,347		(778,226)
	Total gains (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		728,874		1		(761,582)
			Asset management fees and other income		-		(2)		-		-		-
		Included in other comprehensive income (loss)			-		-		-		79		-
	Net investment income				-		-		-		-		-
	Purchases				400		57		117,432		19,350		-
	Sales				-		-		-		-		-
	Issuances				-		-		-		-		(123,149)
	Settlements				-		(5)		-		-		-
	Transfers into Level 3 (1)				-		-		-		1,985		-
	Transfers out of Level 3 (1)				-		-		-		-		-
Fair Value, end of period assets/(liabilities)				$	400	$	536	$	1,594,311	$	27,762		(1,662,957)
					.		.		.
Unrealized gains (losses) for the period relating to those
	Level 3 assets that were still held at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	749,020	$	-		(782,440)
			Asset management fees and other income	$	-	$	-	$	-	$	-		-

					Three Months Ended June 30, 2013
					Fixed Maturities Available-For-Sale							Trading Account Assets - Equity Securities		Other Long Term Investments
					Corporate Securities		Asset Backed Securities		Commercial Mortgage-Backed
					(in thousands)
Fair Value, beginning of period assets/(liabilities)					$	95,575	$	72,740	$	9,106	$	267	$	463
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net			45		-		1		-		(97)
			Asset management fees and other income			-		-		-		12		4
		Included in other comprehensive income (loss)				(3,789)		(151)		-		-		-
	Net investment income					1,176		181		-		-		-
	Purchases					643		18,922		-				37
	Sales					-		-		-		-		-
	Issuances					-		-		-		-		-
	Settlements					(2,434)		(5,606)		-		-		-
	Transfers into Level 3 (1)					4,976		-		-		-		-
	Transfers out of Level 3 (1)					-		-		(9,107)		-		-
Fair Value, end of period assets/(liabilities)					$	96,192	$	86,086	$	-	$	279	$	407
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net		$	-	$	-	$	-	$	-	$	(97)
			Asset management fees and other income		$	-	$	-	$	-	$	11	$	4
					Three Months Ended June 30, 2013
					Reinsurance Recoverables		Receivables from parent and affiliates		Future Policy Benefits
				(in thousands)
Fair Value, beginning of period assets/(liabilities)					$	1,191,409	$	2,000	$	(1,230,323)
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net			(596,967)		-		622,798
			Asset management fees and other income			-		-		-
			Included in other comprehensive income (loss)			-		(4)		-
		Net investment income				-		-		-
		Purchases				59,616		3,254		-
		Sales				-		-		-
		Issuances				-		-		(62,464)
		Settlements				-		-		-
		Transfers into Level 3 (1)				-		-		-
		Transfers out of Level 3 (1)				-		-		-
Fair Value, end of period assets/(liabilities)					$	654,058	$	5,250	$	(669,989)
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net		$	(588,372)	$	-	$	614,035

				Six Months Ended June 30, 2013
				Fixed Maturities Available-For-Sale							Trading Account Assets - Equity Securities		Other Long Term Investments
				Corporate Securities		Asset Backed Securities		Commercial Mortgage-Backed Securities
				(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	95,555	$	69,298	$	-	$	207	$	1,054
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		49		-		-		-		(721)
			Asset management fees and other income		-		-		-		72		37
		Included in other comprehensive income (loss)			(4,060)		11		-		-		-
	Net investment income				2,330		316		17		-		-
	Purchases				1,243		25,980		9,090		-		37
	Sales				-		-		-		-		-
	Issuances				-		-		-		-		-
	Settlements				(3,901)		(9,519)		-		-		-
	Transfers into Level 3 (1)				4,976		-		-		-		-
	Transfers out of Level 3 (1)				-		-		(9,107)		-		-
Fair Value, end of period assets/(liabilities)				$	96,192	$	86,086	$	-	$	279	$	407
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	(721)
			Asset management fees and other income	$	-	$	-	$	-	$	72	$	37
					Six Months Ended June 30, 2013
					Reinsurance Recoverables		Other Assets		Future Policy Benefits
					(in thousands)
Fair Value, beginning of period assets/(liabilities)				$	1,732,094	$	1,995	$	(1,793,136)
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		(1,195,788)		-		1,246,584
			Asset management fees and other income		-		-		-
			Included in other comprehensive income (loss)		-		1		-
		Net investment income			-		-		-
		Purchases			117,752		3,254		-
		Sales			-		-		-
		Issuances			-		-		(123,437)
		Settlements			-		-		-
		Transfers into Level 3 (1)					-		-
		Transfers out of Level 3 (1)			-		-		-
Fair Value, end of period assets/(liabilities)				$	654,058	$	5,250	$	(669,989)
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held
	at the end of the period (2):
		Included in earnings:
			Realized investment gains (losses), net	$	(1,173,117)	$	-	$	1,223,615
			Asset management fees and other income	$	-	$	-	$	-

(1) Transfers into or out of Level 3 are reported as the value as of the beginning of the quarter in which the transfer occurs.

