regtofile.htm

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

This document is a supplement to the prospectus dated May 1, 2012 (the “prospectus”) for the Group Variable Universal Life Insurance Contract and Certificates that Prudential offers to you. This supplement is not a complete prospectus, and must be accompanied by the prospectus. The prospectus describes the insurance features and other aspects of the Group Contract and Certificates. In this supplement, we describe the Funds that are available to you under the Group Contract and Certificates.

TABLE OF CONTENTS

Page

Total Annual Fund Operation Expenses	2
The Funds	2
AIM Variable Insurance Funds (INVESCO Variable Insurance Funds)	2
AllianceBernstein Variable Products Series Fund, Inc.	3
American Century Variable Portfolios, Inc.	4
Dreyfus Variable Investment Funds	4
DWS Variable Series II	5
Franklin® Templeton® Variable Insurance Products Trust	5
Janus Aspen Series	6
J.P. Morgan Insurance Trust	7
Lazard Retirement Series, Inc.	8
MFS® Variable Insurance Trust	9
Neuberger Berman Advisers Management Trust	10
PIMCO Variable Insurance Trust	11
T. Rowe Price	11
The Prudential Series Fund	12

The following table describes the Fund fees and expenses that you will pay periodically during the time that you own the Certificate. The table shows the minimum and maximum fees and expenses charged by the Funds. More detail concerning each Fund’s fees and expenses as well as objective and investment strategy is contained in this document and in the prospectus for each Fund.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	2.52%

The Funds

Set out below is a list of each Fund in which the Separate Account may currently invest. Also included are each Fund’s investment objective and principal strategies, investment management fees and other expenses, and its investment adviser/investment manager.

Certain Funds have adopted distribution plans pursuant to the federal securities laws, and under those plans, the Fund may make payments to Prudential and/or its affiliates for certain marketing efforts.

AIM Variable Insurance Funds (INVESCO Variable Insurance Funds)

(Series I Shares)

Invesco V.I. Core Equity Fund: The Fund’s investment objective is long-term growth of capital. The Fund invests, under normal circumstances, at least 80% of net assets (plus borrowings for investment purposes) in equity securities.

Invesco V.I. Government Securities Fund: The Fund’s investment objective is total return, comprised of current income and capital appreciation. The Fund invests, under normal circumstances, at least 80% of net assets (plus borrowings for investment purposes) in debt securities issued, guaranteed or otherwise backed by the U.S. Government or its agencies and instrumentalities.

Invesco V.I. International Growth Fund: The Fund’s investment objective is long-term growth of capital. The Fund’s invests primarily in a diversified portfolio of international equity securities whose issuers are considered by the Fund’s portfolio managers to have strong earnings growth.

Invesco V.I. Small Cap Equity Fund: The Fund’s investment objective is long-term growth of capital. The Fund invests, under normal circumstances, at least 80% of net assets (plus borrowings for investment purposes), in equity securities of small-capitalization issuers.

Invesco V.I. Utilities Fund: The Fund’s investment objective is long-term growth of capital and, secondarily, current income . The Fund invests, under normal circumstance, at least 80% of net assets (plus borrowing for investment purposes) in securities of issuers engaged primarily in utilities-related industries.

Invesco Advisers, Inc. serves as the investment adviser of each of the above-mentioned Funds.

AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (Series I Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses(1)	12b-1 Fees	Total Expenses
Invesco V.I. Core Equity (1)	0.61%	0.28%	--	--	0.89%
Invesco V.I. Government Securities Fund (2)	0.46%	0.29%	--	--	0.75%
Invesco V.I. International Growth Fund	0.71%	0.32%	--	--	1.03%
Invesco V.I. Small Cap Equity Fund (3)	0.74%	0.32%	--	--	1.06%
Invesco V.I. Utilities Fund	0.60%	0.44%	--	--	1.04%

) The Adviser has contractually agreed, through at least April 30, 2013, to waive advisory fees and/or reimburse expenses of Series I shares to the extent necessary to limit Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement of Series I shares to 1.30% of average daily net assets. In determining the Adviser's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement to exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary or non-routine items, including litigation expenses; (v) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of Trustees and Invesco Advisers, Inc. mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2013.

The Adviser has contractually agreed, through at least April 30, 2013, to waive advisory fees and/or reimburse expenses of Series I shares to the extent necessary to limit Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement (subject to the same exclusions discussed above in Note 1) of Series I shares to 0.70% of average daily net assets. Unless the Board of Trustees and Invesco Advisers, Inc. mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2013.

The Adviser has contractually agreed, through at least April 30, 2013, to waive advisory fees and/or reimburse expenses of Series I shares to the extent necessary to limit Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement (subject to the same exclusions discussed above in Note 3) of Series I shares to 1.15% of average daily net assets. Unless the Board of Trustees and Invesco Advisers, Inc. mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2013.

AllianceBernstein Variable Products Series Fund, Inc.

(Class A Shares)

AllianceBernstein VPS International Growth Portfolio: The Portfolio’s investment objective is long-term growth of capital. The Portfolio invests primarily in an international portfolio of equity securities of companies selected by the Adviser for their growth potential within various market sectors. In consultation with the Portfolio’s Investment Advisory Members (oversight group composed of senior investment professionals), sector heads are responsible for the construction of the portfolio. This investment teal allocates the Portfolio’s investments among broad sector groups based on the fundamental company research conducted by the Adviser’s large internal research staff, assessing the current and forecasted investment opportunities and conditions, as well as diversification and risk considerations.

AllianceBernstein VPS Real Estate Investment Portfolio: The Portfolio’s investment objective is total return from long-term growth of capital and income. Under normal circumstances, the Portfolio invests at least 80% of its net assets in equity securities of real estate investment trusts, or REITs, and other real estate industry companies. The Portfolio invests in real estate companies that the Adviser believes have strong property fundamentals and management teams. The Portfolio seeks to invest in real estate companies whose underlying portfolios are diversified geographically and by property type.

AllianceBernstein L.P. ("AllianceBernstein") is the investment adviser to each of the above-mentioned funds.

AllianceBernstein Variable Products Series Fund, Inc. (Class A Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
AllianceBernstein VPS International Growth Portfolio	0.75%	0.19%	--	--	0.94%
AllianceBernstein VPS Real Estate Investment Portfolio	0.55%	0.33%	--	--	0.88%

American Century Variable Portfolios, Inc.

(Class I Shares)

VP Balanced Fund: The fund seeks long-term capital growth and current income by investing approximately 60% of its assets in equity securities and the remainder in bonds and other fixed-income securities.

VP International Fund: The fund seeks capital growth.

VP Value Fund: The fund seeks long-term capital growth. Income is a secondary objective.

American Century Investment Management, Inc. ("ACIM") is the investment adviser to each of the above-mentioned portfolios.

American Century Variable Portfolios, Inc. (Class I Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
VP Balanced Portfolio	0.90%	0.01%	--	--	0.91%
VP International Portfolio	1.40%	0.01%	--	--	1.43%
VP Value	0.98%	0.00%	--	--	0.98%

Dreyfus Variable Investment Funds

(Initial Shares)

Dreyfus Variable Investment Funds (“Dreyfus VIF”)

Dreyfus VIF - International Equity Portfolio: The fund seeks capital growth. The fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in common stocks or securities convertible into common stocks of foreign companies and depositary receipts evidencing ownership in such securities. At least 75% of the fund's net assets will be invested in countries represented in the Morgan Stanley Capital International Europe, Australasia and the Far East (MSCI EAFE®) Index. The fund may invest up to 20% of its assets in emerging market countries. The core of the investment philosophy of Newton Capital Management Limited (Newton), an affiliate of The Dreyfus Corporation and the fund's sub-investment adviser, is the belief that no company, market or economy can be considered in isolation; each must be understood within a global context. Newton believes that a global comparison of companies is the most effective method of stock analysis, researching investment opportunities by global sector rather than by region. The process begins by identifying a core list of investment themes that Newton believes will positively affect certain sectors or industries and cause stocks within these sectors or industries to outperform others. Newton then identifies specific companies using investment themes to help focus on areas where thematic and strategic research indicates superior returns are likely to be achieved. The fund may, but is not required to, use derivatives, such as futures, options and forward contracts, as a substitute for investing directly in and underlying asset or currency, to increase returns, to manage currency risk, or as part of hedging strategy.

The Dreyfus Corporation ("Dreyfus") is the investment adviser to the above-mentioned portfolio. The principal distributor of the portfolio is "MBSC Securities Corporation" ("MBSC"). Dreyfus' and DSC's principal business address is 200 Park Avenue, New York, New York 10166. The sub-adviser for the International Equity Portfolio is Newton Capital Management, Ltd.

The Dreyfus Corporation (Initial Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
Dreyfus Variable Investment Funds
Dreyfus VIF - International Equity	0.75%	0.35%	--	--	1.10%

DWS Variable Series II

(Class A Shares)

DWS Dreman Small Mid Cap Value VIP: The fund seeks long-term capital appreciation. Under normal circumstances, the fund invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in undervalued common stocks of small and mid-size US companies.

DWS Government & Agency Securities VIP: The fund seeks high current income consistent with preservation of capital. Under normal circumstances, the fund invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in US government securities and repurchase agreements of US government securities.

DWS High Income VIP: The fund seeks to provide a high level of current income. Under normal circumstances, the fund generally invests at least 65% of net assets, plus the amount of any borrowings for investment purposes, in junk bonds, which are those rated below the fourth highest credit rating category (that is, grade BB/Ba and below). The fund may invest up to 50% of total assets in bonds denominated in US dollars or foreign currencies from foreign issuers.

DWS Unconstrained Income VIP (formerly DWS Strategic Income VIP): The fund seeks a high total return. Under normal circumstances, the fund invests mainly in fixed income securities issued by both US and foreign corporations and governments. The credit quality of the fund’s investments may vary; the fund may invest up to 100% of total assets in either investment-grade fixed income securities or in junk bonds, which are those below the fourth highest credit rating category (that is, grade BB/Ba and below). The fund may also invest in emerging markets securities, mortgage- and asset-backed securities, adjustable rate loans that have a senior right to payment (“senior loans”) and other floating rate debt securities and dividend-paying common stocks.

The investment advisor of the funds is Deutsche Investment Management Americas Inc. (“Deutsche”). Dreman Value Management L.L.C. (“Dreman”) is the subadvisor to the DWS Dreman Small Mid Cap Value VIP. QS Investors, LLC is the subadviser to the DWS Unconstrained Income VIP.

DWS Variable series ii (Class A Shares)
Fund Name	Investment Management Fees1	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
DWS Dreman Small Mid Cap Value VIP	0.65%	0.16%	0.09%	--	0.90%
DWS Government & Agency Securities VIP1	0.45%	0.22%	--	--	0.67%
DWS High Income VIP	0.50%	0.22%	--	--	0.72%
DWS Unconstrained Income VIP2	0.55%	0.44%	--	--	0.99%

Through April 30, 2013, the Advisor has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the portfolio to the extent necessary to maintain the portfolio's total annual operating expenses at a ratio no higher than 0.66% for Class A shares, excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest. The agreement may only be terminated with the consent of the fund's Board.

Through April 30, 2013, the Advisor has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the portfolio to the extent necessary to maintain the portfolio's total annual operating expenses at a ratio no higher than 0.78% for Class A shares, excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest. The agreement may only be terminated with the consent of the fund's Board.

Franklin® Templeton® Variable Insurance Products Trust

(Class 2 Shares)

Franklin Large Cap Value Securities Fund: Seeks long-term capital appreciation. Under normal market conditions, the fund invests at least 80% of its net assets in investments of large capitalization companies, focusing on those the manager believes to be undervalued.

Franklin Small Cap Value Securities Fund: Seeks long-term total return. Under normal market conditions, the fund invests at least 80% of its net assets in investments of small capitalization companies.

Templeton Developing Markets Securities Fund: Seeks long-term capital appreciation. Under normal market conditions, the fund invests at least 80% of its net assets in emerging market investments.

Templeton Foreign Securities Fund: Seeks long-term capital growth. Under normal market conditions, the fund invests at least 80% of its net assets in investments of issuers located outside the U.S., including those in emerging markets.

Templeton Global Bond Securities Fund: Seeks high current income, consistent with preservation of capital, with capital appreciation as a secondary consideration. Under normal market conditions, the fund invests at least 80% of its net assets in bonds, which include debt securities of any maturity, such as bonds, notes, bills, and debentures. .

Franklin Advisers, Inc. serves as the investment advisor for the Templeton Global Bond Securities Fund. Franklin Advisory Services, LLC serves as the investment advisor for the Franklin Large Cap Value Securities Fund and the Franklin Small Cap Value Securities Fund. Templeton Asset Management Ltd. (Asset Management) serves as the investment advisor for the Templeton Developing Markets Securities Fund. Templeton Investment Counsel, LLC serves as the investment advisor for the Templeton Foreign Securities Fund.

Franklin® Templeton® Variable Insurance Products Trust (Class 2 Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
Franklin Large Cap Value Securities Fund1	0.76%	0.39%	0.01%	0.25%	1.41%
Franklin Small Cap Value Securities Fund2	0.50%	0.16%	0.01%	0.25%	0.92%
Templeton Developing Markets Securities Fund	1.15%	0.25%	--	0.25%	1.65%
Templeton Foreign Securities Fund 2	0.64%	0.15%	0.01%	0.25%	1.05%
Templeton Global Bond Securities Fund1	0.46%	0.10%	--	0.25%	0.81%

1.	The fund administration fee is paid indirectly through the management fee.

2.	The investment manager has contractually agreed in advance to reduce its fees as a result of the Fund's investment in a Franklin Templeton money market fund ("Sweep Money Fund" shown above in column “Acquired portfolio fees and expenses”). This reduction will continue until at least April 30, 2013.

Janus Aspen Series

(Institutional Shares)

Enterprise Portfolio: Seeks long-term growth of capital. The Portfolio pursues its investment objective by investing primarily in common stocks selected for their growth potential, and normally invests at least 50% of its equity assets in medium-sized companies. Medium-sized companies are those whose market capitalization falls within the range of companies in the Russell Midcap Growth Index. Market capitalization is a commonly used measure of the size and value of a company. The Portfolio may invest in foreign equity and debt securities, which may include investments in emerging markets.

Janus Portfolio: Seeks long-term growth of capital. The Portfolio pursues its investment objective by investing primarily in common stocks selected for their growth potential. Although the Portfolio may invest in companies of any size, it generally invests in larger, more established companies. The Portfolio may invest in foreign equity and debt securities, which may include investments in emerging markets.

Overseas Portfolio: Seeks long-term growth of capital. The Portfolio invests, under normal circumstances, at least 80% of its net assets in securities of issuers from countries outside the United States. The Portfolio normally invests in securities of issuers from several different countries, excluding the United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers, and it may, under unusual circumstances, invest all of its assets in a single country. The Portfolio may have significant exposure to emerging markets. The Portfolio may invest in foreign debt securities.

Worldwide Portfolio: Seeks long-term growth of capital. The Portfolio pursues its investment objective by investing primarily in equity securities, which include, but are not limited to, common stocks, preferred stocks, and depositary receipts of companies of any size located throughout the world. The Portfolio normally invests in issuers from several different countries, including the United States. The Portfolio may, under unusual circumstances, invest in a single country. The Portfolio may have significant exposure to emerging markets. The Portfolio may also invest in foreign equity and debt securities.

Janus Capital Management LLC ("Janus Capital") serves as the investment adviser. Janus Distributors LLC serves as the principal underwriter to each of the above-mentioned portfolios.

Janus Aspen Series (Institutional Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses1	12b-1 Fees	Total Expenses
Enterprise Portfolio	0.64%	0.05%	--	--	0.69%
Janus Portfolio	0.56%	0.07%	--	--	0.63%
Overseas Portfolio2	0.60%	0.06%	--	--	0.66%
Worldwide Portfolio	0.66%	0.05%	--	--	0.71%

“Acquired Fund” refers to any underlying fund (including, but not limited to, exchange-traded funds) in which a Portfolio invests or has invested during the period. Acquired fund fees and expenses are indirect expenses a Portfolio may incur as a result of investing in shares of an underlying fund. To the extent a Portfolio invests in Acquired Funds, the Portfolio’s “Total Annual Fund Operating Expenses” may not correlate to the “ratio of gross expenses to average net assets” presented in the Financial Highlights table in the Prospectus because that ratio includes only the direct operating expenses incurred by the Portfolio, not the indirect costs of investing in Acquired Funds. Amounts less than 0.01% are included in Other Expenses.

2.	The Portfolio pays an investment advisory fee rate that adjusts up or down by a variable of up to 0.15% (assuming constant assets) on a monthly basis based upon the Portfolio’s performance relative to its benchmark index during a measurement period.

J.P. Morgan Insurance Trust

(Class I Shares)

JPMorgan Insurance Trust Core Bond Portfolio: Seeks to maximize total return by investing primarily in a diversified portfolio of intermediate- and long-term debt securities. The Portfolio’s average weighted maturity will ordinarily range between four and twelve years, and securities will be rated investment grade (or the unrated equivalent) at the time of purchase. The Portfolio invests at least 80% of its net assets in bonds. Net assets include the amount of borrowings for investment purposes.

JPMorgan Insurance Trust International Equity Portfolio: Seeks to provide high total return from a portfolio of equity securities of foreign companies. Total return consists of capital growth and current income. Under normal conditions, the Portfolio invests at least 80% of the value of its assets in equity investments. Assets means net assets, plus the amount of borrowings for investment purposes. The Portfolio will primarily invest in foreign companies of various sizes, including foreign subsidiaries of U.S. companies. The advisor seeks to diversify the Portfolio by investing in issuers in at least three different countries other than the United States. However, the Portfolio may invest a substantial part of its assets in just one region or country.

JPMorgan Insurance Trust Small Cap Core Portfolio: Seeks capital growth over the long term. Under normal circumstances, the Portfolio invests at least 80% of its Assets in equity securities of small cap companies. Assets means net assets, plus the amount of borrowings for investment purposes. Small cap companies are companies with market capitalizations equal to those within the universe of the Russell 2000® Index at the time of purchase.

JPMorgan Insurance Trust U.S. Equity Portfolio: Seeks to provide high total return from a portfolio of selected equity securities. Under normal circumstances, the Portfolio invests at least 80% of its assets in equity investments of U.S. companies. Assets means net assets, plus the amount of borrowings for investment purposes. In implementing its strategy, the Portfolio primarily invests in common stocks of large-and mid-capitalization U.S. companies but it may also invest up to 20% of its Assets in common stocks of foreign companies, including depositary receipts.

JPMorgan Insurance Trust Intrepid Mid Cap Portfolio: Seeks long-term capital growth by investing primarily in equity securities of companies with intermediate capitalizations. Under normal circumstances, at least 80% of the Portfolio’s Assets will be invested in common and preferred stocks, rights, warrants, convertible securities, and other equity securities of mid-cap companies. Assets means net assets, plus the amount of borrowings for investment purposes. Mid cap companies are companies with market capitalizations similar to those within the universe of the Russell Midcap Index at the time of purchase.

J.P. Morgan Investment Management Inc. ("J.P. Morgan") serves as the investment adviser to each of the above-mentioned portfolios.

J.P. Morgan (Class 1 Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
JPMorgan Insurance Trust Core Bond Portfolio	0.40%	0.21%	--	--	0.61%1
JPMorgan Insurance Trust International Equity Portfolio	0.60%	0.51%	--	--	1.11%2
JPMorgan Insurance Trust Small Cap Core Portfolio	0.65%	0.30%	--	--	0.95%3
JPMorgan Insurance Trust U.S. Equity Portfolio	0.55%	0.24%	--	--	0.79%4
JPMorgan Insurance Trust Intrepid Mid-Cap Portfolio	0.65%	0.43%	--	--	1.08%5

The Portfolio’s adviser and administrator (the Service Providers) have contractually agreed to waive fees and/or reimburse expenses to the extent Total Expenses of Class 1 Shares (excluding acquired fund fees and expenses, dividend expenses related to short sales, interest, taxes, expenses related to litigation and potential litigation, extraordinary expenses and expenses related to the Board of Trustees’ deferred compensation plan) exceed 0.60% of their average daily net assets. This contract cannot be terminated prior to 5/1/13, at which time, the Service Providers will determine whether or not to renew or revise it.

The Portfolio’s adviser and administrator (the Service Providers) have contractually agreed to waive fees and/or reimburse expenses to the extent Total Expenses of Class 1 Shares (excluding acquired fund fees and expenses, dividend expenses related to short sales, interest, taxes, expenses related to litigation and potential litigation, and extraordinary expenses and expenses related to the Board of Trustees’ deferred compensation plan) exceed 1.03% of their average daily net assets. This contract cannot be terminated prior to 5/1/13, at which time, the Service Providers will determine whether or not to renew or revise it.

The Portfolio’s adviser and administrator (the Service Providers) have contractually agreed to waive fees and/or reimburse expenses to the extent Total Expenses of Class 1 Shares (excluding acquired fund fees and expenses, dividend expenses related to short sales, interest, taxes, expenses related to litigation and potential litigation, and extraordinary expenses and expenses related to the Board of Trustees’ deferred compensation plan) exceed 0.80% of their average daily net assets. This contract cannot be terminated prior to 5/1/13, at which time, the Service Providers will determine whether or not to renew or revise it.

The Portfolio’s adviser and administrator (the Service Providers) have contractually agreed to waive fees and/or reimburse expenses to the extent Total Expenses of Class 1 Shares (excluding acquired fund fees and expenses, dividend expenses related to short sales, interest, taxes, expenses related to litigation and potential litigation, and extraordinary expenses and expenses related to the Board of Trustees’ deferred compensation plan) exceed 0.90% of their average daily net assets. This contract cannot be terminated prior to 5/1/13, at which time, the Service Providers will determine whether or not to renew or revise it.

Lazard Retirement Series, Inc.

(Service Shares)

Lazard Retirement Emerging Markets Equity Portfolio: The Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of non-U.S. companies whose principal activities are located in emerging market countries and that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. Under normal circumstances, the Portfolio invests at least 80% of its assets in equity securities of companies whose principal business activities are located in emerging market countries. The allocation of the Portfolio’s assets among emerging market countries may shift from time to time based on the Investment Manager’s judgment and its analysis of market conditions. However, the Portfolio is likely to focus on companies in Latin America, the Pacific Basin and Eastern Europe.

Lazard Retirement International Equity Portfolio: The Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of relatively large non-U.S. companies with market capitalizations in the range of companies included in the Morgan Stanley Capital International (MSCI®) Europe, Australasia and Far East (EAFE®) Index (ranging from approximately $1.4 billion to $196.6 billion as of March 4, 2011) that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. In choosing stocks for the Portfolio, the Investment manager looks for established companies in economically developed countries. The allocation of the Portfolio’s assets among geographic sectors may shift from time to time based on the Investment Manager’s judgment. Under normal circumstances, the Portfolio invests at least 80% of its assets in equity securities.

Lazard Retirement U.S. Small-Mid Cap Equity Portfolio: The Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of small to mid capitalization U.S. companies. The Investment Manager considers "small-mid cap companies" to be those companies that, at the time of initial purchase by the Portfolio, have market capitalizations within the range of companies included in the Russell 2500 Index (ranging from approximately $5 million to $11.2 billion as of March 4, 2011). Because "small-mid cap companies" are defined in part by reference to an index, the market capitalization of companies in which the Portfolio may invest may vary with market conditions. The Investment Manager is not required to sell a company’s securities from the Portfolio’s holdings when the capitalization of that company increases such that the company no longer meets the definition of a "small-mid cap company". Under normal circumstances, the Portfolio invests at least 80% of its assets in equity securities of small-mid cap U.S. companies. The Investment Manager seeks to construct a diversified portfolio of investments for the Portfolio that maintains sector and industry balance, using investment opportunities identified through bottom-up fundamental research conducted by the Investment Manager’s small cap, mid cap and global research platforms. The Investment Manager believes that contribution of ideas from multiple sources within the firm benefits the generation of investment ideas for consideration by the Portfolio’s portfolio management team. Companies selected for investment in the Portfolio generally have, in the Investment Manager’s opinion, one or more of the following characteristics:

•	sustainable returns

•	strong free cash flow with balance sheet flexibility

•	attractive valuation, utilizing peer group and historical comparisons

The Portfolio may invest up to 20% of its assets in equity securities of larger U.S. companies and may invest up to 10% of its total assets in non-U.S. equity securities, including American Depositary receipts (“ADRs”) and Global Depositary Receipts.

Lazard Asset Management LLC ("Lazard"), a Delaware limited liability company, serves as the investment manager and principal underwriter to each of the above-mentioned portfolios.

Lazard Retirement Series, Inc. (Service Shares)
Fund Name	Investment Management Fees	Other Expenses1	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
Emerging Markets Equity Portfolio	1.00%	0.17%	--	0.25%	1.42%
International Equity Portfolio	0.75%	0.12%	--	0.25%	1.12%
U. S. Small-Mid Cap Equity Portfolio	0.75%	0.15%	--	0.25%	1.15%

1.	“Other Expenses” are based on estimated amounts for the current fiscal year, using the “other Expenses” for Service Shares from the last fiscal year.

MFS® Variable Insurance Trust

(Initial Class Shares)

MFS® Research Series: The fund’s investment objective is to seek capital appreciation. MFS normally invests the fund’s assets primarily in equity securities. A team of investment research analysts selects investments for the fund. MFS allocates the fund’s assets to analysts by broad market sectors.

MFS® Research Bond Series: The fund’s investment objective is to seek total return with an emphasis on current income, but also considering capital appreciation. MFS normally invests at least 80% of the fund’s net assets in debt instruments. MFS primarily invests the fund’s assets in investment-grade debt instruments, but may also invest in lower quality debt instruments. A team of investment research analysts selects investments for the fund. MFS allocates the fund’s assets to analysts by broad sectors of the debt market.

MFS® Strategic Income Series: The fund’s investment objective is to seek total return with an emphasis on high current income, but also considering capital appreciation. MFS normally invests the fund’s assets primarily in debt instruments, including lower quality debt instruments. MFS normally invests the fund’s assets in U.S. government securities, foreign government securities, mortgage and asset-backed securities of U.S. and foreign issuers, corporate bonds of U.S. and/or foreign issuers, and/or debt instruments of issuers located in emerging market countries.

The investment adviser for each series is Massachusetts Financial Services Company ("MFS").

MFS® Variable Insurance Trust (Initial Class Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
MFS® Research Series	0.75%	0.13%	--	--	0.88%
MFS® Research Bond Series	0.50%	0.07%	--	--	0.57%
MFS® Strategic Income Series1	0.70%	0.42%	--	--	1.12%

MFS has agreed in writing to bear the fund’s expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs and investment-related expenses (such as interest and borrowing expenses incurred in connection with the fund's investment activity), such that “Total Annual Fund Operating Expenses” do not exceed 0.80% of the fund’s average daily net assets annually for Initial Class shares. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue until at least April 30, 2013.

Neuberger Berman Advisers Management Trust

(Class I Shares)

AMT Growth Portfolio: Seeks growth of capital by investing mainly in common stocks of mid-capitalization companies, which it defines as those with a total market capitalization within the market capitalization range of the Russell Midcap ® Index. The portfolio seeks to reduce risk by diversifying among many companies, sectors and industries.

AMT Large Cap Value Portfolio (formerly AMT Partners Portfolio): Seeks growth of capital by investing mainly in common stocks of mid to large-capitalization companies. The portfolio seeks to reduce risk by diversifying among many companies and industries. The portfolio managers look for well-managed companies with strong balance sheets whose stock prices are believed to be undervalued.

AMT Short Duration Bond Portfolio: Seeks the highest available current income consistent with liquidity and low risk to principal; total return is a secondary goal. To pursue these goals, the portfolio invests mainly in investment-grade bonds and other debt securities from U.S. government and corporate issuers.

AMT Socially Responsive Portfolio: The Fund seeks long-term growth of capital by investing primarily in securities of companies that meet the Fund’s financial criteria and social policy. To pursue this goal, the Fund invests mainly in common stocks of mid- to large-capitalization companies. The Fund seeks to reduce risk by investing across many different industries.

Neuberger Berman Management LLC (“NBM”) serves as the investment manager of the portfolios and is also the principal underwriter of the portfolios.

Neuberger Berman Advisers Management Trust (“AMT”) (Class I Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
AMT Growth Portfolio1	0.85%	1. 67%	--	--	2.52%
AMT Large Cap Value Portfolio1	0.85%	0.28%	--	--	1.13%
AMT Short Duration Bond Portfolio1	0.65%	0.17%	--	--	0.82%
AMT Socially Responsive Portfolio1	0.85%	0.21%	--	--	1.06%

Neuberger Berman Management LLC (“NBM”) has undertaken through December 31, 2014 to waive fees and/or reimburse certain operating expenses, including the compensation of NBM (except with respect to Growth, Short Duration Bond, and Large Cap Value Portfolios) and excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 1% of average daily net asset value of the Growth, Short Duration Bond, and Large Cap Value Portfolios; 1.30% of the average daily net asset value of the Socially Responsive Portfolio. The expense limitation arrangements for the Portfolios are contractual and any excess expenses can be repaid to NBM within three years of the year incurred, provided such recoupment would not cause a Portfolio to exceed its respective limitation.

PIMCO Variable Insurance Trust

(Administrative Class)

All Asset Portfolio: Seeks maximum real return consistent with preservation of real capital and prudent investment management.

Long-Term U.S. Government Portfolio: Seeks maximum total return, consistent with preservation of capital and prudent investment management.

Total Return Portfolio: Seeks maximum total return, consistent with preservation of capital and prudent investment management.

Pacific Investment Management Company LLC. serves as the investment adviser to each of the above-mentioned portfolios.

PIMCO Variable Insurance Trust (Administrative Class)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	Service Fees	12b-1 Fees	Total Expenses
All Asset Portfolio	0.425%	--	0.74%1	0.15%	--	1.315%2,3
Long-Term U.S. Government Portfolio	0.475%	--	--	0.15%	--	0.625%
Total Return Portfolio	0.50%	--	--	0.15%	--	0.65%

Acquired Fund Fees and Expenses include interest expense of 0.02%. Interest expense is based on the amount incurred during an Underlying PIMCO Fund’s most recent fiscal year as a result of entering into certain investments, such as reverse repurchase agreements. Interest expense is required to be treated as an expense of the Underlying PIMCO Fund for accounting purposes and is not payable to PIMCO. The amount of interest expense (if any) will vary based on the Underlying PIMCO Fund’s use of such investments as an investment strategy.

2.	Total Annual Portfolio Operating Expenses excluding interest expense of the Underlying PIMCO Funds is 1.295% for the Administrative Class.

Total Annual Portfolio Operating Expenses do not match the Ratio of Expenses to Average Net Assets of the Portfolio as set forth in the Financial Highlights table of the prospectus, because the Ratio of Expenses to Average Net Assets reflects the operating expenses of the Portfolio and does not include Acquired Fund Fees and Expenses.

T. Rowe Price

T. Rowe Price Equity Series, Inc.

Equity Income Portfolio: The fund seeks to provide substantial dividend income as well as long-term growth of capital through investments in the common stocks of established companies.

New America Growth Portfolio: The fund seeks to provide long-term capital growth by investing primarily in the common stocks of growth companies.

Personal Strategy Balanced Portfolio: The fund seeks the highest total return over time, consistent with an emphasis on both capital appreciation and income.

T. Rowe Price International Series, Inc.

International Stock Portfolio: The fund seeks long-term growth of capital by investing primarily in the common stocks of established non-U.S. companies.

The investment adviser for each portfolio is T. Rowe Price Associates, Inc. ("T. Rowe Price"). T. Rowe Price International Ltd. and T. Rowe Price Singapore Private Ltd. are the subadvisors to the T. Rowe Price International Stock Portfolio. T. Rowe Price is wholly owned by T. Rowe Price Group, Inc., a publicly traded financial services holding company.

T. Rowe Price
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
T. Rowe Price Equity Series. Inc.
Equity Income Portfolio	0.85%	--	--	--	0.85%
New America Growth Portfolio	0.85%	--	--	--	0.85%
Personal Strategy Balanced Portfolio1	0.90%	--	0.12%	--	1.02%1
T. Rowe Price International Series, Inc.
International Stock Portfolio	1.05%	--	--	--	1.05%

1.	Excludes expenses permanently waived 0.10%, 0.08%, 0.04%, 0.02% and 0.02% of average net assets for the years ended 12/31/10, 12/31/09, 12/31/08, 12/31/07, and 12/31/06, respectively, related to investments in T. Rowe Price mutual funds.

The Prudential Series Fund

(Class I Shares)

Conservative Balanced Portfolio: The investment objective of the Portfolio is total investment return consistent with a conservatively managed diversified portfolio. The Portfolio invests in a mix of equity and equity-related securities, debt obligations and money market instruments. Under normal market conditions the portfolio normally invests approximately 50% of its assets inequity and equity-related securities (with a range of 15% to 75%) and approximately 50% of its assets indebt obligations and money market instruments (with a range of 25% to 85%). The percentage of Portfolio assets in each category is adjusted depending on the Portfolio’s expectation regarding the different markets. The Portfolio invests in foreign securities.

Diversified Bond Portfolio: The investment objective of the Portfolio is a high level of income over a longer term while providing reasonable safety of capital. The Portfolio normally invests at least 80% of its investable assets (net assets plus any borrowings made for investment purposes) in high-grade debt obligations and high-quality money market investments. In addition, the Portfolio invests up to 20% of the its investable assets in high-yield/high-risk debt securities (commonly known as “junkbonds”). The Portfolio invests up to 20% of its total assets in debt securities issued outside the U.S. by U.S. or foreign issuers whether or not such securities are denominated in the U.S. dollar.

Equity Portfolio: The investment objective of the Portfolio is long-term growth of capital. The Portfolio normally invests at least 80% of its investable assets (net assets plus any borrowings made for investment purposes) in common stock of major established companies as well as smaller companies. The Portfolio considers major established companies to be those companies with market capitalizations within the market capitalization range of the Russell 1000® Index (measured at the time of purchase). The Portfolio also invests up to 30% of its total assets in foreign securities (not including American Depositary receipts and similar instruments). The Portfolio employs a bottom-up stocks election process and invests in securities and value stocks.

Flexible Managed Portfolio: The investment objective of the Portfolio is total return consistent with an aggressively managed diversified portfolio. The Portfolio invests in a mix of equity and equity-related securities, debt obligations and money market instruments. Under normal market conditions, the Portfolio normally invest approximately 60% of its assets in equity and equity-related securities (with a range of 25% to 100%) and approximately 40% of the its assets in debt obligations and money market instruments (with a range of 0% to 75%). The percentage of Portfolio assets in each category is adjusted depending on the Portfolio’s expectations regarding the different markets. The Portfolio invests in foreign securities. A portion of the debt portion of the Portfolio may be invested in high-yield/high-risk debt securities (commonly known as “junkbonds”).

Global Portfolio The investment objective of the Portfolio is long-term growth of capital. The Portfolio invests approximately 50% of its assets in the equity and equity-related securities of foreign companies and approximately 50% of its assets in the equity and equity-related securities of U.S. companies. Generally, the Portfolio invests in at least three countries, including the U.S., but may invest up to 35% of its assets in companies located in any one country. The 35% limitation does not apply to U.S investments. For these purposes, the Portfolio does not consider American Depositary Receipts (ADRs) and similar receipts or shares traded in the U.S. markets as foreign securities. The

Portfolio has four subadvisers and each subadviser uses either a “growth” approach or a “value” approach in selecting either foreign or U.S. common stocks (for example, one subadviser invests the Portfolio’s assets in U.S. common stocks using a growth approach and the other subadviser who invests the Portfolio’s assets in U.S. common stocks uses a value approach).

Government Income Portfolio: The investment objective of the Portfolio is a high level of income over the long term consistent with the preservation of capital. The Portfolio normally invest at least 80% of its investable assets (net assets plus any borrowings made for investment purposes) in U.S. Government securities, including U.S. Treasury securities, debt obligations issued or guaranteed by agencies or instrumentalities established by the U.S. Government, and mortgage-backed securities issued by U.S. Government instrumentalities. The Portfolio invests up to 20% of investable assets in other securities, including corporate debt securities and asset-backed securities.

High Yield Bond Portfolio: The investment objective of the Portfolio is a high total return. The Portfolio normally invests at least 80% of the Portfolio’s investable assets (net assets plus any borrowings made for investment purposes) in high-yield/high-risk debt investments, which are often referred to as “junk bonds”. The Portfolio also invests up to 20% of its total assets in foreign debt obligations.

Jennison Portfolio: The investment objective of the Portfolio is long-term growth of capital. The Portfolio normally invests at least 65% of its total assets in equity and equity-related securities of companies that exceed $1 billion in market capitalization at the time of investment and that the Portfolio believes have above-average growth prospects. The Portfolio selects stocks on a company-by-company basis using fundamental analysis and look for companies with some or all of the following: high sales growth, high unit growth, high or improving returns on assets and equity and a strong balance sheet. Often a company selected by the Portfolio has a defendable competitive position, enduring business franchise, differentiated product or service and/or proven management team. The Portfolio invests up to 30% of its assets in foreign securities.

Jennison 20/20 Focus Portfolio: The investment objective of the Portfolio is long-term growth of capital. The Portfolio invests primarily in approximately 40 (which may temporarily range up to 45) equity and equity-related securities of U.S. companies that are selected by the Portfolio’s two portfolio managers (approximately 20 by each) a shaving strong capital appreciation potential. Each portfolio manager is responsible for selecting the securities within his discipline. The value portfolio manager seeks to invest in companies valued at a discount to their true worth, as defined by the value of their earnings, free cash flow, assets, private market value, or some combination of these factors, which also possess identifiable catalysts which can help unlock their true worth. The growth portfolio manager seeks to invest in companies with growth in units, revenues, cash flows and/or earnings; defendable competitive positions and enduring business franchises that offer a differentiated product and/or service; proven management teams; robust balance sheets; high or improving return on equity; above average return on assets or invested capital; sustainable earnings growth superior to the market average and duration of that growth rate; and appropriate valuations. Up to 20% of the Portfolio’s total assets may be invested in foreign securities.

Money Market Portfolio: The investment objective of the Portfolio is maximum current income that is consistent with the stability of capital and the maintenance of liquidity. The Portfolio invests in high-quality, short-term money market instruments issued by the U.S. Government or its agencies and instrumentalities which include direct obligations issued by the U.S. Treasury and obligations of certain entities that may be chartered or sponsored by acts of Congress, such as the Government National Mortgage Association (GNMA), the Farmers Home Administration, the Export-Import Bank, the Small Business Administration and senior unsecured debt guaranteed under the Federal Deposit Insurance Corporation’s Temporary Liquidity Guarantee Program (which consists of qualifying debt of eligible institutions, including, among others, U.S. bank holding companies and insured depository institutions). The Fund may also invest in obligations issued by other U.S. Government entities that may be chartered or sponsored by Acts of Congress, but which are not backed by the full faith and credit of the United States and obligations issued by foreign banks, companies or foreign governments. The Portfolio will invest only in instruments with a remaining maturity of 397 days or less, and which are denominated in U.S. dollars.

Natural Resources Portfolio: The investment objective of the Portfolio is long-term growth of capital. The Portfolio normally invests at least 80% of its investable assets (net assets plus any borrowings made for investment purposes) in common stocks and convertible securities of natural resource companies and securities that are related to the market value of some natural resource. Natural resource companies are companies that primarily own, explore, mine, process or otherwise develop natural resources, or supply goods and services to such companies. Natural resources generally include precious metals, such as gold, silver and platinum, ferrous and nonferrous metals, such as iron, aluminum and copper, strategic metals such as uranium and titanium, hydrocarbons such as coal and oil, timberland, undeveloped real property and agricultural commodities. The Portfolio seeks securities with an attractive combination of valuation versus peers, organic reserve and production growth, and competitive unit cost structure. Up to 50% of the Portfolio’s total assets may be invested in foreign equity and equity-related securities.

Small Capitalization Stock Portfolio: The investment objective of the Portfolio is long-term growth of capital. The Portfolio invests primarily in equity securities of publicly-traded companies with small market capitalizations. With the price and yield performance of the Standard & Poor’s Small Capitalization 600 Stock Index (the S&P Small Cap 600 Index) as our benchmark, the Portfolio normally invests at least 80% of the Portfolio’s investable assets (net assets plus any borrowings made for investment purposes) in all or a representative sample of the stocks in the S&P Small Cap 600 Index. The Portfolio is not “managed” in the traditional sense of using market and economic analyses to select stocks. Rather, the holdings and weights in the portfolio are generally based on that of the benchmark S&P Small Cap 600 Index.

Stock Index Portfolio: The investment objective of the Portfolio is to achieve investment results that generally correspond to the performance of publicly-traded common stocks. With the price and yield performance of the Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index) as our benchmark, the Portfolio normally invest at least 80% of the Portfolio’s investable assets (net assets plus any borrowings made for investment purposes) in S&P 500 stocks. The S&P 500 Index represents more than 70% of the total market value of all publicly-traded common stocks and is widely viewed as representative of publicly-traded common stocks as a whole. The Portfolio is not “managed” in the traditional sense of using market and economic analyses to select stocks. Rather, the portfolio manager generally purchases stocks in proportion to their weighting in the S&P 500 Index.

Value Portfolio: The investment objective of the Portfolio is capital appreciation. The Portfolio normally invests at least 65% of its total assets in equity and equity-related securities. Most of our investments will be securities of large capitalization companies. The Portfolio defines large capitalization companies as those companies with market capitalizations, measured at the time of purchase, to be within the market capitalization of the Russell 1000® Value Index. The Portfolio invests primarily in equity and equity-related securities that it believes are undervalued - those securities that are trading below their underlying asset value, cash generating ability and overall earnings and earnings growth, and that also have identifiable catalysts which may be able to close the gap between the price and what the Portfolio believes to be the true worth of the company. The Portfolio may invest up to 25% of its total assets in real estate investment trusts (REITs) and up to 30% of its total assets in foreign securities.

Investment Manager

Prudential Investments LLC (“PI”) serves as the investment manager of the Series Fund Portfolios.

The investment management agreements for The Prudential Series Fund provide that the investment manager or co-investment managers (the “Investment Managers”) will furnish each applicable Portfolio with investment advice and administrative services subject to the supervision of the Board of Trustees and in conformity with the stated policies of the applicable Portfolio. The Investment Manager must also provide, or obtain and supervise, the executive, administrative, accounting, custody, transfer agent and shareholder servicing services that are deemed advisable by the Board.

Investment Subadvisers

Jennison Associates LLC (“Jennison”), an indirect, wholly-owned subsidiary of Prudential Financial, Inc., serves as the subadviser for the Equity Portfolio, Jennison Portfolio, the Jennison 20/20 Focus Portfolio, the Natural Resources Portfolio, and the Value Portfolio.

Prudential Investment Management, Inc. (“PIM”), an indirect, wholly-owned subsidiary of Prudential Financial, Inc., serves as the subadviser for the Diversified Bond Portfolio, the Government Income Portfolio, the High Yield Bond Portfolio, and the Money Market Portfolio. PIM also serves as a subadviser for a portion of the assets of the Conservative Balanced Portfolio, and the Flexible Managed Portfolio.

Quantitative Management Associates LLC (“QMA”), a wholly-owned subsidiary of PIM, serves as the subadviser for the Small Capitalization Stock Portfolio and the Stock Index Portfolio. QMA also serves as a subadviser for a portion of the assets of the Conservative Balanced Portfolio, the Flexible Managed Portfolio, and the Global Portfolio.

LSV Asset Management (“LSV”) serves as a subadviser for a portion of the assets of the Global Portfolio.

Marsico Capital Management, LLC (“MCM”) serves as a subadviser for a portion of the assets of the Global Portfolio.

T. Rowe Price Associates, Inc. (“T. Rowe Price”) serves as the subadviser for a portion of the assets of the Global Portfolio.

William Blair & Company LLC (“William Blair”) serves as a subadviser for a portion of the assets of the Global Portfolio.

The Prudential Series Fund (Class I Shares)
Fund Name	Investment Management Fees	Other Expenses	Acquired Portfolio Fees and Expenses	12b-1 Fees	Total Expenses
Conservative Balanced Portfolio	0.55%	0.04%	--	--	0.59%
Diversified Bond Portfolio	0.40%	0.03%	--	--	0.43%
Equity Portfolio	0.45%	0.03%	--	--	0.48%
Flexible Managed Portfolio	0.60%	0.03%	--	--	0.63%
Global Portfolio	0.75%	0.09%	--	--	0.84%
Government Income Portfolio	0.40%	0.06%	--	--	0.46%
High Yield Bond Portfolio	0.55%	0.03%	--	--	0.58%
Jennison Portfolio	0.60%	0.04%	--	--	0.64%
Jennison 20/20 Focus Portfolio	0.75%	0.05%	--	--	0.80%
Money Market Portfolio	0.40%	0.02%	--	--	0.42%
Natural Resources Portfolio	0.45%	0.05%	--	--	0.50%
Small Capitalization Stock Portfolio	0.40%	0.08%	--	--	0.48%
Stock Index Portfolio	0.35%	0.03%	--	--	0.38%
Value Portfolio	0.40%	0.03%	--	--	0.43%

A complete description of the Funds, their objectives and investment strategies can be found in the respective Fund prospectuses, which can be obtained by calling our Customer Service Center at (800) 562-9874. You should read the Fund prospectuses before you decide to allocate assets to a variable investment option. There is no assurance that the investment objectives of the Funds will be met.

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract for

Executive GVUL

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	4
Service Fees Payable to Prudential	6
Charges	6
Eligibility and Enrollment	8
“Free Look” Period	8
Maximum Age	8
Coverage Information	8
Changes in Face Amount	8
Definition of Life Insurance	9
Additional Insurance Benefits	9
Lapse and Reinstatement	9
Loans	9
Surrender Charge	9
Additional Premium Payments	9
Exclusions	9
Changes in Personal Status	9

Table of Contents of the Fund Prospectuses

	AllianceBernstein Variable Products Series Fund, Inc.:			Appendix 1
			AllianceBernstein VPS Real Estate Investment Portfolio
	DWS Variable Series II:			Appendix 2
		DWS Dreman Small Mid Cap Value VIP
DWS Variable Series II:				Appendix 3
		DWS Government & Agency Securities VIP
Franklin Templeton Variable Insurance Products Trust:				Appendix 4
		Templeton Foreign Securities Fund
Lazard Retirement Series, Inc.:				Appendix 5
		Lazard Retirement Emerging Markets Equity Portfolio
MFS® Variable Insurance Trustsm:				Appendix 6
		MFS Research Bond Series
T. Rowe Price Equity Series, Inc.:				Appendix 7
		Equity Income Portfolio
T. Rowe Price Equity Series, Inc.:				Appendix 8
		New America Growth Portfolio
T. Rowe Price International Series, Inc.:				Appendix 9
		International Stock Portfolio

The Prudential Series Fund Portfolio:

Appendix 10

Conservative Balanced

Diversified Bond Portfolio

Equity Portfolio

Government Income Portfolio

High Yield Bond Portfolio

Jennison Portfolio

Money Market Portfolio

Small Capitalization Portfolio

Stock Index Portfolio

Value Portfolio

Benefits and Risks

The prospectus contains a summary of the risks and benefits that are associated with purchasing and owning Group Variable Universal Life insurance. You must read the prospectus and this supplement together to fully understand how Group Variable Universal Life Insurance works.

Fee Tables

The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering a Certificate. In several instances we use the terms “maximum” and “current charge.” The “maximum” in each instance is the highest charge that we are entitled to make under the Group Contract. The “current charge” is the amount that we are now charging. If circumstances change, we reserve the right to increase each current charge up to the maximum, without giving any advance notice.

The first table describes the fees and expenses that you will pay at the time you buy the Certificate, pay premiums, make transfers between investment options, take a loan, or surrender the Certificate.

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5% Current – 0.0%.
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Current – 2.60%
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum - the lesser of $20 and 2% of the amount withdrawn. Current - $0.00.
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate year.	Maximum - $10 per transfer after the twelfth. Current - $0.00
Charge for Additional Statements	This charge is assessed each time you request an additional statement.	Maximum - $20 per statement Current - $0.00

For these purposes, “taxes attributable to premiums” shall include any federal, state or local income, premium, excise, business, or any other type of tax (or component thereof) measured by or based upon the amount of premium received by Prudential. In some states, this is called a premium based administrative charge. Currently the amount deducted is 2.60% of each premium payment. However, this amount is subject to change, based on state, local and federal tax rates.

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum - $3.00 Current - $3.00
*Cost of Insurance2
Minimum and Maximum Guaranteed Charge	Monthly	Maximum - $50.48 Minimum - $0.04 Representative guaranteed charge - $0.694
Net Interest on Loans5	Annually	2%
*Additional Insurance Benefits3:
Child Dependents Term Life Insurance	Monthly	Maximum - $0.126 Minimum - $0.126
		Representative current charge - $0.127
Spouse Dependents Term Life Insurance	Monthly	Maximum - $2.506 Minimum - $0.066
		Representative current charge - $0.258
AD&D on employee’s life	Monthly	Maximum - $0.026 Minimum - $0.026 Representative current charge - $0.027
Waiver Benefit	Monthly	Maximum - $0.066 Minimum - $0.016 Representative current charge - $0.037

The charges shown for Cost of Insurance and AD&D on employee’s life are expressed as rates per $1,000 of Net Amount at Risk. The charges shown for Spouse and Child Term Insurance are expressed as rates per unit. One unit includes $5,000 spouse coverage, $100 child coverage if the child is less than 6 months old, and $4,000 child coverage if the child is 6 months old and over.

1.	The daily charge is based on the effective annual rate shown.

2.	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3.	These benefits may not be available to some groups.

The representative guaranteed charge for cost of insurance is a sample guaranteed maximum rate charged for a 51 year old insured. The representative guaranteed charge of the cost of insurance may vary by Executive GVUL contract based on age, most common rating class of actual certificates, and demographics of the group.

5.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

6.	These are the maximum and minimum rates currently charged on one of our existing Executive Group contracts. The contract does not specify a guaranteed maximum or minimum rate for additional insurance benefits.

7.	The representative current charge for additional insurance benefits are sample rates currently charged on one of our existing Group contracts.

8.	The representative current charge for spouse term insurance is a sample rate currently charged on one of our existing Executive GVUL contracts for a 51 year old insured, who is the spouse of an active employee.

The next table describes the Fund fees and expenses that you will pay periodically during the time that you own the Certificate. The table shows the minimum and maximum fees and expenses charged by the Portfolio Companies for the Funds available under your plan. More detail concerning each Fund’s fees and Expenses, as well as objective and investment strategy is contained in the Prospectus for each Fund.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	1.42%

Portfolio Companies

Set out below is a list of each available Fund and its investment adviser/investment manager.

The Funds

Each of these Funds is detailed in separate prospectuses that are provided with this prospectus. You should read the Fund prospectuses before you decide to allocate assets to the variable investment options. There is no assurance that the investment objectives of the variable investment options will be met. There may be Portfolios or Funds described in the accompanying Fund prospectuses that are not available in this product. Please refer to the list below to see which variable investment options you may choose.

The terms “Fund” and “Portfolio” are largely used interchangeably. Some of the variable investment options use the term “Fund”, and others use the term “Portfolio” in their respective prospectuses.

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

The charts below reflect the variable investment options in which the Account invests, their investment objectives, and each variable investment option’s investment advisers and investment subadvisers. The full names of the investment subadvisers and investment advisers are listed immediately following each chart. For Portfolios with multiple subadvisers, each subadviser manages a portion of the assets for that Portfolio.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
Conservative Balanced: Total investment return consistent with a conservatively managed diversified portfolio.	Balanced	PIM QMA
Diversified Bond: High level of income over a longer term while providing reasonable safety of capital.	Fixed Income - Corporate	PIM
Equity: Long-term growth of capital.	Large-Cap Core	Jennison
Government Income: High level of income over the long term consistent with the preservation of capital.	Fixed Income - Government	PIM

High Yield Bond: High total return.	Fixed Income – High Yield	PIM
Jennison: Long-term growth of capital.	Large-Cap Growth	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Small Capitalization Stock: Long-term growth of capital.	Small-Cap Core	QMA
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA
Value: Capital appreciation.	Large-Cap Value	Jennison

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
AllianceBernstein Real Estate Investment Portfolio1: Total return from long-term growth of capital and income.	Sector	AllianceBernstein
DWS Dreman Small Mid Cap Value1: Long-term capital appreciation.	Multi-Cap Value	Deutsche
DWS Government & Agency Securities VIP1: High current income consistent with preservation of capital.	Fixed Income – Government	Deutsche
Templeton Foreign Securities Fund2: Long-term capital growth.	International – Equity	Investment Counsel
Lazard Retirement Emerging Markets Equity Portfolio3: Long-term capital appreciation.	International – Equity	Lazard
MFS Research Bond Series4: Total return with an emphasis on high current income, but also considering capital appreciation.	Fixed Income – Corporate	MFS
T. Rowe Price Equity Income Portfolio: Substantial dividend income as well as long-term growth of capital.	Large –Cap Value	T. Rowe Price
T. Rowe International Stock Portfolio: Long-term growth of capital.	International – Equity	T. Rowe Price
T. Rowe New America Growth Fund: Long-term capital growth.	Multi-Cap Growth	T. Rowe Price

1.	Class A Shares

2.	Class 2 Shares

3.	Service Shares

4.	Initial Class Shares

Investment Advisers for Unaffiliated Funds / Portfolios

·	AllianceBernstein L.P. (“AllianceBernstein”)

·	Deutsche Investment Management Americas Inc. (“Deutsche”)

·	Lazard Asset Management LLC ("Lazard")

·	Massachusetts Financial Services Company ("MFS")

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

·	Templeton Investment Counsel, LLC (“Investment Counsel”)

Service Fees Payable to Prudential

Prudential has entered into agreements with the investment adviser or distributor of the underlying funds. Under the terms of these agreements, Prudential provides administrative and support services to the funds for which it receives an annual fee based on the average assets allocated to the Fund or portfolio under the Contract from the investment adviser, distributor and/or the Fund. These agreements, including the fees paid and services provided, can vary for each underlying mutual fund whose Funds are offered as investment options.

Prudential and/or our affiliates may receive substantial and varying administrative service payments and Rule 12b-1 fees from certain underlying Funds or related parties. These types of payments and fees are sometimes referred to as “revenue sharing” payments. Rule 12b-1 fees and administrative service payments partially compensate for distribution, marketing, and/or servicing functions and for providing administrative services with respect to Contract owners invested indirectly in the Fund, which include duties such as recordkeeping, shareholder services, and the mailing of periodic reports. We receive administrative services fees with respect to both affiliated underlying Funds and unaffiliated underlying Funds. The administrative services fees we receive from affiliates originate from the assets of the affiliated Fund itself and/or the assets of the Fund’s investment adviser. In either case, the existence of administrative services fees may tend to increase the overall cost of investing in the Fund. The existence of a 12b-1 fee will always increase the overall cost of investing in those funds. In addition, because these fees are paid to us, allocations you make to these affiliated underlying Funds may benefit us financially if these fees exceed the costs of the administrative support services.

The 12b-1 fees and administrative services fees that we receive may vary among the different fund complexes that are part of our investment platform. Thus, the fees we collect may be greater or smaller, based on the Funds that you select. In addition, we may consider these payments and fees, among a number of factors, when deciding to add or keep a Fund on the “menu” of Funds that we offer through the product. We collect these payments and fees under agreements between us and a Fund’s principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund. As of May 1, 2012, the administrative service fees we receive range from 0.05% to 0.25% of the average assets allocated to the Fund. The service fees received from The Prudential Series Fund are 0.05%. Some funds pay a 12b-1 fee instead of, or in addition to, the administrative services fees. The 12b-1 fee we receive is equal to 0.25% of the average assets allocated to the Funds indicated below.

The following Portfolios currently pay a 12b-1 fee:

·	Franklin Templeton Foreign Securities

·	Lazard Retirement Emerging Markets Equity

Charges

The current charges under your Group Contract are as follows:

Charge for Taxes Attributable to Premiums

We will deduct a charge for taxes attributable to premiums. These taxes include federal, state or local income, premium, excise, business or any other type of tax (or part of one) that is based on the amount of premium we receive.

This charge is currently made up of two parts:

·	The first part is for state and local premium taxes. Currently, it is 2.25% of the premium Prudential receives. (In some states, this charge is called a premium-based administrative charge.) The rates are subject to change based on local, state and federal tax rates.

The second part

is for federal income taxes measured by premiums. Currently, it is 0.35% of premiums received by Prudential. We believe that this second charge is a reasonable estimate of an increase in our federal income taxes resulting from a 1990 change in the Internal Revenue Code. This charge is intended to recover this increased tax.

We will deduct this charge from each premium payment you make before we invest the payment in the investment options you selected. We may increase this charge if the cost of our taxes related to premiums is increased. We also reserve the right to deduct a charge to cover federal, state or local taxes that are imposed on the operations of the Account. These are taxes other than those described above. Currently, we do not deduct any charge to cover these additional taxes.

Daily Charges for Mortality and Expense Risks

Prudential deducts this charge from the assets of the subaccount(s) that correspond to the Funds you select. This charge is to compensate Prudential for assuming mortality and expense risks. Prudential does not deduct this charge from assets invested in the Fixed Account.

The current daily charge for mortality and expense risks is equivalent to an effective annual rate of 0.45%.

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and other expenses. These fees are described earlier in this supplement.

Monthly Charges

Prudential deducts a monthly charge for the cost of insurance from your Certificate Fund.

For certificates currently available to the largest existing group case, the highest current rate per thousand is $1.70, and applies to insureds at age 72 and older. The lowest current rate per thousand is $0.06, and applies to insureds at age 34.

The following table provides sample per thousand rates (net of taxes):

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.06
45	$0.10
55	$0.25
65	$0.79

Spouse and Child Term Insurance: The rate for child term insurance is currently $0.12 per thousand. The highest current rate per thousand for spouse term insurance is currently $2.50 and applies to insureds over age 73. The lowest current rate per thousand is $0.06, and applies to insureds under age 25.

AD&D on the Employee’s Life: The rate per thousand currently offered for this coverage is $0.02. Generally, one rate is payable at all ages for a given group of insureds.

Waiver Benefit: The current waiver charges will vary from $0.01 to $0.06 per $1,000 of Net Amount at Risk per month.

Possible Additional Charges

For details on possible additional charges, please see the Charges and Expenses section of the prospectus.

Eligibility and Enrollment

Eligibility

Eligible Group Members are active employees, classes or members of the Group as determined by the employer or Group Contract holder.

We refer to each Eligible Group Member who buys coverage as a "Participant." When the term "you" or "your" is used, we are also referring to a Participant.

Enrollment Period

There is no limited enrollment period. Eligible Group Members may enroll at any time during the year. But, if the person applies for coverage more than 31 days after first becoming eligible, Prudential will ask for evidence of good health before that person can become covered.

“Free Look” Period

Generally, you may return a Certificate for a refund within 10 days after you receive it. This 10-day period is known as the “free look” period. Some states allow a longer period. You can ask for a refund by mailing the Certificate back to Prudential.

During the first 20 days after the initial Certificate Date, your premium payments will be invested in the Fixed Account. Prudential reserves the right to limit contributions and transactions during the free look period.

See the "Free Look" Period section of the prospectus for more details.

Maximum Age

Generally, Prudential will not accept an enrollment form requesting coverage on an Eligible Group Member who is older than age 75. Also, a Participant's Face Amount of Insurance will end at the maximum age shown in the Certificate (usually, that is age 100).

Coverage Information

Face Amount

The minimum Face Amount is $50,000. When a Face Amount is based on salary, we round the Face Amount to the next higher multiple of $1,000 if it is not already an even multiple of $1,000. See the How Prudential Issues Certificates section of the prospectus.

Evidence of insurability satisfactory to Prudential will be required if the Face Amount exceeds the limits set forth in your Certificate.

Changes in Face Amount

Increases in Face Amount

For Face Amounts based on annual salary or earnings, we may increase Face Amounts based on salary or earnings information reported to us. At any time, you may choose to increase your Face Amount of insurance, but you must provide evidence of good health.

Decrease in Face Amount

Face Amounts will not decrease unless you request a decrease.

Definition of Life Insurance

Under this method we would increase the Death Benefit (before we deduct any Certificate Debt and outstanding charges) to make it equal to a specified "corridor percentage" of the Certificate Fund based on your Attained Age. See the Adjustment in the Death Benefit section of the prospectus for the “corridor percentage”.

Additional Insurance Benefits

Accelerated Benefit Option

You can choose to receive an early payment of part of the Death Benefit when diagnosed as being terminally ill. In this situation, you may elect up to 90% of the Death Benefit, subject to a maximum of $500,000. "Terminally ill" means you have a life expectancy of 12 months or less (6 or 24 months in some states). This benefit and the specific rules that apply to your group can be found in your certificate.

Lapse and Reinstatement

You may request reinstatement of a lapsed Certificate any time within 5 years after the end of the grace period. But, you must be less than the maximum age at which a Certificate may be held. We will not reinstate a lapsed Certificate if the Group Contract under which the Certificate was issued ended and you did not have the right to continue your insurance.

Loans

The minimum amount you may borrow at any one time is $100.

Surrender Charge

You may surrender your Certificate for its Cash Surrender Value at any time. If you do, your insurance coverage will end. Prudential will calculate the Cash Surrender Value as of the Business Day on which we receive your request form in Good Order. There is no charge for surrendering your certificate.

Additional Premium Payments

In addition to routine premium payments, you may make additional premium payments at any time. Each additional premium payment must be at least $20. Prudential reserves the right to limit the amount of additional premiums.

Exclusions

As stated in the prospectus, Group Variable Universal Life Insurance has a suicide exclusion. See the Suicide Exclusion section of the prospectus for details.

Changes in Personal Status

Continuing Coverage If You Become Totally Disabled

If you become totally disabled prior to age 60 and are unable to work in any occupation, Prudential will extend your Group Variable Universal Life coverage so that you will continue to have insurance coverage equal to the Face Amount of your Certificate until you reach age 65 or are no longer totally disabled. When you reach age 65 or are no longer totally disabled, you may continue your Group Variable Universal Life Coverage even if you are on a disability leave of absence. Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administrative expenses.

Continuing Coverage at Retirement

You can continue coverage at retirement. Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administrative expenses.

Continuing Coverage When You Leave the Group for Reasons Other Than Retirement

You may elect to continue your Group Variable Universal Life coverage if you leave for any reason and are no longer an Eligible Group Member. We call this "Continuation Coverage." Continuation rates are higher than rates for coverage as an Eligible Group Member, but will not exceed the guaranteed rates. Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administrative expenses.

Please contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

PROSPECTUS

May 1, 2012

For certificates effective on or after 01/01/2009

PRUDENTIAL VARIABLE CONTRACT ACCOUNT GI-2

AICPA Group Variable Universal Life

for Members

This prospectus describes a flexible premium variable universal life insurance contract, the Group Variable Universal Life Contract offered by The Prudential Insurance Company of America, a stock life insurance company.

You may choose to invest your Contract's premiums and its earnings in one or more of 14 variable investment options of the Prudential Variable Contract Account GI-2 (the “Account”). For a complete list of the variable investment options, their investment objectives, and their investment advisers, see The Funds.

You may also choose to invest your Contract’s premiums and its earnings in the fixed rate option, which pays a guaranteed interest rate. See The Fixed Account.

Please Read this Prospectus. Please read this prospectus carefully and keep it for future reference. This document is followed by prospectuses for each of the Funds that will be available to you under your group program. This prospectus may be accompanied by a supplement that describes the unique features of the particular Group Contract and Certificates. For those Group Contracts, the prospectus and the supplement together provide all the information you need to know about Group Variable Universal Life Insurance and you should read them together. Current prospectuses for each of the underlying mutual funds accompany this prospectus. These prospectuses contain important information about the mutual funds. Please read these prospectuses and keep them for reference.

Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities or determined that this Contract is a good investment, nor has the SEC determined that this prospectus is complete or accurate. It is a criminal offense to state otherwise.

The Prudential Insurance Company of America

751 Broad Street

Newark, New Jersey 07102

Telephone: (800) 562-9874

TABLE OF CONTENTS

Page

SUMMARY OF CHARGES AND EXPENSES		1
	Expenses other than Portfolio Expenses	1
	Portfolio Expenses	3

SUMMARY OF THE CONTRACT AND CONTRACT BENEFITS		3
	Brief Description of the Group Variable Universal Life Insurance Contract	3
	The Death Benefit	4
	The Certificate Fund	4
	Premium Payments	4
	Allocation of Premium Payments and Investment Choices	4
	Transfers among Investment Options	4
	Dollar Cost Averaging	4
	Surrenders	5
	Withdrawals from the Certificate Fund	5
	Loans	5
	Canceling Your Certificate (“Free Look”)	5

SUMMARY OF CONTRACT RISKS		5
	Certificate Values are not Guaranteed	5
	Limitation of Benefits on Certain Riders for Claims due to War or Service in the Armed Forces	6
	Increase in Charges	6
	Certificate Lapse	6
	Risks of Using the Certificate as a Short-Term Savings Vehicle	6
	Risks of Taking Withdrawals	6
	Risks of Taking a Loan	6
	Effect of Premium Payments on Tax Status	7
	Replacing Your Life Insurance	7

SUMMARY OF RISKS ASSOCIATED WITH THE VARIABLE INVESTMENT OPTIONS		7
	Risks Associated with the Variable Investment Options	7
	Learn More about the Funds	8

GENERAL DESCRIPTIONS OF THE REGISTRANT, DEPOSITOR, AND PORTFOLIO COMPANIES			8
	The Prudential Insurance Company of America		8
	The Prudential Variable Contract Account GI-2		8
	The Funds		9
		Investment Manager	9
		Investment Subadvisers for the Prudential Series Fund	9
		Investment Advisers for Unaffiliated Funds / Portfolios	10
	Service Fees Payable to Prudential		11
	Voting Rights		11
	Substitution of Variable Investment Options		12
	The Fixed Account		12

CHARGES AND EXPENSES		12
	Charge for Taxes Attributable to Premiums	13
	Withdrawal Charge	13
	Cost of Insurance	13
	Monthly Deductions from the Certificate Fund	14
	Daily Deductions from the Variable Investment Options	15
	Transaction Charges	15
	Portfolio Charges	15

PERSONS HAVING RIGHTS UNDER THE CONTRACT		15
	Contract Holder	15
	Certificate Holder	16
	Applicant Owner	16
	Beneficiary	16

OTHER GENERAL CONTRACT PROVISIONS		16
	How Prudential Issues Certificates	16
	Effective Date of Insurance	17

Effective Date of More Favorable Rate Class		17
Maximum Age		17
“Free Look” Period		17
Assignment		18
Premium Refunds		18
Suicide Exclusion		18
Incontestability		18
Misstatement of Age and/or Gender		18
Termination of a Group Contract Holder’s Participation		19
Participants Who Are No Longer Eligible Group Members		19
Options on Termination of Coverage		19
	Conversion	19
	Paid-Up Coverage	20
	Payment of Cash Surrender Value	20
When Proceeds Are Paid		20

PROCEDURES		21
	Electronic Transactions	21
	When Prudential Reconciles Financial Transactions	21

ADDITIONAL INSURANCE BENEFITS		21
	Child Term Insurance	21
	Accelerated Benefit Option	21
	Accidental Death and Dismemberment Benefit	22
	Extended Death Protection During Total Disability	22

PREMIUMS		22
	Routine Premium Payments	22
	Additional Premium Payments	22
	How You Will Pay Premiums	23
	Deducting Premiums by Automatic Debit	23
	Effect of Premium Payments on Tax Status	23
	Allocation of Premiums	23
	Changing the Allocation of Future Premium Payments	23
	Transfers/Restrictions on Transfers	24
	Dollar Cost Averaging	25

DEATH BENEFITS			26
	When Proceeds Are Paid		26
	Amount of the Death Benefit		26
	Adjustment in the Death Benefit		26
	Death Claim Settlement Options		26
	Changes in Face Amount of Insurance		27
		Increases in Face Amount	27
		Decreases in Face Amount	28
		How We Calculate the Face Amount of Your Insurance When You Reach Age 75 and Age 80	28

SURRENDER AND WITHDRAWALS		28
	Surrender of a Certificate	28
	Cash Surrender Value	29
	Withdrawals	29
	Payment of Cash Surrender Value	29

LOANS

LAPSE AND REINSTATEMENT

TAXES			31
	Treatment as Life Insurance and Investor Control		31
	Pre-Death Distributions		32
		Certificates Not Classified As Modified Endowment Contracts	32
		Modified Endowment Contracts	32
	Withholding		33
	Other Tax Considerations		33
	Federal Income Tax Status of Amounts Received Under the Certificate		33
	Company Taxes		33

LEGAL PROCEEDINGS

FINANCIAL STATEMENTS

ADDITIONAL INFORMATION

DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS OF THE FUND PROSPECTUSES

AllianceBernstein Variable Products Series Fund, Inc.:		Appendix 1
	AllianceBernstein VPS International Growth Portfolio

AllianceBernstein Variable Products Series Fund, Inc.:		Appendix 2
	AllianceBernstein VPS Real Estate Investment Portfolio

Dreyfus Variable Insurance Funds:		Appendix 3
	Dreyfus VIF International Equity Portfolio

DWS Variable Series II:		Appendix 4
	DWS Dreman Small Mid Cap Value VIP

Lazard Retirement Series, Inc.:		Appendix 5
	Lazard Retirement Emerging Markets Equity Portfolio

T. Rowe Price Equity Series, Inc.:		Appendix 6
	Mid-Cap Growth Portfolio

T. Rowe Price Equity Series, Inc.:		Appendix 7
	New America Growth Portfolio

T. Rowe Price Equity Series, Inc.:		Appendix 8
	Personal Strategy Balanced Portfolio

The Prudential Series Fund Portfolio:		Appendix 9
	High Yield Bond Portfolio
	Jennison 20/20 Focus Portfolio
	Money Market Portfolio
	Small Capitalization Portfolio
	Stock Index Portfolio
	Value Portfolio

SUMMARY OF CHARGES AND EXPENSES

Capitalized terms used in this prospectus are defined where first used or in the DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS.

Expenses other than Portfolio Expenses

The following tables describe the maximum fees and expenses that you could pay when buying, owning, and surrendering the Certificate. Generally, our current fees and expenses are lower than the maximum fees and expenses reflected in the following tables. For more information about fees and expenses, see CHARGES AND EXPENSES.

The first table describes maximum fees and expenses that we deduct from each premium payment, and maximum fees we charge for transactions and riders.

	Transaction Fees
Charge	When Charge is Deducted	Maximum Guaranteed Charge
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Currently, the maximum is 0.00% of each premium payment.
Withdrawal Charge	This charge is assessed on a Withdrawal.	Maximum charge - $20 Current charge - The lesser of $10 and 2% of the amount withdrawn.
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate Year.	Maximum charge - $20 per transfer after the twelfth. Current charge - $10 per transfer after the twelfth.
Quarterly Report Reprint Charges	This charge is assessed when a quarterly report is reprinted for a period that ended more than a year ago.	Maximum charge - $5 Current charge - $2.50

For these purposes, “taxes attributable to premiums” shall include any federal, state or local income, premium, excise, business, or any other type of tax (or component thereof) measured by or based upon the amount of premium received by Prudential. In some states, this is called a premium based administrative charge. Currently, the taxes paid for this Certificate are reflected as a deduction in computing Premium Refunds.

The second table describes the fees and expenses that you will pay periodically during the time you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than the Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality & Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum charge - $4.00 Current charge - $0.00
Cost of Insurance2,3:
Minimum and Maximum Charge	Monthly	Maximum - $29.19 Minimum - $0.02
Charge for a Representative Participant		Representative guaranteed charge - $0.304
Net Interest on Loans5	Annually	Maximum - 2% Current – 1%
Additional Insurance Benefits3:
Child Term Insurance	Deducted from the annual refund, if any	Maximum - $6.006 Minimum - $6.006
		Representative current charge - $6.007
Accidental Death & Dismemberment	Monthly	Maximum - $0.036 Minimum - $0.026
		Representative current charge - $.027
Waiver Benefit	Monthly	Maximum - $0.076 Minimum - $0.0026
		Representative current charge - $.027

1.	The daily charge is based on the effective annual rate shown.

The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a Participant will pay. You may obtain more information about the particular COI charges that apply to you by contacting Aon Benfield Securities, Inc.

3.	The charges shown for Cost of Insurance and Additional Insurance Benefits are expressed as rates per $1,000 of Net Amount at Risk. The Child Term Insurance is expressed as a rate per unit. The unit is a $10,000 benefit.

4.	The representative current charge for cost of insurance and accidental death & dismemberment is a sample rate currently charged for a 49 year old Covered Person, who is a male AICPA member in the Select rate class.

5.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

6.	This is the rate currently charged. The contract does not specify a guaranteed maximum or minimum rate for additional insurance benefits.

7.	The representative current charge for additional insurance benefits are sample rates currently charged.

Portfolio Expenses

This table shows the minimum and maximum total operating expenses charged by the Funds that you will pay periodically during the time you own a Certificate. More detail concerning each Funds’ fees and expenses is contained in the prospectus for each of the Funds

Total Annual Fund Operating Expenses	Minimum	Maximum
These are expenses that are deducted from the Funds’ assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	1.42%

SUMMARY OF THE CONTRACT AND CONTRACT BENEFITS

Brief Description of the Group Variable Universal Life Insurance Contract

This document is a prospectus. It tells you about Group Variable Universal Life Insurance (sometimes referred to as “GVUL”) contracts offered by The Prudential Insurance Company of America (“Prudential,” the “Company,” “we,” “our,” or “us”) for insurance programs that are sponsored by groups. We will refer to each person who buys coverage as a "Participant." When we use the terms "you" or "your," we mean a Participant.

A Group Variable Universal Life Insurance contract is an insurance contract issued by Prudential to a trust, or the group that sponsors the Group Variable Universal Life Insurance program. Often the group that sponsors a program is an employer. Other groups such as membership associations may also sponsor programs. Group Variable Universal Life is a variable insurance product that offers life insurance protection together with investment opportunity through variable investment options and the Fixed Account.

A Group Variable Universal Life Insurance policy is a flexible form of life insurance. It has a Death Benefit and a Certificate Fund, the value of which changes every day according to the investment performance of the investment options to which you have allocated your Net Premiums. Although the value of your Certificate Fund will increase if there is favorable investment performance in the variable investment options you select, investment returns in the variable investment options are NOT guaranteed. There is a risk that investment performance will be unfavorable and that the value of your Certificate Fund will decrease. The risk will be different, depending upon which variable investment options you choose. You bear the risk of any decrease. The coverage is designed to be flexible to meet your specific life insurance needs. Within certain limits, this type of coverage will provide you with flexibility in determining the amount and timing of your premium payments.

The Group Contract states the terms of the agreement between Prudential and the sponsoring group. It forms the entire agreement between them. Among other things, the Group Contract defines which members of the group are eligible to buy the Group Variable Universal Life Insurance. The Group Contract also says whether or not Eligible Group Members may also buy coverage for their qualified dependents.

We will give a Certificate to each Eligible Group Member or Applicant Owner who buys coverage under the Group Contract. The Certificate provides for a Death Benefit and a Cash Surrender Value. The Death Benefit and the Cash Surrender Value can change every day. They change based on the performance of the investment options you selected.

On the date of the Contract Anniversary, if all required premium payments have been paid for the year and the Group Contract remains in force, Prudential will determine whether a divisible surplus exists. If a divisible surplus exists, Prudential will determine the share to allocate to the Group Contract. You will receive your portion of the divisible surplus in the form of an annual refund that ordinarily will be applied as a premium payment. However, you may choose to receive your refund in cash by notifying Aon Benfield Securities, Inc. in writing.

The Death Benefit

When you buy Group Variable Universal Life Insurance, you will choose a Face Amount of insurance, based on the amounts available for your group. Prudential will pay a Death Benefit to the beneficiary when the Covered Person dies. Generally, the Death Benefit is the Face Amount of insurance plus the value of your Certificate Fund on the date of your death, minus any Certificate Debt and outstanding charges. Because the value of the Certificate Fund will vary daily with the performance of the investment options you select, the amount of the Death Benefit will also vary from day to day. But, the Death Benefit will not be less than the Face Amount of insurance shown plus the amount of any extra benefit, if the Participant’s insurance is not in default and there is no Certificate Debt. See the Death Benefit and Contract Values section.

The Certificate Fund

The Certificate Fund consists of the Net Premiums that we invest in the investment options you select. Prudential will deduct its charges for the insurance from the Certificate Fund. The Certificate Fund value changes daily, reflecting: (i) increases or decreases in the value of the variable investment options you select; (ii) interest credited on any amounts allocated to the Fixed Account; (iii) interest credited on any loan; (iv) the daily charge for mortality and expense risks assessed against the variable investment options; and (v) monthly charges Prudential deducts for the insurance. The Certificate Fund also changes to reflect the receipt of premiums.

Premium Payments

You will usually be able to decide when to make premium payments and how much each premium payment will be. You are responsible for making sure that there is enough value in your Certificate Fund (minus Certificate Debt and outstanding charges) to cover each month’s charges. If your Certificate Fund balance is less than the amount needed to pay any month’s charges, then you must make a premium payment that increases your Certificate Fund balance above this minimum amount. You must make that payment during the grace period, and if you do not, your coverage will end.

You may choose to make additional premium payments of at least $100 and have those payments directed to the investment options you previously selected. See the Additional Premium Payments section.

Allocation of Premium Payments and Investment Choices

Before your premiums are allocated to your investment choices, we deduct a charge for taxes attributable to premiums (or premium based administrative charges). This charge is currently 0.00%. The remainder is your Net Premium, which is then invested in the investment options. See the Charges and Expenses section.

You may choose investment options from among the Funds selected by your Group Contract Holder. You choose how to allocate your premium payments among the investment options. You may choose more aggressive Funds or less aggressive Funds, as well as the Fixed Account. What you choose depends on your personal circumstances, your investment objectives and how they may change over time.

If you prefer to reduce the risks that come with investing in the Funds, you can choose to direct some of your premium payments or the amount in your Certificate Fund to the Fixed Account. Prudential guarantees that the part of your Certificate Fund that is directed to the Fixed Account will earn interest daily at a rate that Prudential declares periodically. That rate will change from time to time, but it will never be lower than an effective annual rate of 4%. See The Fixed Account section.

Transfers among Investment Options

You may transfer amounts from one investment option to another – we do not limit the number of transfers between variable investment options, but we may charge for more than 12 transfers in a Certificate Year. See the Transfers and the Transfer Restrictions sections.

Dollar Cost Averaging

Dollar Cost Averaging, or DCA, lets you systematically transfer specified dollar amounts from the Prudential Series Fund Money Market Portfolio to the other available investment options available under the Contract at monthly intervals. The minimum transfer amount is $100. You can request that a designated number of transfers be made under the DCA feature. You may use DCA at any time after your Certificate becomes effective, but to start the DCA feature, you usually have to make a premium payment of at least $1,000 to the Prudential Series Fund Money Market Portfolio. The main objective of DCA is to reduce the risk of dramatic short-term market fluctuations. Since the same

dollar amount is transferred to an available Fund with each transfer, you buy more of the Fund when the price is low and less of the fund when its price is high. Therefore, you may achieve a lower than average cost over the long term. This plan of investing does not assure a profit or protect against a loss in declining markets. See the Dollar Cost Averaging section.

Surrenders

You may surrender your insurance and receive its Cash Surrender Value. The Cash Surrender Value is the value of the Certificate Fund at the close of business on the day of the surrender minus any Certificate Debt and any outstanding charges. A surrender may have tax consequences. See the Surrenders and Withdrawals section, and the Taxes section.

Withdrawals from the Certificate Fund

While your Certificate is in effect, you may withdraw part of the Certificate’s Cash Surrender Value. You must withdraw at least $200 in any withdrawal, but you must leave enough in your Certificate Fund (less any Certificate Debt and outstanding charges) to pay the next month’s charges. There is no limit on the number of withdrawals You can make in a year. However, there is a transaction charge for each withdrawal. A withdrawal may have tax consequences. See Surrenders and Withdrawals section, and the Taxes section.

