FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2012

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

4. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

AIG carries certain of its financial instruments at fair value. AIG defines the fair value of a financial instrument as the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 6 to the Consolidated Financial Statements in the 2011 Annual Report for a discussion of AIG's accounting policies and procedures regarding fair value measurements related to the following information.

Assets and liabilities recorded at fair value in the Consolidated Balance Sheet are measured and classified in accordance with a fair value hierarchy consisting of three "levels" based on the observability of inputs available in the marketplace used to measure the fair values as discussed below:

•

Level 1:  Fair value measurements that are quoted prices (unadjusted) in active markets that AIG has the ability to access for identical assets or liabilities.

•

Level 2:  Fair value measurements based on inputs other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

•

Level 3:  Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, AIG must make certain assumptions as to the inputs a hypothetical market participant would use to value that asset or liability.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used:

September 30, 2012 (in millions)	Level 1		Level 2		Level 3		Counterparty Netting(a)			Cash Collateral(b)			Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	28	$	4,380	$	–	$	–		$	–		$	4,408
Obligations of states, municipalities and political subdivisions		–		35,360		1,104		–			–			36,464
Non-U.S. governments		742		25,542		14		–			–			26,298
Corporate debt		–		148,528		1,612		–			–			150,140
RMBS		–		23,692		11,488		–			–			35,180
CMBS		–		4,469		5,013		–			–			9,482
CDO/ABS		–		3,293		4,649		–			–			7,942
Total bonds available for sale		770		245,264		23,880		–			–			269,914
Bond trading securities:
U.S. government and government sponsored entities		302		7,406		–		–			–			7,708
Obligations of states, municipalities and political subdivisions		–		81		–		–			–			81
Non-U.S. governments		–		2		–		–			–			2
Corporate debt		–		1,316		2		–			–			1,318
RMBS		–		1,101		370		–			–			1,471
CMBS		–		1,490		612		–			–			2,102
CDO/ABS		–		3,650		8,505		–			–			12,155
Total bond trading securities		302		15,046		9,489		–			–			24,837
Equity securities available for sale:
Common stock		2,781		1		40		–			–			2,822
Preferred stock		–		48		45		–			–			93
Mutual funds		86		20		–		–			–			106
Total equity securities available for sale		2,867		69		85		–			–			3,021
Equity securities trading		17		81		–		–			–			98
Mortgage and other loans receivable		–		129		1		–			–			130
Other invested assets(c)		6,257		1,706		7,070		–			–			15,033
Derivative assets:
Interest rate contracts		11		6,278		996		–			–			7,285
Foreign exchange contracts		–		53		–		–			–			53
Equity contracts		113		98		53		–			–			264
Commodity contracts		–		141		1		–			–			142
Credit contracts		–		1		59		–			–			60
Other contracts		–		11		57		–			–			68
Counterparty netting and cash collateral		–		–		–		(3,219	)		(1,197	)		(4,416	)
Total derivative assets		124		6,582		1,166		(3,219	)		(1,197	)		3,456
Short-term investments		592		6,708		–		–			–			7,300
Separate account assets		53,829		2,911		–		–			–			56,740
Other assets		–		698		–		–			–			698
Total	$	64,758	$	279,194	$	41,691	$	(3,219	)	$	(1,197	)	$	381,227
Liabilities:
Policyholder contract deposits	$	–	$	–	$	1,308	$	–		$	–		$	1,308
Derivative liabilities:
Interest rate contracts		–		6,303		243		–			–			6,546
Foreign exchange contracts		–		166		–		–			–			166
Equity contracts		2		159		10		–			–			171
Commodity contracts		–		143		–		–			–			143
Credit contracts(d)		–		–		2,349		–			–			2,349
Other contracts		–		26		250		–			–			276
Counterparty netting and cash collateral		–		–		–		(3,219	)		(2,118	)		(5,337	)
Total derivative liabilities		2		6,797		2,852		(3,219	)		(2,118	)		4,314
Other long-term debt(e)		–		8,428		407		–			–			8,835
Other liabilities		138		792		–		–			–			930
Total	$	140	$	16,017	$	4,567	$	(3,219	)	$	(2,118	)	$	15,387

December 31, 2011 (in millions)	Level 1		Level 2		Level 3		Counterparty Netting(a)			Cash Collateral(b)			Total
Assets:
Bonds available for sale:
U.S. government and government sponsored entities	$	174	$	5,904	$	–	$	–		$	–		$	6,078
Obligations of states, municipalities and political subdivisions		–		36,538		960		–			–			37,498
Non-U.S. governments		259		25,467		9		–			–			25,735
Corporate debt		–		142,883		1,935		–			–			144,818
RMBS		–		23,727		10,877		–			–			34,604
CMBS		–		3,991		3,955		–			–			7,946
CDO/ABS		–		3,082		4,220		–			–			7,302
Total bonds available for sale		433		241,592		21,956		–			–			263,981
Bond trading securities:
U.S. government and government sponsored entities		100		7,404		–		–			–			7,504
Obligations of states, municipalities and political subdivisions		–		257		–		–			–			257
Non-U.S. governments		–		35		–		–			–			35
Corporate debt		–		809		7		–			–			816
RMBS		–		1,345		303		–			–			1,648
CMBS		–		1,283		554		–			–			1,837
CDO/ABS		–		3,835		8,432		–			–			12,267
Total bond trading securities		100		14,968		9,296		–			–			24,364
Equity securities available for sale:
Common stock		3,294		70		57		–			–			3,421
Preferred stock		–		44		99		–			–			143
Mutual funds		55		5		–		–			–			60
Total equity securities available for sale		3,349		119		156		–			–			3,624
Equity securities trading		43		82		–		–			–			125
Mortgage and other loans receivable		–		106		1		–			–			107
Other invested assets(c)		12,549		1,709		6,618		–			–			20,876
Derivative assets:
Interest rate contracts		2		7,251		1,033		–			–			8,286
Foreign exchange contracts		–		143		2		–			–			145
Equity contracts		92		133		38		–			–			263
Commodity contracts		–		134		2		–			–			136
Credit contracts		–		–		89		–			–			89
Other contracts		29		462		250		–			–			741
Counterparty netting and cash collateral		–		–		–		(3,660	)		(1,501	)		(5,161	)
Total derivative assets		123		8,123		1,414		(3,660	)		(1,501	)		4,499
Short-term investments		2,309		3,604		–		–			–			5,913
Separate account assets		48,502		2,886		–		–			–			51,388
Total	$	67,408	$	273,189	$	39,441	$	(3,660	)	$	(1,501	)	$	374,877
Liabilities:
Policyholder contract deposits	$	–	$	–	$	918	$	–		$	–		$	918
Derivative liabilities:
Interest rate contracts		–		6,661		248		–			–			6,909
Foreign exchange contracts		–		178		–		–			–			178
Equity contracts		–		198		10		–			–			208
Commodity contracts		–		146		–		–			–			146
Credit contracts(d)		–		4		3,362		–			–			3,366
Other contracts		–		155		217		–			–			372
Counterparty netting and cash collateral		–		–		–		(3,660	)		(2,786	)		(6,446	)
Total derivative liabilities		–		7,342		3,837		(3,660	)		(2,786	)		4,733
Other long-term debt(e)		–		10,258		508		–			–			10,766
Other liabilities		193		714		–		–			–			907
Total	$	193	$	18,314	$	5,263	$	(3,660	)	$	(2,786	)	$	17,324