(2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

Transfers – Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotesfor assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company is able to validate

Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. However, in some cases, as described below, the carrying amount equals or approximates fair value.

				June 30, 2014
				Fair Value								Carrying Amount (1)
				Level 1		Level 2		Level 3		Total		Total
			(in thousands)
Assets:
	Commercial mortgage and other loans		$	-	$	2,680	$	441,931	$	444,611	$	414,676
	Policy loans			-		-		12,884		12,884		12,884
	Other long term investments			-		-		2,166		2,166		1,780
	Cash and cash equivalents			202		-		-		202		202
	Accrued investment income			-		27,009		-		27,009		27,009
	Receivables from parent and affiliates			-		12,423		-		12,423		12,423
	Other assets			-		2,935		-		2,935		2,935
		Total assets	$	202	$	45,047	$	456,981	$	502,230	$	471,909
Liabilities:
	Policyholders' account balances - investment contracts		$	-	$	-	$	88,865	$	88,865	$	89,746
	Cash collateral for loaned securities			-		37,404		-		37,404		37,404
	Short-term debt			-		218,897		-		218,897		215,000
	Payables to parent and affiliates			-		32,154		-		32,154		32,154
	Other liabilities			-		88,040		-		88,040		88,040
	Separate account liabilities - investment contracts			-		609		-		609		609
		Total liabilities	$	-	$	377,104	$	88,865	$	465,969	$	462,953

				December 31, 2013
				Fair Value								Carrying Amount (1)
				Level 1		Level 2		Level 3		Total		Total
			(in thousands)
Assets:
	Commercial mortgage and other loans		$	-	$	-	$	422,584	$	422,584	$	398,991
	Policy loans			-		-		12,454		12,454		12,454
	Other long term investments			-		-		1,623		1,623		1,440
	Cash and cash equivalents			1,417		-		-		1,417		1,417
	Accrued investment income			-		32,169		-		32,169		32,169
	Receivables from parent and affiliates			-		10,177		-		10,177		10,177
	Other assets			-		11,190		-		11,190		11,190
		Total assets	$	1,417	$	53,536	$	436,661	$	491,614	$	467,838
Liabilities:
	Policyholders' account balances - investment contracts		$	-	$	-	$	84,153	$	84,153	$	85,672
	Cash collateral for loaned securities			-		47,896		-		47,896		47,896
	Short-term debt			-		218,488		-		218,488		205,000
	Payables to parent and affiliates			-		85,204		-		85,204		85,204
	Other liabilities			-		101,656		-		101,656		101,656
	Separate account liabilities - investment contracts			-		796		-		796		796
		Total liabilities	$	-	$	454,040	$	84,153	$	538,193	$	526,224

• Carrying values presented herein differ from those in the Company's Unaudited Interim Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.

The fair values presented above have been determined by using available market information and by applying market valuation methodologies, as described in more detail below.

Commercial Mortgage and Other Loans

The fair value of most commercial mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate plus an appropriate credit spread for similar quality loans. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology.

Policy Loans

Policy loans carrying value approximates fair value.

Other Long-term Investments

Other long-term investments include investments in joint ventures and limited partnerships. The estimated fair values of these cost method investments are generally based on the Company's share of the net asset value (“NAV”) as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. No such adjustments were made as of June 30, 2014 and December 31, 2013.

Cash and Cash Equivalents, Accrued Investment Income, Receivables from Parent and Affiliates, and Other Assets

The Company believes that due to the short-term nature of certain assets, the carrying value approximates fair value. These assets include: cash, accrued investment income, and other assets that meet the definition of financial instruments, including receivables such as unsettled trades and accounts receivable.

Policyholders' Account Balances – Investment Contracts

Only the portion of policyholders' account balances related to products that are investment contracts (those without significant mortality or morbidity risk) are reflected in the table above. For fixed deferred annuities and payout annuities and other similar contracts without life contingencies, fair values are derived using discounted projected cash flows based on interest rates that are representative of the Company's financial strength ratings, and hence reflect the Company's own NPR.For those balances that can be withdrawn by the customer at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value.

Cash Collateral for Loaned Securities

Cash collateral for loaned securities represents the collateral received or paid in connection with loaning or borrowing securities. For these transactions, the carrying value of the related asset/liability approximates fair value as they equal the amount of cash collateral received or paid.

