Derivatives (Tables)

3 Months Ended

Mar. 31, 2013

Derivatives [Abstract]

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

		March 31, 2013						December 31, 2012
	Primary Underlying Risk Exposure	Notional Amount		Estimated Fair Value				Notional Amount		Estimated Fair Value
				Assets		Liabilities				Assets		Liabilities
		(In millions)
Derivatives Designated as Hedging Instruments
Fair value hedges:
Interest rate swaps	Interest rate	$	5,438	$	1,802	$	74	$	5,397	$	1,921	$	90
Foreign currency swaps	Foreign currency exchange rate		3,291		252		139		3,187		332		85
Subtotal			8,729		2,054		213		8,584		2,253		175
Cash flow hedges:
Interest rate swaps	Interest rate		3,482		539		7		3,642		705		—
Interest rate forwards	Interest rate		620		101		—		675		139		—
Foreign currency swaps	Foreign currency exchange rate		11,007		351		368		9,038		219		355
Credit forwards	Credit		60		—		—		—		—		—
Subtotal			15,169		991		375		13,355		1,063		355
Foreign operations hedges:
Foreign currency forwards	Foreign currency exchange rate		3,782		90		20		2,552		43		61
Currency options	Foreign currency exchange rate		5,000		137		—		4,375		43		3
Subtotal			8,782		227		20		6,927		86		64
Total qualifying hedges			32,680		3,272		608		28,866		3,402		594
Derivatives Not Designated or Not Qualifying as Hedging Instruments
Interest rate swaps	Interest rate		102,074		4,834		1,920		83,250		5,201		2,043
Interest rate floors	Interest rate		56,246		1,026		709		56,246		1,174		837
Interest rate caps	Interest rate		37,015		81		—		49,465		74		—
Interest rate futures	Interest rate		9,882		1		16		11,684		1		38
Interest rate options	Interest rate		34,474		769		74		16,328		640		60
Synthetic GICs	Interest rate		4,291		—		—		4,162		—		—
Foreign currency swaps	Foreign currency exchange rate		8,694		294		580		8,208		199		736
Foreign currency forwards	Foreign currency exchange rate		10,836		123		153		9,202		26		288
Currency futures	Foreign currency exchange rate		1,542		1		—		1,408		4		—
Currency options	Foreign currency exchange rate		730		37		—		129		1		—
Credit default swaps - purchased	Credit		3,925		14		42		3,674		11		34
Credit default swaps - written	Credit		8,909		91		3		8,879		79		5
Equity futures	Equity market		6,626		1		7		7,008		14		132
Equity options	Equity market		29,624		2,145		588		22,920		2,825		356
Variance swaps	Equity market		21,023		132		486		19,830		122		310
Total rate of return swaps	Equity market		3,541		2		108		3,092		4		103
Total non-designated or non-qualifying derivatives			339,432		9,551		4,686		305,485		10,375		4,942
Total		$	372,112	$	12,823	$	5,294	$	334,351	$	13,777	$	5,536

Components of Net Derivatives Gains (Losses)

	Three Months Ended March 31,
	2013		2012
	(In millions)
Derivatives and hedging gains (losses) (1)	$	(2,314)	$	(3,802)
Embedded derivatives		1,684		1,824
Total net derivative gains (losses)	$	(630)	$	(1,978)

(1) Includes foreign currency transaction gains (losses) on hedged items in cash flow and non-qualifying hedging relationships, which are not presented elsewhere in this note.

Earned Income On Derivatives And Income Statement Location

	Three Months Ended March 31,
	2013		2012
	(In millions)
Qualifying hedges:
Net investment income	$	36	$	24
Interest credited to policyholder account balances		35		45
Other expenses		(3)		(1)
Non-qualifying hedges:
Net investment income		(1)		(1)
Other revenues		—		18
Net derivative gains (losses)		15		(11)
Policyholder benefits and claims		(65)		(62)
Total	$	17	$	12

Amount and location of gains (losses) recognized in income for derivatives that are not designated or qualifying as hedging instruments

	Net Derivative Gains (Losses)		Net Investment Income (1)		Policyholder Benefits and Claims (2)		Other Revenues (3)
	(In millions)
For the Three Months Ended March 31, 2013:
Interest rate derivatives	$	(233)	$	—	$	2	$	—
Foreign currency exchange rate derivatives		(451)		—		—		—
Credit derivatives - purchased		(6)		(3)		—		—
Credit derivatives - written		32		—		—		—
Equity derivatives		(1,553)		(7)		(274)		—
Total	$	(2,211)	$	(10)	$	(272)	$	—
For the Three Months Ended March 31, 2012:
Interest rate derivatives	$	(1,459)	$	—	$	—	$	(114)
Foreign currency exchange rate derivatives		(342)		—		—		—
Credit derivatives - purchased		(188)		(9)		—		—
Credit derivatives - written		104		—		—		—
Equity derivatives		(1,938)		7		(263)		—
Total	$	(3,823)	$	(2)	$	(263)	$	(114)

(1) Changes in estimated fair value related to economic hedges of equity method investments in joint ventures; changes in estimated fair value related to derivatives held in relation to trading portfolios; and changes in estimated fair value related to derivatives held within contractholder-directed unit-linked investments.