(a)      Represents netting of derivative exposures covered by a qualifying master netting agreement.

(b)      Represents cash collateral posted and received. Securities collateral posted for derivative transactions that is reflected in Fixed maturity securities in the Consolidated Balance Sheet, and collateral received, not reflected in the Consolidated Balance Sheet, were $1.8 billion and $177 million, respectively, at September 30, 2012 and $1.8 billion and $100 million, respectively, at December 31, 2011.

(c)      Included in Level 1 are $6.1 billion and $12.4 billion at September 30, 2012 and December 31, 2011, respectively, of AIA ordinary shares publicly traded on the Hong Kong Stock Exchange.

(d)      Included in Level 3 is the fair value derivative liability of $2.3 billion and $3.2 billion at September 30, 2012 and December 31, 2011, respectively, on the super senior credit default swap portfolio.

(e)      Includes Guaranteed Investment Agreements (GIAs), notes, bonds, loans and mortgages payable.

Transfers of Level 1 and Level 2 Assets and Liabilities

AIG's policy is to record transfers of assets and liabilities between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. Assets are transferred out of Level 1 when they are no longer transacted with sufficient frequency and volume in an active market. Conversely, assets are transferred from Level 2 to Level 1 when transaction volume and frequency are indicative of an active market. During the three- and nine-month periods ended September 30, 2012, AIG transferred $148 million and $284 million of securities issued by Non-U.S. government entities from Level 1 to Level 2, respectively, as they are no longer considered actively traded. For similar reasons, during the three- and nine-month periods ended September 30, 2012, AIG transferred $743 million of securities issued by the U.S. government and government-sponsored entities from Level 1 to Level 2. AIG had no material transfers from Level 2 to Level 1 during the three- and nine-month periods ended September 30, 2012.

Changes in Level 3 Recurring Fair Value Measurements

The following tables present changes during the three-and nine-month periods ended September 30, 2012 and 2011 in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities that remained in the Consolidated Balance Sheet at September 30, 2012 and 2011:

(in millions)	Fair value Beginning of Period(a)		Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income (Loss)			Purchases, Sales, Issues and Settlements, Net			Gross Transfers in		Gross Transfers out			Fair value End of Period		Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Three Months Ended September 30, 2012
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	1,013	$	16		$	–		$	102		$	25	$	(52	)	$	1,104	$	–
Non-U.S. governments		13		1			(1	)		2			–		(1	)		14		–
Corporate debt		1,306		10			35			94			233		(66	)		1,612		–
RMBS		10,488		197			1,029			(678	)		566		(114	)		11,488		–
CMBS		4,643		(17	)		271			115			1		–			5,013		–
CDO/ABS		5,074		87			82			(129	)		63		(528	)		4,649		–
Total bonds available for sale		22,537		294			1,416			(494	)		888		(761	)		23,880		–
Bond trading securities:
Corporate debt		3		–			–			(1	)		–		–			2		–
RMBS		290		40			–			(56	)		97		(1	)		370		12
CMBS		457		(3	)		–			1			157		–			612		(19	)
CDO/ABS		14,647		581			–			(6,780	)		57		–			8,505		427
Total bond trading securities		15,397		618			–			(6,836	)		311		(1	)		9,489		420
Equity securities available for sale:
Common stock		41		–			(1	)		–			–		–			40		–
Preferred stock		139		15			(12	)		(104	)		8		(1	)		45		–
Total equity securities available for sale		180		15			(13	)		(104	)		8		(1	)		85		–
Mortgage and other loans receivable		1		–			–			–			–		–			1		–
Other invested assets		7,049		22			8			(90	)		126		(45	)		7,070		–
Total	$	45,164	$	949		$	1,411		$	(7,524	)	$	1,333	$	(808	)	$	40,525	$	420