Debt

The fair value of short term and long−term debt is generally determined by either prices obtained from independent pricing services, which are validated by the Company, or discounted cash flow models. These fair values consider the Company's own NPR. Discounted cash flow models predominately use market observable inputs such as the borrowing rates currently available to the Company for debt and financial instruments with similar terms and remaining maturities.

Other Liabilities and Payables to Parent and Affiliates

Other liabilities and Payables to Parent and Affiliates are primarily payables, such as unsettled trades, drafts, escrow deposits and accrued expense payables. Due to the short term until settlement of most of these liabilities, the Company believes that carrying value approximates fair value.

Separate Account Liabilities–Investment Contracts

Only the portion of separate account liabilities related to products that are investments contracts are reflected in the table above. Separate account liabilities are recorded at the amount credited to the contractholder, which reflects the change in fair value of the corresponding separate account assets including contractholder deposits less withdrawals and fees. Therefore, carrying value approximates fair value.

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Quarterly Results of Operations (Unaudited) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
QuarterlyFinancialDataAbstract
Total revenues	$ 309,786	$ 283,524	$ 621,035	$ 574,100
Total benefits and expenses	242,370	96,720	459,266	189,910
Income Loss From Continuing Operations Before Income Taxes And Operating Joint Ventures	67,416	186,804	161,769	384,190
Net income	$ 57,431	$ 143,670	$ 134,929	$ 291,058

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Investments (Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Allowance for Credit Losses:
Ending Balance: Individually evaluated for impairment	$ 0	[1]	$ 0	[1]
Ending Balance: collectively evaluated for impairment	1,256	[2]	1,256	[2]
Total	1,256		1,256
Recorded Investment:
Ending balance gross of reserves: individually evaluated for impairment	0	[1],[3]	0	[1],[3]
Ending balance gross of reserves: collectively evaluated for impairment	415,932	[2],[3]	400,247	[2],[3]
Total	415,932	[3]	400,247	[3]
Agricultural Property Loans [Member]
Allowance for Credit Losses:
Ending Balance: collectively evaluated for impairment	100		100
Recorded Investment:
Ending balance gross of reserves: collectively evaluated for impairment	55,000		52,000
Uncollateralized Loans [Member]
Recorded Investment:
Ending balance gross of reserves: collectively evaluated for impairment	$ 3,000		$ 3,000

[1] _____________ There were no loans individually evaluated for impairments at June 30, 2014 and December 31, 2013.

[2] Agricultural loans collectively evaluated for impairment had a recorded investment of $55 million and $52 million at June 30, 2014 and December 31, 2013, respectively, and a related allowance of $0.1 million for both periods. Uncollateralized loans collectively evaluated for impairment had a recorded investment of $3 million at both June 30, 2014 and December 31, 2013 and no related allowance for both periods.

[3] Recorded investment reflects the balance sheet carrying value gross of related allowance.

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Investments (Reclassifications of AOCI) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014		Jun. 30, 2014		Jun. 30, 2013
OCI Unrealized Gain Loss On Cash Flow Hedges Net Of Tax
Amount Reclassified from AOCI	$ (19)	[1],[2],[3]	$ (34)	[1],[2],[3]
OCI Unrealized Gain Loss On Available For Sale Securities Arising During Period Net Of Tax
Amount Reclassified from AOCI	90	[1],[2]	911	[1],[2]
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Amount Reclassified from AOCI	(71)	[1],[2],[4]	(877)	[1],[2],[4],[5]	(7,809)	[5]
Accumulated Other Comprehensive Income (loss) [Member]
Amount Reclassified from AOCI	$ (71)	[1],[2]	$ (877)	[1],[2]	$ (7,809)

[1] _____________ All amounts are shown before tax.

[2] Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

[3] See Note 5 for additional information on cash flow hedges.

[4] See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs and future policy benefits.

[5] Includes cash flow hedges of ($4) million as of both June 30, 2014 and December 31, 2013 and ($1) million and ($3) million as of June 30, 2013 and December 31, 2012, respectively

