VARIABLE INTEREST ENTITIES

3 Months Ended

Mar. 31, 2015

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

8. VARIABLE INTEREST ENTITIES

We enter into various arrangements with VIEs in the normal course of business and consolidate the VIEs when we determine we are the primary beneficiary. This analysis includes a review of the VIE’s capital structure, related contractual relationships and terms, nature of the VIE’s operations and purpose, nature of the VIE’s interests issued and our involvement with the entity. When assessing the need to consolidate a VIE, we evaluate the design of the VIE as well as the related risks the entity was designed to expose the variable interest holders to.

For VIEs with attributes consistent withthatof an investment company or a money market fund, the primarybeneficiary is the party or group of related parties that absorbs a majority of the expected losses of the VIE, receivesthe majority of the expected residual returns of the VIE, or both.

For all other VIEs, the primary beneficiary is the entity that has both (1) the power to direct theactivitiesof the VIE that most significantly affect the entity’s economic performance and (2) the obligation to absorblosses or the right to receive benefits that could be potentially significant to the VIE. While also considering thesefactors, the consolidation conclusion depends on the breadth of our decision-making ability and our ability toinfluence activities that significantly affect the economic performance of the VIE.

Balance Sheet Classification and Exposure to Loss

The following table presents the total assets and total liabilities associated with our variable interests in consolidated VIEs, as classified in the Condensed Consolidated Balance Sheets:

(in millions)		Real Estate and Investment Entities(d)		Securitization Vehicles		Structured Investment Vehicle		Affordable Housing Partnerships		Other		Total
March 31, 2015
Assets:
Bonds available for sale	$	-	$	11,389	$	-	$	-	$	34	$	11,423
Other bond securities		-		6,850		528		-		38		7,416
Mortgage and other loans receivable		-		2,359		-		-		155		2,514
Other invested assets		611		632		-		1,846		27		3,116
Other (a)		41		1,298		142		57		70		1,608
Total assets(b)	$	652	$	22,528	$	670	$	1,903	$	324	$	26,077
Liabilities:
Long-term debt	$	68	$	1,318	$	52	$	265	$	6	$	1,709
Other (c)		37		247		1		140		33		458
Total liabilities	$	105	$	1,565	$	53	$	405	$	39	$	2,167

December 31, 2014
Assets:
Bonds available for sale	$	-	$	11,459	$	-	$	-	$	35	$	11,494
Other bond securities		-		7,251		615		-		40		7,906
Mortgage and other loans receivable		-		2,398		-		-		162		2,560
Other invested assets		577		651		-		1,684		29		2,941
Other (a)		40		1,447		140		49		76		1,752
Total assets(b)	$	617	$	23,206	$	755	$	1,733	$	342	$	26,653
Liabilities:
Long-term debt	$	69	$	1,370	$	52	$	199	$	7	$	1,697
Other(c)		32		276		-		101		37		446
Total liabilities	$	101	$	1,646	$	52	$	300	$	44	$	2,143

(a) Comprised primarily of Short-term investments, Premiums and other receivables and Other assets at both March 31,2015 and December 31,2014.

(b) The assets of each VIE can be used only to settle specific obligations of that VIE.

(c) Comprised primarily of Other liabilities and Derivative liabilities, at fair value, at both March 31,2015 and December 31,2014.

(d) At March 31,2015 and December 31,2014, off-balance sheet exposure, primarily consisting of commitments to real estate and investment entities, was $81.9 million and $56.4 million, respectively.

We calculate our maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of VIE assets or liabilities where we have also provided credit protection to the VIE with the VIE as the referenced obligation, and (iii) other commitments and guarantees to the VIE. Interest holders in VIEs sponsored by us generally have recourse only to the assets and cash flows of the VIEs and do not have recourse to us, except in limited circumstances when we have provided a guarantee to the VIE’s interest holders.

The following table presents total assets of unconsolidated VIEs in which we hold a variable interest, as well as our maximum exposure to loss associated with these VIEs:

			Maximum Exposure to Loss
		Total VIE		On-Balance		Off-Balance
(in millions)		Assets		Sheet*		Sheet		Total
March 31, 2015
Real estate and investment entities	$	19,342	$	2,817	$	433	$	3,250
Affordable housing partnerships		7,760		405		-		405
Other		383		14		-		14
Total	$	27,485	$	3,236	$	433	$	3,669
December 31, 2014
Real estate and investment entities	$	19,949	$	2,785	$	454	$	3,239
Affordable housing partnerships		7,911		425		-		425
Other		617		32		-		32
Total	$	28,477	$	3,242	$	454	$	3,696

* Atboth March 31,2015 and December 31,2014, $3.2 billion of our total unconsolidated VIE assets were recorded as Other invested assets.

See Note 10 to the Consolidated Financial Statements in the 2014 Annual Report for additional information on VIEs.