(in millions)	Fair value Beginning of Period(a)			Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income (Loss)			Purchases, Sales, Issues and Settlements, Net			Gross Transfers in			Gross Transfers out			Fair value End of Period			Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Liabilities:
Policyholder contract deposits	$	(1,188	)	$	(45	)	$	(72	)	$	(3	)	$	–		$	–		$	(1,308	)	$	279
Derivative liabilities, net:
Interest rate contracts		761			(55	)		–			47			–			–			753			11
Foreign exchange contracts		–			–			–			–			–			–			–			–
Equity contracts		28			18			–			(4	)		1			–			43			–
Commodity contracts		2			4			–			(3	)		–			(2	)		1			(1	)
Credit contracts		(2,587	)		208			–			89			–			–			(2,290	)		(360	)
Other contracts		(154	)		(122	)		(6	)		73			16			–			(193	)		14
Total derivative liabilities, net		(1,950	)		53			(6	)		202			17			(2	)		(1,686	)		(336	)
Other long-term debt(b)		(407	)		(27	)		–			61			(34	)		–			(407	)		170
Total	$	(3,545	)	$	(19	)	$	(78	)	$	260		$	(17	)	$	(2	)	$	(3,401	)	$	113
Nine Months Ended September 30, 2012
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	960		$	48		$	11		$	139		$	70		$	(124	)	$	1,104		$	–
Non-U.S. governments		9			1			–			–			5			(1	)		14			–
Corporate debt		1,935			(7	)		104			96			579			(1,095	)		1,612			–
RMBS		10,877			322			1,832			32			921			(2,496	)		11,488			–
CMBS		3,955			(84	)		572			618			44			(92	)		5,013			–
CDO/ABS		4,220			127			348			(150	)		669			(565	)		4,649			–
Total bonds available for sale		21,956			407			2,867			735			2,288			(4,373	)		23,880			–
Bond trading securities:
Corporate debt		7			–			–			(5	)		–			–			2			–
RMBS		303			68			–			(94	)		97			(4	)		370			18
CMBS		554			46			–			(121	)		193			(60	)		612			45
CDO/ABS		8,432			3,646			–			(3,630	)		57			–			8,505			2,635
Total bond trading securities		9,296			3,760			–			(3,850	)		347			(64	)		9,489			2,698
Equity securities available for sale:
Common stock		57			23			(13	)		(33	)		6			–			40			–
Preferred stock		99			17			(35	)		(35	)		11			(12	)		45			–
Total equity securities available for sale		156			40			(48	)		(68	)		17			(12	)		85			–
Mortgage and other loans receivable		1			–			–			–			–			–			1			–
Other invested assets		6,618			(157	)		284			(57	)		886			(504	)		7,070			–
Total	$	38,027		$	4,050		$	3,103		$	(3,240	)	$	3,538		$	(4,953	)	$	40,525		$	2,698
Liabilities:
Policyholder contract deposits	$	(918	)	$	(314	)	$	(72	)	$	(4	)	$	–		$	–		$	(1,308	)	$	135
Derivative liabilities, net:
Interest rate contracts		785			(9	)		–			(23	)		–			–			753			(37	)
Foreign exchange contracts		2			–			–			(2	)		–			–			–			–
Equity contracts		28			7			–			9			(1	)		–			43			–
Commodity contracts		2			4			–			(5	)		–			–			1			–
Credit contracts		(3,273	)		409			–			574			–			–			(2,290	)		(880	)
Other contracts		33			(110	)		(4	)		(5	)		(107	)		–			(193	)		53
Total derivative liabilities, net		(2,423	)		301			(4	)		548			(108	)		–			(1,686	)		(864	)
Other long-term debt(b)		(508	)		(405	)		(77	)		197			(34	)		420			(407	)		224
Total	$	(3,849	)	$	(418	)	$	(153	)	$	741		$	(142	)	$	420		$	(3,401	)	$	(505	)

(in millions)	Fair value Beginning of Period(a)			Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income (Loss)			Purchases, Sales, Issues and Settlements, Net			Gross Transfers In		Gross Transfers Out			Fair value End of Period			Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Three Months Ended September 30, 2011
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	800		$	1		$	83		$	74		$	–	$	(50	)	$	908		$	–
Non-U.S. governments		5			–			(1	)		1			–		–			5			–
Corporate debt		1,844			13			(21	)		(56	)		1,170		(475	)		2,475			–
RMBS		10,692			(83	)		29			(437	)		254		(47	)		10,408			–
CMBS		4,228			(46	)		(293	)		134			16		(64	)		3,975			–
CDO/ABS		3,925			12			(131	)		220			329		(238	)		4,117			–
Total bonds available for sale		21,494			(103	)		(334	)		(64	)		1,769		(874	)		21,888			–
Bond trading securities:
Corporate debt		9			–			–			(1	)		–		–			8			–
RMBS		170			(5	)		(1	)		168			–		–			332			(20	)
CMBS		483			(31	)		(4	)		(16	)		115		–			547			2
CDO/ABS		9,503			(993	)		(9	)		(131	)		48		(24	)		8,394			(1,340	)
Total bond trading securities		10,165			(1,029	)		(14	)		20			163		(24	)		9,281			(1,358	)
Equity securities available for sale:
Common stock		59			9			(9	)		(11	)		10		(2	)		56			–
Preferred stock		64			2			2			–			2		–			70			–
Total equity securities available for sale		123			11			(7	)		(11	)		12		(2	)		126			–
Equity securities trading		1			(1	)		–			–			–		–			–			–
Other invested assets		7,045			(27	)		42			(54	)		205		(27	)		7,184			–
Total	$	38,828		$	(1,149	)	$	(313	)	$	(109	)	$	2,149	$	(927	)	$	38,479		$	(1,358	)
Liabilities:
Policyholder contract deposits	$	(406	)	$	(928	)	$	–		$	(28	)	$	–	$	–		$	(1,362	)	$	950
Derivative liabilities, net:
Interest rate contracts		754			47			–			9			–		(21	)		789			(61	)
Foreign exchange contracts		4			1			–			(5	)		–		–			–			–
Equity contracts		34			(10	)		–			–			–		–			24			(7	)
Commodity contracts		5			(1	)		–			(1	)		–		–			3			(1	)
Credit contracts		(3,332	)		(25	)		–			(5	)		–		–			(3,362	)		398
Other contracts		(69	)		32			(32	)		9			–		99			39			(121	)
Total derivatives liabilities, net		(2,604	)		44			(32	)		7			–		78			(2,507	)		208
Other long-term debt(b)		(958	)		183			–			(14	)		–		–			(789	)		349
Total	$	(3,968	)	$	(701	)	$	(32	)	$	(35	)	$	–	$	78		$	(4,658	)	$	1,507