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Investments (Fixed Maturities and Equity Securities Excluding Investments Classified as Trading) (Details) (USD $)	Jun. 30, 2014		Dec. 31, 2013
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	$ 2,784,393,000		$ 3,079,002,000
Available-for-sale equity securities amortized cost basis	14,000		206,000
Fair Value, Fixed maturities, available for sale	3,015,527,000		3,264,216,000
Equity securities, available for sale	17,000		208,000
Net unrealized gains on impaired securities relating to changes in value of securities subsequent to the impairment measurement date	100,000		1,700,000
Fixed Maturities [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	2,784,393,000		3,079,002,000
Gross Unrealized Gains	234,021,000		207,110,000
Gross Unrealized Losses	2,887,000		21,896,000
Fair Value, Fixed maturities, available for sale	3,015,527,000		3,264,216,000
Other-than-temporary impairments in AOCI	78,000	[1]	1,391,000	[2]
Fixed Maturities [Member] | US Treasury And Government [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	6,337,000		6,382,000
Gross Unrealized Gains	18,000		36,000
Gross Unrealized Losses	10,000		34,000
Fair Value, Fixed maturities, available for sale	6,345,000		6,384,000
Other-than-temporary impairments in AOCI	0	[1]	0	[2]
Fixed Maturities [Member] | Obligations of U.S. states and their political subdivisions [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	68,339,000		67,225,000
Gross Unrealized Gains	2,353,000		2,911,000
Gross Unrealized Losses	360,000		1,570,000
Fair Value, Fixed maturities, available for sale	70,332,000		68,566,000
Other-than-temporary impairments in AOCI	0	[1]	0	[2]
Fixed Maturities [Member] | Foreign Government Debt Securities [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	25,270,000		25,437,000
Gross Unrealized Gains	6,946,000		5,717,000
Gross Unrealized Losses	0		0
Fair Value, Fixed maturities, available for sale	32,216,000		31,154,000
Other-than-temporary impairments in AOCI	0	[1]	0	[2]
Fixed Maturities [Member] | Public Utilities [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	239,759,000		229,807,000
Gross Unrealized Gains	25,945,000		17,048,000
Gross Unrealized Losses	638,000		3,190,000
Fair Value, Fixed maturities, available for sale	265,066,000		243,665,000
Other-than-temporary impairments in AOCI	0	[1]	0	[2]
Fixed Maturities [Member] | Corporate Debt Securities [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	1,823,344,000		2,029,720,000
Gross Unrealized Gains	172,542,000		158,360,000
Gross Unrealized Losses	1,404,000		9,103,000
Fair Value, Fixed maturities, available for sale	1,994,482,000		2,178,977,000
Other-than-temporary impairments in AOCI	0	[1]	0	[2]
Fixed Maturities [Member] | Asset-backed Securities [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	165,680,000	[3]	182,888,000	[3]
Gross Unrealized Gains	7,043,000	[3]	6,513,000	[3]
Gross Unrealized Losses	220,000	[3]	1,509,000	[3]
Fair Value, Fixed maturities, available for sale	172,503,000	[3]	187,892,000	[3]
Other-than-temporary impairments in AOCI	40,000	[1],[3]	1,351,000	[2],[3]
Fixed Maturities [Member] | Commercial Mortgage Backed Securities [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	316,199,000		384,764,000
Gross Unrealized Gains	11,799,000		11,387,000
Gross Unrealized Losses	255,000		5,518,000
Fair Value, Fixed maturities, available for sale	327,743,000		390,633,000
Other-than-temporary impairments in AOCI	0	[1]	0	[2]
Fixed Maturities [Member] | Residential Mortgage Backed Securities [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fixed maturities, available-for-sale, amortized cost	139,465,000	[4]	152,779,000	[4]
Gross Unrealized Gains	7,375,000	[4]	5,138,000	[4]
Gross Unrealized Losses	0	[4]	972,000	[4]
Fair Value, Fixed maturities, available for sale	146,840,000	[4]	156,945,000	[4]
Other-than-temporary impairments in AOCI	38,000	[1],[4]	40,000	[2],[4]
Equity Securities Available For Sale [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Available-for-sale equity securities amortized cost basis	14,000		206,000
Gross Unrealized Gains	3,000		2,000
Gross Unrealized Losses	0		0
Equity securities, available for sale	17,000		208,000
Equity Securities Available For Sale [Member] | Public Utilities [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Available-for-sale equity securities amortized cost basis	0		192,000
Gross Unrealized Gains	0		0
Gross Unrealized Losses	0		0
Equity securities, available for sale	0		192,000
Equity Securities Available For Sale [Member] | Industrial, Miscellaneous, and All Others [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Available-for-sale equity securities amortized cost basis	0
Gross Unrealized Gains	0
Gross Unrealized Losses	0
Equity securities, available for sale	0
Equity Securities Available For Sale [Member] | Mutual Fund [Member]
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Available-for-sale equity securities amortized cost basis	14,000		14,000
Gross Unrealized Gains	3,000		2,000
Gross Unrealized Losses	0		0
Equity securities, available for sale	$ 17,000		$ 16,000

[1] Represents the amount of other-than-temporary impairment losses in “AOCI,” which were not included in earnings. Amount excludes $0.1 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.

[2] Represents the amount of other-than-temporary impairment losses in “AOCI,” which were not included in earnings. Amount excludes $1.7 million of net unrealized gains on impaired available-for-sale securities relating to changes in the value of such securities subsequent to the impairment measurement date.

[3] _____________ Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.

[4] Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.