Cash Surrender Value and Death Benefit

If you ask, Prudential will give you an illustration of how the Cash Surrender Value and Death Benefit of your Certificate can change as a result of the performance of the investment options you select. The illustration will show your age, risk class, proposed face amount of insurance, and proposed Premium payments. We refer to this as a “personalized illustration”. This is not our prediction of how value will grow. It is a hypothetical example and is just intended to show you how a Certificate works.

Loans

You may borrow money from your Certificate Fund. The Maximum Loan Value, which is the maximum amount you may borrow, is 90% of your Certificate Fund minus any existing loan (and its accrued interest), outstanding charges, and the amount of the next month's charges. In states that require it, you may borrow a greater amount. Loan interest charges accrue daily. Depending on the tax status of your Certificate, taking a loan may have tax consequences. There may also be tax consequences if your Certificate lapses or terminates with an outstanding loan. See the Loans section, and the Taxes section.

Canceling Your Certificate (“Free Look”)

Generally, you may return your Certificate for a refund within 30 days after you receive it. This 30-day period is known as the “free look” period. Some states allow a longer period. You can ask for a refund by mailing or delivering the Certificate to Aon Benfield Securities, Inc.. (you may not ask for a refund if your Certificate is a replacement for one previously issued under the Group Contract). If you cancel your coverage during the free look period, we will generally refund the premium payments you made, minus any loans or withdrawals that you took. (However, if applicable law so requires, you will receive a refund of all premiums paid minus any loans or withdrawals, and plus or minus any change due to investment experience.) This refund amount will be further reduced by applicable federal and state income tax withholding. See the “Free Look” Period section.

SUMMARY OF CONTRACT RISKS

Certificate Values are not Guaranteed

Your benefits (including life insurance) are not guaranteed. The value of your Certificate Fund will vary with the performance of the investment options you select. There is no guarantee that the variable investment options will meet their investment objectives, so your Death Benefit could go down if the investment options in your Certificate Fund have poor investment performance. Poor investment performance could cause your Certificate to lapse, and you could lose your insurance. If you prefer to reduce the risks that come with investing in the variable options, you can choose to direct some of your premium payments or the amounts in your Certificate Fund to the Fixed Account.

Because the Certificate provides for an accumulation of a Certificate Fund as well as a Death Benefit, you may wish to use it for various financial planning purposes. Purchasing the Certificate for such purposes may involve certain risks. Accessing the values in your Certificate through withdrawals and Certificate loans may significantly affect

current and future Certificate values or Death Benefit proceeds and may increase the chance that your Certificate will lapse. If your Certificate lapses and you have an outstanding Certificate loan, there may be tax consequences. See the Taxes section.

Limitation of Benefits on Certain Riders for Claims due to War or Service in the Armed Forces

We will not pay a benefit on any Accidental Death Benefit type rider if the death or injury is caused or contributed to by war or act of war, declared or undeclared, including resistance to armed aggression. This restriction includes service in the armed forces of any country at war.

Increase in Charges

Certain fees and expenses currently are assessed at less than their guaranteed maximum levels. We may in the future increase these current charges up to the guaranteed maximum levels. If fees and expenses are increased, you may need to increase the amount and/or frequency of premiums to keep your Certificate in force.

Certificate Lapse

Each month we determine the value of your Certificate Fund. If the Certificate Fund less any applicable surrender charges is zero or less, the Certificate will end (in insurance terms, it will “lapse”). Your Certificate will also end if the Certificate Debt ever grows to be equal to or more than the Certificate Fund less any outstanding charges. Should this happen, Aon Benfield Securities, Inc. will notify you of the payment you need to make to prevent your insurance from terminating. Currently, Aon Benfield Securities, Inc. must receive your payment by the later of 71 days after the Monthly Deduction Date, or 30 days after the date Aon Benfield Securities, Inc. mailed you the notice. If you do not make the payment, your Certificate will end and have no value. See the Lapse section and the Reinstatement section. If you have an outstanding loan when your Certificate lapses, you may have taxable income as a result. See the Taxes section.

Risks of Using the Certificate as a Short-Term Savings Vehicle

Because the Certificate provides for an accumulation of a Certificate Fund as well as a Death Benefit, you may wish to use it for various insurance planning purposes. Purchasing the Certificate for such purposes may involve certain risks.

For example, a life insurance contract could play an important role in helping you to meet the future costs of a child’s education. The Certificate’s Death Benefit could be used to provide for education costs should something happen to you, and its investment features could help you accumulate savings. However, if the variable investment options you choose perform poorly, if you do not pay sufficient premiums, or if you access the values in your Certificate through withdrawals or loans, your Certificate may lapse or you may not accumulate the funds you need.

The Certificate is designed to provide benefits on a long-term basis. Consequently, you should not purchase the Certificate as a short-term investment or savings vehicle. Because of the long-term nature of the Certificate, you should consider whether purchasing the Certificate is consistent with the purpose for which it is being considered.

Risks of Taking Withdrawals

You may withdraw part of your Certificate’s Cash Surrender Value, so long as the amount withdrawn exceeds $200. However, you must leave enough in your Certificate Fund (less any Certificate Debt and outstanding charges) to pay the next month’s charges. There is no limit on the number of withdrawals you can make in a year, but there is a transaction charge (the lesser of $10 and 2% of the amount withdrawn). Prudential may raise this charge, but not above $20. We will deduct the transaction charge from the Certificate Fund.

You may not repay any amount that you withdraw from the Certificate’s Cash Surrender Value, so withdrawals will reduce the amount of your Death Benefit but you generally can make additional premium payments. Withdrawal of the Cash Surrender Value may have tax consequences. See the Taxes section.

Risks of Taking a Loan

Taking a loan from your Certificate may increase the risk that your Certificate will lapse, will have a permanent impact on your Certificate Fund, and will reduce the Death Benefit. If your loan plus accrued interest exceeds the value of your Certificate Fund, you will not have enough money in your Certificate Fund to cover the month’s charges. If we pay a death claim while a loan is outstanding, we will reduce the Death Benefit by the amount of the loan plus any

accrued interest. If you repay a loan by using the Certificate Fund, we will treat the repayment as a withdrawal from the Certificate Fund, which may have tax consequences. If you have a loan outstanding when you surrender your Certificate, or when you allow your Certificate to lapse, the amount you borrowed may become taxable. In addition, if your Certificate is classified as a Modified Endowment Contract for tax purposes, taking a loan may be treated as a distribution of income for tax purposes and may have tax consequences. See the Taxes section.

Effect of Premium Payments on Tax Status

If you pay additional premiums, we may need to increase your Death Benefit (and corresponding cost of insurance charges) to continue to qualify it as life insurance for federal tax purposes. Also, if you make premium payments above certain limits, the tax status of the insurance may change to that of a Modified Endowment Contract under the Internal Revenue Code. That status could have significant disadvantages from a tax standpoint. We have procedures designed to identify most situations in which a premium payment would cause your Certificate to be treated as a Modified Endowment Contract. When we identify such a situation, we generally will notify you and ask whether you want us to refund the premium payment. If you fail to respond within a reasonable time, we will continue to process the premium payment as usual.

If you have notified us in the past 13 months that you want us to refund excess premium payments causing Modified Endowment Contract treatment and we receive any excess payment which is less than $100.00, then we may, without additional notification by you, sell the minimum number of units necessary so as not to cause your Certificate to be treated as a Modified Endowment Contract.

We reserve the right to return any premium payment that would cause your insurance to fail to qualify as life insurance under applicable tax laws, or that would increase the Death Benefit by more than it increases the Certificate Fund. See the Taxes section.

Replacing Your Life Insurance

You should know that in most instances, it is not in your best interest to replace one life insurance policy with another one. When you need additional life insurance, it is usually better for you to add coverage, either by asking for a new policy or by buying additional insurance, than it is for you to replace a policy. In that way, you don’t lose benefits under the policy you already have.

If you are thinking about replacing a life insurance policy you already have so that you can obtain Group Variable Universal Life Insurance, you should consider your choices carefully. Compare the costs and benefits of adding coverage to your current policy against the costs and benefits of Group Variable Universal Life Insurance. You should also get advice from a tax adviser.

SUMMARY OF RISKS ASSOCIATED WITH THE VARIABLE INVESTMENT OPTIONS

You may choose to invest your Certificate’s premiums and its earnings in one or more of the available variable investment options. You may also invest in the Fixed Account option. The Fixed Account is the only investment option that offers a guaranteed rate of return. See The Funds section and The Fixed Account section.

Risks Associated with the Variable Investment Options

Each variable investment option invests in the shares of portfolios (each, a “Fund”) of open-end management investment companies registered under the Investment Company Act of 1940. Each Fund has its own investment objective and associated risks, which are described in the accompanying Fund prospectuses. The income, gains and losses of one Fund generally have no effect on the investment performance of any other Fund.

We do not promise that the Funds will meet their investment objectives. Amounts you allocate to the variable investment options may grow in value, decline in value, or grow less than you expect, depending on the investment performance of the variable investment options that you choose. You bear the investment risk that the Funds may not meet their investment objectives. You also bear the risk that the Fund’s investment adviser may restrict investment in the fund, and even close the Fund, at their discretion. For a detailed discussion of the investment policies, objectives and strategies, and the investment risks associated with each Fund, please read the Fund’s current prospectus.

Learn More about the Funds

Before allocating amounts to the variable investment options, you should read the Fund’s current prospectus for detailed information concerning their investment objectives and strategies, and their investment risks.

GENERAL DESCRIPTIONS OF THE REGISTRANT, DEPOSITOR, AND PORTFOLIO COMPANIES

Prudential Insurance Company of America

The Contract and Certificates are issued by The Prudential Insurance Company of America (“Prudential,” “we,” “us,” “our,” or the “Company”), a New Jersey stock life insurance company that has been doing business since 1875. Prudential is an indirect wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”), a New Jersey insurance holding company, and is located at 751 Broad Street, Newark, New Jersey, 07102. Prudential Financial exercises significant influence over the operations and capital structure of Prudential. However, neither Prudential Financial nor any other related company has any legal responsibility to pay amounts that Prudential may owe under the contract and/or Certificate.

Prudential is licensed to sell life insurance and annuities in all states, in the District of Columbia, and in all United States territories and possessions. Prudential and its affiliates act in a variety of capacities with respect to registered investment companies, including as depositor, adviser, and principal underwriter.

The Prudential Variable Contract Account GI-2

The Prudential Variable Contract Account GI-2 (the “Account”) was established on June 14, 1988, under New Jersey law as a separate investment account. The Account is divided into Subaccounts. Each variable investment option is a Subaccount of the Account. The Fixed Interest Rate Option is not a Subaccount of the Account. The Account meets the definition of a “separate account” under federal securities laws. The Account holds assets that are segregated from all of Prudential’s other assets. The assets of each Subaccount are segregated from the assets of each other Subaccount. When we refer to “Funds” in this prospectus, we mean all or any of these Subaccounts. We may use “Variable Investment Option,” “Subaccount” or “Fund” interchangeably when referring to a variable investment option.

You may then choose investment options from among the Funds selected by your Group Contract Holder. You may also choose to invest in the Fixed Account. (The Fixed Account may also be referred to as an “investment option.”) You may choose to make additional premium contributions and have those Funds directed to the investment options you select. Once you select the investment options you want, Prudential will direct your additional premium contributions to the Subaccounts associated with those Funds and/or to the Fixed Account. You may change your selection of investment options at any time.

Prudential is the legal owner of the assets in the Account. Prudential will maintain assets in the Account with a total market value at least equal to the liabilities relating to the benefits attributable to the Account. In addition to these assets, the Account’s assets may include amounts contributed by Prudential to commence operation of the Account and may include accumulations of the charges Prudential makes against the Account. From time to time, Prudential will transfer these additional amounts to its general account. Before making any such transfer, Prudential will consider any possible adverse impact the transfer might have on the Account.

Income, gains and losses related to, or charged against, the Account reflect the Account’s own investment experience and not the investment experience of other Prudential assets. These assets may not be charged with liabilities that arise from any other business Prudential conducts. Prudential is obligated to pay all amounts promised to the Participant under the Group Contract.

The Account is registered with the SEC under federal securities laws as a unit investment trust, which is a type of investment company. Registration does not involve any supervision by the SEC of the management or investment policies or practices of the Account. For state law purposes, the Account is treated as a part or division of Prudential. Prudential may take all actions in connection with the operation of the Account that are permitted by applicable law, including those permitted upon regulatory approval.

The Funds

There are currently 14 variable investment options offered under Group Variable Universal Life. When you choose a variable investment option, we purchase shares of a mutual fund or a separate investment series of a mutual fund that is held as an investment for that option. We hold these shares in the Subaccount. Prudential may add additional variable investment options in the future.

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

Prudential Series Fund – Class I Shares
Portfolios/Objectives	Style/Type	Subadvisers
High Yield Bond: High total return.	Fixed Income – High Yield	PIM
Jennison 20/20 Focus: Long-term growth of capital.	Multi-Cap Core	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Small Capitalization Stock: Long-term growth of capital.	Small-Cap Core	QMA
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA
Value: Capital appreciation.	Large-Cap Value	Jennison

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
AllianceBernstein International Growth Portfolio1: Long-term growth of capital.	International – Equity	AllianceBernstein
AllianceBernstein Real Estate Investment Portfolio1: Total return from long-term growth of capital and income.	Sector	AllianceBernstein
Dreyfus VIF - International Equity Portfolio2: Capital growth.	International – Equity	Dreyfus
DWS Dreman Small Mid Cap Value VIP3: Long-term capital appreciation.	Multi-Cap Value	Deutsche
Lazard Retirement Emerging Markets Equity Portfolio4: Long-term capital appreciation.	International – Equity	Lazard
T. Rowe Price Mid-Cap Growth Portfolio: Long-term capital appreciation.	Mid-Cap Growth	T. Rowe Price
T. Rowe Price New America Growth Portfolio: Long-term capital growth.	Multi-Cap Growth	T. Rowe Price
T. Rowe Price Personal Strategy Balanced Portfolio: Highest total return over time, consistent with an emphasis on both capital appreciation and income.	Asset Allocation	T. Rowe Price

1.	Series I Shares

2.	Initial Shares

3.	Class A Shares

4.	Service Shares

Investment Advisers for Unaffiliated Funds / Portfolios

·	AllianceBernstein L.P. ("AllianceBernstein")

·	Dreyfus Corporation (“Dreyfus”)

·	Deutsche Investment Management Americas Inc. (“Deutsche”)

·	Lazard Asset Management LLC ("Lazard")

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

The investment advisers or subadvisers for the Funds charge a daily investment management fee as compensation for their services. These fees are more fully described in the prospectus for each Fund.

In the future, it may become disadvantageous for separate accounts of variable life insurance and variable annuity contracts to invest in the same underlying variable investment options. Neither the companies that invest in the Funds nor the Funds currently foresee any such disadvantage. The Board of Directors for each Fund intends to monitor events in order to identify any material conflict between variable life insurance and variable annuity Contract owners and to determine what action, if any, should be taken. Material conflicts could result from such things as:

(1)	changes in state insurance law;

(2)	changes in federal income tax law;

(3)	changes in the investment management of any Fund; or

(4)	differences between voting instructions given by variable life insurance and variable annuity contract owners.

A fund or portfolio may have a similar name, investment objective, or investment policy resembling those of a mutual fund managed by the same investment adviser or subadviser that is sold directly to the public. Despite such similarities, there can be no assurance that the investment performance of any such fund or portfolio will resemble that of the publicly available mutual fund.

Each Fund has provided Prudential with information about its management fees and other expenses. Except for the Prudential Series Fund, Inc., Prudential has not verified that information independently.

Service Fees Payable to Prudential

Prudential has entered into agreements with the principal underwriter, transfer agent , investment adviser, distributor and/or other related entities of the underlying funds. Under the terms of these agreements, Prudential provides administrative and support services to the funds for which it receives an annual fee based on the average assets allocated to the Fund or portfolio under the Contract from the investment adviser, distributor and/or the Fund. These agreements, including the fees paid and services provided, can vary for each underlying mutual fund whose Funds are offered as investment options.

Prudential and/or our affiliates may receive substantial and varying administrative service payments and Rule 12b-1 fees from certain underlying Funds or related parties. These types of payments and fees are sometimes referred to as “revenue sharing” payments. Rule 12b-1 fees and administrative service payments partially compensate for distribution, marketing, and/or servicing functions and for providing administrative services with respect to Contract owners invested indirectly in the Fund, which include duties such as recordkeeping, shareholder services, and the mailing of periodic reports. We receive administrative services fees with respect to both affiliated underlying Funds and unaffiliated underlying Funds. The administrative services fees we receive from affiliates originate from the assets of the affiliated Fund itself and/or the assets of the Fund’s investment adviser. In either case, the existence of administrative services fees may tend to increase the overall cost of investing in the Fund. The existence of a 12b-1 fee will always increase the overall cost of investing in those Funds. In addition, because these fees are paid to us, allocations you make to these affiliated underlying Funds may benefit us financially if these fees exceed the costs of the administrative support services.

As of May 1, 2012 , the administrative service fees we receive range from 0.05% to 0.25% of the average assets allocated to the Fund. The service fees received from The Prudential Series Fund are 0.05%. Some Funds pay a 12b-1 fee instead of, or in addition to, the administrative services fees. The 12b-1 fee we receive is equal to 0.25% of the average assets allocated to the Funds indicated below.

The following Fund currently pays a 12b-1 fee:

·	Lazard Retirement Emerging Markets Equity Portfolio

In addition to the payments that we receive from underlying funds and/or their affiliates, those same funds and/or their affiliates may make payments to us and/or other insurers within the Prudential Financial group related to the offering of investment options within variable annuities or life insurance offered by different Prudential business units.

Voting Rights

Prudential is the legal owner of the shares of the mutual funds associated with the variable investment options. Because we are the owner, we have the right to vote on any matter that shareholders of the Funds vote on. The voting happens at regular and special shareholder meetings. We will (as required by law) vote in accordance with voting instructions we receive from Participants. When a vote is required, we will mail you a proxy which is a form you need to complete and return to us to tell us how you wish to vote. A Fund may not hold annual shareholder meetings when not required to do so under the laws of the state of its incorporation or under federal securities laws.

If we do not receive timely voting instructions for Fund shares from Participants, we will vote those shares in the same proportion as shares in the Funds for which we do receive instructions. We will do the same thing for shares held as general account investments of Prudential. If federal securities laws change so that Prudential is allowed to vote on Fund shares in our own right, we may decide to do so.

Generally, you may give us voting instructions on matters that would be changes in fundamental policies of the Funds. You may also give us voting instructions on any matter that requires a vote of the Fund's shareholders. But, if a Fund that you participate in has a vote on approval of the investment advisory agreement or any change in a Fund's fundamental investment policy, you will vote separately by Fund. This practice is dictated by federal securities laws. Here's how we will determine the number of Fund shares and votes for which you may give instructions:

·	To determine the number of Fund shares, we will divide the part of your Certificate Fund that is derived from participation in a Subaccount by the value of one share in the corresponding portfolio of the applicable Fund.

·	The number of votes will be determined as of the record date chosen by the Board of Directors of the applicable Fund.

We reserve the right to change the way in which we calculate the weight we give to voting instructions. We would make such a change to comply with federal regulations.

If we are required by state insurance regulations, we may disregard voting instructions in certain instances. Also, Prudential itself may disregard voting instructions that would require changes in the investment policy or investment adviser of one or more of the Funds' portfolios, provided that Prudential reasonably disapproves such changes in accordance with applicable federal regulations. If Prudential does disregard voting instructions, we will tell you that we did and our reasons for it in the next annual or semi-annual report to Participants.

Substitution of Variable Investment Options

We may substitute the shares of another portfolio or of an entirely different variable investment option. We may also cease to allow any investments in any variable investment option. We would not do this without any necessary Securities and Exchange Commission and/or any necessary state approval. We would notify Group Contract Holders and Participants in advance if we were to make such a substitution.

The Fixed Account

You may invest all or part of your Certificate Fund in the Fixed Account. The amount invested in the Fixed Account becomes part of Prudential's general assets, commonly referred to as the general account. The general account consists of all assets owned by Prudential other than those in the Account and other separate accounts that have been or may be established by Prudential. Subject to applicable law, Prudential has sole discretion over the investment of the general account assets, and Participants do not share in the investment experience of those assets.

The part of the Certificate Fund that you invest in the Fixed Account will accrue interest daily at a rate that Prudential declares periodically. This rate will not be less than an effective annual rate of 4%. Prudential may in its sole discretion declare a higher rate, though we are not obligated to do so. At least annually and anytime you ask, we will tell you what interest rate currently applies.

Because of exemptive and exclusionary provisions, interests in the fixed rate option under the Certificate have not been registered under the Securities Act of 1933 and the general account has not been registered as an investment company under the Investment Company Act of 1940. Accordingly, interests in the fixed rate option are not subject to the provisions of these Acts, and Prudential has been advised that the staff of the SEC has not reviewed the disclosure in this prospectus relating to the fixed rate option. Any inaccurate or misleading disclosure regarding the fixed rate option may, however, be subject to certain generally applicable provisions of federal securities laws.

Prudential has the right to delay payment of any Cash Surrender Value attributable to the Fixed Account for up to six months. See the When Proceeds Are Paid section.

CHARGES AND EXPENSES

This section provides a more detailed description of each charge that is described briefly in the SUMMARY OF CHARGES AND EXPENSES beginning on page 1 of this prospectus. There are charges and other expenses associated with the Contract that reduce the return on your investment. These charges and expenses are described below.

The total amount invested in the Certificate Fund, at any time, consists of the sum of the amount credited to the variable investment options, the amount allocated to the fixed rate option, plus any interest credited on amounts allocated to the fixed rate option, and the principal amount of any Certificate loan plus the amount of interest credited to the Certificate upon that loan. See Loans. Most charges, although not all, are made by reducing the Certificate Fund.

In several instances we use the terms "maximum charge" and "current charge." The "maximum charge", in each instance, is the highest charge that we may make under the Certificate. The "current charge", in each instance, is the amount that we now charge, which may be lower than maximum charges. If circumstances change, we reserve the right to increase each current charge, up to the maximum charge, without giving any advance notice.

Current charges deducted from premium payments and the Certificate Fund may change from time to time, subject to maximum charges. In deciding whether to change any of these current charges, we will periodically consider factors such as mortality, persistency, expenses, taxes and interest and/or investment experience to see if a change in our assumptions is needed. Changes in charges will be by class. We will not recoup prior losses or distribute prior gains by means of these changes.

The charges under the Contract are designed to cover, in the aggregate, our direct and indirect costs of selling, administering and providing benefits under the Contract. They are also designed, in the aggregate, to compensate us for the risks of loss we assume pursuant to the Contract. If, as we expect, the charges that we collect from the Contract exceed our total costs in connection with the Contract, we will earn a profit. Otherwise, we will incur a loss. The rates of certain of our charges have been set with reference to estimates of the amount of specific types of expenses or risks that we will incur. In most cases, this prospectus identifies such expenses or risks in the name of the charge; however, the fact that any charge bears the name of, or is designed primarily to defray a particular expense or risk does not mean that the amount we collect from that charge will never be more than the amount of such expense or risk. Nor does it mean that we may not also be compensated for such expense or risk out of any other charges we are permitted to deduct by the terms of the Contract. We may reduce stated fees under particular contracts as to which, due to economies of scale and other factors, our administrative costs are reduced.

Charge for Taxes Attributable to Premiums

We may deduct a charge for taxes attributable to premiums. These taxes include federal, state or local income, premium, excise, business or any other type of tax (or part of one) that is based on the amount of premium we receive. This charge is currently 0.00%. Currently, the taxes paid by us for this Group Contract are a deduction in computing Premium Refunds. The deduction reflects that, for federal taxes, some or all of the premium is treated as for an individual life insurance policy which have higher factors. The definition of what premium is treated as for a group life certificate is found in IRC section 848.

We also reserve the right to deduct a charge to cover federal, state or local taxes that are imposed on the Operations of the Account. These are taxes other than those described above. Currently, we do not deduct any charge to cover these additional taxes.

We may increase this charge at any time.

Withdrawal Charge

Under some Group Contracts, a transaction charge may be imposed for each withdrawal. The current charge is the lesser of $10 and 2% of the amount you withdraw. The maximum charge for withdrawals is $20. We will deduct the transaction charge from Certificate Fund.

Cost of Insurance

Each month, we will deduct from your Certificate Fund a charge for the cost of your insurance (a “COI” charge). We will take the charge from each investment option you selected in the same proportion that the value of your Certificate Fund is invested. To calculate the cost of insurance charge, we multiply:

- your Certificate's “Net Amount at Risk” by

- the “cost of insurance rate” for the Covered Person.

“Net Amount at Risk” means the amount by which your Certificate's Death Benefit (computed as if there were no Certificate Debt) exceeds your Certificate Fund.

The “cost of insurance rate” is based on many factors, including:

·	the Covered Person's age;

·	the Covered Person's rate class (such as classes for standard, select status, and preferred);

·	the Covered Person’s gender (except for residents of Montana);

·	the life expectancy of the people covered under your Group Contract;

·	the additional insurance benefits shown in the Additional Insurance Benefits section;

·	the expected expenses.

The cost of insurance rate will generally increase as the Covered Person ages. We may adjust the actual cost of insurance rates from time to time. The changes in cost of insurance rates for each Group Contract Holder are based on many factors, including:

·	The number of Certificates in effect;

·	The number of new Certificates issued;

·	The number of Certificates surrendered;

·	The expected claims (Death Benefits, accelerated benefits and surrenders);

·	The expected expenses; and

·	The level of administrative services provided to the Group Contract Holder.

In addition to the list above, the past claims, expenses and the costs of additional insurance benefits, if any, of the group are reviewed, since they are an important factor in calculating the expected claims, expenses and costs. However, we are generally prohibited by state insurance law from recovering past losses.

·	If we change the cost of insurance rates, we will change them the same way for all persons of the same age, rate class. We will not change them to be higher than the guaranteed cost of insurance rates shown in your Certificate. The guaranteed maximum rates are set out in the 2001 CSO Table.

Generally, we will deduct the COI charge on the Monthly Deduction Date.

COI Rates: The highest current charge per thousand is $ $29.19, and applies to male Covered Persons age 99. The lowest current rate per thousand is $0.02, and applies to female Covered Persons under age 30.

The following table provides sample per thousand cost of insurance rates for Covered Persons who are in the standard class:

Covered Person	Males	Females
35	$0.05	$0.04
45	$0.16	$0.13
55	$0.54	$0.44
65	$1.47	$1.02

Monthly Deductions from the Certificate Fund

In addition to the Cost of Insurance Charge described above, Prudential will deduct the following charges from your Certificate Fund each month. We will take the charges from each investment option you have selected, in the same proportion that the value of your Certificate Fund is invested.

Generally, we will deduct these charges on the Monthly Deduction Date.

1. Charge for Additional Insurance Benefits: The Additional Insurance Benefits section tells you about benefits that you may be able to buy in addition to the Group Variable Universal Life Insurance and the additional insurance benefits that the Group Participant elected to buy. We will deduct a separate charge from your Certificate Fund each month for any additional insurance benefits that you have elected.

Accelerated Benefit Option: There is no additional charge for this benefit.

Child Term Insurance: The rate for child term insurance is currently $6.00 per year for $10,000 coverage. This charge is deducted from the annual refund, if any.

Waiver Benefit: The current waiver charges will vary from $0.002 to $0.07 per $1,000 of Net Amount of Risk per month. The rates vary by Attained Age, gender, and rate class of the Covered Person.

AD&D on the Covered Person’s Life: The monthly charge is $0.02 for Covered Persons at ages less than 65 and $0.03 for ages 65 to 74 per $1,000 of Net Amount at Risk. We will deduct a separate charge from your Certificate Fund each month for this additional insurance benefit.

2. Charge for Administrative Expenses: Currently, we do not impose a monthly charge for administrative expenses, but we may deduct such a charge in the future. This charge would pay for maintaining records and for communicating with Participants and your Group Contract Holder. If we did deduct such a charge, it would not exceed $4 per month.

Charge for other taxes: We reserve the right to deduct a charge to cover federal, state, or local taxes that are imposed on the operations of the Account. These are taxes other than those described under Charge For Taxes Attributable to Premiums section. Currently, we do not charge for these other taxes.

Daily Deductions from the Variable Investment Options

Each day, Prudential deducts a charge from the assets of each of the variable investment options in an amount equal to an effective annual rate of up to 0.90%. This charge is intended to compensate us for assuming mortality and expense risks of the insurance provided under the Group Contract. The “mortality risk” assumed is the risk that Covered Persons may live for shorter periods of time than Prudential estimated when we determined what mortality charge to make. The "expense risk" assumed is the risk that expenses for issuing and administering the insurance will be more than Prudential estimated when we determined the charge for administrative expenses.

We will earn a profit from this risk charge to the extent we do not need it to provide benefits and pay expenses under the Certificate. We do not assess this charge on amounts allocated to the Fixed Account.

Transaction Charges

Prudential may make the following Transaction Charges:

·	When you make a withdrawal from your Certificate Fund. The charge is $10 or 2% of the amount you withdraw, whichever amount is less. Prudential may increase this charge in the future, but it will not exceed $20.

When you request more that 12 transfers between investment options in a Certificate Year the charge is currently $10 for each transfer after the 12th transfer. Prudential may increase this charge in the future, but it will not exceed $20. Currently, a transfer that occurs under the DCA feature is not counted towards the 20 transfers permitted each calendar year or the 12 free transfers permitted each Certificate year.

When you request a reprint of a quarterly report that was previously sent to you for a period that ended more than one year ago. The charge is currently $2.50 for each quarterly report. In the future, Prudential may charge for any reprints requested and may increase this charge, but it will not exceed $20 for reports covering each policy year.

Also, Prudential has the right to assess a charge for any taxes that may be imposed on the operations of the Account.

Portfolio Charges

We deduct charges from and pay expenses out of the variable investment options as described in the Fund prospectuses. Prudential also reserves the right to assess a charge for any taxes that may be imposed on the operations of the Account.

PERSONS HAVING RIGHTS UNDER THE CONTRACT

Contract Holder

The Contract Holder is the American Institute of Certified Public Accountants Insurance Trust.

Certificate Holder

The Participant is generally an Eligible Group Member who becomes a Covered Person under a group variable universal life plan. However, if the Certificate is assigned, then the assignee will become the Participant replacing any previous Participant. A Participant has all the rights and obligations to their Coverage, such as the right to surrender the Certificate. Subject to the limitations set forth in the Certificate, the Participant may, with respect to their Coverage:

(1)	designate and change the beneficiary;

(2)	make premium payments;

(3)	access certificate values through loans and withdrawals;

(4)	surrender his or her coverage;

(5)	allocate amounts in his or her Certificate Fund among the Variable Investment Options and/or the Fixed Interest Rate Option; and

(6)	decrease face amount.

A Participant may assign his or her coverage. Any rights, benefits or privileges that the Participant has may be assigned without restriction. The rights assigned include, but are not limited to, any right to designate a beneficiary or to convert to another contract of insurance.

Applicant Owner

The Group Contract has an “Applicant Owner” provision. An “Applicant Owner” is a person who may apply for coverage on the life of an Eligible Group Member. And if an Eligible Group Member agrees to let another person be the Applicant Owner of the Certificate, that person would have all of the rights to make decisions about the coverage. References to "Participant" and "You" in this prospectus also apply to an Applicant Owner.

When naming an Applicant Owner, the Eligible Group Member must agree to have his or her life covered. Examples of people who may be Applicant Owners are the Eligible Group Member's spouse, child, parent, grandparent, grandchild, sister, brother, or the trustee of any trust set up by the Eligible Group Member. A person must have attained the age of majority to be an Applicant Owner. At any one time, only one person may be an “Applicant Owner” under a Certificate.

An “Applicant Owner” must fill out an enrollment form. The Eligible Group Member must sign the enrollment form to show his or her agreement. Prudential may require the Eligible Group Member to answer questions about his or her health, or to have a medical examination. If we approve the enrollment form, we will issue the Certificate to the Applicant Owner.

However, states may require that the Certificate be initially issued to the insured Eligible Group Member. In those cases, the three year rule contained in the Internal revenue Code section 2035 may apply. You should consult your tax adviser if you are considering having the Certificate issued to someone other than the insured Eligible Group Member.

Beneficiary

You have the right to name the beneficiary who will receive the Death Benefit from your Certificate. You must use the form that Prudential requires you to use. You may change the beneficiary at any time. You do not need the consent of the present beneficiary. If you have more than one beneficiary at the time the Covered Person dies, we will pay the Death Benefit in equal parts to each beneficiary, unless you have given us other instructions.

OTHER GENERAL CONTRACT PROVISIONS

How Prudential Issues Certificates

To apply for coverage under a Group Variable Universal Life Insurance contract, an Eligible Group Member must fill out an enrollment form. Prudential may ask questions about the health of the person whose life is to be covered, and may ask that person to have a medical exam. If Prudential approves the person for coverage, that person will become a Covered Person under the Group Variable Universal Life Insurance.

Usually, the Eligible Group Member buys coverage on his or her own life from the coverage options available under the Group Contract. But, under your Group Contract, an Eligible Group Member may allow another person the right to make decisions about the coverage. When that happens, Prudential Insurance considers the other person to be a

Participant. No matter whose life is covered, the Participant is the person who "owns" the right to make decisions about the coverage (for example, deciding who the beneficiary will be). When we use the term “Participant” or “You,” we mean the person who owns those rights. When we use the term “Covered Person,” we mean the person whose life is covered.

Prudential will issue a Certificate to each Participant. The Certificate tells you about your rights, benefits, coverage, and obligations under the Group Variable Universal Life Insurance. The minimum Face Amount of insurance for a Certificate is $10,000.

Effective Date of Insurance

When your insurance begins depends on what day of the month Prudential approves your completed enrollment form. If we approve your completed enrollment form prior to the twentieth day of a month, your insurance will begin on the first day of the next month after you meet all of the requirements. If we approve your completed enrollment form on or after the twentieth day of a month, your insurance will begin on the first day of the month after the next month.

Effective Date of More Favorable Rate Class

When your more favorable rate class begins depends on what day of the month Prudential approves your completed enrollment form. If we approve your completed enrollment form prior to the twentieth day of a month, your lower rates will begin on the first day of the month after you meet all of the requirements. If we approve your completed enrollment form on or after the twentieth day of a month, your lower rates will begin on the first day of the second month after you meet all of the requirements.

Maximum Age

Generally, Prudential will not accept an enrollment form requesting coverage on an Eligible Group Member who is older than age 74. Also, a Participant's Face Amount of Insurance will end at the maximum age shown in the Certificate (usually, that is age 100).

When a Participant reaches the maximum age, we make available these two options:

·	You may ask to receive the Cash Surrender Value of the Certificate. Prudential believes that a cash surrender upon termination of coverage will be subject to the same tax treatment as other surrenders. See the Taxes section.

You can remain invested in your investment options. Under this option, we will no longer deduct monthly charges for the cost of insurance. The Death Benefit will change. Specifically, the Death Benefit will be equal to the amount of the Certificate Fund, minus any Certificate Debt and outstanding charges. The Death Benefit will no longer include the Face Amount of insurance. Also, we will no longer allow you to make premium contributions. You can still make loan repayments.

The Face Amount of your life insurance coverage may be reduced when you become 75 years old, and again when you become 80 years old. See Changes In Face Amount section. Also, additional insurance coverages, such as Accidental Death and Dismemberment, will end according to separate rules. See the Additional Insurance Benefits section. You should refer to your Certificate to learn when coverage under your Certificate will end.

“Free Look” Period

Generally, you may return a Certificate for a refund within 30 days after you receive it. This 30-day period is known as the “free look” period. Some states allow a longer period. You can ask for a refund by mailing or delivering the Certificate to Aon Benfield Securities, Inc. (You may not ask for a refund if your Certificate is a replacement for one previously issued under the Group Contract.)

If you cancel your coverage during the free look period, we will generally refund the premium payments you made, minus any loans or withdrawals that you took. We will not add or subtract any gain or loss that would have come from the investment options you chose (unless a state law requires that we take those gains or losses into account when we make a refund). When we make a refund, we will not deduct any charges. The amount refunded will be further reduced by any applicable federal and state income tax withholding.

During the first 30 days after the initial Certificate Date, your premium payments will be invested in the Fixed Account. Prudential reserves the right to limit premiums and transactions during the free look period.

If there is a change in your coverage that results in a new Certificate Date, the free look provision will not apply.

Assignment

You may assign your Certificate, including all rights, benefits and privileges that you have to someone else. If you do, you should consider the references to "you" in this prospectus as applying to the person to whom you validly assigned your Certificate.

Prudential will honor the assignment only if:

·	You make the assignment in writing;

·	You sign it; and

·	Aon Benfield Securities, Inc. receives a copy of the assignment, or Prudential receives a copy of the assignment at the Prudential office shown in your Certificate.

We are not responsible for determining whether the assignment is legal or valid. Certificates that have been assigned are not permitted to use electronic transactions.

If you assign a Certificate that is a Modified Endowment Contract, it might affect the way you are taxed. It might also affect the way the person to whom you assign the Certificate is taxed. See the Taxes section.

Premium Refunds

The Group Contract is eligible to receive Premium Refunds. We do not guarantee that we will pay Premium Refunds. We decide the amount and manner of calculating any Premium Refunds. This calculation may use factors, charges, expenses or other assumptions that differ from those actually charged or described in the Group Contract. If there is a Premium Refund, Prudential Insurance will pay it to your Group Contract Holder, who will pass it on to the subscribers to the AICPA Insurance Trust in the form of a refund. Ordinarily, any refund will be reinvested in your insurance – that is, as a premium payment. However, you may choose to receive your refund in cash by notifying Aon Benfield Securities, Inc. in writing.

Suicide Exclusion

Generally, if the Covered Person dies by suicide within two years from the Certificate Date or reinstatement, Prudential will not pay the Death Benefit described in other sections of this prospectus. Instead, we will pay your beneficiary an amount equal to your premium payments minus any Certificate Debt and any withdrawals, since the Certificate Date or reinstatement. This limit will apply whether the suicide occurred while the Covered Person was sane or insane.

If the Covered Person dies by suicide within two years after the effective date of an increase in the Face Amount of your Certificate that required our approval, we will not pay the increased amount of insurance. Instead of the amount of the increase, we will pay your beneficiary the monthly charges that were attributable to the increased amount. Again, this limit will apply whether the suicide occurred while the Covered Person was sane or insane.

Incontestability

After your Certificate has been in force for two years or more during the Covered Person's lifetime, Prudential will not contest liability under the Certificate. We will also not contest liability for any change in your Certificate that required our approval after the change has been in force for two years or more during the Covered Person's lifetime.

Misstatement of Age and/or Gender

If the Covered Person's age is stated incorrectly in the Certificate and the error is detected prior to their death, we will adjust the monthly cost of insurance deduction to reflect the proper amount based on the correct age. If an adjustment results in an increased cost of insurance, Aon Benfield Securities, Inc. will bill for the difference. If an adjustment results in a decreased cost of insurance, Aon Benfield Securities, Inc. will refund the difference. If the change in age affects the amount of the person’s insurance, Prudential will change the amount and the cost of insurance accordingly.

If the Covered person’s gender is updated in our records, the monthly cost of insurance will be revised starting with the next month. Also, we will adjust the first monthly cost of insurance deduction after we update our records. This adjustment will reflect the sum of the differences each month since October of 2005 (or effective date, if later).

Termination of a Group Contract Holder’s Participation

The Group Contract Holder may decide to terminate the Group Contract with Prudential, by giving Prudential 90 days' written notice.

In addition, Prudential may terminate a Group Contract:

·	If the aggregate Face Amount of all Certificates, or the number of Certificates in force, falls below the permitted minimum, by giving the Group Contract Holder 90 days' written notice; or

·	If the Group Contract Holder fails to remit premium payments to Prudential in a timely way.

Termination of the Group Contract means that the Group Contract Holder will not remit premiums to Prudential. In that event, no new Certificates will be issued under the Group Contract. How the termination affects you is described in the Options on Termination of Coverage section. The options that are available to you from Prudential may depend on what other insurance options are available to you. You should refer to your particular Certificate to find out more about your options at termination of coverage.

Participants Who Are No Longer Eligible Group Members

If you are no longer a member of either the AICPA, any State Society of CPAs or other qualifying organization, you are no longer eligible for coverage. Your Group Variable Universal Life Insurance will end on the last day of the month in which Aon Benfield Securities, Inc. receives notice that you are no longer eligible for coverage.

If your insurance ends, you have the options of Conversion, Paid-Up Coverage, or payment of Cash Surrender Value, which are described in the Options on Termination of Coverage section below. If you are a member of both the AICPA and a State Society of CPAs or other qualifying organization, and you end one of those memberships, your coverage may be reduced. If that happens, you will have a Conversion Privilege to the extent of the reduction.

Options on Termination of Coverage

Your insurance coverage under the Group Contract will end when the Group Contract itself ends or when you are no longer an Eligible Group Member. If the Group Contract ends, the effect on Participants depends on whether or not the Group Contract Holder replaces the Group Contract with another life insurance contract that allows for the accumulation of cash value. Generally, here is what will happen:

If the Group Contract Holder does replace the Group Contract with another life insurance contract that allows for the accumulation of cash value, Prudential will terminate your Certificate. We will also transfer the Cash Surrender Value of your Certificate directly to that new contract, unless you elect to receive the Cash Surrender Value of your Certificate. If you had Certificate Debt that is not carried forward as a loan on the new Certificate, that amount of your debt will be immediately taxable to the extent of any gain.

If the Group Contract Holder does not replace the Group Contract with another life insurance contract that allows for the accumulation of cash value, you will have the options of converting your Certificate, purchasing Paid-Up Coverage, or receiving the Cash Surrender Value. Each option is listed below in more detail.

Conversion

You may elect to convert your Certificate to an individual life insurance policy without giving Prudential evidence that the Covered Person is in good health. To elect this option, you must apply for it and pay the first premium:

·	Within 31 days after your Certificate coverage ends or reduces without your request, if you were given notice no more than 15 days after the coverage under the Group Contract ends or is reduced, or;

·	Within 45 days after you were given notice that your Certificate coverage ends or reduces without your request, if you were given notice more than 15 days, but less than 90 days, after the coverage under the Group Contract ends or is reduced, or;

·	Within 90 days after your Certificate coverage ends or reduces without your request, if you were not given written notice.

You may select any form of individual life insurance policy (other than term insurance) that Prudential normally makes available to persons who are the same age as you and who are asking for the same amount of life insurance. Your

premiums for the individual life insurance policy will be based on the type and amount of life insurance you select, your age and your risk class.

If your coverage reduces without your request, you may convert the amount of the reduction. If your coverage ends because you are no longer an Eligible Group Member, the amount you are able to convert may not exceed the total amount of life insurance ending for you reduced by:

·	The amount of your Certificate Fund needed to cancel any loan due,

·	The amount of any paid-up insurance you may have purchased by using your Certificate Fund after the Face Amount of insurance ends, and

·	The amount of group life insurance, from any carrier, for which you become eligible within the next 45 days.

If a Covered Person dies within 90 days after the Certificate ends or reduces it without your request and you otherwise had the right to convert to an individual policy, we will pay a Death Benefit under the Certificate. But, the Death Benefit will be equal to the amount of individual insurance you could have had if you had actually made the conversion to the individual policy.

Paid-Up Coverage

You may elect to use your Certificate's Cash Surrender Value for Paid-Up Coverage on the Covered Person. To use this option, you must have at least $1,000 of Cash Surrender Value on the day you elect Paid-Up Coverage. The insurance amount will depend on how much the Cash Surrender Value is and on the Covered Person’s date of birth. But, the amount of Paid-Up Coverage cannot be more than your Certificate's Death Benefit right before you elect Paid-Up Coverage. Once you elect Paid-Up Coverage, it will be the only coverage provided under your Certificate.

You may elect this option within 61 days of the date your Certificate ended. Prudential will make the Paid-Up Coverage effective as of the end of the Business Day on which Aon Benfield Securities, Inc. receives your request on the form we require you to use for this purpose. If you elect this option, your insurance may become a Modified Endowment Contract under the Internal Revenue Code. See the Taxes section.

Payment of Cash Surrender Value

You may receive the Cash Surrender Value by surrendering your Certificate. To do this, you must make a request to Aon Benfield Securities, Inc. on the form that we require you to use for this purpose. The election of this option may have tax consequences. See the Taxes section.

If you do not choose one of the options described above within 61 days of the date the Certificate ends, we will exchange your Certificate Fund for Paid-Up Coverage if your Certificate Fund value is at least $1,000. If it does not have that much value, we will pay the Cash Surrender Value.

When Proceeds Are Paid

Prudential will generally pay any Death Benefit, Cash Surrender Value, withdrawal or loan proceeds within 7 days after Aon Benfield Securities, Inc. receives the request for payment. We will determine the amount of the Death Benefit as of the date of the Covered Person's death. For other types of redemptions, we will determine the amount of the proceeds as of the end of the Business Day on which we received the request in Good Order. There are certain circumstances when we may delay payment of proceeds:

We may delay payment of proceeds that come from the Funds and the variable part of the Death Benefit if any of the following events occurs: the New York Stock Exchange is closed (other than for a regular holiday or a weekend), trading is restricted by the SEC, or the SEC declares that an emergency exists.

We expect to pay proceeds that come from the Fixed Account or from Paid-Up Coverage promptly upon request. But, we do have the right to delay these payments (other than the Death Benefit) for up to six months (or a shorter period, if required by state law). We will pay interest at the current rate for settlement options left with Prudential to accumulate with interest if we may delay payment for more than 10 days.

PROCEDURES

Your Group Contract describes various transactions that can be made under your Group Variable Universal Life Insurance--for example, how you will submit an enrollment form, make premium payments, request loans and withdrawals, and transfer or reallocate money in your Certificate Fund. You should consult the appropriate form to learn what those procedures are.

Premium payments must be sent to the AICPA Insurance Trust at the address on your form or bill. Prudential will consider premium payments to be "received" when the AICPA Insurance Trust receives them in Good Order at the address on the premium bill or form. If you send your premium payment to the wrong address or without the correct form, it will be forwarded to the correct address and the date of receipt will be the date it is received at the correct address and the correct account is determined.

Loan repayments must be sent directly to Prudential at a unique address that appears on the loan repayment form.

All other transactions or requests must be sent to Aon Benfield Securities, Inc. at the address on each respective form. If you do not have the proper form, you may request one from Aon Benfield Securities Inc. at (800) 223-7473. Aon Benfield Securities, Inc. is the plan agent for the Contract and is a wholly-owned subsidiary of Aon Corporation and an affiliate of Aon Insurance Services.

Electronic Transactions

You may be able to perform some transactions electronically. These transactions include: transferring amounts among available investment options, making surrenders, requesting withdrawals, and requesting loans.

Prudential will not be liable when we follow instructions that we receive electronically, if we reasonably believe the instructions were genuine. We have adopted security procedures that are reasonably designed to verify that such communications are genuine. We cannot guarantee that you will be able to get through to complete an electronic transaction during peak periods, such as periods of drastic economic or market change, or during system failures or power outages.

When Prudential Reconciles Financial Transactions

Transactions received in Good Order by us before 4 p.m. Eastern time on a Business Day are processed on the same day. Transactions received in Good Order after 4 p.m. Eastern time on a Business Day are processed on the next Business Day.

ADDITIONAL INSURANCE BENEFITS

The following additional insurance benefits are available to you, either automatically or as options.

Child Term Insurance

You may choose a child term insurance benefit. This life insurance benefit covers your dependent child or children. The child must be unmarried, living at birth and less than 21 years old. The age 21 limit does not apply to a child who is wholly dependent on you for support and maintenance, is enrolled full time as a student in a school and is less than age 25. You should refer to your Certificate to learn the details of any benefit that may be available to you.

If you choose this optional benefit, it will reduce the amount of the annual refund that you could otherwise receive from your Group Contract Holder.

Accelerated Benefit Option

You are automatically covered for the Accelerated Benefit Option. Under an accelerated benefit option (referred to in your Certificate as Option to Accelerate Payment of Certain Death Benefits), You can elect to receive an early lump sum payment of part of the Certificate's Death Benefit when the Covered Person is diagnosed as being terminally ill. "Terminally ill" means the Covered Person has a life expectancy of 6 months or less. You must give Prudential satisfactory evidence that the Covered Person is terminally ill.

The amount of the accelerated payment will be equal to a portion of the Covered Person's Net Amount at Risk, plus a portion of the Covered Person's Certificate Fund. If you elect to receive payment under the Accelerated Benefit Option, then the total amount otherwise payable on the Covered Person's death will be reduced by the amount of the accelerated payment.

We will not pay an accelerated benefit if coverage was assigned or if you are required to elect it to meet the claims of creditors or to obtain a government benefit. We can furnish details about the amount of accelerated benefit that is available to you. Unless required by law, you can no longer request an increase in the Face Amount of your Certificate once you have elected to receive an accelerated benefit. The amount of future premium payments you can make will also be limited.

Adding the Accelerated Benefit Option to your Certificate will not affect the way you are taxed. This income tax exclusion may not apply if the benefit is paid to someone other than the Participant. But, if you actually receive proceeds from the Accelerated Benefit Option, it could have tax consequences and may affect your eligibility for certain government benefits or entitlements. In general, the accelerated benefit option is excluded from income if the Covered Person is terminally ill or chronically ill as defined in the tax law (although the exclusion in the latter case may be limited). You should consult a tax adviser before you elect to receive this benefit.

Accidental Death and Dismemberment Benefit

If you are younger than age 75, you may be covered for an Accidental Death and Dismemberment Benefit. You may elect to decline an Accidental Death and Dismemberment Benefit. An Accidental Death and Dismemberment Benefit provides you insurance for accidental loss of life, sight, hand, or foot. This benefit excludes certain types of losses. For example, losses due to suicide or attempted suicide, diseases and infirmities, medical or surgical treatments, and acts of war are not covered. The benefit may be subject to other exclusions from coverage, age limitations, and benefit limitations. You should refer to your Certificate to learn the details of any benefit that may be available to you. This benefit ends when you reach age 75.

Extended Death Protection During Total Disability

You may choose an extended Death Benefit option (also referred to as Waiver of Cost of Insurance Charges) that provides protection during your total disability. Under this provision, Prudential Insurance will waive your monthly charges if you became totally disabled prior to age 60 and your disability continues for at least 9 months. We will extend your insurance coverage for successive one-year periods, generally until age 75. You must provide satisfactory proof of continued total disability. At age 75, Monthly Charges will again be deducted and coverage may lapse if the Certificate Fund is insufficient. See the Lapse section.

PREMIUMS

Your Group Variable Universal Life Insurance has flexible premiums.

Routine Premium Payments

You will usually be able to decide how often to make premium payments and how much each premium payment will be. You must make sure that there is enough value in your Certificate Fund--minus Certificate Debt and outstanding charges-- to cover each month's charges. If there is not, your insurance will end (in insurance terms, it will "lapse"). If the balance in your Certificate Fund is less than the amount of any month's charges, you must make a premium payment that increases your Certificate Fund balance above this minimum amount. You must make that payment during the grace period. If you don't, your insurance coverage will end. See the Lapse section to learn how your insurance will end and what you can do to stop it from ending.

You will also be required to pay a minimum initial premium to become a Participant. The minimum initial premium equals the cost of coverage for the first two months.

Additional Premium Payments

In addition to routine premium payments, you may make additional premium payments at any time. Each additional premium payment must be at least $100. Prudential reserves the right to limit the amount of additional premiums.

How You Will Pay Premiums

Participants will remit payments to Aon Benfield Securities, Inc. (who will pass them on to us).

Deducting Premiums by Automatic Debit

You may choose to have your premium deducted automatically from your checking or savings account.

Effect of Premium Payments on Tax Status

Allocation of Premiums

Prudential will deposit premium payments in your Certificate Fund after we deduct any charges that apply. The amount of your premium after we deduct those charges is called the "Net Premium." See the Charges and Expenses section.

Here's how Prudential will deposit and invest your Net Premiums: we generally will make deposits to your investment options at the end of the Business Day on which Prudential receives the payment. Any payments received before the Certificate Date will be deposited as of the Certificate Date.

BEFORE THE CERTIFICATE DATE. Prudential will hold any premium payment that it receives before the Certificate Date in a non-interest bearing account (on your behalf). We will not pay interest on those amounts. If we receive a premium payment before we have approved your enrollment under the Group Contract, however, we generally will return the premium payment to you.

·	DURING THE FIRST 30 DAYS THAT YOUR CERTIFICATE IS IN EFFECT. We will invest any Net Premiums that we receive during the first 30 days in the Fixed Account. We will leave the Net Premiums in the Fixed Account for those first 30 days.

·	AFTER YOUR CERTIFICATE HAS BEEN IN EFFECT FOR 30 DAYS. After your Certificate has been in effect for 30 days, Prudential will invest the Net Premiums in your Certificate Fund and allocate them by your percentage for each investment option in our records.

If you have not given us complete instructions on how you want Net Premiums to be invested, we will leave your Net Premiums invested in the Fixed Account until you furnish complete information.

Changing the Allocation of Future Premium Payments

You may ask Prudential to change the way your future premium payments will be allocated among the investment options. Aon Benfield Securities, Inc. will give you a form to use for this purpose. We will start to allocate premium payments in the new way as of the end of the Business Day on which Aon Benfield Securities, Inc. receives your request form in Good Order. The minimum percent that you may allocate to an available investment option is 5%. All allocations must be in whole percentages.

You may not change the way Prudential allocates future premiums if, at the time we receive your request, there is not enough money in your Certificate Fund, minus Certificate Debt and outstanding charges, to cover each month’s charges. See the Lapse section.

We do not currently charge for changing the allocation of your future premiums. But, we may charge for changes in the future.

Transfers/Restrictions on Transfers

You may transfer amounts from one investment option to another. You may request a transfer in terms of dollars (such as a transfer of $10,000 from one available option to another) or in terms of a percent reallocation (such as a transfer of 25% of your Certificate Fund from one option to another).

There are some rules about how transfers can be made:

·	The minimum amount you may transfer from one option to another is $100 (or the entire balance in the investment option, if it is less than $100).

·	The minimum percent that you may allocate to an available investment option is 5%. All allocations must be in whole percents.

For the first 20 transfers in a Certificate Year, you may transfer amounts by proper written notice, or electronically. See the Electronic Transactions section. After you have submitted 20 transfers in a Certificate Year, we will accept subsequent transfer requests only if they are in a form acceptable to us, bear an original signature in ink, and are sent to us by U.S. regular mail. After you have submitted 20 transfers in a Certificate Year, a subsequent transfer request by telephone, fax or electronic means will be rejected, even in the event that it is inadvertently processed.

Multiple transfers that occur during the same day, but prior to the end of the valuation period for that day, will be counted as a single transfer.

There is no transaction charge for the first 12 transfers among investment options per Certificate Year. There is an administrative charge of up to $20 for each transfer exceeding 12 in any Certificate Year.

For purposes of the 20 transfer limit, we currently do not count transfers that involve one of our systematic programs, such as Dollar Cost Averaging. For additional information, please see the Dollar Cost Averaging section.

The Group Contract was not designed for professional market timing organizations, other organizations, or individuals using programmed, large, or frequent transfers. Large or frequent transfers among variable investment options in response to short-term fluctuations in markets, sometimes called “market timing,” can make it very difficult for Fund advisers/sub-advisers to manage the variable investment options. Large or frequent transfers may cause the Funds to hold more cash than otherwise necessary, disrupt management strategies, increase transaction costs, or affect performance to the disadvantage of other Participants. If we (in our own discretion) believe that a pattern of transfers or a specific transfer request, or group of transfer requests, may have a detrimental effect on the share prices of the variable investment options, or we are informed by a Fund (e.g., by the Fund’s adviser/sub-adviser) that the purchase or redemption of shares in the variable investment option must be restricted because the Fund believes the transfer activity to which such purchase or redemption relates would have a detrimental effect on share price of the affected variable investment option, we may modify your right to make transfers by restricting the number, timing, and amount of transfers. We reserve the right to prohibit transfer requests made by an individual acting under a power of attorney on behalf of more than one Participant. We will immediately notify you at the time of a transfer request if we exercise this right.

Any restrictions on transfers will be applied uniformly to all Participants, and will not be waived. However, due to the discretion involved in any decision to exercise our right to restrict transfers, it is possible that some Participants may be able to effect transactions that could affect Fund performance to the disadvantage of other Participants.

Owners of variable life insurance or variable annuity contracts that do not impose the above-referenced transfer restrictions might make more numerous and frequent transfers than Participants and other contract owners who are subject to such limitations. Contract owners who are not subject to the same transfer restrictions may have the same underlying variable investment options available to them, and unfavorable consequences associated with such frequent trading within the underlying variable investment option (e.g., greater portfolio turnover, higher transaction costs, or performance or tax issues) may affect all contract and Participants.

The Funds have adopted their own policies and procedures with respect to excessive trading of their respective shares, and we reserve the right to enforce these policies and procedures. The prospectuses for the Funds describe any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted. Under SEC rules, we are required to: (1) enter into a written agreement with each portfolio or its principal underwriter that obligates us to provide to the Fund promptly upon request certain information about the trading activity of individual Contract owners, and (2) execute instructions from the Fund to restrict or prohibit further purchases or transfers by specific Contract owners who violate the excessive trading policies established by the Fund. In addition, you should be aware that some Funds may receive “omnibus” purchase and redemption orders from other insurance companies or intermediaries such as retirement plans. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance contracts and/or individual retirement plan Participants. The omnibus nature of these orders may limit the Funds in their ability to apply their excessive trading policies and procedures. In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations. For these reasons, we cannot guarantee that the Funds (and thus Contract owners) will not be harmed by transfer activity relating to other insurance companies and/or retirement plans that may invest in the Funds.

A Fund also may assess a short term trading fee in connection with a transfer out of the variable investment option investing in that Fund that occurs within a certain number of days following the date of allocation to the variable investment option. Each Fund determines the amount of the short term trading fee and when the fee is imposed. The fee is retained by or paid to the Fund and is not retained by us. The fee will be deducted from your Contract Value to the extent allowed by law. At present, no Fund has adopted a short-term trading fee.

Although our transfer restrictions are designed to prevent excessive transfers, they are not capable of preventing every potential occurrence of excessive transfer activity.

Transfers will take effect as of the end of the Business Day in which a proper transfer request is received by Aon Benfield Securities, Inc. on the form we require you to use for this purpose. Aon Benfield Securities, Inc. will give you a form to request a transfer.

Dollar Cost Averaging

As an administrative practice, we currently offer a feature called Dollar Cost Averaging, or DCA. Once the free look period ends, this feature lets you systematically transfer specified dollar amounts from the Prudential Series Fund Money Market Portfolio to the other available Funds at monthly intervals. You can request that a designated number of transfers be made under the DCA feature. When we make transfers under the DCA feature, the transfers are effective as of the end of the first Business Day of the following month.

You may use DCA at any time after your Certificate becomes effective. But, to start the DCA feature, you usually have to make a premium payment of at least $1,000 to the Series Fund Money Market Portfolio. And, the minimum transfer amount is $100.

Aon Benfield Securities, Inc. will give you a form to request DCA. If Aon Benfield Securities, Inc. receives your request form in Good Order by the tenth of the month, we will start DCA processing during the next month. If the request is received after the tenth day of the month, we will start DCA processing during the month after the next month. We will terminate the DCA arrangement when any of the following events occur:

·	We have completed the designated number of transfers;

·	The amount you have invested in the Prudential Series Fund Money Market Portfolio is not enough to complete the next transfer;

·	Aon Benfield Securities, Inc. receives your written request to end the DCA arrangement; or

·	You no longer have coverage under the Group Variable Universal Life Insurance.

Currently, we do not charge for the DCA arrangement but we may in the future.

The main objective of DCA is to shield investments from short-term price fluctuations. Since the same dollar amount is transferred to an available Fund with each transfer, you buy more of the Fund when its price is low and less of the Fund when its price is high. Therefore, you may achieve a lower average cost over the long term. This plan of investing does not assure a profit or protect against a loss in declining markets.

We reserve the right to change this practice, modify the requirements, or discontinue the feature.

DEATH BENEFITS

When Proceeds Are Paid

Prudential will pay a Death Benefit to the beneficiary you have named, when the Covered Person dies.

Amount of the Death Benefit

The Death Benefit is the Face Amount of insurance plus the value of the Certificate Fund as of the date of death minus any Certificate Debt and any past due monthly charges. But, the Death Benefit will not be less than the Face Amount of insurance shown plus the amount of any additional insurance benefit, if the Covered Person’s insurance is not in default and there is no Certificate Debt or withdrawal.

When a Covered Person attains age 100, the person’s Death Benefit will be equal to the Certificate Fund, less any Certificate Debt outstanding and any past due monthly charges. The Face Amount of Insurance ends, the monthly Expense Charges for the Cost of Insurance will no longer be required and Prudential will no longer accept premiums. Any additional provisions that may have been part of the Variable Universal Life Coverage will end.

Adjustment in the Death Benefit

The Certificate Fund may have grown to the point where we would need to increase the Death Benefit to be certain that the insurance will meet the Internal Revenue Code's definition of life insurance using the “Cash Value Accumulation Test”.

If that were the case for your Certificate, we would increase the Death Benefit (before we deduct any Certificate Debt and outstanding charges) to make it equal the Certificate Fund divided by the Net Single Premium per dollar of insurance for the Covered Person’s Attained Age. For this purpose, we base the Net Single Premium on the 2001 CSO Male Table, and interest rates as described in The Internal Revenue Code, Section 7702.

Death Claim Settlement Options

Prudential may make a range of settlement and payment options available to group life insurance beneficiaries. Subject to applicable state law the standard method of paying group life insurance benefits of certain amounts as established by Prudential (currently $5,000) is via Prudential’s Alliance AccountÒ whereby funds are held with Prudential. When the claim is paid, the full amount of life insurance proceeds payable to the claimant is paid in a single distribution by the establishment of an interest-bearing Alliance Account in the beneficiary’s name. The beneficiary can access all funds immediately by writing a check for the entire amount, may leave funds in the account as long as desired, and generally preserve the ability to transfer all or some funds to other settlement options as available. The Alliance Account begins earning interest immediately and continues earning interest until all funds are withdrawn or the account is closed based on any minimum balance requirement, in which event a close-out check is sent to the beneficiary. Interest is accrued daily, compounded daily, and credited monthly. The interest rate may change at any time, subject to a minimum rate applicable for successive 90 day periods, and is adjusted at Prudential’s discretion based on variable economic factors (including but not limited to, prevailing market rates for short term demand deposit accounts, bank money market rates and Federal Reserve interest rates) and may be more or less than the rate Prudential earns on the funds in the account. The Alliance Account is backed by the financial strength of The Prudential Insurance Company of America. It is not FDIC insured because it is not a bank account or a bank product. Alliance is not available for payments less than $5,000, payments to individuals residing outside the United States and its territories, and certain other payments. These payments will be paid by check. Beneficiaries may wish to consult a tax advisor regarding interest earned on the account. Prudential’s Alliance Account is a registered trademark of The Prudential Insurance Company of America.

The following settlement and payment options are also available (please note availability of options is subject to change):

Payments for a Fixed Period

The Death Benefit plus interest may be paid over a fixed number of years (1 to 25) either monthly, quarterly, semi-annually, or annually. The payment amount will be higher or lower depending on the period selected and the interest rate may change. Beneficiaries may withdraw the total present value of payments not yet made at any time.

Payments in Installments for Life

The Death Benefit may provide monthly payments in installments for as long as the beneficiary lives. Beneficiaries may choose a guaranteed minimum payment period (5, 10, or 20 years) or an installment refund, which will guarantee that the sum of the payments equals the amount of the Death Benefit payable under this option. If the beneficiary dies before Prudential has made all guaranteed payments, we will pay the present value of the remaining guaranteed payments to a payee your beneficiary designates. If your beneficiary does not choose a payment period, no Death Benefits will be paid.

Payment of a Fixed Amount

The beneficiary may choose an income payment of a stated amount either monthly, quarterly, semi-annually, or annually. Prudential will make the payment until the proceeds and interest earned are fully paid. Your beneficiary receives a guaranteed specified sum for a limited number of years. The interest rate can change. Any interest credited will be used to extend the payment period.

Under each of the previously-mentioned alternative options, each payment must generally be at least $20.

Interest Income

All or part of the proceeds may be left with Prudential to earn interest, which can be paid annually, semi-annually, quarterly, or monthly. The minimum deposit is $1,000. This option allows your beneficiary to choose another settlement option at a later time. Withdrawals of $100 or more (including the entire unpaid Death Benefit) can be made at any time.

Lump Sum

Your beneficiary may choose to receive the full death benefit in a single lump sum check.

If the beneficiary elects one of these settlement options, the tax treatment of the Death Benefit may be different than it would have been had the option not been elected. Please consult your tax advisor for advice.

Changes in Face Amount of Insurance

The Face Amount of insurance may increase or decrease. You may choose to increase or decrease the Face Amount of your insurance at certain times according to the Group Contract and Prudential's rules. The Face Amount may also decrease automatically when you reach age 75 and age 80. Here are some general statements about changes in your Face Amount of insurance. But you should read your Certificate to learn how changes work in your case.

When your Face Amount of insurance changes - whether it increases or decreases - the change may cause your insurance to be treated as a Modified Endowment Contract under the Internal Revenue Code. When we identify such a situation, we generally will notify you and ask whether you want us to process the Face Amount of insurance change. When you respond to this notification, we will process the change as you have requested in your response. The Good Order date that we receive your response to this notification will be the effective date of this Face Amount change. Also, a decrease in coverage may limit the amount of premiums that you may contribute in the future. See the Taxes section. You should consult your tax adviser before you change the Face Amount of your insurance.

Increases in Face Amount

Whether you are eligible to increase the Face Amount will depend on several factors at the time you request an increase. These factors include:

·	your current Face Amount;.

your age;

·	your AICPA membership;

·	Your State Society of CPA or other qualifying organization membership; and

·	the schedule of coverage available.

When we receive a request to increase the Face Amount of insurance, Prudential may ask questions about the Covered Person's health, or require the Covered Person to have a medical exam, before the increase can become effective. Based on the answers to the questions or on the exam, Prudential may not allow the increase.

An increase in the Face Amount will result in higher insurance charges because our Net Amount at Risk will increase.

Decreases in Face Amount

Whether you are eligible to decrease the Face Amount will depend on several factors at the time you request a decrease. These factors include:

·	The reduced Face Amount must be a scheduled amount available to you.

·	A Participant may not decrease the Face Amount to less than $10,000 or below the minimum amount required to maintain status as life insurance under federal tax laws.

·	The Face Amount may decrease automatically when you attain ages 75 and 80.

We will calculate the change in the Face Amount at the end of the first Business Day on or after the receipt of your instructions to decrease the Face Amount or when you attain age 75 or 80. The actual decrease will generally take effect on the first Monthly Deduction Date after that. Sometimes it may take an additional month before the charges change. If that happens, we will adjust the amount we deduct the first month after the decrease takes effect to credit you for any extra monthly charges we deducted the previous month.

How We Calculate the Face Amount of Your Insurance When You Reach Age 75 and Age 80

When you reach age 75, we will reduce the Face Amount to:

(1)	Five times the value of the Certificate Fund, or

(2)	75% of the Face Amount prior to age 75, whichever is greater

When you reach age 80, we will reduce the Face Amount to:

(1)	Five times the value of the Certificate Fund, or

(2)	50% of the Face Amount prior to age 75, whichever is greater

Once the Face Amount is recalculated, it will be rounded to the next highest $10,000 increment. We will determine the amount of any reduction that occurs due to your attainment of an age on the later of (1) the Contract Anniversary coinciding with or next following your attainment of the reduction age and (2) the Contract Anniversary (October 1) on or after the tenth anniversary of the day on which you became insured for GVUL under the Group Contract.

The value of the Certificate Fund used in determining the reduced Face Amount will be calculated on the last Business Day prior to the effective date of the reduction.

But in no event will your ultimate Face Amount of insurance, as determined above, exceed your amount of insurance on the day prior to your attainment of the reduction age. Nor will your amount of insurance at anytime be reduced to an amount below an amount required to keep the coverage within the definition of the life insurance under the Internal Revenue Code of 1986, or successor law, without reducing the Certificate Fund.

SURRENDER AND WITHDRAWALS

Surrender of a Certificate

You may surrender your Certificate for its Cash Surrender Value at any time. If you do, all insurance coverage will end. Prudential will calculate the Cash Surrender Value as of the end of the Business Day on which Aon Benfield Securities, Inc. receives your request form in Good Order.

We will pay the proceeds as described in the When Proceeds Are Paid section. If you redeem units from your Certificate Fund that you just purchased and paid for by check or ACH (Automatic Clearing House) transfer, we will

process your redemption, but will delay sending you the proceeds for up to 10 calendar days to allow the check or ACH transfer to clear.

A surrender may have tax consequences. See the Taxes section.

Cash Surrender Value

The Cash Surrender Value of your Certificate is equal to your Certificate Fund minus any Certificate Debt, outstanding charges. On any day, your Certificate Fund equals the sum of the amounts in the Funds, the amount invested in the Fixed Account, and the Loan Account. See the Loans section.

The Cash Surrender Value will change daily to reflect:

·	Net Premiums;

·	Withdrawals;

·	Increases or decreases in the value of the Funds you selected;

·	Interest credited on any amounts allocated to the Fixed Account and on the Loan Account;

·	Interest accrued on any loan;

·	The daily asset charge for mortality and expense risks assessed against the variable investment options; and

·	Monthly charges that Prudential deducts from your Certificate Fund.

If you ask, Aon Benfield Securities, Inc. will tell you the amount of the Cash Surrender Value of your Certificate. Prudential does not guarantee a minimum Cash Surrender Value. It is possible for the Cash Surrender Value of your Certificate to be zero.

Withdrawals

While your Certificate is in effect, you may withdraw part of your Certificate's Cash Surrender Value (“Withdrawal”). We will take it from each investment option you selected in the same proportions as the value of your Certificate Fund is invested, unless your request tells us to take the withdrawal from only selected investment options.

Withdrawals will be effective as of the end of the Business Day on which Aon Benfield Securities, Inc. receives your request form in Good Order. We will pay you the amount withdrawn as described in the When Proceeds Are Paid section. If you redeem units from your Certificate Fund that were recently purchased by check or ACH transfer, we will process your redemption, but will delay sending you the proceeds for up to 10 calendar days to allow the check or ACH transfer to clear.

You must withdraw at least $200 in any withdrawal. You may withdraw any amount that is more than $200, but you must leave enough in your Certificate Fund (less any Certificate Debt and outstanding charges) to pay the next month's charges.

There is no limit on the number of withdrawals you can make in a year. However, there is a transaction charge for each withdrawal. Currently, this charge is $10 or 2% of the amount you withdraw, whichever is less. In the future, Prudential Insurance may raise this charge, but not above $20. We will deduct the transaction charge from the amount you withdraw. A withdrawal will decrease the amount of the Death Benefit.

You may not repay any amount that you withdraw, although you generally may make additional premium payments. Withdrawals may have tax consequences. See the Taxes section.

Payment of Cash Surrender Value

LOANS

You may borrow up to the Maximum Loan Value of your Certificate Fund. The Maximum Loan Value is 90% of your Certificate Fund minus any existing loan (and its accrued interest), outstanding charges, and the amount of the next month's charges. In states that require it, you may borrow a greater amount.

You cannot take a loan if the Certificate Debt exceeds the Maximum Loan Value. Prudential will pay loan proceeds as described in the When Proceeds Are Paid section.

Interest charged on the loan accrues daily at a rate that Prudential sets each year. Interest payments are due the last business day before the Contract Anniversary. If you do not pay the interest when it is due, we will add it to the principal amount of the loan. When this happens, we will take an amount out of your investment options to make the loan and the Loan Account equal in value.

When you take a loan from your Certificate Fund, here's what happens:

·	We will take an amount equal to the loan out of each of your investment options on a pro-rata basis unless you tell us to take it only from selected investment options.

·	We will start a Loan Account for you and will credit the Loan Account with an amount equal to the loan.

We will generally credit interest to the amount in the Loan Account at an effective annual rate that is currently 1% less than the rate Prudential Insurance charges as interest on the loan. The crediting rate will generally be equal to the Fixed Account crediting rate, but will never be less than 4%.

You may repay all or part of a loan at any time. We will apply a loan repayment first against any unpaid loan interest and then to reduce the principal amount of the loan. You may repay a loan either by repayment or by withdrawing amounts from the Certificate Fund. You should send your loan repayments directly to Prudential Insurance. You may request a loan repayment form from Aon Benfield Securities, Inc.

If you repay a loan by using the Certificate Fund, we will treat the repayment as a withdrawal from the Certificate Fund. A withdrawal may have tax consequences. See the Withdrawals section and the Taxes section.

A loan will not cause your Certificate to lapse. However, your loan plus accrued interest (together, these are called "Certificate Debt") may not equal or exceed the value of your Certificate Fund. If Certificate Debt exceeds the value of your Certificate Fund, you will not have enough money in your Certificate Fund to cover the month's charges and your coverage will end. See the Lapse section below.

If you still have Certificate Debt outstanding when you surrender your Certificate or when you allow your Certificate to lapse, the amount you borrowed may become taxable. Also, loans from Modified Endowment Contracts may be treated for tax purposes as distributions of income. See the Taxes section.

If we pay the Death Benefit or the Cash Surrender Value while a loan is outstanding, we will reduce the Death Benefit or the Cash Surrender Value by the amount of the loan plus any accrued interest.

A loan will have a permanent effect on your Certificate's Cash Surrender Value. It may also have a permanent effect on the Death Benefit. This happens because the investment results of the investment options you selected will apply only to the amount remaining in those investment options after the loan amount is transferred to the Loan Account. The longer a loan is outstanding, the greater the effect is likely to be. The effect could be favorable or unfavorable. If investment results are greater than the rate being credited on the amount of the loan while the loan is outstanding, values under the Contract will not increase as rapidly as they would have if no loan had been made. If investment results are below that rate, Contract values will be higher than they would have been had no loan been made.

LAPSE AND REINSTATEMENT

In general, your Certificate will remain in force as long as the balance in your Certificate Fund (less any Certificate Debt and outstanding charges) is enough to pay the monthly charges when due. If the Certificate Fund balance is not enough, Aon Benfield Securities, Inc. will send you a notice to tell you that your insurance is going to end, how much

you must pay to stop it from ending, and when you must pay. We will send the notice to the last known address we have on file for you. This payment must be received by the end of the grace period, or the Certificate will no longer have any value. The grace period is currently 71 days. However, we guarantee that the grace period will be at least the later of 61 days after the Monthly Deduction Date, or 30 days after the date Aon Benfield Securities, Inc. mailed you the notice. A Certificate that lapses with Certificate Debt may affect the way you are taxed. See the Taxes section.

If the Covered Person dies during the grace period, we will reduce the Death Benefit by any past due monthly charges and by any Certificate Debt.

You may request reinstatement of a lapsed Certificate any time within 3 years after the end of the grace period. But, you must be less than the maximum age at which a Certificate may be held. We will not reinstate a lapsed Certificate if the Group Contract under which the Certificate was issued ended or if you are no longer an Eligible Group Member. (If you are an Applicant Owner, we will not reinstate a lapsed Certificate if the Covered Person is no longer eligible for coverage under the Group Contract.)

To reinstate your Certificate, you must send the following items to Aon Benfield Securities, Inc.:

·	A written request for reinstatement;

·	Evidence of the good health of the Covered Person. The evidence must be satisfactory to Prudential;

·	A premium payment that is at least enough, after deduction of any charges that apply, to pay the monthly charges for the grace period and for two more months. See the Charges and Expenses section;

We will make your Certificate effective again on the Monthly Deduction Date that occurs after we approve your request for reinstatement. The terms of your original Certificate will still apply. We will apply a new two-year period of incontestability, and the period during which the suicide exclusion applies will start over again. See the Suicide Exclusion and Incontestability sections.

Currently, we do not charge for a reinstatement. But, we reserve the right to charge for reinstatements in the future. Reinstatement of your Certificate does not reverse or eliminate tax reporting related to a lapse with an outstanding loan.

TAXES

This summary provides general information on federal income tax treatment of a Certificate under the Group Contract. It is not a complete statement of what federal income taxes will be in all circumstances. It is based on current law and interpretations, which may change. It does not cover state taxes or other taxes. It is not intended as tax advice. You should consult your own tax adviser for complete information and advice.

Treatment as Life Insurance and Investor Control

The Certificate must meet certain requirements to qualify as life insurance for tax purposes. These requirements include certain definitional tests and rules for diversification of investments. For further information on the diversification requirements, see Dividends, Distributions and Taxes in the applicable Fund prospectuses or Statements of Additional Information.

We believe we have taken adequate steps to insure that the Certificate qualifies as life insurance for tax purposes. Generally speaking, this means that:

·	You will not be taxed on the growth of the Funds in the Certificate Fund, unless you receive a distribution from the Certificate Fund, and

·	The Certificate's Death Benefit will be income tax free to your beneficiary.

Although we believe that the Certificate should qualify as life insurance for tax purposes, there are some uncertainties, particularly because the Secretary of Treasury has not yet issued permanent regulations that bear on this question. Moreover, regulations issued to date do not provide guidance concerning the extent to which Participants may direct their investments to the particular available Subaccounts of a separate account without causing the Participants, instead of Prudential Insurance, to be considered the owners of the underlying assets. The ownership rights under the Certificate are similar to, but different in certain respects from, those addressed by the

Internal Revenue Service (“IRS”) rulings holding that the insurance company was the owner of the assets. For example, Participants have the choice of more funds and the ability to reallocate amounts among available Subaccounts more frequently than in the rulings. While we believe that Prudential Insurance will be treated as the owner of the separate account assets, it is possible that the Participants may be considered to own the assets.

Because of these uncertainties, we reserve the right to make changes--which will be applied uniformly to all Participants after advance written notice--that we deem necessary to insure that the Certificates under the Group Contract will qualify as life insurance and that Prudential Insurance will be treated as the owner of the underlying assets.

In order to meet the definition of life insurance rules for federal income tax purposes, the Certificate must satisfy the Cash Value Accumulation Test under the Internal Revenue Code.

Under the Cash Value Accumulation Test, the Certificate must maintain a minimum ratio of Death Benefit to cash value. Therefore, in order to ensure that the Certificate qualifies as life insurance, the Certificate's Death Benefit may increase as the Certificate Fund value increases. The Death Benefit, at all times, must be at least equal to the Certificate Fund multiplied by the applicable Attained Age factor.

Pre-Death Distributions

The tax treatment of any distribution you receive before the Covered Person's death depends on whether your Certificate is classified as a Modified Endowment Contract.

Certificates Not Classified As Modified Endowment Contracts

If you surrender your Certificate or allow it to lapse, you will be taxed on the amount you receive in excess of the premiums you paid less the untaxed portion of any prior withdrawals. For this purpose, you will be treated as receiving any portion of the Cash Surrender Value used to repay Certificate Debt. In other words, you will immediately have taxable income to the extent of gain in the Contract. Reinstatement of the Contract after lapse will not eliminate the taxable income which we are required to report to the Internal Revenue Service ("IRS"). The tax consequences of a surrender may differ if you take the proceeds under an income payment settlement option.

Generally, you will be taxed on a withdrawal to the extent the amount you receive exceeds the premiums you paid for the Certificate less the untaxed portion of any prior withdrawals. However, under some limited circumstances, in the first 15 Certificate Years, all or a portion of a withdrawal may be taxed if the Certificate Fund exceeds the total premiums paid less the untaxed portions of any prior withdrawals, even if total withdrawals do not exceed total premiums paid.

·	Extra premiums for optional benefits and riders generally do not count in computing the premiums paid for the Certificate for the purposes of determining whether a withdrawal is taxable.

·	Loans you take against the Certificate are ordinarily treated as debt and are not considered distributions subject to tax.

Modified Endowment Contracts

The rules change if the Certificate is classified as a Modified Endowment Contract. The Certificate could be classified as a Modified Endowment Contract if premiums in excess of certain IRS limits are paid, or a change in the Face Amount of insurance is made (or an additional benefit is added or removed). You should first consult a tax adviser if you are contemplating any of these steps.