(2) Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits.

(3) Changes in estimated fair value related to derivatives held in connection with the Company’s mortgage banking activities.

Net derivatives gains (losses) recognized on fair value derivatives and the related hedged items

Derivatives in Fair Value Hedging Relationships	Hedged Items in Fair Value Hedging Relationships	Net Derivative Gains (Losses) Recognized for Derivatives		Net Derivative Gains (Losses) Recognized for Hedged Items		Ineffectiveness Recognized in Net Derivative Gains (Losses)
		(In millions)
For the Three Months Ended March 31, 2013:
Interest rate swaps:	Fixed maturity securities	$	8	$	(8)	$	—
	Policyholder liabilities (1)		(153)		152		(1)
Foreign currency swaps:	Foreign-denominated fixed maturity securities		4		(5)		(1)
	Foreign-denominated PABs (2)		(139)		133		(6)
Foreign currency forwards:	Foreign-denominated fixed maturity securities		—		—		—
Total		$	(280)	$	272	$	(8)
For the Three Months Ended March 31, 2012:
Interest rate swaps:	Fixed maturity securities	$	6	$	(6)	$	—
	Policyholder liabilities (1)		(300)		301		1
Foreign currency swaps:	Foreign-denominated fixed maturity securities		2		(2)		—
	Foreign-denominated PABs (2)		57		(63)		(6)
Foreign currency forwards:	Foreign-denominated fixed maturity securities		(58)		56		(2)
Total		$	(293)	$	286	$	(7)

(1) Fixed rate liabilities reported in PABs or future policy benefits.

(2) Fixed rate or floating rate liabilities.

Derivatives and Non-Derivative Hedging Instruments in Net Investment Hedging Relationships

Derivatives in Net Investment Hedging Relationships (1), (2)	Amount of Gains (Losses) Deferred in AOCI (Effective Portion)
	(In millions)
For the Three Months Ended March 31, 2013:
Foreign currency forwards	$	80
Currency options		90
Total	$	170
For the Three Months Ended March 31, 2012:
Foreign currency forwards	$	(52)
Currency options		1
Total	$	(51)

(1) During the three months ended March 31, 2013 and 2012, there were no sales or substantial liquidations of net investments in foreign operations that would have required the reclassification of gains or losses from AOCI into earnings.

(2) There was no ineffectiveness recognized for the Company’s hedges of net investments in foreign operations. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

Schedule of estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps

	March 31, 2013						December 31, 2012
Rating Agency Designation of Referenced Credit Obligations (1)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps (2)		Weighted Average Years to Maturity (3)		Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps (2)		Weighted Average Years to Maturity (3)
	(In millions)						(In millions)
Aaa/Aa/A
Single name credit default swaps (corporate)	$	9	$	717		2.5	$	10	$	777		2.7
Credit default swaps referencing indices		36		2,713		1.8		42		2,713		2.1
Subtotal		45		3,430		2.0		52		3,490		2.2
Baa
Single name credit default swaps (corporate)		12		1,209		3.4		8		1,314		3.4
Credit default swaps referencing indices		21		3,945		5.1		11		3,750		4.9
Subtotal		33		5,154		4.7		19		5,064		4.5
Ba
Single name credit default swaps (corporate)		—		25		2.4		—		25		2.7
Credit default swaps referencing indices		—		—		—		—		—		—
Subtotal		—		25		2.4		—		25		2.7
B
Single name credit default swaps (corporate)		—		—		—		—		—		—
Credit default swaps referencing indices		10		300		5.2		3		300		4.9
Subtotal		10		300		5.2		3		300		4.9
Total	$	88	$	8,909		3.7	$	74	$	8,879		3.6

(1) The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.

(2) Assumes the value of the referenced credit obligations is zero.

(3) The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.

Estimated Fair Value of Derivative Assets and Liabilities after Master Netting Agreements and Cash Collateral

	March 31, 2013				December 31, 2012
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Assets		Liabilities		Assets		Liabilities
	(In millions)
Gross estimated fair value of derivatives:
Over-the-counter (1)	$	13,091	$	5,414	$	14,048	$	5,480
Exchange-traded		3		23		19		170
Total gross estimated fair value of derivatives (1)		13,094		5,437		14,067		5,650
Amounts offset in the consolidated balance sheets		—		—		—		—
Estimated fair value of derivatives presented in the consolidated balance sheets (1)		13,094		5,437		14,067		5,650
Gross amounts not offset in the consolidated balance sheets:
Gross estimated fair value of derivatives: (2)
Over-the-counter		(4,548)		(4,548)		(4,562)		(4,562)
Exchange-traded		(3)		(3)		(19)		(19)
Cash collateral: (3)
Over-the-counter		(3,912)		(2)		(5,960)		(1)
Exchange-traded		—		(20)		—		(151)
Securities collateral: (4)
Over-the-counter		(4,372)		(769)		(3,526)		(875)
Exchange-traded		—		—		—		—
Net amount after application of master netting agreements and collateral	$	259	$	95	$	—	$	42

(1) At March 31, 2013 and December 31, 2012, derivative assets include income or expense accruals reported in accrued investment income or in other liabilities of $271 million and $290 million, respectively, and derivative liabilities include income or expense accruals reported in accrued investment income or in other liabilities of $143 million and $114 million, respectively.