(in millions)	Fair value Beginning of Period(a)			Net Realized and Unrealized Gains (Losses) Included in Income			Accumulated Other Comprehensive Income (Loss)			Purchases, Sales, Issues and Settlements, Net			Gross Transfers In			Gross Transfers Out			Fair value End of Period			Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Period
Nine Months Ended September 30, 2011
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	609		$	–		$	110		$	248		$	17		$	(76	)	$	908		$	–
Non-U.S. governments		5			–			(1	)		1			–			–			5			–
Corporate debt		2,262			10			1			216			1,703			(1,717	)		2,475			–
RMBS		6,367			(85	)		397			3,506			276			(53	)		10,408			–
CMBS		3,604			(80	)		262			206			69			(86	)		3,975			–
CDO/ABS		4,241			44			181			(617	)		775			(507	)		4,117			–
Total bonds available for sale		17,088			(111	)		950			3,560			2,840			(2,439	)		21,888			–
Bond trading securities:
Corporate debt		–			–			–			(10	)		18			–			8			–
RMBS		91			(5	)		(8	)		254			–			–			332			(15	)
CMBS		506			35			(1	)		(92	)		276			(177	)		547			31
CDO/ABS		9,431			(840	)		–			(221	)		48			(24	)		8,394			(770	)
Total bond trading securities		10,028			(810	)		(9	)		(69	)		342			(201	)		9,281			(754	)
Equity securities available for sale:
Common stock		61			27			(5	)		(38	)		18			(7	)		56			–
Preferred stock		64			(1	)		3			–			4			–			70			–
Total equity securities available for sale		125			26			(2	)		(38	)		22			(7	)		126			–
Equity securities trading		1			–			–			(1	)		–			–			–			–
Other invested assets		7,414			9			511			(565	)		250			(435	)		7,184			–
Total	$	34,656		$	(886	)	$	1,450		$	2,887		$	3,454		$	(3,082	)	$	38,479		$	(754	)
Liabilities:
Policyholder contract deposits	$	(445	)	$	(882	)	$	–		$	(35	)	$	–		$	–		$	(1,362	)	$	887
Derivative liabilities, net:
Interest rate contracts		732			69			–			9			–			(21	)		789			(55	)
Foreign exchange contracts		16			(11	)		–			(5	)		–			–			–			–
Equity contracts		22			(17	)		–			38			(7	)		(12	)		24			(14	)
Commodity contracts		23			1			–			(21	)		–			–			3			(1	)
Credit contracts		(3,798	)		451			–			(15	)		–			–			(3,362	)		446
Other contracts		(112	)		9			(58	)		49			–			151			39			(87	)
Total derivatives liabilities, net		(3,117	)		502			(58	)		55			(7	)		118			(2,507	)		289
Other long-term debt(b)		(982	)		(28	)		–			242			(21	)		–			(789	)		(31	)
Total	$	(4,544	)	$	(408	)	$	(58	)	$	262		$	(28	)	$	118		$	(4,658	)	$	1,145

(a)     Total Level 3 derivative exposures have been netted in these tables for presentation purposes only.

(b)     Includes GIAs, notes, bonds, loans and mortgages payable.

Net realized and unrealized gains and losses related to Level 3 items shown above are reported in the Consolidated Statement of Operations as follows:

(in millions)	Net Investment Income			Net Realized Capital Gains (Losses)			Other Income			Total
Three Months Ended September 30, 2012
Bonds available for sale	$	218		$	51		$	25		$	294
Bond trading securities		491			–			127			618
Equity securities		–			15			–			15
Other invested assets		6			(16	)		32			22
Policyholder contract deposits		–			(45	)		–			(45	)
Derivative liabilities, net		–			(39	)		92			53
Other long-term debt		–			–			(27	)		(27	)
Three Months Ended September 30, 2011
Bonds available for sale	$	193		$	(300	)	$	4		$	(103	)
Bond trading securities		(1,333	)		4			300			(1,029	)
Equity securities		(1	)		11			–			10
Other invested assets		(13	)		(29	)		15			(27	)
Policyholder contract deposits		–			(928	)		–			(928	)
Derivative liabilities, net		1			54			(11	)		44
Other long-term debt		–			–			183			183
Nine Months Ended September 30, 2012
Bonds available for sale	$	683		$	(333	)	$	57		$	407
Bond trading securities		3,330			–			430			3,760
Equity securities		–			40			–			40
Other invested assets		(3	)		(189	)		35			(157	)
Policyholder contract deposits		–			(314	)		–			(314	)
Derivative liabilities, net		(1	)		22			280			301
Other long-term debt		–			–			(405	)		(405	)
Nine Months Ended September 30, 2011
Bonds available for sale	$	433		$	(556	)	$	12		$	(111	)
Bond trading securities		(828	)		4			14			(810	)
Equity securities		–			26			–			26
Other invested assets		31			(81	)		59			9
Policyholder contract deposits		–			(882	)		–			(882	)
Derivative liabilities, net		2			7			493			502
Other long-term debt		–			–			(28	)		(28	)

The following tables present the gross components of purchases, sales, issues and settlements, net, shown above:

(in millions)	Purchases			Sales			Settlements			Purchases, Sales, Issues and Settlements, Net(a)
Three Months Ended September 30, 2012
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	189		$	(53	)	$	(34	)	$	102
Non-U.S. governments		3			–			(1	)		2
Corporate debt		139			(6	)		(39	)		94
RMBS		198			(360	)		(516	)		(678	)
CMBS		299			(127	)		(57	)		115
CDO/ABS		210			–			(339	)		(129	)
Total bonds available for sale		1,038			(546	)		(986	)		(494	)
Bond trading securities:
Corporate debt		–			–			(1	)		(1	)
RMBS		–			(45	)		(11	)		(56	)
CMBS		11			–			(10	)		1
CDO/ABS(b)		2,191			(6	)		(8,965	)		(6,780	)
Total bond trading securities		2,202			(51	)		(8,987	)		(6,836	)
Equity securities		–			(22	)		(82	)		(104	)
Other invested assets		129			(30	)		(189	)		(90	)
Total assets	$	3,369		$	(649	)	$	(10,244	)	$	(7,524	)
Liabilities:
Policyholder contract deposits	$	–		$	(6	)	$	3		$	(3	)
Derivative liabilities, net		6			–			196			202
Other long-term debt(c)		–			–			61			61
Total liabilities	$	6		$	(6	)	$	260		$	260
Three Months Ended September 30, 2011
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	78		$	–		$	(4	)	$	74
Non-U.S. governments		–			–			1			1
Corporate debt		58			(27	)		(87	)		(56	)
RMBS		(11	)		–			(426	)		(437	)
CMBS		178			–			(44	)		134
CDO/ABS		405			–			(185	)		220
Total bonds available for sale		708			(27	)		(745	)		(64	)
Bond trading securities:
Corporate debt		–			–			(1	)		(1	)
RMBS		197			–			(29	)		168
CMBS		79			(90	)		(5	)		(16	)
CDO/ABS		101			(93	)		(139	)		(131	)
Total bond trading securities		377			(183	)		(174	)		20
Equity securities		–			(8	)		(3	)		(11	)
Other invested assets		156			(59	)		(151	)		(54	)
Total assets	$	1,241		$	(277	)	$	(1,073	)	$	(109	)
Liabilities:
Policyholder contract deposits	$	–		$	(32	)	$	4		$	(28	)
Derivative liabilities, net		1			–			6			7
Other long-term debt(c)		–			–			(14	)		(14	)
Total liabilities	$	1		$	(32	)	$	(4	)	$	(35	)