If the Certificate is classified as a Modified Endowment Contract, then amounts you receive under the Certificate before the Covered Person's death, including loans, withdrawals, and premium refunds (passed on to you as an annual refund) which are not reinvested are included in income to the extent that the Certificate Fund exceeds the premiums paid for the Certificate increased by the amount of any loans previously included in income and reduced by any untaxed amounts previously received other than the amount of any loans excludible from income. An assignment of a Modified Endowment Contract is taxable in the same way.

·	These rules also apply to loans, withdrawals, premium refunds which are not reinvested, and full surrenders made during the two-year period before the time that the Certificate became a Modified Endowment Contract.

·	The first part is for state and local premium taxes. Currently, it is 2.25% of the premium Prudential receives. (In some states, this charge is called a premium-based administrative charge.) The rates are subject to change based on local, state and federal tax rates.

The second part is for federal income taxes measured by premiums. Currently, it is 0.35% of premiums received by Prudential. We believe that this second charge is a reasonable estimate of an increase in our federal income taxes resulting from a 1990 change in the Internal Revenue Code. This charge is intended to recover this increased tax.

Daily Charges for Mortality and Expense Risks

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and other expenses. These fees are described earlier in this supplement.

Monthly Charges

Prudential deducts a monthly charge for the cost of insurance from your Certificate Fund.

For certificates currently available to the largest existing group case, the highest current rate per thousand is $19.56, and applies to insureds at age 99. The lowest current rate per thousand is $0.05, and applies to insureds under age 24.

The following table provides sample per thousand rates (net of taxes):

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.07
45	$0.12
55	$0.32
65	$0.90

Spouse and Child Term Insurance: The rate for child term insurance is currently $0.08 per thousand. The highest current rate per thousand for spouse term insurance is currently $2.19 and applies to insureds age 70 and older. The lowest current rate per thousand is $0.06, and applies to insureds age 24 and under.

Possible Additional Charges

For details on possible additional charges, please see the Charges and Expenses section of the prospectus.

The Fixed Account

Eligibility and Enrollment

Eligibility

Eligible Group Members are active employees, classes or members of the Group as determined by the employer or Group Contract holder.

We refer to each Eligible Group Member who buys coverage as a "Participant." When the term "you" or "your" is used, we are also referring to a Participant.

Enrollment Period

“Free Look” Period

See the "Free Look" Period section of the prospectus for more details.

Coverage Information

Face Amount

The minimum Face Amount is $100,000. When a Face Amount is based on salary, we round the Face Amount to the next higher multiple of $1,000 if it is not already an even multiple of $1,000. See the How Prudential Issues Certificates section of the prospectus.

Evidence of insurability satisfactory to Prudential will be required if the Face Amount exceeds the limits set forth in your Certificate.

Changes in Face Amount

Increases in Face Amount

Decrease in Face Amount

Face Amounts will not decrease unless you request a decrease. However, if your Face Amount is a multiple of salary, then your Face Amount may decrease if your salary decreases.

Definition of Life Insurance

Additional Insurance Benefits

Accelerated Benefit Option

Exclusions

As stated in the prospectus, Group Variable Universal Life Insurance has a suicide exclusion. See the Suicide Exclusion section of the prospectus for details.

Changes in Personal Status

Continuing Coverage If You Become Totally Disabled

Continuing Coverage at Retirement

You can continue coverage at retirement. Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administrative expenses.

Continuing Coverage When You Leave the Group for Reasons Other Than Retirement

Please contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract For

Ingersoll Rand

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	4
Service Fees Payable to Prudential	6
Charges	7
The Fixed Account	8
Eligibility and Enrollment	8
“Free Look” Period	9
Coverage Information	9
Changes in Face Amount	9
Definition of Life Insurance	9
Additional Insurance Benefits	10
Exclusions	10
Premiums	10
When Monthly Charges are Deducted	10

Table of Contents of the Fund Prospectuses

AllianceBernstein Variable Products Series Fund, Inc.:

Appendix 1

AllianceBernstein Real Estate Investment Portfolio

DWS Variable Series II:

Appendix 2

DWS Government & Agency Securities VIP

DWS Variable Series II:

Appendix 3

DWS High Income VIP

Franklin Templeton Variable Insurance Products Trust:

Appendix 4

Templeton Developing Markets Securities Fund

Franklin Templeton Variable Insurance Products Trust:

Appendix 5

Templeton Foreign Securities Fund

Janus Aspen Series:

Appendix 6

Janus Portfolio

Janus Aspen Series:

Appendix 7

Janus Overseas Portfolio

Lazard Retirement Series, Inc.:

Appendix 8

Lazard Retirement U.S. Small-Mid Cap Equity Portfolio

MFS® Variable Insurance Trustsm:

Appendix 9

MFS Research Series

T. Rowe Price Equity Series, Inc.:

Appendix 10

Equity Income Portfolio

T. Rowe Price Equity Series, Inc.:

Appendix 11

Mid-Cap Growth Portfolio

T. Rowe Price Equity Series, Inc.:

Appendix 12

New America Growth Portfolio

The Prudential Series Fund Portfolio:		Appendix 13
	Diversified Bond Portfolio
	Equity Portfolio
	Flexible Managed Portfolio
	Global Portfolio
	Jennison Portfolio
	Money Market Portfolio
	Stock Index Portfolio
	Value Portfolio

Benefits and Risks

Fee Tables

The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering a Certificate. In several instances we use the terms “maximum” and “current charge.” The “maximum charge” in each instance is the highest charge that we are entitled to make under the Group Contract. The “current charge” is the amount that we are now charging. If circumstances change, we reserve the right to increase each current charge up to the maximum charge, without giving any advance notice.

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5% Current – 0.0%.
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Current - 2.60%
Charge for Processing Premiums	This charge is deducted from each premium when the premium is paid.	Maximum - $2.00 Current - $0.00.
Surrender Charge (Load)	This charge is assessed on a full Surrender of a Certificate.	Maximum - the lesser of $20 and 2% of the amount surrendered. Current - $0.00.
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum – the lesser of $20 and 2% of the amount withdrawn. Current - $0.00
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate year.	Maximum - $20 per transfer after the twelfth. Current - $0.00
Charge for Additional Statements	This charge is assessed each time you request an additional statement.	Maximum - $20 per statement Current - $0.00
Loan Transaction Charge	This charge is assessed when a loan is processed.	Maximum - $20 for each loan. Current - $0.00.

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum - $6.00 Current - $0.00
*Cost of Insurance2
Minimum and Maximum Guaranteed Charge	Monthly	Maximum - $83.34 Minimum - $0.10
Charge for a Representative Participant		Representative guaranteed charge - $0.554
Net Interest on Loans5	Annually	2%
*Additional Insurance Benefits3:
Spouse Dependents Term Life Insurance	Monthly	Maximum -$18.076 Minimum - $0.046
		Representative current charge - $0.557
Child Dependents Term Life Insurance	Monthly	Maximum - $0.066 Minimum - $0.066
		Representative current charge - $0.068
AD&D on employee’s life	Monthly	Maximum- $0.036 Minimum - $0.036
		Representative current charge – 0.038
AD&D on employee and family’s life	Monthly	Maximum - $0.046 Minimum - $0.046
		Representative current charge – 0.048

*	The charges shown for Cost of Insurance and Additional Insurance Benefits are expressed as rates per $1,000 of Net Amount at Risk.

1.	The daily charge is based on the effective annual rate shown.

2.	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3.	These benefits may not be available to some groups.

4.	The representative guaranteed charge for cost of insurance is a sample rate charged for a 44 year old insured guaranteed under the contract.

5.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

6.	These are the maximum and minimum rates currently charged. The contract does not specify a guaranteed maximum or minimum rate for additional insurance benefits.

7.	The representative current charge for spouse term insurance is a sample rate currently charged for a 44 year old insured, who is the spouse of an active employee in Ingersoll Rand.

8.	The representative current charge for additional insurance benefits are sample rates currently charged.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	1.60%

Portfolio Companies

Set out below is a list of each available Fund and its investment advisor/investment manager.

The Funds

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
Diversified Bond: High level of income over a longer term while providing reasonable safety of capital.	Fixed Income - Corporate	PIM
Equity: Long-term growth of capital.	Large-Cap Core	Jennison
Flexible Managed: Total return consistent with an aggressively managed diversified portfolio.	Balanced	PIM QMA

Global: Long-term growth of capital.	International - Equity	QMA LSV MCM T. Rowe Price William Blair
Jennison: Long-term growth of capital.	Large-Cap Growth	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA
Value: Capital appreciation.	Large-Cap Value	Jennison

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

·	LSV Asset Management (“LSV”)

·	Marsico Capital Management, LLC (“MCM”)

·	T. Rowe Price Associates, Inc. (“T. Rowe Price”)

·	William Blair & Company LLC (“William Blair”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
AllianceBernstein Real Estate Investment Portfolio1: Total return from long-term growth of capital and income.	Sector	AllianceBernstein
DWS Government & Agency Securities VIP1: High current income consistent with preservation of capital.	Fixed Income – Government	Deutsche
DWS High Income VIP1: High level of current income	Fixed Income – High Yield	Deutsche
Templeton Developing Markets Securities Fund2: Long-term capital appreciation.	International – Equity	Asset Management

Templeton Foreign Securities Fund2: Long-term capital growth.	International – Equity	Investment Counsel
Janus Overseas Portfolio3: Long-term growth of capital.	International – Equity	Janus Capital
Janus Portfolio3: Long-term growth of capital.	Large-Cap Growth	Janus Capital
Lazard Retirement U.S. Small-Mid Cap Equity Portfolio4: Long-term capital appreciation.	Multi-Cap Growth	Lazard
MFS Research Series5: Capital appreciation.	Large-Cap Core	MFS
T. Rowe Price Equity Income Portfolio: Substantial dividend income as well as long-term growth of capital.	Large-Cap Value	T. Rowe Price
T. Rowe Price Mid-Cap Growth Portfolio: Long-term capital appreciation.	Mid-Cap Growth	T. Rowe Price
T. Rowe Price New America Growth Portfolio: Long-term capital growth.	Multi-Cap Growth	T. Rowe Price

1.	Class A Shares

2.	Class 2 Shares

3.	Institutional Shares

4.	Service Shares

5.	Initial Class Shares

Investment Advisers for Unaffiliated Funds / Portfolios

·	AllianceBernstein L.P. ("AllianceBernstein")

·	Deutsche Investment Management Americas Inc. (“Deutsche”)

·	Janus Capital Management LLC (“Janus Capital”)

·	Lazard Asset Management LLC ("Lazard")

·	Massachusetts Financial Services Company ("MFS").

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

·	Templeton Investment Counsel, LLC (“Investment Counsel”)

·	Templeton Asset Management Ltd. (“Asset Management”)

Service Fees Payable to Prudential

Prudential has entered into agreements with the investment adviser or distributor of the underlying funds. Under the terms of these agreements, Prudential provides administrative and support services to the Funds for which it receives an annual fee based on the average assets allocated to the Fund or portfolio under the Contract from the investment adviser, distributor and/or the Fund. These agreements, including the fees paid and services provided, can vary for each underlying mutual fund whose Funds are offered as investment options.

Prudential and/or our affiliates may receive substantial and varying administrative service payments and Rule 12b-1 fees from certain underlying Funds or related parties. These types of payments and fees are sometimes referred to as “revenue sharing” payments. Rule 12b-1 fees and administrative service payments partially compensate for distribution, marketing, and/or servicing functions and for providing administrative services with respect to Contract owners invested indirectly in the Fund, which include duties such as recordkeeping, shareholder services, and the mailing of periodic reports. We receive administrative services fees with respect to both affiliated underlying Funds and unaffiliated underlying Funds. The administrative services fees we receive from affiliates originate from the assets of the affiliated Fund itself and/or the assets of the Fund’s investment adviser. In either case, the existence of administrative services fees may tend to increase the overall cost of investing in the Fund. The existence of a 12b-1 fee will always increase the overall cost of investing in those Funds. In addition, because these fees are paid to us,

allocations you make to these affiliated underlying Funds may benefit us financially if these fees exceed the costs of the administrative support services.

The 12b-1 fees and administrative services fees that we receive may vary among the different fund complexes that are part of our investment platform. Thus, the fees we collect may be greater or smaller, based on the Funds that you select. In addition, we may consider these payments and fees, among a number of factors, when deciding to add or keep a Fund on the “menu” of Fund that we offer through the product. We collect these payments and fees under agreements between us and a Fund’s principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund. As of May 1, 2012 , the administrative service fees we receive range from 0.05% to 0.25% of the average assets allocated to the Fund. The service fees received from The Prudential Series Fund are 0.05%. Some Funds pay a 12b-1 fee instead of, or in addition to, the administrative services fees. The 12b-1 fee we receive is equal to 0.25% of the average assets allocated to the Funds indicated below.

The following Funds currently pay a 12b-1 fee:

·	Franklin Templeton Developing Markets Securities Fund

·	Franklin Templeton Foreign Securities Fund

·	Lazard Retirement U.S. Small-Mid Cap Equity

Charges

The current charges under the Ingersoll Rand Group Contract are as follows:

Charge for Taxes Attributable to Premiums

This charge is currently made up of two parts:

·	The first part is for state and local premium taxes. Currently, it is 2.25% of the premium Prudential receives. (In some states, this charge is called a premium-based administrative charge.) The rates are subject to change based on local, state and federal tax rates.

Daily Charges for Mortality and Expense Risks

For Ingersoll Rand, the current daily charge for mortality and expense risks is equivalent to an effective annual rate of 0.45%.

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and expenses. These fees are described earlier in this supplement.

Monthly Charges

Prudential deducts a monthly charge for the cost of insurance, and, if applicable, a monthly charge for administrative expenses. Currently, there is no monthly charge for administrative expenses under the Ingersoll Rand plan.

The highest current rate per thousand is $18.07, and applies to insureds at age 99, who have chosen to continue their coverage. The lowest current rate per thousand is $0.04, and applies to insured active employees under age 30.

The following table provides sample per thousand cost of insurance rates (net of taxes):

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.06
45	$0.12
55	$0.34
65	$1.05

Spouse Term Insurance: The highest current rate per thousand is $18.07, and applies to spouses at age 99. The lowest current rate per thousand currently offered for this benefit is $.04, and applies to spouses under age 30.

The following table provides sample per thousand Spouse term insurance charges:

Insured’s Age	Monthly Rate per $1000
35	$0.06
45	$0.12
55	$0.34
65	$1.05

Child Term Insurance: The rate for child term insurance is currently $0.06 per thousand.

AD&D on the Employee’s Life: The rate per thousand currently offered for this coverage is $0.03. Generally, one rate is payable at all ages for a given group of insureds.

AD&D Family Rate: The rate per thousand currently offered for this coverage is $0.04. Generally, one rate is payable at all ages for a given group of insureds.

Possible Additional Charges

For details on possible additional charges, see the Charges and Expenses section of the prospectus.

The Fixed Account

Eligibility and Enrollment

Eligibility

Eligible Group Members for the Group Variable Universal Life Insurance are:

Employees of Ingersoll Rand who were participating in the Group Variable Universal Life Insurance program on 12/31/04. Prior to January 1, 2005, eligibility was open to all employees who were eligible for the Ingersoll Rand Flexible Benefits Plan and had either (1) a Benefits Eligible Pay of $75,000 or more or (2) as of December 31, 2001 had an accumulated additional premium balance in the Cash Accumulation Fund under the Ingersoll Rand Group Universal Life Plan in existence on that date.

On and after January 1, 2005, no new enrollments are allowed into this plan.

We refer to each person who buys coverage as a “Participant.” When we use the terms “you” or “your,” we mean a Participant.

Enrollment Period

You or your spouse would have had to enroll in the plan prior to 12/31/2009. No new employees or spouses may enroll for coverage after that date.

“Free Look” Period

During the first 20 days after the initial Certificate Date, your premium payments will be invested in the Series Fund Money Market Portfolio. Prudential reserves the right to limit contributions and transactions during the free look period.

See the "Free Look" Period section of the prospectus for more details.

Coverage Information

Face Amount

A Participant may choose a Face Amount from one times his or her Benefits Eligible pay to six times his or her Benefits Eligible pay, up to a maximum of $3,000,000. (When Face Amount is based on salary, we round the Benefits Eligible pay to the next higher multiple of $1,000 if it is not already an even multiple of $1,000).

Once enrolled, you may increase your Face Amount of insurance within 31 days following a qualifying life event or at annual enrollment. However, increased coverage may require evidence of insurability satisfactory to Prudential, as explained in the section Evidence Of Good Health below.

Evidence of Good Health

You must give evidence of good health if you enroll for a Face Amount that is more than three times your Benefits Eligible pay or $750,000. However, special rules applied during the November 2001 and October 2003 enrollment periods.

Once enrolled, you will need to give evidence of good health, satisfactory to Prudential, when increasing coverage, except that you will be able to increase your Face Amount within 31 days of a qualifying life event, by one times your Benefits Eligible pay, without having to submit evidence of good health.

Changes in Face Amount

Increases in Face Amount

Once enrolled, you may increase your Face Amount of insurance. However, increased coverage may require evidence of insurability satisfactory to Prudential, as noted in the section Evidence of Good Health above.

Decreases in Face Amount

Generally, your Face Amount will not decrease unless you request a decrease from Prudential, which you can do at any time.

Definition of Life Insurance

Additional Insurance Benefits

Accelerated Benefit Option

A Participant can elect to receive an early payment of part of the Death Benefit when diagnosed as being terminally ill. A Participant may elect up to 50% of the Death Benefit, subject to a maximum of $250,000. “Terminally Ill” means the Participant has a life expectancy of 12 months or less.

Exclusions

As stated in the prospectus, Group Variable Universal Life Insurance has a suicide exclusion. For the purposes of this exclusion, the coverage effective date is the earlier of the date you become covered under the Prudential Group Variable Universal Life Plan, and the date you were previously covered under a Group Universal or Group Variable Universal Life Insurance Policy issued to Ingersoll Rand, if applicable. See the Suicide Exclusion section of the prospectus.

Premiums

Payment of Premiums

All participants will be billed directly by Prudential and will submit their premium payments directly to Prudential.

When Monthly Charges are Deducted

We calculate and deduct the monthly charge from your Certificate Fund, depending upon whether you make routine premium payments by automatic payroll deduction or directly to Prudential. We deduct the monthly charge from each investment option in the same proportions that your Certificate Fund is invested.

If you make routine premium payments directly to Prudential

We generally will deduct charges once per period, on the date that we receive your premium payments. If your premium payments have not been received by the 45th day after the due date, we will deduct the charges from the Certificate Fund on that 45th day. For select groups that utilize monthly premium processing, the charges will be deducted from the Certificate Fund on the first business day of every month, regardless of the billing frequency.

Please refer to the prospectus for information on these and other features of the Ingersoll Rand Group Contract.

Please contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

Supplement dated May 1, 2012

to Prospectus dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract for

JP Morgan Chase & Company

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	3
The Funds	3
Charges	5
The Fixed Account	6
Eligibility and Enrollment	6
“Free Look” Period	6
Coverage Information	7
Changes in Face Amount	7
Definition of Life Insurance	7
Additional Insurance Benefits	7
Exclusions	7
Changes in Personal Status	8
Premiums	8

Table of Contents of the Fund Prospectuses

American Century Variable Portfolios, Inc.:		Appendix 1
	American Century VP Balanced Fund
American Century Variable Portfolios, Inc.:		Appendix 2
	American Century VP International Fund
American Century Variable Portfolios, Inc.:		Appendix 3
	American Century VP Value Fund
J.P. Morgan Insurance Trust:		Appendix 4
	JPMorgan Insurance Trust Core Bond Portfolio
J.P. Morgan Insurance Trust:		Appendix 5
	JPMorgan Insurance Trust International Equity Portfolio
J.P. Morgan Insurance Trust:		Appendix 6
	JPMorgan Insurance Trust Small Cap Core Portfolio
J.P. Morgan Insurance Trust:		Appendix 7
	JPMorgan Insurance Trust U.S. Equity Portfolio
The Prudential Series Fund Portfolio:		Appendix 8
	Flexible Managed Portfolio
	Global Portfolio
	High Yield Bond Portfolio
	Jennison Portfolio
	Money Market Portfolio

Benefits and Risks

Fee Tables

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5%. Current – 0.0%.
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Current - 2.52%
Charge for Processing Premiums	This charge is deducted from each premium when the premium is paid.	Maximum - $2.00 Current - $0.00.
Surrender Charge (Load)	This charge is assessed on a full Surrender of a Certificate.	Maximum - the lesser of $20 or 2% of the amount surrendered. Current - $0.00.
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum - the lesser of $20 or 2% of the amount withdrawn. Current - $0.00.
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate year.	Maximum - $20 per transfer after the twelfth. Current - $0.00
Charge for Additional Statements	This charge is assessed each time you request an additional statement.	Maximum - $20 per statement Current - $0.00
Loan Transaction Charge	This charge is assessed when a loan is processed.	Maximum - $20 for each loan. Current - $0.00.

For these purposes, “taxes attributable to premiums” shall include any federal, state or local income, premium, excise, business, or any other type of tax (or component thereof) measured by or based upon the amount of premium received by Prudential. In some states, this is called a premium based administrative charge. Currently the amount deducted is 2.52% of each premium payment. However, this amount is subject to change, based on state, local and federal tax rates.

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum - $6.00 Current - $2.00
*Cost of Insurance2
Minimum and Maximum Guaranteed Charge	Monthly	Maximum - $83.34 Minimum - $0.10
Charge for a Representative Participant		Representative guaranteed charge - $0.403
Net Interest on Loans4	Annually	2%

* The charges shown for Cost of Insurance are expressed as rates per $1,000 of Net Amount at Risk.

1.	The daily charge is based on the effective annual rate shown.

2.	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3.	The representative guaranteed charge for cost of insurance is a sample rate charged for a 40 year old insured guaranteed under the contract.

4.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.42%	1.43%

Portfolio Companies

Set out below is a list of each available Fund and its investment adviser/investment manager.

The Funds

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
Flexible Managed: Total return consistent with an aggressively managed diversified portfolio.	Balanced	PIM QMA
Global: Long-term growth of capital.	International - Equity	QMA LSV MCM T. Rowe Price William Blair
High Yield Bond: High total return.	Fixed Income – High Yield	PIM
Jennison: Long-term growth of capital.	Large-Cap Growth	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

·	LSV Asset Management (“LSV”)

·	Marsico Capital Management, LLC (“MCM”)

·	T. Rowe Price Associates, Inc. (“T. Rowe Price”)

·	William Blair & Company LLC (“William Blair”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
American Century VP Balanced Fund1: Long-term capital growth and current income.	Balanced	ACIM
American Century VP International Fund1: Capital growth.	International – Equity	ACIM
American Century VP Value Fund1: Long-term capital growth. Income is a secondary objective.	Multi-Cap Value	ACIM

JPMorgan Insurance Trust Core Bond Portfolio2: To maximize total return by investing in a diversified portfolio of intermediate and long-term debt securities.	Fixed Income – Corporate	J.P. Morgan
JPMorgan Insurance Trust International Equity Portfolio2: High total return from a portfolio of equity securities of foreign companies.	International – Equity	J.P. Morgan
JPMorgan Insurance Trust Small Cap Core Portfolio2: Capital growth over the long term.	Small-Cap Core	J.P. Morgan
JPMorgan Insurance Trust U.S. Equity Portfolio2: High total return from a portfolio of selected equity securities.	Large-Cap Core	J.P. Morgan

1.	Class A Shares

2.	Class 1 Shares

Investment Advisers

·	American Century Investment Management, Inc. ("ACIM")

·	J.P. Morgan Investment Management Inc. ("J.P. Morgan")

Charges

The current charges under the JP Morgan Chase & Company Group Contract are as follows:

Charge for Taxes Attributable to Premiums

This charge is currently made up of two parts:

·	The first part is for state and local premium taxes. Currently, it is 2.17% of the premium Prudential receives. (In some states, this charge is called a premium-based administrative charge.) The rates are subject to change based on local, state and federal tax rates.

Daily Charges for Mortality and Expense Risks

Prudential deducts this charge from the assets of the JP Morgan Chase & Company Group Contract that correspond to the Funds you select. This charge is to compensate Prudential for assuming mortality and expense risks. Prudential does not deduct this charge from assets invested in the Fixed Account.

For JP Morgan Chase & Company, the current daily charge for mortality and expense risks is equivalent to an effective annual rate of 0.45%.

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and other expenses. These fees are described earlier in this supplement.

Monthly Charges

Prudential deducts a monthly charge for the cost of insurance and a monthly charge of $2.00 for administrative expenses from your Certificate Fund.

The highest current rate per thousand is $36.86, and applies to insureds at age 99, who are smokers. The lowest current rate per thousand is $0.06, and applies to insureds under age 30, who are nonsmokers.

The following table provides sample per thousand cost of insurance rates for nonsmokers:

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.07
45	$0.18
55	$0.46
65	$1.27

Possible Additional Charges

For details on possible additional charges, see the Charges and Expenses section of the prospectus.

The Fixed Account

Eligibility and Enrollment

Eligibility

Eligible Group Members for the Group Variable Universal Life Insurance include:

·	Current or former employees of JP Morgan who were enrolled in the Group Variable Universal Life Insurance plan prior to 12/31/2001, and have chosen not to enroll in the JP Morgan Chase & Company’s other voluntary group life insurance program, the supplemental term life insurance plan.

Spouses of current or former employees of JP Morgan or their Spouses who were enrolled in the Group Variable Universal Life Insurance plan prior to 12/31/2001, and whose Employee Spouses have chosen not to enroll in the JP Morgan Chase & Company’s other voluntary group life insurance program, the supplemental term life insurance plan.

We refer to each person who buys coverage as a “Participant.” When we use the terms “you” or “your,” we mean a Participant.

Enrollment Period

You or your spouse would have had to enroll in the plan prior to 12/31/2001. No new employees or spouses may enroll for coverage after that date.

“Free Look” Period

See the "Free Look" Period section of the prospectus for more details.

Coverage Information

Face Amount

An employee may have chosen a Face Amount from $50,000 to the lesser of $1,500,000 and five times annual eligible compensation. (When Face Amount is based on eligible compensation, we round the Face Amount to the next higher multiple of $100 if it is not already an even multiple of $100).

A spouse may have chosen a Face Amount from $50,000 to $300,000.

Both employee and spouse face amounts must have been approved by Prudential prior to January 1, 2002.

Evidence of Good Health

Because you may no longer elect or increase your coverage or your spouse’s coverage there is no requirement to provide evidence of good health.

Changes in Face Amount

Increases in Face Amount

After January 1, 2002, the Face Amount of insurance that you have previously chosen may not be increased.

Decreases in Face Amount

Generally, your coverage amount will not decrease unless you request a decrease from Prudential.

See the Changes in Face Amount and Taxes sections of the prospectus.

Definition of Life Insurance

Additional Insurance Benefits

Accelerated Benefit Option

You or your spouse can choose to receive an early payment of all or part of the Death Benefit when diagnosed as being terminally ill. Your accelerated benefit is subject to a maximum of $50,000 or 50% of your Face Amount of insurance, whichever is less. "Terminally ill" means you have a life expectancy of 12 months or less.

Exclusions

As stated in the prospectus, Group Variable Universal Life Insurance has a suicide exclusion. See the Suicide Exclusion section of the prospectus.

Changes in Personal Status

Continuing Coverage When You Become Disabled

There is no disability provision under your Certificate, but you may continue your Group Variable Universal Life Coverage while on Disability Leave of Absence. Prudential will bill you directly for premium payments, and will charge a fee, currently $3 per bill, for administration expenses.

Continuing Coverage When You Retire

You may continue your Group Variable Universal Life coverage when you retire. Prudential will continue to bill you directly for premium payments, and will charge a fee, currently $3 per bill, for administration expenses.

Continuing Coverage If You Leave The Company For Reasons Other Than Retirement

You may elect to continue your coverage, at active employee rates, if you leave JP Morgan Chase & Company for any reason. However, rates for Continuation coverage will be higher than rates for coverage as an active employee commencing on the January 1 immediately following the second anniversary of your leaving JP Morgan Chase & Company. Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administration expenses.

Termination of the Group Contract

Either JP Morgan Chase & Company or Prudential may end the Group Contract. Prudential can end the Group Contract only under the conditions described in the prospectus.

If the Group Contract ends, the effect on Participants depends on whether or not JP Morgan Chase & Company replaces the Group Contract with another life insurance contract that allows for the accumulation of cash value. Generally, here is what will happen:

If JP Morgan Chase & Company does replace the Group Contract with another life insurance contract that allows for the accumulation of cash value, Prudential may terminate your Certificate. We may also transfer the Cash Surrender Value of your Certificate directly to that new contract, unless you elect to receive the Cash Surrender Value of your Certificate.

If JP Morgan Chase & Company does not replace the Group Contract with another life insurance contract that allows for the accumulation of cash value, you will have these options: elect to continue to have Prudential bill you directly for premium payments (with an administration expense fee, currently $3 per bill, charged to you), elect to convert to an individual life insurance policy; use your Certificate Fund to buy paid-up life insurance; or elect to receive the Cash Surrender Value of your Certificate.

See the Options on Termination of Coverage section of the prospectus.

Premiums

Payment of Premiums

Active employees, retirees, employees on an approved leave of absence, and Participants who elect continued coverage will be billed directly by Prudential (with a fee, currently $3 per bill, for administration expenses) and will submit their premium payments directly to Prudential.

When Monthly Charges Are Deducted

The exact date that we deduct the monthly charge from your Certificate Fund depends upon how you make routine premium payments to Prudential. We deduct the monthly charge from each investment option in the same proportions that your Certificate Fund is invested.

If you make routine premium payments directly to Prudential

We generally will deduct charges once per period, on the date that we receive your premium payments. If your premium payment has not been received by the 45th day after the due date, we will deduct the charges from the

Certificate Fund on that 45th day. However, for groups that utilize monthly premium processing, the charges will be deducted from the Certificate Fund on the first Business Day of every month, regardless of the billing frequency.

Please refer to the prospectus for information on these and other features of the JP Morgan Chase & Company Group Variable Universal Life Contract.

You may contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract for

KPMG LLP Retirees and Terminated Partners Prior to 11/5/2003

This document is a supplement to the prospectus dated May 1, 2012 (the “prospectus”) for the Group Variable Universal Life Insurance Contracts and Certificates that The Prudential Insurance Company of America (“Prudential,” “we,” “us”) offers to you. This supplement is not a complete prospectus, and must be accompanied by the prospectus. The prospectus describes the insurance features and other aspects of the KPMG LLP Retirees and Terminated Partners Prior to 11/5/2003(“KPMG LLP Retirees and Terminated Partners”) Group Variable Universal Life Contracts and Certificates. This is specific to groups 61380 & 61381 – former partners enrolled in the Group Variable Universal Life Insurance plan, who either retired or terminated and elected to continue coverage prior to 1/1/2003 and group 41704 – former partners enrolled in the Group Variable Universal Life Insurance plan, who either retired or terminated and elected to continue coverage between 1/1/2003 and 11/5/2003.

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	3
Charges and Expenses	5
The Fixed Account	6
Eligibility and Enrollment	6
“Free Look” Period	7
Coverage Information	7
Changes in Face Amount	7
Definition of Life Insurance	8
Additional Insurance Benefits	8
Exclusions	8
Changes in Personal Status	8
Premiums	9
When Monthly Charges are Deducted	9

Table of Contents of the Fund Prospectuses

American Century Variable Portfolios, Inc.:		Appendix 1
	American Century VP Value Fund
Janus Aspen Series:		Appendix 2
	Janus Worldwide Portfolio
MFS® Variable Insurance Trustsm:		Appendix 3
	MFS Research Series
MFS® Variable Insurance Trustsm:		Appendix 4
	MFS Research Bond Series
MFS® Variable Insurance Trustsm:		Appendix 5
	MFS Strategic Income Series
Neuberger Berman Advisers Management Trust:		Appendix 6
	Neuberger Berman AMT Large Cap Value Portfolio
T. Rowe Price Equity Series, Inc.:		Appendix 7
	Equity Income Portfolio
T. Rowe Price Equity Series, Inc.:		Appendix 8
	New America Growth Portfolio

The Prudential Series Fund Portfolio:		Appendix 9
	Equity Portfolio
	Global Portfolio
	High Yield Bond Portfolio
	Jennison Portfolio
	Money Market Portfolio
	Small Capitalization Stock Portfolio
	Stock Index Portfolio

Benefits and Risks

Fee Tables

The first table describes the fees and expenses that you will pay at the time that you buy the Certificate, pay premiums, make transfers between investment options, take a loan, or surrender the Certificate.

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5% Current – 0.0%.
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid	Current - 0.00%
Charge for Processing Premiums	This charge is deducted from each premium when the premium is paid.	Maximum - $2.00 Current – $0.00.
Surrender Charge (Load)	This charge is assessed on a full Surrender of a Certificate.	Maximum - the lesser of $20 and 2% of the amount surrendered. Current - $0.00.
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum - the lesser of $20 and 2% of the amount withdrawn. Current - $0.00.
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate Year.	Maximum - $20 per transfer after the twelfth. Current - $0.00
Charge for Additional Statements	This charge is assessed each time you request an additional statement	Maximum - $20 per statement. Current - $0.00
Loan Transaction Charge	This charge is assessed when a loan is processed.	Maximum - $20 for each loan. Current - $0.00

For these purposes, “taxes attributable to premiums” shall include any federal, state or local income, premium, excise, business, or any other type of tax (or component thereof) measured by or based upon the amount of premium received by Prudential. In some states, this is called a premium based administrative charge. Currently, the cost of taxes attributable to premiums is included in the cost of insurance charges.

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum - $6.00 Current - $0.00
*Cost of Insurance2
Minimum and Maximum Guaranteed Charge	Monthly	Maximum - $83.34 Minimum - $0.08
Charge for a Representative Participant		Representative guaranteed charge - $0.563
Net Interest on Loans4	Annually	2%

*	The charges shown for Cost of Insurance are expressed as rates per $1,000 of Net Amount at Risk.

1.	The daily charge is based on the effective annual rate shown.

2.	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3.	The representative guaranteed charge for the cost of insurance is a sample rate charged for a 46 year old insured guaranteed under the contract.

4.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	1.13%

Portfolio Companies

Set out below is a list of each available Fund and its investment advisor/investment manager.

The Funds

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
Equity: Long -term growth of capital.	Large-Cap Core	Jennison
Global: Long-term growth of capital.	International - Equity	QMA LSV MCM T. Rowe Price William Blair
High Yield Bond: High total return.	Fixed Income – High Yield	PIM
Jennison: Long-term growth of capital.	Large-Cap Growth	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Small Capitalization Stock: Long-term growth of capital.	Small-Cap Core	QMA
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

·	LSV Asset Management (“LSV”)

·	Marsico Capital Management, LLC (“MCM”)

·	T. Rowe Price Associates, Inc. (“T. Rowe Price”)

·	William Blair & Company LLC (“William Blair”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
American Century VP Value Fund1: Long-term capital growth.	Multi-Cap Value	ACIM
Janus Worldwide Portfolio2: Long-term growth of capital.	International – Equity	Janus Capital
MFS Research Series3: Capital appreciation.	Large-Cap Core	MFS
MFS Research Bond Series3: Total return with an emphasis on current income but also considering capital appreciation.	Fixed Income - Corporate	MFS
MFS Strategic Income Series3: Total return with an emphasis on high current income but also considering capital appreciation.	Fixed Income - Corporate	MFS
Neuberger Berman AMT Large Cap Value Portfolio1: Growth of capital.	Multi-Cap Value	NBM
T. Rowe Price Equity Income Portfolio: Substantial dividend income as well as long-term growth of capital.	Large-Cap Value	T. Rowe Price
T. Rowe Price New America Growth Portfolio: Long-term capital growth.	Multi-Cap Growth	T. Rowe Price

1.	Class I Shares

2.	Institutional Shares

3.	Initial Class Shares

Investment Advisers for Unaffiliated Funds / Portfolios

·	American Century Investment Management, Inc. ("ACIM")

·	Janus Capital Management LLC (“Janus Capital”)

·	Massachusetts Financial Services Company ("MFS")

·	Neuberger Berman Management Inc. ("NBM")

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

Charges and Expenses

The current charges under the KPMG LLP Retirees and Terminated Partners Group Contract are as follows:

Charge for Taxes Attributable to Premiums

We also reserve the right to deduct a charge to cover federal, state or local taxes that are imposed on the operations of the Account. These are taxes other than those described above. Currently, we do not deduct any charge to cover these additional taxes.

We may increase this charge at any time.

Daily Charges for Mortality and Expense Risks

Prudential deducts this charge from the assets of the Subaccount(s) that correspond to the Fund(s) you select. This charge is to compensate Prudential for assuming mortality and expense risks.

For KPMG LLP Retiree and Terminated Partners, the current daily charge for mortality and expense risks is equivalent to an effective annual rate of 0.45%.

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and expenses. They are described earlier in this supplement.

Monthly COI Charge

Prudential deducts a monthly charge for the cost of insurance. We describe the calculation of this charge in the prospectus.

The guaranteed maximum rates may be up to 130% of the 1980 CSO Male Table. The guaranteed rates are based on many factors, including:

The highest current rate per thousand is $24.57 and applies to certain insureds at age 99, who have terminated employment. The lowest current rate per thousand is $0.16, and applies to insureds at age 48, who are terminated .

The following table provides sample per thousand cost of insurance rates for retired partners (net of taxes):

Insured’s Age	Monthly Cost of Insurance Rate per $1000
55	$0.32
65	$0.75

Possible Additional Charges

For details on possible additional charges, see the Charges and Expenses section of the prospectus.

The Fixed Account

Eligibility and Enrollment

Eligibility

Eligible Group Members for the Group Variable Universal Life Insurance are:

·	Former Partners of KPMG LLP and Subsidiaries who were enrolled in the Group Variable Universal Life Insurance Plan, who either retired or terminated and elected to continue coverage prior to 1/1/2003.

·	Former partners of KPMG LLP and Subsidiaries who were enrolled in the Group Variable Universal Life Insurance Plan, who either retired or terminated and elected to continue coverage between 1/1/2003 and 11/5/2003.

We refer to each person who buys coverage as a "Participant." When we use the terms “you” or “your,” we mean a Participant.

Enrollment Period

You or your spouse would have had to enroll in the plan prior to 11/05/2003. No new employees or spouses may enroll for coverage after that date.

“Free Look” Period

See the "Free Look" Period section of the prospectus for more details.

Coverage Information

Face Amount

An eligible Partner may have chosen a GVUL Face Amount of up to 6 times annual earnings (less incentive compensation), rounded to the nearest $100,000,

·	up to a maximum of $2,500,000, for participants who were retired or terminated and elected to continue coverage prior to 1/1/2003.

·	or up to a maximum of $3,000,000, for participants who were either retired or terminated and elected to continue coverage between 1/1/2003 and 11/5/2003.

All face amounts must have been approved by Prudential prior to 11/5/2003.

Evidence of Good Health

Because you may no longer elect or increase your coverage, there is no requirement evidence of good health.

Changes in Face Amount

Increases in Face Amount

After 11/5/2003, the Face Amount of insurance that you have previously chosen may not be increased.

Decreases in Face Amount

Your Face Amount will decrease only if you voluntarily choose to reduce it.

Conversion

If all or a part of your Face Amount of Insurance ends because ends for one of the reasons stated below, you may elect to convert your Certificate to an individual life insurance policy, without giving Prudential evidence that the Covered Person is in good health. The reasons are:

·	Your employment ends, you transfer out of the covered classes, or the amount of your Face Amount Insurance is reduced by reasons of age, retirement, the end of your membership in a Covered Class, or an amendment to the Group Contract that changes the benefits for your class.

·	All Face Amount of Insurance that applies to you under the Group Contract for your class ends by amendment or otherwise.

To elect this option, you must apply for it within 31 days (or longer, depending on the state law that applies) after your Certificate ends. You may select any form of individual life insurance policy (other than term insurance, unless a term policy is required by law) that Prudential normally makes available for conversion to persons who are the same age as you and who are asking for the same amount of life insurance. Your premiums for the individual life insurance policy will be based on the type and amount of life insurance you select, your age and your risk class.

The amount of the individual contract cannot be more than the total amount of all life insurance then ending for that person under the Group Contract reduced by: (a) the amount of that person's Certificate Fund needed to cancel any loan due; (b) the amount of that person's paid-up insurance, if any; and (c) the amount of group life insurance from any carrier for which you are or become eligible within the next 45 days.

If a Covered Person dies within 31 days (or longer, depending on the state law that applies) after the Certificate ends and you had the right to convert to an individual policy, we will pay a Death Benefit under the Certificate. But, the Death Benefit will be equal to the amount of individual insurance you could have had if you had actually made the conversion to the individual policy.

Definition of Life Insurance

Under this method we would increase the Death Benefit (before we deduct any Certificate Debt and outstanding charges) to make it equal the Certificate Fund divided by the Net Single Premium per dollar of insurance for the Covered Person’s Attained Age. For this purpose, we base the Net Single Premium on the 1980 CSO Male Table, and interest rates as described in The Internal Revenue Code, Section 7702.

Additional Insurance Benefits

Accelerated Benefit Option

A Participant can elect to receive an early payment of part of the Death Benefit when diagnosed as being terminally ill. You may elect up to 50% of the Death Benefit, subject to a maximum of $250,000. “Terminally ill” means the Participant has a life expectancy of 6 months or less.

Exclusions

As stated in the prospectus, Group Variable Universal Life Insurance has a suicide exclusion. See the Suicide Exclusion section of the prospectus.

Changes in Personal Status

Continuing Coverage When You Become Disabled

If you become totally disabled prior to age 57 and are unable to pay premiums, you will continue to have insurance coverage equal to the Face Amount of your Certificate until you reach age 62, as long as you remain totally disabled.

Continuing Coverage When You Retire

You may continue your Group Variable Universal Life coverage when you retire. Your rates for coverage will depend upon your age. We will bill you for premium payments plus a charge of $3 per bill for administration expenses.

Continuing Coverage If You Leave the Company For Reasons Other Than Retirement

In addition to continuing coverage if you retire, you may continue coverage if you leave KPMG for any other reason. Your rates for Continuation coverage will depend upon your age based on the Plan's experience until the second policy anniversary after you leave the employment of KPMG. After that, you will be charged rates for coverage based on the experience of a Prudential portability pool. These rates will be higher than your active rates. We will bill you for premium payments plus a charge of $3 per bill for administration expenses. If the KPMG LLP Retirees and Terminated Partners Group Contracts terminate, you may nonetheless continue your Continuation coverage.

Termination of the Group Contracts

Either KPMG or Prudential may terminate the KPMG LLP Retirees and Terminated Partners Group Contracts, although Prudential will only do so under certain conditions described in the prospectus. If the KPMG LLP Retirees and Terminated Partners Group Contracts are terminated, KPMG may replace them with another life insurance contract that, like the KPMG LLP Retirees and Terminated Partners Group Contracts, permits you to accumulate cash value. In that case, you will have the option of (i) transferring the value of your investment options less any loans, accrued interest, and outstanding charges to the new contract; or (ii) receiving that same amount in a lump sum payment, or (iii) have Prudential continue to bill you directly for premium payments (with a fee of $3 per bill for administration expenses charged to you).

If KPMG does not replace the KPMG LLP Retirees and Terminated Partners Group Contracts with a life insurance contract that permits you to accumulate cash value, then you will have the option of electing to have Prudential continue to bill you directly for premium payments (with a fee of $3 per bill for administration expenses charged to you), electing to convert to a cash value individual life insurance policy, electing a paid-up life insurance policy in which no future premiums would be paid, or receiving a lump sum payment as previously described.

See the Options on Termination of Coverage section of the prospectus.

Premiums

Payment of Premiums

All participants will be billed directly by Prudential and will submit their premium payments directly to Prudential.

You may also make lump sum payments at any time. The minimum lump sum payment is $100. The maximum is subject to annual and lifetime limits set by the Internal Revenue Service. See the Taxes section of the prospectus.

When Monthly Charges are Deducted

We calculate and deduct the charges monthly from your Certificate Fund, depending upon how you make routine premium payments to Prudential. We take the charges from each investment option in the same proportions that your Certificate Fund is invested.

If you make routine premium payments directly to Prudential

We generally will deduct the monthly Certificate Fund charges once per month, on the date we receive your premium payment. If your premium has not been received by the 45th day after the due date we will deduct the month's Certificate Fund charges on that 45th day. However, for groups that utilize monthly premium processing, the charges will be deducted from the Certificate Fund on the first Business Day of every month, regardless of the billing frequency.

Please refer to the prospectus for information on these and other features of the KPMG LLP Retirees and Terminated Partners Group Contracts.

Please contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract for

Mayo Clinic

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	3
Service Fees Payable to Prudential	5
Charges	6
The Fixed Account	7
Eligibility and Enrollment	7
“Free Look” Period	7
Premiums	7
Maximum Age	7
Coverage Information	7
Changes in Face Amount	8
Definition of Life Insurance	8
Additional Insurance Benefits	8
Exclusions	8
Changes in Personal Status	8

Table of Contents of the Fund Prospectuses

AllianceBernstein Variable Products Series Fund, Inc.:		Appendix 1
	AllianceBernstein VPS Real Estate Investment Portfolio
Janus Aspen Series:		Appendix 2
	Janus Portfolio
Janus Aspen Series:		Appendix 3
	Janus Overseas Portfolio
Lazard Retirement Series, Inc.:		Appendix 4
	Lazard Retirement Emerging Markets Equity Portfolio
MFS® Variable Insurance Trustsm:		Appendix 5
	MFS Strategic Income Series
Neuberger Berman Advisers Management Trust:		Appendix 6
	Neuberger Berman AMT Growth Portfolio
T. Rowe Price Equity Series, Inc.:		Appendix 7
	T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price International Series, Inc.:		Appendix 8
	T. Rowe Price International Stock Portfolio
The Prudential Series Fund Portfolio:		Appendix 9
	Conservative Balanced Portfolio
	Global Portfolio
	Government Income Portfolio
	High Yield Bond Portfolio
	Money Market Portfolio
	Natural Resources Portfolio
	Small Capitalization Stock Portfolio
	Stock Index Portfolio
	Value Portfolio

Benefits and Risks

Fee Tables

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5% Current – 0.0%
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Current - $0.00
Charge for Processing Premiums.	This charge is deducted from each premium when the premium is paid.	Maximum - $2.00 Current - $0.00
Surrender Charge (Load)	This charge is assessed on a full Surrender of a Certificate.	Maximum - $20 Current - $0.00
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum - $20 Current - $0.00
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate year.	Maximum - $20 per transfer after the twelfth. Current - $0.00
Charge for Additional Statements	This charge is assessed each time you request an additional statement.	Maximum - $20 per statement Current - $0.00
Loan Transaction Charge	This charge is assessed when a loan is processed.	Maximum - $20 for each loan. Current - $0.00

For these purposes, “taxes attributable to premiums” shall include any federal, state or local income, premium, excise, business, or any other type of tax (or component thereof) measured by or based upon the amount of premium received by Prudential. In some states, this is called a premium based administrative charge. Currently, the cost of taxes attributable to premiums is included in the cost of insurance charges.

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum - $6.00 Current - $0.00
*Cost of Insurance2
Minimum and Maximum Guaranteed Charge	Monthly	Maximum - $50.48 Minimum - $ 0.04
Charge for a Representative Participant	Monthly	Representative guaranteed charge - $0.553
Net Interest on Loans4	Annually	2%

*	The charges shown for Cost of Insurance are expressed as rates per $1,000 of Net Amount at Risk.

1.	The daily charge is based on the effective annual rate shown.

2.	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3.	The representative guaranteed charge for cost of insurance is a sample rate charged for a 48 year old insured guaranteed under the contract.

4.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	2.52%

Portfolio Companies

Set out below is a list of each available Fund and its investment adviser/investment manager.

The Funds

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
Conservative Balanced: Total investment return consistent with a conservatively managed diversified portfolio.	Balanced	PIM QMA
Global: Long-term growth of capital.	International - Equity	QMA LSV MCM T. Rowe Price William Blair
Government Income: High level of income over the long term consistent with the preservation of capital.	Fixed Income - Government	PIM
High Yield Bond: High total return.	Fixed Income – High Yield	PIM
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Natural Resources: Long-term growth of capital.	Sector	Jennison
Small Capitalization Stock: Long-term growth of capital.	Small-Cap Core	QMA
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA
Value: Capital appreciation.	Large-Cap Value	Jennison

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

·	LSV Asset Management (“LSV”)

·	Marsico Capital Management, LLC (“MCM”)

·	T. Rowe Price Associates, Inc. (“T. Rowe Price”)

·	William Blair & Company LLC (“William Blair”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
AllianceBernstein Real Estate Investment Portfolio1: Total return from long-term growth of capital and income.	Sector	AllianceBernstein
Janus Overseas Portfolio3: Long-term growth of capital.	International – Equity	Janus Capital
Janus Portfolio3: Long-term growth of capital.	Large-Cap Growth	Janus Capital
Lazard Retirement Emerging Markets Equity Portfolio4: Long-term capital appreciation.	International – Equity	Lazard
MFS Strategic Income Series5: Total return with an emphasis on high current income, but also considering capital appreciation	Fixed Income – Corporate	MFS
Neuberger Berman AMT Growth Portfolio6: Growth of capital.	Mid-Cap Growth	NBM
T. Rowe Price International Stock Portfolio: Long-term growth of capital.	International – Equity	T. Rowe Price
T. Rowe Price Mid-Cap Growth Portfolio: Long-term capital appreciation.	Mid-Cap Growth	T. Rowe Price

1.	Class A Shares

2.	Institutional Shares

3.	Service Shares

4.	Initial Class Shares

5.	Class I Shares

Investment Advisers for Unaffiliated Funds / Portfolios

·	AllianceBernstein L.P. ("AllianceBernstein")

·	Janus Capital Management LLC (“Janus Capital”)

·	Lazard Asset Management LLC ("Lazard")

·	Massachusetts Financial Services Company ("MFS")

·	Neuberger Berman Management Inc. ("NBM")

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

Service Fees Payable to Prudential

Prudential has entered into agreements with the investment adviser or distributor of the underlying funds. Under the terms of these agreements, Prudential provides administrative and support services to the Funds for which it receives an annual fee based on the average assets allocated to the Fund or portfolio under the Contract from the investment adviser, distributor and/or the Fund. These agreements, including the fees paid and services provided, can vary for each underlying mutual fund whose Funds are offered as investment options.

as “revenue sharing” payments. Rule 12b-1 fees and administrative service payments partially compensate for distribution, marketing, and/or servicing functions and for providing administrative services with respect to Contract owners invested indirectly in the Fund, which include duties such as recordkeeping, shareholder services, and the mailing of periodic reports. We receive administrative services fees with respect to both affiliated underlying Funds and unaffiliated underlying Funds. The administrative services fees we receive from affiliates originate from the assets of the affiliated Fund itself and/or the assets of the Fund’s investment adviser. In either case, the existence of administrative services fees may tend to increase the overall cost of investing in the Fund. The existence of a 12b-1 fee will always increase the overall cost of investing in those Fund. In addition, because these fees are paid to us, allocations you make to these affiliated underlying Fund may benefit us financially if these fees exceed the costs of the administrative support services.

The 12b-1 fees and administrative services fees that we receive may vary among the different fund complexes that are part of our investment platform. Thus, the fees we collect may be greater or smaller, based on the Funds that you select. In addition, we may consider these payments and fees, among a number of factors, when deciding to add or keep a Fund on the “menu” of Funds that we offer through the product. We collect these payments and fees under agreements between us and a Fund’s principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund. As of May 1, 2012, the administrative service fees we receive range from 0.05% to 0.25% of the average assets allocated to the Fund. The service fees received from The Prudential Series Fund are 0.05%. Some Fund pay a 12b-1 fee instead of, or in addition to, the administrative services fees. The 12b-1 fee we receive is equal to 0.25% of the average assets allocated to the Funds indicated below.

The following Funds currently pay a 12b-1 fee:

·	Franklin Templeton Global Asset Allocation Fund

·	Lazard Retirement Emerging Markets Equity Portfolio

Charges

The current charges under your Group Contract are as follows:

Charge for Taxes Attributable to Premiums

We may increase this charge at any time.

Daily Charges for Mortality and Expense Risks

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and other expenses. These fees are described earlier in this supplement.

Monthly Charges

Prudential deducts a monthly charge for the cost of insurance from your Certificate Fund.

The highest current rate per thousand is $19.01, and applies to insureds at age 99. The lowest current rate per thousand is $0.02, and applies to insureds under age 25.

The following table provides sample per thousand rates (net of taxes):

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.04
45	$0.07
55	$0.17
65	$0.57

Possible Additional Charges

For details on possible additional charges, please see the Charges and Expenses section of the prospectus.

The Fixed Account

Eligibility and Enrollment

Eligibility

Eligible Group Members are active employees, classes or members of the Group as determined by the employer or Group Contract holder.

We refer to each Eligible Group Member who buys coverage as a "Participant." When the term "you" or "your" is used, we are also referring to a Participant.

“Free Look” Period

See the "Free Look" Period section of the prospectus for more details.

Premiums

Premiums for Your Certificate are paid for directly by Mayo Clinic. As a result, the entire “How You Will Pay Premiums” section at the bottom of page 21 does not apply to your Contract. You may, however, choose to pay additional premiums on your own at any time. Please see the “Additional Premium Payments” section of the prospectus for additional details and limitations.

Maximum Age

There are no maximum issue age limitations for this case.

Coverage Information

Face Amount

A Participant will be provided a Face Amount of three times his or her annual earnings or salary or as listed in the contract to a maximum of $3,000,000. The minimum Face Amount is $10,000. When a Face Amount is based on salary, we round the Face Amount to the next higher multiple of $1,000 if it is not already an even multiple of $1,000. See the How Prudential Issues Certificates section of the prospectus.

Changes in Face Amount

Increases in Face Amount

For Face Amounts based on annual salary or earnings, we may increase Face Amounts based on salary or earnings information reported to us.

Decrease in Face Amount

If your Face Amount is a multiple of salary, then your Face Amount may decrease if your salary decreases.

Face amounts may decrease if you wish to continue coverage after retirement. Decreases in coverage amounts will depend upon your age, date of hire, or years of service.

Definition of Life Insurance

We use the "Guideline Premium Test" for purposes of ensuring that your coverage meets the Internal Revenue Code's definition of life insurance. The Certificate Fund may have grown to the point where we would need to increase the Death Benefit to continue to meet this test. Under this method we would increase the Death Benefit (before we deduct any Certificate Debt and outstanding charges) to make it equal to a specified "corridor percentage" of the Certificate Fund based on your Attained Age. See the Adjustment in the Death Benefit section of the prospectus for the “corridor percentage”.

Additional Insurance Benefits

Accelerated Benefit Option

You can choose to receive an early payment of part of the Death Benefit when diagnosed as being terminally ill. In this situation, you may elect up to 75% of the Death Benefit, subject to a maximum of $50,000. "Terminally ill" means you have a life expectancy of 12 months or less (6 or 24 months in some states). This benefit and the specific rules that apply to your group can be found in your contract.

Exclusions

There are no suicide exclusions.

Changes in Personal Status

Continuing Coverage If You Become Disabled

If you become disabled and are unable to work, Prudential will extend your Group Variable Universal Life coverage so that you will continue to have insurance coverage equal to the Face Amount of your Certificate until you are no longer disabled.

Continuing Coverage When You Retire

You may continue your Group Variable Universal Life coverage when you retire. Your rates and coverage amount will depend upon your age, date of hire, and years of service. You can choose to pay premiums via an electronic funds transfer or be billed directly. If we bill you directly for premium payments, there will be a charge of $3 per bill for administration expenses.

Continuing Coverage When You Leave the Group for Reasons Other Than Retirement

You may elect to continue your Group Variable Universal Life coverage if you leave for any reason and are no longer an Eligible Group Member. We call this "Continuation Coverage." Continuation rates are higher than rates for coverage as an active Eligible Group Member, but will not exceed the guaranteed rates. Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administrative expenses.

Please contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract For

Mayo Clinic Retirees on or after 01/01/2010

This document is a supplement to the prospectus dated May 1, 2012 (the “prospectus”) for the Group Variable Universal Life Insurance Contract and Certificates that The Prudential Insurance Company of America (“Prudential,” “we,” “us”) offers to you. This supplement is not a complete prospectus, and must be accompanied by the prospectus. The prospectus describes the insurance features and other aspects of the Mayo Clinic Group Variable Universal Life Contract and Certificates. This is specific to the plan provided under Control Number 51001 – former employees enrolled in the Group Variable Universal Life Insurance plan provided under Control Number 46820, who were hired on or before 11/01/2003 and retired on or after 01/01/2010, and who were still enrolled at the time of retirement. If you continue coverage under 46820, you should keep the prospectus supplement for both certificates.

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	3
Service Fees Payable to Prudential	5
Charges	6
The Fixed Account	7
Eligibility and Enrollment	7
“Free Look” Period	7
Premiums	7
Maximum Age	7
Coverage Information	8
Changes in Face Amount	8
Definition of Life Insurance	8
Additional Insurance Benefits	8
Exclusions	8

Table of Contents of the Fund Prospectuses

AllianceBernstein Variable Products Series Fund, Inc.:		Appendix 1
	AllianceBernstein VPS Real Estate Investment Portfolio
Janus Aspen Series:		Appendix 2
	Janus Portfolio
Janus Aspen Series:		Appendix 3
	Janus Overseas Portfolio
Lazard Retirement Series, Inc.:		Appendix 4
	Lazard Retirement Emerging Markets Equity Portfolio
MFS® Variable Insurance Trustsm:		Appendix 5
	MFS Strategic Income Series
Neuberger Berman Advisers Management Trust:		Appendix 6
	Neuberger Berman AMT Growth Portfolio
T. Rowe Price Equity Series, Inc.:		Appendix 7
	T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price International Series, Inc.:		Appendix 8
	T. Rowe Price International Stock Portfolio

The Prudential Series Fund Portfolio:		Appendix 9
	Conservative Balanced Portfolio
	Global Portfolio
	Government Income Portfolio
	High Yield Bond Portfolio
	Money Market Portfolio
	Natural Resources Portfolio
	Small Capitalization Stock Portfolio
	Stock Index Portfolio
	Value Portfolio

Benefits and Risks

Fee Tables

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5% Current – 0.0%
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Current - 0.00%
Charge for Processing Premiums.	This charge is deducted from each premium when the premium is paid.	Maximum - $2.00 Current - $0.00
Surrender Charge (Load)	This charge is assessed on a full Surrender of a Certificate.	Maximum - $20 Current - $0.00
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum - $20 Current - $0.00
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate year.	Maximum - $20 per transfer after the twelfth. Current - $0.00
Charge for Additional Statements	This charge is assessed each time you request an additional statement.	Maximum - $20 per statement Current - $0.00
Loan Transaction Charge	This charge is assessed when a loan is processed.	Maximum - $20 for each loan. Current - $0.00

For these purposes, “taxes attributable to premiums” shall include any federal, state or local income, premium, excise, business, or any other type of tax (or component thereof) measured by or based upon the amount of premium received by Prudential. In some states, this is called a premium based administrative charge. Currently, the cost of taxes attributable to premiums is included in the cost of insurance charges.

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum - $6.00 Current - $0.00
*Cost of Insurance2
Minimum and Maximum Guaranteed Charge	Monthly	Maximum - $50.48 Minimum - $ 0.04
Charge for a Representative Participant	Monthly	Representative guaranteed charge - $2.523
Net Interest on Loans4	Annually	2%

*	The charges shown for Cost of Insurance are expressed as rates per $1,000 of Net Amount at Risk.

1.	The daily charge is based on the effective annual rate shown.

2.	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3.	The representative guaranteed charge for cost of insurance is a sample rate charged for a 64 year old insured guaranteed under the contract.

4.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	2.52%

Portfolio Companies

Set out below is a list of each available Fund and its investment adviser/investment manager.

The Funds

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
Conservative Balanced: Total investment return consistent with a conservatively managed diversified portfolio.	Balanced	PIM QMA
Global: Long-term growth of capital.	International - Equity	QMA LSV MCM T. Rowe Price William Blair
Government Income: High level of income over the long term consistent with the preservation of capital.	Fixed Income - Government	PIM
High Yield Bond: High total return.	Fixed Income – High Yield	PIM
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Natural Resources: Long-term growth of capital.	Sector	Jennison
Small Capitalization Stock: Long-term growth of capital.	Small-Cap Core	QMA
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA
Value: Capital appreciation.	Large-Cap Value	Jennison

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

·	LSV Asset Management (“LSV”)

·	Marsico Capital Management, LLC (“MCM”)

·	T. Rowe Price Associates, Inc. (“T. Rowe Price”)

·	William Blair & Company LLC (“William Blair”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
AllianceBernstein Real Estate Investment Portfolio1: Total return from long-term growth of capital and income.	Sector	AllianceBernstein
Janus Overseas Portfolio3: Long-term growth of capital.	International – Equity	Janus Capital
Janus Portfolio3: Long-term growth of capital.	Large-Cap Growth	Janus Capital
Lazard Retirement Emerging Markets Equity Portfolio4: Long-term capital appreciation.	International – Equity	Lazard
MFS Strategic Income Series5: Total return with an emphasis on high current income, but also considering capital appreciation	Fixed Income – Corporate	MFS
Neuberger Berman AMT Growth Portfolio6: Growth of capital.	Mid-Cap Growth	NBM
T. Rowe Price International Stock Portfolio: Long-term growth of capital.	International – Equity	T. Rowe Price
T. Rowe Price Mid-Cap Growth Portfolio: Long-term capital appreciation.	Mid-Cap Growth	T. Rowe Price

1.	Class A Shares

2.	Institutional Shares

3.	Service Shares

4.	Initial Class Shares

5.	Class I Shares

Investment Advisers for Unaffiliated Funds / Portfolios

·	AllianceBernstein L.P. ("AllianceBernstein")

·	Janus Capital Management LLC (“Janus Capital”)

·	Lazard Asset Management LLC ("Lazard")

·	Massachusetts Financial Services Company ("MFS")

·	Neuberger Berman Management Inc. ("NBM")

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

Service Fees Payable to Prudential

Prudential has entered into agreements with the investment adviser or distributor of the underlying funds. Under the terms of these agreements, Prudential provides administrative and support services to the Funds for which it receives an annual fee based on the average assets allocated to the Fund or portfolio under the Contract from the investment adviser, distributor and/or the Fund. These agreements, including the fees paid and services provided, can vary for each underlying mutual fund whose Funds are offered as investment options.

Prudential and/or our affiliates may receive substantial and varying administrative service payments and Rule 12b-1 fees from certain underlying Funds or related parties. These types of payments and fees are sometimes referred to as “revenue sharing” payments. Rule 12b-1 fees and administrative service payments partially compensate for distribution, marketing, and/or servicing functions and for providing administrative services with respect to Contract owners invested indirectly in the Fund, which include duties such as recordkeeping, shareholder services, and the mailing of periodic reports. We receive administrative services fees with respect to both affiliated underlying Funds and unaffiliated underlying Funds. The administrative services fees we receive from affiliates originate from the assets of the affiliated Fund itself and/or the assets of the Fund’s investment adviser. In either case, the existence of administrative services fees may tend to increase the overall cost of investing in the Fund. The existence of a 12b-1 fee will always increase the overall cost of investing in those Fund. In addition, because these fees are paid to us, allocations you make to these affiliated underlying Fund may benefit us financially if these fees exceed the costs of the administrative support services.

The 12b-1 fees and administrative services fees that we receive may vary among the different fund complexes that are part of our investment platform. Thus, the fees we collect may be greater or smaller, based on the Funds that you select. In addition, we may consider these payments and fees, among a number of factors, when deciding to add or keep a Fund on the “menu” of Funds that we offer through the product. We collect these payments and fees under agreements between us and a Fund’s principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund. As of May 1, 2012 , the administrative service fees we receive range from 0.05% to 0.25% of the average assets allocated to the Fund. The service fees received from The Prudential Series Fund are 0.05%. Some Fund pay a 12b-1 fee instead of, or in addition to, the administrative services fees. The 12b-1 fee we receive is equal to 0.25% of the average assets allocated to the Funds indicated below.

The following Funds currently pay a 12b-1 fee:

·	Lazard Retirement Emerging Markets Equity Portfolio

Charges

The current charges under your Group Contract are as follows:

Charge for Taxes Attributable to Premiums

We may increase this charge at any time.

Daily Charges for Mortality and Expense Risks

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and other expenses. These fees are described earlier in this supplement.

Monthly Charges

Prudential deducts a monthly charge for the cost of insurance from your Certificate Fund.

The highest current rate per thousand is $19.01, and applies to insureds at age 99. The lowest current rate per thousand is $0.02, and applies to insureds under age 25.

The following table provides sample per thousand rates (net of taxes):

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.04
45	$0.07
55	$0.17
65	$0.57

Possible Additional Charges

For details on possible additional charges, please see the Charges and Expenses section of the prospectus.

The Fixed Account

Eligibility and Enrollment

Eligibility

Eligible Group Members are classes or members of the Group as determined by the employer or Group Contract holder.

We refer to each Eligible Group Member who buys coverage as a "Participant." When the term "you" or "your" is used, we are also referring to a Participant.

“Free Look” Period

See the "Free Look" Period section of the prospectus for more details.

Premiums

Maximum Age

There are no maximum issue age limitations for this case.

Coverage Information

Face Amount

A Participant will be provided a Face Amount of one time his or her annual earnings or salary as of 11/01/2003 or as listed in the contract to a maximum of $1,000,000. The minimum Face Amount is $10,000. When a Face Amount is based on salary, we round the Face Amount to the next higher multiple of $1,000 if it is not already an even multiple of $1,000. See the How Prudential Issues Certificates section of the prospectus.

Changes in Face Amount

Increases in Face Amount

Increases in face amount are not allowed.

Decrease in Face Amount

Decreases in coverage amounts will depend upon your age or years of service as of November 1, 2003.

Definition of Life Insurance

Additional Insurance Benefits

Accelerated Benefit Option

Exclusions

There are no suicide exclusions.

Please contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract for

The New Jersey Judicial Retirement System (JRS)

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	4
Service Fees Payable to Prudential	6
Charges	7
The Fixed Account	8
Eligibility and Enrollment	8
“Free Look” Period	9
Coverage Information	9
Changes in Face Amount	10
Definition of Life Insurance	10
Additional Insurance Benefits	10
Exclusions	10
Changes in Personal Status	11
Premiums	11
When Monthly Charges Are Deducted	11

Table of Contents of the Fund Prospectuses

DWS Variable Series II:		Appendix 1
	DWS High Income VIP
Franklin Templeton Variable Insurance Products Trust:		Appendix 2
	Templeton Foreign Securities Fund
Janus Aspen Series:		Appendix 3
	Janus Portfolio
Janus Aspen Series:		Appendix 4
	Janus Overseas Portfolio
Lazard Retirement Series, Inc.:		Appendix 5
	Lazard Retirement U.S. Small-Mid Cap Equity Portfolio
MFS® Variable Insurance Trustsm:		Appendix 6
	MFS Research Series
T. Rowe Price Equity Series, Inc.:		Appendix 7
	Equity Income Portfolio
T. Rowe Price Equity Series, Inc.:		Appendix 8
	New America Growth Portfolio
The Prudential Series Fund Portfolio:		Appendix 9
	Diversified Bond Portfolio
	Equity Portfolio
	Flexible Managed Portfolio
	Global Portfolio
	Jennison Portfolio
	Money Market Portfolio
	Stock Index Portfolio
	Value Portfolio

Benefits and Risks

Fee Tables

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5% Current – 0.0%.
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Current - 2.41%
Charge for Processing Premiums	This charge is deducted from each premium when the premium is paid.	Maximum - $2.00 Current charge - $0.00
Surrender Charge (Load)	This charge is assessed on a full Surrender of a Certificate.	Maximum - the lesser of $20 and 2% of the amount surrendered. Current - $0.00.
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum - the lesser of $20 and 2% of the amount withdrawn. Current - $0.00.
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate year.	Maximum - $20 per transfer after the twelfth. Current - $0.00
Charge for Additional Statements	This charge is assessed each time you request an additional statement.	Maximum - $20 per statement Current - $0.00
Loan Transaction Charge	This charge is assessed when a loan is processed.	Maximum - $20 for each loan. Current - $0.00.

For these purposes, “taxes attributable to premiums” shall include any federal, state or local income, premium, excise, business, or any other type of tax (or component thereof) measured by or based upon the amount of premium received by Prudential. In some states, this is called a premium based administrative charge. Currently the amount deducted is 2.41% of each premium payment. However, this amount is subject to change, based on state, local and federal tax rates.

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Bi-weekly	Certificates issued on or before 12/31/2008: Maximum - $2.77 Current - $2.00 Certificates issued on or after 01/01/2009: Maximum - $6.00 Current - $2.00
*Cost of Insurance2
Minimum and Maximum Guaranteed Charge	Monthly	Certificates effective on or before 12/31/2008: Maximum - $83.34 Minimum - $0.10 Representative guaranteed charge - $1.054 Certificates effective on or after 01/01/2009: Maximum - $50.48 Minimum - $0.04
Charge for a Representative Participant		Representative guaranteed charge - $0.764
Net Interest on Loans5	Annually	2%
*Additional Insurance Benefits3
Spouse and Child Dependents Term Life Insurance	Monthly	Maximum - $2.006 Minimum - $2.006
		Representative current charge - $2.007

*	The charges shown for Cost of Insurance are expressed as rates per $1,000 of Net Amount at Risk. The charges shown for Spouse and Child Term Insurance are expressed as rates per unit. One unit includes $5,000 spouse coverage and $5,000 coverage per child, if any.

1.	The daily charge is based on the effective annual rate shown.

2.	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3.	These benefits may not be available to some groups.

4.	The representative guaranteed charge for cost of insurance is a sample rate charged for a 52 year old insured guaranteed under the contract.

5.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

6.	These are the maximum and minimum rates currently charged. The contract does not specify a guaranteed maximum or minimum rate for additional insurance benefits.

7.	The representative current charge for additional insurance benefits are sample rates currently charged.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	1.15%

Portfolio Companies

Set out below is a list of each available Fund and its investment adviser/investment manager.

The Funds

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

The charts below reflect the variable investment options in which the Account invests their investment objectives, and each variable investment option’s investment advisers and investment subadvisers. The full names of the investment subadvisers and investment advisers are listed immediately following each chart. For Portfolios with multiple subadvisers, each subadviser manages a portion of the assets for that Portfolio.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
Diversified Bond: High level of income over a longer term while providing reasonable safety of capital.	Fixed Income - Corporate	PIM
Equity: Long-term growth of capital.	Large-Cap Core	Jennison
Flexible Managed: Total return consistent with an aggressively managed diversified portfolio.	Balanced	PIM QMA

Global: Long-term growth of capital.	International - Equity	QMA LSV MCM T. Rowe Price William Blair
Jennison: Long-term growth of capital.	Large-Cap Growth	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA
Value: Capital appreciation.	Large-Cap Value	Jennison

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

·	LSV Asset Management (“LSV”)

·	Marsico Capital Management, LLC (“MCM”)

·	T. Rowe Price Associates, Inc. (“T. Rowe Price”)

·	William Blair & Company LLC (“William Blair”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
DWS High Income VIP1: High level of current income.	Fixed Income – High Yield	Deutsche
Templeton Foreign Securities Fund2: Long-term capital growth.	International Equity	Investment Counsel
Janus Overseas Portfolio3: Long-term growth of capital.	International Equity	Janus Capital
Janus Portfolio3: The investment objective is long-term growth of capital.	Large-Cap Growth	Janus Capital
Lazard Retirement U.S. Small-Mid Cap Equity Portfolio4: Long-term capital appreciation.	Multi-Cap Growth	Lazard
MFS Research Series5: Capital appreciation.	Large-Cap Core	MFS
T. Rowe Price Equity Income Portfolio: Substantial dividend income as well as long-term growth of capital.	Large-Cap Value	T. Rowe Price

T. Rowe New America Growth Fund: Long-term capital growth.

Multi-Cap Growth

T. Rowe Price

1.	Class A Shares

2.	Class 2 Shares

3.	Institutional Shares

4.	Service Shares

5.	Initial Class Shares

Investment Advisers for Unaffiliated Funds / Portfolios

·	Deutsche Investment Management Americas Inc. (“Deutsche”)

·	Janus Capital Management LLC (“Janus Capital”)

·	Lazard Asset Management LLC ("Lazard")

·	Massachusetts Financial Services Company ("MFS")

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

·	Templeton Investment Counsel, LLC (“Investment Counsel”)

Service Fees Payable to Prudential

Prudential has entered into agreements with the investment adviser or distributor of the underlying funds. Under the terms of these agreements, Prudential provides administrative and support services to the portfolios for which it receives an annual fee based on the average assets allocated to the Fund or portfolio under the Contract from the investment adviser, distributor and/or the Fund. These agreements, including the fees paid and services provided, can vary for each underlying mutual fund whose Funds are offered as investment options.

Prudential and/or our affiliates may receive substantial and varying administrative service payments and Rule 12b-1 fees from certain underlying Portfolios or related parties. These types of payments and fees are sometimes referred to as “revenue sharing” payments. Rule 12b-1 fees and administrative service payments partially compensate for distribution, marketing, and/or servicing functions and for providing administrative services with respect to Contract owners invested indirectly in the Fund, which include duties such as recordkeeping, shareholder services, and the mailing of periodic reports. We receive administrative services fees with respect to both affiliated underlying Funds and unaffiliated underlying Fund. The administrative services fees we receive from affiliates originate from the assets of the affiliated Fund itself and/or the assets of the Fund’s investment adviser. In either case, the existence of administrative services fees may tend to increase the overall cost of investing in the Fund. The existence of a 12b-1 fee will always increase the overall cost of investing in those Funds. In addition, because these fees are paid to us, allocations you make to these affiliated underlying Funds may benefit us financially if these fees exceed the costs of the administrative support services.

The 12b-1 fees and administrative services fees that we receive may vary among the different fund complexes that are part of our investment platform. Thus, the fees we collect may be greater or smaller, based on the Funds that you select. In addition, we may consider these payments and fees, among a number of factors, when deciding to add or keep a Fund on the “menu” of Portfolios that we offer through the product. We collect these payments and fees under agreements between us and a Fund’s principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund. As of May 1, 2012 , the administrative service fees we receive range from 0.05% to 0.25% of the average assets allocated to the Fund. The service fees received from The Prudential Series Fund are 0.05%. Some portfolios pay a 12b-1 fee instead of, or in addition to, the administrative services fees. The 12b-1 fee we receive is equal to 0.25% of the average assets allocated to the Funds indicated below.

The following Funds currently pay a 12b-1 fee:

·	Franklin Templeton Foreign Securities

·	Lazard Retirement U.S. Small-Mid Cap Equity

Charges

The current charges under the JRS Group Contract are as follows:

Charge for Taxes Attributable to Premiums

This charge is currently made up of two parts:

·	The first part is for state and local premium taxes. Currently, it is 2.06% of the premium Prudential receives. (In some states, this charge is called a premium-based administrative charge.) The rates are subject to change based on local, state and federal tax rates.

Daily Charges for Mortality and Expense Risks

Prudential deducts this charge from the assets of the subaccount(s) that correspond to the Funds you select. This charge is to compensate us for assuming mortality and expense risks. Prudential does not deduct this charge from assets invested in the Fixed Account. The current daily charge for mortality and expense risks is equivalent to an effective annual rate of 0.45% (never to exceed 0.90%).

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and other expenses. These fees are described earlier in this supplement.

Bi-Weekly Charges

Prudential deducts a bi-weekly charge for the cost of insurance and a bi-weekly charge of $2.00 for administrative expenses from your Certificate Fund. We describe the calculation of this charge in the prospectus.

The highest current rate per thousand is $29.55, and applies to insureds at age 99, who have chosen to continue their coverage. The lowest current rate per thousand is $0.06, and applies to insured active employees under age 25.

The following table provides sample per thousand cost of insurance rates (net of taxes):

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.10
45	$0.16
55	$0.45
65	$1.32

Spouse and child term insurance: The rate for spouse and child term insurance is currently $1.95 per unit. Each unit includes $5,000 spouse coverage and $5,000 coverage per child, if any.

Possible Additional Charges

For details on possible additional charges, please see the Charges and Expenses section of the prospectus.

The Fixed Account

Eligibility and Enrollment

Eligibility:

Eligible Group Members for the Group Variable Universal Life Insurance include active Judges of the New Jersey Judicial Retirement System (“JRS”) who work full-time on a regular basis. In addition, Eligible Group Members who purchase Group Variable Universal Life coverage for themselves may also purchase Group Term Life Insurance coverage for their dependent spouses if, at enrollment, the spouse is not confined for medical treatment at home or elsewhere and Dependent Term Life Insurance coverage for their eligible dependent children..

We refer to each Eligible Group Member who buys coverage as a “Participant.” When we use the terms “you” or “your,” we mean a Participant.

Spouses who are also Judges of the JRS may not be covered both as a Judge and a spouse. If, after the death of a spouse, we become aware that a spouse was enrolled as both a Judge and a spouse, we will pay a death benefit as though the spouse were a Judge only. We will return the premiums that were paid as a spouse.

See the Applicant Owner Provision section of the prospectus to learn about how a spouse or other person may apply for coverage on the life of the Judge.

In addition, your children are eligible for dependent term life coverage from birth to 19 years (or, if an unmarried student, to age 25), provided they are not confined for medical treatment at home or elsewhere at the time of enrollment. Eligible children include legally adopted children, stepchildren and foster children who live with you and depend on you substantially for support.

·	When a child reaches age 19 (or, if an unmarried student, age 25), he or she may continue coverage if he or she is not physically or mentally capable of self-support. You must give Prudential evidence of the incapacity within 31 days after coverage would end.

·	If both parents are Judges of the JRS, a child may be covered by only one parent.

Enrollment

There is no limited enrollment period. You may enroll at any time. If, however, you enroll when you are first eligible for coverage, you do not have to provide evidence of good health for certain levels of coverage. If you are a new Judge, you may apply for coverage within 90 days after becoming first eligible in lieu of the group term life insurance that is mandatory for the first twelve months of service as a Judge.

If you do not enroll yourself or your dependent spouse or children during the initial enrollment period, you may contact your AOC human resources office and obtain an application for coverage. Complete the application and mail it directly to Prudential. Prudential will make arrangements with you for determining evidence of good health and the coverage will then be put into effect.

“Free Look” Period

See the "Free Look" Period section of the prospectus for more details.

Coverage Information

Face Amount

A Judge may choose a Face Amount equal to one and one half, two, three, four or five times annual base salary. (The Face Amount is rounded up to the next higher multiple of $1,000). See the JRS optional contributory insurance amounts available to you.

You may buy $5,000 of term life insurance for your eligible spouse.

You may buy $5,000 of term life insurance for each eligible child. If you have spouse coverage, the coverage for your children is at no additional cost.

Evidence of Good Health

Evidence of good health is not required when:

·	A Judge requests 1½ times salary when first eligible to enroll (i.e., when a new Judge first starts service as a Judge).

·	A Judge requests spouse or dependent child term life insurance coverage when the Judge is first eligible to enroll (i.e., when a new Judge first starts service as a Judge).

·	A Judge adds spouse or dependent child term life insurance coverage at some time after the initial eligibility period to enroll, but within 90 days of getting married or after the birth, adoption, or guardianship of a new child.

·	A Judge retires and opts to continue coverage at retirement.

·	A Judge terminates service and opts to continue coverage.

·	A participant (Judge, spouse or dependent child) opts to convert to an individual life insurance policy with Prudential.

Evidence of good health is required when:

A Judge requests 2, 3, 4 or 5 times salary when first eligible to enroll (i.e., when a new Judge first starts service as a Judge). Insurance of 1½ times salary will be put into effect immediately; the remainder of the coverage will go into effect on the first of the month after the good health is determined.

·	A Judge requests insurance coverage of any amount any time after declining coverage during the initial enrollment period.

·	A Judge requests to increase insurance coverage from 1½ times salary to some higher amount.

·	A Judge adds spouse or dependent child term life insurance coverage at some time after the initial eligibility period to enroll, and beyond the 90 day period after getting married or after the birth, adoption, or guardianship of a new child.

If you need to provide evidence of good health, Prudential will provide you with an Evidence of Insurability Form that you will need to complete. If an examination or verification from a physician is required, Prudential will provide you with the appropriate forms and instruct you on the required steps to prove good health.