(2) Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.

(3) Cash collateral received is included in cash and cash equivalents or in short-term investments, and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded derivatives and is included in premiums, reinsurance and other receivables in the consolidated balance sheets. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At March 31, 2013 and December 31, 2012, the Company received excess cash collateral of $19 million and $0, respectively, and provided excess cash collateral of $422 million and $290 million, respectively, which is not included in the table above due to the foregoing limitation.

(4) Securities collateral received by the Company are held in separate custodial accounts and are not recorded on the consolidated balance sheets. Subject to certain constraints, the Company is permitted by contract to sell or repledge this collateral, but at March 31, 2013 none of the collateral had been sold or repledged. Securities collateral pledged by the Company are reported in fixed maturity securities in the consolidated balance sheets. Subject to certain constraints, the counterparties are permitted by contract to sell or repledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At March 31, 2013 and December 31, 2012, the Company received excess securities collateral of $239 million and $161 million, respectively, for its OTC derivatives and $0 and $0, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation. At March 31, 2013 and December 31, 2012, the Company provided excess securities collateral of $110 million and $0, respectively, for its OTC derivatives and $40 million and $40 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.

Derivative Instruments, Gain (Loss) [Line Items]

Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location

Derivatives in Cash Flow Hedging Relationships	Amount of Gains (Losses) Deferred in Accumulated Other Comprehensive Income (Loss) on Derivatives		Amount and Location of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)						Amount and Location of Gains (Losses) Recognized in Income (Loss) on Derivatives
	(Effective Portion)		(Effective Portion)						(Ineffective Portion)
			Net Derivative Gains (Losses)		Net Investment Income		Other Expenses		Net Derivative Gains (Losses)
			(In millions)
For the Three Months Ended March 31, 2013:
Interest rate swaps	$	(124)	$	4	$	2	$	—	$	(2)
Interest rate forwards		(25)		3		1		(1)		—
Foreign currency swaps		87		(189)		(1)		—		4
Credit forwards		—		—		—		—		—
Total	$	(62)	$	(182)	$	2	$	(1)	$	2
For the Three Months Ended March 31, 2012:
Interest rate swaps	$	(293)	$	1	$	1	$	(2)	$	4
Interest rate forwards		(88)		—		—		—		1
Foreign currency swaps		(104)		11		(1)		—		(1)
Credit forwards		—		—		—		—		—
Total	$	(485)	$	12	$	—	$	(2)	$	4

Schedule of Derivative Instruments

			Estimated Fair Value of Collateral Provided:				Fair Value of Incremental Collateral Provided Upon:
	Estimated Fair Value of Derivatives in Net Liability Position  (1)		Fixed Maturity Securities		Cash		One Notch Downgrade in the Company’s Credit Rating		Downgrade in the Company’s Credit Rating to a Level that Triggers Full Overnight Collateralization or Termination of the Derivative Position
	(In millions)
March 31, 2013:
Derivatives subject to credit-contingent provisions	$	729	$	737	$	—	$	20	$	24
Derivatives not subject to credit-contingent provisions		79		142		3		—		—
Total	$	808	$	879	$	3	$	20	$	24
December 31, 2012:
Derivatives subject to credit-contingent provisions	$	771	$	775	$	—	$	35	$	73
Derivatives not subject to credit-contingent provisions		79		100		1		—		—
Total	$	850	$	875	$	1	$	35	$	73

(1) After taking into consideration the existence of netting agreements.

Embedded Derivative Financial Instruments [Member]

Derivative Instruments, Gain (Loss) [Line Items]

Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location

	Three Months Ended March  31,
	2013		2012
	(In millions)
Net derivative gains (losses) (1)	$	1,684	$	1,824
Policyholder benefits and claims	$	(47)	$	(47)

(1) The valuation of guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses), in connection with this adjustment, were ($414) million and ($1.2) billion for the three months ended March 31, 2013 and 2012, respectively.

Schedule of Derivative Instruments

	Balance Sheet Location	March 31, 2013		December 31, 2012
		(In millions)
Net embedded derivatives within asset host contracts:
Ceded guaranteed minimum benefits	Premiums, reinsurance and other receivables	$	356	$	439
Funds withheld on assumed reinsurance	Other invested assets		63		66
Options embedded in debt or equity securities	Investments		(147)		(88)
Other	Other invested assets		1		1
Net embedded derivatives within asset host contracts		$	273	$	418
Net embedded derivatives within liability host contracts:
Direct guaranteed minimum benefits	PABs	$	(165)	$	923
Assumed guaranteed minimum benefits	PABs		2,024		2,582
Funds withheld on ceded reinsurance	Other liabilities		144		162
Other	PABs		15		17
Net embedded derivatives within liability host contracts		$	2,018	$	3,684