(in millions)	Purchases		Sales			Settlements			Purchases, Sales, Issues and Settlements, Net(a)
Nine Months Ended September 30, 2012
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	394	$	(219	)	$	(36	)	$	139
Non-U.S. governments		4		(3	)		(1	)		–
Corporate debt		280		(59	)		(125	)		96
RMBS		2,308		(722	)		(1,554	)		32
CMBS		1,021		(260	)		(143	)		618
CDO/ABS		730		(4	)		(876	)		(150	)
Total bonds available for sale		4,737		(1,267	)		(2,735	)		735
Bond trading securities:
Corporate debt		–		–			(5	)		(5	)
RMBS		–		(45	)		(49	)		(94	)
CMBS		194		(106	)		(209	)		(121	)
CDO/ABS(b)		7,216		(6	)		(10,840	)		(3,630	)
Total bond trading securities		7,410		(157	)		(11,103	)		(3,850	)
Equity securities		67		(55	)		(80	)		(68	)
Other invested assets		529		(63	)		(523	)		(57	)
Total assets	$	12,743	$	(1,542	)	$	(14,441	)	$	(3,240	)
Liabilities:
Policyholder contract deposits	$	–	$	(20	)	$	16		$	(4	)
Derivative liabilities, net		8		–			540			548
Other long-term debt(c)		–		–			197			197
Total liabilities	$	8	$	(20	)	$	753		$	741
Nine Months Ended September 30, 2011
Assets:
Bonds available for sale:
Obligations of states, municipalities and political subdivisions	$	254	$	–		$	(6	)	$	248
Non-U.S. governments		1		(1	)		1			1
Corporate debt		478		(27	)		(235	)		216
RMBS		4,613		(22	)		(1,085	)		3,506
CMBS		419		(20	)		(193	)		206
CDO/ABS		666		–			(1,283	)		(617	)
Total bonds available for sale		6,431		(70	)		(2,801	)		3,560
Bond trading securities:
Corporate debt		–		–			(10	)		(10	)
RMBS		300		–			(46	)		254
CMBS		139		(144	)		(87	)		(92	)
CDO/ABS		245		(219	)		(247	)		(221	)
Total bond trading securities		684		(363	)		(390	)		(69	)
Equity securities		–		(31	)		(8	)		(39	)
Other invested assets		506		(217	)		(854	)		(565	)
Total assets	$	7,621	$	(681	)	$	(4,053	)	$	2,887
Liabilities:
Policyholder contract deposits	$	–	$	(51	)	$	16		$	(35	)
Derivative liabilities, net		40		–			15			55
Other long-term debt(c)		–		–			242			242
Total liabilities	$	40	$	(51	)	$	273		$	262

(a)     There were no issuances during the three- and nine-month periods ended September 30, 2012 and 2011.

(b)     Includes securities with a fair value of approximately $7.1 billion purchased through the FRBNY's auction of Maiden Lane III LLC (ML III) assets.

(c)     Includes GIAs, notes, bonds, loans and mortgages payable.

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above. As a result, the unrealized gains (losses) on instruments held at September 30, 2012 and 2011 may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable inputs (e.g., changes in unobservable long-dated volatilities).

Transfers of Level 3 Assets and Liabilities

AIG's policy is to record transfers of assets and liabilities into or out of Level 3 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. As a result, the Net realized and unrealized gains (losses) included in income or other comprehensive income and as shown in the table above excludes $80 million of net losses and $127 million of net gains related to assets and liabilities transferred into Level 3 during the three- and nine-month periods ended September 30, 2012, respectively, and includes $29 million and $83 million of net gains related to assets and liabilities transferred out of Level 3 during the three- and nine-month periods ended September 30, 2012, respectively.

Transfers of Level 3 Assets

During the three- and nine-month periods ended September 30, 2012, transfers into Level 3 included certain residential mortgage-backed securities (RMBS), commercial mortgage backed securities (CMBS), asset-backed securities (ABS), private placement corporate debt and certain private equity funds and hedge funds. Transfers into Level 3 for certain RMBS and certain ABS were related to decreased observations of market transactions and price information for those securities. The transfers into Level 3 of investments in certain other RMBS and CMBS were due to a decrease in market transparency, downward credit migration and an overall increase in price disparity for certain individual security types. Transfers into Level 3 for private placement corporate debt and certain other ABS were primarily the result of limited market pricing information that required AIG to determine fair value for these securities based on inputs that are adjusted to better reflect AIG's own assumptions regarding the characteristics of a specific security or associated market liquidity. Certain private equity fund and hedge fund investments were transferred into Level 3 due to these investments being carried at fair value and no longer being accounted for using the equity method of accounting, consistent with the changes to AIG's influence over the respective investments. Other hedge fund investments were transferred into Level 3 as a result of limited market activity due to fund-imposed redemption restrictions.