Changes in Face Amount

Increases in Face Amount

After the initial enrollment, you may increase your Face Amount of insurance at any time, but you must provide evidence of good health.

Decreases in Face Amount

Generally, your face amount will not decrease unless you request a decrease from Prudential. However, if your face amount is a multiple of salary, then your Face amount may decrease if your salary decreases.

See the Changes in Face Amount and Taxes sections of the prospectus.

Effect of Purchasing This Contributory Insurance on Your Taxable Income

The new non-contributory program for the JRS members is separate from the contributory insurance provided to JRS members through a group insurance policy held by the State Treasurer at the State of New Jersey. The new program is significantly different from the group term life insurance provided by the state as the employer of JRS members, and it has been determined that it is not subject to the imputed income provisions of the Internal Revenue Code (Section 79). The new contributory life insurance program for JRS members includes both group term life and optional group variable universal life insurance. The premiums for the Judges' Group Variable Universal Life coverage are age based and insurance coverage is available for spouses and children. The cost of the program is borne totally by participating JRS members.

See the Taxes section of the prospectus.

Definition of Life Insurance

Additional Insurance Benefits

Accelerated Benefit Option

While you remain a Judge, you can choose to receive an early payment of part of the Death Benefit when diagnosed as being terminally ill. In this situation, you may elect up to 50% of the Death Benefit, subject to a maximum of $250,000. "Terminally ill" means you have a life expectancy of 6 months or less.

Dependent Term Life Insurance

You may buy $5,000 of term life insurance for your eligible spouse. You may buy $5,000 of term life insurance for each eligible child. If you have spouse coverage, the coverage for your children is at no additional cost.

Exclusions

As stated in the prospectus, Group Variable Universal Life Insurance has a suicide exclusion. See the Suicide Exclusion section of the prospectus.

Changes in Personal Status

Continuing Coverage When You Retire

You may continue your Group Variable Universal Life coverage when you retire. Retiree rates are identical to those of active Judges. Prudential will bill you directly for premium payments, and will charge a fee, currently $3 per bill, for administration expenses.

Continuing Coverage If You Leave Your Position as a Judge for Reasons Other Than Retirement

You may elect to continue your coverage if you leave the JRS for any reason. We call this “Continuation Coverage.” Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administration expenses. Contact Prudential for a continued coverage rate schedule.

Termination Of The Group Contract

Either the JRS or Prudential may end the Group Contract. Prudential can end the Group Contract only under the conditions described in the prospectus.

If the Group Contract ends, the effect on Participants depends on whether or not the JRS replaces the Group Contract with another life insurance contract that allows for the accumulation of cash value. Generally, here is what will happen:

If JRS does replace the Group Contract with another life insurance contract that allows for the accumulation of cash value, Prudential will terminate your Certificate. We will also transfer the Cash Surrender Value of your Certificate directly to that new contract, unless you elect to receive the Cash Surrender Value of your Certificate.

If JRS does not replace the Group Contract with another life insurance contract that allows for the accumulation of cash value, you will have these options: convert to an individual life insurance policy; use your Certificate Fund to buy paid-up life insurance; elect to continue coverage or elect to receive the Cash Surrender Value of your Certificate.

See the Options on Termination of Coverage section of the prospectus.

Premiums

Payment of Premiums

For active Judges and their dependents, the JRS will send routine premium payments to Prudential by bi-weekly payroll deduction, and will make these payments bi-weekly. Retirees, deferred retirees, Judges on an approved leave of absence and Participants who choose to continue their coverage will be billed directly by Prudential on a quarterly basis and will submit their premium payments directly to Prudential.

When Monthly Charges Are Deducted

The exact date that we deduct charges from your Certificate Fund depends upon whether you make routine premium payments by bi-weekly automatic payroll deduction or directly to Prudential. We take the charges from each investment option in the same proportions that your Certificate Fund is invested.

·	If you make routine premium payments by automatic payroll deduction, we generally will deduct the bi-weekly Certificate Fund charges once per pay period, on the Payroll Deduction Date. The Payroll Deduction Date will coincide with the date the JRS forwards the payroll deductions to us.

The JRS intends to forward automatic payroll deduction premium payments by the beginning of the week after the end of each payroll period. But, even if the JRS has not transferred the payroll deductions to us by the 45th day after the first day of the bi-weekly pay period, we will nevertheless deduct the bi-weekly Certificate Fund charges on that 45th day.

If you make routine premium payments directly to Prudential, we generally will deduct charges once per period, on the date that we receive your premium payments. If your premium payments have not been received by the 45th day after the due date, we will deduct the charges from the Certificate Fund on that 45th day. For groups that utilize monthly premium processing, charges will be deducted from the Certificate Fund on the first business day of every month, regardless of the billing frequency.

Please refer to the prospectus for information on these and other features of the New Jersey JRS Group Contract. Your Enrollment Kit also explains key features of your plan.

You may contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract for

Sears Holding Corporation

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	4
Service Fees Payable to Prudential	5
Charges	6
Eligibility and Enrollment	7
“Free Look” Period	7
Maximum Age	8
Coverage Information	8
Changes in Face Amount	8
Definition of Life Insurance	8
Additional Insurance Benefits	8
Lapse and Reinstatement	8
Loans	9
Surrender Charge	9
Additional Premium Payments	9
Exclusions	9
Changes in Personal Status	9

Table of Contents of the Fund Prospectuses

Franklin Templeton Variable Insurance Products Trust:		Appendix 1
	Templeton Foreign Securities Fund
Janus Aspen Series:		Appendix 2
	Janus Worldwide Portfolio
PIMCO Variable Insurance Trust:		Appendix 3
	PIMCO Total Return Portfolio
T. Rowe Price Equity Series, Inc:		Appendix 4
	Equity Income Portfolio
T. Rowe Price Equity Series, Inc:		Appendix 5
	New America Growth Portfolio
T. Rowe Price Equity Series, Inc:		Appendix 6
	Personal Strategy Portfolio
The Prudential Series Fund Portfolio:		Appendix 7
	High Yield Bond Portfolio
	Jennison Portfolio
	Money Market Portfolio
	Small Capitalization Stock Portfolio
	Stock Index Portfolio

Benefits and Risks

Fee Tables

The first table describes the fees and expenses that you will pay at the time you buy the Certificate, pay premiums, make transfers between investment options, make a withdrawal, or request additional statements.

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5% Current – 0.0%.
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Current – 2.60%
Charge for Processing Premiums	This charge is deducted from each premium when the premium is paid.	Maximum - $2.00 Current - $0.00.
Surrender Charge	This charge is assessed on a full Surrender of a Certificate.	Maximum - $20.00 Current - $0.00.
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum - $20.00 Current - $0.00
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate year.	Maximum - $20.00 per transfer after the twelfth. Current - $20.00 per transfer after the twelfth
Charge for Additional Statements	This charge is assessed each time you request an additional statement.	Maximum - $20.00 per statement Current - $0.00

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum - $6.00 Current - $0.00
*Cost of Insurance2
Minimum and Maximum Guaranteed Charge	Monthly	Maximum - $50.48 Minimum - $0.04 Representative guaranteed charge - $0.694
Net Interest on Loans5	Annually	2%
*Additional Insurance Benefits3:
Child Dependents Term Life Insurance	Monthly	Maximum - $0.126 Minimum - $0.126
		Representative current charge - $0.127
Spouse Dependents Term Life Insurance	Monthly	Maximum - $2.506 Minimum - $0.066
		Representative current charge - $.258
AD&D on employee’s life	Monthly	Maximum - $0.026 Minimum - $0.026 Representative current charge - $0.027

1.	The daily charge is based on the effective annual rate shown.

2.	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3.	These benefits may not be available to some groups.

4.	The representative guaranteed charge for cost of insurance is a sample rate charged for a 51 year old insured under the contract.

5.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

6.	These are the maximum and minimum rates currently charged. The contract does not specify a guaranteed maximum or minimum rate for additional insurance benefits.

7.	The representative current charge for additional insurance benefits are sample rates currently charged.

8.	The representative current charge for spouse term insurance is a sample rate currently charged for a 51 year old insured, who is the spouse of an active employee of Sears Holding Corporation.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	1.05%

Portfolio Companies

Set out below is a list of each available Fund and its investment adviser/investment manager.

The Funds

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
High Yield Bond: High total return.	Fixed Income – High Yield	PIM
Jennison: Long-term growth of capital.	Large-Cap Growth	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Small Capitalization Stock: Long-term growth of capital.	Small-Cap Core	QMA
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
Franklin Templeton Foreign Securities Fund1: Long-term capital growth.	International – Equity	Investment Counsel
Janus Worldwide Portfolio2: Long-term growth of capital.	International – Equity	Janus Capital
PIMCO Total Return Portfolio3: Total return with an emphasis on high current income, but also considering capital appreciation.	Fixed Income - Corporate	PIMCO
T. Rowe Price Equity Income Portfolio: Substantial dividend income as well as long-term growth of capital.	Large-Cap Value	T. Rowe Price
T. Rowe Price New America Growth Fund: Long-term capital growth.	Multi-Cap Growth	T. Rowe Price
T. Rowe Price Personal Strategy Balanced Portfolio: Highest total return over time, consistent with an emphasis on both capital appreciation and income.	Asset Allocation	T. Rowe Price

1.	Class 2 Shares

2.	Institutional Shares

3.	Administrative Class

Investment Advisers for Unaffiliated Funds / Portfolios

·	Janus Capital Management LLC (“Janus Capital”)

·	Pacific Investment Management Company LLC (“PIMCO”)

·	Templeton Investment Counsel, LLC (“Investment Counsel”)

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

Service Fees Payable to Prudential

The 12b-1 fees and administrative services fees that we receive may vary among the different fund complexes that are part of our investment platform. Thus, the fees we collect may be greater or smaller, based on the Funds that you select. In addition, we may consider these payments and fees, among a number of factors, when deciding to add or keep a Fund on the “menu” of Funds that we offer through the product. We collect these payments and fees under agreements between us and a Fund’s principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund. As of May 1, 2012 , the administrative service fees we receive range from 0.05% to 0.25% of the average assets allocated to the Fund. The service fees received from The Prudential Series Fund are 0.05%. Some funds pay a 12b-1 fee instead of, or in addition to, the administrative services fees. The 12b-1 fee we receive is equal to 0.15% to 0.25% of the average assets allocated to the Funds indicated below.

The following Portfolio currently pays a 12b-1 fee of 0.15%:

·	PIMCO Total Return Portfolio

The following Portfolio currently pays a 12b-1 fee of 0.25%:

·	Franklin Templeton Foreign Securities

Charges

The current charges under your Group Contract are as follows:

Charge for Taxes Attributable to Premiums

This charge is currently made up of two parts:

·	The first part is for state and local premium taxes. Currently, it is 2.25% of the premium Prudential receives. (In some states, this charge is called a premium-based administrative charge.) The rates are subject to change based on local, state and federal tax rates.

Daily Charges for Mortality and Expense Risks

The current daily charge for mortality and expense risks is equivalent to an effective annual rate of 0.45%.

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and other expenses. These fees are described earlier in this supplement.

Monthly Charges

Prudential deducts a monthly charge for the cost of insurance from your Certificate Fund.

The highest current rate per thousand is $9.39, and applies to insureds at age 90 and older. The lowest current rate per thousand is $0.04, and applies to insureds under age 25.

The following table provides sample per thousand rates (net of taxes):

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.06
45	$0.10
55	$0.25
65	$0.67

Spouse Term Insurance: The highest current rate per thousand is $2.50, and applies to spouses over age 73. The lowest current rate per thousand currently offered for this benefit is $0.06, and applies to spouses under age 25.

The following table provides sample per thousand Spouse term insurance charges:

Insured’s Age	Monthly Rate per $1000
35	$0.08
45	$0.14
55	$0.36
65	$0.92

Child term insurance: The rate for child term insurance is currently $0.12 per thousand.

AD&D on the Employee’s Life: The rate per thousand currently offered for this coverage is $0.02. Generally, one rate is payable at all ages for a given group of insureds.

Possible Additional Charges

For details on possible additional charges, please see the Charges and Expenses section of the prospectus.

Eligibility and Enrollment

Eligibility

Eligible Group Members are classes of active employees as determined by the employer.

We refer to each Eligible Group Member who buys coverage as a "Participant." When the term "you" or "your" is used, we are also referring to a Participant.

Enrollment Period

“Free Look” Period

See the "Free Look" Period section of the prospectus for more details.

Maximum Age

Generally, Prudential will not accept an enrollment form requesting coverage on an Eligible Group Member who is older than age 70. Also, a Participant's Face Amount of Insurance will end at the maximum age shown in the Certificate (usually, that is age 100).

Coverage Information

Face Amount

The minimum Face Amount is $50,000 and the maximum Face amount is $9,950,000. When a Face Amount is based on salary, we round the Face Amount to the next higher multiple of $1,000 if it is not already an even multiple of $1,000. See the How Prudential Issues Certificates section of the prospectus.

Evidence of insurability satisfactory to Prudential will be required if the Face Amount exceeds the limits set forth in your Certificate.

Changes in Face Amount

Increases in Face Amount

Decrease in Face Amount

Face Amounts will not decrease unless you request a decrease. However, if your Face Amount is a multiple of salary, then your Face Amount may decrease if your salary decreases.

Definition of Life Insurance

If that were the case for your Certificate, we would increase the Death Benefit (before we deduct any Certificate Debt and outstanding charges) to make it equal the Certificate Fund divided by the Net Single Premium per dollar of insurance for the Covered Person’s Attained Age. For this purpose, we base the Net Single Premium on the 2001 CSO Unisex Table (70% Male – 30% Female), and interest rates as described in The Internal Revenue Code, Section 7702.

Additional Insurance Benefits

Accelerated Benefit Option

You can choose to receive an early payment of part of the Death Benefit when diagnosed as being terminally ill. In this situation, you may elect up to 75% of the Death Benefit. "Terminally ill" means you have a life expectancy of 12 months or less (6 or 24 months in some states). Prudential does not have an age restriction when applying for this Option. This benefit and the specific rules that apply to your group can be found in your certificate.

Lapse and Reinstatement

You may request reinstatement of a lapsed Certificate any time within 3 years after the end of the grace period. But, you must be less than the maximum age at which a Certificate may be held. We will not reinstate a lapsed Certificate if the Group Contract under which the Certificate was issued ended and you did not have the right to continue your insurance.

Loans

The minimum amount you may borrow at any one time is $100.

Surrender Charge

Additional Premium Payments

Exclusions

As stated in the prospectus, Group Variable Universal Life Insurance has a suicide exclusion. See the Suicide Exclusion section of the prospectus for details.

Changes in Personal Status

Continuing Coverage If You Become Totally Disabled

Continuing Coverage at Retirement

You can continue coverage at retirement. Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administrative expenses.

Continuing Coverage When You Leave The Group For Reasons Other Than Retirement

Please contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract for

Towers Watson Pennsylvania

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	4
Charges	5
The Fixed Account	6
Eligibility and Enrollment	6
“Free Look” Period	7
Coverage Information	7
Changes in Face Amount	7
Definition of Life Insurance	8
Additional Insurance Benefits	8
Exclusions	8
Changes in Personal Status	8
Premiums	9
When Monthly Charges are Deducted	9

Table of Contents of the Fund Prospectuses

DWS Variable Series II:		Appendix 1
	DWS High Income VIP
Janus Aspen Series:		Appendix 2
	Janus Portfolio
Janus Aspen Series:		Appendix 3
	Janus Overseas Portfolio
T. Rowe Price Equity Series, Inc.:		Appendix 4
	Mid-Cap Growth Portfolio
The Prudential Series Fund Portfolio:		Appendix 5
	Diversified Bond Portfolio
	Flexible Managed Portfolio
	Global Portfolio
	Jennison Portfolio
	Money Market Portfolio
	Small Capitalization Stock Portfolio
	Stock Index Portfolio
	Value Portfolio

Benefits and Risks

Fee Tables

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5% Current – 0.0%.
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Current – 2.60%
Charge for Processing Premiums	This charge is deducted from each premium when the premium is paid.	Maximum charge - $2.00 Current - $0.00.
Surrender Charge (Load)	This charge is assessed on a full Surrender of a Certificate.	Maximum - the lesser of $20 and 2% of the amount surrendered. Current - $0.00.
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum - the lesser of $20 and 2% of the amount withdrawn. Current - $0.00.
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate year.	Maximum - $20 per transfer after the twelfth. Current - $0.00
Charge for Additional Statements	This charge is assessed each time you request an additional statement.	Maximum - $20 per statement Current - $0.00
Loan Transaction Charge	This charge is assessed when a loan is processed.	Maximum - $20 for each loan. Current - $0.00.

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current - 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum - $6.00 Current - $3.00
*Cost of Insurance2
Minimum and Maximum Guaranteed Charge	Monthly	Certificates effective on or before 12/31/2008: Maximum - $83.34 Minimum - $0.10 Representative guaranteed charge - $0.433 Certificates effective on or after 01/01/2009: Maximum - $47.38 Minimum - $0.04 Representative guaranteed charge - $0.293
Net Interest on Loans4	Annually	2%

*	The charges shown for Cost of Insurance are expressed as rates per $1,000 of Net Amount at Risk.

1	The daily charge is based on the effective annual rate shown.

2	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3	The representative guaranteed charge for cost of insurance is a sample rate charged for a 41 year old insured guaranteed under the contract.

4	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	0.85%

Portfolio Companies

Set out below is a list of each available Fund and its investment adviser/investment manager.

The Funds

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
Diversified Bond: High level of income over a longer term while providing reasonable safety of capital.	Fixed Income - Corporate	PIM
Flexible Managed: Total return consistent with an aggressively managed diversified portfolio.	Balanced	PIM QMA
Global: Long-term growth of capital.	International - Equity	QMA LSV MCM T. Rowe Price William Blair
Jennison: Long-term growth of capital.	Large-Cap Growth	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Small Capitalization Stock: Long-term growth of capital.	Small-Cap Core	QMA
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA

Value: Capital appreciation.

Large-Cap Value

Jennison

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

·	LSV Asset Management (“LSV”)

·	Marsico Capital Management, LLC (“MCM”)

·	T. Rowe Price Associates, Inc. (“T. Rowe Price”)

·	William Blair & Company LLC (“William Blair”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
DWS High Income VIP1: High level of current income.	Fixed Income – High Yield	Deutsche
Janus Overseas Portfolio2: Long-term growth of capital.	International - Equity	Janus Capital
Janus Portfolio2: Long-term growth of capital.	Large-Cap Growth	Janus Capital
T. Rowe Price Mid-Cap Growth Portfolio: Long-term capital appreciation.	Mid-Cap Growth	T. Rowe Price

1.	Initial Shares

2.	Institutional Shares

Investment Advisers for Unaffiliated Funds / Portfolios

·	Deutsche Investment Management Americas Inc. (“Deutsche”)

·	Janus Capital Management LLC (“Janus Capital”)

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

Charges

The current charges under the Towers Watson Pennsylvania Group Contract are as follows:

Charge for Taxes Attributable to Premiums

This charge is currently made up of two parts:

·	The first part is for state and local premium taxes. Currently, it is 2.25% of the premium Prudential receives. (In some states, this charge is called a premium-based administrative charge.) The rates are subject to change based on local, state and federal tax rates.

Daily Charges for Mortality and Expense Risks

Prudential deducts this charge from the assets of the Towers Watson Pennsylvania Group Contract that correspond to the Funds you select. This charge is to compensate us for assuming mortality and expense risks. Prudential does not deduct this charge from assets invested in the Fixed Account.

For Towers Watson Pennsylvania, the current daily charge for mortality and expense risks is equivalent to an effective annual rate of 0.45%.

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and other expenses. These fees are described earlier in this supplement.

Monthly Charges

Prudential deducts a monthly charge for the cost of insurance and a monthly charge of $3.00 for administrative expenses from your Certificate Fund.

The highest current rate per thousand is $35.16, and applies to insureds age 99, who are retired smokers and have chosen to continue their coverage. The lowest current rate per thousand is $0.04, and applies to insured non-smoking active employees under age 25.

The following table provides sample per thousand cost of insurance rates (net of taxes) for nonsmokers:

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.06
45	$0.13
55	$0.32
65	$0.79

Possible Additional Charges

For details on possible additional charges, see the Charges section of the prospectus.

The Fixed Account

Eligibility and Enrollment

Eligibility

Eligible Group Members for the Group Variable Universal Life Insurance include:

·	Active, full-time US employees of Towers Watson Pennsylvania.

·	Active, full-time reduced hour US employees of Towers Watson Pennsylvania.

Employees may be insured under either the Group Universal Life plan or the Group Variable Universal Life plan, but not both.

We refer to each person who buys coverage as a “Participant.” When we use the terms “you” or “your,” we mean a Participant.

Enrollment Period

You or your spouse would have had to enroll in the plan prior to 12/31/2010. No new employees or spouses may enroll for coverage after that date.

“Free Look” Period

See the "Free Look" Period section of the prospectus for more details.

Coverage Information

Face Amount

A Participant may choose a Face Amount from one to five times base annual earnings starting at a minimum of $10,000 up to a maximum of $3,000,000. (When a Face Amount is based on salary, we round the Face Amount to the next higher multiple $1,000 if it is not already an even multiple of $1,000).

Evidence of Good Health

Special rules applied during the initial enrollment period.

For a Current Participant: Current amounts of coverage were “grandfathered,” provided that amounts in excess of $1,000,000 have been subject to the eligible employee giving evidence of good health. In addition, any increase in coverage will be subject to the eligible employee giving evidence of good health.

·	For a Newly Hired Eligible Group Member: You must provide evidence of good health if you enroll and request a Face Amount that is more than $1,000,000. If you enroll more than 31 days after you first become eligible, you must give evidence of good health to enroll for any Face Amount.

Changes in Face Amount

Increases in Face Amount

After the initial enrollment, you may increase your Face Amount of insurance during the annual enrollment, but you must provide evidence of good health. You may also increase your face amount of insurance within 31 days following a qualifying life event, but you will be required to provide evidence of good health.

Decreases in Face Amount

Generally, your coverage amount will not decrease unless you request a decrease from us. However, if your coverage amount is a multiple of salary, then your coverage amount may decrease if your salary decreases.

See the Changes in Face Amount and Taxes sections of the prospectus.

Definition of Life Insurance

Additional Insurance Benefits

Accelerated Benefit Option

You can choose to receive an early payment of all or part of the Death Benefit when diagnosed as being terminally ill. Accelerated benefits are subject to a combined maximum of $1,000,000 if your term life death benefit is also accelerated. “Terminally ill” means you have a life expectancy of 12 months or less.

Exclusions

As stated in the prospectus, Group Variable Universal Life Insurance has a suicide exclusion. See the Suicide Exclusion section of the prospectus.

Changes in Personal Status

Continuing Coverage When You Become Disabled

There is no disability provision under your Certificate, but you may continue your Group Variable Universal Life Coverage while on Disability Leave of Absence that is approved by Towers Watson Pennsylvania. Prudential will bill you directly for premium payments, and will charge a fee, currently $3 per bill, for administration expenses.

Continuing Coverage When You Retire

You may continue your coverage when you retire. Prudential will bill you directly for premium payments, and will charge a fee, currently $3 per bill, for administration expenses.

Continuing Coverage If You Leave the Company for Reasons Other Than Retirement

You may elect to continue your coverage if you leave Towers Watson Pennsylvania for any reason. Rates for Continuation coverage are higher than rates for coverage as an active employee. Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administration expenses.

Termination of the Group Contract

Either Towers Watson Pennsylvania or Prudential may end the Group Contract. Prudential can end the Group Contract only under the conditions described in the prospectus.

If the Group Contract ends, the effect on Participants depends on whether or not Towers Watson Pennsylvania replaces the Group Contract with another life insurance contract that allows for the accumulation of cash value. Generally, here is what will happen:

If Towers Watson Pennsylvania does replace the Group Contract with another life insurance contract that allows for the accumulation of cash value, Prudential will terminate your Certificate. We will also transfer the Cash Surrender Value of your Certificate directly to that new contract, unless you elect to receive the Cash Surrender Value of your Certificate.

If Towers Watson Pennsylvania does not replace the Group Contract with another life insurance contract that allows for the accumulation of cash value, you will have these options: convert to an individual life insurance policy; use your Certificate Fund to buy paid-up life insurance; elect to continue coverage; or elect to receive the Cash Surrender Value of your Certificate.

See the Options On Termination of Coverage section of the prospectus.

Premiums

Payment of Premiums

For active employees, Towers Watson Pennsylvania will send routine premium payments to Prudential by payroll deduction, and will make these payments monthly. Retirees, employees on an approved leave of absence, and Participants who choose continued coverage will be billed directly by Prudential (with an additional fee, currently $3 per bill, for administration expenses) and will submit their premium payments directly to Prudential.

When Monthly Charges are Deducted

The exact date that we deduct the monthly charge from your Certificate Fund depends upon whether you make routine premium payments by automatic payroll deduction or directly to Prudential. We deduct the monthly charge from each investment option in the same proportions that your Certificate Fund is invested.

If you make routine premium payments by automatic payroll deduction through Towers Watson Pennsylvania

We generally will deduct the monthly charge once per month, on the Monthly Deduction Date. The Monthly Deduction Date will coincide with the date Towers Watson Pennsylvania forwards the payroll deductions to us.

Towers Watson Pennsylvania intends to forward automatic payroll deduction premium payments to us on a periodic basis, typically twice per month. But, if Towers Watson Pennsylvania has not transferred the monthly payroll deductions to us by the 45th day after the premium due date, we will deduct the monthly charge on that 45th day.

If you make routine premium payments directly to Prudential

We generally will deduct charges once per period, on the date that we receive your premium payments. If your premium payments have not been received by the 45th day after the premium due date, we will deduct the charges from the Certificate Fund on that 45th day. However, for groups that utilize monthly premium processing, charges will be deducted from the Certificate Fund on the first Business Day of every month, regardless of the billing frequency.

Please refer to the prospectus for information on these and other features of the Towers Watson Pennsylvania Group Contract.

You may contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

Supplement Dated May 1, 2012

to Prospectus Dated May 1, 2012

for Group Variable Universal Life Insurance

Special Features of the Group Contract for

Yellow Roadway

Special terms that we use are defined in the prospectus. See the Definitions of Special Terms section of the prospectus.

TABLE OF CONTENTS

Page

Benefits and Risks	2
Fee Tables	2
Portfolio Companies	2
Service Fees Payable to Prudential	2
Charges	2
The Fixed Account	2
Eligibility and Enrollment	2
“Free Look” Period	2
Coverage Information	2
Changes in Face Amount	2
Definition of Life Insurance	2
Additional Insurance Benefits	2
Exclusions	2
Changes in Personal Status	2

Table of Contents of the Fund Prospectuses

DWS Variable Series II:		Appendix 1
	DWS High Income VIP
Franklin Templeton Variable Insurance Products Trust:		Appendix 2
	Templeton Foreign Securities Fund
Janus Aspen Series:		Appendix 3
	Janus Portfolio
Janus Aspen Series:		Appendix 4
	Janus Overseas Portfolio
Lazard Retirement Series, Inc.:		Appendix 5
	Lazard Retirement U.S. Small-Mid Cap Equity Portfolio
MFS® Variable Insurance Trustsm:		Appendix 6
	MFS Research Series
T. Rowe Price Equity Series, Inc.:		Appendix 7
	Equity Income Portfolio
T. Rowe Price Equity Series, Inc.:		Appendix 8
	New America Growth Portfolio
The Prudential Series Fund Portfolio:		Appendix 9
	Diversified Bond Portfolio
	Equity Portfolio
	Flexible Managed Portfolio
	Global Portfolio
	Jennison Portfolio
	Money Market Portfolio
	Stock Index Portfolio
	Value Portfolio

Benefits and Risks

Fee Tables

The prospectus describes the fees and expenses that you will pay when buying, owning, and surrendering a Certificate. The following tables provide the “current” and “maximum charge” applicable to the Group Contract. The “maximum” in each instance is the highest charge that we are entitled to make under the Group Contract. The “current charge” is the amount that we are now charging. If circumstances change, we reserve the right to increase each current charge up to the maximum, without giving any advance notice.

Transaction Fees
Charge	When Charge is Deducted	Amounted Deducted
Charge for Sales Expenses (Load)	This charge is deducted from each premium when the premium is paid.	Maximum - 3.5% Current - $0.00
Charge for Taxes Attributable to Premiums1	This charge is deducted from each premium when the premium is paid.	Current - 2.60%
Charge for Processing Premiums.	This charge is deducted from each premium when the premium is paid.	Maximum - $2.00 Current - $0.00.
Surrender Charge (Load)	This charge is assessed on a full Surrender of a Certificate.	Maximum - the lesser of $20 and 2% of the amount surrendered. Current - $0.00.
Withdrawal Charge	This charge is assessed on a Withdrawal (Partial Surrender) from the Certificate Fund.	Maximum - The lesser of $20 and 2% of the amount withdrawn. Current - $0.00.
Transfer Charge	This charge is assessed when transfers between investment options exceed 12 in a Certificate year.	Maximum - $20 per transfer after the twelfth. Current - $0.00.
Charge for Additional Statements	This charge is assessed each time you request an additional statement.	Maximum - $20 per statement. Current - $0.00.
Loan Transaction Charge	This charge is assessed when a loan is processed.	Maximum - $20 for each loan. Current - $0.00.

The next table describes the fees and expenses that you will pay periodically during the time that you own the Certificate, not including the Funds’ fees and expenses.

Periodic Charges Other Than The Funds’ Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Account Charge for Variable Investment Options (for Mortality and Expense Risk)	Daily	Maximum - 0.90%1 of the amount of assets in the variable investment options. Current – 0.45%1 of the amount of assets in the variable investment options.
Charge for Administrative Expenses	Monthly	Maximum - $6.00 Current - $3.50
*Cost of Insurance2
	Monthly	Maximum - $83.34 Minimum - $0.10
Charge for a Representative Participant		Representative guaranteed charge - $0.813
Net Interest on Loans4	Annually	2%

*	The charges shown for Cost of Insurance are expressed as rates per $1,000 of Net Amount at Risk.

1.	The daily charge is based on the effective annual rate shown.

2.	The Cost of Insurance (“COI”) charge varies based on individual characteristics. The amounts shown in the table may not be representative of the charge that a particular Participant will pay. Your Certificate contains more information about the particular COI charges that apply to you.

3.	The representative guaranteed charge for cost of insurance is a sample rate charged for a 49 year old insured guaranteed under the contract.

4.	The net interest on loans reflects the additional interest you pay above the effective annual interest we credit to your loan. The loan interest crediting rate will generally be equal to the Fixed Account crediting rate.

Total Annual Fund Operation Expenses	Minimum	Maximum
These are expenses that are deducted from the Fund’s assets, including management fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.	0.38%	1.15%

Portfolio Companies

Set out below is a list of each available Fund and its investment adviser/investment manager.

The Funds

Investment Manager

Prudential Investments LLC (“PI”) serves as investment manager of the Prudential Series Fund.

Prudential Series Fund – Class I Shares
Portfolios / Objectives	Style/Type	Subadvisers
Diversified Bond: High level of income over a longer term while providing reasonable safety of capital.	Fixed Income - Corporate	PIM
Equity: Long term growth of capital.	Large-Cap Core	Jennison
Flexible Managed: Total return consistent with an aggressively managed diversified portfolio.	Balanced	PIM QMA
Global: Long-term growth of capital.	International - Equity	QMA LSV MCM T. Rowe Price William Blair
Jennison: Long-term growth of capital.	Large-Cap Growth	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA
Value: Capital appreciation.	Large-Cap Value	Jennison

Investment Subadvisers for the Prudential Series Fund

·	Jennison Associates LLC (“Jennison”)

·	Prudential Investment Management, Inc. (“PIM”)

·	Quantitative Management Associates LLC (“QMA”)

·	LSV Asset Management (“LSV”)

·	Marsico Capital Management, LLC (“MCM”)

·	T. Rowe Price Associates, Inc. (“T. Rowe Price”)

·	William Blair & Company LLC (“William Blair”)

Unaffiliated Funds / Portfolios
Funds / Portfolios / Objectives	Style/Type	Advisers
DWS High Income VIP1: High level of current income.	Fixed Income – High Yield	Deutsche
Templeton Foreign Securities Fund2: Long-term capital growth.	International - Equity	Investment Counsel
Janus Overseas Portfolio3: Long-term growth of capital.	International - Equity	Janus Capital
Janus Portfolio3: Long-term growth of capital.	Large-Cap Growth	Janus Capital
Lazard Retirement U.S. Small-Mid Cap Equity Portfolio4: Long-term capital appreciation.	Multi-Cap Growth	Lazard
MFS Research Series5: Capital appreciation.	Large-Cap Core	MFS
T. Rowe Price Equity Income Portfolio: Substantial dividend income as well as long-term growth of capital.	Large-Cap Value	T. Rowe Price
T. Rowe New America Growth Fund: Long-term capital growth.	Multi-Cap Growth	T. Rowe Price

1.	Class A Shares

2.	Class 2 Shares

3.	Institutional Shares

4.	Service Shares

5.	Initial Shares

Investment Advisers for Unaffiliated Funds / Portfolios

·	Deutsche Investment Management Americas Inc. (“Deutsche”)

·	Janus Capital Management LLC (“Janus Capital”)

·	Lazard Asset Management LLC ("Lazard")

·	Massachusetts Financial Services Company ("MFS")

·	T. Rowe Price Associates, Inc. ("T. Rowe Price")

·	Templeton Investment Counsel, LLC (“Investment Counsel”)

Service Fees Payable to Prudential

Prudential has entered into agreements with the investment adviser or distributor of the underlying funds. Under the terms of these agreements, Prudential provides administrative and support services to the Funds for which it receives an annual fee based on the average assets allocated to the Fund or portfolio under the Contract from the investment adviser, distributor and/or the Fund. These agreements, including the fees paid and services provided, can vary for each underlying mutual fund whose Funds are offered as investment options.

Prudential and/or our affiliates may receive substantial and varying administrative service payments and Rule 12b-1 fees from certain underlying Funds or related parties. These types of payments and fees are sometimes referred to as “revenue sharing” payments. Rule 12b-1 fees and administrative service payments partially compensate for distribution, marketing, and/or servicing functions and for providing administrative services with respect to Contract owners invested indirectly in the Fund, which include duties such as recordkeeping, shareholder services, and the mailing of periodic reports. We receive administrative services fees with respect to both affiliated underlying Funds and unaffiliated underlying Funds. The administrative services fees we receive from affiliates originate from the assets of the affiliated Fund itself and/or the assets of the Fund’s investment adviser. In either case, the existence of administrative services fees may tend to increase the overall cost of investing in the Fund. The existence of a 12b-1 fee will always increase the overall cost of investing in those Funds. In addition, because these fees are paid to us, allocations you make to these affiliated underlying Funds may benefit us financially if these fees exceed the costs of the administrative support services.

agreements between us and a Fund’s principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund. As of May 1, 2012 , the administrative service fees we receive range from 0.05% to 0.25% of the average assets allocated to the Fund. The service fees received from The Prudential Series Fund are 0.05%. Some Funds pay a 12b-1 fee instead of, or in addition to, the administrative services fees. The 12b-1 fee we receive is equal to 0.25% of the average assets allocated to the Funds indicated below.

The following Funds currently pay a 12b-1 fee:

·	Franklin Templeton Foreign Securities

·	Lazard Retirement U.S. Small-Mid Cap Equity

Charges

The current charges under your Group Contract are as follows:

Charge for Taxes Attributable to Premiums

This charge is currently made up of two parts:

·	The first part is for state and local premium taxes. Currently, it is 2.25% of the premium Prudential receives. (In some states, this charge is called a premium-based administrative charge.) The rates are subject to change based on local, state and federal tax rates.

Daily Charges for Mortality and Expense Risks

The current daily charge for mortality and expense risks is equivalent to an effective annual rate of 0.45%.

Daily Charges for Investment Management Fees and Expenses

Each of the underlying mutual funds deducts investment management fees and other expenses. These fees are described earlier in this supplement.

Monthly Charges

Prudential deducts a monthly charge for the cost of insurance and a monthly charge of $3.50 for administrative expenses from your Certificate Fund.

The highest current rate per thousand is $22.18, and applies to insureds at age 99, who have chosen to continue their coverage. The lowest current rate per thousand is $0.03, and applies to insureds under age 35 who have chosen to continue their coverage.

The following table provides sample per thousand rates (net of taxes):

Insured’s Age	Monthly Cost of Insurance Rate per $1000
35	$0.04
45	$0.11
55	$0.26
65	$0.45

Possible Additional Charges

For details on possible additional charges, please see the Charges and Expenses section of the prospectus.

The Fixed Account

Eligibility and Enrollment

Eligibility

Eligible Group Members are full time active executive level employees as determined by Yellow Roadway. We refer to each Eligible Group Member who buys coverage as a "Participant". When the term "you" or "your" is used, we are also referring to a Participant.

Enrollment Period

You or your spouse would have had to enroll in the plan prior to 11/30/2007. No new employees or spouses may enroll for coverage after that date.

“Free Look” Period

See the "Free Look" Period section of the prospectus for more details.

Coverage Information

Face Amount

An Eligible Group Member may enroll for a Face Amount of coverage up to five times his or her annual earnings or salary (including incentive compensation) to a maximum of $3,000,000. Prudential may ask questions about your health and ask you to have a medical exam. The minimum Face Amount is $100,000. When a Face Amount is based on salary, we round the Face Amount to the next higher multiple of $1,000 if it is not already an even multiple of $1,000. See the How Prudential Issues Certificates section of the prospectus.

Changes in Face Amount

Increases in Face Amount

For coverage based on annual salary or earnings, we may increase your Face Amount based on salary or earnings information reported to us. At any time, you may choose to increase your Face Amount of insurance, but you must provide evidence of good health.

Decrease in Face Amount

Face Amounts will not decrease unless you request a decrease. However, if your Face Amount is a multiple of salary, then your Face Amount may decrease if your salary decreases.

Definition of Life Insurance

Additional Insurance Benefits

Accelerated Benefit Option

Exclusions

There are no exclusions in the Yellow Roadway Group Variable Universal Life Insurance plan.

Changes in Personal Status

Continuing Coverage at Retirement or Disability

You can continue coverage at retirement or if you become disabled. Prudential will bill you directly for premium payments and will charge a fee, currently $3 per bill, for administrative expenses.

Continuing Coverage When You Leave the Group For Reasons Other Than Retirement

Please contact The Prudential Insurance Company of America’s Group Variable Universal Life Customer Service Center at (800) 562-9874 to answer any questions or to obtain transaction forms.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Consolidated Statements of Financial Position
December 31, 2011 and 2010 (in millions, except share amounts)

	2011		2010
ASSETS
Fixed maturities, available for sale, at fair value (amortized cost: 2011-$112,265; 2010- $111,314)	$	123,027	$	116,558
Trading account assets supporting insurance liabilities, at fair value		17,749		16,037
Other trading account assets, at fair value		5,055		5,177
Equity securities, available for sale, at fair value (cost: 2011-$4,153; 2010-$4,243)		4,917		5,432
Commercial mortgage and other loans		28,787		26,647
Policy loans		8,077		8,036
Other long-term investments (includes $366 and $258 measured at fair value under the fair value
option at December 31, 2011 and 2010, respectively.)		3,824		3,485
Short-term investments and other		5,329		3,221
Total investments		196,765		184,593
Cash and cash equivalents		4,428		3,329
Accrued investment income		1,635		1,615
Deferred policy acquisition costs		8,505		8,267
Other assets		7,677		12,623
Due from parent and affiliates		6,919		4,333
Separate account assets		174,740		159,204
Total Assets	$	400,669	$	373,964

LIABILITIES AND EQUITY
LIABILITIES
Future policy benefits	$	82,349	$	78,821
Policyholders' account balances		75,051		73,256
Policyholders' dividends		5,639		3,297
Securities sold under agreements to repurchase		6,031		5,885
Cash collateral for loaned securities		2,847		1,929
Income taxes		4,142		3,170
Short-term debt		1,255		1,488
Long-term debt		10,101		8,454
Other liabilities		5,748		10,397
Due to parent and affiliates		10,882		6,781
Separate account liabilities		174,740		159,204
Total liabilities		378,785		352,682

COMMITMENTS AND CONTINGENT LIABILITIES (See Note 22)

EQUITY
Common Stock ($5.00 par value; 500,000 shares authorized; issued and outstanding
at December 31, 2011 and 2010		2		2
Additional paid-in capital		18,282		18,275
Accumulated other comprehensive income (loss)		2,693		1,244
Retained earnings		897		1,738
Total Prudential Insurance Company of America's equity		21,874		21,259
Noncontrolling interests		10		23
Total equity		21,884		21,282
TOTAL LIABILITIES AND EQUITY	$	400,669	$	373,964

See Notes to Consolidated Financial Statements

B-1

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Consolidated Statements of Operations
Years Ended December 31, 2011, 2010 and 2009 (in millions)

	2011			2010			2009
REVENUES
Premiums	$	10,586		$	10,229		$	9,633
Policy charges and fee income		2,574			2,197			2,090
Net investment income		8,762			8,680			8,580
Other income		1,937			1,571			2,488
Realized investment gains (losses), net:
Other-than-temporary impairments on fixed maturity securities		(1,913	)		(2,655	)		(3,337	)
Other-than-temporary impairments on fixed maturity securities transferred to
Other Comprehensive Income		1,664			2,261			2,004
Other realized investment gains (losses), net		1,614			1,657			(1,262	)
Total realized investment gains (losses), net		1,365			1,263			(2,595	)
Total revenues		25,224			23,940			20,196

BENEFITS AND EXPENSES
Policyholders' benefits		12,623			11,918			11,047
Interest credited to policyholders' account balances		3,146			3,314			3,648
Dividends to policyholders'		2,600			2,101			1,257
Amortization of deferred policy acquisition costs		1,456			475			483
General and administrative expenses		4,269			3,343			3,355
Total benefits and expenses		24,094			21,151			19,790

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES		1,130			2,789			406
Income taxes:
Current		266			(267	)		200
Deferred		162			1,094			(599	)
Total income tax expense (benefit)		428			827			(399	)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE EQUITY IN EARNINGS
OF OPERATING JOINT VENTURES		702			1,962			805
Equity in earnings of operating joint ventures, net of taxes		156			46			1,487
INCOME (LOSS) FROM CONTINUING OPERATIONS		858			2,008			2,292
Income from discontinued operations, net of taxes		15			31			20
NET INCOME (LOSS)		873			2,039			2,312
Less: Income attributable to noncontrolling interests		(13	)		1			1
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL INSURANCE COMPANY OF AMERICA	$	886		$	2,038		$	2,311

See Notes to Consolidated Financial Statements

B-2

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Consolidated Statements of Equity
Years Ended December 31, 2011, 2010 and 2009 (in millions)


												Total
									Accumulated			Prudential
			Additional			Retained			Other			Insurance Company
	Common		Paid-in			Earnings			Comprehensive			of America			Noncontrolling			Total
	Stock		Capital			(Deficit)			Income (Loss)			Equity			Interests			Equity
Balance, December 31, 2008	$	2	$	17,819		$	(186	)	$	(6,590	)	$	11,045		$	21		$	11,066
Capital contribution from parent		-		415			-			-			415			-			415
Assets purchased/transferred from affiliates		-		256			-			-			256			-			256
Long-term stock-based compensation program		-		(9	)		-			-			(9	)		-			(9	)
Impact on Company's investment in Wachovia
Securities		-		(109	)		-			-			(109	)		-			(109	)
Impact of adoption of guidance for other-than-
temporary impairments of debt
securities, net of taxes		-		-			575			(575	)		-			-			-
Comprehensive income:
Net income		-		-			2,311			-			2,311			1			2,312
Other comprehensive income, net of tax:
Change in foreign currency translation
adjustments										6			6			-			6
Change in net unrealized investment gains (losses)										7,332			7,332			-			7,332
Change in pension and postretirement
unrecognized net periodic benefit cost										(620	)		(620	)		-			(620	)
Other comprehensive income													6,718			-			6,718
Total comprehensive income													9,029			1			9,030

Balance, December 31, 2009		2		18,372			2,700			(447	)		20,627			22			20,649
Dividends to parent		-		-			(3,000	)		-			(3,000	)		-			(3,000	)
Assets purchased/transferred from affiliates		-		(96	)		-			-			(96	)		-			(96	)
Long-term stock-based compensation program		-		(1	)		-			-			(1	)		-			(1	)
Comprehensive loss:
Net income (loss)		-		-			2,038			-			2,038			1			2,039
Other comprehensive income (loss), net of tax:
Change in foreign currency translation
adjustments										2			2			-			2
Change in net unrealized investment gains										1,361			1,361			-			1,361
Change in pension and postretirement
unrecognized net periodic benefit cost										328			328			-			328
Other comprehensive loss													1,691			-			1,691
Total comprehensive income (loss)													3,729			1			3,730

Balance, December 31, 2010		2		18,275			1,738			1,244			21,259			23			21,282
Dividends to parent		-		-			(1,727	)		-			(1,727	)		-			(1,727	)
Long-term stock-based compensation program		-		7			-			-			7			-			7
Comprehensive income:
Net income		-		-			886			-			886			(13	)		873
Other comprehensive income, net of tax:
Change in foreign currency translation
adjustments										(27	)		(27	)		-			(27	)
Change in net unrealized investment gains										1,646			1,646			-			1,646

See Notes to Consolidated Financial Statements

B-3

Change in pension and postretirement
unrecognized net periodic benefit cost															(170	)	(170	)		-			(170	)
Other comprehensive income																			1,449		-					1,449
Total comprehensive income																				2,335	(13	)			2,322
Balance, December 31, 2011	$	2	$	18,282	$	897	$	2,693	$	21,874	$	10	$	21,884

See Notes to Consolidated Financial Statements

B-4

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Consolidated Statements of Cash Flows
Years Ended December 31, 2011, 2010 and 2009 (in millions)
										Retated
	2011									2010						2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)				$	873		$	2,039			$	2,312
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Realized investment (gains) losses, net		(1,364	)					(1,263	)					2,595
Policy charges and fee income		(751	)					(729	)					(824	)
Interest credited to policyholders' account balances		3,147						3,314						3,648
Depreciation and amortization		(206	)					(264	)					(53	)
(Gains) losses on trading account assets supporting insurance liabilities, net		(385	)					(468	)					(1,533	)
Gain on sale of joint venture in Wachovia Securities		-						-						(2,247	)
Change in:
Deferred policy acquisition costs		(392	)					(1,103	)					(569	)
Future policy benefits and other insurance liabilities		1,735						1,790						(218	)
Other trading account assets		563						(1,369	)					(407	)
Income taxes		(197	)					(188	)					(90	)
Other, net		2,120						2,808						523
Cash flows from operating activities		5,143						4,567						3,137
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available for sale		25,501						21,002						26,552
Equity securities, available for sale		2,346						1,676						765
Trading account assets supporting insurance liabilities and other trading account assets		21,082						37,880						37,183
Commercial mortgage and other loans		3,797						3,794						3,321
Policy loans		890						897						968
Other long-term investments		354						622						295
Short-term investments		14,103						12,685						14,604
Payments for the purchase/origination of:
Fixed maturities, available for sale		(25,799	)					(26,662	)					(24,194	)
Equity securities, available for sale		(2,100	)					(1,587	)					(827	)
Trading account assets supporting insurance liabilities and other trading account assets		(22,439	)					(38,796	)					(37,522	)
Commercial mortgage and other loans		(5,838	)					(4,090	)					(2,336	)
Policy loans		(611	)					(660	)					(778	)
Other long-term investments		(824	)					(636	)					(399	)
Short-term investments		(13,827	)					(11,589	)					(15,449	)
Proceeds from sale of joint venture in Wachovia Securities					-			-				4,500
Due to/from parent and affiliates					(1,358	)		1,401				(982	)
Other, net					110			62				(461	)
Cash flows from (used in) investing activities		(4,613	)					(4,001	)					5,240
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders' account deposits					15,467			15,542				16,883
Policyholders' account withdrawals					(15,565	)		(16,478	)			(19,052	)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities					1,065			(724	)			(2,257	)
Net change in financing arrangements (maturities 90 days or less)					37			491				(3,327	)
Proceeds from the issuance of debt (maturities longer than 90 days)					2,793			2,343				1,929
Repayments of debt (maturities longer than 90 days)					(1,473	)		(2,702	)			(3,259	)
Excess tax benefits from share-based payment arrangements					12			4				2
Capital contribution from parent					-			-				-
Dividends to parent					(1,630	)		(3,000	)			-
Other, net					(122	)		176				(289	)
Cash flows from (used in) financing activities		584						(4,348	)					(9,370	)
Effect of foreign exchange rate changes on cash balances					(15	)		(28	)			9

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS					1,099			(3,810	)			(984	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR					3,329			7,139				8,123
CASH AND CASH EQUIVALENTS, END OF YEAR				$	4,428		$	3,329			$	7,139

SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid/(received)				$	355		$	(56	)		$	492
Interest paid				$	306		$	313			$	388

NON-CASH TRANSACTIONS DURING THE YEAR
Impact on Company's investment in Wachovia Securities due to addition of A.G. Edwards business, net of tax				$	-		$	-			$	(109	)

See Notes to Consolidated Financial Statements

B-5

1. BUSINESS AND BASIS OF PRESENTATION

The Prudential Insurance Company of America (“Prudential Insurance”), together with its subsidiaries (collectively, the “Company”), is a wholly owned subsidiary of Prudential Holdings, LLC (“Prudential Holdings”), which is a wholly owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”). The Company has organized its operations into the Closed Block Business and the Financial Services Businesses. The Closed Block Business consists principally of the Closed Block (see Note 12); assets held outside the Closed Block that Prudential Insurance needs to hold to meet capital requirements related to the Closed Block policies and invested assets held outside the Closed Block that represent the difference between the Closed Block Assets and Closed Block Liabilities and the interest maintenance reserve (collectively, “Surplus and Related Assets”); deferred policy acquisition costs related to Closed Block policies; and certain other related assets and liabilities. Its Financial Services Businesses consist primarily of non-participating individual life insurance, annuities, group insurance, retirement-related services and global commodities sales and trading, which was sold in 2011.

Demutualization and Destacking

On December 18, 2001 (the “date of demutualization”), the Company converted from a mutual life insurance company to a stock life insurance company and became a direct, wholly owned subsidiary of Prudential Holdings, which became a direct, wholly owned subsidiary of Prudential Financial.

Concurrent with the demutualization, the Company completed a corporate reorganization (the “destacking”) whereby various subsidiaries (and certain related assets and liabilities) of the Company were dividended so that they became wholly owned subsidiaries of Prudential Financial rather than of the Company.

Restatement of Consolidated Statements of Cash Flows

The Consolidated Statement of Cash Flows for the year ended December 31, 2010 has been restated to reclass dividends paid to Parent from 'Other - Net' Operating activities to 'Dividends to Parent' Financing activities. As a result of the restatement, previously reported sources of cash from operating activities and uses of cash in financing activities were increased for the year ended December 31, 2010.

	Year ended December 31, 2010
	(in millions)
Cash flows from operating activities:
As originally reported	$	1,567
Impact of restatement		3,000
Restated	$	4,567

Cash flows from financing activities:
As originally reported	$	(1,348	)
Impact of restatement		(3,000	)
Restated	$	(4,348	)

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The restatement had no impact on the net change in cash and cash equivalents within the Consolidated Statements of Cash Flows or on the Consolidated Statements of Operations, Financial Position or Equity.

Basis of Presentation

The Consolidated Financial Statements include the accounts of Prudential Insurance, entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities in which the Company is considered the primary beneficiary. See Note 5 for more information on the Company’s consolidated variable interest entities. The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Intercompany balances and transactions have been eliminated. The Company has extensive transactions and relationships with Prudential Financial and other affiliates. Due to these relationships it is possible that the terms of these transactions are not as those that would result from transactions among related parties. The Company has evaluated subsequent events through March 31, 2012, the date these financial statements were issued.

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 sales inducements; measurement of goodwill and any related impairment; valuation of investments including derivatives and the recognition of other-than-temporary impairments; future policy benefits including guarantees; pension and other postretirement benefits; 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.

Reclassifications

Certain amounts in prior years have been reclassified to conform to the current year presentation.

Out of Period Adjustment

For the year ended December 31, 2011, the Company recorded an out of period adjustment that increased “Income from continuing operations before income taxes and equity in earnings of operating joint ventures” by $99 million. The adjustment is related to the capitalization of acquisition costs (expense allowance) associated with an affiliated reinsurance arrangement. The Company, which is the assuming company, had been using an approximation method for determining the amount of acquisition costs to capitalize. However, the Company should have been capitalizing all of the payments to the affiliated ceding company. This adjustment also increased the deferred policy acquisition cost asset by the same amount. The correction is not material to any previously reported financial statements.

B-7

2. SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Investments and Investment-Related Liabilities

The Company’s principal investments are fixed maturities; equity securities; commercial mortgage and other loans; policy loans; other long-term investments, including joint ventures (other than operating joint ventures), limited partnerships, and real estate; and short-term investments. Investments and investment-related liabilities also include securities repurchase and resale agreements and securities lending transactions. The accounting policies related to each are as follows:

Fixed maturities are comprised of bonds, notes and redeemable preferred stock. Fixed maturities classified as “available-for-sale” are carried at fair value. See Note 19 for additional information regarding the determination of fair value. The amortized cost of fixed maturities is adjusted for amortization of premiums and accretion of discounts to maturity. Interest income, as well as the related amortization of premium and accretion of discount, is included in “Net investment income” under the effective yield method. For mortgage-backed and asset-backed securities, the effective yield is based on estimated cash flows, including prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral, including default rates and changes in value. These assumptions can significantly impact income recognition and the amount of other-than-temporary impairments recognized in earnings and other comprehensive income. For high credit quality mortgage-backed and asset-backed securities (those rated AA or above), cash flows are provided quarterly, and the amortized cost and effective yield of the security are adjusted as necessary to reflect historical prepayment experience and changes in estimated future prepayments. The adjustments to amortized cost are recorded as a charge or credit to net investment income in accordance with the retrospective method. For asset-backed and mortgage-backed securities rated below AA, the effective yield is adjusted prospectively for any changes in estimated cash flows. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Unrealized gains and losses on fixed maturities classified as “available for sale,” net of tax, and the effect on deferred policy acquisition costs, value of business acquired, deferred sales inducements, future policy benefits and policyholders’ dividends that would result from the realization of unrealized gains and losses, are included in “Accumulated other comprehensive income (loss).”

“Trading account assets supporting insurance liabilities, at fair value” includes invested assets that support certain products which are experience rated, meaning that the investment results associated with these products are expected to ultimately accrue to contractholders. Realized and unrealized gains and losses for these investments are reported in “Other income.” Interest and dividend income from these investments is reported in “Net investment income.”

“Other trading account assets, at fair value” consist primarily of fixed maturities, equity securities, including certain perpetual preferred stock, and certain derivatives, including those used by the Company in its capacity as a broker-dealer and derivative hedging positions used in a non-broker-dealer capacity primarily to hedge the risks related to certain products. These instruments are carried at fair value. Realized and unrealized gains and losses on these investments and on derivatives used by the Company in its capacity as a broker-dealer are reported in “Other income” and, for those related to the Company’s global commodities group, in “Income from discontinued operations, net of taxes.” Interest and dividend income from these investments is reported in “Net investment income” and, for those related to the Company’s global commodities group, in “Income from discontinued operations, net of taxes.”

Equity securities available for sale are comprised of common stock, mutual fund shares, non-redeemable preferred stock, and perpetual preferred stock, and are carried at fair value. The associated unrealized gains and losses, net of tax, and the effect on deferred policy acquisition costs, value of business acquired, deferred sales inducements, future policy benefits and policyholders’ dividends that would result from the realization of unrealized gains and losses, are included in “Accumulated other comprehensive income (loss).” The cost of equity securities is written down to fair value when a decline in value is considered to be other-than-temporary. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Dividends from these investments are recognized in “Net investment income” when declared.

Commercial mortgage and other loans consist of commercial mortgage loans, agricultural loans, loans backed by residential properties, as well as certain other collateralized and uncollateralized loans. Commercial mortgage loans are broken down by class which is based on property type (industrial properties, retail, office, multi-family/apartment, hospitality, and other).

Commercial mortgage and other loans originated and held for investment are generally carried at unpaid principal balance, net of unamortized deferred loan origination fees and expenses, and net of an allowance for losses. Commercial mortgage and other loans acquired, including those related to the acquisition of a business, are recorded at fair value when purchased, reflecting any premiums or discounts to unpaid principal balances.

Interest income, as well as prepayment fees and the amortization of the related premiums or discounts, related to commercial mortgage and other loans, are included in “Net investment income.”

Impaired loans include those loans for which it is probable that amounts due according to the contractual terms of the loan agreement will not all be collected. The Company defines “past due” as principal or interest not collected at least 30 days past the scheduled contractual due date. Interest received on loans that are past due, including impaired and non-impaired loans as well as loans that were previously modified in a troubled debt restructuring, is either applied against the principal or reported as net investment income, based on the Company’s assessment as to the collectability of the principal. See Note 4 for additional information about the Company’s past due loans.

The Company discontinues accruing interest on loans after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability. When the Company discontinues accruing interest on a loan, any accrued but uncollectible interest on the loan and other loans backed by the same collateral, if any, is charged to interest income in the same period. Generally, a loan is restored to accrual status only after all delinquent interest and principal are brought current and, in the case of loans where the payment of interest has been interrupted for a substantial period, or the loan has been modified, a regular payment performance has been established.

B-8

The Company reviews the performance and credit quality of the commercial mortgage and other loan portfolio on an on-going basis. Loans are placed on watch list status based on a predefined set of criteria and are assigned one of three categories. Loans are placed on “early warning” status in cases where, based on the Company’s analysis of the loan’s collateral, the financial situation of the borrower or tenants or other market factors, it is believed a loss of principal or interest could occur. Loans are classified as “closely monitored” when it is determined that there is a collateral deficiency or other credit events that may lead to a potential loss of principal or interest. Loans “not in good standing” are those loans where the Company has concluded that there is a high probability of loss of principal, such as when the loan is delinquent or in the process of foreclosure. As described below, in determining the allowance for losses, the Company evaluates each loan on the watch list to determine if it is probable that amounts due according to the contractual terms of the loan agreement will not be collected.

Loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage loans. The loan-to-value ratio compares the amount of the loan to the fair value of the underlying property collateralizing the loan, and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. A smaller loan-to-value ratio indicates a greater excess of collateral value over the loan amount. The debt service coverage ratio compares a property’s net operating income to its debt service payments. Debt service coverage ratios less than 1.0 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A larger debt service coverage ratio indicates a greater excess of net operating income over the debt service payments. The values utilized in calculating these ratios are developed as part of the Company’s periodic review of the commercial mortgage loan and agricultural loan portfolio, which includes an internal appraisal of the underlying collateral value. The Company’s periodic review also includes a quality re-rating process, whereby the internal quality rating originally assigned at underwriting is updated based on current loan, property and market information using a proprietary quality rating system. The loan-to-value ratio is the most significant of several inputs used to establish the internal credit rating of a loan which in turn drives the allowance for losses. Other key factors considered in determining the internal credit rating include debt service coverage ratios, amortization, loan term, estimated market value growth rate and volatility for the property type and region. See Note 4 for additional information related to the loan-to-value ratios and debt service coverage ratios related to the Company’s commercial mortgage and agricultural loan portfolios.

Loans backed by residential properties, other collateralized loans, and uncollateralized loans are also reviewed periodically. Each loan is assigned an internal or external credit rating. Internal credit ratings take into consideration various factors including financial ratios and qualitative assessments based on non-financial information. In cases where there are personal or third party guarantors, the credit quality of the guarantor is also reviewed. These factors are used in developing the allowance for losses. Based on the diversity of the loans in these categories and their immateriality, the Company has not disclosed the credit quality indicators related to these loans in Note 4.

For those loans not reported at fair value, the allowance for losses includes a loan specific reserve for each impaired loan that has a specifically identified loss and a portfolio reserve for probable incurred but not specifically identified losses. For impaired commercial mortgage and other loans the allowances for losses are determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or based upon the fair value of the collateral if the loan is collateral dependent. The portfolio reserves for probable incurred but not specifically identified losses in the commercial mortgage and agricultural loan portfolio segments considers the current credit composition of the portfolio based on an internal quality rating, (as described above). The portfolio reserves are determined using past loan experience, including historical credit migration, loss probability and loss severity factors by property type. These factors are reviewed each quarter and updated as appropriate.

The allowance for losses on commercial mortgage and other loans can increase or decrease from period to period based on the factors noted above. “Realized investment gains (losses), net” includes changes in the allowance for losses. “Realized investment gains (losses), net” also includes gains and losses on sales, certain restructurings, and foreclosures.

When a commercial mortgage or other loan is deemed to be uncollectible, any specific valuation allowance associated with the loan is reversed and a direct write down to the carrying amount of the loan is made. The carrying amount of the loan is not adjusted for subsequent recoveries in value.

Commercial mortgage and other loans are occasionally restructured in a troubled debt restructuring. These restructurings generally include one or more of the following: full or partial payoffs outside of the original contract terms; changes to interest rates; extensions of maturity; or additions or modifications to covenants. Additionally, the Company may accept assets in full or partial satisfaction of the debt as part of a troubled debt restructuring. When restructurings occur, they are evaluated individually to determine whether the restructuring or modification constitutes a "troubled debt restructuring" as defined by authoritative accounting guidance. If the borrower is experiencing financial difficulty and the Company has granted a concession, the restructuring, including those that involve a partial payoff or the receipt of assets in full satisfaction of the debt is deemed to be a troubled debt restructuring. Based on the Company’s credit review process described above, these loans generally would have

B-9

been deemed impaired prior to the troubled debt restructuring, and specific allowances for losses would have been established prior to the determination that a troubled debt restructuring has occurred.

In a troubled debt restructuring where the Company receives assets in full satisfaction of the debt, any specific valuation allowance is reversed and a direct write down of the loan is recorded for the amount of the allowance, and any additional loss, net of recoveries, or any gain is recorded for the difference between the fair value of the assets received and the recorded investment in the loan. When assets are received in partial settlement, the same process is followed, and the remaining loan is evaluated prospectively for impairment based on the credit review process noted above. When a loan is restructured in a troubled debt restructuring, the impairment of the loan is remeasured using the modified terms and the loan’s original effective yield, and the allowance for loss is adjusted accordingly. Subsequent to the modification, income is recognized prospectively based on the modified terms of the loans in accordance with the income recognition policy noted above. Additionally, the loan continues to be subject to the credit review process noted above.

In situations where a loan has been restructured in a troubled debt restructuring and the loan has subsequently defaulted, this factor is considered when evaluating the loan for a specific allowance for losses in accordance with the credit review process noted above.

See Note 4 for additional information about commercial mortgage and other loans that have been restructured in a troubled debt restructuring.

“Policy loans” are carried at unpaid principal balances. Interest income on policy loans is recognized in net investment income at the contract interest rate when earned. Policy loans are fully collateralized by the cash surrender value of the associated insurance policies.

Securities repurchase and resale agreements and securities loaned transactions are used to earn spread income, to borrow funds, or to facilitate trading activity. Securities repurchase and resale agreements are generally short-term in nature, and therefore, the carrying amounts of these instruments approximate fair value. As part of securities repurchase agreements or securities loaned transactions, the Company transfers either corporate debt securities, or U.S. government and government agency securities and receives cash as collateral. As part of securities resale agreements, the Company transfers cash as collateral and receives U.S. government securities. For securities repurchase agreements and securities loaned transactions used to earn spread income, the cash received is typically invested in cash equivalents, short-term investments or fixed maturities.

Securities repurchase and resale agreements that satisfy certain criteria are treated as collateralized financing arrangements. These agreements are carried at the amounts at which the securities will be subsequently resold or reacquired, as specified in the respective agreements. For securities purchased under agreements to resell, the Company’s policy is to take possession or control of the securities and to value the securities daily. Securities to be resold are the same, or substantially the same, as the securities received. For securities sold under agreements to repurchase, the market value of the securities to be repurchased is monitored, and additional collateral is obtained where appropriate, to protect against credit exposure. Securities to be repurchased are the same, or substantially the same, as those sold. Income and expenses related to these transactions executed within the insurance companies used to earn spread income are reported as “Net investment income;” however, for transactions used to borrow funds, the associated borrowing cost is reported as interest expense (included in “General and administrative expenses”). Income and expenses related to these transactions executed within the Company’s derivative operations are reported in “Other income.” Income and expenses related to these transactions executed within the Company’s global commodities group are reported in “Income from discontinued operations, net of taxes.”

Securities loaned transactions are treated as financing arrangements and are recorded at the amount of cash received. The Company obtains collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. The Company monitors the market value of the securities loaned on a daily basis with additional collateral obtained as necessary. Substantially all of the Company’s securities loaned transactions are with large brokerage firms. Income and expenses associated with securities loaned transactions used to earn spread income are reported as “Net investment income;” however, for securities loaned transactions used for funding purposes the associated rebate is reported as interest expense (included in “General and administrative expenses”).

“Other long-term investments” consist of the Company’s investments in joint ventures and limited partnerships, other than operating joint ventures, as well as wholly-owned investment real estate and other investments. Joint venture and partnership interests are generally accounted for using the equity method of accounting. In certain instances in which the Company’s partnership interest is so minor (generally less than 3%) that it exercises virtually no influence over operating and financial policies, the Company applies the cost method of accounting. The Company’s income from investments in joint ventures and partnerships accounted for using the equity method or the cost method, other than the Company’s investment in operating joint ventures, is included in “Net investment income.” The carrying value of these investments is written down, or impaired, to fair

B-10

value when a decline in value is considered to be other-than-temporary. In applying the equity method or the cost method (including assessment for other-than-temporary impairment), the Company uses financial information provided by the investee, generally on a one to three month lag. The Company consolidates joint ventures and limited partnerships in certain other instances where it is deemed to exercise control, or is considered the primary beneficiary of a variable interest entity. The Company’s net income from consolidated joint ventures and limited partnerships is included in the respective revenue and expense line items depending on the activity of the consolidated entity.

The Company’s wholly-owned investment real estate consists of real estate which the Company has the intent to hold for the production of income as well as real estate held for sale. Real estate which the Company has the intent to hold for the production of income is carried at depreciated cost less any writedowns to fair value for impairment losses and is reviewed for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. Real estate held for sale is carried at the lower of depreciated cost or fair value less estimated selling costs and is not further depreciated once classified as such. An impairment loss is recognized when the carrying value of the investment real estate exceeds the estimated undiscounted future cash flows (excluding interest charges) from the investment. At that time, the carrying value of the investment real estate is written down to fair value. Decreases in the carrying value of investment real estate held for the production of income due to other-than-temporary impairments are recorded in “Realized investment gains (losses), net.” Depreciation on real estate held for the production of income is computed using the straight-line method over the estimated lives of the properties, and is included in “Net investment income.” In the period a real estate investment is deemed held for sale and meets all of the discontinued operation criteria, the Company reports all related net investment income and any resulting investment gains and losses as discontinued operations for all periods presented.

“Short-term investments” primarily consist of highly liquid debt instruments with a maturity of greater than three months and less than twelve months when purchased, other than those debt instruments meeting this definition that are included in “Trading account assets supporting insurance liabilities, at fair value.” These investments are generally carried at fair value and include certain money market investments, short-term debt securities issued by government sponsored entities and other highly liquid debt instruments. Short-term investments held in the Company’s former broker-dealer operations were marked-to-market through “Income from discontinued operations, net of taxes.”

Realized investment gains (losses) are computed using the specific identification method. Realized investment gains and losses are generated from numerous sources, including the sale of fixed maturity securities, equity securities, investments in joint ventures and limited partnerships and other types of investments, as well as adjustments to the cost basis of investments for net other-than-temporary impairments recognized in earnings. Realized investment gains and losses are also generated from prepayment premiums received on private fixed maturity securities, allowance for losses on commercial mortgage and other loans, and fair value changes on embedded derivatives and free-standing derivatives that do not qualify for hedge accounting treatment, except those derivatives used in the Company’s capacity as a broker or dealer.

The Company’s available-for-sale securities with unrealized losses are reviewed quarterly to identify other-than-temporary impairments in value. In evaluating whether a decline in value is other-than-temporary, the Company considers several factors including, but not limited to the following: (1) the extent and the duration of the decline; (2) the reasons for the decline in value (credit event, currency or interest-rate related, including general credit spread widening); and (3) the financial condition of and near-term prospects of the issuer. With regard to available-for-sale equity securities, the Company also considers the ability and intent to hold the investment for a period of time to allow for a recovery of value. When it is determined that a decline in value of an equity security is other-than-temporary, the carrying value of the equity security is reduced to its fair value, with a corresponding charge to earnings.

Under the authoritative guidance for the recognition and presentation of other-than-temporary impairments for debt securities an other-than-temporary impairment must be recognized in earnings for a debt security in an unrealized loss position when an entity either (a) has the intent to sell the debt security or (b) more likely than not will be required to sell the debt security before its anticipated recovery. For all debt securities in unrealized loss positions that do not meet either of these two criteria, the guidance requires that the Company analyze its ability to recover the amortized cost by comparing the net present value of projected future cash flows with the amortized cost of the security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment. The Company may use the estimated fair value of collateral as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. If the net present value is less than the amortized cost of the investment, an other-than-temporary impairment is recognized.

Under the authoritative guidance for the recognition and presentation of other-than-temporary impairments, when an other-than-temporary impairment of a debt security has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the debt security meets either of these two criteria, the other-than-temporary

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impairment recognized in earnings is equal to the entire difference between the security’s amortized cost basis and its fair value at the impairment measurement date. For other-than-temporary impairments of debt securities that do not meet these two criteria, the net amount recognized in earnings is equal to the difference between the amortized cost of the debt security and its net present value calculated as described above. Any difference between the fair value and the net present value of the debt security at the impairment measurement date is recorded in “Other comprehensive income (loss).” Unrealized gains or losses on securities for which an other-than-temporary impairment has been recognized in earnings is tracked as a separate component of “Accumulated other comprehensive income (loss).”

For debt securities, the split between the amount of an other-than-temporary impairment recognized in other comprehensive income and the net amount recognized in earnings is driven principally by assumptions regarding the amount and timing of projected cash flows. For mortgage-backed and asset-backed securities, cash flow estimates consider the payment terms of the underlying assets backing a particular security, including prepayment assumptions, and are based on data from widely accepted third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates include assumptions regarding the underlying collateral including default rates and recoveries, which vary based on the asset type and geographic location, as well as the vintage year of the security. For structured securities, the payment priority within the tranche structure is also considered. For all other debt securities, cash flow estimates are driven by assumptions regarding probability of default and estimates regarding timing and amount of recoveries associated with a default. The Company has developed these estimates using information based on its historical experience as well as using market observable data, such as industry analyst reports and forecasts, sector credit ratings and other data relevant to the collectability of a security, such as the general payment terms of the security and the security’s position within the capital structure of the issuer.

The new cost basis of an impaired security is not adjusted for subsequent increases in estimated fair value. In periods subsequent to the recognition of an other-than-temporary impairment, the impaired security is accounted for as if it had been purchased on the measurement date of the impairment. For debt securities, the discount (or reduced premium) based on the new cost basis may be accreted into net investment income in future periods, including increases in cash flow on a prospective basis. In certain cases where there are decreased cash flow expectations, the security is reviewed for further cash flow impairments.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, amounts due from banks, certain money market investments and other debt instruments with maturities of three months or less when purchased, other than cash equivalents that are included in “Trading account assets supporting insurance liabilities, at fair value.”

Deferred Policy Acquisition Costs

Costs that vary with and that are related primarily to the production of new insurance and annuity business are deferred to the extent such costs are deemed recoverable from future profits. Such deferred policy acquisition costs (“DAC”) include commissions, costs of policy issuance and underwriting, and variable field office expenses that are incurred in producing new business. See below under “Future Adoption of New Accounting Pronouncements” for a discussion of the new authoritative guidance adopted effective January 1, 2012, regarding which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. In each reporting period, capitalized DAC is amortized to “Amortization of deferred policy acquisition costs,” net of the accrual of imputed interest on DAC balances. DAC is subject to recoverability testing at the end of each reporting period to ensure that the balance does not exceed the present value of anticipated gross profits, anticipated gross margins, or premiums less benefits and maintenance expenses, as applicable. DAC, for applicable products, is adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in “Accumulated other comprehensive income (loss).”

For traditional participating life insurance included in the Closed Block, DAC is amortized over the expected life of the contracts (up to 45 years) in proportion to gross margins based on historical and anticipated future experience, which is evaluated regularly. The effect of changes in estimated gross margins on unamortized DAC is reflected in “Amortization of deferred policy acquisition costs,” in the period such estimated gross margins are revised. Policy acquisition costs related to interest-sensitive and variable life products and fixed and variable deferred annuity products are deferred and amortized over the expected life of the contracts (periods ranging from 25 to 99 years) in proportion to gross profits arising principally from investment results, mortality and expense margins, and surrender charges, based on historical and anticipated future experience, which is updated periodically. The Company uses a reversion to the mean approach to derive the blended future rate of return assumptions. However, if the projected future rate of return calculated using this approach is greater than the maximum future rate of return assumption, the maximum future rate of return is utilized in deriving the blended future rate of return assumption. In addition to the gross profit components previously mentioned, the impact of the embedded derivatives associated with certain optional living benefit features of the Company’s variable annuity contracts and related hedging activities are also included in actual gross profits used as the basis for calculating current period amortization and, in certain instances, in management’s estimate of total gross profits used for setting

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the amortization rate. The effect of changes to estimated gross profits on unamortized DAC is reflected in “Amortization of deferred policy acquisition costs” in the period such estimated gross profits are revised. DAC related to non-participating traditional individual life insurance is amortized in proportion to gross premiums.

For group annuity contracts, acquisition expenses are deferred and amortized over the expected life of the contracts in proportion to gross profits. For group corporate-, bank- and trust-owned life insurance contracts, acquisition costs are deferred and amortized in proportion to lives insured. For group and individual long-term care contracts, acquisition expenses are deferred and amortized in proportion to gross premiums. For single premium immediate annuities with life contingencies, and single premium group annuities and single premium structured settlements with life contingencies, all acquisition costs are charged to expense immediately because generally all premiums are received at the inception of the contract. For funding agreement notes contracts, single premium structured settlement contracts without life contingencies, and single premium immediate annuities without life contingencies, acquisition expenses are deferred and amortized over the expected life of the contracts using the interest method. For other group life and disability insurance contracts and guaranteed investment contracts, acquisition costs are expensed as incurred.

For some products, policyholders can elect to modify product benefits, features, rights or coverages by exchanging a contract for a new contract or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. These transactions are known as internal replacements. If policyholders surrender traditional life insurance policies in exchange for life insurance policies that do not have fixed and guaranteed terms, the Company immediately charges to expense the remaining unamortized DAC on the surrendered policies. For other internal replacement transactions, except those that involve the addition of a nonintegrated contract feature that does not change the existing base contract, the unamortized DAC is immediately charged to expense if the terms of the new policies are not substantially similar to those of the former policies. If the new terms are substantially similar to those of the earlier policies, the DAC is retained with respect to the new policies and amortized over the expected life of the new policies.

Separate Account Assets and Liabilities

Separate account assets are reported at fair value and represent segregated funds that are invested for certain policyholders, pension funds and other customers. The assets consist primarily of equity securities, fixed maturities, real estate related investments, real estate mortgage loans, short-term investments and derivative instruments. The assets of each account are legally segregated and are generally not subject to claims that arise out of any other business of the Company. 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 primarily represent the contractholder’s account balance in separate account assets and to a lesser extent borrowings of the separate account, and will be equal and offsetting to total separate account assets. See Note 11 for additional information regarding separate account arrangements with contractual guarantees. The investment income and realized investment gains or losses from separate account assets generally accrue to the policyholders and are not included in the Company’s results of operations. Mortality, policy administration and surrender charges assessed against the accounts are included in “Policy charges and fee income.” Asset management fees charged to the accounts are included in “Other income.” Seed money that the Company invests in separate accounts is reported in the appropriate general account asset line. Investment income and realized investment gains or losses from seed money invested in separate accounts accrues to the Company and is included in the Company’s results of operations.

Other Assets and Other Liabilities

Other assets consist primarily of prepaid pension benefit costs, certain restricted assets, trade receivables, value of business acquired, goodwill, deferred sales inducements, the Company’s investments in operating joint ventures, which include the Company’s indirect investment in China Pacific Insurance (Group) Co., Ltd. (“China Pacific Group”), property and equipment, and reinsurance recoverables. Other liabilities consist primarily of trade payables, pension and other employee benefit liabilities, derivative liabilities, and reinsurance payables.

Property and equipment are carried at cost less accumulated depreciation. Depreciation is determined using the straight-line method over the estimated useful lives of the related assets, which generally range from 3 to 40 years.

As a result of certain acquisitions and the application of purchase accounting, the Company reports a financial asset representing the value of business acquired (“VOBA”). VOBA includes an explicit adjustment to reflect the cost of capital attributable to the acquired insurance contracts.VOBA represents an adjustment to the state value of inforce insurance contract liabilities to present them at fair value, determined as of the acquisition date. VOBA balances are subject to recoverability testing, in the manner in which it was acquired, at the end of each reporting period to ensure that the balance does not exceed the present value of anticipated gross profits. The Company has established a VOBA asset primarily for its deferred annuity, defined contribution and defined benefit businesses. For acquired annuity contracts, future positive cash flows generally include fees and

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other charges assessed to the contracts as long as they remain in force as well as fees collected upon surrender, if applicable, while future negative cash flows include costs to administer contracts and benefit payments. In addition, future cash flows with respect to acquired annuity business include the impact of future cash flows expected from the guaranteed minimum death and income benefit provisions. For acquired defined contribution and defined benefits businesses, contract balances are projected using assumptions for add-on deposits, participant withdrawals, contract surrenders, and investment returns. Gross profits are then determined based on investment spreads and the excess of fees and other charges over the costs to administer the contracts. The Company amortizes VOBA over the effective life of the acquired contracts in “General and administrative expenses.” For acquired annuity contracts, VOBA is amortized in proportion to estimated gross profits arising from the contracts and anticipated future experience, which is evaluated regularly. For acquired defined contribution and defined benefit businesses, the majority of VOBA is amortized in proportion to estimated gross profits arising principally from investment spreads and fees in excess of actual expense based upon historical and estimated future experience, which is updated periodically. The remainder of VOBA is amortized based on estimated gross revenues, fees, or the change in policyholders’ account balances, as applicable. The effect of changes in estimated gross profits on unamortized VOBA is reflected in the period such estimates of expected future profits are revised. See Note 8 for additional information regarding VOBA.

As a result of certain acquisitions, the Company recognizes an asset for goodwill representing the excess of cost over the net fair value of the assets acquired and liabilities assumed. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within the reporting unit, whether acquired or organically grown, are available to support the value of the goodwill.

The Company tests goodwill for impairment annually as of December 31 and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s reporting units are the Financial Services Businesses and the Closed Block Business. The fundamental goodwill impairment analysis is a two-step test that is performed at the reporting unit level. The first step, used to identify potential impairment, involves comparing each reporting unit’s fair value to its carrying value including goodwill. If the fair value of a reporting unit exceeds its carrying value, the applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value, there is an indication of a potential impairment and the second step of the test is performed to measure the amount of impairment.

The second step involves calculating an implied fair value of goodwill for each reporting unit for which the first step indicated impairment. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, which is the excess of the fair value of the reporting unit, as determined in the first step, over the aggregate fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill in the “pro forma” business combination accounting as described above exceeds the goodwill assigned to a reporting unit, there is no impairment. If the goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded in “General and administrative expenses” for the excess. An impairment loss recognized cannot exceed the amount of goodwill assigned to a reporting unit, and the loss establishes a new basis in the goodwill. Subsequent reversal of goodwill impairment losses is not permitted. Management is required to make significant estimates in determining the fair value of a reporting unit including, but not limited to: projected earnings, comparative market multiples, and the risk rate at which future net cash flows are discounted.

