2.4.0.82108100 - Disclosure - Commitments and Contingenciestruefalsefalse1falsefalsefalseD2013Q2YTDhttp://www.sec.gov/CIK0000045947duration2013-01-01T00:00:002013-06-30T00:00:001true1us-gaap_CommitmentsAndContingenciesDisclosureAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_CommitmentsAndContingenciesDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseverboseLabel1falsefalsefalse00<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:8px;padding-top:8px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Commitments and Contingencies</font></div></div><div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Litigation</font></div><div style="line-height:120%;padding-bottom:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Company accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves. Management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of the Company.</font></div><div style="line-height:120%;padding-bottom:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company is also involved in other kinds of legal actions, some of which assert claims for substantial amounts. These actions include, among others, individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims or other allegedly unfair or improper business practices. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to the consolidated financial condition of the Company. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, the outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows in particular quarterly or annual periods.</font></div></div><div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Derivative Commitments</font></div><div style="line-height:120%;padding-bottom:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings of the individual legal entity that entered into the derivative agreement as set by nationally recognized statistical rating agencies. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could demand immediate and ongoing full collateralization and in certain instances demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement. The settlement amount is determined by netting the derivative positions transacted under each agreement. If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">June 30, 2013</font><font style="font-family:inherit;font-size:10pt;">, is $</font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">718</font><font style="font-family:inherit;font-size:10pt;">. Of this $</font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">718</font><font style="font-family:inherit;font-size:10pt;"> the legal entities have posted collateral of $</font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">707</font><font style="font-family:inherit;font-size:10pt;"> in the normal course of business. In addition, the Company has posted collateral of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$44</font><font style="font-family:inherit;font-size:10pt;"> associated with a customized GMWB derivative. Based on derivative market values as of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">June 30, 2013</font><font style="font-family:inherit;font-size:10pt;">, a downgrade of one level below the current financial strength ratings by either Moody’s or S&P could require approximately an additional $</font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">15</font><font style="font-family:inherit;font-size:10pt;"> to be posted as collateral. Based on derivative market values as of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">June 30, 2013</font><font style="font-family:inherit;font-size:10pt;">, a downgrade by either Moody’s or S&P of two levels below the legal entities’ current financial strength ratings could require approximately an additional </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">$20</font><font style="font-family:inherit;font-size:10pt;"> of assets to be posted as collateral. These collateral amounts could change as derivative market values change, as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated. The nature of the collateral that we would post, if required, would be primarily in the form of U.S. Treasury bills, U.S. Treasury notes and government agencies.</font></div><div style="line-height:120%;padding-bottom:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On June 17, 2013, S&P lowered its counterparty credit and insurer financial strength ratings on Hartford Life Insurance Company to BBB+. Given this downgrade action, termination rating triggers of one derivative counterparty relationship was impacted. This counterparty has the right to terminate this relationship and would have to settle the outstanding derivatives prior to exercising its termination right. The Company is in the process of re-negotiating the rating trigger which it expects to successfully complete. Accordingly, the Company's hedging programs have not been adversely impacted by the announcement of the downgrade of Hartford Life Insurance Company. As of </font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">June 30, 2013</font><font style="font-family:inherit;font-size:10pt;">, the notional amount and fair value related to this counterparty is $</font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">1.3 billion</font><font style="font-family:inherit;font-size:10pt;"> and $</font><font style="font-family:inherit;font-size:10pt;color:#000000;text-decoration:none;">(8)</font><font style="font-family:inherit;font-size:10pt;">, respectively.</font></div></div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for commitments and contingencies.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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