Assets are transferred out of Level 3 when circumstances change such that significant inputs can be corroborated with market observable data. This may be due to a significant increase in market activity for the asset, a specific event, one or more significant input(s) becoming observable or a long-term interest rate significant to a valuation becoming short-term and thus observable. In addition, transfers out of Level 3 also occur when investments are no longer carried at fair value as the result of a change in the applicable accounting methodology, given changes in the nature and extent of AIG's ownership interest. During the three- and nine-month periods ended September 30, 2012, transfers out of Level 3 primarily related to certain RMBS, ABS, investments in private placement corporate debt and private equity funds and hedge funds. Transfers out of Level 3 for certain RMBS were based on consideration of the market liquidity as well as related transparency of pricing and associated observable inputs for these investments. Transfers out of Level 3 for ABS and private placement corporate debt were primarily the result of AIG using observable pricing information that reflects the fair value of those securities without the need for adjustment based on AIG's own assumptions regarding the characteristics of a specific security or the current liquidity in the market. The removal of fund-imposed redemption restrictions, as well as a fund investment no longer being carried at fair value, resulted in the transfer of hedge funds and private equity funds out of Level 3.

Transfers of Level 3 Liabilities

As AIG presents carrying values of its derivative positions on a net basis in the table above, transfers into Level 3 liabilities for the three- and nine-month periods ended September 30, 2012, primarily related to certain derivative assets transferred out of Level 3 because of the presence of observable inputs on certain forward commitments and options. During the three- and nine-month periods ended September 30, 2012, certain notes payable were transferred out of Level 3 because input parameters for the pricing of these liabilities became more observable as a result of market movements and portfolio aging. There were no significant transfers of derivative liabilities out of Level 3 liabilities.

AIG uses various hedging techniques to manage risks associated with certain positions, including those classified within Level 3. Such techniques may include the purchase or sale of financial instruments that are classified within Level 1 and/or Level 2. As a result, the realized and unrealized gains (losses) for assets and liabilities classified within Level 3 presented in the table above do not reflect the related realized or unrealized gains (losses) on hedging instruments that are classified within Level 1 and/or Level 2.

Fair Value Measurements on a Non-Recurring Basis

See Notes 2(c), (e), (f) and (g) to the Consolidated Financial Statements in the 2011 Annual Report for additional information about how AIG measures the fair value of certain assets on a non-recurring basis and how AIG tests various asset classes for impairment.

The following table presents assets measured at fair value on a non-recurring basis at the time of impairment and the related impairment charges recorded during the periods presented:

	Assets at Fair Value								Impairment Charges
	Non-Recurring Basis								Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	Level 1		Level 2		Level 3		Total		2012		2011		2012		2011
September 30, 2012
Investment real estate	$	–	$	–	$	311	$	311	$	–	$	–	$	–	$	15
Other investments		–		–		1,534		1,534		97		181		273		526
Aircraft*		–		–		324		324		98		1,518		227		1,676
Other assets		–		1		18		19		–		–		9		–
Total	$	–	$	1	$	2,187	$	2,188	$	195	$	1,699	$	509	$	2,217
December 31, 2011
Investment real estate	$	–	$	–	$	457	$	457
Other investments		–		–		2,199		2,199
Aircraft		–		–		1,683		1,683
Other assets		–		–		4		4
Total	$	–	$	–	$	4,343	$	4,343

*        Aircraft impairment charges include fair value adjustments on aircraft where appropriate.

Quantitative Information About Level 3 Fair Value Measurements

The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments, and includes only those instruments for which information about the inputs is reasonably available to AIG, such as data from pricing vendors and from internal valuation models. Because input information with respect to certain Level 3 instruments may not be reasonably available to AIG, balances shown below may not equal total amounts reported for such Level 3 assets and liabilities:

(in millions)	Fair Value at September 30, 2012		Valuation Technique	Unobservable Input(a)	Range (Weighted Average)(a)
Assets:
Corporate debt	$	826	Discounted cash flow	Yield(b)	1.85% - 8.95% (5.40%)
Residential mortgage backed securities		10,867	Discounted cash flow	Constant prepayment rate(c)	0.00% - 10.58% (4.99%)
				Loss severity(c)	40.07% - 78.97% (59.52%)
				Constant default rate(c)	3.61% - 13.01% (8.31%)
				Yield(c)	2.69% - 9.53% (6.11%)
Certain CDO/ABS		1,866	Discounted cash flow	Constant prepayment rate(c)	0.00% - 39.55% (12.87%)
				Loss severity(c)	0.00% - 9.20% (0.78%)
				Constant default rate(c)	0.00% - 1.19% (0.13%)
				Yield(c)	0.84% - 4.85% (2.85%)
Commercial mortgage backed securities		3,051	Discounted cash flow	Yield(b)	0.00% - 27.34% (10.14%)
CDO/ABS – Direct			Binomial Expansion	Recovery rate(b)	3% - 65%
Investment Book		1,290	Technique (BET)	Diversity score(b)	4 - 37 (14)
				Weighted average life(b)	1.12 - 9.17 years (4.57 years)
Liabilities:
Policyholder contract deposits – GMWB		1,005	Discounted cash flow	Equity implied volatility(b)	6.0% - 40.0%
				Base lapse rates(b)	1.00% - 40.0%
				Dynamic lapse rates(b)	0.2% - 60.0%
				Mortality rates(b)	0.5% - 40.0%
				Utilization rates(b)	0.5% - 25.0%
Derivative Liabilities – Credit contracts		1,600	BET	Recovery rates(b)	3% - 36% (16%)
				Diversity score(b)	8 - 31 (13)
				Weighted average life(b)	5.02 - 8.40 years (6.08 years)

(a)     The unobservable inputs and ranges for the constant prepayment rate, loss severity and constant default rate relate to each of the individual underlying mortgage loans that comprise the entire portfolio of securities in the RMBS and collateralized debt obligation (CDO) securitization vehicles and not necessarily to the securitization vehicle bonds (tranches) purchased by AIG. The ranges of these inputs do not directly correlate to changes in the fair values of the tranches purchased by AIG because there are other factors relevant to the specific tranches owned by AIG including, but not limited to, purchase price, position in the waterfall, senior versus subordinated position and attachment points.

(b)     Represents discount rates, estimates and assumptions that AIG believes would be used by market participants when valuing these assets and liabilities.