In accordance with recently issued accounting guidance, the Company may first perform a qualitative goodwill assessment to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step goodwill impairment test, as described above, is not necessary. If, however, the Company concludes otherwise, then the Company must perform the first step of the two-step impairment test by comparing the reporting unit’s fair value with its carrying value including goodwill. If the carrying value exceeds fair value, then the Company must perform the second step of the goodwill impairment test to measure the impairment loss, if any. Further details of this recently issued guidance are provided under “Adoption of New Accounting Pronouncements,” below.

See Note 9 for additional information regarding goodwill.

The Company offers various types of sales inducements to policyholders related to fixed and variable deferred annuity contracts. The Company defers sales inducements and amortizes them over the anticipated life of the policy using the same methodology and assumptions used to amortize DAC. Sales inducements balances are subject to recoverability testing at the end of each reporting period to ensure that the balance does not exceed the present value of anticipated gross profits. The Company records amortization of deferred sales inducements in “Interest credited to policyholders’ account balances.” See Note 11 for additional information regarding sales inducements.

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The majority of the Company’s reinsurance recoverables and payables are receivables and corresponding payables associated with the reinsurance arrangements used to effect the Company’s acquisition of the retirement businesses of CIGNA. The remaining amounts relate to other reinsurance arrangements entered into by the Company. For each of its reinsurance contracts, the Company determines if the contract provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. The Company reviews all contractual features, particularly those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. See Note 13 for additional information about the Company’s reinsurance arrangements.

Investments in operating joint ventures are generally accounted for under the equity method. The carrying value of these investments is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. See Note 7 for additional information on investments in operating joint ventures.

Future Policy Benefits

The Company’s liability for future policy benefits is primarily comprised of the present value of estimated future payments to or on behalf of policyholders, where the timing and amount of payment depends on policyholder mortality or morbidity, less the present value of future net premiums. For individual traditional participating life insurance products, the mortality and interest rate assumptions applied are those used to calculate the policies’ guaranteed cash surrender values. For life insurance, other than individual traditional participating life insurance, and annuity and disability products, expected mortality and morbidity is generally based on the Company’s historical experience or standard industry tables including a provision for the risk of adverse deviation. Interest rate assumptions are based on factors such as market conditions and expected investment returns. Although mortality and morbidity and interest rate assumptions are “locked-in” upon the issuance of new insurance or annuity business with fixed and guaranteed terms, significant changes in experience or assumptions may require the Company to provide for expected future losses on a product by establishing premium deficiency reserves. Premium deficiency reserves, if required, are determined based on assumptions at the time the premium deficiency reserve is established and do not include a provision for the risk of adverse deviation. See Note 10 for additional information regarding future policy benefits.

The Company’s liability for future policy benefits also includes a liability for unpaid claims and claim adjustment expenses. The Company does not establish claim liabilities until a loss has occurred. However, unpaid claims and claim adjustment expenses includes estimates of claims that the Company believes have been incurred but have not yet been reported as of the balance sheet date. The Company’s liability for future policy benefits also includes net liabilities for guarantee benefits related to certain nontraditional long-duration life and annuity contracts, which are discussed more fully in Note 11, and certain unearned revenues.

Policyholders’ Account Balances

The Company’s liability for policyholders’ account balances represents the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability is generally equal to the accumulated account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the account balance. These policyholders’ account balances also include provision for benefits under non-life contingent payout annuities and certain unearned revenues. See Note 10 for additional information regarding policyholders’ account balances.

Policyholders’ Dividends

The Company’s liability for policyholders’ dividends includes its dividends payable to policyholders and its policyholder dividend obligation associated with the participating policies included in the Closed Block. The dividends payable for participating policies included in the Closed Block are determined at the end of each year for the following year by the Board of Directors of Prudential Insurance based on its statutory results, capital position, ratings, and the emerging experience of the Closed Block. The policyholder dividend obligation represents amounts to be paid to Closed Block policyholders as an additional policyholder dividend unless otherwise offset by future Closed Block performance that is less favorable than originally expected, the components of which are discussed more fully in Note 12.

Contingent Liabilities

Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable. Management evaluates whether there are incremental legal or other costs directly associated with the ultimate resolution of the matter that are reasonably estimable and, if so, they are included in the accrual.

Insurance Revenue and Expense Recognition

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Premiums from individual life products, other than interest-sensitive life contracts, and health insurance and long-term care products are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded as an expense when they are incurred. A liability for future policy benefits is recorded when premiums are recognized using the net level premium method.

Premiums from non-participating group annuities with life contingencies, single premium structured settlements with life contingencies and single premium immediate annuities with life contingencies are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium is deferred and recognized into revenue in a constant relationship to the amount of expected future benefit payments. Benefits are recorded as an expense when they are incurred. A liability for future policy benefits is recorded when premiums are recognized using the net premium method.

Certain individual annuity contracts provide the holder a guarantee that the benefit received upon death or annuitization will be no less than a minimum prescribed amount. These benefits are accounted for as insurance contracts and are discussed in further detail in Note 11. The Company also provides contracts with certain living benefits which are considered embedded derivatives. These contracts are discussed in further detail in Note 11.

Amounts received as payment for interest-sensitive group and individual life contracts, deferred fixed annuities, structured settlements and other contracts without life contingencies, and participating group annuities are reported as deposits to “Policyholders’ account balances.” Revenues from these contracts are reflected in “Policy charges and fee income” consisting primarily of fees assessed during the period against the policyholders’ account balances for mortality charges, policy administration charges and surrender charges. In addition to fees, the Company earns investment income from the investment of policyholders’ deposits in the Company’s general account portfolio. Fees assessed that represent compensation to the Company for services to be provided in future periods and certain other fees are deferred and amortized into revenue over the life of the related contracts in proportion to estimated gross profits. Benefits and expenses for these products include claims in excess of related account balances, expenses of contract administration, interest credited to policyholders’ account balances and amortization of DAC.

For group life, other than interest-sensitive group life contracts, and disability insurance, premiums are recognized over the period to which the premiums relate in proportion to the amount of insurance protection provided. Claim and claim adjustment expenses are recognized when incurred.

Premiums, benefits and expenses are stated net of reinsurance ceded to other companies, except for amounts associated with certain modified coinsurance contracts which are reflected in the Company’s financial statements based on the application of the deposit method of accounting. Estimated reinsurance recoverables and the cost of reinsurance are recognized over the life of the reinsured policies using assumptions consistent with those used to account for the underlying policies.

Other Income

“Other income” includes asset management fees and securities and commodities commission revenues, which are recognized in the period in which the services are performed, interest earned on affiliated notes receivable, realized and unrealized gains and losses from investments classified as “trading” such as “Trading account assets supporting insurance liabilities” and “Other trading account assets,” and short-term investments that are marked-to-market through other income.

Foreign Currency

Assets and liabilities of foreign operations and subsidiaries reported in currencies other than U.S. dollars are translated at the exchange rate in effect at the end of the period. Revenues, benefits and other expenses are translated at the average rate prevailing during the period. The effects of translating the statements of operations and financial position of non-U.S. entities with functional currencies other than the U.S. dollar are included, net of related qualifying hedge gains and losses and income taxes, in “Accumulated other comprehensive income (loss).” Gains and losses from foreign currency transactions are reported in either “Accumulated other comprehensive income (loss)” or current earnings in “Other income” depending on the nature of the related foreign currency denominated asset or liability.

Derivative Financial Instruments

Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices, values of securities or commodities, credit spreads, market volatility, expected returns, and liquidity. Values can also be affected

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by changes in estimates and assumptions, including those related to counterparty behavior and non-performance risk used in valuation models. Derivative financial instruments generally used by the Company include swaps, futures, forwards and options and may be exchange-traded or contracted in the over-the-counter market. Derivative positions are carried at fair value, generally by obtaining quoted market prices or through the use of valuation models.

Derivatives are used in a non-broker-dealer capacity, to manage the interest rate and currency characteristics of assets or liabilities and to mitigate volatility of net investments in foreign operations resulting from changes in currency exchange rates. Additionally, derivatives may be used to seek to reduce exposure to interest rate, credit, foreign currency and equity risks associated with assets held or expected to be purchased or sold, and liabilities incurred or expected to be incurred. As discussed in detail below and in Note 21, all realized and unrealized changes in fair value of non-broker-dealer related derivatives are recorded in current earnings, with the exception of the effective portion of cash flow hedges and effective hedges of net investments in foreign operations. Cash flows from derivatives are reported in the operating, investing, or financing activities sections in the Consolidated Statements of Cash Flows based on the nature and purpose of the derivative.

Derivatives were also used in a derivative broker-dealer capacity in the Company’s global commodities group to meet the needs of clients by structuring transactions that allow clients to manage their exposure to interest rates, foreign exchange rates, indices and prices of securities and commodities. The Company’s global commodities group was sold on July 1, 2011. See Note 3 for further details. Realized and unrealized changes in fair value of derivatives used in these dealer related operations are included in “Income from discontinued operations, net of taxes” in the periods in which the changes occur. Cash flows from such derivatives are reported in the operating activities section of the Consolidated Statements of Cash Flows.

Derivatives are recorded either as assets, within “Other trading account assets, at fair value” or “Other long-term investments,” or as liabilities, within “Other liabilities,” except for embedded derivatives which are recorded with the associated host contract. The Company nets the fair value of all derivative financial instruments with counterparties for which a master netting arrangement has been executed.

The Company designates derivatives as either (1) a hedge of the fair value of a recognized asset or liability or unrecognized firm commitment (“fair value” hedge); (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge); (3) a foreign-currency fair value or cash flow hedge (“foreign currency” hedge); (4) a hedge of a net investment in a foreign operation; or (5) a derivative that does not qualify for hedge accounting.

To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated risk of the hedged item. Effectiveness of the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a derivative qualifies for hedge accounting treatment, there may be an element of ineffectiveness of the hedge. Under such circumstances, the ineffective portion is recorded in “Realized investment gains (losses), net.”

The Company formally documents at inception all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as fair value, cash flow, or foreign currency hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. Hedges of a net investment in a foreign operation are linked to the specific foreign operation.

When a derivative is designated as a fair value hedge and is determined to be highly effective, changes in its fair value, along with changes in the fair value of the hedged asset or liability (including losses or gains on firm commitments), are reported on a net basis in the income statement, generally in “Realized investment gains (losses), net.” When swaps are used in hedge accounting relationships, periodic settlements are recorded in the same income statement line as the related settlements of the hedged items.

When a derivative is designated as a cash flow hedge and is determined to be highly effective, changes in its fair value are recorded in “Accumulated other comprehensive income (loss)” until earnings are affected by the variability of cash flows being hedged (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings). At that time, the related portion of deferred gains or losses on the derivative instrument is reclassified and reported in the income statement line item associated with the hedged item.

When a derivative is designated as a foreign currency hedge and is determined to be highly effective, changes in its fair value are recorded either in current period earnings if the hedge transaction is a fair value hedge (e.g., a hedge of a recognized foreign currency asset or liability) or in “Accumulated other comprehensive income (loss)” if the hedge transaction is a cash flow hedge (e.g., a foreign currency denominated forecasted transaction). When a derivative is used as a hedge of a net investment in a foreign operation, its change in fair value, to the extent effective as a hedge, is recorded in the cumulative translation adjustment account within “Accumulated other comprehensive income (loss).”

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If it is determined that a derivative no longer qualifies as an effective fair value or cash flow hedge or management removes the hedge designation, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in “Realized investment gains (losses), net.” In this scenario, the hedged asset or liability under a fair value hedge will no longer be adjusted for changes in fair value and the existing basis adjustment is amortized to the income statement line associated with the asset or liability. The component of “Accumulated other comprehensive income (loss)” related to discontinued cash flow hedges is reclassified to the income statement line associated with the hedged cash flows consistent with the earnings impact of the original hedged cash flows.

When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, or because it is probable that the forecasted transaction will not occur by the end of the specified time period, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in “Realized investment gains (losses), net.” Any asset or liability that was recorded pursuant to recognition of the firm commitment is removed from the balance sheet and recognized currently in “Realized investment gains (losses), net.” Gains and losses that were in “Accumulated other comprehensive income (loss)” pursuant to the hedge of a forecasted transaction are recognized immediately in “Realized investment gains (losses), net.”

If a derivative does not qualify for hedge accounting, all changes in its fair value, including net receipts and payments, are included in “Realized investment gains (losses), net” without considering changes in the fair value of the economically associated assets or liabilities.

The Company is a party to financial instruments that contain derivative instruments that are “embedded” in the financial instruments. At inception, the Company assesses whether the economic characteristics of the embedded instrument are clearly and closely related to the economic characteristics of the remaining component of the financial instrument (i.e., the host contract) and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. When it is determined that (1) the embedded instrument possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded instrument qualifies as an embedded derivative that is separated from the host contract, carried at fair value, and changes in its fair value are included in “Realized investment gains (losses), net.” For certain financial instruments that contain an embedded derivative that otherwise would need to be bifurcated and reported at fair value, the Company may elect to classify the entire instrument as a trading account asset and report it within “Other trading account assets, at fair value.”

Short-Term and Long-Term Debt

Liabilities for short-term and long-term debt are primarily carried at an amount equal to unpaid principal balance, net of unamortized discount or premium. Original-issue discount or premium and debt-issue costs are recognized as a component of interest expense over the period the debt is expected to be outstanding, using the interest method of amortization. Short-term debt is debt coming due in the next twelve months, including that portion of debt otherwise classified as long-term. The short-term debt caption may exclude short-term items the Company intends to refinance on a long-term basis in the near term. See Note 14 for additional information regarding short-term and long-term debt.

Income Taxes

The Company is a member of the consolidated federal income tax return of Prudential Financial and primarily files separate company state and local tax returns. Pursuant to the tax allocation arrangement with Prudential Financial, total federal income tax expense is determined on a separate company basis. Members with losses record tax benefits to the extent such losses are recognized in the consolidated federal tax provision.

Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is recorded to reduce a deferred tax asset to the amount expected to be realized.

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 jurisdictions. 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

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taxes. The Company classifies all interest and penalties related to tax uncertainties as income tax expense. See Note 18 for additional information regarding income taxes.

Adoption of New Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (“FASB”) issued updated guidance regarding the application of the goodwill impairment test. The updated guidance allows an entity to first perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is not necessary. However, if an entity concludes otherwise, then it must perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the impairment loss, if any. An entity has the option to bypass the qualitative assessment for any reporting unit in any period and to proceed directly to performing the first step of the two-step goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. The updated guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The Company’s early adoption of this guidance, as permitted, effective December 31, 2011, did not have a material effect on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

In April 2011, the FASB issued updated guidance clarifying which restructurings constitute troubled debt restructurings. It is intended to assist creditors in their evaluation of whether conditions exist that constitute a troubled debt restructuring. This new guidance is effective for the first interim or annual reporting period beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual reporting period of adoption. The Company’s adoption of this guidance in the third quarter of 2011 did not have a material effect on the Company’s consolidated financial position, results of operations, or financial statement disclosures.

In December 2010, the FASB issued authoritative guidance for business combinations that modifies the first step of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform the second step of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. The qualitative factors are consistent with existing authoritative guidance, which requires that goodwill of a reporting unit be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. This new guidance is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2010. The Company’s adoption of this guidance effective January 1, 2011 did not have a material effect on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

In July 2010, the FASB issued updated guidance that requires enhanced disclosures related to the allowance for credit losses and the credit quality of a company’s financing receivable portfolio. The disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The Company adopted this guidance effective December 31, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning after December 15, 2010. The required disclosures are included above and in Note 4. In January 2011, the FASB deferred the disclosures required by this guidance related to troubled debt restructurings. These disclosures are effective for the first interim or annual reporting period beginning on or after June 15, 2011, concurrent with the effective date of guidance for determining what constitutes a troubled debt restructuring. The disclosures required by this guidance related to troubled debt restructurings were adopted in the third quarter of 2011 and are included above and in Note 4.

In April 2010, the FASB issued authoritative guidance clarifying that an insurance entity should not consider any separate account interests in an investment held for the benefit of policyholders to be the insurer’s interests, and should not combine those interests with its general account interest in the same investment when assessing the investment for consolidation, unless the separate account interests are held for a related party policyholder, whereby consolidation of such interests must be considered under applicable variable interest guidance. This guidance is effective for interim and annual reporting periods beginning after December 15, 2010 and retrospectively to all prior periods upon the date of adoption, with early adoption permitted. The Company’s adoption of this guidance effective January 1, 2011 did not have a material effect on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

In March 2010, the FASB issued updated guidance that amends and clarifies the accounting for credit derivatives embedded in interests in securitized financial assets. This new guidance eliminates the scope exception for embedded credit derivatives (except for those that are created solely by subordination) and provides new guidance on how the evaluation of embedded credit

B-19

derivatives is to be performed. This new guidance is effective for the first interim reporting period beginning after June 15, 2010. The Company’s adoption of this guidance effective with the interim reporting period ending September 30, 2010 did not have a material effect on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

In January 2010, the FASB issued updated guidance that requires new fair value disclosures about significant transfers between Level 1 and 2 measurement categories and separate presentation of purchases, sales, issuances, and settlements within the roll forward of Level 3 activity. Also, this updated fair value guidance clarifies the disclosure requirements about level of disaggregation and valuation techniques and inputs. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of Level 3 activity, which are effective for interim and annual reporting periods beginning after December 15, 2010. The Company adopted the guidance effective for interim and annual reporting periods beginning after December 15, 2009 on January 1, 2010. The Company adopted the guidance effective for interim and annual reporting periods beginning after December 15, 2010 on January 1, 2011. The required disclosures are provided in Note 19.

In June 2009, the FASB issued authoritative guidance which changes the analysis required to determine whether or not an entity is a variable interest entity (“VIE”). In addition, the guidance changes the determination of the primary beneficiary of a VIE from a quantitative to a qualitative model. Under the new qualitative model, the primary beneficiary must have both the ability to direct the activities of the VIE and the obligation to absorb either losses or gains that could be significant to the VIE. This guidance also changes when reassessment is needed, as well as requires enhanced disclosures, including the effects of a company’s involvement with a VIE on its financial statements. This guidance is effective for interim and annual reporting periods beginning after November 15, 2009. In February 2010, the FASB issued updated guidance which defers, except for disclosure requirements, the impact of this guidance for entities that (1) possess the attributes of an investment company, (2) do not require the reporting entity to fund losses, and (3) are not financing vehicles or entities that were formerly classified as qualified special purpose entities (“QSPE’s”). The Company’s adoption of this guidance effective January 1, 2010 did not have a material effect on the Company’s consolidated financial position and results of operations. The disclosures required by this revised guidance are provided in Note 5.

In June 2009, the FASB issued authoritative guidance which changes the accounting for transfers of financial assets, and is effective for transfers of financial assets occurring in interim and annual reporting periods beginning after November 15, 2009. It removes the concept of a QSPE from the guidance for transfers of financial assets and removes the exception from applying the guidance for consolidation of variable interest entities to qualifying special-purpose entities. It changes the criteria for achieving sale accounting when transferring a financial asset and changes the initial recognition of retained beneficial interests. The guidance also defines “participating interest” to establish specific conditions for reporting a transfer of a portion of a financial asset as a sale. The Company’s adoption of this guidance effective January 1, 2010 did not have a material effect on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

Future Adoption of New Accounting Pronouncements

In December 2011, the FASB issued updated guidance regarding the disclosure of offsetting assets and liabilities. This new guidance requires an entity to disclose information on both a gross basis and net basis about instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. This new guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim reporting periods within those years, and should be applied retrospectively for all comparative periods presented. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

In December 2011, the FASB issued updated guidance clarifying the accounting for when a parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary’s nonrecourse debt. This new guidance is effective for annual reporting periods beginning on or after June 15, 2012, and interim reporting periods within those years, and should be applied prospectively. Early adoption is permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

In June 2011, the FASB issued updated guidance regarding the presentation of comprehensive income. The updated guidance eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. Under the updated guidance, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The updated guidance does not change the items that are reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB issued updated guidance deferring the requirement to separately present reclassifications from the components of other comprehensive income to the components of net income on the face of the financial statements. Companies

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are still required to adopt the other requirements of the updated guidance. This updated guidance, with the exception of the requirement to separately present reclassifications from the components of other comprehensive income to the components of net income, is effective for the first interim or annual reporting period beginning after December 15, 2011 and should be applied retrospectively. The Company expects this guidance to impact its financial statement presentation but not to impact the Company’s consolidated financial position or results of operations.

In May 2011, the FASB issued updated guidance regarding the fair value measurements and disclosure requirements. The updated guidance clarifies existing guidance related to the application of fair value measurement methods and requires expanded disclosures. This new guidance is effective for the first interim or annual reporting period beginning after December 15, 2011 and should be applied prospectively. The Company expects this guidance to have an impact on its financial statement disclosures but limited, if any, impact on the Company’s consolidated financial position or results of operations.

In April 2011, the FASB issued updated guidance regarding the assessment of effective control for repurchase agreements. This new guidance is effective for the first interim or annual reporting period beginning on or after December 15, 2011 and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. The Company’s adoption of this guidance effective January 1, 2012 is not expected to have a material effect on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

In October 2010, the FASB issued authoritative guidance to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. Under the amended guidance, acquisition costs are to include only those costs that are directly related to the acquisition or renewal of insurance contracts by applying a model similar to the accounting for loan origination costs. An entity may defer incremental direct costs of contract acquisition with independent third parties or employees that are essential to the contract transaction, as well as the portion of employee compensation, including payroll fringe benefits, and other costs directly related to underwriting, policy issuance and processing, medical inspection, and contract selling for successfully negotiated contracts. This amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and permits, but does not require, retrospective application. The Company will adopt this guidance effective January 1, 2012, and will apply the retrospective method of adoption. While the adoption of this amended guidance changes the timing of when certain costs are reflected in the Company’s results of operations, it has no effect on the total acquisition costs to be recognized over time and will have no impact on the Company’s cash flows.

3. ACQUISITIONS AND DISPOSITIONS

Sale of investment in Wachovia Securities

On December 31, 2009 the Company completed the sale of its minority joint venture interest in Wachovia Securities. See Note 7 for more details on this transaction.

Discontinued Operations

Income (loss) from discontinued businesses, including charges upon disposition, for the years ended December 31, are as
follows:

	2011				2010			2009

	(in millions)
Global Commodities business(1)		$	22			$	30		$	28
Real estate investments sold or held for sale(2)			(1	)			12			1
Other(3)			-				-			(1	)
Income from discontinued operations before income taxes			21				42			28
Income tax benefit			6				11			8
Income from discontinued operations, net of taxes		$	15			$	31		$	20

The Company’s Consolidated Statements of Financial Position include total assets and total liabilities related to discontinued businesses of $14 million and $2 million, respectively, at December 31, 2011 and $15 million and $3 million, respectively, at December 31, 2010.

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(1)

On April 6, 2011, the Company entered into a stock and asset purchase agreement with Jefferies Group, Inc. (“Jefferies”), pursuant to which the Company agreed to sell to Jefferies all of the issued and outstanding shares of capital stock of the Company’s subsidiaries that conduct its global commodities business (the “Global Commodities Business”) and certain assets that are primarily used in connection with the Global Commodities Business. Subsidiaries included in the sale are Prudential Bache Commodities, LLC, Prudential Bache Securities, LLC, Bache Commodities Limited, and Bache Commodities (Hong Kong) Ltd. On July 1, 2011, the Company completed the sale and received cash proceeds of $422 million, which includes a final purchase price true-up of $2 million received post closing. Included in the table above for the year ended December 31, 2011, are after-tax losses of $13 million recorded in connection with the sale of these operations, consisting of pre-tax losses of $12 million and income tax expense of $1 million.

(2)	Reflects the income or loss from discontinued real estate investments, primarily related to gains recognized on the sale of real estate properties.

(3)	Includes the results of the European retail transaction-oriented stockbrokerage and related activities of Prudential Securities Group, Inc as well as the Company’s healthcare business.

Charges recorded in connection with the disposals of businesses include estimates that are subject to subsequent adjustment.

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4. INVESTMENTS

Fixed Maturities and Equity Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) at December 31:

	2011

													Other-than-
				Gross			Gross						temporary
	Amortized			Unrealized			Unrealized			Fair			impairments
	Cost			Gains			Losses			Value			in AOCI (3)

	(in millions)
Fixed maturities, available for sale
U.S. Treasury securities and obligations of U.S.
government authorities and agencies		$	8,144		$	2,155		$	-		$	10,299		$	-
Obligations of U.S. states and their political
subdivisions			2,059			353			1			2,411			-
Foreign government bonds			1,718			384			6			2,096			1
Corporate securities			73,822			9,008			550			82,280			(19	)
Asset-backed securities(1)			10,912			120			1,703			9,329			(1,122	)
Commercial mortgage-backed securities			9,934			618			10			10,542			-
Residential mortgage-backed securities(2)			5,676			415			21			6,070			(12	)
Total fixed maturities, available for sale		$	112,265		$	13,053		$	2,291		$	123,027		$	(1,152	)
Equity securities, available for sale		$	4,153		$	948		$	184		$	4,917

(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 “Accumulated other comprehensive income (loss),” or “AOCI,” which were not included in earnings. Amount excludes $182 million of net unrealized gains on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date.

	2010

													Other-than-
				Gross			Gross						temporary
	Amortized			Unrealized			Unrealized			Fair			impairments
	Cost			Gains			Losses			Value			in AOCI(3)

	(in millions)
Fixed maturities, available for sale
U.S. Treasury securities and obligations of U.S.
government authorities and agencies		$	9,467		$	639		$	264		$	9,842		$	-
Obligations of U.S. states and their political
subdivisions			1,792			32			47			1,777			-
Foreign government bonds			1,846			351			9			2,188			1
Corporate securities			69,547			5,581			625			74,503			(30	)
Asset-backed securities(1)			11,359			157			1,542			9,974			(1,305	)
Commercial mortgage-backed securities			10,525			607			19			11,113			-
Residential mortgage-backed securities(2)			6,778			400			17			7,161			(13	)
Total fixed maturities, available for sale		$	111,314		$	7,767		$	2,523		$	116,558		$	(1,347	)
Equity securities, available for sale		$	4,243		$	1,240		$	51		$	5,432

(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 “Accumulated other comprehensive income (loss),” or “AOCI,” which were not included in earnings. Amount excludes $540 million of net unrealized gains on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date.

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The amortized cost and fair value of fixed maturities by contractual maturities at December 31, 2011, are as follows:

	Available for Sale
	Amortized			Fair
	Cost			Value

	(in millions)
Due in one year or less		$	4,768		$	4,816
Due after one year through five years			22,512			23,857
Due after five years through ten years			26,030			29,212
Due after ten years			32,433			39,201
Asset-backed securities			10,912			9,329
Commercial mortgage-backed securities			9,934			10,542
Residential mortgage-backed securities			5,676			6,070
Total		$	112,265		$	123,027

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:

	2011			2010			2009

	(in millions)
Fixed maturities, available for sale
Proceeds from sales	$	12,493		$	7,807		$	12,133
Proceeds from maturities/repayments		12,742			13,216			14,295
Gross investment gains from sales, prepayments, and maturities		797			580			510
Gross investment losses from sales and maturities		(102	)		(51	)		(303	)

Equity securities, available-for-sale
Proceeds from sales	$	2,349		$	1,659		$	783
Gross Investment gains from sales		439			308			182
Gross Investment losses from sales		(135	)		(40	)		(31	)

Fixed maturity and equity security impairments
Net writedowns for other-than-temporary impairment losses on
fixed maturities recognized in earnings (1)	$	(249	)	$	(394	)	$	(1,333	)
Writedowns for impairments on equity securities		(30	)		(40	)		(724	)

(1)	Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

As discussed in Note 2, 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 table sets 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

B-24

	Year Ended December 31,
	2011			2010

	(in millions)

Balance, beginning of period	$	1,154		$	1,520
Credit losses remaining in retained earnings related to adoption of new
Credit loss impairments previously recognized on securities which matured, paid down,
prepaid or were sold during the period		(252	)		(280	)
Credit loss impairments previously recognized on securities impaired to fair value during
the period(1)		(29	)		(329	)
Credit loss impairment recognized in the current period on securities not previously impaired		29			17
Additional credit loss impairments recognized in the current period on securities
previously impaired		260			190
Increases due to the passage of time on previously recorded credit losses		53			88
Accretion of credit loss impairments previously recognized due to an increase in
cash flows expected to be collected		(22	)		(52	)
Balance, end of period	$	1,193		$	1,154

(1)	Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

Trading Account Assets Supporting Insurance Liabilities

The following table sets forth the composition of “Trading account assets supporting insurance liabilities” at December 31:

	2011				2010

	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value

	(in millions)
Short-term investments and cash equivalents	$	951	$	951	$	697	$	697
Fixed maturities:
Corporate securities		10,123		10,861		9,472		10,006
Commercial mortgage-backed securities		2,157		2,247		2,352		2,407
Residential mortgage-backed securities(1)		1,786		1,845		1,350		1,363
Asset-backed securities(2)		1,504		1,367		1,158		1,030
Foreign government bonds		100		106		97		101
U.S. government authorities and agencies and obligations of U.S.
states		320		360		366		360
Total fixed maturities		15,990		16,786		14,795		15,267
Equity securities		17		12		90		73
Total trading account assets supporting insurance liabilities	$	16,958	$	17,749	$	15,582	$	16,037

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

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

The net change in unrealized gains (losses) from trading account assets supporting insurance liabilities still held at period end, recorded within “Other income” was $336 million, $372 million and $1,564 million during the years ended December 31, 2011, 2010 and 2009, respectively.

Other Trading Account Assets

The following table sets forth the composition of the “Other trading account assets” at December 31:

2011

2010

Amortized

Fair

Amortized

Fair

Cost

Value

Cost

Value

B-25

	(in millions)
Fixed Maturities:
Asset-backed securities		271		272		168		175
Corporate securities		151		164		151		164
Commercial mortgage-backed securities		51		51		50		52
U.S. government authorities and agencies and obligations
of U.S. states		23		12		200		202
Total fixed maturities		496		499		569		593
Equity securities		207		211		209		226
Subtotal	$	703	$	710	$	778	$	819

Derivative instruments				4,345				4,358
Total other trading account assets	$	703	$	5,055	$	778	$	5,177

The net change in unrealized gains (losses) from other trading account assets, excluding derivative instruments, still held at period end, recorded within “Other income” was $(34) million, $7 million and $78 million during the years ended December 31, 2011, 2010 and 2009, respectively.

Commercial Mortgage and Other Loans

The Company’s commercial mortgage and other loans are comprised as follows at December 31:

	2011				2010
	Amount		% of		Amount		% of
	(in millions)		Total		(in millions)		Total

Commercial and Agricultural mortgage loans by property type:
Office buildings	$	5,790	20.0	%	$	5,259	19.6	%
Retail stores		6,804	23.6			5,900	22.0
Apartments/Multi-Family		4,027	13.9			4,071	15.1
Industrial buildings		6,415	22.2			6,079	22.6
Hospitality		1,420	4.9			1,511	5.6
Other		2,459	8.5			2,235	8.3

Total commercial mortgage loans		26,915	93.1			25,055	93.2

Agricultural property loans		1,988	6.9			1,837	6.8
Total commercial mortgage and agricultural loans		28,903	100.0	%		26,892	100.0	%
Valuation allowance		(267)				(374)

Total net commercial mortgage and agricultural loans		28,636				26,518

Other loans
Uncollateralized loans		145				121
Residential property loans		7				8
Other collateralized loans		-				-

Total other loans		152				129
Valuation allowance		(1)				-

Total net other loans		151				129

Total commercial mortgage and other loans	$	28,787			$	26,647

The commercial mortgage and agricultural property loans are geographically dispersed throughout the United States, Canada and Asia with the largest concentrations in California (28%), New York (11%) and Texas (7%) at December 31, 2011.

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Activity in the allowance for losses for all commercial mortgage and other loans, for the years ended December 31, is as follows:

	2011(1)
	Commercial				Agricultural			Residential			Other
	Mortgage				Property			Property			Collateralized			Uncollateralized
	Loans				Loans			Loans			Loans			Loans				Total

	(in millions)

Allowance for losses, beginning of year		$	366			$	8		$	-		$	-		$	-					$	374
Addition to / (release of) allowance of
losses			(112	)			5			-			-			1						(106	)
Charge-offs, net of recoveries			-				-			-			-			-						-
Change in foreign exchange			-				-			-			-			-						-
Allowance for losses, end of year		$	254			$	13		$	-		$	-		$	1					$	268

		2010	(1)
	Commercial				Agricultural			Residential			Other
	Mortgage				Property			Property			Collateralized			Uncollateralized
	Loans				Loans			Loans			Loans			Loans				Total

	(in millions)

Allowance for losses, beginning of year		$	478			$	-		$	-		$	-		$	1					$	479
Addition to / (release of) allowance of
losses			(112	)			8			-			-			(1	)					(105	)
Charge-offs, net of recoveries			-				-			-			-			-						-
Change in foreign exchange			-				-			-			-			-						-
Allowance for losses, end of year		$	366			$	8		$	-		$	-		$	-					$	374

																			2009	(1)
																		Total
																		(in millions)
Allowance for losses, beginning of year																					$	168
Addition to / (release of) allowance of losses																						411
Charge-offs, net of recoveries																						(100	)
Change in foreign exchange																						-
Allowance for losses, end of year																					$	479

(1)	Valuation allowances for 2011 and 2010 are presented in a format consistent with new disclosure requirements under the updated guidance issued by the FASB in 2011. Valuation allowances for 2009 are provided consistent with the prior presentation.

The following table sets forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans, for the years ended December 31:

	2011
	Commercial		Agricultural		Residential		Other
	Mortgage		Property		Property		Collateralized		Uncollateralized
	Loans		Loans		Loans		Loans		Loans		Total

Allowance for Credit Losses:	(in millions)
Ending balance: individually evaluated
for impairment	$	88	$	6	$	-	$	-	$	-	$	94

B-27

Ending balance: collectively evaluated
for impairment		166		7		-		-		1		174
Ending balance: loans acquired with
deteriorated credit quality		-		-		-		-		-		-
Total ending balance	$	254	$	13	$	-	$	-	$	1	$	268

Recorded Investment:(1)
Ending balance gross of reserves:
individually evaluated for impairment	$	715	$	36	$	-	$	-	$	-	$	751
Ending balance gross of reserves:
collectively evaluated for impairment		26,200		1,952		7		-		145		28,304
Ending balance gross of reserves: loans
acquired with deteriorated credit
quality		-		-		-		-		-		-
Total ending balance, gross of reserves	$	26,915	$	1,988	$	7	$	-	$	145	$	29,055

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

B-28

	2010
	Commercial		Agricultural		Residential		Other
	Mortgage		Property		Property		Collateralized		Uncollateralized
	Loans		Loans		Loans		Loans		Loans		Total

Allowance for Credit Losses:	(in millions)
Ending balance: individually evaluated
for impairment	$	141	$	-	$	-	$	-	$	-	$	141
Ending balance: collectively evaluated
for impairment		225		8		-		-		-		233
Ending balance: loans acquired with
deteriorated credit quality		-		-		-		-		-		-
Total ending balance	$	366	$	8	$	-	$	-	$	-	$	374

Recorded Investment:(1)
Ending balance gross of reserves:
individually evaluated for impairment	$	845	$	31	$	-	$	-	$	-	$	876
Ending balance gross of reserves:
collectively evaluated for impairment		24,210		1,806		8		-		121		26,145
Ending balance gross of reserves: loans
acquired with deteriorated credit
quality		-		-		-		-		-		-
Total ending balance, gross of reserves	$	25,055	$	1,837	$	8	$	-	$	121	$	27,021

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

Impaired loans include those loans for which it is probable that amounts due according to the contractual terms of the loan agreement will not all be collected. Impaired commercial mortgage and other loans identified in management’s specific review of probable loan losses and the related allowance for losses at December 31, 2011 are as follows:

Impaired Commercial Mortgage and Other Loans
	Year Ended December 31, 2011

										Average
										Recorded
				Unpaid						Investment		Interest
	Recorded			Principal			Related			Before		Income
	Investment (1)			Balance			Allowance			Allowance (2)		Recognized (3)

	(in millions)
With no related allowance recorded:
Commercial mortgage loans:
Hospitality			-			-			-		22		-
Total commercial mortgage loans			-			-			-		22		-

Agricultural property loans			-			-			-		1		-
Total with no related allowance		$	-		$	-		$	-	$	23	$	-

With an allowance recorded:
Commercial mortgage loans:
Industrial		$	54		$	54		$	19	$	33	$	1
Retail			32			32			-		69		-
Office			39			39			3		31		-

B-29

Apartments/Multi-Family		19		19		3		31		1
Hospitality		129		129		55		168		-
Other		39		39		8		51		1
Total commercial mortgage loans		312		312		88		383		3

Agricultural property loans		10		10		6		7		(1	)
Total with related allowance	$	322	$	322	$	94	$	390	$	2

Total:
Commercial mortgage loans	$	312	$	312	$	88	$	406	$	2
Agricultural property loans		10		10		6		8		-
Total	$	322	$	322	$	94	$	414	$	2

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

Non-performing loans include those loans for which it is probable that amounts due according to the contractual terms of the loan agreement will not all be collected. Non-performing commercial mortgage and other loans identified in management’s specific review of probable loan losses and the related allowance for losses at December 31, are as follows:

Impaired Commercial Mortgage and Other Loans
	Year Ended December 31, 2010
			Unpaid
	Recorded		Principal		Related
	Investment (1)		Balance		Allowance

	(in millions)
With no related allowance recorded:
Commercial mortgage loans:
Industrial	$	-	$	-	$	-
Retail		-		-		-
Office		-		-		-
Apartments/Multi-Family		-		-		-
Hospitality		64		64		-
Other		-		-		-
Total commercial mortgage loans	$	64	$	64	$	-

Agricultural property loans	$	1		1		-
Residential property loans		-		-		-
Other collateralized loans		-		-		-
Uncollateralized loans		-		-		-
Total with no related allowance	$	1	$	1	$	-

With an allowance recorded:
Commercial mortgage loans:
Industrial	$	18	$	18	$	18
Retail		102		102		16
Office		28		28		7
Apartments/Multi-Family		47		47		6
Hospitality		194		194		76
Other		60		60		18

B-30

Total commercial mortgage loans	$	449	$	449	$	141

Agricultural property loans	$	-	$	-	$	-
Residential property loans		-		-		-
Other collateralized loans		-		-		-
Uncollateralized loans		-		-		-
Total with related allowance	$	-	$	-	$	-

Total:
Commercial mortgage loans	$	513	$	513	$	141
Agricultural property loans		1		1		-
Residential property loans		-		-		-
Other collateralized loans		-		-		-
Uncollateralized loans		-		-		-
Total	$	514	$	514	$	141

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 average recorded investment in impaired loans before allowance for losses was $271 million for 2010. Net investment income recognized on these loans totaled $20 million for the year ended December 31, 2010. See Note 2 for information regarding the Company’s accounting policies for commercial mortgage and other loans.

Non-performing 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 average recorded investment in non-performing loans before allowance for losses was $460 million for 2009. Net investment income recognized on these loans totaled $24 million for 2009. See Note 2 for information regarding the Company’s accounting policies for commercial mortgage and other loans.

B-31

The following tables set forth the credit quality indicators as of December 31, 2011, based upon the recorded investment gross of allowance for credit losses.

Commercial Mortgage Loans - Industrial
			Buildings
						Debt Service Coverage Ratio December 31, 2011
						Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio						(in millions)
	0%-49.99	%		$	544		$	307		$	198		$	244		$	14		$	47	$	1,354
	50%-59.99	%			283			82			294			246			53			43		1,001
	60%-69.99	%			757			275			350			287			322			105		2,096
	70%-79.99	%			175			85			136			400			358			95		1,249
	80%-89.99	%			-			-			-			106			56			236		398
	90%-100	%			19			-			-			-			-			156		175
Greater than 100%								16			-			-			-			7				119			142

Total Industrial							$	1,794		$	749		$	978		$	1,283		$	810			$	801		$	6,415

Commercial Mortgage Loans - Retail
						Debt Service Coverage Ratio December 31, 2011
						Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio						(in millions)
	0%-49.99	%		$	1,152		$	241		$	477		$	85		$	14		$	3	$	1,972
	50%-59.99	%			561			488			559			55			37			4		1,704
	60%-69.99	%			323			499			694			476			73			17		2,082
	70%-79.99	%			-			46			281			570			18			-		915
	80%-89.99	%			-			-			-			9			17			23		49
	90%-100	%			-			-			-			-			5			40		45
Greater than 100%								-			-			-			8			29				-			37
Total Retail							$	2,036		$	1,274		$	2,011		$	1,203		$	193			$	87		$	6,804

Commercial Mortgage Loans - Office
						Debt Service Coverage Ratio December 31, 2011
						Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio						(in millions)
	0%-49.99	%		$	1,688		$	346		$	176		$	118		$	5		$	31	$	2,364
	50%-59.99	%			425			103			196			180			16			10		930
	60%-69.99	%			530			361			70			431			51			27		1,470
	70%-79.99	%			64			-			24			15			612			14		729
	80%-89.99	%			-			-			-			114			52			54		220
	90%-100	%			-			-			-			-			-			17		17
Greater than 100%								-			-			17			31			8				4			60

Total Office							$	2,707		$	810		$	483		$	889		$	744			$	157		$	5,790

B-32

Commercial Mortgage Loans - Apartments/Multi-Family
					Debt Service Coverage Ratio December 31, 2011
					Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio					(in millions)
	0%-49.99	%	$	687		$	166		$	252		$	141		$	163		$	51	$	1,460
	50%-59.99	%		96			14			218			147			57			31		563
	60%-69.99	%		166			10			259			279			65			88		867
	70%-79.99	%		67			77			111			511			83			44		893
	80%-89.99	%		-			-			-			27			-			42		69
	90%-100	%		-			-			-			-			-			67		67
Greater than 100%							-			-			-			-			-				108			108
Total Multi Family/Apartment						$	1,016		$	267		$	840		$	1,105		$	368			$	431		$	4,027

Commercial Mortgage Loans - Hospitality
					Debt Service Coverage Ratio December 31, 2011
					Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio					(in millions)
	0%-49.99	%	$	134		$	151		$	-		$	115		$	22		$	-	$	422
	50%-59.99	%		51			-			-			9			57			-		117
	60%-69.99	%		-			-			45			348			11			-		404
	70%-79.99	%		6			-			-			-			118			61		185
	80%-89.99	%		-			-			72			46			27			36		181
	90%-100	%		-			-			-			-			19			15		34
Greater than 100%							-			-			-			-			-				77			77

Total Hospitality						$	191		$	151		$	117		$	518		$	254			$	189		$	1,420

Commercial Mortgage Loans - Other
					Debt Service Coverage Ratio December 31, 2011
					Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio					(in millions)
	0%-49.99	%	$	295		$	31		$	3		$	74		$	1		$	1	$	405
	50%-59.99	%		49			185			14			7			-			-		255
	60%-69.99	%		111			157			280			268			118			7		941
	70%-79.99	%		271			-			187			245			13			-		716
	80%-89.99	%		-			-			61			21			11			5		98
	90%-100	%		-			19			-			-			8			15		42
Greater than 100%							-			-			-			-			2				-			2

Total Other						$	726		$	392		$	545		$	615		$	153			$	28		$	2,459

B-33

Commercial Mortgage Loans - Agricultural
						Debt Service Coverage Ratio December 31, 2011
						Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio						(in millions)
	0%-49.99	%		$	375		$	120		$	334		$	412		$	153		$	-	$	1,394
	50%-59.99	%			70			108			8			37			-			3		226
	60%-69.99	%			155			4			179			-			-			-		338
	70%-79.99	%			-			-			-			-			-			-		-
	80%-89.99	%			-			-			-			-			-			-		-
	90%-100	%			-			-			-			-			-			30		30
Greater than 100%								-			-			-			-			-				-			-

Total Agricultural Property Loans							$	600		$	232		$	521		$	449		$	153			$	33		$	1,988

Total Commercial Mortgage and Agricultural Loans
						Debt Service Coverage Ratio December 31, 2011
						Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio						(in millions)
	0%-49.99	%		$	4,875		$	1,362		$	1,440		$	1,189		$	372		$	133	$	9,371
	50%-59.99	%			1,535			980			1,289			681			220			91		4,796
	60%-69.99	%			2,042			1,306			1,877			2,089			640			244		8,198
	70%-79.99	%			583			208			739			1,741			1,202			214		4,687
	80%-89.99	%			-			-			133			323			163			396		1,015
	90%-100	%			19			19			-			-			32			340		410
Greater than 100%								16			-			17			39			46				308			426
																				-
Total Commercial Mortgage and
			Agricultural				$	9,070		$	3,875		$	5,495		$	6,062		$	2,675			$	1,726		$	28,903

B-34

The following tables set forth the credit quality indicators as of December 31, 2010, based upon the recorded investment gross of allowance for credit losses.
Commercial Mortgage Loans - Industrial
			Buildings
						Debt Service Coverage Ratio December 31, 2010
						Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio						(in millions)
	0%-49.99	%		$	616		$	307		$	184		$	190		$	15		$	23	$	1,335
	50%-59.99	%			304			59			145			178			45			49		780
	60%-69.99	%			355			89			485			366			180			113		1,588
	70%-79.99	%			71			76			528			504			193			200		1,572
	80%-89.99	%			-			-			17			136			88			255		496
	90%-100	%			-			-			-			-			46			131		177
Greater than 100%								16			-			-			7			-				108			131

Total Industrial							$	1,362		$	531		$	1,359		$	1,381		$	567			$	879		$	6,079

Commercial Mortgage Loans - Retail
						Debt Service Coverage Ratio December 31, 2010
						Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio						(in millions)
	0%-49.99	%		$	604		$	328		$	390		$	87		$	28		$	4	$	1,441
	50%-59.99	%			551			158			387			52			153			1		1,302
	60%-69.99	%			316			382			436			326			37			4		1,501
	70%-79.99	%			65			47			388			552			131			-		1,183
	80%-89.99	%			-			-			65			93			83			-		241
	90%-100	%			-			-			-			9			29			21		59
Greater than 100%								-			-			-			6			125				42			173

Total Retail							$	1,536		$	915		$	1,666		$	1,125		$	586			$	72		$	5,900

B-35

Commercial Mortgage Loans - Office
					Debt Service Coverage Ratio December 31, 2010
					Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio					(in millions)
	0%-49.99	%	$	1,743		$	49		$	310		$	137		$	17		$	7	$	2,263
	50%-59.99	%		182			197			192			106			46			17		740
	60%-69.99	%		136			222			103			156			16			46		679
	70%-79.99	%		16			-			79			172			589			1		857
	80%-89.99	%		-			-			-			371			39			25		435
	90%-100	%		-			-			-			-			174			48		222
Greater than 100%							-			-			-			28			17				18			63

Total Office						$	2,077		$	468		$	684		$	970		$	898			$	162		$	5,259

Commercial Mortgage Loans - Apartments/Multi-Family
					Debt Service Coverage Ratio December 31, 2010
					Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio					(in millions)
	0%-49.99	%	$	701		$	184		$	326		$	178		$	199		$	56	$	1,644
	50%-59.99	%		16			-			108			162			57			9		352
	60%-69.99	%		96			17			170			225			101			27		636
	70%-79.99	%		62			47			113			186			107			45		560
	80%-89.99	%		-			-			44			43			254			100		441
	90%-100	%		20			-			-			-			10			120		150
Greater than 100%							-			-			-			-			-				288			288

Total Multi Family/Apartment						$	895		$	248		$	761		$	794		$	728			$	645		$	4,071

B-36

Commercial Mortgage Loans - Hospitality
					Debt Service Coverage Ratio December 31, 2010
					Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio					(in millions)
	0%-49.99	%	$	143		$	-		$	128		$	121		$	-		$	27	$	419
	50%-59.99	%		21			-			-			-			-			-		21
	60%-69.99	%		-			36			52			156			59			11		314
	70%-79.99	%		-			-			6			243			-			-		249
	80%-89.99	%		-			-			72			-			71			101		244
	90%-100	%		-			-			-			-			-			87		87
Greater than 100%							-			-			-			46			32				99			177

Total Hospitality						$	164		$	36		$	258		$	566		$	162			$	325		$	1,511

Commercial Mortgage Loans - Other
					Debt Service Coverage Ratio December 31, 2010
					Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio					(in millions)
	0%-49.99	%	$	338		$	-		$	10		$	18		$	1		$	1	$	368
	50%-59.99	%		40			14			25			59			-			-		138
	60%-69.99	%		57			193			37			424			123			7		841
	70%-79.99	%		3			67			188			72			74			-		404
	80%-89.99	%		133			-			45			136			10			6		330
	90%-100	%		-			-			-			-			-			-		-
Greater than 100%							-			-			-			38			24				92			154

Total Other						$	571		$	274		$	305		$	747		$	232			$	106		$	2,235

B-37

Commercial Mortgage Loans - Agricultural
						Debt Service Coverage Ratio December 31, 2010
						Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio						(in millions)
	0%-49.99	%		$	397		$	107		$	349		$	477		$	108		$	6	$	1,444
	50%-59.99	%			38			124			15			26			-			-		203
	60%-69.99	%			161			-			-			-			29			-		190
	70%-79.99	%			-			-			-			-			-			-		-
	80%-89.99	%			-			-			-			-			-			-		-
	90%-100	%			-			-			-			-			-			-		-
Greater than 100%								-			-			-			-			-				-			-

Total Agricultural Property Loans							$	596		$	231		$	364		$	503		$	137			$	6		$	1,837

Total Commercial Mortgage and Agricultural Loans
						Debt Service Coverage Ratio December 31, 2010
						Greater than 2.0X			1.8X to 2.0X			1.5X to <1.8X			1.2X to <1.5X			1.0X to <1.2X			Less than 1.0X				Grand Total

Loan-to-Value Ratio						(in millions)
	0%-49.99	%		$	4,542		$	975		$	1,697		$	1,208		$	368		$	124	$	8,914
	50%-59.99	%			1,152			552			872			583			301			76		3,536
	60%-69.99	%			1,121			939			1,283			1,653			545			208		5,749
	70%-79.99	%			217			237			1,302			1,729			1,094			246		4,825
	80%-89.99	%			133			-			243			779			545			487		2,187
	90%-100	%			20			-			-			9			259			407		695
Greater than 100%								16			-			-			125			198				647			986
Total Commercial Mortgage and
			Agricultural				$	7,201		$	2,703		$	5,397		$	6,086		$	3,310			$	2,195		$	26,892

See Note 2 for further discussion regarding the credit quality of other loans.

B-38

The following table provides an aging of past due commercial mortgage and other loans as of December 31, 2011, based upon the recorded investment gross of allowance for credit losses.

	As of December 31, 2011
																			Total
										Greater			Greater						Commercial
										Than 90			Than 90						Mortgage
				30-59 Days			60-89 Days			Day -			Day - Not			Total Past Due			and other
	Current			Past Due			Past Due			Accruing			Accruing			Due			Loans

	(in millions)
Commercial mortgage loans:
Industrial		$	6,413		$	-		$	2		$	-		$	-		$	2		$	6,415
Retail			6,799			-			-			-			5			5			6,804
Office			5,769			5			-			-			16			21			5,790
Apartments/Multi-Family			3,981			-			-			-			46			46			4,027
Hospitality			1,420			-			-			-			-			-			1,420
Other			2,409			13			10			-			27			50			2,459
Total commercial mortgage loans		$	26,791		$	18		$	12		$	-		$	94		$	124		$	26,915

Agricultural property loans		$	1,956		$	-		$	1		$	1		$	30		$	32		$	1,988
Residential property loans			1			5			-			-			1			6			7
Other collateralized loans			-			-			-			-			-			-			-
Uncollateralized loans			145			-			-			-			-			-			145
Total		$	28,893		$	23		$	13		$	1		$	125		$	162		$	29,055


	As of December 31, 2010
																			Total
										Greater			Greater						Commercial
										Than 90			Than 90						Mortgage
				30-59 Days			60-89 Days			Day -			Day - Not			Total Past Due			and other
	Current			Past Due			Past Due			Accruing			Accruing			Due			Loans

	(in millions)
Commercial mortgage loans:
Industrial		$	6,079		$	-		$	-		$	-		$	-		$	-		$	6,079
Retail			5,834			61			-			-			5			66			5,900
Office			5,237			22			-			-			-			22			5,259
Apartments/Multi-Family			4,070			-			-			-			1			1			4,071
Hospitality			1,405			11			10			-			85			106			1,511
Other			2,165			17			-			-			53			70			2,235
Total commercial mortgage loans		$	24,790		$	111		$	10		$	-		$	144		$	265		$	25,055

B-39

Agricultural property loans	$	1,805	$	2	$	-	$	-	$	30	$	32	$	1,837
Residential property loans		3		4		-		-		1		5		8
Other collateralized loans		-		-		-		-		-		-		-
Uncollateralized loans		121		-		-		-		-		-		121
Total	$	26,719	$	117	$	10	$	-	$	175	$	302	$	27,021

See Note 2 for further discussion regarding nonaccrual status loans. The following table sets forth commercial mortgage and other loans on nonaccrual status, based upon the recorded investment gross of allowance for credit losses, for the years ended December 31.

	2011		2010

	(in millions)
Commercial mortgage loans:
Industrial	$	54	$	43
Retail		16		102
Office		47		44
Apartments/Multi-Family		46		49
Hospitality		156		258
Other		60		77
Total commercial mortgage loans		379		573

Agricultural property loans		35		30
Residential property loans		1		1
Other collateralized loans		-		-
Uncollateralized loans		-		-

Total	$	415	$	604

The following table sets forth the commercial mortgage and other loans acquired and sold for the year ended December 31, 2011:

	Commercial			Agricultural			Residential			Other
	Mortgage			Property			Property			Collateralized			Uncollateralized
	Loans			Loans			Loans			Loans			Loans			Total

	(in millions)
Acquired(1)		$	-		$	-		$	-		$	-		$	-		$	-
Sold(2)			-			-			-			2			-			2

(1)	Reported at purchase price of commercial mortgage and other loans acquired.

(2)	Reported at book value of commercial mortgage and other loans sold.

B-40

The following tables provide information about commercial mortgage and other loans involved in a trouble debt restructuring as of the dates indicated. The pre-modification outstanding recorded investment has been adjusted for any partial payoffs, and the table excludes troubled debt restructurings where we have received assets, other than loans, in full satisfaction of the loan. See Note 2 for additional information relating to the accounting for troubled debt restructurings.

	Three Months Ended December 31, 2011				Year Ended December 31, 2011
	Adjusted				Adjusted
	Pre-Modification		Post-Modification		Pre-Modification		Post-Modification
	Outstanding		Outstanding		Outstanding		Outstanding
	Recorded		Recorded		Recorded		Recorded
	Investment		Investment		Investment		Investment

	(in millions)
Commercial mortgage loans:
Industrial	$	-	$	-	$	-	$	-
Retail		-		-		106		94
Office		-		-		-		-
Apartments/Multi-Family		-		-		-		-
Hospitality		55		46		76		65
Other		35		30		63		49
Total commercial mortgage loans		90		76		245		208

Agricultural property loans		2		2		2		2
Residential property loans		-		-		-		-
Other collateralized loans		-		-		-		-
Uncollateralized loans		-		-		-		-

Total	$	92	$	78	$	247	$	210

The amount of payment defaults during the period on commercial mortgage and other loans that were modified as a troubled debt restructuring within the last 12 months was less than $1 million as of December 31, 2011.

As of December 31, 2011, the Company committed to fund $5 million to borrowers that have been involved in a troubled debt restructuring.

Other Long-term Investments

“Other long-term investments” are comprised as follows at December 31:

	2011		2010

	(in millions)
Joint ventures and limited partnerships:
Real estate related	$	481	$	421
Non-real estate related		2,567		2,261
Total joint ventures and limited partnerships		3,048		2,682
Real estate held through direct ownership		31		15
Other		745		788
Total other long-term investments	$	3,824	$	3,485

B-41

Equity Method Investments

The following tables set forth summarized combined financial information for significant joint ventures and limited partnership interests accounted for under the equity method, including the Company’s investments in operating joint ventures that are disclosed in more detail in Note 7. Changes between periods in the tables below reflect changes in the activities within the joint ventures and limited partnerships, as well as changes in the Company’s level of investment in such entities.

	At December 31,
	2011		2010

	(in millions)

STATEMENT OF FINANCIAL POSITION
Investments in real estate	$	4,365	$	4,136
Investments in securities		13,139		10,454
Cash and cash equivalents		521		369
Receivables		292		192
Property and equipment		-		-
Other assets(1)		687		684

Total assets	$	19,004	$	15,835

Borrowed funds-third party	$	1,830	$	1,868
Borrowed funds-Prudential		-		49
Payables		271		275
Other liabilities(2)		1,486		1,606

Total liabilities		3,587		3,798
Partners' capital		15,417		12,037

Total liabilities and partners' capital	$	19,004	$	15,835

Total liabilities and partners' capital included above	$	2,122	$	2,208
Equity in limited partnership interests not included above		189		197
Carrying value	$	2,311	$	2,405

(1)	Other assets consist of goodwill, intangible assets and other miscellaneous assets.

(2)	Other liabilities consist of securities repurchase agreements and other miscellaneous liabilities.

	Years ended December 31,
	2011			2010			2009

	(in millions)
STATEMENTS OF OPERATIONS
Income from real estate investments	$	805		$	353		$	(325	)
Income from securities investments		1,228			1,104			9,529
Income from other		13			21			78
Interest expense		(87	)		(108	)		(460	)
Depreciation		-			(4	)		(7	)
Management fees/salary expense		(109	)		(95	)		(4,409	)
Other expenses		(136	)		(533	)		(4,563	)
Net earnings(losses)	$	1,714		$	738		$	(157	)

B-42

Equity in net earnings (losses) included above(1)	$	335	$	89	$	2,194
Equity in net earnings (losses) of limited partnership interests not included above		30		73		(28	)
Total equity in net earnings(losses)	$	365	$	162	$	2,166

(1)	The year ended December 31, 2009 includes a $2.247 billion pre-tax gain related to the sale of the Company’s minority joint venture interest in Wachovia Securities, not included in the detailed financial lines above. See Note 7 for additional information regarding this sale.

Net Investment Income

Net investment income for the years ended December 31, was from the following sources:

	2011			2010			2009
	(in millions)
Fixed maturities, available-for-sale	$	5,918		$	5,945		$	6,039
Fixed maturities, held-to-maturity		9			-			-
Equity securities, available-for-sale		204			215			216
Trading account assets		774			741			738
Commercial mortgage and other loans		1,670			1,644			1,653
Policy loans		466			469			479
Short-term investments and cash equivalents		14			18			69
Other long-term investments		94			19			(237	)
Gross investment income		9,149			9,051			8,957
Less investment expenses		(387	)		(371	)		(377	)
Net investment income	$	8,762		$	8,680		$	8,580

Carrying value for non-income producing assets included in fixed maturities totaled $209 million as of December 31, 2011. Non-income producing assets represent investments that have not produced income for the twelve months preceding December 31, 2011.

Realized Investment Gains (Losses), Net

Realized investment gains (losses), net, for years ended December 31, were from the following sources:

	2011			2010			2009

	(in millions)
Fixed maturities	$	447		$	135		$	(1,126	)
Equity securities		275			228			(574	)
Commercial mortgage and other loans		94			78			(358	)
Investment real-estate		-			-			-
Joint ventures and limited partnerships		(10	)		(31	)		(39	)
Derivatives(1)		549			848			(501	)
Other		10			5			3
Realized investment gains (losses), net	$	1,365		$	1,263		$	(2,595	)

(1) Includes the offset of hedged items in qualifying effective hedge relationships prior to maturity or termination.

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 Consolidated Statements of Financial Position as a component of “Accumulated

B-43

other comprehensive income (loss),” or “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

				Deferred
				Policy
				Acquisition										Accumulated
				Costs,										Other
				Deferred										Comprehensive
	Net			Sales										Income (Loss)
	Unrealized			Inducements,							Deferred			Related To Net
	Gains (Losses)			and Valuation			Future				Income Tax			Unrealized
	on			of Business			Policy		Policyholders'		(Liability)			Investment
	Investments			Acquired			Benefits		Dividends		Benefit			Gains (Losses)

	(in millions)
Balance, December 31, 2008	$	-		$	-		$	-	$	-	$	-		$	-
Cummulative impact of the adoption
of new authoritative guidance on
January 1, 2009		(1,012	)		9			1				343			(659	)
Net investment gains (losses) on
investments arising during the
period		565										(203	)		362
Reclassification adjustment for (gains)
losses included in net income		925										(333	)		592
Reclassification adjustment for OTTI
losses excluded from net income(1)		(1,630	)									587			(1,043	)
Impact of net unrealized investment
(gains) losses on deferred policy
acquisition costs, deferred sales
inducements and valuation of
business acquired					156							(56	)		100
Impact of net unrealized investment
(gains) losses on future policy
benefits								1				-			1
Impact of net unrealized investment
(gains) losses on policyholders'
dividends										-		-			-
Balance, December 31, 2009	$	(1,152	)	$	165		$	2	$	-	$	338		$	(647	)
Net investment gains (losses) on
investments arising during the
period		3										(1	)		2
Reclassification adjustment for (gains)
losses included in net income		393										(138	)		255
Reclassification adjustment for OTTI
losses excluded from net income(1)		(51	)									18			(33	)
Impact of net unrealized investment
(gains) losses on deferred policy
acquisition costs, deferred sales
inducements and valuation of
business acquired					(158	)						55			(103	)
Impact of net unrealized investment
(gains) losses on future policy

B-44

benefits							(7	)				2			(5	)
Impact of net unrealized investment
(gains) losses on policyholders'
dividends										334		(117	)		217
Balance, December 31, 2010	$	(807	)	$	7	$	(5	)	$	334	$	157		$	(314	)
Net investment gains (losses) on
investments arising during the
period		(376	)									132			(244	)
Reclassification adjustment for (gains)
losses included in net income		265										(93	)		172
Reclassification adjustment for OTTI
losses excluded from net income(1)		(52	)									18			(34	)
Impact of net unrealized investment
(gains) losses on deferred policy
acquisition costs, deferred sales
inducements and valuation of
business acquired					-							-			-
Impact of net unrealized investment
(gains) losses on future policy
benefits							18					(6	)		12
Impact of net unrealized investment
(gains) losses on policyholders'
dividends										132		(46	)		86
Balance, December 31, 2011	$	(970	)	$	7	$	13		$	466	$	162		$	(322	)

(1)	Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

B-45

All Other Net Unrealized Investment Gains and Losses in AOCI

				Deferred
				Policy
				Acquisition												Accumulated
				Costs,												Other
				Deferred												Comprehensive
	Net			Sales												Income (Loss)
	Unrealized			Inducements,									Deferred			Related To Net
	Gains (Losses)			and Valuation			Future						Income Tax			Unrealized
	on			of Business			Policy			Policyholders'			(Liability)			Investment
	Investments(1)			Acquired			Benefits			Dividends			Benefit			Gains (Losses)

	(in millions)
Balance, December 31, 2008	$	(10,471	)	$	1,487		$	(351	)	$	432		$	3,082		$	(5,821	)
Cumulative impact of the adoption
of new authoritative guidance
on January 1, 2009		(320	)		15			4			418			(33	)		84
Net investment gains (losses) on
investments arising during the
period		11,564												(3,876	)		7,688
Reclassification adjustment for (gains)
losses included in net income		797												(279	)		518
Impact of net unrealized investment
(gains) losses on deferred policy		1,630												(587	)		1,043
acquisition costs, deferred sales
inducements and valuation of
business acquired
Impact of net unrealized investment
(gains) losses on future policy					(1,943	)								681			(1,262	)
benefits
Impact of net unrealized investment
(gains) losses on policyholders'								(177	)					62			(115	)
dividends
Purchase of fixed maturities from an
affiliate											(850	)		298			(552	)
Balance, December 31, 2009	$	3,200		$	(441	)	$	(524	)	$	-		$	(652	)	$	1,583
Net investment gains (losses) on
investments arising during the
period		5,089												(1,753	)		3,336
Reclassification adjustment for (gains)
losses included in net income		(750	)											262			(488	)
Reclassification adjustment for OTTI
losses excluded from net income(2)		51												(18	)		33
Impact of net unrealized investment
(gains) losses on deferred policy
acquisition costs, deferred sales
inducements and valuation of
business acquired					10									(4	)		6
Impact of net unrealized investment
(gains) losses on future policy
benefits								(411	)					144			(267	)
Impact of net unrealized investment
(gains) losses on policyholders'
dividends											(2,450	)		858			(1,592	)
Balance, December 31, 2010	$	7,590		$	(431	)	$	(935	)	$	(2,450	)	$	(1,163	)	$	2,611

B-46

Net investment gains (losses) on
investments arising during the
period		6,019												(2,119	)		3,900
Reclassification adjustment for (gains)
losses included in net income		(967	)											338			(629	)
Reclassification adjustment for OTTI
losses excluded from net income(2)		52												(18	)		34
Impact of net unrealized investment
(gains) losses on deferred policy
acquisition costs, deferred sales
inducements and valuation of
business acquired					(276	)								97			(179	)
Impact of net unrealized investment
(gains) losses on future policy
benefits								(401	)					140			(261	)
Impact of net unrealized investment
(gains) losses on policyholders'
dividends											(1,863	)		652			(1,211	)
Balance, December 31, 2011	$	12,694		$	(707	)	$	(1,336	)	$	(4,313	)	$	(2,073	)	$	4,265

(1)	Includes cash flow hedges. See Note 21 for information on cash flow hedges.

(2)	Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

The table below presents net unrealized gains (losses) on investments by asset class at December 31:

	2011			2010			2009

	(in millions)
Fixed maturity securities on which an OTTI loss has been recognized	$	(970	)	$	(807	)	$	(1,152	)
Fixed maturity securities, available for sale - all other		11,732			6,052			2,004
Equity securities, available for sale		764			1,189			860
Derivatives designated as cash flow hedges (1)		2			(174	)		(242	)
Other investments (2)		196			523			578
Net unrealized gains (losses) on investments	$	11,724		$	6,783		$	2,048

(1)	See Note 21 for more information on cash flow hedges.

(2)	Includes net unrealized gains on certain joint ventures that are strategic in nature and are included in “Other Assets.”

B-47

Duration of Gross Unrealized Loss Positions for Fixed Maturities

The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, at December 31:

	2011
	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 millions)
Fixed maturities
U.S. Treasury securities and obligations of
U.S. government authorities and agencies		$	495		$	-		$	-		$	-		$	495		$	-
Obligations of U.S. states and their political
subdivisions			5			-			5			1			10			1
Foreign government bonds			42			2			22			4			64			6
Corporate securities			5,786			249			2,524			301			8,310			550
Commercial mortgage-backed securities			194			3			176			7			370			10
Asset-backed securities			2,482			33			3,839			1,670			6,321			1,703
Residential mortgage-backed securities			97			8			218			13			315			21
Total		$	9,101		$	295		$	6,784		$	1,996		$	15,885		$	2,291

	2010
	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 millions)
Fixed maturities
U.S. Treasury securities and obligations of
U.S. government authorities and agencies		$	3,275		$	196		$	294		$	68		$	3,569		$	264
Obligations of U.S. states and their political
subdivisions			989			41			53			6			1,042			47
Foreign government bonds			50			3			37			6			87			9
Corporate securities			7,585			253			4,279			372			11,864			625
Commercial mortgage-backed securities			503			7			101			12			604			19
Asset-backed securities			1,247			15			5,073			1,527			6,320			1,542
Residential mortgage-backed securities			583			9			235			8			818			17
Total		$	14,232		$	524		$	10,072		$	1,999		$	24,304		$	2,523

The gross unrealized losses at December 31, 2011 and 2010 are composed of $1,117 million and $1,441 million related to high or highest quality securities based on NAIC or equivalent rating and $1,174 million and $1,082 million related to other than high or highest quality securities based on NAIC or equivalent rating. At December 31, 2011, $1,721 million of the gross unrealized losses represented declines in value of greater than 20%, $270 million of which had been in that position for less than six months, as compared to $1,383 million at December 31, 2010, that represented declines in value of greater than 20%, $97 million of which had been in that position for less than six months. At December 31, 2011, the $1,996 million of gross unrealized losses of twelve months or more were concentrated in asset-backed securities and in the public utilities sectors of the Company’s corporate securities. At December 31, 2010, the $1,999 million of gross unrealized losses of twelve months or more were concentrated in asset-backed securities. In accordance with its policy described in Note 2, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at December 31, 2011 and 2010. 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 December 31, 2011, the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell the securities before the anticipated recovery of its remaining amortized cost basis.

B-48

Duration of Gross Unrealized Loss Positions for Equity Securities

The following table shows the fair value and gross unrealized losses aggregated by length of time that individual equity securities have been in a continuous unrealized loss position, at December 31:

	2011
	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 millions)
Equity securities, available-for-sale		$	1,082		$	184		$	-		$	-		$	1,082		$	184

		2010
	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 millions)
Equity securities, available-for-sale		$	505		$	44		$	56		$	7		$	561		$	51

At December 31, 2011, $113 million of the gross unrealized losses represented declines of greater than 20%, $108 million of which had been in that position for less than six months. At December 31, 2010, $17 million of the gross unrealized losses represented declines of greater than 20%, $12 million of which had been in that position for less than six months. Perpetual preferred securities have characteristics of both debt and equity securities. Since an impairment model similar to fixed maturity securities is applied to these securities, an other-than-temporary impairment has not been recognized on certain perpetual preferred securities that have been in a continuous unrealized loss position for twelve months or more as of December 31, 2011 and 2010. In accordance with its policy described in Note 2, the Company concluded that an adjustment for other-than-temporary impairments for these equity securities was not warranted at December 31, 2011 and 2010.

Securities Pledged, Restricted Assets and Special Deposits

The Company pledges as collateral investment securities it owns to unaffiliated parties through certain transactions, including securities lending, securities sold under agreements to repurchase, collateralized borrowings and postings of collateral with derivative counterparties. At December 31, the carrying value of investments pledged to third parties as reported in the Consolidated Statements of Financial Position included the following:

	2011		2010

	(in millions)
Fixed maturities(1)	$	10,740	$	10,010
Trading account assets supporting insurance liabilities		738		276
Other trading account assets		15		321
Separate account assets		4,073		4,082
Equity securities		276		334
Total securities pledged	$	15,842	$	15,023

(1)	Includes $4 million and $132 million of fixed maturity securities classified as short-term investments at December 31, 2011 and 2010, respectively.

As of December 31, 2011, the carrying amount of the associated liabilities supported by the pledged collateral was $15,462 million. Of this amount, $6,031 million was “Securities sold under agreements to repurchase,” $4,160 million was “Separate account liabilities,” $2,847 million was “Cash collateral for loaned securities,” $725 million was “Long-term debt,” $199 million was “Short-term debt,” and $1,500 million was “Policyholders’ account balances,”. As of December 31, 2010, the carrying amount of the associated liabilities supported by the pledged collateral was $14,565 million. Of this amount, $5,885 million was “Securities sold under agreements to repurchase,” $4,082 million was “Separate account liabilities,” $1,929 million was “Cash collateral for loaned securities,” $725 million was “Long-term debt,” $275 million was “Short-term debt,” $1,500 million was “Policyholders’ account balances,” and $169 million was “Other liabilities.”

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In the normal course of its business activities, the Company accepts collateral that can be sold or repledged. The primary sources of this collateral are securities in customer accounts and securities purchased under agreements to resell. The fair value of this collateral was approximately $2,077 million and $1,622 million at December 31, 2011 and 2010, respectively, all of which, for both periods, had either been sold or repledged.

Assets of $21 million and $58 million at December 31, 2011 and 2010, respectively, were on deposit with governmental authorities or trustees. Additionally, assets carried at $596 million and $694 million at December 31, 2011 and 2010, respectively, were held in voluntary trusts established primarily to fund guaranteed dividends to certain policyholders and to fund certain employee benefits. Securities restricted as to sale amounted to $184 million and $630 million at December 31, 2011 and 2010, respectively. These amounts include member and activity based stock associated with memberships in the Federal Home Loan Bank of New York and Boston. Restricted cash and securities of $34 million and $2,900 million at December 31, 2011 and 2010, respectively, were included in “Other assets.” The restricted cash and securities for December 31, 2010 primarily represent funds, associated with the sold Global Commodities Business, deposited by clients or accruing to clients as a result of trades or contracts.

5. VARIABLE INTEREST ENTITIES

In the normal course of its activities, the Company enters into relationships with various special purpose entities and other entities that are deemed to be variable interest entities (“VIEs”). A VIE is an entity that either (1) has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control activities of the entity, the obligation to absorb the entity’s expected losses and the right to receive the entity’s expected residual returns) or (2) lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE.

If the Company determines that it is the VIE’s “primary beneficiary” it consolidates the VIE. There are currently two models for determining whether or not the Company is the “primary beneficiary” of a VIE. The first relates to those VIE’s that have the characteristics of an investment company and for which certain other conditions are true. These conditions are that (1) the Company does not have the implicit or explicit obligation to fund losses of the VIE and (2) the VIE is not a securitization entity, asset-backed financing entity or an entity that was formerly considered a qualified special-purpose entity. In this model the Company is the primary beneficiary if it stands to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns and would be required to consolidate the VIE.

For all other VIE’s, the Company is the primary beneficiary if the Company has (1) the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and (2) the obligation to absorb losses of the entity that could be potentially significant to the VIE or the right to receive benefits from the entity that could be potentially significant. If both conditions are present the Company would be required to consolidate the VIE.

Consolidated Variable Interest Entities

The Company is the primary beneficiary of certain VIEs in which the Company has invested, as part of its investment activities, but over which the Company does not exercise control. The Company’s position in the capital structure and/or relative size indicates that the Company is the primary beneficiary. The Company is not required to provide, and has not provided material financial or other support to these VIEs. The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of these consolidated VIEs are reported. The creditors of each consolidated VIE have recourse only to the assets of that VIE.

	December 31,
	2011		2010

	(in millions)
Fixed maturities, available for sale	$	-	$	14
Trading account assets supporting insurance liabilities		8		9
Other long-term investments		14		6
Cash and cash equivalents		-		(2	)
Separate account assets		-		4
Total assets of consolidated VIEs	$	22	$	31

Separate account liabilities	$	-	$	4

Total liabilities of consolidated VIEs	$	-	$	4

B-50

In addition, not reflected in the table above, the Company has created a trust that is a VIE, to facilitate Prudential Insurance’s Funding Agreement Notes Issuance Program (“FANIP”). The trust issues medium-term notes secured by funding agreements issued to the trust by Prudential Insurance with the proceeds of such notes. The trust is the beneficiary of an indemnity agreement with the Company that provides that the Company is responsible for costs related to the notes issued with limited exception. As a result, the Company has determined that it is the primary beneficiary of the trust, which is therefore consolidated.

The funding agreements represent an intercompany transaction that is eliminated upon consolidation. However, in recognition of the security interest in such funding agreements, the trust’s medium-term note liability of $3,197 million and $3,509 million at December 31, 2011 and 2010, respectively, is classified within “Policyholders’ account balances.” Creditors of the trust have recourse to Prudential Insurance if the trust fails to make contractual payments on the medium-term notes. The Company has not provided material financial or other support that was not contractually required to the trust.

Unconsolidated Variable Interest Entities

The Company may invest in debt or equity securities issued by certain asset-backed investment vehicles (commonly referred to as collateralized debt obligations, or “CDOs”) that are managed by an affiliated company. CDOs raise capital by issuing debt securities, and use the proceeds to purchase investments, typically interest-bearing financial instruments. The Company’s maximum exposure to loss resulting from its relationship with unconsolidated CDOs managed by affiliates is limited to its investment in the CDOs, which was $394 million and $389 million at December 31, 2011 and 2010, respectively. These investments are reflected in “Fixed maturities, available for sale.” The fair value of assets held within these unconsolidated VIEs was $3,615 million and $3,813 million as of December 31, 2011 and 2010, respectively. There are no liabilities associated with these unconsolidated VIEs on the Company’s balance sheet.

The Company has an investment in a note receivable issued by an affiliated VIE. This VIE issued notes to the Company in consideration for certain fixed maturity assets sold by the Company in December 2009. The total assets of this VIE at December 31, 2011 and 2010 were approximately $1.0 billion and $1.5 billion, respectively, and primarily consisted of fixed maturity securities. The market value and book value of the notes issued by the VIE and held by the Company at December 31, 2011 and 2010 was $0.6 billion and $1.1 billion, respectively. The Company’s maximum exposure to loss was $0.6 billion and $1.1 billion as of December 31, 2011 and 2010, respectively.

In the normal course of its activities, the Company will invest in joint ventures and limited partnerships. These ventures include hedge funds, private equity funds and real estate related funds and may or may not be VIEs. The Company’s maximum exposure to loss on these investments, both VIEs and non-VIEs, is limited to the amount of its investment. The Company has determined that it is not required to consolidate these entities because either (1) it does not control them or (2) it does not have the obligation to absorb losses of the entities that could be potentially significant to the entities or the right to receive benefits from the entities that could be potentially significant. The Company classifies these investments as “Other long-term investments” and its maximum exposure to loss associated with these entities was $3,048 million and $2,683 million as of December 31, 2011 and 2010, respectively.

In addition, in the normal course of its activities, the Company will invest in structured investments including VIEs. These structured investments typically invest in fixed income investments and are managed by third parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities. The Company’s maximum exposure to loss on these structured investments, both VIEs and non-VIEs, is limited to the amount of its investment. See Note 4 for details regarding the carrying amounts and classification of these assets. The Company has not provided material financial or other support that was not contractually required to these structures. The Company has determined that it is not the primary beneficiary of these structures due to the fact that it does not control these entities.

Included among these structured investments are asset-backed securities issued by VIEs that manage investments in the European market. In addition to a stated coupon, each investment provides a return based on the VIE’s portfolio of assets and related investment activity. The market value of these VIEs was approximately $2.6 billion and $5.0 billion as of December 31, 2011 and 2010, respectively, and these VIEs were financed primarily through the issuance of notes similar to those purchased by the Company. The Company generally accounts for these investments as available for sale fixed maturities containing embedded derivatives that are bifurcated and marked-to-market through “Realized investment gains (losses), net,” based upon the change in value of the underlying portfolio. The Company’s variable interest in each of these VIEs represents less than 50% of the only class of variable interests issued by the VIE. The Company’s maximum exposure to loss from these interests was $657 million and $746 million at December 31, 2011 and 2010, respectively, which includes the fair value of the embedded derivatives.

6. DEFERRED POLICY ACQUISITION COSTS

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The balances of and changes in deferred policy acquisition costs as of and for the years ended December 31, are as follows:

	2011				2010				2009

		(in millions)
Balance, beginning of year		$	8,267			$	7,314			$	8,538
Capitalization of commissions, sales and issue expenses			1,973				1,578				1,053
Amortization			(1,455	)			(475	)			(483	)
Change in unrealized investment gains and losses			(280	)			(150	)			(1,760	)
Other (1)			-				-				(34	)
Balance, end of year		$	8,505			$	8,267			$	7,314

(1)	Other represents DAC written off against additional paid in capital under Funding Agreement termination.

7. INVESTMENTS IN OPERATING JOINT VENTURES

The Company has made investments in certain joint ventures that are strategic in nature and made other than for the sole purpose of generating investment income. These investments are accounted for under the equity method of accounting and are included in “Other assets” in the Company’s Consolidated Statements of Financial Position. The earnings from these investments are included on an after-tax basis in “Equity in earnings of operating joint ventures, net of taxes” in the Company’s Consolidated Statements of Operations. Investments in operating joint ventures include an indirect investment in China Pacific Group, and prior to its sale on December 31, 2009, also included the Company’s investment in Wachovia Securities. The summarized financial information for the Company’s operating joint ventures has been included in the summarized combined financial information for all significant equity method investments shown in Note 4.

Investment in China Pacific Group

The Company has made an indirect investment in China Pacific Group, a Chinese insurance operation. The carrying value of this operating joint venture was $126 million and $459 million, as of December 31, 2011 and 2010, respectively. The indirect investment in China Pacific Group includes unrealized changes in market value, which are included in accumulated other comprehensive income and relate to the market price of China Pacific Group’s publicly traded shares, which began trading on the Shanghai Exchange in 2007 and since the fourth quarter of 2009 are trading on the Hong Kong exchange. The Company recognized combined after-tax equity earnings from this operating joint venture of $156 million, $46 million and $3 million for the years ended December 31, 2011, 2010 and 2009, respectively. Dividends received from this investment were $3 million, $5 million and $5 million for the years ended December 31, 2011, 2010 and 2009, respectively. In December 2010, a consortium of investors including the Company sold approximately 16% of its holdings, resulting in a pre-tax gain of $66 million to the Company, and sold approximately 50% of its original holdings in 2011, resulting in a pre-tax gain of $237 million to the Company.

