Transactions with Affiliates Level 3 (Tables)

6 Months Ended

Jun. 30, 2015

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

7. Transactions with Affiliates

Parent Company Transactions

Transactions of the Company with Hartford Fire Insurance Company ("Hartford Fire"), Hartford Holdings Inc ("HHI") and its affiliates relate principally to tax settlements, reinsurance, insurance coverage, rental and service fees, payment of dividends and capital contributions. In addition, an affiliated entity purchased annuity contracts from the Company to fund structured settlement periodic payment obligations assumed by the affiliated entity as part of claims settlements with property casualty insurance companies and self-insured entities. As of June 30, 2015 and December 31, 2014, the Company had $54 of reserves for claim annuities purchased by affiliated entities. For the six months endedJune 30, 2015 and 2014, the Company recorded earned premiums of $1 and $2, respectively, for these intercompany claim annuities.

Substantially all general insurance expenses related to the Company, including rent and employee benefit plan expenses are initially paid by The Hartford. Expenses are allocated to the Company using specific identification if available, or other applicable methods, that would include a blend of revenue, expense and capital.

The Company has issued a guarantee to retirees and vested terminated employees (“Retirees”) of The Hartford Retirement Plan for U.S. Employees (“the Plan”) who retired or terminated prior to January 1, 2004. The Plan is sponsored by The Hartford. The guarantee is an irrevocable commitment to pay all accrued benefits which the Retiree or the Retiree’s designated beneficiary is entitled to receive under the Plan in the event the Plan assets are insufficient to fund those benefits and the Company is unable to provide sufficient assets to fund those benefits. The Company believes that the likelihood that payments will be required under this guarantee is remote.

In 1990, Hartford Fire guaranteed the obligations of the Company with respect to life, accident and health insurance and annuity contracts issued after January 1, 1990. The guarantee was issued to provide an increased level of security to potential purchasers of the Company’s products. Although the guarantee was terminated in 1997, it still covers policies that were issued from 1990 to 1997. As of June 30, 2015 and December 31, 2014, no recoverables have been recorded for this guarantee, as the Company was able to meet these policyholder obligations.

Reinsurance Assumed from Affiliates

Concurrent with the sale of HLIKK in 2014, certain fixed annuity products and variable annuity product GMDB, GMIB, GMWB and GMAB riders that had been previously reinsured to the Company and HLAI were recaptured by terminating or modifying intercompany agreements. Upon closing, the Company and HLAI transferred approximately $1.6 billion of assets supporting the recaptured reserves resulting in a loss of $213 on the recapture transaction and the Buyer became responsible for all liabilities of the recaptured business.

HLAI continues to provide reinsurance for yen denominated fixed payout annuities approximating $760 as of June 30, 2015.

Reinsurance Ceded to Affiliates

The Company maintains a reinsurance agreement with HLA, whereby the Company cedes both group life and group accident and health risk. Under this treaty, the Company ceded group life premium of $17 and $36 for the three and six months endedJune 30, 2015, respectively, and $20 and $42 for the three and six months endedJune 30, 2014, respectively. The Company ceded accident and health premiums to HLA of $38 and $79 for the three and six months endedJune 30, 2015, respectively, and $60 and $279 for the three and six months endedJune 30, 2014, respectively.

Until April 1, 2014, HLAI had a modified coinsurance (“modco”) and coinsurance with funds withheld reinsurance agreement with WRR. HLAI ceded to WRR variable annuity contracts, associated riders, and payout annuities written by HLAI; annuity contracts and associated riders assumed by HLAI under unaffiliated reinsurance agreements; GMAB, GMIB riders and GMDB risks assumed by HLAI from HLIKK.

Under modco, the assets and the liabilities, and under coinsurance with funds withheld, the assets, associated with the reinsured business remained on the consolidated balance sheet of HLIC in segregated portfolios, and WRR received the economic risks and rewards related to the reinsured business through modco and funds withheld adjustments. These adjustments were recorded as an adjustment to operating expenses.

Effective April 1, 2014, HLAI terminated its modco and coinsurance with funds withheld reinsurance agreement with WRR, following receipt of approval from the CTDOI and Vermont Department of Financial Regulation. As a result, the Company reclassified $310 in aggregate reserves for annuity contracts from funds withheld within Other liabilities to Other policyholder funds and benefits payable. The Company recognized a gain of $213 in the year ended December 31, 2014 resulting from the termination of derivatives associated with the reinsurance transaction. On April 30, 2014, The Hartford dissolved WRR which resulted in WRR paying off a $655 surplus note and returning $367 in capital to The Hartford, all of which was contributed as capital to HLAI to support the recaptured risks.

The impact of the modco and coinsurance with funds withheld reinsurance agreement with WRR on the Company’s Condensed Consolidated Statements of Operations prior to termination was as follows:

	Six Months Ended June 30,
	2014
Earned premiums	$	(5	)
Net realized losses [1]	(103		)
Total revenues	(108		)
Benefits, losses and loss adjustment expenses	(1		)
Insurance operating costs and other expenses	(4		)
Total expenses	(5		)
Loss before income taxes	(103		)
Income tax benefit	(36		)
Net loss	$	(67	)

[1] Amounts represent the change in valuation of the derivative associated with this transaction.

Schedule of Related Party Transactions [Table Text Block]

	Six Months Ended June 30,
	2014
Earned premiums	$	(5	)
Net realized losses [1]	(103		)
Total revenues	(108		)
Benefits, losses and loss adjustment expenses	(1		)
Insurance operating costs and other expenses	(4		)
Total expenses	(5		)
Loss before income taxes	(103		)
Income tax benefit	(36		)
Net loss	$	(67	)

[1] Amounts represent the change in valuation of the derivative associated with this transaction.