(c)     Information received from independent third-party valuation service providers.

The ranges of reported inputs for Corporate debt, RMBS, CDO/ABS, and commercial mortgage-backed securities (CMBS) valued using a discounted cash flow technique consist of plus/minus one standard deviation in either direction from the value-weighted average. The preceding table does not give effect to AIG's risk management practices that might offset risks inherent in these investments.

Sensitivity to Changes in Unobservable Inputs

AIG considers unobservable inputs to be those for which market data is not available and that are developed using the best information available to AIG about the assumptions that market participants would use when pricing the asset or liability. Relevant inputs vary depending on the nature of the instrument being measured at fair value. The following is a general description of sensitivities of significant unobservable inputs along with interrelationships between and among the significant unobservable inputs and their impact on the fair value measurements. The effect of a change in a particular assumption in the sensitivity analysis below is considered independently of changes in any other assumptions. In practice, simultaneous changes in assumptions may not always have a linear effect on the inputs discussed below. Interrelationships may also exist between observable and unobservable inputs. Such relationships have not been included in the discussion below. For each of the individual relationships described below, the inverse relationship would also generally apply.

Corporate Debt

Corporate debt securities included in Level 3 are primarily private placement issuances that are not traded in active markets or that are subject to transfer restrictions. Fair value measurements consider illiquidity and non-transferability. When observable price quotations are not available, fair value is determined based on discounted cash flow models using discount rates based on credit spreads, yields or price levels of publicly-traded debt of the issuer or other comparable securities, considering illiquidity and structure. The significant unobservable input used in the fair value measurement of corporate debt is the yield. The yield is affected by the market movements in credit spreads and U.S. Treasury yields. In addition, the migration in credit quality of a given security generally has a corresponding effect on the fair value measurement of the securities. For example, a downward migration of credit quality would increase spreads. Holding U.S. Treasury rates constant, an increase in corporate credit spreads would decrease the fair value of corporate debt.

RMBS and Certain CDO/ABS

The significant unobservable inputs used in fair value measurements of residential mortgage backed securities and certain CDO/ABS valued by third-party valuation service providers are constant prepayment rates (CPR), constant default rates (CDR), loss severity, and yield. A change in the assumptions used for the probability of default will generally be accompanied by a corresponding change in the assumption used for the loss severity and an inverse change in the assumption used for prepayment rates. In general, increases in yield, CPR, CDR, and loss severity, in isolation, would result in a decrease in the fair value measurement. Changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship between the directional change of each input is not usually linear.

CMBS

The significant unobservable input used in fair value measurements for commercial mortgage backed securities is the yield. Prepayment assumptions for each mortgage pool are factored into the yield. CMBS generally feature a lower degree of prepayment risk than RMBS because commercial mortgages generally contain a penalty for prepayment. In general, increases in the yield would decrease the fair value of CMBS.

CDO/ABS – Direct Investment book

The significant unobservable inputs used for certain CDO/ABS securities valued using the BET are recovery rates, diversity score, and the weighted average life of the portfolio. An increase in recovery rates and diversity score will have a directionally similar corresponding impact on the fair value measurement of the portfolio. An increase in the weighted average life will decrease the fair value.

Policyholder contract deposits

The significant unobservable inputs used for embedded derivatives in policyholder contract deposits measured at fair value, mainly guaranteed minimum withdrawal benefits (GMWB) for variable annuity products, are equity volatility, mortality rates, lapse rates and utilization rates. Mortality, lapse and utilization rates may vary significantly depending upon age groups and duration. In general, increases in volatilities and utilization rates will increase the fair value, while increases in lapse rates and mortality rates will decrease the fair value of the liability associated with the GMWB.

Derivative liabilities – credit contracts

The significant unobservable inputs used for Derivatives liabilities – credit contracts are recovery rates, diversity scores, and the weighted average life of the portfolio. AIG non-performance risk is also considered in the measurement of the liability. See Note 6 to the Consolidated Financial Statements in the 2011 Annual Report for a discussion of AIG's accounting policies and procedures regarding incorporation of AIG's own credit risk in fair value measurements.

An increase in recovery rates and diversity score will decrease the fair value of the liability. An increase in the weighted average life will have a directionally similar corresponding effect on the fair value measurement of the liability.

Investments in Certain Entities Carried at Fair Value Using Net Asset Value Per Share

The following table includes information related to AIG's investments in certain other invested assets, including private equity funds, hedge funds and other alternative investments that calculate net asset value per share (or its equivalent). For these investments, which are measured at fair value on a recurring or non-recurring basis, AIG uses the net asset value per share as a practical expedient to measure fair value.

		September 30, 2012				December 31, 2011
(in millions)	Investment Category Includes	Fair Value Using Net Asset Value or its equivalent		Unfunded Commitments		Fair Value Using Net Asset Value or its equivalent		Unfunded Commitments
Investment Category
Private equity funds:
Leveraged buyout	Debt and/or equity investments made as part of a transaction in which assets of mature companies are acquired from the current shareholders, typically with the use of financial leverage	$	3,223	$	821	$	3,185	$	945
Non-U.S.	Investments that focus primarily on Asian and European based buyouts, expansion capital, special situations, turnarounds, venture capital, mezzanine and distressed opportunities strategies		173		31		165		57
Venture capital	Early-stage, high-potential, growth companies expected to generate a return through an eventual realization event, such as an initial public offering or sale of the company		309		32		316		39
Distressed	Securities of companies that are already in default, under bankruptcy protection, or troubled		172		37		182		42
Other	Real estate, energy, multi-strategy, mezzanine, and industry-focused strategies		364		145		252		98
Total private equity funds			4,241		1,066		4,100		1,181
Hedge funds:
Event-driven	Securities of companies undergoing material structural changes, including mergers, acquisitions and other reorganizations		894		2		774		2
Long-short	Securities that the manager believes are undervalued, with corresponding short positions to hedge market risk		1,139		–		927		–
Macro	Investments that take long and short positions in financial instruments based on a top-down view of certain economic and capital market conditions		248		–		173		–
Distressed	Securities of companies that are already in default, under bankruptcy protection or troubled		367		–		272		10
Other	Non-U.S. companies, futures and commodities, relative value, and multi-strategy and industry-focused strategies		604		–		627		–
Total hedge funds			3,252		2		2,773		12
Total		$	7,493	$	1,068	$	6,873	$	1,193

Private equity fund investments included above are not redeemable, as distributions from the funds will be received when underlying investments of the funds are liquidated. Private equity funds are generally expected to have 10-year lives at their inception, but these lives may be extended at the fund manager's discretion, typically in one or two year increments. At September 30, 2012, assuming average original expected lives of 10 years for the funds, 42 percent of the total fair value using net asset value or its equivalent above would have expected remaining lives of less than three years, 56 percent between three and seven years and 2 percent between seven and 10 years.