Former Investment in Wachovia Securities

On December 31, 2009, the Company completed the sale of its minority joint venture interest in Wachovia Securities (including Wells Fargo Advisors) to Wells Fargo. For the year ended December 31, 2009, “Equity in earnings of operating joint ventures, net of taxes” includes the associated pre-tax gain on the sale of $2.247 billion. In addition, “General and administrative expenses” includes certain one-time costs related to the sale of the joint venture interest of $104 million, for pre-tax compensation costs and costs related to increased contributions to the Company’s charitable foundation.

8. VALUATION OF BUSINESS ACQUIRED

The balances of and changes in VOBA as of and for the years ended December 31, are as follows:

	2011				2010				2009
		(in millions)
Balance, beginning of year		$	277			$	285			$	437
Amortization(1)			(43	)			(25	)			(171	)
Interest(2)			16				17				19
Balance, end of year		$	250			$	277			$	285

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(1)	The VOBA balance at December 31, 2011 was $250 million related to the insurance transactions associated with CIGNA. The weighted average remaining expected life was approximately 16 years for the VOBA related to CIGNA.

(2)	The interest accrual rates vary by product. The interest rates for the VOBA related to CIGNA were 7.10%, 7.00% and 6.90% for the years 2011, 2010 and 2009 respectively. The interest rate for VOBA related to Allstate for 2009 was 5.42%.

During the first quarter of 2009 the Company recognized impairments of $73 million VOBA associated with the Allstate acquisition. These impairments are included on the Amortization line in the table above. The impairment recorded in 2009 represented the remaining VOBA balance associated with the Allstate acquisition. These impairments are reflective of the deterioration in the financial markets, which resulted in additional market depreciation within the separate account assets and corresponding decreases in fee income and overall expected future earnings for this business. These impairments were determined using discounted present value of future estimated gross profits. Since the VOBA balance was completely impaired for these contracts, it cannot be reestablished for market value appreciation in subsequent periods. There were no impairments during 2011 and 2010.

The following table provides estimated future amortization, net of interest, for the periods indicated.

	VOBA Amortization
	(in millions)
2012	$	5
2013		3
2014		3
2015		2
2016		2
2017 and thereafter		235
Total	$	250

9. GOODWILL AND OTHER INTANGIBLES

Goodwill

The changes in the book value of goodwill are as follows:
		Goodwill


	(in millions)


Balance at January 1, 2009:
Gross Goodwill			725
Accumulated Impairment Losses			-
Net Balance at January 1, 2009			725

2009 Activity:
Other(1)			2

Balance at December 31, 2009:
Gross Goodwill			727
Accumulated Impairment Losses			-
Net Balance at December 31, 2009			727

2010 Activity:
Other(1)			10

Balance at December 31, 2010:
Gross Goodwill			737
Accumulated Impairment Losses			-

B-53

Net Balance at December 31, 2010		737

2011 Activity:
Impairment Charges		(737)

Balance at December 31, 2011:
Gross Goodwill		737
Accumulated Impairment Losses		(737)
Net Balance at December 31, 2011	$	-

(1) Other represents foreign currency translation.

The Company tests goodwill for impairment annually as of December 31 and more frequently if an event or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount, as discussed in further detail in Note 2. The test is performed only on the Financial Services Business reporting unit as this is the portion of the Company that contains 100% of the Company’s goodwill.

The Company performed goodwill impairment testing for its Financial Services Business reporting unit at December 31, 2011. There was an indication of impairment and accordingly, the second step of the test was performed. Based on the results of the second step, all of the goodwill was impaired, which resulted in a total charge $737 million during the fourth quarter of 2011. The charge was reported in “General and administrative expenses”. The impairment was primarily due to the impact of the continuing deterioration in the financial markets, especially in the second half of 2011. While markets rose during the last several weeks of the year, this late upswing did not overcome the overall negative impact of the markets on earnings multiples of peer companies used in the impairment evaluation.

There were no goodwill impairment charges during 2010 or 2009.

Other Intangibles

Other intangible balances at December 31, are as follows:

	2011										2010
	Gross Carrying Amount			Accumulated Amortization				Net Carrying Amount			Gross Carrying Amount			Accumulated Amortization				Net Carrying Amount
		(in millions)
Subject to amortization:
Customer relationships		$	175		$	(39	)		$	136		$	175		$	(29	)		$	146
Other			19			(19	)			-			22			(22	)			-
Total		$	194		$	(58	)		$	136		$	197		$	(51	)		$	146

Amortization expense for other intangibles was $7 million, $13 million and $12 million for the years ending December 31, 2011, 2010 and 2009, respectively. Amortization expense for other intangibles is expected to be approximately $8 million in 2012, $12 million in 2013 and 2014 and $11 million in 2015 and 2016.


10. POLICYHOLDERS' LIABILITIES

Future Policy Benefits

Future policy benefits at December 31, are as follows:

	2011		2010

		(in millions)

B-54

Life insurance	$	57,508	$	57,147
Individual and group annuities and supplementary contracts		17,095		16,071
Other contract liabilities		5,204		3,231
Subtotal future policy benefits excluding unpaid claims and claim adjustment expenses		79,807		76,449
Unpaid claims and claim adjustment expenses		2,542		2,372
Total future policy benefits	$	82,349	$	78,821

Life insurance liabilities include reserves for death and endowment policy benefits, terminal dividends and certain health benefits. Individual and group annuities and supplementary contracts liabilities include reserves for life contingent immediate annuities and life contingent group annuities. Other contract liabilities include unearned revenue and certain other reserves for group, annuities and individual life and health products.

Future policy benefits for individual participating traditional life insurance are based on the net level premium method, calculated using the guaranteed mortality and nonforfeiture interest rates which range from 2.5% to 7.5%. Participating insurance represented 11% and 12% of direct individual life insurance in force at December 31, 2011 and 2010, respectively, and 72%, 73% and 76% of direct individual life insurance premiums for 2011, 2010 and 2009, respectively.

Future policy benefits for individual non-participating traditional life insurance policies, group and individual long-term care policies and individual health insurance policies are generally equal to the aggregate of (1) the present value of future benefit payments and related expenses, less the present value of future net premiums, and (2) any premium deficiency reserves. Assumptions as to mortality, morbidity and persistency are based on the Company’s experience, and in certain instances, industry experience, when the basis of the reserve is established. Interest rates used in the determination of the present values range from 2.5% to 8.3%; less than 1% of the reserves are based on an interest rate in excess of 8%.

Future policy benefits for individual and group annuities and supplementary contracts are generally equal to the aggregate of (1) the present value of expected future payments, and (2) any premium deficiency reserves. Assumptions as to mortality are based on the Company’s experience, and in certain instances, industry experience, when the basis of the reserve is established. The interest rates used in the determination of the present values range from 1.0% to 11.9%; less than 1% of the reserves are based on an interest rate in excess of 8%.

Future policy benefits for other contract liabilities are generally equal to the present value of expected future payments based on the Company’s experience, except for example, certain group insurance coverages for which future policy benefits are equal to gross unearned premium reserves. The interest rates used in the determination of the present values range from 0.1% to 6.0%.

Premium deficiency reserves are established, if necessary, when the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for expected future policy benefits and expenses and to recover any unamortized policy acquisition costs. Premium deficiency reserves have been recorded for the group single premium annuity business, which consists of limited-payment, long-duration, traditional, and non-participating annuities; structured settlements; single premium immediate annuities with life contingencies; and for certain individual health policies. Liabilities of $2,447 million and $2,001 million as of December 31, 2011 and 2010, respectively, are included in “Future policy benefits” with respect to these deficiencies, of which $1,432 million and $926 million as of December 31, 2011 and 2010, respectively, relate to net unrealized gains on securities classified as available for sale.

The Company’s liability for future policy benefits is also inclusive of liabilities for guarantee benefits related to certain nontraditional long-duration life and annuity contracts, which are discussed more fully in Note 11 and are primarily reflected in other contract liabilities in the table above.

Unpaid claims and claim adjustment expenses primarily reflect the Company’s estimate of future disability claim payments and expenses as well as estimates of claims incurred but not yet reported as of the balance sheet dates related to group disability products. Unpaid claim liabilities are discounted using interest rates ranging from 3.5% to 6.4%.

Policyholders' Account Balances

Policyholders' account balances at December 31, are as follows:

	2011			2010

	(in millions)
Individual annuities		$	9,437		$	9,247

B-55

Group annuities		23,124		21,712
Guaranteed investment contracts and guaranteed interest accounts		14,416		14,325
Funding agreements		5,324		6,166
Interest-sensitive life contracts		7,970		7,524
Dividend accumulation and other		14,780		14,282
Total policyholders' account balances	$	75,051	$	73,256

Policyholders’ account balances represent an accumulation of account deposits plus credited interest less withdrawals, expenses and mortality charges, if applicable. These policyholders’ account balances also include provisions for benefits under non-life contingent payout annuities. Included in “Funding agreements” at December 31, 2011 and 2010, are $3,244 million and $3,592 million, respectively, related to the Company’s FANIP product which is carried at amortized cost, adjusted for the effective portion of changes in fair value of qualifying derivative financial instruments. For additional details on the FANIP product see Note 5. The interest rates associated with such notes range from 0.5% to 5.5%. Also included in funding agreements at December 31, 2011 and 2010 are $529 million and $1,005 million, respectively, of affiliated funding agreements with Prudential Financial in support of a retail note issuance program to financial wholesalers. Interest crediting rates range from 0% to 5.0% for interest-sensitive life contracts and from 0% to 13.4% for contracts other than interest-sensitive life. Less than 1% of policyholders’ account balances have interest crediting rates in excess of 8%.

11. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS

The Company issues traditional variable annuity contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. The Company also issues variable annuity contracts with general and separate account options where the Company contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract less any partial withdrawals (“return of net deposits”), (2) total deposits made to the contract less any partial withdrawals plus a minimum return (“minimum return”), or (3) the highest contract value on a specified date minus any withdrawals (“contract value”). These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods.

The Company also issues annuity contracts with market value adjusted investment options (“MVAs”), which provide for a return of principal plus a fixed rate of return if held-to-maturity, or, alternatively, a “market adjusted value” if surrendered prior to maturity or if funds are reallocated to other investment options. The market value adjustment may result in a gain or loss to the Company, depending on crediting rates or an indexed rate at surrender, as applicable.

In addition, the Company issues variable life, variable universal life and universal life contracts where the Company contractually guarantees to the contractholder a death benefit even when there is insufficient value to cover monthly mortality and expense charges, whereas otherwise the contract would typically lapse (“no lapse guarantee”). Variable life and variable universal life contracts are offered with general and separate account options.

The assets supporting the variable portion of both traditional variable annuities and certain variable contracts with guarantees are carried at fair value and reported as “Separate account assets” with an equivalent amount reported as “Separate account liabilities.” Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in “Policy charges and fee income” and changes in liabilities for minimum guarantees are generally included in “Policyholders’ benefits.” In 2011, 2010 and 2009, there were no gains or losses on transfers of assets from the general account to a separate account.

For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, timing of annuitization, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the

B-56

contract in excess of the current account balance. For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. The Company’s primary risk exposures for these contracts relates 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 or contractholder behavior used in the original pricing of these products.

The Company’s contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed may not be mutually exclusive. The liabilities related to the net amount at risk are reflected within “Future policy benefits.” As of December 31, 2011 and 2010, the Company had the following guarantees associated with these contracts, by product and guarantee type:

	December 31, 2011						December 31, 2010
	In the Event of Death			At Annuitization / Accumulation (1)			In the Event of Death					At Annuitization / Accumulation (1)

Variable Annuity Contracts	(dollars in millions)

Return of net deposits
Account value		$	38,983		$	21			$	26,167			$	24
Net amount at risk		$	1,000		$	1			$	155			$	6
Average attained age of contractholders		60 years			68 years				60 years				67 years

Minimum return or contract value
Account value		$	20,788		$	47,666			$	20,211			$	33,332
Net amount at risk		$	4,026		$	3,753			$	3,088			$	1,478
Average attained age of contractholders		66 years			60 years				66 years				60 years
Average period remaining until earliest
expected annuitization			N/A		1 year					N/A			1 year
________
(1) Includes income and withdrawal benefits as described herein.

	December 31, 2011						December 31, 2010
	Unadjusted Value			Adjusted Value			Unadjusted Value					Adjusted Value

Variable Annuity Contracts	(in millions)

Market value adjusted annuities
Account value		$	830		$	833			$	911			$	917

							December 31,
								2011			2010

							In the Event of Death
							(dollars in millions)
Variable Life, Variable Universal Life and Universal Life Contracts

No lapse guarantees
Separate account value									$	2,419			$	2,392
General account value									$	2,089			$	1,790
Net amount at risk									$	54,917			$	51,500
Average attained age of contractholders									52 years				51 years

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Account balances of variable annuity contracts with guarantees were invested in separate account investment options as follows:

	December 31,
	2011			2010

	(in millions)
Equity funds		$	28,417		$	26,851
Bond funds			24,501			12,667
Money market funds			3,426			3,250
Total		$	56,344		$	42,768

In addition to the amounts invested in separate account investment options above, $3,427 million at December 31, 2011 and $3,609 million at December 31, 2010 of account balances of variable annuity contracts with guarantees, inclusive of contracts with MVA features, were invested in general account investment options.

Liabilities For Guarantee Benefits

The table below summarizes the changes in general account liabilities, either written directly by the Company or assumed by the Company via reinsurance for guarantees on variable contracts. The liabilities for guaranteed minimum death benefits (“GMDB”) and guaranteed minimum income benefits (“GMIB”) are included in “Future policy benefits” and the related changes in the liabilities are included in “Policyholders’ benefits.” Guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”), and guaranteed minimum income and withdrawal benefits (“GMIWB”) features are considered to be bifurcated embedded derivatives and are recorded at fair value. Changes in the fair value of these derivatives, including changes in the Company’s own risk of non-performance, along with any fees attributed or payments made relating to the derivative, are recorded in “Realized investment gains (losses), net.” See Note 19 for additional information regarding the methodology used in determining the fair value of these embedded derivatives. The liabilities for GMAB, GMWB and GMIWB are included in “Future policy benefits.” As discussed below, the Company maintains a portfolio of derivative investments that serve as a partial hedge of the risks associated with these products, for which the changes in fair value are also recorded in “Realized investment gains (losses), net.” This portfolio of derivative investments does not qualify for hedge accounting treatment under U.S. GAAP.

	GMDB						GMIB			GMAB/GMWB/ GMIWB
	Variable Life, Variable Universal Life and Universal Life			Variable Annuity			Variable Annuity			Variable Annuity


	(in millions)
Balance at December 31, 2008	$	86		$	284		$	247		$	1,172
Incurred guarantee benefits(1)		64			(11	)		(21	)		(1,114	)
Paid guarantee benefits and other		(7	)		(158	)		(32	)		-
Balance at December 31, 2009		143			115			194			58
Incurred guarantee benefits(1)		19			25			29			(406	)
Paid guarantee benefits and other		(1	)		(83	)		(123	)		-
Balance at December 31, 2010		161			57			100			(348	)
Incurred guarantee benefits(1)		66			158			44			1,439
Paid guarantee benefits and other		(2	)		(77	)		(42	)		-
Balance at December 31, 2011	$	225		$	138		$	102		$	1,091

(1)	Incurred guarantee benefits include the portion of assessments established as additions to reserves as well as changes in estimates affecting the reserves. Also includes changes in the fair value of features considered to be derivatives.

The GMDB liability is determined each period end by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the death benefits in excess of the account balance. The GMIB liability is determined each period by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the projected income benefits in excess of the account balance. The portion of assessments used is chosen such that, at issue (or, in the case of

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acquired contracts at the acquisition date), the present value of expected death benefits or expected income benefits in excess of the projected account balance and the portion of the present value of total expected assessments over the lifetime of the contracts are equal. The Company regularly evaluates the estimates used and adjusts the GMDB and GMIB liability balances, with an associated charge or credit to earnings, if actual experience or other evidence suggests that earlier assumptions should be revised.

The GMAB features provide the contractholder with a guaranteed return of initial account value or an enhanced value if applicable. The GMAB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.

The GMWB features provide the contractholder with a guaranteed remaining balance if the account value is reduced to zero through a combination of market declines and withdrawals. The guaranteed remaining balance is generally equal to the protected value under the contract, which is initially established as the greater of the account value or cumulative deposits when withdrawals commence, less cumulative withdrawals. The contractholder also has the option, after a specified time period, to reset the guaranteed remaining balance to the then-current account value, if greater. The GMWB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.

The GMIWB features predominantly present a benefit that provides a contractholder two optional methods to receive guaranteed minimum payments over time, a “withdrawal” option or an “income” option. The withdrawal option guarantees that, upon the election of such benefit, a contract holder can withdraw an amount each year until the cumulative withdrawals reach a total guaranteed balance. The guaranteed remaining balance is generally equal to the protected value under the contract, which is initially established as the greater of: (1) the account value on the date of first withdrawal; (2) cumulative deposits when withdrawals commence, less cumulative withdrawals plus a minimum return; or (3) the highest contract value on a specified date minus any withdrawals. The income option guarantees that a contract holder can, upon the election of this benefit, withdraw a lesser amount each year for the annuitant’s life based on the total guaranteed balance. The withdrawal or income benefit can be elected by the contract holder upon issuance of an appropriate deferred variable annuity contract or at any time following contract issue prior to annuitization. Certain GMIWB features include an automatic rebalancing element that reduces the Company’s exposure to these guarantees. The GMIWB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.

Liabilities for guaranteed benefits for GMAB, GMWB and GMIWB riders include amounts assumed from affiliates of $30 million and $21 million as of December 31, 2011 and 2010, respectively. See Note 13 for amounts recoverable from reinsurers relating to the ceding of certain embedded derivative liabilities associated with these guaranteed benefits, which are not reflected in the tables above.

As part of its risk management strategy, the Company hedges or limits its exposure to these risks, excluding those risks that have been deemed suitable to retain and risks that are not able to be hedged, through a combination of product design elements, such as an automatic rebalancing element, and externally purchased hedging instruments, such as equity options and interest rate derivatives. The automatic rebalancing element included in the design of certain optional living benefits transfers assets between certain variable investments selected by the annuity contractholder and, depending on the benefit feature, a fixed rate account in the general account or a bond portfolio within the separate accounts. The transfers are based on the static mathematical formula used with the particular optional benefit which considers a number of factors, including the impact of investment performance of the contractholder’s total account value. In general, negative investment performance may result in transfers to a fixed-rate account in the general account or a bond portfolio within the separate accounts, and positive investment performance may result in transfers back to contractholder-selected variable investments. Other product design elements utilized for certain products to manage these risks include asset allocation restrictions and minimum issuance age requirements. For risk management purposes the Company segregates the variable annuity living benefit features into those that include the automatic rebalancing element, including certain GMIWB riders and certain GMAB riders; and those that do not include the automatic rebalancing element, including certain legacy GMIWB, GMWB, GMAB and GMIB riders. Living benefit riders that include the automatic rebalancing element also include GMDB riders, and as such the GMDB risk in these riders also benefits from the automatic rebalancing element.

Sales Inducements

The Company defers sales inducements and amortizes them over the anticipated life of the policy using the same methodology and assumptions used to amortize deferred policy acquisition costs. These deferred sales inducements are included in “Other assets.” The Company offers various types of sales inducements. These inducements include: (1) a bonus whereby the policyholder’s initial account balance is increased by an amount equal to a specified percentage of the customer’s initial deposit, (2) additional credits after a certain number of years a contract is held and (3) enhanced interest crediting rates that are higher than

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the normal general account interest rate credited in certain product lines. Changes in deferred sales inducements, reported as “Interest credited to policyholders’ account balances,” are as follows:

	Sales Inducements

	(in millions)
Balance at December 31, 2008	$	297
Capitalization		97
Amortization		(51	)
Change in unrealized gain/(loss) on investments		(28	)
Balance at December 31, 2009		315
Capitalization		248
Amortization		(15	)
Change in unrealized gain/(loss) on investments		3
Balance at December 31, 2010		551
Capitalization		291
Amortization		(290	)
Change in unrealized gain/(loss) on investments		3
Balance at December 31, 2011	$	555

12. CLOSED BLOCK

On the date of demutualization, Prudential Insurance established a Closed Block for certain individual life insurance policies and annuities issued by Prudential Insurance in the U.S. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block Business.

The policies included in the Closed Block are specified individual life insurance policies and individual annuity contracts that were in force on the effective date of the Plan of Reorganization and for which Prudential Insurance is currently paying or expects to pay experience-based policy dividends. Assets have been allocated to the Closed Block in an amount that has been determined to produce cash flows which, together with revenues from policies included in the Closed Block, are expected to be sufficient to support obligations and liabilities relating to these policies, including provision for payment of benefits, certain expenses, and taxes and to provide for continuation of the policyholder dividend scales in effect in 2000, assuming experience underlying such scales continues. To the extent that, over time, cash flows from the assets allocated to the Closed Block and claims and other experience related to the Closed Block are, in the aggregate, more or less favorable than what was assumed when the Closed Block was established, total dividends paid to Closed Block policyholders may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect in 2000 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to Closed Block policyholders and will not be available to stockholders. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the Closed Block. The Closed Block will continue in effect as long as any policy in the Closed Block remains in force unless, with the consent of the New Jersey insurance regulator, it is terminated earlier.

The excess of Closed Block Liabilities over Closed Block Assets at the date of the demutualization (adjusted to eliminate the impact of related amounts in “Accumulated other comprehensive income (loss)”) represented the estimated maximum future earnings at that date from the Closed Block expected to result from operations attributed to the Closed Block after income taxes. In establishing the Closed Block, the Company developed an actuarial calculation of the timing of such maximum future earnings. If actual cumulative earnings of the Closed Block from inception through the end of any given period are greater than the expected cumulative earnings, only the expected earnings will be recognized in income. Any excess of actual cumulative earnings over expected cumulative earnings will represent undistributed accumulated earnings attributable to policyholders, which are recorded as a policyholder dividend obligation. The policyholder dividend obligation represents amounts to be paid to Closed Block policyholders as an additional policyholder dividend unless otherwise offset by future Closed Block performance that is less favorable than originally expected. If the actual cumulative earnings of the Closed Block from its inception through the end of any given period are less than the expected cumulative earnings of the Closed Block, the Company will recognize only the actual earnings in income. However, the Company may reduce policyholder dividend scales, which would be intended to increase future actual earnings until the actual cumulative earnings equaled the expected cumulative earnings.

As of December 31, 2011 and 2010, the Company recognized a policyholder dividend obligation of $762 million and $126 million, respectively, to Closed Block policyholders for the excess of actual cumulative earnings over the expected cumulative

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earnings. Additionally, accumulated net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block have been reflected as a policyholder dividend obligation of $3,847 million and $2,117 million at December 31, 2011 and 2010, respectively, to be paid to Closed Block policyholders unless offset by future experience, with an offsetting amount reported in “Accumulated other comprehensive income (loss).” See the table below for changes in the components of the policyholder dividend obligation for the years ended December 31, 2011 and 2010.

On December 13, 2011 and December 14, 2010, Prudential Insurance’s Board of Directors approved a continuation of the Closed Block dividend scales in 2012 and 2011, respectively. On December 8, 2009, Prudential Insurance’s Board of Directors acted to reduce the dividends payable in 2010 on Closed Block policies. This decrease reflected the deterioration in investment results and resulted in a $98 million reduction of the liability for policyholder dividends recognized in the year ended December 31, 2009.

Closed Block Liabilities and Assets designated to the Closed Block at December 31, as well as maximum future earnings to be recognized from Closed Block Liabilities and Closed Block Assets, are as follows:

	2011			2010

	(in millions)
Closed Block Liabilities
Future policy benefits	$	51,424		$	51,632
Policyholders' dividends payable		902			909
Policyholders' dividend obligation		4,609			2,243
Policyholders' account balances		5,484			5,536
Other Closed Block liabilities		4,030			4,637
Total Closed Block Liabilities		66,449			64,957

Closed Block Assets
Fixed maturities, available-for-sale, at fair value		42,024			41,044
Other trading account assets, at fair value		269			150
Equity securities, available-for-sale, at fair value		3,122			3,545
Commercial mortgage and other loans		8,322			7,827
Policy loans		5,296			5,377
Other long-term investments		2,080			1,662
Short-term investments		485			1,119
Total investments		61,598			60,724
Cash and cash equivalents		1,006			345
Accrued investment income		571			600
Other Closed Block assets		284			275
Total Closed Block Assets		63,459			61,944

Excess of reported Closed Block Liabilities over Closed Block Assets		2,990			3,013
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses)		3,836			2,092
Allocated to policyholder dividend obligation		(3,847	)		(2,117	)
Future earnings to be recognized from Closed Block Assets and Closed Block Liabilities	$	2,979		$	2,988

Information regarding the policyholder dividend obligation is as follows:

	2011			2010

	(in millions)
Balance, January 1		$	2,243		$	-
Impact from earnings allocable to policyholder dividend obligation			636			126
Change in net unrealized investment gains (losses) allocated to policyholder dividend
obligation			1,730			2,117
Balance, December 31		$	4,609		$	2,243

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Closed Block revenues and benefits and expenses for the years ended December 31, were as follows:

	2011		2010			2009

	(in millions)
Revenues
Premiums	$	2,918	$	3,007		$	3,250
Net investment income		2,976		2,994			2,907
Realized investment gains (losses), net		855		804			(1,219	)
Other income		38		38			102

Total Closed Block revenues		6,787		6,843			5,040

Benefits and Expenses
Policyholders' benefits		3,482		3,512			3,762
Interest credited to policyholders' account balances		139		140			141
Dividends to policyholders		2,571		2,071			1,222
General and administrative expenses		519		540			568

Total Closed Block benefits and expenses		6,711		6,263			5,693

Closed Block revenues, net of Closed Block benefits and expenses, before
income taxes and discontinued operations		76		580			(653	)
Income tax expense (benefit)		67		(38	)		(63	)
Closed Block revenues, net of Closed Block benefits and expenses and income
taxes, before discontinued operations		9		618			(590	)
Income from discontinued operations, net of taxes		-		1			-
Closed Block revenues, net of Closed Block benefits and expenses, income taxes
and discontinued operations	$	9	$	619		$	(590	)

13. REINSURANCE

The Company participates in reinsurance in order to provide additional capacity for future growth, to limit the maximum net loss potential arising from large risks and in acquiring or disposing of businesses.

In 2006, the Company acquired the variable annuity business of The Allstate Corporation (“Allstate”) through a reinsurance transaction. The reinsurance arrangements with Allstate include a coinsurance arrangement associated with the general account liabilities assumed and a modified coinsurance arrangement associated with the separate account liabilities assumed. The reinsurance payable, which represents the Company’s obligation under the modified coinsurance arrangement, is netted with the reinsurance receivable in the Company’s Consolidated Statement of Financial Position.

In 2004, the Company acquired the retirement business of CIGNA and as a result, entered into various reinsurance arrangements. The Company still has indemnity coinsurance and modified coinsurance without assumption arrangements in effect related to this acquisition.

Life and disability reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term, per person excess and coinsurance. In addition, the Company entered into reinsurance agreements covering 90% of the Closed Block policies, including 7% with an affiliate through various modified coinsurance arrangements. The Company accounts for these modified coinsurance arrangements under the deposit method of accounting. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. Reinsurance premiums, commissions, expense reimbursements, benefits and reserves related to reinsured long-duration contracts are accounted for over the life of the underlying reinsured contracts using assumptions consistent with those used to account for the underlying contracts. The cost of reinsurance related to short-duration contracts is accounted for over the reinsurance contract period. Amounts recoverable from reinsurers, for both short-and long-duration reinsurance arrangements, are estimated in a manner consistent with the claim liabilities and policy benefits associated with the reinsured policies. The Company also participates in reinsurance of Liabilities for Guaranteed Benefits, which are more fully described in Note 11.

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The Company participates in reinsurance transactions with the following subsidiaries of Prudential Financial: Prudential Life Insurance Company of Taiwan Inc., The Prudential Life Insurance Company of Korea, Ltd., The Prudential Life Insurance Company, Ltd., Pramerica Life S.p.A., Pramerica Zycie Towarzystwo Ubezpieczen i Reasekuracji Spolka Akcyjna, Prudential Holdings of Japan, Inc., Pruco Reinsurance Ltd., Prudential Annuities Life Assurance Corporation, Prudential Seguros Mexico, S.A., Prudential Seguros, S.A., Pramerica of Bermuda Life Assurance Company, Ltd., and Prudential Arizona Reinsurance III Company.

The tables presented below exclude amounts pertaining to the Company’s discontinued operations.

Reinsurance amounts included in the Consolidated Statements of Operations for premiums, policy charges and fees and policyholders’ benefits for the years ended December 31, were as follows:

	2011				2010					2009

	(in millions)
Direct premiums		$	10,416				$	10,183			$	9,866
Reinsurance assumed			1,555					1,368				1,164
Reinsurance ceded			(1,385	)				(1,322	)			(1,397	)
Premiums		$	10,586				$	10,229			$	9,633

Direct policy charges and fees		$	2,540				$	2,137			$	2,020
Reinsurance assumed			124					140				140
Reinsurance ceded			(90	)				(80	)			(70	)
Policy charges and fees		$	2,574				$	2,197			$	2,090


Direct policyholder benefits		$	12,511				$	11,971			$	11,485
Reinsurance assumed			1,448					1,225				959
Reinsurance ceded			(1,336	)				(1,278	)			(1,397	)
Policyholders' benefits		$	12,623				$	11,918			$	11,047

Reinsurance recoverables at December 31, are as follows:

						2011		2010

					(in millions)
Individual and group annuities (1)							$	722			$	1,075
Life Insurance								1,766				1,702
Other reinsurance								139				126
Total reinsurance recoverable							$	2,627			$	2,903

_________

(1)	Primarily represents reinsurance recoverables established under the reinsurance arrangements associated with the acquisition of the retirement business of CIGNA. The Company has recorded related reinsurance payables of $713 million and $1,068 million at December 31, 2011 and 2010, respectively.

“Premiums” includes affiliated reinsurance assumed of $1,447 million, $1,224 million and $1,092 million and affiliated reinsurance ceded of $(117) million, $(111) million and $(111) million for the years ended December 31, 2011, 2010, and 2009, respectively.

“Policyholders’ benefits” includes affiliated reinsurance assumed of $1,169 million, $959 million and $823 million and affiliated reinsurance ceded of $(70) million, $(58) million and $(61) million for the years ended December 31, 2011, 2010, and 2009, respectively.

“General and administrative expenses” include affiliated assumed expenses of $39 million, $147 million and $128 million for the years ended December 31, 2011, 2010, and 2009, respectively.

“Due from parent and affiliates” includes affiliated reinsurance recoverables of $1,187 million and $1,120 million at December 31, 2011 and 2010, respectively reflected in the table above. Excluding both the reinsurance recoverable associated with the acquisition of the retirement business of CIGNA and affiliated reinsurance recoverables, four major reinsurance companies

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account for approximately 62% of the reinsurance recoverable at December 31, 2011. The Company periodically reviews the financial condition of its reinsurers and amounts recoverable therefrom in order to minimize its exposure to loss from reinsurer insolvencies, recording an allowance when necessary for uncollectible reinsurance.

“Due from parent and affiliates” also include $886 million and $(387) million at December 31, 2011 and 2010, respectively, related to the ceding of certain embedded derivative liabilities associated with the Company’s guaranteed benefits. “Realized investment gains (losses), net” includes a gain of $935 million, a loss of $484 million and a loss of $878 million for the years ended December 31, 2011, 2010, and 2009, respectively, related to the change in fair values of these ceded embedded derivative liabilities.

“Deferred policy acquisition costs” includes affiliated amounts related to reinsurance of $1,140 million and $860 million at December 31, 2011 and 2010, respectively.

“Due to parent and affiliates” includes reinsurance payables of $4,704 million and $3,702 million at December 31, 2011 and 2010, respectively.

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14. SHORT-TERM AND LONG-TERM DEBT

Short-term Debt

Short-term debt at December 31, is as follows:

	2011			2010

	(in millions)
Commercial paper		$	870		$	874
Other notes payable(1)(2)			382			389
Current portion of long-term debt(3)			3			225

Total short-term debt

1,255

1,488

-------------------------------------

(1)	Includes collateralized borrowings from the Federal Home Loan Bank of New York of $199 million and $275 million at December 31, 2011 and 2010, respectively, which are discussed in more detail below.

(2)	Includes notes due to related parties of $181 million and $112 million at December 31, 2011 and 2010, respectively. The related party notes payable have variable interest rates ranging from 0.4% to 2.1% in 2011 and 0.6% to 1.7% in 2010.

(3)	Includes notes due to related parties of $213 million at December 31, 2010.

The weighted average interest rate on outstanding short-term debt, excluding the current portion of long-term debt, was 0.4% at both December 31, 2011 and 2010.

At December 31, 2011 and 2010, the Company was in compliance with all covenants related to the above debt.

Commercial Paper

Prudential Funding, LLC (“Prudential Funding”), a wholly-owned subsidiary of Prudential Insurance, has a commercial paper program with an authorized capacity of $7.0 billion. Prudential Funding commercial paper borrowings have generally served as an additional source of financing to meet the working capital needs of Prudential Insurance and its subsidiaries. Prudential Funding also lends to other subsidiaries of Prudential Financial up to limits agreed with the New Jersey Department of Banking and Insurance. Prudential Funding’s outstanding commercial paper borrowings were $870 million and $874 million at December 31, 2011 and 2010, respectively. At December 31, 2011 and 2010, the weighted average maturity of total commercial paper outstanding was 20 and 31 days, respectively. Prudential Financial has issued a subordinated guarantee covering Prudential Funding’s domestic commercial paper program.

Federal Home Loan Bank of New York

Prudential Insurance is a member of the Federal Home Loan Bank of New York (“FHLBNY”). Membership allows Prudential Insurance access to the FHLBNY's financial services, including the ability to obtain collateralized loans and to issue collateralized funding agreements that can be used as an alternative source of liquidity. FHLBNY borrowings and funding agreements are collateralized by qualifying mortgage-related assets or U.S. Treasury securities, the fair value of which must be maintained at certain specified levels relative to outstanding borrowings, depending on the type of asset pledged. FHLBNY membership requires Prudential Insurance to own member stock and borrowings require the purchase of activity-based stock in an amount equal to 4.5% of outstanding borrowings. Under FHLBNY guidelines, if Prudential Insurance’s financial strength ratings decline below A/A2/A Stable by S&P/Moody’s/Fitch, respectively, and the FHLBNY does not receive written assurances from the New Jersey Department of Banking and Insurance (“NJDOBI”) regarding Prudential Insurance’s solvency, new borrowings from the FHLBNY would be limited to a term of 90 days or less. Currently there are no restrictions on the term of borrowings from the FHLBNY. All FHLBNY stock purchased by Prudential Insurance is classified as restricted general account investments within “Other long-term investments,” and the carrying value of these investments was $173 million and $177 million as of December 31, 2011 and 2010, respectively.

NJDOBI permits Prudential Insurance to pledge collateral to the FHLBNY in an amount up to 5% of its prior year-end statutory net admitted assets, excluding separate account assets. Based on Prudential Insurance’s statutory net admitted assets as of December 31, 2010, the 5% limitation equates to a maximum amount of pledged assets of $7.4 billion and an estimated maximum borrowing capacity (after taking into account required collateralization levels and purchases of activity-based stock) of approximately $6.1 billion. Nevertheless, FHLBNY borrowings are subject to the FHLBNY’s discretion and to the availability of qualifying assets at Prudential Insurance.

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As of December 31, 2011, Prudential Insurance had pledged qualifying assets with a fair value of $2.8 billion, which supported outstanding collateralized advances of $0.9 billion and collateralized funding agreements of $1.5 billion. The fair value of qualifying assets that were available to Prudential Insurance but not pledged amounted to $5.6 billion as of December 31, 2011.

As of December 31, 2011, $199 million of the FHLBNY outstanding advances are reflected in “Short-term debt” and matures in December 2012 and the remaining $725 million is in “Long-term debt” and matures in December 2015. The funding agreements issued to the FHLBNY, which are reflected in “Policyholders’ account balances,” have priority claim status above debt holders of Prudential Insurance.

Federal Home Loan Bank of Boston

Prudential Retirement Insurance and Annuity Company (“PRIAC”), a wholly-owned subsidiary of the Company, is a member of the Federal Home Loan Bank of Boston (“FHLBB”). Membership allows PRIAC access to collateralized advances which will be classified in “Short-term debt” or “Long-term debt,” depending on the maturity date of the obligation. PRIAC’s membership in FHLBB requires the ownership of member stock and borrowings from FHLBB require the purchase of activity-based stock in an amount between 3.0% and 4.5% of outstanding borrowings depending on the maturity date of the obligation. As of December 31, 2011, PRIAC had no advances outstanding under the FHLBB facility.

The Connecticut Department of Insurance (“CTDOI”) permits PRIAC to pledge up to $2.6 billion in qualifying assets to secure FHLBB borrowings through December 31, 2011. PRIAC must seek re-approval from CTDOI prior to borrowing additional funds after that date. Based on available eligible assets as of December 31, 2011, PRIAC had an estimated maximum borrowing capacity, after taking into consideration required collateralization levels and required purchases of activity-based FHLBB stock, of approximately $1.2 billion.

Credit Facilities

As of December 31, 2011, the Company had a $1,750 million revolving credit facility. The three-year facility has both Prudential Financial and Prudential Funding as borrowers. There were no outstanding borrowings under this credit facility as of December 31, 2011. The facility is available to the applicable borrowers up to the aggregate committed credit and may be used for general corporate purposes, including as backup liquidity for the Company’s commercial paper program discussed above.

The credit facility contains representations and warranties, covenants and events of default that are customary for facilities of this type; however, borrowings under the facility are not contingent on the Company’s credit ratings nor subject to material adverse change clauses. Borrowings under the credit facility are conditioned on the continued satisfaction of other customary conditions, including, the maintenance at all times of consolidated net worth, relating to the Financial Services Businesses of Prudential Financial, of at least $21.25 billion, which for this purpose is calculated as U.S. GAAP equity, excluding “Accumulated other comprehensive income (loss)” and excluding equity of noncontrolling interests. Under the applicable credit agreement, the required minimum level of consolidated net worth will be reduced automatically in the future by an amount equal to 85 percent of the amount of any reduction, on an after-tax basis, in the total U.S. GAAP equity attributable to the Financial Services Businesses, resulting from Prudential Financial’s expected retrospective application of amended authoritative guidance regarding the deferral of costs relating to the acquisition of new or renewal insurance contracts.

As of December 31, 2011, Prudential Financial’s consolidated net worth of the Financial Services Businesses exceeded the minimum amount required to borrow under the facility.

In addition to the above credit facility, the Company, as part of its real estate separate account activities, had outstanding lines of credit of $815 million at December 31, 2011, of which $30 million was used. The Company also has access to uncommitted lines of credit from financial institutions.

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Long-term Debt

Long-term debt at December 31, is as follows:

	Maturity
	Dates		Rate	2011		2010

				(in millions)
Fixed-rate notes:
Surplus notes subject to set-off arrangements		2021	4.99%-5.22%	$	500	$	-
Surplus notes(1)		2014-2052	5.10%-8.30%		2,985		2,986
Other fixed-rate notes(2)(3)		2013-2041	0.55%-14.85%		3,916		2,128
Floating-rate notes:
Surplus notes		2016-2052	(4)		3,200		3,200
Other floating-rate notes		2012	(5)		-		140
Subtotal					10,601		8,454
Less: assets under set-off arrangements(6)					500		-

Total long-term debt

10,101

8,454

-------------------------------

(1)	Fixed rate surplus notes at December 31, 2011 and 2010 includes $2,045 million and $2,044 million, respectively, due to a related party. Maturities of these notes range from 2014 through 2052. The interest rates ranged from 5.1% to 6.7% in both 2011 and 2010.

(2)	Includes collateralized borrowings from the Federal Home Loan Bank of New York of $725 million at both December 31, 2011 and 2010. These borrowings are discussed in more detail above.

(3)	Other fixed rate notes at December 31, 2011 and 2010 includes $3,004 million and $1,213 million, respectively, due to related parties. Maturities of these notes range from 2013 through 2041 and interest rates ranged from 0.55% to 14.85% in 2011 and 3.01% to 14.85% in 2010.

(4)	The interest rate on the floating rate Surplus notes ranged from 0.52% to 3.62% in 2011 and 0.52% to 3.71% in 2010.

(5)	Other floating rate notes at December 31, 2010, which are all due to related parties were prepaid in 2011. The interest rates on these notes were based on LIBOR and ranged from 1.18% to 1.32% in 2011 and 1.23% to 1.96% in 2010.

(6)	Assets under set-off arrangements represent a reduction in the amount of fixed-rate surplus notes included in long-term debt, relating to an arrangement where valid rights off set-off exist and it is the intent of both parties to settle on a net basis under legally enforceable arrangements.

At December 31, 2011 and 2010, the Company was in compliance with all debt covenants related to the borrowings in the above table.

The following table presents, as of December 31, 2011, the Company’s contractual principal payments of its long-term debt:


	Long-term Debt

	(in millions)
Calendar Year:
2013	$	122
2014		1,023
2015		1,554
2016		719
2017 and thereafter		6,683

Total

10,101

Surplus Notes

The fixed rate surplus notes issued by Prudential Insurance to non-affiliates are subordinated to other Prudential Insurance borrowings and policyholder obligations, and the payment of interest and principal may only be made with the prior approval of the Commissioner of Banking and Insurance of the State of New Jersey (the “Commissioner”). The Commissioner could prohibit the payment of the interest and principal on the surplus notes if certain statutory capital requirements are not met. At December 31, 2011 and 2010, the Company met these statutory capital requirements. At December 31, 2011 and 2010, $940 million and $942 million, respectively, of fixed rate surplus notes were outstanding to non-affiliates.

During 2011, a subsidiary of Prudential Insurance entered into agreements providing for the issuance and sale of up to $1 billion of ten-year fixed rate surplus notes in order to finance reserves required under Regulation XXX. At December 31, 2011, $500 million of surplus notes were outstanding under this facility. Under the agreements, the subsidiary issuer received debt securities, with a principal amount equal to the surplus notes issued, which are redeemable under certain circumstances, including

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upon the occurrence of specified stress events affecting the subsidiary issuer. Because valid rights of set-off exist, interest and principal payments on the surplus notes and on the debt securities are settled on a net basis, and the surplus notes are reflected in the Company’s total consolidated borrowings on a net basis. Prudential Financial has agreed to make capital contributions to the subsidiary issuer in order to reimburse it for investment losses in excess of specified amounts.

In September 2009, Prudential Insurance issued in a private placement $500 million of surplus notes due September 2019 with an interest rate of 5.36% per annum. The surplus notes are exchangeable at the option of the holder, in whole but not in part, for shares of Prudential Financial Common Stock beginning in September 2014, or earlier upon a fundamental business combination involving Prudential Financial or a continuing payment default. The initial exchange rate for the surplus notes is 10.1235 shares of Common Stock per each $1,000 principal amount of surplus notes, which represents an initial exchange price per share of Common Stock of $98.78; however, the exchange rate is subject to customary anti-dilution adjustments. The exchange rate is also subject to a make-whole decrease in the event of an exchange prior to maturity (except upon a fundamental business combination or a continuing payment default), that will result in a reduction in the number of shares issued upon exchange (per $1,000 principal amount of surplus notes) determined by dividing a prescribed cash reduction value (which will decline over the life of the surplus notes, from $102.62 for an exercise on September 18, 2014 to zero for an exercise at maturity) by the price of the Common Stock at the time of exchange. In addition, the exchange rate is subject to a customary make-whole increase in connection with an exchange of the surplus notes upon a fundamental business combination where 10% or more of the consideration in that business combination consists of cash, other property or securities that are not listed on a U.S. national securities exchange.

These exchangeable surplus notes are not redeemable by Prudential Insurance prior to maturity, except in connection with a fundamental business combination involving Prudential Financial, in which case the surplus notes will be redeemable by Prudential Insurance, subject to the noteholders’ right to exchange the surplus notes instead, at par or, if greater, a make-whole redemption price. The surplus notes are subordinated to all other Prudential Insurance borrowings and policyholder obligations, except for other surplus notes of Prudential Insurance (including those currently outstanding), with which the surplus notes rank pari passu. Payments of interest and principal on the surplus notes may only be made with the prior approval of the Commissioner.

During 2007, a subsidiary of Prudential Insurance issued $500 million of 45-year floating rate surplus notes to an unaffiliated financial institution. Surplus notes issued under this facility are subordinated to policyholder obligations, and the payment of interest and principal on them may only be made by the issuer with the prior approval of the Arizona Department of Insurance. Concurrent with the issuance of these surplus notes, Prudential Financial entered into a credit derivative that will require Prudential Financial to make certain payments in the event of deterioration in the value of the surplus notes. As of December 31, 2011 and 2010, the credit derivative was a liability of $77 million and $26 million, respectively, with no requirement to pledge collateral.

During 2006, a subsidiary of Prudential Insurance entered into a surplus note purchase agreement with an unaffiliated financial institution that provides for the issuance of up to $3,000 million of ten-year floating rate surplus notes. At both December 31, 2011 and 2010, $2,700 million were outstanding under this agreement. Concurrent with the issuance of each surplus note, Prudential Financial enters into arrangements with the buyer, which are accounted for as derivative instruments that may result in payments by, or to, Prudential Financial over the term of the surplus notes, to the extent there are significant changes in the value of the surplus notes. Surplus notes issued under this facility are subordinated to policyholder obligations, and the payment of interest and principal on them may only be made by the issuer with the prior approval of the Arizona Department of Insurance. As of December 31, 2011 and 2010, these derivative instruments had no material value.

Other

In order to modify exposure to interest rate and currency exchange rate movements, the Company utilizes derivative instruments, primarily interest rate swaps, in conjunction with some of its debt issues. The impact of these derivative instruments are not reflected in the rates presented in the tables above. For those derivative instruments that qualify for hedge accounting treatment, there was no material effect on interest expense for the years ended December 31, 2011, 2010 and 2009. See Note 21 for additional information on the Company’s use of derivative instruments.

Interest expense for short- and long-term debt, including interest on affiliated debt, was $358 million, $318 million and $352 million, for the years ended December 31, 2011, 2010 and 2009, respectively. Interest expense related to affiliated debt was $203 million, $155 million and $154 million for the years ended December 31, 2011, 2010 and 2009, respectively. “Due to parent and affiliates” included $74 million and $25 million associated with the affiliated long-term interest payable at December 31, 2011 and 2010, respectively.

Included in “Policyholders’ account balances” are additional debt obligations of the Company. See Notes 10 and 5 for further discussion.

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15. EQUITY

Comprehensive Income

The components of comprehensive income (loss) for the years ended December 31, are as follows:

			2011				2010				2009

			(in millions)
Net income				$	873			$	2,039			$	2,312
Other comprehensive income (loss), net of taxes
	Change in foreign currency translation adjustments				(27	)			2				6
	Change in net unrealized investments gains (1)				1,646				1,361				7,332
	Change in pension and postretirement unrecognized net periodic benefit (cost)				(170	)			328				(620	)
Other comprehensive income, net of tax expense of $811,
	$	869, $3,364			1,449				1,691				6,718
Comprehensive income					2,322				3,730				9,030
	Comprehensive income (loss) attributable to noncontrolling interests				13				(1	)			(1	)
Comprehensive income attributable to Prudential Insurance Company of America.				$	2,335			$	3,729			$	9,029

(1)	Includes cash flow hedges. See Note 21 for information on cash flow hedges.

The balance of and changes in each component of “Accumulated other comprehensive income (loss) attributable to Prudential Insurance Company of America” for the years ended December 31, are as follows (net of taxes):

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Insurance Company of America

	Foreign Currency Translation Adjustments				Net Unrealized Investment Gains (Losses) (1)				Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)				Total Accumulated Other Comprehensive Income (Loss)

	(in millions)
Balance, December 31, 2008		$	99			$	(5,821	)		$	(868	)		$	(6,590	)
Change in component during year			6				7,332				(620	)			6,718
Impact of adoption of guidance for other-than-
temporary impairments of debt securities(2)			-				(575	)			-				(575	)
Balance, December 31, 2009			105				936				(1,488	)			(447	)
Change in component during year			2				1,361				328				1,691
Balance, December 31, 2010			107				2,297				(1,160	)			1,244
Change in component during year			(27	)			1,646				(170	)			1,449
Balance, December 31, 2011		$	80			$	3,943			$	(1,330	)		$	2,693

(1)	Includes cash flow hedges. See Note 21 for information on cash flow hedges.

(2)	See Note 2 for additional information on the adoption of guidance for other-than-temporary impairments of debt securities.

Dividend Restrictions

New Jersey insurance law provides that, except in the case of extraordinary dividends (as described below), all dividends or other distributions paid by Prudential Insurance may be paid only from unassigned surplus, as determined pursuant to statutory accounting principles, less unrealized investment gains and losses and revaluation of assets as of the prior calendar year-end. As of December 31, 2011, Prudential Insurance’s unassigned surplus was $5,070 million, and it recorded applicable adjustments for

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cumulative unrealized investment gains of $2,184 million. Prudential Insurance must give prior notification to the New Jersey Department of Banking and Insurance (the “Department”) of its intent to pay any dividend or distribution. Also, if any dividend, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (i) 10% of Prudential Insurance’s statutory surplus as of the preceding December 31 ($8,160 million as of December 31, 2011) or (ii) its statutory net gain from operations excluding realized investment gains and losses for the twelve month period ending on the preceding December 31, ($584 million for the year ended December 31, 2011), the dividend is considered to be an “extraordinary dividend” and the prior approval of the Department is required for the payment of the dividend. The laws regulating dividends of Prudential Insurance’s other insurance subsidiaries domiciled in other states are similar, but not identical, to New Jersey’s.

Statutory Net Income and Surplus

Prudential Insurance and its U.S. insurance subsidiaries are required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance department of the state of domicile. Statutory accounting practices primarily differ from U.S. GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions as well as valuing investments and certain assets and accounting for deferred taxes on a different basis. Statutory net income (loss) of Prudential Insurance amounted to $826 million, $1,623 million and $1,101 million for the years ended December 31, 2011, 2010 and 2009, respectively. Statutory capital and surplus of Prudential Insurance amounted to $8,160 million and $8,364 million at December 31, 2011 and 2010, respectively.

The New York State Insurance Department recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company for determining its solvency under the New York Insurance Law and for determining whether its financial condition warrants the payment of a dividend to its policyholders. No consideration is given by the New York State Insurance Department to financial statements prepared in accordance with GAAP in making such determinations.

16. STOCK-BASED COMPENSATION

In 2011 and prior, Prudential Financial issued stock-based compensation awards to employees of the Company, including stock options, restricted stock units, restricted stock awards, performance shares and performance units, under a plan authorized by Prudential Financial’s Board of Directors.

Prudential Financial recognizes the cost resulting from all share-based payments in the financial statements in accordance with the authoritative guidance on accounting for stock based compensation and applies the fair value based measurement method in accounting for share-based payment transactions with employees except for equity instruments held by employee share ownership plans.

The results of operations of the Company for the years ended December 31, 2011, 2010 and 2009, include allocated costs of $13 million, $13 million and $14 million, respectively, associated with employee stock options and $39 million, $44 million, and $37 million, respectively, associated with employee restricted stock shares, restricted stock units, performance shares and performance units issued by Prudential Financial to certain employees of the Company.

17. EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Plans

The Company has funded and non-funded non-contributory defined benefit pension plans, which cover substantially all of its employees as well as employees of certain destacked subsidiaries. For some employees, benefits are based on final average earnings and length of service, while benefits for other employees are based on an account balance that takes into consideration age, service and earnings during their career.

The Company provides certain health care and life insurance benefits for its retired employees (including those of certain destacked subsidiaries), their beneficiaries and covered dependents (“other postretirement benefits”). The health care plan is contributory; the life insurance plan is non-contributory. Substantially all of the Company’s U.S. employees may become eligible to receive other postretirement benefits if they retire after age 55 with at least 10 years of service or under certain circumstances after age 50 with at least 20 years of continuous service. The Company has elected to amortize its transition obligation for other postretirement benefits over 20 years.

Prepaid benefits costs and accrued benefit liabilities are included in “Other assets” and “Other liabilities,” respectively, in the Company’s Consolidated Statements of Financial Position. The status of these plans as of December 31, 2011 and 2010, is summarized below:

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	Pension Benefits						Other Postretirement Benefits
	2011			2010			2011			2010

	(in millions)
Change in benefit obligation
Benefit obligation at the beginning of period	$	(8,230	)		(7,957	)	$	(2,116	)		(2,122	)
Acquisition/divestiture		8			-			3			-
Service cost		(137	)		(130	)		(10	)		(10	)
Interest cost		(454	)		(450	)		(109	)		(113	)
Plan participants’ contributions		-			-			(26	)		(23	)
Medicare Part D subsidy receipts		-			-			(11	)		(20	)
Early retirement reinsurance program receipts		-			-			(14	)		-
Amendments		-			-			-			-
Actuarial gains/(losses), net		(976	)		(201	)		(181	)		(40	)
Settlements		-			-			-			-
Curtailments		22			4			-			-
Special termination benefits		(3	)		-			-			-
Benefits paid		534			498			210			213
Foreign currency changes and other		-			6			(6	)		(1	)
Benefit obligation at end of period	$	(9,236	)	$	(8,230	)	$	(2,260	)	$	(2,116	)

Change in plan assets
Fair value of plan assets at beginning of period	$	10,508		$	9,572		$	1,495		$	1,519
Actual return on plan assets		1,620			1,366			5			152
Employer contributions		126			72			14			14
Plan participants’ contributions		-			-			26			23
Early retirement reinsurance program receipts		-			-			14			-
Disbursement for settlements		-			-			-			-
Benefits paid		(534	)		(498	)		(210	)		(213	)
Foreign currency changes and other		(3	)		(4	)		-			-
Fair value of plan assets at end of period	$	11,717		$	10,508		$	1,344		$	1,495

Funded status at end of period	$	2,481		$	2,278		$	(916	)	$	(621	)

Amounts recognized in the Statements of Financial Position
Prepaid benefit cost	$	3,389		$	3,219		$	-		$	-
Accrued benefit liability		(908	)		(941	)		(916	)		(621	)
Net amount recognized	$	2,481		$	2,278		$	(916	)	$	(621	)

Items recorded in “Accumulated other comprehensive income”
not yet recognized as a component of net periodic (benefit) cost:
Transition obligation	$	-		$	-		$	-		$	1
Prior service cost		59			81			(42	)		(54	)
Net actuarial loss		1,255			1,221			852			617
Net amount not recognized	$	1,314		$	1,302		$	810		$	564

Accumulated benefit obligation	$	(8,778	)	$	(7,834	)	$	(2,260	)	$	(2,116	)

In addition to the plan assets above, the Company in 2007 established an irrevocable trust, commonly referred to as a “rabbi trust,” for the purpose of holding assets of the Company to be used to satisfy its obligations with respect to certain non-qualified retirement plans ($813 million and $841 million benefit obligation at December 31, 2011 and 2010, respectively). Assets held in the rabbi trust are available to the general creditors of the Company in the event of insolvency or bankruptcy. The Company may from time to time in its discretion make contributions to the trust to fund accrued benefits payable to participants in one or more of the plans, and, in the case of a change in control of the Company, as defined in the trust agreement, the Company will be required

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to make contributions to the trust to fund the accrued benefits, vested and unvested, payable on a pretax basis to participants in the plans. The Company made a discretionary payment of $95 million to the trust during 2010. As of December 31, 2011 and 2010, the assets in these trusts had a carrying value of $404 million and $390 million, respectively.

The Company also maintains a separate rabbi trust established at the time of the combination of its retail securities brokerage and clearing operations with those of Wachovia for the purpose of holding assets of the Company to be used to satisfy its obligations with respect to certain non-qualified retirement plans ($78 million and $74 million benefit obligation at December 31, 2011 and 2010, respectively), as well as certain cash-based deferred compensation arrangements. As of December 31, 2011 and 2010, the assets in the trust had a carrying value of $134 million and $124 million, respectively.

Pension benefits for foreign plans comprised 2% and 3% of the ending benefit obligation for 2011 and 2010. Foreign pension plans comprised 2% of the ending fair value of plan assets for 2011 and 2010. There are no material foreign postretirement plans.

Information for pension plans with a projected benefit obligation in excess of plan assets

	2011		2010

	(in millions)

Projected benefit obligation	$	908		$	1,128
Fair value of plan assets		-			187

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Information for pension plans with an accumulated benefit obligation in excess of plan assets

	2011			2010

		(in millions)

Accumulated benefit obligation		$	759		$	1,029
Fair value of plan assets			-			187

There were no purchases of annuity contracts in 2011 and 2010 from Prudential Insurance. The approximate future annual benefit payment payable by Prudential Insurance for all annuity contracts was $18 million and $20 million as of December 31, 2011 and 2010, respectively.

There were no pension plan amendments in 2011 and 2010. There were no postretirement plan amendments in 2011 and 2010.

Components of Net Periodic Benefit Cost

Net periodic (benefit) cost included in “General and administrative expenses” in the Company’s Consolidated Statements of Operations for the years ended December 31, includes the following components:

	Pension Benefits									Other Postretirement Benefits
	2011			2010			2009			2011			2010			2009

	(in millions)

Service cost	$	137		$	130		$	120		$	10		$	10		$	10
Interest cost		454			450			441			109			113			115
Expected return on plan assets		(718	)		(743	)		(729	)		(98	)		(107	)		(107	)
Amortization of transition obligation		-			-			-			1			1			1
Amortization of prior service cost		23			23			26			(12	)		(12	)		(11	)
Amortization of actuarial (gain) loss, net		26			26			20			36			39			42
Settlements		-			-			-			-			-			-
Curtailments		(18	)		-			-			-			-			-
Special termination benefits		3			-			1			-			-			-
Net periodic (benefit) cost (1)	$	(93	)	$	(114	)	$	(121	)	$	46		$	44		$	50

(1) Includes net periodic (benefit) cost for pensions of ($18) million, $1 million and $1 million for 2011, 2010 and 2009, respectively, that have been classified as discontinued operations.

Certain employees were provided special termination benefits under non-qualified plans in the form of unreduced early retirement benefits as a result of their involuntary termination.

Changes in Accumulated Other Comprehensive Income

The amounts recorded in “Accumulated other comprehensive income” as of the end of the period, which have not yet been recognized as a component of net periodic (benefit) cost, and the related changes in these items during the period that are recognized in “Other Comprehensive Income” are as follows:

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	Pension Benefits								Other Postretirement Benefits
	Transition Obligation		Prior Service Cost			Net Actuarial (Gain) Loss			Transition Obligation			Prior Service Cost			Net Actuarial (Gain) Loss

	(in millions)

Balance, December 31, 2009	$	-	$	105		$	1,674		$	1		$	(65	)	$	660
Amortization for the period		-		(23	)		(26	)		(1	)		12			(39	)
Deferrals for the period		-		-			(422	)		-			-			(5	)
Impact of foreign currency changes and other		-		(1	)		(5	)		1			(1	)		1
Balance, December 31, 2010		-		81			1,221			1			(54	)		617
Amortization for the period		-		(23	)		(26	)		(1	)		12			(36	)
Deferrals for the period		-		-			74			-			-			274
Impact of foreign currency changes and other		-		1			(14	)		-			-			(3	)
Balance, December 31, 2011	$	-	$	59		$	1,255		$	-		$	(42	)	$	852

The amounts included in “Accumulated other comprehensive income” expected to be recognized as components of net periodic (benefit) cost in 2012 are as follows:
	Pension Benefits			Other Postretirement Benefits

	(in millions)
Amortization of transition obligation		$	-		$	-
Amortization of prior service cost			23			(12	)
Amortization of actuarial (gain) loss, net			93			54
Total		$	116		$	42

The Company’s assumptions related to the calculation of the domestic benefit obligation (end of period) and the determination of net periodic (benefit) cost (beginning of period) are presented in the table below:

		Pension Benefits				Other Postretirement Benefits
		2011		2010	2009	2011	2010	2009

Weighted-average assumptions
Discount rate (beginning of period)			5.60%	5.75%	6.00%	5.35%	5.50%	6.00%
Discount rate (end of period)			4.85%	5.60%	5.75%	4.60%	5.35%	5.50%
Rate of increase in compensation levels (beginning of period)			4.50%	4.50%	4.50%	N/A	N/A	N/A
Rate of increase in compensation levels (end of period)			4.50%	4.50%	4.50%	N/A	N/A	N/A
Expected return on plan assets (beginning of period)			7.00%	7.50%	7.50%	7.50%	8.00%	8.00%
Health care cost trend rates (beginning of period)			N/A	N/A	N/A	5.00-7.50%	5.00-7.50%	5.00-8.00%
Health care cost trend rates (end of period)			N/A	N/A	N/A	5.00-7.50%	5.00-7.50%	5.00-7.50%
For 2010, 2009 and 2008, the ultimate health care cost trend rate after
	gradual decrease until: 2015, 2014, 2012 (beginning of period)		N/A	N/A	N/A	5.00%	5.00%	5.00%
For 2010, 2009 and 2008, the ultimate health care cost trend rate
	after gradual decrease until: 2017, 2015, 2014 (end of period)		N/A	N/A	N/A	5.00%	5.00%	5.00%

The domestic discount rate used to value the pension and postretirement obligations at December 31, 2011 and December 31, 2010 is based upon the value of a portfolio of Aa investments whose cash flows would be available to pay the benefit obligation's cash flows when due. The portfolio is selected from a compilation of approximately 550 Aa-rated bonds across the full range of maturities. Since yields can vary widely at each maturity point, the Company generally avoids using the highest and lowest yielding bonds at the maturity points, so as to avoid relying on bonds that might be mispriced or misrated. This refinement process generally results in having a distribution from the 10th to 90th percentile. The Aa portfolio is then selected and, accordingly, its value is a measure of the benefit obligation at December 31, 2011 and December 31, 2010. A single equivalent

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discount rate is calculated to equate the value of the Aa portfolio to the cash flows for the benefit obligation. The result is rounded to the nearest 5 basis points and the benefit obligation is recalculated using the rounded discount rate.

The pension and postretirement expected long-term rates of return on plan assets for 2011 were determined based upon an approach that considered an expectation of the allocation of plan assets during the measurement period of 2011. Expected returns are estimated by asset class as noted in the discussion of investment policies and strategies below. Expected returns on asset classes are developed using a building-block approach that is forward looking and are not strictly based upon historical returns. The building blocks for equity returns include inflation, real return, a term premium, an equity risk premium, capital appreciation, effect of active management, expenses and the effect of rebalancing. The building blocks for fixed maturity returns include inflation, real return, a term premium, credit spread, capital appreciation, effect of active management, expenses and the effect of rebalancing.

The Company applied the same approach to the determination of the expected long-term rate of return on plan assets in 2012. The expected long-term rate of return for 2012 is 6.75% and 7.00% for pension and postretirement, respectively.

The Company, with respect to pension benefits, uses market related value to determine the components of net periodic (benefit) cost. Market related value is a measure of asset value that reflects the difference between actual and expected return on assets over a five-year period.

The assumptions for foreign pension plans are based on local markets. There are no material foreign postretirement plans.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one-percentage point increase and decrease in assumed health care cost trend rates would have the following effects:

	Other Postretirement Benefits

	(in millions)
One percentage point increase
Increase in total service and interest costs	$	9
Increase in postretirement benefit obligation		193

One percentage point decrease
Decrease in total service and interest costs	$	6
Decrease in postretirement benefit obligation		135

Plan Assets

The investment goal of the domestic pension plan assets is to generate an above benchmark return on a diversified portfolio of stocks, bonds and other investments, while meeting the cash requirements for a pension obligation that includes a traditional formula principally representing payments to annuitants and a cash balance formula that allows lump sum payments and annuity payments. The pension plan risk management practices include guidelines for asset concentration, credit rating and liquidity. The pension plan does not invest in leveraged derivatives. Derivatives such as futures contracts are used to reduce transaction costs and change asset concentration, while interest rate swaps are used to adjust duration.

The investment goal of the domestic postretirement plan assets is to generate an above benchmark return on a diversified portfolio of stocks, bonds, and other investments, while meeting the cash requirements for the postretirement obligation that includes a medical benefit including prescription drugs, a dental benefit, and a life benefit. The postretirement plans risk management practices include guidelines for asset concentration, credit rating, liquidity, and tax efficiency. The postretirement plan does not invest in leveraged derivatives. Derivatives such as futures contracts are used to reduce transaction costs and change asset concentration, while interest rate swaps are used to adjust duration.

The plan fiduciaries for the Company’s pension and postretirement plans have developed guidelines for asset allocations reflecting a percentage of total assets by asset class, which are reviewed on an annual basis. Asset allocation targets as of the December 31, 2011 are as follows:

	Pension		Postretirement
	Minimum	Maximum	Minimum	Maximum

Asset Category

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U.S. Equities	3%	14%	39%	51%
International Equities	2%	14%	1%	8%
Fixed Maturities	58%	74%	0%	51%
Short-term Investments	0%	13%	0%	55%
Real Estate	1%	8%	0%	0%
Other	0%	12%	0%	0%

To implement the investment strategy, plan assets are invested in funds that primarily invest in securities that correspond to one of the asset categories under the investment guidelines. However, at any point in time, some of the assets in a fund may be of a different nature than the specified asset category.

Assets held with Prudential Insurance are in either pooled separate accounts or single client separate accounts. Pooled separate accounts hold assets for multiple investors. Each investor owns a “unit of account.” Single client separate accounts hold assets for only one investor, the domestic qualified pension plan and each security in the fund is treated as individually owned. Assets held with a bank are either in common/collective trusts or single client trusts. Common or collective trusts hold assets for more than one investor. Each investor owns a “unit of account.” Single client trusts hold assets for only one investor, the domestic qualified pension plan and each security in the fund is treated as individually owned.

There were no investments in Prudential Financial Common Stock as of December 31, 2011 and December 31, 2010 for either the pension or postretirement plans. Pension plan assets of $8,262 million and $6,944 million are included in the Company’s separate account assets and liabilities as of December 31, 2011 and December 31, 2010, respectively.

The authoritative guidance around fair value established a framework for measuring fair value. Fair value is disclosed using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, as described in Note 19.

The following describes the valuation methodologies used for pension and postretirement plans assets measured at fair value.

Insurance Company Pooled Separate Accounts, Common or Collective Trusts, and United Kingdom Insurance Pooled Funds – Insurance company pooled separate accounts are invested via group annuity contracts issued by Prudential Insurance. Assets are represented by a “unit of account.” The redemption value of those units is based on a per unit value whose value is the result of the accumulated values of underlying investments. The underlying investments are valued in accordance with the corresponding valuation method for the investments held.

Equities – See Note 19 for a discussion of the valuation methodologies for equity securities.

U.S. Government Securities (both Federal and State & Other), Non–U.S. Government Securities, and Corporate Debt - See Note 19 for a discussion of the valuation methodologies for fixed maturity securities.

Interest Rate Swaps – See Note 19 for a discussion of the valuation methodologies for derivative instruments.

Guaranteed Investment Contract - The value is based on contract cash flows and available market rates for similar investments.

Registered Investment Companies (Mutual Funds) - Securities are priced at the net asset value (“NAV”) of shares.

Unrealized Gain (Loss) on Investment of Securities Lending Collateral - This value is the contractual position relative to the investment of securities lending collateral.

Real Estate - The values are determined through an independent appraisal process. The estimate of fair value is based on three approaches; (1) current cost of reproducing the property less deterioration and functional/economic obsolescence; (2) discounting a series of income streams and reversion at a specific yield or by directly capitalizing a single year income estimate by an appropriate factor; and (3) value indicated by recent sales of comparable properties in the market. Each approach requires the exercise of subjective judgment.

Short-term Investments - Securities are valued initially at cost and thereafter adjusted for amortization of any discount or premium (i.e., amortized cost). Amortized Cost approximates fair value.

Partnerships - The value of interests owned in partnerships is based on valuations of the underlying investments that include private placements, structured debt, real estate, equities, fixed maturities, commodities and other investments.

Structured Debt (Gateway Recovery Trust) - The value is based primarily on unobservable inputs including probability weighted cash flows and reinvestment yield assumptions.

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Hedge Funds - The value of interests in the hedge funds is based on the underlying investments that include equities, debt and other investments.

Variable Life Insurance Policies – These assets are held in group and individual variable life insurance policies issued by Prudential Insurance. Group policies are invested in Insurance Company Pooled Separate Accounts. Individual policies are invested in Registered Investment Companies (Mutual Funds). The value of interests in these policies is the cash surrender value of the policies based on the underlying investments.

Pension plan asset allocations in accordance with the investment guidelines are as follows:

	As of December 31, 2011
	Level 1		Level 2			Level 3		Total

	(in millions)
U.S. Equities:
Pooled separate accounts (1)	$	-	$	900		$	-	$	900
Common/collective trusts (1)		-		54			-		54
Sub-total									954

International Equities:
Pooled separate accounts (2)		-		33			-		33
Common/collective trusts (3)		-		163			-		163
United Kingdom insurance pooled funds (4)		-		68			-		68
Sub-total									264

Fixed Maturities:
Pooled separate accounts (5)		-		1,006			20		1,026
Common/collective trusts (6)		-		313			-		313
U.S. government securities (federal):
Mortgage backed		-		4			-		4
Other U.S. government securities		-		2,031			-		2,031
U.S. government securities (state & other)		-		653			-		653
Non-U.S. government securities		-		17			-		17
United Kingdom insurance pooled funds (7)		-		176			-		176
Corporate Debt:
Corporate bonds (8)		-		3,712			12		3,724
Asset backed		-		17			-		17
Collateralized Mortgage Obligations (CMO) (9)		-		639			-		639
Interest rate swaps (Notional amount: $559)		-		(21	)		-		(21	)
Guaranteed investment contract		-		-			-		-
Other (10)		46		2			62		110
Unrealized gain (loss) on investment of securities lending
collateral (11)		-		(141	)		-		(141	)
Sub-total									8,548

Short-term Investments:
Pooled separate accounts		-		292			-		292
United Kingdom insurance pooled funds		-		6			-		6
Sub-total									298

Real Estate:
Pooled separate accounts (12)		-		-			318		318
Partnerships		-		-			105		105
Sub-total									423

Other:

B-77

Structured debt (Gateway Recovery Trust)		-		-		-		-
Partnerships		-		-		552		552
Hedge funds		-		-		678		678
Sub-total								1,230
Total	$	46	$	9,924	$	1,747	$	11,717

	As of December 31, 2010
	Level 1		Level 2			Level 3			Total

	(in millions)
U.S. Equities:
Pooled separate accounts (1)	$	-	$	922		$	-		$	922
Common/collective trusts (1)		-		35			-			35
Sub-total										957

International Equities:
Pooled separate accounts (2)		-		24			-			24
Common/collective trusts (3)		-		191			-			191
United Kingdom insurance pooled funds (4)		-		77			-			77
Sub-total										292

Fixed Maturities:
Pooled separate accounts (5)		-		996			-			996
Common/collective trusts (6)		-		290			-			290
U.S. government securities (federal):
Mortgage backed		-		4			-			4
Other U.S. government securities		-		1,806			-			1,806
U.S. government securities (state & other)		-		533			-			533
Non-U.S. government securities		-		15			-			15
United Kingdom insurance pooled funds (7)		-		104			-			104
Corporate Debt:
Corporate bonds (8)		-		3,043			10			3,053
Asset backed		-		20			-			20
Collateralized Mortgage Obligations (CMO) (9)		-		739			-			739
Interest rate swaps (Notional amount: $412)		-		(23	)		-			(23	)
Guaranteed investment contract		-		-			-			-
Other (10)		101		9			(8	)		102
Unrealized gain (loss) on investment of securities lending
collateral (13)		-		(123	)		-			(123	)
Sub-total										7,516

Short-term Investments:
Pooled separate accounts		-		32			-			32
United Kingdom insurance pooled funds		-		6			-			6
Sub-total										38

Real Estate:
Pooled separate accounts (12)		-		-			216			216
Partnerships		-		-			42			42
Sub-total										258

Other:
Structured debt (Gateway Recovery Trust)		-		-			658			658
Partnerships		-		-			219			219

B-78

Hedge funds		-		-		570		570
Sub-total								1,447
Total	$	101	$	8,700	$	1,707	$	10,508

(1)	These categories invest in U.S. equity funds whose objective is to track or outperform various indexes.

(2)	This category invests in large cap international equity fund whose objective is to track an index.

(3)	This category invests in international equity funds, primarily large cap, whose objective is to outperform various indexes.

(4)	This category invests in an international equity fund whose objective is to track an index.

(5)	This category invests in bond funds, primarily highly rated private placement securities.

(6)	This category invests in bond funds, primarily highly rated public securities whose objective is to outperform an index.

(7)	This category invests in bond funds, primarily highly rated corporate securities.

(8)	This category invests in highly rated corporate securities.

(9)	This category invests in highly rated Collateralized Mortgage Obligations.

(10)	Primarily cash and cash equivalents, short term investments, payables and receivables and open future contract positions (including fixed income collateral).

(11)	The contractual net value of the investment of securities lending collateral invested in primarily short-term bond funds is $1,289 million and the liability for securities lending collateral is $1,430 million.

(12)	This category invests in commercial real estate and real estate securities funds, whose objective is to outperform an index

(13)	The contractual value of investments of securities lending collateral invested in primarily short-term bond funds is $1,295 million and the liability for securities lending collateral is $1,418 million.

B-79

Changes in Fair Value of Level 3 Pension Assets

	Year Ended December 31, 2011

	Fixed Maturities - Pooled Separate Accounts			Fixed Maturities - Corporate Debt - Corporate Bonds				Fixed Maturities - Other				Real Estate - Pooled Separate Accounts

	(in millions)
Fair Value, beginning of period		$	-		$	10			$	(8	)		$	216
Actual Return on Assets:
Relating to assets still held at the reporting date			-			-				-				39
Relating to assets sold during the period			-			-				-				16
Purchases, sales and settlements			20			(1	)			70				47
Transfers in and /or out of Level 3			-			3				-				-
Fair Value, end of period		$	20		$	12			$	62			$	318

	Year Ended December 31, 2011

	Real Estate - Partnerships			Other - Structured Debt				Other - Partnerships				Other - Hedge Fund

	(in millions)
Fair Value, beginning of period		$	42		$	658			$	219			$	570
Actual Return on Assets:
Relating to assets still held at the reporting date			-			-				22				(20	)
Relating to assets sold during the period			-			44				11				2
Purchases, sales and settlements			63			(702	)			300				126
Transfers in and /or out of Level 3			-			-				-				-
Fair Value, end of period		$	105		$	-			$	552			$	678

	Year Ended December 31, 2010

	Fixed Maturities - Corporate Debt - Corporate Bonds			Fixed Maturities - Corporate Debt - CMO				Fixed Maturities - Other				Real Estate - Pooled Separate Accounts

	(in millions)
Fair Value, beginning of period		$	1		$	2			$	120			$	187
Actual Return on Assets:
Relating to assets still held at the reporting date			1			-				-				42
Relating to assets sold during the period			-			-				-				(2	)
Purchases, sales and settlements			-			-				(128	)			(11	)
Transfers in and /or out of Level 3			8			(2	)			-				-
Fair Value, end of period		$	10		$	-			$	(8	)		$	216

B-80

	Year Ended December 31, 2010

	Real Estate - Partnerships				Other - Structured Debt			Other - Partnerships				Other - Hedge Fund

	(in millions)
Fair Value, beginning of period		$	48			$	572		$	280			$	218
Actual Return on Assets:
Relating to assets still held at the reporting date			4				86			17				44
Relating to assets sold during the period			-				-			-				-
Purchases, sales and settlements			(10	)			-			30				200
Transfers in and /or out of Level 3			-				-			(108	)			108
Fair Value, end of period		$	42			$	658		$	219			$	570

Postretirement plan asset allocations in accordance with the investment guidelines are as follows:

	As of December 31, 2011
	Level 1		Level 2	Level 3		Total

	(in millions)
U.S. Equities:
Variable Life Insurance Policies (1)		-	439		-	439
Common trusts (2)		-	85		-	85
Equities		96	-		-	96
Sub-total						620

International Equities:
Variable Life Insurance Policies (3)		-	44		-	44
Common trusts (4)		-	15		-	15
Sub-total						59

Fixed Maturities:
Common trusts (5)		-	27		-	27
U.S. government securities (federal):
Mortgage Backed		-	12		-	12
Other U.S. government securities		-	101		-	101
U.S. government securities (state & other)		-	3		-	3
Non-U.S. government securities		-	3		-	3
Corporate Debt:
Corporate bonds (6)		-	284		2	286
Asset Backed		-	62		-	62
Collateralized Mortgage Obligations (CMO) (7)		-	144		-	144
Interest rate swaps (Notional amount: $560)		-	(4)		-	(4)
Other (8)		8	-		2	10
Unrealized gain (loss) on investment of securities lending
collateral (9)		-	-		-	-
Sub-total						644

B-81

Short-term Investments:
Variable Life Insurance Policies
Pooled separate accounts		-		1		-		1
Registered investment companies		20		-		-		20
Sub-total								21
Total	$	124	$	1,216	$	4	$	1,344


	As of December 31, 2010
	Level 1		Level 2		Level 3		Total

	(in millions)
U.S. Equities:
Variable Life Insurance Policies (1)		-		449		-		449
Common trusts (2)		-		88		-		88
Equities		102		-		-		102
Sub-total								639

International Equities:
Variable Life Insurance Policies (3)		-		51		-		51
Common trusts (4)		-		17		-		17
Sub-total								68

Fixed Maturities:
Common trusts (5)		-		23		-		23
U.S. government securities (federal):
Mortgage Backed		-		13		-		13
Other U.S. government securities		-		157		-		157
U.S. government securities (state & other)		-		2		-		2
Non-U.S. government securities		-		3		-		3
Corporate Debt:
Corporate bonds (6)		-		281		2		283
Asset Backed		-		73		-		73
Collateralized Mortgage Obligations (CMO) (7)		-		201		-		201
Interest rate swaps (Notional amount: $322)		-		3		-		3
Other (8)		10		-		4		14
Unrealized gain (loss) on investment of securities lending
collateral (10)		-		-		-		-
Sub-total								772

Short-term Investments:
Variable Life Insurance Policies
Pooled separate accounts		-		1		-		1
Registered investment companies		15		-		-		15
Sub-total								16
Total	$	127	$	1,362	$	6	$	1,495

(1)	This category invests in U.S. equity funds, primarily large cap equities whose objective is to track an index via pooled separate accounts and registered investment companies.

(2)	This category invests in U.S. equity funds, primarily large cap equities.

(3)	This category invests in international equity funds, primarily large cap international equities whose objective is to track an index.

(4)	This category fund invests in large cap international equity fund whose objective is to outperform an index.

(5)	This category invests in U.S. bonds funds.

(6)	This category invests in highly rated corporate bonds.

B-82

7)	This category invests in highly rated Collateralized Mortgage Obligations.

(8)	Cash and cash equivalents, short term investments, payables and receivables and open future contract positions (including fixed income collateral).

(9)	In 2011 the contractual net value of the investment of securities lending collateral invested in primarily short-term bond funds is $78 million and the liability for securities lending collateral is $78 million.

(10)	In 2010 the contractual net value of the investment of securities lending collateral invested in primarily short term bond funds is $30 million and the liability for securities lending collateral is $30 million.

Changes in Fair Value of Level 3 Postretirement Assets

	Year Ended December 31, 2011

	Fixed Maturities - Corporate Debt - Corporate Bonds			Fixed Maturities - Other

	(in millions)
Fair Value, beginning of period		$	2		$	4
Actual Return on Assets:
Relating to assets still held at the reporting date			-			-
Relating to assets sold during the period			-			-
Purchases, sales and settlements			-			(2	)
Transfers in and /or out of Level 3			-			-
Fair Value, end of period		$	2		$	2

	Year Ended December 31, 2010

	Fixed Maturities - Corporate Debt - Corporate Bonds			Fixed Maturities - Corporate Debt - CMO				Fixed Maturities - Other

	(in millions)
Fair Value, beginning of period		$	1		$	2			$	12
Actual Return on Assets:
Relating to assets still held at the reporting date			-			-				-
Relating to assets sold during the period			-			-				-
Purchases, sales and settlements			1			-				(8	)
Transfers in and /or out of Level 3			-			(2	)			-
Fair Value, end of period		$	2		$	-			$	4

B-83

A summary of pension and postretirement plan asset allocation as of the year ended December 31, are as follows:

	Pension Percentage of Plan Assets				Postretirement Percentage of Plan Assets
	2011		2010		2011		2010

Asset Category
U.S. Equities	8	%	9	%	46	%	43	%
International Equities	2		3		4		5
Fixed Maturities	73		72		48		51
Short-term Investments	2		-		2		1
Real Estate	4		2		-		-
Other	11		14		-		-
Total	100	%	100	%	100	%	100	%

The expected benefit payments for the Company's pension and postretirement plans, as well as the expected Medicare Part D subsidy receipts related to the Company's postretirement plan, for the years indicated are as follows:

	Pension Benefits			Other Postretirement Benefits			Other Postretirement Benefits - Medicare Part D Subsidy Receipts

	(in millions)
2012		$	540		$	194		$	19
2013			536			195			20
2014			544			195			20
2015			547			193			21
2016			551			191			22
2017-2021			2,856			927			113
Total		$	5,574		$	1,895		$	215

The Company anticipates that it will make cash contributions in 2012 of approximately $60 million to the pension plans and approximately $10 million to the postretirement plans.

Postemployment Benefits

The Company accrues postemployment benefits for income continuance and health and life benefits provided to former or inactive employees who are not retirees. The net accumulated liability for these benefits at December 31, 2011 and 2010 was $34 million and $33 million, respectively, and is included in “Other liabilities.”

Other Employee Benefits

The Company sponsors voluntary savings plans for employees (401(k) plans). The plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The matching contributions by the Company included in “General and administrative expenses” were $54 million, $52 million and $53 million for the years ended December 31, 2011, 2010 and 2009, respectively.

B-84

18. INCOME TAXES

The components of income tax expense (benefit) for the years ended December 31, were as follows:

	2011			2010			2009

	(in millions)
Current tax expense (benefit)
U.S.	$	255		$	(269	)	$	200
State and local		(1	)		(4	)		(2	)
Foreign		12			6			2
Total		266			(267	)		200
Deferred tax expense (benefit)
U.S.		156			1,096			(605	)
State and local		1			(2	)		9
Foreign		5			-			(3	)
Total		162			1,094			(599	)
Total income tax expense (benefit) on continuing operations before equity in earnings of operating
joint ventures	$	428		$	827		$	(399	)
Income tax expense on equity in earnings of operating joint ventures		84			25			807
Income tax expense on discontinued operations		6			11			8
Income tax expense (benefit) reported in equity related to:
Other comprehensive income (loss)		811			869			3,054
Impact on Company's investment in Wachovia Securities due to addition of A.G. Edwards business		-			-			(59	)
Stock-based compensation programs		(11	)		1			10
Cumulative effect of changes in accounting principles		-			-			310
Total income taxes	$	1,318		$	1,733		$	3,731

The Company’s actual income tax expense on continuing operations before equity in earnings of operating joint ventures for the years ended December 31, differs from the expected amount computed by applying the statutory federal income tax rate of 35% to income from continuing operations before income taxes and equity in earnings of operating joint ventures for the following reasons:


	2011			2010			2009

	(in millions)
Expected federal income tax expense (benefit)	$	400		$	976		$	142
Low income housing and other tax credits		(72	)		(72	)		(79	)
Non-taxable investment income		(191	)		(157	)		(120	)
Uncertain tax positions and interest		46			(9	)		(350	)
Non-deductible goodwill impairment		236			-			-
Change in tax rate		-			93			-
Other		9			(4	)		8
Total income tax expense (benefit) on continuing operations before equity in earnings of
operating joint ventures	$	428		$	827		$	(399	)

B-85

Deferred tax assets and liabilities at December 31, resulted from the items listed in the following table:

	2011			2010

	(in millions)
Deferred tax assets
Policyholders' dividends	$	1,817		$	938
Net operating and capital loss carryforwards		4			4
Tax credits carryforwards		357			190
Insurance reserves		1,262			907
Other		-			63
Deferred tax assets before valuation allowance		3,440			2,102
Valuation allowance		(9	)		(10	)
Deferred tax assets after valuation allowance		3,431			2,092
Deferred tax liabilities
Net unrealized investment gains		3,965			2,284
Employee benefits		205			262
Investments		1,178			528
Deferred policy acquisition costs		1,983			1,948
Other		200			-
Deferred tax liabilities		7,531			5,022
Net deferred tax liability	$	(4,100	)	$	(2,930	)

The application of U.S. GAAP requires the Company to evaluate the recoverability of deferred tax assets and establish a valuation allowance if necessary to reduce the deferred tax asset to an amount that is more likely than not expected to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company considers many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized.

A valuation allowance has been recorded related to tax benefits associated with state and local and foreign deferred tax assets. Adjustments to the valuation allowance are made to reflect changes in management’s assessment of the amount of the deferred tax asset that is realizable. The valuation allowance includes amounts recorded in connection with deferred tax assets at December 31, as follows


	2011			2010

	(in millions)
Valuation allowance related to state and local deferred tax assets		$	-		$	-
Valuation allowance related to foreign operations deferred tax assets		$	9		$	10

B-86

The following table sets forth the federal and state operating and capital loss carryforwards for tax purposes, at December 31:

	2011			2010

	(in millions)
Federal net operating and capital loss carryforwards (1)		$	8		$	11
State net operating and capital loss carryforwards (2)		$	5		$	5

[Missing Graphic Reference]

(1)	Expires between 2020 and 2031.

(2)	Expires between 2029 and 2030.

The Company does not provide U.S. income taxes on unremitted foreign earnings of its non-U.S. operations, other than its Taiwan investment management subsidiary. During 2011, 2010, and 2009 the Company made no changes with respect to its repatriation assumptions.

The following table sets forth the undistributed earnings of foreign subsidiaries, where the Company assumes permanent reinvestment, for which U.S. deferred taxes have not been provided, as of the periods indicated. Determining the tax liability that would arise if these earnings were remitted is not practicable.

	At December 31,
	2011			2010			2009

	(in millions)
Undistributed earnings of foreign subsidiaries (assuming permanent reinvestment)		$	40		$	205		$	187

The Company’s unrecognized tax benefits for the periods indicated are as follows:

	Unrecognized tax benefits prior to 2002			Unrecognized tax benefits 2002 and forward			Total unrecognized tax benefits all years




	(in millions)
Amounts as of December 31, 2009	$	-		$	119		$	119
Increases in unrecognized tax benefits taken in prior period		2			40			42
Amounts as of December 31, 2010		2			159			161
Increases in unrecognized tax benefits taken in prior period		-			53			53
(Decreases) in unrecognized tax benefits taken in prior period		(2	)		-			(2	)
Settlements with taxing authorities		-			(143	)		(143	)
Amounts as of December 31, 2011	$	-		$	69		$	69
Unrecognized tax benefits that, if recognized, would favorably impact the effective
rate as of December 31, 2009	$	-		$	9		$	9
Unrecognized tax benefits that, if recognized, would favorably impact the effective
rate as of December 31, 2010	$	2		$	9		$	11
Unrecognized tax benefits that, if recognized, would favorably impact the effective
rate as of December 31, 2011	$	-		$	9		$	9

The Company classifies all interest and penalties related to tax uncertainties as income tax expense (benefit). The amounts recognized in the consolidated financial statements for tax-related interest and penalties for the years ended December 31, are as follows:

2011	2010	2009

(in millions)

B-87

Interest and penalties recognized in the consolidated statements of operations	$	-	$	18	$	(138	)
Interest and penalties recognized in liabilities in the consolidated statements of
financial position	$	-	$	-	$	(18	)

The Company's liability for income taxes includes the liability for unrecognized tax benefits and interest that relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing authorities. The completion of review or the expiration of the Federal statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The Federal statute of limitations for the 2002 tax year expired on April 30, 2009. The Federal statute of limitations for the 2003 tax year expired on July 31, 2009. The Federal statute of limitations for the 2004 through 2006 tax years will expire on December 31, 2012. The Federal statute of limitations for the 2007 tax year will expire on December 31, 2013. Tax years 2008 through 2010 are still open for IRS examination.

During 2004 through 2006, the Company entered into a transaction that involved, among other things, the payment of foreign income taxes that were credited against the Company’s U.S. tax liability. On May 23, 2011, the IRS issued notices of proposed adjustments disallowing the foreign tax credits claimed and related transaction expenses. The total amount of the proposed adjustments for the transactions was approximately $100 million of tax and penalties. During the fourth quarter of 2011, the Company reached agreement with the IRS on the resolution of the proposed foreign tax credits disallowance. The impact to the 2011 results attributable to the settlement was an increase to tax expense of approximately $39 million. The settlement of the foreign tax credit transactions for 2004 through 2006 marked the conclusion of the IRS audits for those years. As a result, all unrecognized tax positions plus interest relating to tax years prior to 2007 were recognized in 2011. As such, 2011 results included an additional tax expense of $53 million, including the impact from the foreign tax credit disallowance.

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.

The dividends received deduction (“DRD”) reduces the amount of dividend income subject to U.S. tax and is the primary component of the non-taxable investment income shown in the table above, and, as such, 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 2010, 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. On February 13, 2012, the Obama Administration released the “General Explanations of the Administration’s Revenue Proposals.” One proposal 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. These activities had no impact on the Company’s 2009, 2010 or 2011 results.

In December 2006, the IRS completed all fieldwork with respect to its examination of the consolidated federal income tax returns for tax years 2002 and 2003. The final report was initially submitted to the Joint Committee on Taxation for their review in April 2007. The final report was resubmitted in March 2008 and again in April 2008. The Joint Committee returned the report to the IRS for additional review of an industry issue regarding the methodology for calculating the DRD related to variable life insurance and annuity contracts. The IRS completed its review of the issue and proposed an adjustment with respect to the calculation of the DRD. In order to expedite receipt of an income tax refund related to the 2002 and 2003 tax years, the Company agreed to such adjustment. The report, with the adjustment to the DRD, was submitted to the Joint Committee on Taxation in October 2008. The Company was advised on January 2, 2009 that the Joint Committee completed its consideration of the report and took no exception to the conclusions reached by the IRS. Accordingly, the final report was processed and a $157 million refund was received in February 2009. The Company believed that its return position with respect to the calculation of the DRD was technically correct. Therefore, the Company filed protective refund claims on October 1, 2009 to recover the taxes associated with the agreed upon adjustment. The IRS issued an Industry Director Directive (“IDD”) in May 2010 stating 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

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be used to determine the DRD. The Company’s parent, Prudential Financial, has received a refund of approximately $3 million pursuant to the protective refund claims. These activities had no impact on the Company’s 2009, 2010 or 2011 results.

For tax years 2007 through 2011, the Company is participating in the IRS’s Compliance Assurance Program (“CAP”). Under CAP, the IRS assigns an examination team to review completed transactions contemporaneously during these tax years in order to reach agreement with the Company on how they should be reported in the tax returns. If disagreements arise, accelerated resolutions programs are available to resolve the disagreements in a timely manner before the tax returns are filed. It is management’s expectation this program will shorten the time period between the filing of the Company’s federal income tax returns and the IRS’s completion of its examination of the returns.

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act, which was modified by the Health Care and Education Reconciliation Act of 2010 signed into law on March 30, 2010, (together, the “Healthcare Act”). The federal government provides a subsidy to companies that provide certain retiree prescription drug benefits (the “Medicare Part D subsidy”), including the Company. The Medicare Part D subsidy was previously provided tax-free. However, as currently adopted, the Healthcare Act includes a provision that would reduce the tax deductibility of retiree health care costs to the extent of any Medicare Part D subsidy received. In effect, this provision of the Healthcare Act makes the Medicare Part D subsidy taxable beginning in 2013. Therefore, the Company incurred a charge in 2010 for the reduction of deferred tax assets of $94 million, which reduces net income and is reflected in “Income tax expense (benefit).”

19. FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement – Fair value is defined as 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 guidance around fair value established a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques into three levels. 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. These generally provide the most reliable evidence and are used to measure fair value whenever available. Active markets are defined as having the following characteristics for the measured asset/liability: (i) many transactions, (ii) current prices, (iii) price quotes not varying substantially among market makers, (iv) narrow bid/ask spreads and (v) most information publicly available. The Company’s Level 1 assets and liabilities primarily include certain cash equivalents and short term investments, equity securities and derivative contracts that are traded in an active exchange market. Prices are obtained from readily available sources for market transactions involving identical assets or liabilities.

Level 2 - Fair value is based on significant inputs, other than Level 1 inputs, 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), short-term investments and certain cash equivalents (primarily commercial paper), and certain over-the-counter derivatives. Valuations are generally obtained from third party pricing services for identical or comparable assets or liabilities or through the use of valuation methodologies using observable market inputs. Prices from services are validated through comparison to trade data and internal estimates of current fair value, generally developed using market observable inputs and economic indicators.

Level 3 - Fair value is based on at least one or more significant unobservable inputs for the asset or liability. These inputs reflect the Company’s assumptions about the inputs market participants would use in pricing the asset or liability. 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. Prices are determined using valuation methodologies such as option pricing models, discounted cash flow models and other similar techniques. Non-binding broker quotes, which are utilized when pricing service information is not available, are reviewed for reasonableness based on the Company’s understanding of the market, and are generally considered Level 3. Under certain conditions, based on its observations of transactions in active markets, the Company may conclude the prices received from independent third party pricing services or brokers are not reasonable or reflective of market activity. In those instances, the Company may choose to over-ride the third-party pricing information or quotes received and apply internally developed values to the related assets or liabilities. To the extent the internally developed valuations

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use significant unobservable inputs, they are classified as Level 3. As of December 31, 2011 and 2010, these over-rides on a net basis were not material.

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 December 31, 2011
	Level 1		Level 2		Level 3			Netting (1)			Total

	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government
authorities and agencies	$	-	$	10,233	$	66		$	-		$	10,299
Obligations of U.S. states and their political subdivisions		-		2,411		-			-			2,411
Foreign government bonds		-		2,071		25			-			2,096
Corporate securities		6		81,471		803			-			82,280
Asset-backed securities		-		7,672		1,657			-			9,329
Commercial mortgage-backed securities		-		10,530		12			-			10,542
Residential mortgage-backed securities		-		6,054		16			-			6,070
Subtotal		6		120,442		2,579			-			123,027
Trading account assets supporting insurance liabilities:
U.S. Treasury securities and obligations of U.S. government
authorities and agencies		-		67		9			-			76
Obligations of U.S. states and their political subdivisions		-		284		-			-			284
Foreign government bonds		-		106		-			-			106
Corporate securities		-		10,752		109			-			10,861
Asset-backed securities		-		1,010		357			-			1,367
Commercial mortgage-backed securities		-		2,226		21			-			2,247
Residential mortgage-backed securities		-		1,843		2			-			1,845
Equity securities		1		-		11			-			12
All other activity		684		267		-			-			951
Subtotal		685		16,555		509			-			17,749
Other trading account assets:
U.S. Treasury securities and obligations of U.S. government
authorities and agencies		-		12		-			-			12
Obligations of U.S. states and their political subdivisions		-		-		-			-			-
Corporate securities		-		164		-			-			164
Asset-backed securities		-		270		2			-			272
Commercial mortgage-backed securities		-		51		-			-			51
Equity securities		5		-		206			-			211
All other activity (2)		-		15,480		87			(11,222	)		4,345
Subtotal		5		15,977		295			(11,222	)		5,055

Equity securities, available-for-sale		3,108		1,743		66			-			4,917
Commercial mortgage and other loans		-		-		(1	)		-			(1	)
Other long-term investments		5		28		371			-			404
Short-term investments		4,548		730		-			-			5,278
Cash equivalents		368		3,656		-			-			4,024
Other assets		3		86		-			-			89
Due from parent and affiliates		-		-		2,737			-			2,737
Subtotal excluding separate account assets		8,728		159,217		6,556			(11,222	)		163,279
Separate account assets (3)		38,161		117,246		19,333			-			174,740
Total assets	$	46,889	$	276,463	$	25,889		$	(11,222	)	$	338,019
Future policy benefits		-		-		1,091			-			1,091
Other liabilities		-		7,231		3			(7,854	)		(620	)

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Due to parent and affiliates			-				7,598				83				-				7,681
Total liabilities		$	-			$	14,829			$	1,177			$	(7,854	)		$	8,152

	As of December 31, 2010 (3)
	Level 1		Level 2		Level 3			Netting (2)			Total

	(in millions)
Fixed maturities, available for sale:
U.S. Treasury securities and obligations of U.S. government
authorities and agencies	$	-	$	9,842	$	-		$	-		$	9,842
Obligations of U.S. states and their political subdivisions		-		1,777		-			-			1,777
Foreign government bonds		-		2,161		27			-			2,188
Corporate securities		5		73,507		991			-			74,503
Asset-backed securities		-		8,467		1,507			-			9,974
Commercial mortgage-backed securities		-		11,113		-			-			11,113
Residential mortgage-backed securities		-		7,138		23			-			7,161
Subtotal		5		114,005		2,548			-			116,558
Trading account assets supporting insurance liabilities:
U.S. Treasury securities and obligations of U.S. government
authorities and agencies		-		178		-			-			178
Obligations of U.S. states and their political subdivisions		-		182		-			-			182
Foreign government bonds		-		101		-			-			101
Corporate securities		-		9,924		82			-			10,006
Asset-backed securities		-		804		226			-			1,030
Commercial mortgage-backed securities		-		2,402		5			-			2,407
Residential mortgage-backed securities		-		1,345		18			-			1,363
Equity securities		2		67		4			-			73
All other activity		606		91		-			-			697
Subtotal		608		15,094		335			-			16,037
Other trading account assets:
U.S. Treasury securities and obligations of U.S. government
authorities and agencies		-		84		-			-			84
Obligations of U.S. states and their political subdivisions		118		-		-			-			118
Corporate securities		-		164		-			-			164
Asset-backed securities		-		164		11			-			175
Commercial mortgage-backed securities		-		52		-			-			52
Equity Securities		222		-		4			-			226
All other activity		17		10,116		129			(5,904	)		4,358
Subtotal		357		10,580		144			(5,904	)		5,177

Equity securities, available for sale		3,440		1,923		69			-			5,432
Commercial mortgage and other loans		-		-		(6	)		-			(6	)
Other long-term investments		3		10		251			-			264
Short-term investments		2,586		505		-			-			3,091
Cash equivalents		478		1,667		-			-			2,145
Other assets		2,781		-		-			-			2,781
Due from parent and affiliates		-		528		1,919			-			2,447
Subtotal excluding separate account assets		10,258		144,312		5,260			(5,904	)		153,926
Separate account assets (1)		41,092		102,341		15,771			-			159,204
Total assets	$	51,350	$	246,653	$	21,031		$	(5,904	)	$	313,130
Future policy benefits		-		-		(348	)		-			(348	)
Other liabilities		3		6,582		3			(5,712	)		876
Due to parent and affiliates		-		2,882		126			-			3,008
Total liabilities	$	3	$	9,464	$	(219	)	$	(5,712	)	$	3,536

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(1)

“Netting” amounts represent cash collateral and the impact of offsetting unaffiliated asset and liability positions held with the same counterparty. External derivative transactions are classified as receivables or payables within the table on an individual trade basis. Affiliated derivative transactions within each fair value hierarchy level are classified net as receivables or payables based on their net counterparty exposure.

(2)	Primarily represents derivative assets

(3)

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 assets classified as Level 3 consist primarily of real estate and real estate investment funds. 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 Consolidated Statement of Financial Position.

(4)	Includes reclassifications to conform to current period presentation.

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. Information regarding separate account assets is excluded as the risk associated with these assets is primarily borne by the Company’s customers and policyholders.

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 from pricing services are sourced from multiple vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company generally receives prices from multiple pricing services for each security, but ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. To validate reasonableness, prices are reviewed by internal asset managers through comparison with directly observed recent market trades and internal estimates of current fair value, developed using market observable inputs and economic indicators. 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 in comparison to the presented market observations, the security remains within Level 2.

If the Company ultimately concludes that pricing information received from the independent pricing service is not reflective of market activity, non-binding broker quotes are used, if available. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may over-ride the information from the pricing service or broker with an internally-developed valuation. As of December 31, 2011 and 2010, over-rides on a net basis were not material. Internally-developed valuations or non-binding broker quotes are also used to determine fair value in circumstances where vendor pricing is not available. These estimates may use significant unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the asset. Circumstances where observable market data are not available may include events such as market illiquidity and credit events related to the security. Pricing service over-rides, internally developed valuations and non-binding broker quotes are generally included in Level 3 in the fair value hierarchy.

The fair value of private fixed maturities, which are primarily comprised of investments in private placement securities, originated by internal private asset managers, are primarily determined using a discounted cash flow model. In certain cases these models primarily use observable inputs with a discount rate based upon the average of spread surveys collected from private market intermediaries who are active in both primary and secondary transactions, taking into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Generally, these securities have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model may also incorporate significant unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the asset. To the extent management determines that such unobservable inputs are not significant to the price of a security, a Level 2 classification is made. Otherwise, a Level 3 classification is used.

Private fixed maturities also include debt investments in funds that, in addition to a stated coupon, pay a return based upon the results of the underlying portfolios. The fair values of these securities are determined by reference to the funds’ net asset value (“NAV”). Since the NAV at which the funds trade can be observed by redemption and subscription transactions between third parties, the fair values of these investments have been reflected within Level 2 in the fair value hierarchy.

Trading Account Assets – Trading account assets (including trading account assets supporting insurance liabilities) consist primarily of public corporate bonds, treasuries, equity securities and derivatives whose fair values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and below under “Equity Securities” and “Derivative Instruments.”

Equity Securities – Equity securities consist principally of investments in common and preferred stock of publicly traded companies, perpetual preferred stock, privately traded securities, as well as common stock 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

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within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using valuation and discounted cash flow models that require a substantial level of judgment. In determining the fair value of certain privately traded equity securities the discounted cash flow model may also use unobservable inputs, which reflect the Company’s assumptions about the inputs market participants would use in pricing the asset. Most privately traded equity securities are classified within Level 3. The fair values of common stock 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 preferred equity securities are based on prices obtained from independent pricing services. These prices are then validated for reasonableness against recently traded market prices. Accordingly, these securities are generally classified within Level 2 in the fair value hierarchy. Fair values of perpetual preferred stock based on observable market inputs are classified within Level 2. However, when prices from independent pricing services are based on non-binding broker quotes as the directly observable market inputs become unavailable, the fair values of perpetual preferred stock are classified as Level 3.

Other Long-Term Investments – Other long-term investments, other than derivatives, consist of fund investments where the fair value option has been elected. The fair value of these fund investments is primarily determined by the fund managers. Since the valuations may be based on unobservable market inputs and cannot be validated by the Company, these investments have been included within Level 3 in the fair value hierarchy.

Derivative Instruments - Derivatives are recorded at fair value either as assets, within “Other trading account assets,” or “Other long-term investments,” or as liabilities, within “Other liabilities,” except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts are determined based on quoted prices in active exchanges or through the use of valuation models. The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, commodity prices, credit spreads, market volatility, expected returns, non-performance risk, 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 Company’s exchange-traded futures and options include treasury futures, eurodollar futures, commodity futures, eurodollar options and commodity options. Exchange-traded futures and options are valued using quoted prices in active markets and are classified within Level 1 in the fair value hierarchy.

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 generally accepted in the financial services industry that use actively quoted or observable market input values from external market data providers, third-party pricing vendors and/or recent trading activity. The fair values of most OTC derivatives, including interest rate and cross currency swaps, currency forward contracts, commodity swaps, commodity forward contracts, single name credit default swaps, loan commitments held for sale and to-be-announced (or TBA) forward contracts on highly rated mortgage-backed securities issued by U.S. government sponsored entities 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, non-performance risk, volatility and other factors.

OTC derivative contracts are executed under master netting agreements with counterparties with a Credit Support Annex, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties, should either party suffer a credit rating deterioration. The vast majority of the Company’s derivative agreements are with highly rated major international financial institutions. To reflect the market’s perception of its own and the counterparty’s non-performance risk, the Company incorporates additional spreads over London Interbank Offered Rate (“LIBOR”) into the discount rate used in determining the fair value of OTC derivative assets and liabilities. The additional credit spread over LIBOR rates is determined taking into consideration publicly available information relating to the financial strength of the Company. The Company adjusts these credit spreads to remove any illiquidity risk premium, which is subject to a floor based on a percentage of the credit spread. However, the non-performance risk adjustment is applied only to the uncollateralized portion of the OTC derivative assets and liabilities, after consideration of the impacts of two-way collateral posting. Most OTC derivative contract inputs have bid and ask prices that are actively quoted or can be readily obtained from external market data providers. The Company’s policy is to use mid-market pricing in determining its best estimate of fair value.

Derivatives classified as Level 3 include first-to-default credit basket swaps, look-back equity options and other structured products. These derivatives are valued based upon models with some significant unobservable market inputs or inputs from less actively traded markets. The fair values of first-to-default credit basket swaps are derived from relevant observable inputs (e.g., individual credit default spreads, interest rates and recovery rates), and unobservable model-specific input values such as correlation between different credits within the same basket. Look-back equity options and other structured options and derivatives

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are valued using simulation models such as the Monte Carlo and other techniques. The input values for look-back equity options are derived from observable market indices (e.g., interest rates, dividend yields and equity indices), and unobservable model-specific input values including certain volatility parameters. Level 3 methodologies are validated through periodic comparison of the Company’s fair values to broker-dealer values.

Cash Equivalents and Short-Term Investments – Cash equivalents and short-term investments include money market instruments, commercial paper and other highly liquid debt instruments. Money market instruments are generally valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1. The remaining instruments in the Cash Equivalents and Short-term Investments category are typically not traded in active markets; however, their fair values are based on market observable inputs and, accordingly, these investments have been classified within Level 2 in the fair value hierarchy.

Other Assets and Other Liabilities – Other assets carried at fair value as of December 31, 2010 include U.S. Treasury bills held within the Company’s former global commodities business whose fair values are based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. As a result, they are reported in the Level 1 hierarchy. Other liabilities as of both December 31, 2011 and 2010, respectively, include derivative instruments for which fair values are determined as described above under “Derivative Instruments.”

Due to\from parent and affiliates - Due to\from parent and affiliates consist primarily of notes receivable, derivative activity and receivables associated with the reinsurance of guarantees on variable annuity contracts whose fair values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and “Derivative Instruments” and “Future Policy Benefits” below.

Future Policy Benefits - The liability for future policy benefits includes general account liabilities for guarantees on 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 customers less the present value of assessed rider fees attributable to the embedded derivative feature. This methodology could result in either a liability or contra-liability balance, given changing capital market conditions and various policyholder behavior 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 Company is also required to incorporate the market-perceived risk of its own non-performance (“NPR”) in the valuation of the embedded derivatives associated with its optional living benefit features. Since insurance liabilities are senior to debt, the Company believes that reflecting the financial strength ratings of the Company’s insurance subsidiaries in the valuation of the liability or contra-liability appropriately takes into consideration its NPR. To reflect NPR, the Company incorporates an additional credit spread over LIBOR rates into the discount rate used in the valuations of the embedded derivatives associated with its optional living benefit features. The additional credit spread over LIBOR rates is determined taking into consideration publicly available information relating to the financial strength of the Company’s insurance subsidiaries, as indicated by the credit spreads associated with funding agreements issued by these subsidiaries. The Company adjusts these credit spreads to remove any illiquidity risk premium, which is subject to a floor based on a percentage of the credit spread. The additional credit spread over LIBOR rates incorporated into the discount rate as of December 31, 2011 generally ranged from 150 to 250 basis points for the portion of the interest rate curve most relevant to these liabilities. This additional spread is applied at an individual contract level and only to those embedded derivatives in a liability position and not to those in a contra-liability position.

Other significant inputs to the valuation models for the embedded derivatives associated with the optional living benefit features of the Company’s variable annuity products include capital market assumptions, such as interest rate and implied volatility assumptions, as well as various policyholder behavior assumptions that are actuarially determined, including lapse rates, benefit utilization rates, mortality rates and withdrawal rates. These assumptions are reviewed at least annually, and updated based upon historical experience and give consideration to any observable market data, including market transactions such as acquisitions and reinsurance transactions. Since many of the assumptions utilized in the valuation of the embedded derivatives associated with the Company’s optional living benefit features 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.

Transfers between Levels 1 and 2 – Periodically there are transfers between Level 1 and Level 2 for foreign common stocks held in the Company’s Separate Account. In certain periods, an adjustment may be made for the fair value of these assets beyond the quoted market price to reflect events that occurred between the close of foreign trading markets and the close of U.S. trading markets for that day. If an adjustment is made in the reporting period, these Separate Accounts are classified as Level 2.

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When an adjustment is not made, they are classified as Level 1. This type of adjustment was not made at December 31, 2011 or at December 31, 2010. This adjustments was made at December 31, 2009, as a result, for the year ended December 31, 2010, $3.4 billion of transfers from Level 2 to Level 1 occurred for these Separate Account assets on a net basis.

Changes in Level 3 assets and liabilities - The following tables provide a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2011, as well as the portion of gains or losses included in income for the year ended December 31, 2011 attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2011.

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Year Ended December 31, 2011

Fixed Maturities Available-For-Sale - U.S. Government Authorities

Fixed Maturities Available-For-Sale - Foreign Government Bonds

Fixed Maturities Available-For-Sale - Corporate Securities

Fixed Maturities Available-For-Sale - Asset- Backed Securities

Fixed Maturities Available-For-Sale - Commercial Mortgage- Backed Securities

Fixed Maturities Available-For-Sale - Residential Mortgage- Backed Securities

	(in millions)
Fair Value, beginning of period	$	-	$	27		$	991		$	1,507		$	-		$	23
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		-		-			(24	)		20			-			-
Included in other comprehensive income (loss)		-		1			(56	)		(9	)		-			(1	)
Net investment income		-		-			5			27			-			-
Purchases		66		1			526			1,418			5			1
Sales		-		(1	)		(104	)		(502	)		-			(1	)
Issuances		-		-			9			-			-			-
Settlements		-		-			(342	)		(206	)		-			(5	)
Other(1)		-		-			(3	)		1			-			(1	)
Transfers into Level 3(2)		-		-			281			13			12			-
Transfers out of Level 3(2)		-		(3	)		(480	)		(612	)		(5	)		-
Fair Value, end of period	$	66	$	25		$	803		$	1,657		$	12		$	16

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Realized investment gains (losses), net	$	-	$	-		$	(38	)	$	(1	)	$	-		$	-
Included in other comprehensive income (loss)	$	-	$	2		$	6		$	(5	)	$	-		$	(1	)

B-96

Year Ended December 31, 2011

Trading Account Asset Supporting Insurance Liabilities- U.S. Government Authorities

Trading Account Asset Supporting Insurance Liabilities- Corporate Securities

Trading Account Asset Supporting Insurance Liabilities- Asset- Backed Securities

Trading Account Asset Supporting Insurance Liabilities- Commercial Mortgage- Backed Securities

Trading Account Asset Supporting Insurance Liabilities- Residential Mortgage- Backed Securities

Trading Account Asset Supporting Insurance Liabilities- Equity Securities

	(in millions)
Fair Value, beginning of period	$	-	$	82		$	226		$	5		$	18		$	4
Total gains or (losses) (realized/unrealized):
Included in earnings:
Other income		-		6			-			-			-			(6	)
Net investment income		-		-			3			-			-			-
Purchases		9		72			305			10			-			5
Sales		-		(12	)		(23	)		-			-			(44	)
Issuances		-		1			-			-			-			-
Settlements		-		(39	)		(97	)		(3	)		(1	)		(15	)
Other(1)		-		-			15			-			(15	)		-
Transfers into Level 3(2)		-		43			-			19			-			67
Transfers out of Level 3(2)		-		(44	)		(72	)		(10	)		-			-
Fair Value, end of period	$	9	$	109			357			21			2			11

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Other income	$	-	$	4			(1	)		-			-			(8	)

B-97

	Year Ended December 31, 2011
	Other Trading Account Assets- Asset- Backed Securities				Other Trading Account Assets- Equity Securities				Other Trading Account Assets- All Other Activity				Equity Securities, Available-For-Sale

	(in millions)
Fair Value, beginning of period		$	11			$	4			$	129			$	69
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net			-				-				(14	)			(15	)
Other income			(2	)			(22	)			2				-
Included in other comprehensive income (loss)			-				-				-				20
Net investment income			-				-				-				-
Purchases			-				32				-				49
Sales			-				(33	)			-				(47	)
Issuances			-				-				-				-
Settlements			-				(15	)			(35	)			(8	)
Other(1)			-				240				-				(240	)
Transfers into Level 3(2)			-				-				5				240
Transfers out of Level 3(2)			(7	)			-				-				(2	)
Fair Value, end of period		$	2			$	206			$	87			$	66

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Realized investment gains (losses), net		$	-			$	-			$	(14	)		$	(22	)
Other income		$	(2	)		$	(28	)		$	2			$	-
Included in other comprehensive income (loss)		$	-			$	-			$	-			$	31

	Year Ended December 31, 2011
	Commercial Mortgage and Other Loans				Other Long-term Investments				Due from parent and affiliates				Separate Account Assets(4)

	(in millions)
Fair Value, beginning of period		$	(6	)		$	251			$	1,919			$	15,771
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net			5				6				959				-
Other income			-				(5	)			-				-
Interest credited to policyholders' account balances			-				-				-				2,850
Included in other comprehensive income (loss)			-				-				(54	)			-
Net investment income			-				-				46				20
Purchases			-				145				691				3,097
Sales			-				-				-				(1,454	)
Issuances			-				-				-				3
Settlements			-				(26	)			(501	)			(1,156	)
Other(1)			-				-				(365	)			-
Transfers into Level 3(2)			-				-				42				864
Transfers out of Level 3(2)			-				-				-				(662	)
Fair Value, end of period		$	(1	)		$	371			$	2,737			$	19,333

B-98

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Realized investment gains (losses), net	$	5		$	2			$	999			$	-
Other income	$	-		$	(5	)		$	-			$	-
Interest credited to policyholders' account balances	$	-		$	-			$	-			$	1,825
Included in other comprehensive income (loss)	$	-		$	-			$	(54	)		$	-

			Year Ended December 31, 2011
			Future Policy Benefits				Other Liabilities				Due to parent and affiliates

			(in millions)
Fair Value, beginning of period				$	348			$	(3	)		$	(126	)
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net					(1,154	)			(17	)			36
Other income					-				-				(2	)
Net investment income					-				-				-
Purchases					(284	)			-				-
Sales					-				-				-
Issuances					-				-				-
Settlements					(1	)			17				14
Transfers into Level 3(2)					-				-				(5	)
Transfers out of Level 3(2)					-				-				-
Fair Value, end of period				$	(1,091	)		$	(3	)		$	(83	)

Unrealized gains (losses) for the period relating to
those Level 3 assets and liabilities that were still held
at the end of the period(3):
Included in earnings:
Realized investment gains (losses), net				$	(1,160	)		$	(17	)		$	36
Other income				$	-			$	-			$	(2	)

__________

(1)	Other includes reclassifications of certain assets between reporting categories.

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

(3)	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.

(4)

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 Consolidated Statement of Financial Position.

Transfers – As a part of an ongoing monitoring assessment of pricing inputs to ensure appropriateness of the level classification in the fair value hierarchy the Company may reassign level classification from time to time. As a result of such a review, in the first quarter of 2011, it was determined that the pricing inputs for perpetual preferred stocks provided by third party pricing services were primarily based on non-binding broker quotes which could not always be verified against directly observable market information. Consequently, perpetual preferred stocks were transferred into Level 3 within the fair value hierarchy. This represents the majority of the transfers into Level 3 for Equity Securities Available-for-Sale, Trading Account Assets Supporting Insurance Liabilities – Equity Securities and Other Trading Account Assets – Equity Securities. Other transfers into Level 3 were primarily the result of unobservable inputs utilized within valuation methodologies and the use of broker quotes (that could not be validated) when previously, information from third party pricing services (that could be validated) was utilized. Transfers out of Level 3 were primarily due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate.

The following tables provide a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2010, as well as the portion of gains or losses included in income for the year ended December 31, 2010 attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2010.

B-99

	Year Ended December 31, 2010

	Fixed Maturities Available-For-Sale - Foreign Government Bonds			Fixed Maturities Available-For-Sale - Corporate Securities			Fixed Maturities Available-For-Sale - Asset- Backed Securities			Fixed Maturities Available-For-Sale - Commercial Mortgage- Backed Securities			Fixed Maturities Available-For-Sale - Residential Mortgage- Backed Securities

	(in millions)
Fair Value, beginning of period	$	42		$	752		$	6,085		$	-		$	83
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		-			(28	)		(47	)		-			-
Included in other comprehensive income (loss)		-			94			109			1			-
Net investment income		-			8			(19	)		-			1
Purchases, sales, issuances and settlements		-			(183	)		339			19			(6	)
Other(1)		-			10			-			48			(48	)
Transfers into Level 3(2)		-			455			129			8			2
Transfers out of Level 3(2)		(15	)		(117	)		(5,089	)		(76	)		(9	)
Fair Value, end of period	$	27		$	991		$	1,507		$	-		$	23

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Realized investment gains (losses), net	$	-		$	(30	)	$	(66	)	$	-		$	-
Included in other comprehensive income (loss)	$	-		$	101		$	98		$	1		$	-

B-100

	Year Ended December 31, 2010

	Trading Account Asset Supporting Insurance Liabilities- Corporate Securities				Trading Account Asset Supporting Insurance Liabilities- Asset- Backed Securities				Trading Account Asset Supporting Insurance Liabilities- Commercial Mortgage- Backed Securities				Trading Account Asset Supporting Insurance Liabilities- Residential Mortgage- Backed Securities				Trading Account Asset Supporting Insurance Liabilities- Equity Securities

	(in millions)
Fair Value, beginning of period		$	83			$	281			$	5			$	20			$	3
Total gains or (losses) (realized/unrealized):
Included in earnings:
Other income			(1	)			1				3				1				2
Net investment income			1				1				-				-				-
Purchases, sales, issuances and settlements			(36	)			185				(2	)			(3	)			(1	)
Transfers into Level 3(2)			72				9				31				-				-
Transfers out of Level 3(2)			(37	)			(251	)			(32	)			-				-
Fair Value, end of period		$	82			$	226			$	5			$	18			$	4

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Other income		$	(3	)		$	1			$	5			$	1			$	2

					Year Ended December 31, 2010
					Other Trading Account Assets- Asset- Backed Securities				Other Trading Account Assets- Equity Securities				Other Trading Account Assets- All Other Activity				Equity Securities, Available-For-Sale

					(in millions)
Fair Value, beginning of period						$	42			$	2			$	290			$	124
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net							-				-				(66	)			51
Other income							3				2				3				-
Included in other comprehensive income (loss)							-				-				-				(39	)
Net investment income							-				-				-				-
Purchases, sales, issuances and settlements							(49	)			-				(98	)			(69	)
Transfers into Level 3(2)							15				-				-				3
Transfers out of Level 3(2)							-				-				-				(1	)
Fair Value, end of period						$	11			$	4			$	129			$	69

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Realized investment gains (losses), net						$	-			$	-			$	(65	)		$	(2	)
Other income						$	2			$	1			$	3			$	-
Included in other comprehensive income (loss)						$	-			$	-			$	-			$	5

									Year Ended December 31, 2010
					Commercial Mortgage and Other Loans				Other Long-term Investments				Due from parent and affiliates				Separate Account Assets(4)

B-101

	(in millions)
Fair Value, beginning of period		$	(10	)		$	-			$	3,372			$	13,047
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net			4				(9	)			(477	)			-
Other income			-				18				-				-
Interest credited to policyholders' account balances			-				-				-				2,125
Included in other comprehensive income (loss)			-				-				37				-
Net investment income			-				-				45				-
Purchases, sales, issuances and settlements			-				242				(1,468	)			839
Transfers into Level 3(2)			-				-				410				171
Transfers out of Level 3(2)			-				-				-				(411	)
Fair Value, end of period		$	(6	)		$	251			$	1,919			$	15,771

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Realized investment gains (losses), net		$	4			$	(9	)		$	(476	)		$	-
Other income		$	-			$	18			$	-			$	-
Interest credited to policyholders' account balances		$	-			$	-			$	-			$	1,077
Included in other comprehensive income (loss)		$	-			$	-			$	48			$	-

					Year Ended December 31, 2010
					Future Policy Benefits				Other Liabilities				Due to parent and affiliates

					(in millions)
Fair Value, beginning of period						$	(58	)		$	(10	)		$	(288	)
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net							520				4				68
Other income							-				-				(3	)
Net investment income							-				-				-
Purchases, sales, issuances and settlements							(114	)			3				97
Transfers into Level 3(2)							-				-				-
Transfers out of Level 3(2)							-				-				-
Fair Value, end of period						$	348			$	(3	)		$	(126	)

Unrealized gains (losses) for the period relating to
those Level 3 assets and liabilities that were still held
at the end of the period(3):
Included in earnings:
Realized investment gains (losses), net						$	474			$	4			$	68
Other income						$	-			$	-			$	(3	)

__________

(1)	Other represents reclassifications of certain assets between reporting categories.

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

(3)	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.

(4)

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 Consolidated Statement of Financial Position. Includes reclassifications to conform to current period presentation.

Transfers – Transfers out of Level 3 for Fixed Maturities Available for Sale – Asset-Backed Securities and Trading Account Assets Supporting Insurance Liabilities – Asset-Backed Securities include $4,880 million and $222 million, respectively, for the year ended December 31, 2010 resulting from the Company’s conclusion that the market for asset-backed securities

B-102

collateralized by sub-prime mortgages had been becoming increasingly active, as evidenced by orderly transactions. The pricing received from independent pricing services could be validated by the Company. Other transfers out of Level 3 were typically due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate. Transfers into Level 3 were primarily the result of unobservable inputs utilized within valuation methodologies and the use of broker quotes (that could not be validated) when previously, information from third party pricing services (that could be validated) was utilized.

The following tables provide a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2009, as well as the portion of gains or losses included in income for the year ended December 31, 2009 attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2009.

	Year Ended December 31, 2009

	Fixed Maturities Available-For-Sale - Foreign Government Bonds			Fixed Maturities Available-For-Sale - Corporate Securities			Fixed Maturities Available-For-Sale - Asset-Backed Securities			Fixed Maturities Available-For-Sale - Residential Mortgage-Backed Securities			Trading Account Assets Supporting Insurance Liabilities- Foreign Government Bonds
	(in millions)
Fair Value, beginning of period	$	27		$	833		$	855		$	208		$	-
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		-			(96	)		(661	)		-			-
Included in other comprehensive income (loss)		5			112			2,257			(1	)		-
Net investment income		-			11			57			1			-
Purchases, sales, issuances, settlements		123			(579	)		(1,582	)		18			12
Transfers into Level 3(2)		10			872			5,228			-			-
Transfers out of Level 3(2)		(123	)		(401	)		(69	)		(143	)		(12	)
Fair Value, end of period	$	42		$	752		$	6,085		$	83		$	-

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Realized investment gains (losses), net	$	-		$	(100	)	$	(658	)	$	-		$	-
Included in other comprehensive income (loss)	$	5		$	103		$	2,202		$	(1	)	$	-

B-103

	Year Ended December 31, 2009

	Trading Account Assets Supporting Insurance Liabilities- Corporate Securities				Trading Account Assets Supporting Insurance Liabilities- Asset-Backed Securities				Trading Account Assets Supporting Insurance Liabilities- Commercial Mortgage- Backed Securities				Trading Account Assets Supporting Insurance Liabilities- Residential Mortgage- Backed Securities				Trading Account Assets Supporting Insurance Liabilities- Equity Securities

	(in millions)
Fair Value, beginning of period		$	75			$	35			$	6			$	28			$	1
Total gains (losses) (realized/unrealized):
Included in earnings:
Other income			20				59				(1	)			3				2
Net investment income			2				-				-				-				-
Purchases, sales, issuances, settlements			(72	)			(66	)			-				(4	)			-
Transfers into Level 3(2)			229				266				-				-				-
Transfers out of Level 3(2)			(171	)			(13	)			-				(7	)			-
Fair Value, end of period		$	83			$	281			$	5			$	20			$	3

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Other income		$	16			$	47			$	(1	)		$	3			$	2

	Year Ended December 31, 2009
	Other Trading Account Assets- Corporate Securities				Other Trading Account Assets- Asset- Backed Securities				Other Trading Account Assets- Equity Securities				Other Trading Account Assets- All Other Activity				Equity Securities, Available-For-Sale

	(in millions)
Fair Value, beginning of period		$	38			$	-			$	7			$	1,306			$	73
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net			-				-				-				(320	)			(10	)
Other income			-				3				3				24				-
Included in other comprehensive income (loss)			-				-				-				-				51
Net investment income			-				-				-				-				-
Purchases, sales, issuances, settlements			(2	)			3				(7	)			(720	)			13
Other(1)			(36	)			36				-				-				-
Transfers into Level 3(2)			-				-				-				-				12
Transfers out of Level 3(2)			-				-				(1	)			-				(15	)
Fair Value, end of period		$	-			$	42			$	2			$	290			$	124

B-104

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Realized investment gains (losses), net	$	-	$	-		$	-			$	(320	)		$	(21	)
Other income	$	2	$	1		$	3			$	-			$	-
Included in other comprehensive income (loss)	$	-	$	-		$	-			$	-			$	51

					Year Ended December 31, 2009
					Commercial Mortgage and Other Loans				Due from parent and affiliates				Separate Account Assets(4)

					(in millions)
Fair Value, beginning of period						$	-			$	833			$	19,780
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net							(10	)			(872	)			-
Interest credited to policyholders' account balances							-				-				(7,365	)
Included in other comprehensive income (loss)							-				58				-
Net investment income							-				-				-
Purchases, sales, issuances, settlements							-				1,669				420
Transfers into Level 3(2)							-				1,684				559
Transfers out of Level 3(2)							-				-				(347	)
Fair Value, end of period						$	(10	)		$	3,372			$	13,047

Unrealized gains (losses) for the period relating to
those Level 3 assets that were still held at the end
of the period(3):
Included in earnings:
Realized investment gains (losses), net						$	(10	)		$	(846	)		$	-
Interest credited to policyholders' account balances						$	-			$	-			$	(7,579	)

					Year Ended December 31, 2009
					Future Policy Benefits				Other Liabilities				Due to parent and affiliates

					(in millions)
Fair Value, beginning of period						$	(1,172	)		$	(139	)		$	(1,260	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net							1,159				82				272
Other income							-				-				9
Net investment income							-				-				-
Purchases, sales, issuances, settlements							(45	)			49				691
Transfers into Level 3(2)							-				(2	)			-
Transfers out of Level 3(2)							-				-				-
Fair Value, end of period						$	(58	)		$	(10	)		$	(288	)

B-105

Unrealized gains (losses) for the period relating to
those Level 3 assets and liabilities that were still held
at the end of the period(3):
Included in earnings:
Realized investment gains (losses), net	$	1,079	$	82	$	272

____________

(1)	Other represents reclassification of certain assets between reporting changes.

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

(3)	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.

(4)

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 Consolidated Statement of Financial Position. Includes reclassifications to conform to current period presentation.

Transfers – Transfers into Level 3 for Fixed Maturities Available for Sale - Asset-Backed Securities and Trading Account Assets Supporting Insurance Liabilities – Asset-Backed Securities include $4,583 million and $188 million, respectively, resulting from the Company’s conclusion that the market for asset-backed securities collateralized by sub-prime mortgages was an inactive market. Other transfers into Level 3 were primarily the result of unobservable inputs utilized within valuation methodologies and the use of broker quotes (that could not be validated) when previously, information from third party pricing services (that could be validated) or models with observable inputs were utilized. Transfers out of Level 3 were typically due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate.

Derivative Fair Value Information

The following tables present the balance of derivative assets and liabilities measured at fair value on a recurring basis, as of the date indicated, by primary underlying. These tables exclude embedded derivatives which are recorded with the associated host contract. These derivative assets and liabilities are included in “Other trading account assets,” “Other long-term investments” or “Other liabilities” in the tables presented above.

	As of December 31, 2011
	Level 1		Level 2		Level 3		Netting (1)				Total

	(in millions)
Derivative assets:
Interest Rate	$	10	$	16,520	$	8				$	$	16,538
Currency		-		684		-						684
Credit		-		64		1						65
Currency/Interest Rate		-		562		-						562
Equity		-		543		83						626
Netting (1)								(13,659	)			(13,659	)
Total derivative assets	$	10	$	18,373	$	92	$	(13,659	)		$	4,816
Derivative liabilities:
Interest Rate	$	9	$	15,205	$	6				$	$	15,220
Currency		-		667		-						667
Credit		-		88		-						88
Currency/Interest Rate		-		826		-						826
Equity		-		492		83						575
Netting (1)								(10,309	)			(10,309	)
Total derivative liabilities	$	9	$	17,278	$	89	$	(10,309	)		$	7,067

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	As of December 31, 2010
	Level 1		Level 2		Level 3		Netting (1)				Total

	(in millions)
Derivative assets:
Interest Rate	$	17	$	6,536	$	3				$	$	6,556
Currency		7		1,743		-						1,750
Credit		-		107		-						107
Currency/Interest Rate		-		2,284		-						2,284
Equity		-		549		126						675
Commodity		144		235		-						379
Netting (1)								(7,416	)			(7,416	)
Total derivative assets	$	168	$	11,454	$	129	$	(7,416	)		$	4,335
Derivative liabilities:
Interest Rate	$	18	$	6,206	$	12				$	$	6,236
Currency		-		1,678		-						1,678
Credit		-		108		-						108
Currency/Interest Rate		-		2,402		-						2,402
Equity		-		513		126						639
Commodity		-		314		-						314
Netting (1)								(7,325	)			(7,325	)
Total derivative liabilities	$	18	$	11,221	$	138	$	(7,325	)		$	4,052

(1) “Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty.

Changes in Level 3 derivative assets and liabilities - The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities for the years ended December 31, 2011 and 2010, as well as the portion of gains or losses included in income for the years ended December 31, 2011 and 2010, attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2011.

	Year Ended December 31, 2011
	Derivative Assets - Equity			Derivative Liability - Equity			Derivative Asset - Credit		Derivative Liabilities - Credit		Derivative Asset - Interest Rate		Derivative Liabilities - Interest Rate
	(in millions)
Fair Value, beginning of period	$	126		$	(126	)	$	-	$	-	$	3	$	(12	)
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		(29	)		29			1		-		5		6
Asset management fees and other income		-			-			-		-		-		-
Settlements		(14	)		14			-		-		-		-
Transfers into Level 3(1)		-			-			-		-		-		-
Transfers out of Level 3(1)		-			-			-		-		-		-
Fair Value, end of period	$	83		$	(83	)	$	1	$	-	$	8	$	(6	)

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Unrealized gains (losses) for the period relating to those level 3
assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	(29	)	$	29		$	1		$	(1	)	$	5	$	6
Asset management fees and other income	$	-		$	-		$	-		$	-		$	-	$	-

	Year Ended December 31, 2010
	Derivative Assets - Equity			Derivative Liability - Equity			Derivative Asset - Credit			Derivative Liabilities - Credit			Derivative Asset - Interest Rate		Derivative Liabilities - Interest Rate
	(in millions)
Fair Value, beginning of period	$	297		$	(297	)	$	5		$	(5	)	$	-	$	(4	)
Total gains or (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net		(110	)		110			(5	)		5			3		(12	)
Asset management fees and other income		-			-			-			-			-		4
Purchases, sales, issuances and settlements		(61	)		61			-			-			-		-
Foreign currency translation		-						-			-			-		-
Other(1)		-						-			-			-		-
Transfers into Level 3(1)		-						-			-			-		-
Transfers out of Level 3(1)		-						-			-			-		-
Fair Value, end of period	$	126		$	(126	)	$	-		$	-		$	3	$	(12	)

Unrealized gains (losses) for the period relating to those level 3
assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	(104	)	$	104		$	(5	)	$	5		$	3	$	(12	)
Asset management fees and other income	$	(6	)	$	6		$	-		$	-		$	-	$	-

Nonrecurring Fair Value Measurements - Certain assets and liabilities are measured at fair value on a nonrecurring basis. Nonrecurring fair value adjustments resulted in $5 million of gains being recorded for the year ended December 31, 2011 on certain commercial mortgage loans. The carrying value of these loans as of December 31, 2011 was $49 million. Losses on similar commercial mortgage loans of $5 million and $109 million were recorded for the years ended December 31, 2010 and 2009. These adjustments were based on either discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral and were classified as Level 3 in the hierarchy.

Impairments of $7 million, $6 million and $51 million were recorded for the years ended December 31, 2011, 2010 and 2009, respectively, on certain cost method investments. The carrying value as of December 31, 2011 of these investments was $37 million. In addition, for certain equity method investments no impairments were recorded for the year ended December 31, 2011 and impairments of $2 million and $11 million were recorded for the years ended December 31, 2010 and 2009, respectively. These fair value adjustments were based on inputs classified as Level 3 in the valuation hierarchy. The inputs utilized were primarily discounted estimated future cash flows and, where appropriate, valuations provided by the general partners taken into consideration with deal and management fee expenses.

Fair Value Option - The following table presents information regarding changes in fair values recorded in earnings for other long-term investments where the fair value option has been elected.


		2011	2010	2009

		(in millions)
Assets:
	Other long-term investments:

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Changes in fair value	(5)	18	-

Changes in fair value are reflected in “Other income.” The fair value of other long-term investments was $366 million and $258 million as of December 31, 2011 and 2010, respectively.

Fair Value of Financial Instruments

The Company is required by U.S. GAAP to disclose the fair value of certain financial instruments including those that are not carried at fair value. For the following financial instruments the carrying amount equals or approximates fair value: fixed maturities classified as available for sale, trading account assets supporting insurance liabilities, other trading account assets, equity securities, securities purchased under agreements to resell, certain long-term investments, short-term investments, cash and cash equivalents, accrued investment income, certain amounts due to and from parent and affiliates, separate account assets, investment contracts included in separate account liabilities, securities sold under agreements to repurchase, and cash collateral for loaned securities, as well as certain items recorded within other assets and other liabilities such as broker-dealer related receivables and payables. See Note 21 for a discussion of derivative instruments.

The following table discloses the Company’s financial instruments where the carrying amounts and fair values may differ:

	December 31, 2011						December 31, 2010
	Carrying Amount			Fair Value			Carrying Amount			Fair Value

	(in millions)
Assets:
Commercial mortgage and other loans		$	28,787		$	30,973		$	26,647		$	27,773
Policy loans			8,077			10,987			8,036			9,831
Other affiliated notes receivable			2,880			2,985			971			993
Liabilities:
Policyholders' account balances - investment contracts		$	60,882		$	62,748		$	59,179		$	60,451
Short-term and long-term debt			11,356			11,727			9,942			10,328

The fair values presented above for those financial instruments where the carrying amounts and fair values differ 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 commercial mortgage loans is primarily based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate or Foreign Government Bond rate (for non-U.S. dollar-denominated loans) adjusted for appropriate credit spread for similar quality loans. The quality ratings for these loans, a primary determinant of the credit spread and a significant component of the pricing input, are based upon an internally-developed methodology. The internally derived credit spreads take into account public corporate bond spreads of similar quality and maturity, public commercial mortgage-backed securities spreads, third-party mortgage loan survey spreads and other relevant market information such as pricing indications from market participants on new originations, and where applicable adjustments for property types and locations.

The fair value of certain commercial mortgage loans, for which a discounted cash flow model is not appropriate, is based on internally-developed values that incorporate various factors, including the terms of the loans, the principal exit strategies for the loans, prevailing interest rates, and credit risk.

The fair value of the other loans, which include collateralized and uncollateralized loans, is primarily based upon the present value of the expected future cash flows discounted at the appropriate US. Treasury or Foreign Government Bond rate (for non-U.S. dollar-denominated loans) or other observable inputs, such as local market swap rates and credit default swap spreads, adjusted for an appropriate credit spread and liquidity premium. The credit spread and liquidity premium are a significant component of the pricing inputs, and are based upon an internally-developed methodology, which takes into account, among other factors, the credit quality of the loans, the property type of the collateral, the weighted average coupon, and the weighted average life of the loans.

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Policy Loans

The fair value of U.S. insurance policy loans is calculated using a discounted cash flow model based upon current U.S. Treasury rates and historical loan repayment patterns. For group corporate- bank- and trust-owned life insurance contracts and group universal life contracts, the fair value of the policy loans is the amount due, excluding interest, as of the reporting date.

Other Affiliated Notes Receivable

The fair value of affiliated notes receivable is determined using a discounted cash flow model, which utilizes a discount rate based upon market indications from broker-dealers, as well as internal assumptions and takes into account, among other factors, the credit quality of the issuer and the reduced liquidity associated with private placements, where appropriate. Affiliated notes receivable are reflected within “Due from parent and affiliates.”

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, single premium endowments, 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 reflects the Company’s own non-performance risk. For guaranteed investment contracts, funding agreements, structured settlements without life contingencies and other similar products, fair values are derived using discounted projected cash flows based on interest rates being offered for similar contracts with maturities consistent with those of the contracts being valued. 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. For defined contribution and defined benefit contracts and certain other products the fair value is the market value of the assets supporting the liabilities.

Short-term and Long-term 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 non-performance risk. 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. For commercial paper issuances and other debt with a maturity of less than 90 days, the carrying value approximates fair value.

20. RELATED PARTY

Service Agreements – Services Provided

The Company has service agreements with Prudential Financial and certain of its subsidiaries. These companies, along with their subsidiaries, include PRUCO, LLC, Prudential Asset Management Holding Company, LLC, Prudential International Insurance Holdings, Ltd., Prudential International Insurance Service Company, LLC, Prudential IBH Holdco, Inc., Prudential International Investments Corporation, Prudential International Investments, LLC, Prudential Annuities Holding Company, Inc. and Prudential Japan Holdings, LLC. Under these agreements, the Company provides general and administrative services and, accordingly, charges these companies for such services. These charges totaled $585 million, $519 million and $499 million for the years ended December 31, 2011, 2010 and 2009, respectively, and are recorded as a reduction to the Company’s “General and administrative expenses.”

The Company also engages in other transactions with affiliates in the normal course of business. Affiliated revenues in “Other income” was $1 million for each of the years ended December 31, 2011, 2010 and 2009, related primarily to royalties and compensation for the sale of affiliates’ products through the Company’s distribution network.

“Due from parent and affiliates” includes $154 million at December 31, 2011 and 2010, due primarily to these agreements.

Service Agreements – Services Received

Prudential Financial and certain of its subsidiaries have service agreements with the Company. Under the agreements, the Company primarily receives the services of the officers and employees of Prudential Financial, asset management services from Prudential Asset Management Holding Company and subsidiaries and consulting services from Pramerica Systems Ireland Limited. The Company is charged based on the level of service received. Affiliated expenses for services received were $281 million, $262 million and $248 million as contra-revenue in “Net investment income” and $117 million, $110 million and $155

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million in “General and administrative expenses” for the years ended December 31, 2011, 2010 and 2009, respectively. “Due to parent and affiliates” includes $42 million and $29 million at December 31, 2011 and 2010, respectively, due primarily to these agreements.

Notes Receivable and Other Lending Activities

Affiliated notes receivable included in “Due from parent and affiliates” at December 31, are as follows:

	Maturity
	Dates		Rate			2011			2010

						(in millions)

U.S. Dollar floating rate notes(1)		2011 - 2026		0.50% - 2.54	%		$	139		$	264
U.S. Dollar fixed rate notes(2)		2012 - 2041		1.00% - 11.03	%			3,386			1,794
Japanese Yen fixed rate notes		2014 - 2019		1.73% - 3.40	%			292			290
Total long-term notes receivable - affiliated(3)								3,817			2,348
Short-term notes receivable - affiliated(4)								914			1,077
Total notes receivable - affiliated							$	4,731		$	3,425

[Missing Graphic Reference]

(1)	Includes current portion of the long-term notes receivable of $5 million at December 31, 2010.

(2)	Includes current portion of the long-term notes receivable of $436 million at December 31, 2011.

(3)	All long-term notes receivable may be called for prepayment prior to the respective maturity dates under specified circumstances.

(4)	Short-term notes receivable have variable rates, which averaged 1.57% at December 31, 2011 and 1.36% at December 31, 2010. Short-term notes receivable are payable on demand.

The affiliated notes receivable included above that are classified as loans, and carried at unpaid principal balance, net of any allowance for losses. The Company monitors the internal and external credit ratings of these loans and loan performance. The Company also considers any guarantees made by Prudential Financial for loans due from affiliates.

Accrued interest receivable related to these loans was $44 million and $21 million at December 31, 2011 and 2010, respectively, and is included in “Due from parent and affiliates.” Revenues related to these loans were $147 million, $258 million and $207 million for the years ended December 31, 2011, 2010, and 2009, respectively and are included in “Other income.”

The Company also engages in overnight borrowing and lending of funds with Prudential Financial and affiliates. “Cash and cash equivalents” included $205 million and $181 million, associated with these transactions at December 31, 2011 and 2010, respectively. Revenues related to this lending activity were $0 million, $1 million and $0 million for the years ended December 31, 2011, 2010, and 2009, respectively, and are included in “Net investment income.”

Sales and Dividends of Fixed Maturities and Commercial Mortgage Loans between Related Parties

In March 2011, the Company purchased commercial mortgage loans from an affiliate for a total of $9 million, the fair value on the date of the transfer plus accrued interest. The company recorded the assets at the affiliate’s carrying amount. Commercial mortgage loans are categorized in the Company’s consolidated statement of financial position as commercial mortgage and other loans.

In May 2011, the Company sold commercial mortgage loans to an affiliate for a total of $80 million, the fair value on the date of the transfer plus accrued interest. The Company recognized a gain on the sale of $4 million.

In May 2011, the Company paid a dividend of $139 million to its parent company. The dividend consisted of $38 million of cash and $97 million of fixed maturity investments, the book value on the date of transfer plus accrued interest. $6 million of the fixed maturities were classified as trading account assets. The parent recorded the investments at the historic amortized cost of the Company. Fixed maturity investments are categorized in the Company’s consolidated statement of financial position as available-for-sale debt securities, and are therefore carried at fair value, with the difference amortized cost and fair value reflected in accumulated other comprehensive income. Trading accounts assets are carried at fair value in the Company’s consolidated statement of financial position.

In May 2011, the Company sold fixed maturity investments to an affiliate for a total of $137 million, the fair value on the date of transfer plus accrued interest. The affiliate recorded the investments at the fair value of the investments at the date of sale.

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The difference of $14 million between the historic amortized cost and the fair value, net of taxes, was recorded by the Company as a gain on the investments.

In December 2011, the Company sold fixed maturity investments to an affiliate for a total of $135 million, the fair value on the date of transfer plus accrued interest. The affiliate recorded the investments at the historic amortized cost of the Company.

During 2010, the Company purchased fixed maturity investments, classified as available for sale, from affiliates for a total of $1,136 million, the fair value on the date of the transfer plus accrued interest. The difference of $96 million between the amortized cost and the fair value of the securities was recorded by the Company as a reduction to additional paid-in capital.

In March 2010, the Company purchased fixed maturities classified as trading account assets from an affiliate for a total of $175 million, the fair value on the date of the transfer plus accrued interest. The Company recorded the assets at fair at the time of the purchase. Trading account assets are carried at fair value in the Company’s consolidated statement of financial position.

In June 2010, the Company purchased fixed maturity investments from its separate account for a total of $118 million, the fair value on the date of the transfer plus accrued interest. The Company recorded the investments at fair value at the time of the purchase.

Derivatives

Prudential Global Funding, Inc., an indirect, wholly owned consolidated subsidiary of the Company enters into derivative contracts with Prudential Financial and certain of its subsidiaries. Affiliated derivative assets included in “Other trading account assets” were $1,934 million and $2,217 million at December 31, 2011 and 2010, respectively. Affiliated derivative liabilities included in “Due to parent and affiliates” were $6,121 million and $3,006 million at December 31, 2011 and 2010, respectively.

Retail Medium Term Notes Program

The Company has sold funding agreements (“agreements”) to Prudential Financial as part of a retail note issuance program to financial wholesalers. As discussed in Note 10, “Policyholders’ account balances” include $529 million and $1,005 million related to these agreements at December 31, 2011 and 2010, respectively. In addition, “Deferred policy acquisition costs” includes affiliated amounts of $4 million and $11 million related to these agreements at December 31, 2011 and 2010, respectively. The affiliated interest credited on these agreements is included in “Interest credited to policyholders’ account balances” and was $34 million, $70 million and $121 million for the years ended December 31, 2011, 2010, and 2009, respectively.

Joint Ventures

The Company has made investments in joint ventures with certain subsidiaries of Prudential Financial. “Other long term investments” includes $89 million and $93 million at December 31, 2011 and 2010, respectively. “Net investment income” includes gains of $4 million, $18 million and $22 million for the years ended December 31, 2011, 2010 and 2009, respectively, related to these ventures.

Reinsurance

As discussed in Notes 11 and 13, the Company participates in reinsurance transactions with certain subsidiaries of Prudential Financial.

Short-term and Long-term Debt

As discussed in Note 14, the Company participates in debt transactions with certain subsidiaries of Prudential Financial.

21. DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies used in a non- dealer or broker capacity

Interest Rate Contracts

Interest rate swaps are used by the Company to 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 anticipates acquiring and other anticipated transactions and commitments. 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

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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.

Exchange-traded futures and options are used by the Company to reduce risks from changes in interest rates, to alter mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, and to hedge against changes in the value of securities it owns or anticipates acquiring or selling. In exchange-traded futures transactions, the Company agrees to purchase or sell a specified number of contracts, the values of which are determined by the values of underlying referenced investments, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures and options with regulated futures commission’s merchants who are members of a trading exchange.

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. These hedges do not qualify for hedge accounting.

Foreign Exchange Contracts

Currency derivatives, including exchange-traded currency futures and options, currency forwards and 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. The Company also uses currency forwards to hedge the currency risk associated with net investments in foreign operations and anticipated earnings of its foreign operations.

Under currency forwards, the Company agrees with other parties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. As noted above, the Company uses currency forwards to mitigate the impact of changes in currency exchange rates on U.S. dollar equivalent earnings generated by certain of its non-U.S. businesses, primarily its international insurance and investments operations. The Company executes forward sales of the hedged currency in exchange for U.S. dollars at a specified exchange rate. The maturities of these forwards correspond with the future periods in which the non-U.S. dollar-denominated earnings are expected to be generated. These earnings hedges do not qualify for hedge accounting.

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, or a basket of names in a first to default structure, and in return receives a quarterly premium. With single name 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. With first to default baskets, the premium generally corresponds to a high proportion of the sum of the credit spreads of the names in the basket. If there is an event of default by the referenced name or one of the referenced names in a basket, 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. 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.

Other Contracts

TBA’s. The Company uses “to be announced” (“TBA”) forward contracts to gain exposure to the investment risk and return of mortgage-backed securities. TBA transactions can help the Company to achieve better diversification and to enhance the return on its investment portfolio. TBAs can provide a more liquid and cost effective method of achieving these goals than purchasing or selling individual mortgage-backed pools. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. Additionally, pursuant to the Company’s mortgage dollar roll program, TBAs or

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mortgage-backed securities are transferred to counterparties with a corresponding agreement to repurchase them at a future date. These transactions do not qualify as secured borrowings and are accounted for as derivatives.

Embedded Derivatives. The Company sells variable annuity products, which may include guaranteed benefit features that are accounted for as embedded derivatives. 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. The Company maintains a portfolio of derivative instruments that is intended to economically hedge the risks related to the above products’ features. The derivatives may include, but are not limited to equity options, total return swaps, interest rate swap options, caps, floors, and other instruments. In addition, some variable annuity products feature an automatic rebalancing element to minimize risks inherent in the Company’s guarantees which reduces the need for hedges.

The Company invests in fixed maturities that, in addition to a stated coupon, provide a return based upon the results of an underlying portfolio of fixed income investments and related investment activity. The Company accounts for these investments as available-for-sale fixed maturities containing embedded derivatives. Such embedded derivatives are marked to market through “Realized investment gains (losses), net,” based upon the change in value of the underlying portfolio.

Synthetic Guarantees. The Company sells fee-based synthetic guaranteed investment contracts which include investment-only, stable value contracts, to qualified pension plans. The assets are owned by the trustees of such plans, who invest the assets under the terms of investment guidelines agreed to with the Company. The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated plan cash flow requirements. These contracts are accounted for as derivatives, recorded at fair value and classified as interest rate derivatives.

The table below provides a summary of the gross notional amount and fair value of derivatives contracts used in a non-dealer or broker capacity, excluding embedded derivatives which are recorded with the associated host, by the primary underlying. Many derivative instruments contain multiple underlyings. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral held with the same counterparty. This netting impact results in total derivative assets of $4,816 million and $4,335 million as of December 31, 2011 and December 31, 2010, respectively, and total derivative liabilities of $7,067 million and $4,052 million as of December 31, 2011 and December 31, 2010, respectively, reflected in the Consolidated Statement of Financial Position.

	December 31, 2011							December 31, 2010

Primary Underlying/	Notional		Fair Value					Notional		Fair Value
Instrument Type	Amount		Assets		Liabilities			Amount		Assets		Liabilities

	(in millions)
Qualifying Hedges:
Interest Rate
Interest Rate Swaps	$	4,343	$	54	$	(395	)	$	5,560	$	93	$	(359	)
Currency/Interest Rate
Foreign Currency Swaps		3,520		154		(156	)		2,245		37		(211	)
Total Qualifying Hedges	$	7,863	$	208	$	(551	)	$	7,805	$	130	$	(570	)

Non-Qualifying Hedges:
Interest Rate
Interest Rate Swaps	$	48,530	$	3,816	$	(2,491	)	$	47,455	$	2,192	$	(1,477	)
Interest Rate Futures		6,191		10		(9	)		6,834		17		(18	)
Interest Rate Options		377		13		-			386		15		-
Interest Rate Forwards		2,139		6		-			159		-		-
Synthetic GIC's		46,844		4		-			24,019		2		(1	)
Foreign Currency
Foreign Currency Forwards		2,768		32		(11	)		2,998		13		(40	)
Currency/Interest Rate
Foreign Currency Swaps		2,589		220		(93	)		2,262		190		(146	)
Credit
Credit Default Swaps		1,454		23		(45	)		1,149		72		(72	)
Equity
Equity Options		8,283		115		(48	)		2,940		50		(5	)
Total Return Swaps		372		-		(14	)		176		-		(10	)

B-114

Total Non-Qualifying Hedges		$	119,547			$	4,239			$	(2,711	)		$	88,378			$	2,551			$	(1,769	)
Total Derivatives (1)		$	127,410			$	4,447			$	(3,262	)		$	96,183			$	2,681			$	(2,339	)

(1)

Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a net liability of $1,343 million as of December 31, 2011 and a net liability of $601 million as of December 31, 2010, included in “Future policy benefits” and “Fixed maturities, available-for-sale.”

Cash Flow, Fair Value and Net Investment Hedges

The primary derivative instruments used by the Company in its fair value, cash flow, and net investment hedge accounting relationships are interest rate swaps, currency swaps and currency forwards. 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 fair value, cash flow or net investment hedge accounting relationships.

The following table provides 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:

	Year Ended December 31, 2011
															Interest
															Credited				Accumulated
	Realized				Net										To Policyholder				Other
	Investment				Investment				Other			Interest			Account				Comprehensive
	Gains/(Losses)				Income				Income			Expense			Balances				Income(1)

		(in millions)
Qualifying Hedges
Fair value hedges
Interest Rate		$	(116	)		$	(114	)		$	-		$	-		$	56			$	-
Currency			-				-				-			-			-				-
Total fair value hedges			(116	)			(114	)			-			-			56				-

Cash flow hedges
Interest Rate			-				-				-			-			(1	)			-
Currency/Interest Rate			-				(7	)			3			-			-				176
Total cash flow hedges			-				(7	)			3			-			(1	)			176

Net investment hedges
Currency(2)			-				-				2			-			-				(14	)
Currency/Interest Rate			-				-				-			-			-				-
Total net investment hedges			-				-				2			-			-				(14	)

Non- qualifying hedges
Interest Rate			775				-				-			-			-				-
Currency			15				-				-			-			-				-
Currency/Interest Rate			39				-				-			-			-				-
Credit			-				-				-			-			-				-
Equity			(6	)			-				-			-			-				-
Embedded Derivatives			(1,177	)			-				-			-			-				-
Total non-qualifying hedges			(354	)			-				-			-			-				-
Total		$	(470	)		$	(121	)		$	5		$	-		$	55			$	162

	Year Ended December 31, 2010
															Interest
															Credited				Accumulated
	Realized				Net										To Policyholder				Other
	Investment				Investment				Other			Interest			Account				Comprehensive
	Gains/(Losses)				Income				Income			Expense			Balances				Income(1)

		(in millions)
Qualifying Hedges
Fair value hedges
Interest Rate		$	(114	)		$	(147	)		$	-		$	-		$	68			$	-

B-115

Currency			-				-				-				-			-				-
Total fair value hedges			(114	)			(147	)			-				-			68				-

Cash flow hedges
Interest Rate			-				-				-				-			(3	)			(3	)
Currency/Interest Rate			-				(2	)			4				-			-				71
Total cash flow hedges			-				(2	)			4				-			(3	)			68

Net investment hedges
Currency(2)			-				-				-				-			-				-
Currency/Interest Rate			-				-				-				-			-				-
Total net investment hedges			-				-				-				-			-				-

Non- qualifying hedges
Interest Rate			807				-				-				-			-				-
Currency			51				-				-				-			-				-
Currency/Interest Rate			98				-				-				-			-				-
Credit			(86	)			-				-				-			-				-
Equity			(17	)			-				-				-			-				-
Embedded Derivatives			585				-				-				-			-				-
Total non-qualifying hedges			1,438				-				-				-			-				-
Total		$	1,324			$	(149	)		$	4			$	-		$	65			$	68


	Year Ended December 31, 2009
																Interest
																Credited				Accumulated
	Realized				Net											To Policyholder				Other
	Investment				Investment				Other				Interest			Account				Comprehensive
	Gains/(Losses)				Income				Income				Expense			Balances				Income(1)

		(in millions)
Qualifying Hedges
Fair value hedges
Interest Rate		$	340			$	(157	)		$	-			$	-		$	70			$	-
Currency			-				-				-				-			-				-
Total fair value hedges			340				(157	)			-				-			70				-

Cash flow hedges
Interest Rate			-				-				-				-			(7	)			29
Currency/Interest Rate			-				(2	)			(4	)			-			-				(156	)
Total cash flow hedges			-				(2	)			(4	)			-			(7	)			(127	)

Net investment hedges
Currency(2)			-				-				-				-			-				(5	)
Currency/Interest Rate			-				-				-				-			-				-
Total net investment hedges			-				-				-				-			-				(5	)

Non- qualifying hedges
Interest Rate			(508	)			-				-				-			-				-
Currency			(36	)			-				-				-			-				-
Currency/Interest Rate			(162	)			-				-				-			-				-
Credit			-				-				-				-			-				-
Equity			(239	)			-				-				-			-				-
Embedded Derivatives			1,280				-				-				-			-				-
Total non-qualifying hedges			335				-				-				-			-				-
Total		$	675			$	(159	)		$	(4	)		$	-		$	63			$	(132	)

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

(2)	Relates to the sale of equity method investments.

B-116

For the years ended December 31, 2011, 2010 and 2009, 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. In addition, there were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge.

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


	(in millions)
Balance, December 31, 2008	$	(115	)
Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2009		(151	)
Amount reclassified into current period earnings		24
Balance, December 31, 2009		(242	)
Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2010		62
Amount reclassified into current period earnings		6
Balance, December 31, 2010		(174	)
Net deferred gains (losses) on cash flow hedges from January 1 to December 31, 2011		157
Amount reclassified into current period earnings		19
Balance, December 31, 2011	$	2

Using December 31, 2011 values, it is anticipated that a pre-tax gain of approximately $5 million will be reclassified from “Accumulated other comprehensive income (loss)” to earnings during the subsequent twelve months ending December 31, 2012, offset by amounts pertaining to the hedged items. As of December 31, 2011, the Company does 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 Consolidated Statements of Equity.

For effective net investment hedges, the amounts, before applicable taxes, recorded in the cumulative translation adjustment account within “Accumulated other comprehensive income (loss)” were $109 million in 2011, $123 million in 2010, and $122 million in 2009.

Credit Derivatives Written

The following table sets forth the Company’s exposure from credit derivatives where the Company has written credit protection. The Company’s maximum amount at risk under these credit derivatives listed below assumes the value of the underlying referenced securities become worthless. These credit derivatives generally have maturities of less than 10 years. The table excludes a credit derivative related to surplus notes issued by a subsidiary of Prudential Insurance and embedded derivatives contained in externally-managed investments in the European market, by NAIC rating of the underlying credits as of December 31, 2011 and 2010.

		December 31, 2011				December 31, 2010
		Single Name				Single Name
NAIC Designation		Notional		Fair Value		Notional			Fair Value

				(in millions)
	1	$	431	$	1		$	5	$	-
	2		-		-			-		-
Subtotal			431		1			5		-
	3		-		-			-		-
	4		-		-			-		-
	5		-		-			-		-
	6		-		-			-		-
Subtotal			-		-			-		-
Total		$	431	$	1		$	5	$	-

B-117

The following table sets forth the composition of the Company’s credit derivatives where the Company has written credit protection by industry category as of the dates indicated.

	December 31, 2011				December 31, 2010

Industry	Notional		Fair Value		Notional		Fair Value

	(in millions)
Corporate Securities:
Manufacturing	$	-	$	-	$	-	$	-
Utilities		-		-		-		-
Finance		426		1		-		-
Services		5		-		5		-
Energy		-		-		-		-
Transportation		-		-		-		-
Retail and Wholesale		-		-		-		-
Food/Beverage		-		-		-		-
Aerospace/Defense		-		-		-		-
Chemical		-		-		-		-
Other		-		-		-		-
Total Credit Derivatives	$	431	$	1	$	5	$	-

The Company holds certain externally-managed investments in the European market which contain embedded derivatives whose fair value are primarily driven by changes in credit spreads. These investments are medium-term notes that are collateralized by investment portfolios primarily consisting of investment grade European fixed income securities, including corporate bonds and asset-backed securities, and derivatives, as well as varying degrees of leverage. The notes have a stated coupon and provide a return based on the performance of the underlying portfolios and the level of leverage. The Company invests in these notes to earn a coupon through maturity, consistent with its investment purpose for other debt securities. The notes are accounted for under U.S. GAAP as available-for-sale fixed maturity securities with bifurcated embedded derivatives (total return swaps). Changes in the value of the fixed maturity securities are reported in Equity under the heading “Accumulated Other Comprehensive Income (Loss)” and changes in the market value of the embedded total return swaps are included in current period earnings in “Realized investment gains (losses), net.” The Company’s maximum exposure to loss from these investments was $657 million and $746 million at December 31, 2011 and 2010, respectively.

In addition to writing credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of December 31, 2011 and 2010, the Company had $1.023 billion and $1.144 billion of outstanding notional amounts, respectively, reported at fair value as a liability of $23 million and a liability of less than $1 million, respectively.

Types of Derivative Instruments and Derivative Strategies used in a dealer or broker capacity

Futures, forwards and options contracts, and swap agreements, were also used in a derivative dealer or broker capacity in the Company’s commodities operations, prior to the sale of this business to Jeffries on July 1, 2011, to facilitate transactions of clients, hedge proprietary trading activities and as a means of risk management. These derivatives allowed the Company to structure transactions to manage its exposure to commodities and securities prices, foreign exchange rates and interest rates. Risk exposures were managed through diversification, by controlling position sizes and by entering into offsetting positions.