At September 30, 2012, hedge fund investments included above are redeemable monthly (11 percent), quarterly (31 percent), semi-annually (24 percent) and annually (34 percent), with redemption notices ranging from one day to 180 days. More than 60 percent of these hedge fund investments require redemption notices of less than 90 days. Investments representing approximately 54 percent of the value of the hedge fund investments cannot be redeemed, either in whole or in part, because the investments include various restrictions. The majority of these restrictions were put in place prior to 2009 and do not have stated end dates. The restrictions that have pre-defined end dates are generally expected to be lifted by the end of 2015. The partial restrictions relate to certain hedge funds that hold at least one investment that the fund manager deems to be illiquid.

Fair Value Option

The following table presents the gains or losses recorded related to the eligible instruments for which AIG elected the fair value option:

	Gain (Loss) Three Months Ended September 30,						Gain (Loss) Nine Months Ended September 30,
(in millions)	2012			2011			2012			2011
Assets:
Mortgage and other loans receivable	$	10		$	(3	)	$	41		$	(2	)
Bonds and equity securities		875			(138	)		1,782			1,299
Trading – ML II interest		–			(43	)		246			32
Trading – ML III interest		330			(931	)		2,888			(854	)
Retained interest in AIA		527			(2,315	)		1,829			268
Other, including Short-term investments		14			12			27			40
Liabilities:
Other long-term debt(a)		(86	)		(265	)		(750	)		(821	)
Other liabilities		(9	)		84			(31	)		(91	)
Total gain (loss)(b)	$	1,661		$	(3,599	)	$	6,032		$	(129	)

(a)     Includes GIAs, notes, bonds, loans and mortgages payable.

(b)     Excludes discontinued operation gains or losses on instruments that were required to be carried at fair value. For instruments required to be carried at fair value, AIG recognized gains of $110 million and $664 million for the three and nine months ended September 30, 2012, respectively, and losses of $102 million and gains of $819 million for the three and nine months ended September 30, 2011, respectively, that were primarily due to changes in the fair value of derivatives, trading securities and certain other invested assets for which the fair value option was not elected.

See Note 2(a) to the Consolidated Financial Statements in the 2011 Annual Report for additional information about AIG's policies for recognition, measurement, and disclosure of interest and dividend income and interest expense.

AIG recognized gains (losses) attributable to the observable effect of changes in credit spreads on AIG's own liabilities for which the fair value option was elected of $126 million of loss and $621 million of loss during the three-and nine-month periods ended September 30, 2012, respectively, and gain of $459 million and $475 million during the three- and nine-month periods ended September 30, 2011, respectively. AIG calculates the effect of these credit spread changes using discounted cash flow techniques that incorporate current market interest rates, AIG's observable credit spreads on these liabilities and other factors that mitigate the risk of nonperformance such as cash collateral posted.

The following table presents the difference between fair values and the aggregate contractual principal amounts of mortgage and other loans receivable and long-term borrowings for which the fair value option was elected:

	September 30, 2012							December 31, 2011
(in millions)	Fair Value		Outstanding Principal Amount		Difference			Fair Value		Outstanding Principal Amount		Difference
Assets:
Mortgage and other loans receivable	$	130	$	140	$	(10	)	$	107	$	150	$	(43	)
Liabilities:
Other long-term debt*	$	8,835	$	6,483	$	2,352		$	10,766	$	8,624	$	2,142

*         Includes GIAs, notes, bonds, loans and mortgages payable.

At September 30, 2012 and December 31, 2011, there were no significant mortgage or other loans receivable for which the fair value option was elected that were 90 days or more past due and in non-accrual status.

Sale of AIA Shares

On March 7, 2012, AIG sold approximately 1.72 billion ordinary shares of AIA Group Limited (AIA) for gross proceeds of approximately $6.0 billion. On September 11, 2012, AIG sold approximately 600 million ordinary shares of AIA for gross proceeds of approximately $2.0 billion. As a result of these sales, AIG's retained interest in AIA decreased from approximately 33 percent with a total carrying value of $12.4 billion at December 31, 2011 to approximately 14 percent with a total carrying value of $6.1 billion at September 30, 2012.

Fair Value Information About Financial Instruments Not Measured at Fair Value

The following table presents the carrying value and estimated fair value of AIG's financial instruments not measured at fair value and indicates the level of the estimated fair value measurement based on the levels of the inputs used:

	Estimated Fair Value
									Carrying Value
(in millions)	Level 1		Level 2		Level 3		Total
September 30, 2012
Assets:
Mortgage and other loans receivable	$	–	$	549	$	20,099	$	20,648	$	19,200
Other invested assets		–		209		3,451		3,660		4,947
Short-term investments		–		15,257		–		15,257		15,257
Cash		1,608		–		–		1,608		1,608
Liabilities:
Policyholder contract deposits associated with investment-type contracts		–		138		126,671		126,809		107,119
Other liabilities		–		1,843		831		2,674		2,676
Long-term debt		18,229		50,605		1,792		70,626		64,913
December 31, 2011
Assets:
Mortgage and other loans receivable							$	20,494	$	19,382
Other invested assets								3,390		4,701
Short-term investments								16,657		16,659
Cash								1,474		1,474
Liabilities:
Policyholder contract deposits associated with investment-type contracts								122,125		106,950
Other liabilities								896		896
Long-term debt								61,295		64,487