The fair value of the Company’s derivative contracts used in a derivative dealer or broker capacity were reported on a net-by-counterparty basis in the Company’s Consolidated Statements of Financial Position when management believes a legal right of setoff exists under an enforceable netting agreement.

Realized and unrealized gains and losses from marking-to-market the derivatives used in proprietary positions were recognized on a trade date basis and reported in “Income from discontinued operations, net of taxes. The pre-tax amounts reported in “Income (loss) from discontinued operations, net of taxes” for these derivatives were a gain of $63 million for 2011, a gain of $97 million for 2010.

Credit Risk-Affiliate

B-118

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

The credit exposure of the Company’s over-the-counter (OTC) derivative transactions is represented by the contracts with a positive fair value (market value) at the reporting date. To reduce credit exposures, the Company seeks to (i) enter into OTC derivative transactions pursuant to master agreements that provide for a netting of payments and receipts with a single counterparty (ii) enter into agreements that allow the use of credit support annexes (CSAs), which are bilateral rating-sensitive agreements that require collateral postings at established threshold levels. Likewise, the Company effects exchange-traded futures and options transactions through regulated exchanges and these transactions are settled on a daily basis, thereby reducing credit risk exposure in the event of non-performance by counterparties to such financial instruments.

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.

Certain of the Company’s derivative agreements with some of its counterparties contain credit-risk related triggers. If the Company’s credit rating were to fall below a certain level, the counterparties to the derivative instruments could request termination at the then fair value of the derivative or demand immediate full collateralization on derivative instruments in net liability positions. If a downgrade occurred and the derivative positions were terminated, the Company anticipates it would be able to replace the derivative positions with other counterparties in the normal course of business. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position were $7,055 million as of December 31, 2011. In the normal course of business the Company has posted collateral related to these instruments of $1,254 million as of December 31,, 2011. If the credit-risk-related contingent features underlying these agreements had been triggered on December 31, 2011, the Company estimates that it would be required to post a maximum of $5,801 million of additional collateral to its counterparties.

22.	COMMITMENTS AND GUARANTEES, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS

Commitments and Guarantees

The Company occupies leased office space in many locations under various long-term leases and has entered into numerous leases covering the long-term use of computers and other equipment. Rental expense, net of sub-lease income, incurred for the years ended December 31, 2011, 2010 and 2009 was $63 million, $63 million and $67 million, respectively.

The following table presents, at December 31, 2011, the Company’s future minimum lease payments under non-cancelable operating leases along with associated sub-lease income:

Occasionally, for business reasons, the Company may exit certain non-cancelable operating leases prior to their expiration. In these instances, the Company’s policy is to accrue, at the time it ceases to use the property being leased, the future rental expense net of any expected sub-lease income, and to release this reserve over the remaining commitment period. Of the amount listed above in total non-cancelable operating leases and the amount listed above in total sub-lease income, $9 million and $10 million, respectively, has been accrued at December 31, 2011.

	Operating Leases		Sub-lease Income



2012		79		(5)
2013		72		(4)
2014		66		(4)
2015		38		-
2016		25		-
2017		71		-

B-119

Total

351

(13

)

Commercial Mortgage Loan Commitments

	As of December 31, 2011
	(in millions)

Total outstanding mortgage loan commitments		$	867

In connection with the Company’s origination of commercial mortgage loans, it had outstanding commercial mortgage loan commitments with borrowers.

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)

	As of December 31, 2011
	(in millions)

Expected to be funded from the general account and other operations outside the separate accounts (1)	$	3,798
Expected to be funded from separate accounts	$	1,159
Portion of separate account commitments with recourse to Prudential Insurance	$	397

(1) Includes a remaining commitment of $385 million related to the Company’s agreement to co-invest with the Fosun Group (Fosun) in a private equity fund, managed by Fosun, for the Chinese marketplace.

The Company has other commitments to purchase or fund investments, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. The Company anticipates a portion of these commitments will ultimately be funded from its separate accounts. Some of the separate account commitments have recourse to Prudential Insurance if the separate accounts are unable to fund the amounts when due.

Guarantees of Investee Debt

	As of December 31, 2011
	(in millions)

Total guarantees of debt issued by entities in which the separate accounts have invested	$	2,433
Amount of above guarantee that is limited to separate account assets	$	2,364
Accrued liability associated with guarantee	$	-

A number of guarantees provided by the Company relate to real estate investments held in its separate accounts, in which entities that the separate account has invested in have borrowed funds, and the Company has guaranteed their obligations. The Company provides these guarantees to assist these entities in obtaining financing. The Company’s maximum potential exposure under these guarantees is mostly limited to the assets of the separate account. The exposure that is not limited to the separate account assets relates to guarantees limited to fraud, criminal activity or other bad acts. These guarantees generally expire at various times over the next fourteen years. At December 31, 2011, the Company’s assessment is that it is unlikely payments will be required. Any payments that may become required under these guarantees would either first be reduced by proceeds received by the creditor on a sale of the underlying collateral, or would provide rights to obtain the underlying collateral.

Credit Derivatives Written

As discussed further in Note 21, the Company writes credit derivatives under which the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the defaulted security or similar security.

Guarantees of Asset Values

B-120

	As of December 31, 2011
	(in millions)

Guaranteed value of third parties assets	$	46,792
Fair value of collateral supporting these assets	$	48,824
Asset associated with guarantee, carried at fair value	$	5

Certain contracts underwritten by the Retirement segment include guarantees related to financial assets owned by the guaranteed party. These contracts are accounted for as derivatives and carried at fair value. The collateral supporting these guarantees is not reflected on the Company’s balance sheet.

Other Guarantees

	As of December 31, 2011
	(in millions)

Other guarantees where amount can be determined		$	321
Accrued liability for other guarantees and indemnifications		$	6

The Company is also subject to other financial guarantees and indemnity arrangements. The Company has provided indemnities and guarantees related to acquisitions, dispositions, investments and other transactions that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or applicable. Included above are $300 million of yield maintenance guarantees related to certain investments the Company sold. The Company does not expect to have to make any payments on these guarantees and is not carrying any liabilities associated with these guarantees.

Since certain of these obligations are not subject to limitations, it is not possible to determine the maximum potential amount due under these guarantees. The accrued liabilities identified above do not include retained liabilities associated with sold businesses.

B-121

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 businesses. Pending legal and regulatory actions include proceedings relating to aspects of the Company’s businesses and operations that are specific to it and proceedings that are typical of the businesses in which it operates, including in both cases businesses that have been either divested or placed in wind-down status. Some of these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters, the plaintiffs 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.

Individual Life and Group Insurance

In January 2012, a qui tam action on behalf of the State of Illinois, Total Asset Recovery Services v. Met Life Inc, et al., Prudential Financial, Inc., The Prudential Insurance Company of America, and Prudential Holdings, LLC, filed in the Circuit Court of Cook County, Illinois, was served on the Company. The complaint alleges that the Company failed to escheat life insurance proceeds to the State of Illinois in violation of the Illinois False Claims Whistleblower Reward and Protection Act and seeks injunctive relief, compensatory damages, civil penalties, treble damages, prejudgment interest, attorneys’ fees and costs. In March 2012, a qui tam action on behalf of the State of Minnesota, Total Asset Recovery v. MetLife Inc., et al., Prudential Financial Inc., The Prudential Insurance Company of America and Prudential Holdings, Inc., filed in the Fourth Judicial District, Hennepin County, in the State of Minnesota, was served on the Company. The complaint alleges that the Company failed to escheat life insurance proceeds to the State of Minnesota in violation of the Minnesota False Claims Act and seeks injunctive relief, compensatory damages, civil penalties, treble damages, prejudgment interest, attorneys’ fees and costs.

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. Other jurisdictions that are not signatories to the Regulatory Settlement Agreement are considering proposals that would apply prospectively and require life insurance companies to take additional steps to identify unreported deceased policy and contract holders. These prospective changes and any escheatable property identified as a result of the audits and inquiries could result in: (1) additional payments of previously unclaimed death benefits; (2) the payment of abandoned funds to U.S. jurisdictions; and (3) changes in the Company’s practices and procedures for the identification of escheatable funds and beneficiaries, which would impact claim payments and reserves, among other consequences.

The Company is one of several companies subpoenaed by the New York Attorney General regarding its unclaimed property procedures. Additionally, the New York Department of Insurance (“NYDOI”) has requested that 172 life insurers (including the Company) provide data to the NYDOI regarding use of the SSMDF. The New York Office of Unclaimed Funds recently notified the Company that it intends to conduct an audit of the Company’s compliance with New York’s unclaimed property laws. The

B-122

Minnesota Attorney General has also requested information regarding the Company’s use of the SSMDF and its claim handling procedures and the Company is one of several companies subpoenaed by the Minnesota Department of Commerce, Insurance Division. In February 2012, the Massachusetts Office of the Attorney General requested information regarding the Company’s unclaimed property procedures.

From July 2010 to December 2010, four purported nationwide class actions were filed challenging the use of retained asset accounts to settle death benefit claims of beneficiaries of a group life insurance contract owned by the United States Department of Veterans Affairs (“VA Contract”) that covers the lives of members and veterans of the U.S. armed forces. In 2011, the cases were consolidated in the United States District Court for the District of Massachusetts by the Judicial Panel for Multi-District Litigation as In re Prudential Insurance Company of America SGLI/VGLI Contract Litigation. The consolidated complaint alleges that the use of the retained assets accounts that earn interest and are available to be withdrawn by the beneficiary, in whole or in part, at any time, to settle death benefit claims is in violation of federal law, and asserts claims of breach of contract, breaches of fiduciary duty and the duty of good faith and fair dealing, fraud and unjust enrichment and seeks compensatory and punitive damages, disgorgement of profits, equitable relief and pre and post-judgment interest. In March 2011, the motion to dismiss was denied. In January 2012, plaintiffs filed a motion to certify the class.

In September 2010, Huffman v. The Prudential Insurance Company, a purported nationwide class action brought on behalf of beneficiaries of group life insurance contracts owned by ERISA-governed employee welfare benefit plans was filed in the United States District Court for the Eastern District of Pennsylvania, challenging the use of retained asset accounts in employee welfare benefit plans to settle death benefit claims as a violation of ERISA and seeking injunctive relief and disgorgement of profits. In July 2011, the Company’s motion for judgment on the pleadings was denied. In February 2012, plaintiffs filed a motion to certify the class.

In January 2011, a purported state-wide class action, Garcia v. The Prudential Insurance Company of America was dismissed by the Second Judicial District Court, Washoe County, Nevada. The complaint was brought on behalf of Nevada beneficiaries of individual life insurance policies for which, unless the beneficiaries elected another settlement method, death benefits were placed in retained asset accounts. The complaint alleges that by failing to disclose material information about the accounts, the Company wrongfully delayed payment and improperly retained undisclosed profits, and seeks damages, injunctive relief, attorneys’ fees and pre and post-judgment interest. In February 2011, plaintiff appealed the dismissal to the Nevada Supreme Court. As previously reported, in December 2009, an earlier purported nationwide class action raising substantially similar allegations brought by the same plaintiff in the United States District Court for the District of New Jersey, Garcia v. Prudential Insurance Company of America, was dismissed. In December 2010, a purported state-wide class action complaint, Phillips v. Prudential Financial, Inc., was filed in state court and removed to the United States District Court for the Southern District of Illinois. The complaint makes allegations under Illinois law, substantially similar to the Garcia cases, on behalf of a class of Illinois residents whose death benefit claims were settled by retained assets accounts. In March 2011, the complaint was amended to drop the Company as a defendant and add Pruco Life Insurance Company as a defendant and is now captioned Phillips v. Prudential Insurance and Pruco Life Insurance Company. In November 2011, the complaint was dismissed. In December 2011, plaintiffs appealed the dismissal.

In July 2010, the Company, along with other life insurance industry participants, received a formal request for information from the State of New York Attorney General’s Office in connection with its investigation into industry practices relating to the use of retained asset accounts. In August 2010, the Company received a similar request for information from the State of Connecticut Attorney General’s Office. The Company is cooperating with these investigations. The Company has also been contacted by state insurance regulators and other governmental entities, including the U.S. Department of Veterans Affairs and Congressional committees regarding retained asset accounts. These matters may result in additional investigations, information requests, claims, hearings, litigation, adverse publicity and potential changes to business practices.

In February 2011, a fifth amended complaint was filed in the United States District Court for the District of New Jersey in Clark v. Prudential Insurance Company. The complaint brought on behalf of a purported class of California, Indiana, Ohio and Texas residents who purchased individual health insurance policies alleges that Prudential Insurance failed to disclose that it had ceased selling this type of policy in 1981 and that, as a result, premiums would increase significantly. The complaint alleges claims of fraudulent misrepresentation and omission, breach of the duty of good faith and fair dealing, and California’s Unfair Competition Law and seeks compensatory and punitive damages. The matter was originally filed in 2008 and certain of the claims in the first four complaints were dismissed. In February 2012, plaintiffs filed a motion to certify the class.

In April 2009, Schultz v. The Prudential Insurance Company of America, a purported nationwide class action on behalf of participants claiming disability benefits under certain employee benefit plans insured by Prudential, was filed in the United States District Court for the Northern District of Illinois. As amended, the complaint alleges that Prudential Insurance and the defendant plans violated ERISA by characterizing family Social Security benefits as "loss of time" benefits that were offset against Prudential contract benefits. The complaint seeks a declaratory judgment that the offsets were improper, damages and other relief. The Company has agreed to indemnify the named defendant plans. In April 2011, Schultz was dismissed with prejudice, and

B-123

plaintiffs appealed to the Seventh Circuit Court of Appeals. In March 2012, the court affirmed the dismissal. From November 2002 to March 2005, eleven separate complaints were filed against the Company and the law firm of Leeds Morelli & Brown in New Jersey state court and in the New Jersey Superior Court, Essex County as Lederman v. Prudential Financial, Inc., et al. The complaints allege that an alternative dispute resolution agreement entered into among Prudential Insurance, over 235 claimants who are current and former Prudential Insurance employees, and Leeds Morelli & Brown (the law firm representing the claimants) was illegal and that Prudential Insurance conspired with Leeds Morelli & Brown to commit fraud, malpractice, breach of contract, and violate racketeering laws by advancing legal fees to the law firm with the purpose of limiting Prudential’s liability to the claimants. In February 2010, the New Jersey Supreme Court assigned the cases for centralized case management to the Superior Court, Bergen County. The Company participated in a court-ordered mediation that resulted in a settlement involving 193 of the remaining 235 plaintiffs. The amounts paid to the 193 plaintiffs were within existing reserves for this matter. The remaining 42 plaintiffs continue to pursue their individual lawsuits, and have filed offers of judgment totaling approximately $90 million. In February 2012, the court granted summary judgment against two of the remaining plaintiffs.

Retirement Solutions and Investment Management

In October 2007, Prudential Retirement Insurance and Annuity Co. (“PRIAC”) filed an action in the United States District Court for the Southern District of New York, Prudential Retirement Insurance & Annuity Co. v. State Street Global Advisors, in PRIAC’s fiduciary capacity and on behalf of certain defined benefit and defined contribution plan clients of PRIAC, against an unaffiliated asset manager, State Street Global Advisors (“SSgA”) and SSgA’s affiliate, State Street Bank and Trust Company (“State Street”). This action seeks, among other relief, restitution of certain losses attributable to certain investment funds sold by SSgA as to which PRIAC believes SSgA employed investment strategies and practices that were misrepresented by SSgA and failed to exercise the standard of care of a prudent investment manager. Given the unusual circumstances surrounding the management of these SSgA funds and in order to protect the interests of the affected plans and their participants while PRIAC pursues these remedies, PRIAC implemented a process under which affected plan clients that authorized PRIAC to proceed on their behalf have received payments from funds provided by PRIAC for the losses referred to above. The Company’s consolidated financial statements, and the results of the Retirement segment included in the Company’s U.S. Retirement Solutions and Investment Management Division, for the year ended December 31, 2007 include a pre-tax charge of $82 million, reflecting these payments to plan clients and certain related costs. In September 2008, the United States District Court for the Southern District of New York denied the State Street defendants’ motion to dismiss claims for damages and other relief under Section 502(a)(2) of ERISA, but dismissed the claims for equitable relief under Section 502(a)(3) of ERISA. In October 2008, defendants answered the complaint and asserted counterclaims for contribution and indemnification, defamation and violations of Massachusetts’ unfair and deceptive trade practices law. In February 2010, State Street reached a settlement with the SEC over charges that it misled investors about their exposure to sub-prime investments, resulting in significant investor losses in mid-2007. Under the settlement, State Street paid approximately $313 million in disgorgement, pre-judgment interest, penalty and compensation into a Fair Fund that was distributed to injured investors and consequently, State Street paid PRIAC, for deposit into its separate accounts, approximately $52.5 million. By the terms of the settlement, State Street’s payment to PRIAC does not resolve any claims PRIAC has against State Street or SSgA in connection with the losses in the investment funds SSgA managed, and the penalty component of State Street’s SEC settlement cannot be used to offset or reduce compensatory damages in the action against State Street and SSgA. In June 2010, PRIAC moved for partial summary judgment on State Street’s counterclaims. At the same time, State Street moved for summary judgment on PRIAC’s complaint. In March 2011, the district court denied State Street’s motion for summary judgment and denied in part and granted in part PRIAC’s motion for partial summary judgment on State Street’s counterclaims. In October 2011, the court held a bench trial to determine whether State Street had breached its fiduciary duty to PRIAC’s plan clients. In February 2012, the court issued a decision holding that State Street breached its fiduciary duty to the plans under ERISA to manage the investment funds prudently and to diversify them. The court held that PRIAC did not prove that State Street breached its duty of loyalty to the plans under ERISA. The court held that State Street's breaches caused the plans' losses in the amount of $76.7 million and, after crediting State Street for an earlier payment, awarded $28.1 million in damages in addition to the amount previously recovered as a result of the SEC settlement. The court has not yet ruled on State Street's counterclaims and has reserved judgment on PRIAC's requests for pre-judgment interest and attorney's fees.

Other Matters

In October 2006, a purported class action lawsuit, Bouder v. Prudential Financial, Inc. and Prudential Insurance Company of America, was filed in the United States District Court for the District of New Jersey, claiming that Prudential failed to pay overtime to insurance agents in violation of federal and Pennsylvania law, and that improper deductions were made from these agents’ wages in violation of state law. The complaint seeks back overtime pay and statutory damages, recovery of improper deductions, interest, and attorneys’ fees. In March 2008, the court conditionally certified a nationwide class on the federal overtime claim. Separately, in March 2008, a purported nationwide class action lawsuit was filed in the United States District Court for the Southern District of California, Wang v. Prudential Financial, Inc. and Prudential Insurance, claiming that the Company failed to

B-124

pay its agents overtime and provide other benefits in violation of California and federal law and seeking compensatory and punitive damages in unspecified amounts. In September 2008, Wang was transferred to the United States District Court for the District of New Jersey and consolidated with the Bouder matter. Subsequent amendments to the complaint have resulted in additional allegations involving purported violations of an additional nine states’ overtime and wage payment laws. In February 2010, Prudential moved to decertify the federal overtime class that had been conditionally certified in March 2008 and moved for summary judgment on the federal overtime claims of the named plaintiffs. In July 2010, plaintiffs filed a motion for class certification of the state law claims. In August 2010, the district court granted Prudential’s motion for summary judgment, dismissing the federal overtime claims. The motion for class certification of the state law claims is pending.

Summary

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.

B-125

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholder of

The Prudential Insurance Company of America:

In our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of operations, of equity and of cash flows present fairly, in all material respects, the financial position of The Prudential Insurance Company of America (a wholly owned subsidiary of Prudential Holdings, LLC, which is a wholly owned subsidiary of Prudential Financial, Inc.), and its subsidiaries (collectively, the "Company") at December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 1 to the consolidated financial statements, the Company has restated its 2010 consolidated statements of cash flows to correct an error.

As described in Note 2 of the consolidated financial statements, on January 1, 2009, the Company changed its method of determining and recording other-than-temporary impairment for debt securities.

/s/ PricewaterhouseCoopers LLP

April 16, 2012

B-126

As filed with the SEC on 04/25/2012	Registration No. 333-01031 811-07545

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________

FORM N-6

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 18 [X]
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 24
_____________

THE PRUDENTIAL VARIABLE
CONTRACT ACCOUNT GI-2
(Exact Name of Registrant)

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
(Name of Depositor)

751 Broad Street
Newark, New Jersey 07102
(800) 778-2255
(Address and telephone number of principal executive offices)
_____________

SUN-JIN MOON
VICE PRESIDENT AND CORPORATE COUNSEL
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
213 WASHINGTON STREET
NEWARK, NEW JERSEY 07102
(Name and address of agent for service)

_____________

It is proposed that this filing will become effective (check appropriate space):

□ immediately upon filing pursuant to paragraph (b) of Rule 485

■ on May 1, 2012 pursuant to paragraph (b) of Rule 485
(date)
□ 60 days after filing pursuant to paragraph (a)(1) of Rule 485

□ on pursuant to paragraph (a)(1) of Rule 485
(date)

■ This Post-Effective Amendment designates a new effective date for a previously filed Post-Effective Amendment.

COVERED PERSON’S ATTAINED AGE ---------------------------	CORRIDOR PERCENTAGE -----------------------	COVERED PERSON’S ATTAINED AGE ------------------------------	CORRIDOR PERCENTAGE -----------------------
0-40 41 42 43 44 --- 45 46 47 48 49 --- 50 51 52 53 54 --- 55 56 57 58 59	250 243 236 229 222 --- 215 209 203 197 191 --- 185 178 171 164 157 --- 150 146 142 138 134	60 61 62 63 64 --- 65 66 67 68 69 --- 70 71 72 73 74 --- 75 76 77 78 79	130 128 126 124 122 --- 120 119 118 117 116 --- 115 113 111 107 107 --- 105 105 105 105 105
---	---	---	---
80 81 82 83 84 --- 85 86 87 88 89	105 105 105 105 105 --- 105 105 105 105 105	90 91 92 93 94 --- 95 96 97 98 99	105 104 103 102 101 --- 100 100 100 100 100

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
	PAGE
The Prudential Insurance Company of America	2
The Prudential Variable Contract Account GI-2	2
Principal Underwriter	2
Distribution and Compensation	2
Services Performed by Third Parties	3
State Regulation	4
ERISA Considerations	4
Performance Data	5
Ratings and Advertisement	6
Premiums	6
Processing Premium Payments	6
Information in Good Order	6
Rules That Apply	7
Experts	7
Financial Statements	7

CHARGES AND EXPENSES		11
	Charges for Sales Expenses	11
	Charge for Taxes Attributable to Premiums	11
	Charge for Processing Premiums	12
	Surrender Charge	12
	Withdrawal Charge	12
	Loan Charges	12
	Reduction of Charges	12
	Cost of Insurance	12
	Monthly Deductions from the Certificate Fund	14
	Daily Deductions from the Variable Investment Options	15
	Transaction Charges	15
	Portfolio Charges	15

PERSONS HAVING RIGHTS UNDER THE CONTRACT		15
	Contract Holder	15
	Participant	16
	Applicant Owner Provision	16
	Beneficiary	16

PROCEDURES		20
	Telephone and Electronic Transactions	20
	When Prudential Reconciles Financial Transactions	21

Prudential Series Fund - Class I Shares
Portfolios/Objectives	Style/Type	Subadvisers
Conservative Balanced: Total investment return consistent with a conservatively managed diversified portfolio.	Balanced	PIM QMA
Equity: Long-term growth of capital.	Large-Cap Core	Jennison
Flexible Managed: Total return consistent with an aggressively managed diversified portfolio.	Balanced	PIM QMA
Jennison: Long-term growth of capital.	Large-Cap Growth	Jennison
Money Market: Maximum current income consistent with the stability of capital and the maintenance of liquidity.	Fixed Income – Money Market	PIM
Small Capitalization Stock: Long-term growth of capital	Small-Cap Core	QMA
Stock Index: Investment results that generally correspond to the performance of publicly-traded common stocks.	Large-Cap Core	QMA


	SUBACCOUNTS
	Prudential Money Market Portfolio			Prudential Flexible Managed Portfolio		Prudential Stock Index Portfolio		Prudential Equity Portfolio			Neuberger Berman AMT Short Duration Bond Portfolio
ASSETS
Investment in the portfolio, at fair value	$	3,191,980		$	3,981,771	$	13,619,681	$	4,902,112		$	1,422,033

Net Assets	$	3,191,980		$	3,981,771	$	13,619,681	$	4,902,112		$	1,422,033


NET ASSETS, representing:
Units of Participants or Contract Holders	$	3,191,980		$	3,981,771	$	13,619,681	$	4,891,975		$	1,422,033
Equity of the Prudential Insurance Company of America	$	0		$	0	$	0	$	10,137		$	0

	$	3,191,980		$	3,981,771	$	13,619,681	$	4,902,112		$	1,422,033


Units outstanding		236,679			261,794		1,046,705		367,675			101,313


Portfolio shares held		319,198			249,016		432,783		206,579			131,792
Portfolio net asset value per share	$	10.00		$	15.99	$	31.47	$	23.73		$	10.79
Investment in portfolio shares, at cost	$	3,191,966		$	3,240,711	$	10,744,691	$	3,616,754		$	1,490,076

STATEMENT OF OPERATIONS For the year ended December 31, 2011
	SUBACCOUNTS
	Prudential Money Market Portfolio			Prudential Flexible Managed Portfolio		Prudential Stock Index Portfolio		Prudential Equity Portfolio			Neuberger Berman AMT Short Duration Bond Portfolio
INVESTMENT INCOME
Dividend income	$	740		$	78,935	$	215,724	$	34,865		$	56,938


EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		15,096			17,951		60,670		22,983			6,310


NET INVESTMENT INCOME (LOSS)		(14,356	)		60,984		155,054		11,882			50,628


NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			0		0		0			0
Realized gain (loss) on shares redeemed		0			12,591		19,880		47,127			(41,507	)
Net change in unrealized gain (loss) on investments		0			81,067		72,683		(228,900	)		(10,062	)


NET GAIN (LOSS) ON INVESTMENTS		0			93,658		92,563		(181,773	)		(51,569	)


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(14,356	)	$	154,642	$	247,617	$	(169,891	)	$	(941	)


SUBACCOUNTS (Continued)
DWS High Income VIP			MFS VIT Research Series Portfolio			Dreyfus Variable Investment Opportunistic Small Cap Portfolio			Franklin Templeton Foreign Securities Fund – Class 2			Franklin Templeton Developing Markets Securities Fund – Class 2			Prudential Diversified Bond Portfolio		Prudential High Yield Bond Portfolio			Prudential Value Portfolio

$	3,369,357		$	5,683,068		$	7,415,705		$	4,014,201		$	3,342,198		$	629,855	$	789,559		$	385,534

$	3,369,357		$	5,683,068		$	7,415,705		$	4,014,201		$	3,342,198		$	629,855	$	789,559		$	385,534



$	3,369,357		$	5,683,068		$	7,415,705		$	4,014,201		$	3,342,198		$	615,502	$	789,559		$	376,366
$	0		$	0		$	0		$	0		$	0		$	14,353	$	0		$	9,168

$	3,369,357		$	5,683,068		$	7,415,705		$	4,014,201		$	3,342,198		$	629,855	$	789,559		$	385,534


	190,265			432,168			579,032			286,035			111,667			50,710		39,373			100,400


	513,622			302,613			282,395			319,602			354,798			53,650		160,154			24,202
$	6.56		$	18.78		$	26.26		$	12.56		$	9.42		$	11.74	$	4.93		$	15.93
$	3,177,534		$	3,692,791		$	6,477,300		$	3,402,771		$	2,168,272		$	561,259	$	756,715		$	338,348


SUBACCOUNTS (Continued)
DWS High Income VIP			MFS VIT Research Series Portfolio			Dreyfus Variable Investment Opportunistic Small Cap Portfolio			Franklin Templeton Foreign Securities Fund – Class 2			Franklin Templeton Developing Markets Securities Fund – Class 2			Prudential Diversified Bond Portfolio		Prudential High Yield Bond Portfolio			Prudential Value Portfolio

$	295,982		$	49,502		$	32,496		$	75,099		$	35,220		$	26,521	$	55,000		$	3,522



	14,998			26,152			35,761			19,723			16,479			2,678		3,258			1,514

	280,984			23,350			(3,265	)		55,376			18,741			23,843		51,742			2,008



	0			0			0			0			0			13,798		0			0
	(46,424	)		53,836			(43,696	)		7,041			26,901			2,922		(134	)		1,767
	(114,092	)		(113,760	)		(1,053,204	)		(515,701	)		(634,521	)		1,508		(16,560	)		(20,904	)


	(160,516	)		(59,924	)		(1,096,900	)		(508,660	)		(607,620	)		18,228		(16,694	)		(19,137	)

$	120,468		$	(36,574	)	$	(1,100,165	)	$	(453,284	)	$	(588,879	)	$	42,071	$	35,048		$	(17,129	)


	SUBACCOUNTS
	Prudential Jennison Portfolio			Prudential Global Portfolio			American Century VP Balanced Fund		American Century VP International Fund			American Century VP Value Fund
ASSETS
Investment in the portfolio, at fair value	$	2,146,549		$	224,848		$	81,373	$	65,661		$	264,174

Net Assets	$	2,146,549		$	224,848		$	81,373	$	65,661		$	264,174


NET ASSETS, representing:
Units of Participants or Contract Holders	$	2,146,549		$	216,188		$	81,373	$	65,661		$	264,174
Equity of the Prudential Insurance Company of America	$	0		$	8,660		$	0	$	0		$	0

	$	2,146,549		$	224,848		$	81,373	$	65,661		$	264,174


Units outstanding		195,117			105,107			5,463		5,488			13,530


Portfolio shares held		92,285			13,273			12,500		8,837			45,547
Portfolio net asset value per share	$	23.26		$	16.94		$	6.51	$	7.43		$	5.80
Investment in portfolio shares, at cost	$	1,363,458		$	177,109		$	72,099	$	54,025		$	248,084

STATEMENT OF OPERATIONS For the year ended December 31, 2011
	SUBACCOUNTS
	Prudential Jennison Portfolio			Prudential Global Portfolio			American Century VP Balanced Fund		American Century VP International Fund			American Century VP Value Fund
INVESTMENT INCOME
Dividend income	$	6,307		$	3,280		$	1,606	$	1,037		$	5,540


EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		9,586			803			383		331			1,225


NET INVESTMENT INCOME (LOSS)		(3,279	)		2,477			1,223		706			4,315


NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			0			0		0			0
Realized gain (loss) on shares redeemed		4,149			(892	)		183		310			(306	)
Net change in unrealized gain (loss) on investments		463			(19,589	)		2,708		(10,077	)		(1,524	)


NET GAIN (LOSS) ON INVESTMENTS		4,612			(20,481	)		2,891		(9,767	)		(1,830	)


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	1,333		$	(18,004	)	$	4,114	$	(9,061	)	$	2,485


SUBACCOUNTS (Continued)
T.Rowe Price Mid-Cap Growth Portfolio			T.Rowe Price New America Growth Portfolio			Prudential Small Capitalization Stock Portfolio			MFS VIT Research Bond Series Portfolio		T.Rowe Price Equity Income Portfolio			Neuberger Berman AMT Partners Portfolio			Janus Aspen Worldwide Portfolio – Institutional Shares			MFS VIT Strategic Income Series Portfolio

$	4,046,734		$	386,886		$	779,937		$	214,880	$	5,664,526		$	153,880		$	312,573		$	82,342

$	4,046,734		$	386,886		$	779,937		$	214,880	$	5,664,526		$	153,880		$	312,573		$	82,342



$	4,046,734		$	386,886		$	779,937		$	214,880	$	5,664,526		$	146,076		$	312,573		$	82,342
$	0		$	0		$	0		$	0	$	0		$	7,804		$	0		$	0

$	4,046,734		$	386,886		$	779,937		$	214,880	$	5,664,526		$	153,880		$	312,573		$	82,342


	154,110			30,760			29,909			10,872		363,891			173,879			33,085			4,268


	190,255			19,096			45,879			16,517		291,685			15,404			12,101			8,201
$	21.27		$	20.26		$	17.00		$	13.01	$	19.42		$	9.99		$	25.83		$	10.04
$	3,530,996		$	325,819		$	649,941		$	176,632	$	4,792,672		$	139,890		$	252,555		$	76,748


SUBACCOUNTS (Continued)
T.Rowe Price Mid-Cap Growth Portfolio			T.Rowe Price New America Growth Portfolio			Prudential Small Capitalization Stock Portfolio			MFS VIT Research Bond Series Portfolio		T.Rowe Price Equity Income Portfolio			Neuberger Berman AMT Partners Portfolio			Janus Aspen Worldwide Portfolio – Institutional Shares			MFS VIT Strategic Income Series Portfolio

$	0		$	872		$	6,233		$	5,609	$	98,277		$	0		$	2,459		$	4,462



	17,866			1,558			3,402			952		24,680			472			2,168			364


	(17,866	)		(686	)		2,831			4,657		73,597			(472	)		291			4,098



	482,079			30,338			10,333			2,414		0			0			0			0
	(11,961	)		(1,818	)		(11,261	)		690		(3,897	)		(7,066	)		16,217			41
	(497,096	)		(29,855	)		(3,324	)		5,138		(90,937	)		(16,578	)		(100,323	)		(735	)


	(26,978	)		(1,335	)		(4,252	)		8,242		(94,834	)		(23,644	)		(84,106	)		(694	)


$	(44,844	)	$	(2,021	)	$	(1,421	)	$	12,899	$	(21,237	)	$	(24,116	)	$	(83,815	)	$	3,404


	SUBACCOUNTS
	Janus Aspen Janus Portfolio – Institutional Shares			Janus Aspen Overseas Portfolio – Institutional Shares			Lazard Retirement U.S. Small-Mid Cap Equity Portfolio			Janus Aspen Enterprise Portfolio – Institutional Shares			AllianceBernstein VPS Real Estate Investment Portfolio
ASSETS
Investment in the portfolio, at fair value	$	63,234		$	140,179		$	63,371		$	2,971,958		$	138,919

Net Assets	$	63,234		$	140,179		$	63,371		$	2,971,958		$	138,919


NET ASSETS, representing:
Units of Participants or Contract Holders	$	63,234		$	140,179		$	63,371		$	2,971,958		$	138,919
Equity of the Prudential Insurance Company of America	$	0		$	0		$	0		$	0		$	0

	$	63,234		$	140,179		$	63,371		$	2,971,958		$	138,919


Units outstanding		6,189			7,086			3,841			216,199			5,033


Portfolio shares held		2,769			3,674			6,844			77,861			11,996
Portfolio net asset value per share	$	22.84		$	38.15		$	9.26		$	38.17		$	11.58
Investment in portfolio shares, at cost	$	40,945		$	84,476		$	58,978		$	1,698,726		$	123,947

STATEMENT OF OPERATIONS For the year ended December 31, 2011
	SUBACCOUNTS
	Janus Aspen Janus Portfolio – Institutional Shares			Janus Aspen Overseas Portfolio – Institutional Shares			Lazard Retirement U.S. Small-Mid Cap Equity Portfolio			Janus Aspen Enterprise Portfolio – Institutional Shares			AllianceBernstein VPS Real Estate Investment Portfolio
INVESTMENT INCOME
Dividend income	$	395		$	753		$	0		$	0		$	1,376


EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		345			813			310			13,357			436


NET INVESTMENT INCOME (LOSS)		50			(60	)		(310	)		(13,357	)		940


NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			1,570			4,867			0			10,382
Realized gain (loss) on shares redeemed		14,482			21,871			434			14,095			(7,704	)
Net change in unrealized gain (loss) on investments		(17,196	)		(88,781	)		(10,902	)		(36,212	)		9,303


NET GAIN (LOSS) ON INVESTMENTS		(2,714	)		(65,340	)		(5,601	)		(22,117	)		11,981


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(2,664	)	$	(65,400	)	$	(5,911	)	$	(35,474	)	$	12,921


SUBACCOUNTS (Continued)
DWS Government & Agency Securities VIP		Prudential Conservative Balanced Portfolio		Prudential Jennison 20/20 Focus Portfolio			Dreyfus Variable Investment Fund International Equity Portfolio			DWS Dreman Small Mid Cap Value VIP			Lazard Retirement Emerging Markets Equity Portfolio			T. Rowe Price Personal Strategy Balanced Portfolio			Franklin Templeton Growth Securities Fund*

$	21,314	$	1,298,148	$	83,753		$	254,881		$	64,018		$	1,258,581		$	197,292		$	14,062

$	21,314	$	1,298,148	$	83,753		$	254,881		$	64,018		$	1,258,581		$	197,292		$	14,062



$	7,756	$	1,283,965	$	83,753		$	254,881		$	64,018		$	1,258,581		$	197,292		$	0
$	13,558	$	14,183	$	0		$	0		$	0		$	0		$	0		$	14,062

$	21,314	$	1,298,148	$	83,753		$	254,881		$	64,018		$	1,258,581		$	197,292		$	14,062


	10,517		107,645		6,820			23,581			4,696			108,186			16,093			1,000


	1,625		79,544		5,625			18,537			5,635			67,268			11,084			1,391
$	13.12	$	16.32	$	14.89		$	13.75		$	11.36		$	18.71		$	17.80		$	10.11
$	19,912	$	1,107,962	$	80,167		$	262,414		$	57,265		$	1,403,185		$	190,632		$	10,596


SUBACCOUNTS (Continued)
DWS Government & Agency Securities VIP		Prudential Conservative Balanced Portfolio		Prudential Jennison 20/20 Focus Portfolio			Dreyfus Variable Investment Fund International Equity Portfolio			DWS Dreman Small Mid Cap Value VIP			Lazard Retirement Emerging Markets Equity Portfolio			T. Rowe Price Personal Strategy Balanced Portfolio			Franklin Templeton Growth Securities Fund*

$	853	$	25,314	$	51		$	3,462		$	408		$	27,460		$	3,141		$	204



	33		5,081		294			862			187			6,141			610			68


	820		20,233		(243	)		2,600			221			21,319			2,531			136



	323		0		0			0			0			0			0			0
	64		1,622		(642	)		(1,938	)		(1,911	)		(16,227	)		(1,409	)		(2	)
	226		32,408		(1,222	)		(24,389	)		2,933			(260,142	)		1,373			(1,258	)


	613		34,030		(1,864	)		(26,327	)		1,022			(276,369	)		(36	)		(1,260	)


$	1,433	$	54,263	$	(2,107	)	$	(23,727	)	$	1,243		$	(255,050	)	$	2,495		$	(1,124	)


	SUBACCOUNTS
	Neuberger Berman Advisers Management Trust Growth Portfolio			Prudential Government Income Portfolio			T. Rowe Price International Stock Portfolio			DWS Bond VIP*			Invesco V.I. Core Equity Fund
ASSETS
Investment in the portfolio, at fair value	$	17,413		$	12,425		$	17,509		$	0		$	13,128

Net Assets	$	17,413		$	12,425		$	17,509		$	0		$	13,128


NET ASSETS, representing:
Units of Participants or Contract Holders	$	0		$	178		$	1,012		$	0		$	2,797
Equity of the Prudential Insurance Company of America	$	17,413		$	12,247		$	16,497		$	0		$	10,331

	$	17,413		$	12,425		$	17,509		$	0		$	13,128


Units outstanding		1,000			1,015			1,062			0			12,707


Portfolio shares held		938			1,004			1,474			0			491
Portfolio net asset value per share	$	18.57		$	12.37		$	11.88		$	0.00		$	26.72
Investment in portfolio shares, at cost	$	9,874		$	11,517		$	11,785		$	0		$	12,817

STATEMENT OF OPERATIONS For the year ended December 31, 2011
	SUBACCOUNTS
	Neuberger Berman Advisers Management Trust Growth Portfolio			Prudential Government Income Portfolio			T. Rowe Price International Stock Portfolio			DWS Bond VIP*			Invesco V.I. Core Equity Fund
INVESTMENT INCOME
Dividend income	$	0		$	293		$	302		$	0		$	131


EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		80			53			84			0			7


NET INVESTMENT INCOME (LOSS)		(80	)		240			218			0			124


NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			244			0			0			0
Realized gain (loss) on shares redeemed		36			(1	)		(10	)		(2,002	)		6
Net change in unrealized gain (loss) on investments		(72	)		339			(2,813	)		2,143			(167	)


NET GAIN (LOSS) ON INVESTMENTS		(36	)		582			(2,823	)		141			(161	)


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(116	)	$	822		$	(2,605	)	$	141		$	(37	)


SUBACCOUNTS (Continued)
Van Eck VIP Emerging Markets Fund*			Fidelity VIP Equity-Income Portfolio – Service Class			DWS Strategic Income VIP*			PIMCO VIT Long-Term U.S Government Portfolio			PIMCO Real Return Portfolio*			DWS Global Thematic VIP*			DWS Capital Growth VIP			PIMCO All Asset Portfolio*

$	0		$	54,014		$	0		$	78,826		$	0		$	0		$	213,323		$	0

$	0		$	54,014		$	0		$	78,826		$	0		$	0		$	213,323		$	0



$	0		$	45,629		$	0		$	61,364		$	0		$	0		$	202,879		$	0
$	0		$	8,385		$	0		$	17,462		$	0		$	0		$	10,444		$	0

$	0		$	54,014		$	0		$	78,826		$	0		$	0		$	213,323		$	0


	0			65,131			0			45,042			0			0			203,500			0


	0			2,899			0			5,891			0			0			11,481			0
$	0.00		$	18.63		$	0.00		$	13.38		$	0.00		$	0.00		$	18.58		$	0.00
$	0		$	51,763		$	0		$	66,130		$	0		$	0		$	180,840		$	0


SUBACCOUNTS (Continued)
Van Eck VIP Emerging Markets Fund*			Fidelity VIP Equity-Income Portfolio – Service Class			DWS Strategic Income VIP*			PIMCO VIT Long-Term U.S Government Portfolio			PIMCO Real Return Portfolio*			DWS Global Thematic VIP*			DWS Capital Growth VIP			PIMCO All Asset Portfolio*

$	112		$	1,347		$	0		$	1,630		$	50		$	0		$	1,471		$	51



	0			91			0			107			0			0			463			0


	112			1,256			0			1,523			50			0			1,008			51



	0			0			0			1,589			0			0			0			0
	(3,582	)		(551	)		523			(96	)		1,282			(5,477	)		(1,559	)		(392	)
	2,854			(557	)		(241	)		12,768			(1,074	)		5,628			(9,926	)		649


	(728	)		(1,108	)		282			14,261			208			151			(11,485	)		257


$	(616	)	$	148		$	282		$	15,784		$	258		$	151		$	(10,477	)	$	308


	SUBACCOUNTS
	Franklin Templeton Mutual Global Discovery Securities Fund – Class 2			PIMCO Global Bond Portfolio*			PIMCO VIT Total Return Portfolio			Fidelity VIP Investment Grade Bond Portfolio – Service Class*			Fidelity VIP Overseas Portfolio – Service Class*
ASSETS
Investment in the portfolio, at fair value	$	99,577		$	0		$	111,323		$	0		$	0

Net Assets	$	99,577		$	0		$	111,323		$	0		$	0


NET ASSETS, representing:
Units of Participants or Contract Holders	$	89,318		$	0		$	86,563		$	0		$	0
Equity of the Prudential Insurance Company of America	$	10,259		$	0		$	24,760		$	0		$	0

	$	99,577		$	0		$	111,323		$	0		$	0


Units outstanding		97,091			0			56,824			0			0


Portfolio shares held		5,159			0			10,102			0			0
Portfolio net asset value per share	$	19.30		$	0.00		$	11.02		$	0.00		$	0.00
Investment in portfolio shares, at cost	$	98,950		$	0		$	109,470		$	0		$	0

STATEMENT OF OPERATIONS For the year ended December 31, 2011
	SUBACCOUNTS
	Franklin Templeton Mutual Global Discovery Securities Fund – Class 2			PIMCO Global Bond Portfolio*			PIMCO VIT Total Return Portfolio			Fidelity VIP Investment Grade Bond Portfolio – Service Class*			Fidelity VIP Overseas Portfolio – Service Class*
INVESTMENT INCOME
Dividend income	$	2,111		$	92		$	2,177		$	5		$	0


EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		190			0			226			0			0


NET INVESTMENT INCOME (LOSS)		1,921			92			1,951			5			0


NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		2,127			0			1,402			207			15
Realized gain (loss) on shares redeemed		(825	)		1,585			(75	)		290			(3,085	)
Net change in unrealized gain (loss) on investments		(7,324	)		(1,333	)		(465	)		(354	)		3,154


NET GAIN (LOSS) ON INVESTMENTS		(6,022	)		252			862			143			84


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(4,101	)	$	344		$	2,813		$	148		$	84


SUBACCOUNTS (Continued)
AllianceBernstein VPS International Growth Portfolio			AllianceBernstein VPS International Value Portfolio			Fidelity VIP Freedom 2015 Portfolio			Invesco V.I. International Growth Fund			Franklin Templeton Large Cap Value Securities Fund			Franklin Templeton Global Bond Securities Fund – Class 2			JPMorgan Insurance Trust Intrepid Mid Cap Portfolio			Neuberger Berman AMT Mid-Cap Growth Portfolio

$	109,788		$	65,983		$	204,955		$	54,879		$	56,153		$	238,376		$	10,702		$	141,436

$	109,788		$	65,983		$	204,955		$	54,879		$	56,153		$	238,376		$	10,702		$	141,436



$	102,206		$	59,923		$	193,409		$	45,434		$	47,324		$	223,816		$	1,539		$	130,536
$	7,582		$	6,060		$	11,546		$	9,445		$	8,829		$	14,560		$	9,163		$	10,900

$	109,788		$	65,983		$	204,955		$	54,879		$	56,153		$	238,376		$	10,702		$	141,436


	23,330			123,913			192,080			58,320			63,604			152,884			11,679			129,987


	7,280			5,738			19,764			2,081			5,712			13,134			701			5,134
$	15.08		$	11.50		$	10.37		$	26.37		$	9.83		$	18.15		$	15.26		$	27.55
$	112,812		$	70,557		$	185,705		$	54,171		$	52,049		$	232,928		$	8,038		$	111,550


SUBACCOUNTS (Continued)
AllianceBernstein VPS International Growth Portfolio			AllianceBernstein VPS International Value Portfolio			Fidelity VIP Freedom 2015 Portfolio			Invesco V.I. International Growth Fund			Franklin Templeton Large Cap Value Securities Fund			Franklin Templeton Global Bond Securities Fund – Class 2			JPMorgan Insurance Trust Intrepid Mid Cap Portfolio			Neuberger Berman AMT Mid-Cap Growth Portfolio

$	2,360		$	3,218		$	4,255		$	725		$	576		$	13,120		$	94		$	0



	322			177			452			97			96			495			28			270


	2,038			3,041			3,803			628			480			12,625			66			(270	)



	0			0			1,059			0			0			1,526			0			0
	(2,821	)		(2,231	)		651			(121	)		(801	)		(3,297	)		16,245			(214	)
	(8,283	)		(15,617	)		(8,229	)		(4,476	)		(2,306	)		(15,613	)		(14,150	)		41


	(11,104	)		(17,848	)		(6,519	)		(4,597	)		(3,107	)		(17,384	)		2,095			(173	)


$	(9,066	)	$	(14,807	)	$	(2,716	)	$	(3,969	)	$	(2,627	)	$	(4,759	)	$	2,161		$	(443	)


	SUBACCOUNTS
	Fidelity VIP Mid Cap Portfolio – Service Class			Franklin Templeton Strategic Income Securities Fund – Class 2			Fidelity VIP Value Strategies Portfolio – Service Class			Fidelity VIP Money Market Portfolio			DWS Blue Chip VIP*
ASSETS
Investment in the portfolio, at fair value	$	94,941		$	45,239		$	115,401		$	484,969		$	0

Net Assets	$	94,941		$	45,239		$	115,401		$	484,969		$	0


NET ASSETS, representing:
Units of Participants or Contract Holders	$	83,941		$	32,199		$	107,037		$	474,265		$	0
Equity of the Prudential Insurance Company of America	$	11,000		$	13,040		$	8,364		$	10,704		$	0

	$	94,941		$	45,239		$	115,401		$	484,969		$	0


Units outstanding		90,739			34,333			138,085			452,188			0


Portfolio shares held		3,282			3,687			13,174			484,969			0
Portfolio net asset value per share	$	28.93		$	12.27		$	8.76		$	1.00		$	0.00
Investment in portfolio shares, at cost	$	77,015		$	41,760		$	102,811		$	484,967		$	0

STATEMENT OF OPERATIONS For the year ended December 31, 2011
	SUBACCOUNTS
	Fidelity VIP Mid Cap Portfolio – Service Class			Franklin Templeton Strategic Income Securities Fund – Class 2			Fidelity VIP Value Strategies Portfolio – Service Class			Fidelity VIP Money Market Portfolio			DWS Blue Chip VIP*
INVESTMENT INCOME
Dividend income	$	159		$	2,942		$	1,192		$	97		$	0


EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		246			71			229			863			0


NET INVESTMENT INCOME (LOSS)		(87	)		2,871			963			(766	)		0


NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		182			0			0			0			0
Realized gain (loss) on shares redeemed		(2,187	)		(563	)		(2,656	)		0			(3,349	)
Net change in unrealized gain (loss) on investments		(11,406	)		(1,316	)		(8,757	)		0			3,793


NET GAIN (LOSS) ON INVESTMENTS		(13,411	)		(1,879	)		(11,413	)		0			444


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(13,498	)	$	992		$	(10,450	)	$	(766	)	$	444


SUBACCOUNTS (Continued)
Neuberger Berman AMT Socially Responsive Portfolio*			Prudential SP Growth Asset Allocation Portfolio*			Fidelity VIP Freedom 2025 Portfolio			Fidelity VIP Contrafund Portfolio – Service Class			Prudential Natural Resources Portfolio			Van Eck VIP Global Hard Assets Fund*			Fidelity VIP Freedom 2020 Portfolio – Service Class			Fidelity VIP Index 500 Portfolio – Service Class

$	0		$	0		$	21,200		$	45,262		$	17,589		$	0		$	49,103		$	324,147

$	0		$	0		$	21,200		$	45,262		$	17,589		$	0		$	49,103		$	324,147



$	0		$	0		$	11,193		$	35,097		$	73		$	0		$	38,878		$	309,482
$	0		$	0		$	10,007		$	10,165		$	17,516		$	0		$	10,225		$	14,665

$	0		$	0		$	21,200		$	45,262		$	17,589		$	0		$	49,103		$	324,147


	0			0			21,028			45,552			1,004			0			48,021			346,632


	0			0			2,118			1,972			460			0			4,814			2,513
$	0.00		$	0.00		$	10.01		$	22.95		$	38.25		$	0.00		$	10.20		$	129.00
$	0		$	0		$	19,211		$	36,603		$	11,618		$	0		$	46,980		$	289,150


SUBACCOUNTS (Continued)
Neuberger Berman AMT Socially Responsive Portfolio*			Prudential SP Growth Asset Allocation Portfolio*			Fidelity VIP Freedom 2025 Portfolio			Fidelity VIP Contrafund Portfolio – Service Class			Prudential Natural Resources Portfolio			Van Eck VIP Global Hard Assets Fund*			Fidelity VIP Freedom 2020 Portfolio – Service Class			Fidelity VIP Index 500 Portfolio – Service Class

$	0		$	0		$	434		$	442		$	39		$	161		$	1,037		$	6,379



	0			14			13			86			92			0			65			666


	0			(14	)		421			356			(53	)		161			972			5,713



	0			0			68			0			0			173			188			5,853
	(361	)		2,602			(89	)		(587	)		964			2,789			(3,191	)		(1,718	)
	837			(1,280	)		(1,417	)		(1,696	)		(4,390	)		(2,305	)		1,414			(9,271	)


	476			1,322			(1,438	)		(2,283	)		(3,426	)		657			(1,589	)		(5,136	)


$	476		$	1,308		$	(1,017	)	$	(1,927	)	$	(3,479	)	$	818		$	(617	)	$	577


	SUBACCOUNTS
	PIMCO VIT Low Duration Portfolio			PIMCO VIT Short-Term Portfolio			DWS Dreman Strategic Income VIP*			DWS Small Cap Index VIP			Royce Micro-Cap Portfolio
ASSETS
Investment in the portfolio, at fair value	$	127,027		$	616,059		$	0		$	24,465		$	93,664

Net Assets	$	127,027		$	616,059		$	0		$	24,465		$	93,664


NET ASSETS, representing:
Units of Participants or Contract Holders	$	114,520		$	604,679		$	0		$	14,851		$	83,534
Equity of the Prudential Insurance Company of America	$	12,507		$	11,380		$	0		$	9,614		$	10,130

	$	127,027		$	616,059		$	0		$	24,465		$	93,664


Units outstanding		99,675			541,338			0			25,447			94,607


Portfolio shares held		12,238			60,875			0			2,079			8,997
Portfolio net asset value per share	$	10.38		$	10.12		$	0.00		$	11.77		$	10.41
Investment in portfolio shares, at cost	$	124,764		$	617,256		$	0		$	20,682		$	90,712

STATEMENT OF OPERATIONS For the year ended December 31, 2011
	SUBACCOUNTS
	PIMCO VIT Low Duration Portfolio			PIMCO VIT Short-Term Portfolio			DWS Dreman Strategic Income VIP*			DWS Small Cap Index VIP			Royce Micro-Cap Portfolio
INVESTMENT INCOME
Dividend income	$	2,180		$	4,760		$	566		$	190		$	2,543


EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		280			1,128			21			34			176


NET INVESTMENT INCOME (LOSS)		1,900			3,632			545			156			2,367


NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			960			0			0			0
Realized gain (loss) on shares redeemed		(402	)		(49	)		8,298			(203	)		(1,534	)
Net change in unrealized gain (loss) on investments		(791	)		(3,763	)		(6,160	)		(1,297	)		(16,215	)


NET GAIN (LOSS) ON INVESTMENTS		(1,193	)		(2,852	)		2,138			(1,500	)		(17,749	)


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	707		$	780		$	2,683		$	(1,344	)	$	(15,382	)


SUBACCOUNTS (Continued)
Royce Small-Cap Portfolio			AllianceBernstein VPS Small Cap Growth Portfolio			Invesco V.I. Small Cap Equity Fund			Franklin Templeton Small Cap Value Securities Fund – Class 2			Van Eck VIP Multi-Manager Alternatives Fund*			Fidelity VIP Freedom 2030 Portfolio			DWS Technology VIP*			Invesco V.I. Utilities Fund*

$	16,662		$	174,687		$	38,520		$	265,662		$	0		$	29,153		$	0		$	0

$	16,662		$	174,687		$	38,520		$	265,662		$	0		$	29,153		$	0		$	0



$	6,187		$	162,938		$	27,717		$	253,758		$	0		$	19,513		$	0		$	0
$	10,475		$	11,749		$	10,803		$	11,904		$	0		$	9,640		$	0		$	0

$	16,662		$	174,687		$	38,520		$	265,662		$	0		$	29,153		$	0		$	0


	15,906			148,723			35,657			266,981			0			30,371			0			0


	1,655			10,222			2,347			17,106			0			3,009			0			0
$	10.07		$	17.09		$	16.41		$	15.53		$	0.00		$	9.69		$	0.00		$	0.00
$	17,301		$	131,021		$	32,194		$	201,397		$	0		$	25,243		$	0		$	0


SUBACCOUNTS (Continued)
Royce Small-Cap Portfolio			AllianceBernstein VPS Small Cap Growth Portfolio			Invesco V.I. Small Cap Equity Fund			Franklin Templeton Small Cap Value Securities Fund – Class 2			Van Eck VIP Multi-Manager Alternatives Fund*			Fidelity VIP Freedom 2030 Portfolio			DWS Technology VIP*			Invesco V.I. Utilities Fund*

$	59		$	0		$	0		$	1,773		$	89		$	602		$	0		$	0



	13			389			63			569			0			40			0			0


	46			(389	)		(63	)		1,204			89			562			0			0



	0			0			0			0			56			88			0			0
	(27	)		1,306			(61	)		(466	)		(651	)		(497	)		1,836			(3,407	)
	(784	)		6,206			(255	)		(9,934	)		590			(1,764	)		(1,562	)		3,635


	(811	)		7,512			(316	)		(10,400	)		(5	)		(2,173	)		274			228


$	(765	)	$	7,123		$	(379	)	$	(9,196	)	$	84		$	(1,611	)	$	274		$	228


	SUBACCOUNTS
	Fidelity VIP Value Leaders Portfolio*			Lazard Retirement International Equity Portfolio			Invesco V.I. Government Securities Fund*			JPMorgan Insurance Trust Core Bond Portfolio			AST Balanced Asset Allocation Portfolio
ASSETS
Investment in the portfolio, at fair value	$	0		$	27,063		$	0		$	19,849		$	18,999

Net Assets	$	0		$	27,063		$	0		$	19,849		$	18,999


NET ASSETS, representing:
Units of Participants or Contract Holders	$	0		$	13,586		$	0		$	19,849		$	8,444
Equity of the Prudential Insurance Company of America	$	0		$	13,477		$	0		$	0		$	10,555

	$	0		$	27,063		$	0		$	19,849		$	18,999


Units outstanding		0			20,081			0			1,363			16,987


Portfolio shares held		0			2,901			0			1,695			1,741
Portfolio net asset value per share	$	0.00		$	9.33		$	0.00		$	11.71		$	10.91
Investment in portfolio shares, at cost	$	0		$	26,433		$	0		$	21,914		$	19,897

STATEMENT OF OPERATIONS For the year ended December 31, 2011
	SUBACCOUNTS
	Fidelity VIP Value Leaders Portfolio*			Lazard Retirement International Equity Portfolio			Invesco V.I. Government Securities Fund*			JPMorgan Insurance Trust Core Bond Portfolio			AST Balanced Asset Allocation Portfolio
INVESTMENT INCOME
Dividend income	$	0		$	575		$	0		$	1,215		$	106


EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		0			27			0			92			17


NET INVESTMENT INCOME (LOSS)		0			548			0			1,123			89


NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			0			0			0			0
Realized gain (loss) on shares redeemed		(3,265	)		(14	)		(679	)		(234	)		(20	)
Net change in unrealized gain (loss) on investments		3,609			(3,466	)		706			556			(340	)


NET GAIN (LOSS) ON INVESTMENTS		344			(3,480	)		27			322			(360	)


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	344		$	(2,932	)	$	27		$	1,445		$	(271	)


SUBACCOUNTS (Continued)
AST Wellington Management Hedged Equity Portfolio			AST Preservation Asset Allocation Portfolio			JPMorgan Insurance Trust U.S. Equity Portfolio			JPMorgan Insurance Trust International Equity Portfolio			JPMorgan Insurance Trust Small Cap Portfolio			DWS Large Cap Value VIP*

$	75,046		$	264,117		$	47,986		$	28,382		$	17,302		$	0

$	75,046		$	264,117		$	47,986		$	28,382		$	17,302		$	0



$	65,936		$	253,119		$	47,986		$	28,382		$	17,302		$	0
$	9,110		$	10,998		$	0		$	0		$	0		$	0

$	75,046		$	264,117		$	47,986		$	28,382		$	17,302		$	0


	66,815			235,618			4,489			2,350			1,039			0


	8,348			22,459			3,153			3,196			1,217			0
$	8.99		$	11.76		$	15.22		$	8.88		$	14.22		$	0.00
$	76,348		$	247,619		$	41,028		$	32,691		$	12,969		$	0


SUBACCOUNTS (Continued)
AST Wellington Management Hedged Equity Portfolio			AST Preservation Asset Allocation Portfolio			JPMorgan Insurance Trust U.S. Equity Portfolio			JPMorgan Insurance Trust International Equity Portfolio			JPMorgan Insurance Trust Small Cap Portfolio			DWS Large Cap Value VIP*

$	197		$	2,544		$	581		$	568		$	24		$	0



	122			595			218			140			86			0


	75			1,949			363			428			(62	)		0



	0			0			0			0			0			0
	(133	)		(1,532	)		(80	)		(22	)		1,264			(351	)
	(3,559	)		249			(1,400	)		(4,193	)		(1,858	)		0


	(3,692	)		(1,283	)		(1,480	)		(4,215	)		(594	)		(351	)


$	(3,617	)	$	666		$	(1,117	)	$	(3,787	)	$	(656	)	$	(351	)


	SUBACCOUNTS
	Prudential Money Market Portfolio						Prudential Flexible Managed Portfolio						Prudential Stock Index Portfolio
	01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010
OPERATIONS
Net investment income (loss)	$	(14,356	)	$	(17,006	)	$	60,984		$	67,631		$	155,054		$	172,172
Capital gains distributions received		0			0			0			0			0			0
Realized gain (loss) on shares redeemed		0			0			12,591			(16,754	)		19,880			(143,979	)
Net change in unrealized gain (loss) on investments		0			0			81,067			357,181			72,683			1,660,469


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(14,356	)		(17,006	)		154,642			408,058			247,617			1,688,662


CONTRACT OWNER TRANSACTIONS
Participant or contract holder net payments		0			0			0			11,697			9,122			0
Policy loans, net of repayment and interest		(4,403	)		(34,612	)		(2,108	)		4,607			(201	)		(12,874	)
Surrenders, withdrawals and death benefits		(700,167	)		(206,959	)		(222,424	)		(191,597	)		(558,634	)		(1,134,647	)
Net transfers between other subaccounts or fixed rate option		47,465			(185,122	)		121,824			62,331			691,454			(243,799	)


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		(657,105	)		(426,693	)		(102,708	)		(112,962	)		141,741			(1,391,320	)

NET INCREASE (DECREASE) IN NET ASSETS RETAINED IN THE ACCOUNT		0			0			(14,220	)		0			0			0

TOTAL INCREASE (DECREASE) IN NET ASSETS		(671,461	)		(443,699	)		37,714			295,096			389,358			297,342


NET ASSETS
Beginning of period		3,863,441			4,307,140			3,944,057			3,648,961			13,230,323			12,932,981

End of period	$	3,191,980		$	3,863,441		$	3,981,771		$	3,944,057		$	13,619,681		$	13,230,323


Beginning units		285,246			316,698			278,399			287,001			1,031,930			1,150,733

Units issued		132,843			136,321			82,676			103,932			283,859			307,461
Units redeemed		(181,410	)		(167,773	)		(99,281	)		(112,534	)		(269,084	)		(426,264	)

Ending units		236,679			285,246			261,794			278,399			1,046,705			1,031,930


SUBACCOUNTS (Continued)
Prudential Equity Portfolio						Neuberger Berman AMT Short Duration Bond Portfolio						DWS High Income VIP						MFS VIT Research Series Portfolio
01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010

$	11,882		$	17,370		$	50,628		$	71,723		$	280,984		$	210,033		$	23,350		$	27,259
	0			0			0			0			0			0			0			0
	47,127			25,275			(41,507	)		(43,168	)		(46,424	)		(96,602	)		53,836			16,434
	(228,900	)		462,783			(10,062	)		37,507			(114,092	)		261,530			(113,760	)		729,540


	(169,891	)		505,428			(941	)		66,062			120,468			374,961			(36,574	)		773,233



	1,104			0			0			685			0			37,928			0			0
	(11,248	)		(1,343	)		72			(15,004	)		(6,997	)		(1,762	)		(19,307	)		6,207
	(222,757	)		(400,698	)		(110,036	)		(95,746	)		(218,034	)		(135,410	)		(259,066	)		(193,272	)
	182,857			(51,428	)		76,698			125,392			176,083			349,851			170,532			(136,667	)


	(50,044	)		(453,469	)		(33,266	)		15,327			(48,948	)		250,607			(107,841	)		(323,732	)

	0			0			0			0			0			0			0			0

	(219,935	)		51,959			(34,207	)		81,389			71,520			625,568			(144,415	)		449,501



	5,122,047			5,070,088			1,456,240			1,374,851			3,297,837			2,672,269			5,827,483			5,377,982

$	4,902,112		$	5,122,047		$	1,422,033		$	1,456,240		$	3,369,357		$	3,297,837		$	5,683,068		$	5,827,483

	366,647			415,318			103,584			102,505			192,502			177,035			439,151			467,623

	108,633			133,365			39,684			50,685			58,676			90,399			103,117			126,504
	(107,605	)		(182,036	)		(41,955	)		(49,606	)		(60,913	)		(74,932	)		(110,100	)		(154,976	)

	367,675			366,647			101,313			103,584			190,265			192,502			432,168			439,151


	SUBACCOUNTS
	Dreyfus Variable Investment Opportunistic Small Cap Portfolio						Franklin Templeton Foreign Securities Fund – Class 2						Franklin Templeton Developing Markets Securities Fund – Class 2
	01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010
OPERATIONS
Net investment income (loss)	$	(3,265	)	$	24,348		$	55,376		$	60,776		$	18,741		$	39,858
Capital gains distributions received		0			0			0			0			0			0
Realized gain (loss) on shares redeemed		(43,696	)		(669,298	)		7,041			(26,715	)		26,901			12,289
Net change in unrealized gain (loss) on investments		(1,053,204	)		2,669,304			(515,701	)		269,324			(634,521	)		519,455


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(1,100,165	)		2,024,354			(453,284	)		303,385			(588,879	)		571,602


CONTRACT OWNER TRANSACTIONS
Participant or contract holder net payments		0			0			31,158			125,196			0			34,229
Policy loans, net of repayment and interest		(32,085	)		3,419			(4,590	)		(6,256	)		(9,952	)		(16,918	)
Surrenders, withdrawals and death benefits		(462,162	)		(462,315	)		(204,360	)		(188,200	)		(126,965	)		(184,260	)
Net transfers between other subaccounts or fixed rate option		516,410			(63,487	)		186,535			(69,988	)		136,360			171,261


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		22,163			(522,383	)		8,743			(139,248	)		(557	)		4,312

NET INCREASE (DECREASE) IN NET ASSETS RETAINED IN THE ACCOUNT		0			0			0			0			0			0

TOTAL INCREASE (DECREASE) IN NET ASSETS		(1,078,002	)		1,501,971			(444,541	)		164,137			(589,436	)		575,914


NET ASSETS
Beginning of period		8,493,707			6,991,736			4,458,742			4,294,605			3,931,634			3,355,720

End of period	$	7,415,705		$	8,493,707		$	4,014,201		$	4,458,742		$	3,342,198		$	3,931,634


Beginning units		568,725			611,281			282,618			293,787			110,018			109,933

Units issued		177,389			203,197			98,344			115,064			38,441			45,042
Units redeemed		(167,082	)		(245,753	)		(94,927	)		(126,233	)		(36,792	)		(44,957	)

Ending units		579,032			568,725			286,035			282,618			111,667			110,018


SUBACCOUNTS (Continued)
Prudential Diversified Bond Portfolio						Prudential High Yield Bond Portfolio						Prudential Value Portfolio						Prudential Jennison Portfolio
01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010

$	23,843		$	24,139		$	51,742		$	48,231		$	2,008		$	1,531		$	(3,279	)	$	(300	)
	13,798			7,754			0			0			0			0			0			0
	2,922			10,635			(134	)		393			1,767			(1,790	)		4,149			4,535
	1,508			21,358			(16,560	)		28,825			(20,904	)		40,256			463			198,105


	42,071			63,886			35,048			77,449			(17,129	)		39,997			1,333			202,340



	0			6,331			49,315			27,314			38,196			25,115			0			952
	(2,725	)		(169	)		0			(5	)		(1,109	)		(53	)		(1,309	)		(373	)
	(17,270	)		(185,999	)		(9,544	)		(33,827	)		(39,688	)		(52,425	)		(90,769	)		(87,899	)
	(1,934	)		2			75,235			18,524			50,319			22,901			207,104			90,944


	(21,929	)		(179,835	)		115,006			12,006			47,718			(4,462	)		115,026			3,624

	0			0			(14,089	)		0			0			0			0			0

	20,142			(115,949	)		135,965			89,455			30,589			35,535			116,359			205,964



	609,713			725,662			653,594			564,139			354,945			319,410			2,030,190			1,824,226

$	629,855		$	609,713		$	789,559		$	653,594		$	385,534		$	354,945		$	2,146,549		$	2,030,190


	46,498			53,994			43,821			58,266			52,384			81,578			184,255			184,559

	13,506			14,339			15,590			15,356			66,940			34,343			79,720			82,721
	(9,294	)		(21,835	)		(20,038	)		(29,801	)		(18,924	)		(63,537	)		(68,858	)		(83,025	)

	50,710			46,498			39,373			43,821			100,400			52,384			195,117			184,255


	SUBACCOUNTS
	Prudential Global Portfolio						American Century VP Balanced Fund						American Century VP International Fund
	01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010
OPERATIONS
Net investment income (loss)	$	2,477		$	2,245		$	1,223		$	1,169		$	706		$	1,211
Capital gains distributions received		0			0			0			0			0			0
Realized gain (loss) on shares redeemed		(892	)		42,655			183			(159	)		310			(37	)
Net change in unrealized gain (loss) on investments		(19,589	)		(16,212	)		2,708			7,702			(10,077	)		7,629


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(18,004	)		28,688			4,114			8,712			(9,061	)		8,803


CONTRACT OWNER TRANSACTIONS
Participant or contract holder net payments		14,735			38,471			2,111			2,534			1,193			3,182
Policy loans, net of repayment and interest		(955	)		(95	)		0			(6	)		0			(13	)
Surrenders, withdrawals and death benefits		(3,162	)		(158,856	)		(12,062	)		(477	)		(4,034	)		0
Net transfers between other subaccounts or fixed rate option		23,674			(9	)		0			6			0			13


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		34,292			(120,489	)		(9,951	)		2,057			(2,841	)		3,182

NET INCREASE (DECREASE) IN NET ASSETS RETAINED IN THE ACCOUNT		0			0			0			0			0			0

TOTAL INCREASE (DECREASE) IN NET ASSETS		16,288			(91,801	)		(5,837	)		10,769			(11,902	)		11,985


NET ASSETS
Beginning of period		208,560			300,361			87,210			76,441			77,563			65,578

End of period	$	224,848		$	208,560		$	81,373		$	87,210		$	65,661		$	77,563


Beginning units		83,622			70,661			6,139			5,980			5,676			5,413

Units issued		32,503			40,047			2,534			2,652			608			947
Units redeemed		(11,018	)		(27,086	)		(3,210	)		(2,493	)		(796	)		(684	)

Ending units		105,107			83,622			5,463			6,139			5,488			5,676


SUBACCOUNTS (Continued)
American Century VP Value Fund						T.Rowe Price Mid-Cap Growth Portfolio						T.Rowe Price New America Growth Portfolio						Prudential Small Capitalization Stock Portfolio
01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010

$	4,315		$	5,437		$	(17,866	)	$	(12,840	)	$	(686	)	$	(522	)	$	2,831		$	462
	0			0			482,079			187,691			30,338			5,811			10,333			0
	(306	)		(5,875	)		(11,961	)		(8,448	)		(1,818	)		(1,264	)		(11,261	)		17,762
	(1,524	)		37,670			(497,096	)		598,611			(29,855	)		40,138			(3,324	)		118,043


	2,485			37,232			(44,844	)		765,014			(2,021	)		44,163			(1,421	)		136,267



	0			0			86,529			129,296			36,749			20,947			33,442			0
	0			(19	)		(6,742	)		(20,644	)		(362	)		(109	)		(588	)		260
	(63,545	)		(29,220	)		(225,631	)		(131,614	)		(10,884	)		(1,924	)		(10,557	)		(170,797	)
	0			19			487,553			572,545			71,112			41,180			144,907			258,867


	(63,545	)		(29,220	)		341,709			549,583			96,615			60,094			167,204			88,330

	0			0			0			0			0			0			0			0

	(61,060	)		8,012			296,865			1,314,597			94,594			104,257			165,783			224,597



	325,234			317,222			3,749,869			2,435,272			292,292			188,035			614,154			389,557

$	264,174		$	325,234		$	4,046,734		$	3,749,869		$	386,886		$	292,292		$	779,937		$	614,154


	16,751			18,449			140,350			116,266			22,887			17,542			23,578			18,749

	1,722			2,950			66,168			79,762			24,758			16,841			15,652			14,983
	(4,943	)		(4,648	)		(52,408	)		(55,678	)		(16,885	)		(11,496	)		(9,321	)		(10,154	)

	13,530			16,751			154,110			140,350			30,760			22,887			29,909			23,578


	SUBACCOUNTS
	MFS VIT Research Bond Series Portfolio						T.Rowe Price Equity Income Portfolio						Neuberger Berman AMT Partners Portfolio
	01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010
OPERATIONS
Net investment income (loss)	$	4,657		$	6,117		$	73,597		$	70,976		$	(472	)	$	707
Capital gains distributions received		2,414			744			0			0			0			0
Realized gain (loss) on shares redeemed		690			10,758			(3,897	)		(114,365	)		(7,066	)		(7,953	)
Net change in unrealized gain (loss) on investments		5,138			(83	)		(90,937	)		727,645			(16,578	)		31,504


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		12,899			17,536			(21,237	)		684,256			(24,116	)		24,258


CONTRACT OWNER TRANSACTIONS
Participant or contract holder net payments		0			0			62,983			109,470			52,731			41,533
Policy loans, net of repayment and interest		(349	)		(314	)		5,554			(19,471	)		0			0
Surrenders, withdrawals and death benefits		(5,971	)		(84,185	)		(151,617	)		(297,884	)		(7,572	)		0
Net transfers between other subaccounts or fixed rate option		349			314			389,572			323,212			(53,166	)		0


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		(5,971	)		(84,185	)		306,492			115,327			(8,007	)		41,533

NET INCREASE (DECREASE) IN NET ASSETS RETAINED IN THE ACCOUNT		0			0			0			0			0			0

TOTAL INCREASE (DECREASE) IN NET ASSETS		6,928			(66,649	)		285,255			799,583			(32,123	)		65,791


NET ASSETS
Beginning of period		207,952			274,601			5,379,271			4,579,688			186,003			120,212

End of period	$	214,880		$	207,952		$	5,664,526		$	5,379,271		$	153,880		$	186,003


Beginning units		11,180			15,796			341,549			332,987			184,766			129,670

Units issued		6,119			5,013			143,368			169,377			64,440			77,472
Units redeemed		(6,427	)		(9,629	)		(121,026	)		(160,815	)		(75,327	)		(22,376	)

Ending units		10,872			11,180			363,891			341,549			173,879			184,766


SUBACCOUNTS (Continued)
Janus Aspen Worldwide Portfolio – Institutional Shares						MFS VIT Strategic Income Series Portfolio						Janus Aspen Janus Portfolio – Institutional Shares						Janus Aspen Overseas Portfolio – Institutional Shares
01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010

$	291		$	953		$	4,098		$	3,369		$	50		$	591		$	(60	)	$	488
	0			0			0			0			0			0			1,570			0
	16,217			24,725			41			21			14,482			3,107			21,871			6,065
	(100,323	)		56,403			(735	)		3,649			(17,196	)		9,282			(88,781	)		38,673


	(83,815	)		82,081			3,404			7,039			(2,664	)		12,980			(65,400	)		45,226



	0			0			0			0			0			6,254			3,482			17,788
	0			0			0			0			(86	)		(51	)		(1,202	)		(134	)
	(160,832	)		(114,011	)		(213	)		(1,490	)		(40,425	)		(15,032	)		(45,387	)		(22,262	)
	27,200			(28	)		0			0			(1	)		(1	)		18,648			(9,004	)


	(133,632	)		(114,039	)		(213	)		(1,490	)		(40,512	)		(8,830	)		(24,459	)		(13,612	)

	0			0			0			0			0			0			0			0

	(217,447	)		(31,958	)		3,191			5,549			(43,176	)		4,150			(89,859	)		31,614



	530,020			561,978			79,151			73,602			106,410			102,260			230,038			198,424

$	312,573		$	530,020		$	82,342		$	79,151		$	63,234		$	106,410		$	140,179		$	230,038


	48,167			58,896			4,277			4,360			9,818			10,801			7,850			8,448

	8,692			3,594			418			458			2,883			5,212			2,424			2,635
	(23,774	)		(14,323	)		(427	)		(541	)		(6,512	)		(6,195	)		(3,188	)		(3,233	)

	33,085			48,167			4,268			4,277			6,189			9,818			7,086			7,850


	SUBACCOUNTS
	Lazard Retirement U.S. Small- Mid Cap Equity Portfolio						Janus Aspen Enterprise Portfolio – Institutional Shares						AllianceBernstein VPS Real Estate Investment Portfolio
	01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010
OPERATIONS
Net investment income (loss)	$	(310	)	$	(99	)	$	(13,357	)	$	(9,912	)	$	940		$	448
Capital gains distributions received		4,867			6,220			0			0			10,382			0
Realized gain (loss) on shares redeemed		434			(1,133	)		14,095			33,610			(7,704	)		(1,412	)
Net change in unrealized gain (loss) on investments		(10,902	)		10,702			(36,212	)		562,417			9,303			12,152


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(5,911	)		15,690			(35,474	)		586,115			12,921			11,188


CONTRACT OWNER TRANSACTIONS
Participant or contract holder net payments		0			5,501			0			9,314			41,097			14,358
Policy loans, net of repayment and interest		(707	)		(101	)		(9,384	)		(13,847	)		0			0
Surrenders, withdrawals and death benefits		(12,123	)		(7,521	)		(101,279	)		(182,700	)		(2,847	)		(3,552	)
Net transfers between other subaccounts or fixed rate option		0			(3	)		232,776			(44,477	)		24,148			14,363


NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		(12,830	)		(2,124	)		122,113			(231,710	)		62,398			25,169

NET INCREASE (DECREASE) IN NET ASSETS RETAINED IN THE ACCOUNT		0			0			0			0			(8,731	)		0

TOTAL INCREASE (DECREASE) IN NET ASSETS		(18,741	)		13,566			86,639			354,405			66,588			36,357


NET ASSETS
Beginning of period		82,112			68,546			2,885,319			2,530,914			72,331			35,974

End of period	$	63,371		$	82,112		$	2,971,958		$	2,885,319		$	138,919		$	72,331


Beginning units		4,505			4,634			205,978			226,387			12,509			11,447

Units issued		1,112			1,823			76,859			96,596			5,251			2,603
Units redeemed		(1,776	)		(1,952	)		(66,638	)		(117,005	)		(12,727	)		(1,541	)

Ending units		3,841			4,505			216,199			205,978			5,033			12,509


SUBACCOUNTS (Continued)
DWS Government & Agency Securities VIP						Prudential Conservative Balanced Portfolio						Prudential Jennison 20/20 Focus Portfolio						Dreyfus Variable Investment Fund International Equity Portfolio
01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010			01/01/2011 to 12/31/2011			01/01/2010 to 12/31/2010

$	820		$	947		$	20,233		$	15,873		$	(243	)	$	(120	)	$	2,600		$	988
	323			0			0			0			0			0			0			0
	64			167			1,622			4,385			(642	)		(556	)		(1,938	)		(1,152	)
	226			226			32,408			77,479			(1,222	)		4,662			(24,389	)		14,118


	1,433			1,340			54,263			97,737			(2,107	)		3,986			(23,727	)		13,954



	398			0			16,113			40,520			22,081			10,731			24,580			20,120
	0			0			575			(832	)		0			0			0			0
	(835	)		(3,094	)		(23,120	)		(25,549	)		(1,733	)		0			(3,588	)		0
	4			7			194,697			140,877			19,299			30,058			85,779			112,635


	(433	)		(3,087	)		188,265			155,016			39,647			40,789			106,771			132,755

	0			0			0			0			0			0			0			0

	1,000			(1,747	)		242,528			252,753			37,540			44,775			83,044			146,709



	20,314			22,061			1,055,620			802,867			46,213			1,438			171,837			25,128

$	21,314		$	20,314		$	1,298,148		$	1,055,620		$	83,753		$	46,213		$	254,881		$	171,837


	10,545			11,259			91,466			75,917			3,589			119			13,501			2,163

	401			475			56,853			67,121			7,260			5,095			18,810			16,196
	(429	)		(1,189	)		(40,674	)		(51,572	)		(4,029	)		(1,625	)		(8,730	)		(4,858	)

	10,517			10,545			107,645			91,466			6,820			3,589			23,581			13,501