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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Outstanding derivative instruments with off-balance-sheet risks

				As of March 31, 2012						As of December 31, 2011
				Notional		Fair Value				Notional		Fair Value
				Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
	Interest rate contracts⁽¹⁾			$	2,205	$	101	$	-	$	2,512	$	130	$	-
	Foreign currency contracts⁽¹⁾				340		26		-		340		38		-
		Total cash flow hedges			2,545		127		-		2,852		168		-
Fair value hedges:
	Interest rate contracts⁽¹⁾				1,175		215		-		1,675		319		-
Non-Qualifying Hedges
Interest rate contracts⁽¹⁾					36,178		156		-		30,232		568		-
Foreign currency contracts⁽¹⁾					94		-		-		4		-		-
Equity market contracts⁽¹⁾					16,411		1,749		-		16,401		2,096		-
Credit contracts⁽¹⁾					47		(3)		-		48		-		-
Credit contracts⁽²⁾					148		-		10		148		-		16
Embedded derivatives:
	Indexed annuity contracts⁽³⁾				-		-		480		-		-		399
	Guaranteed living benefits ("GLB")
		reserves⁽³⁾			-		-		1,064		-		-		2,217
	Reinsurance related ⁽⁴⁾				-		-		158		-		-		168
			Total derivative instruments	$	56,598	$	2,244	$	1,712	$	51,360	$	3,151	$	2,800

Maturity of the notional amounts of derivative financial instruments

			Remaining Life as of March 31, 2012
			Less Than		1 – 5		6 – 10		11 – 30		Over 30
			1 Year		Years		Years		Years		Years		Total
Interest rate contracts⁽¹⁾			$	3,060	$	9,774	$	11,595	$	15,122	$	7	$	39,558
Foreign currency contracts⁽²⁾				94		61		179		100		-		434
Equity market contracts				8,041		23		3,168		5,176		3		16,411
Credit contracts				40		-		108		47		-		195
	Total derivative instruments
		with notional amounts	$	11,235	$	9,858	$	15,050	$	20,445	$	10	$	56,598

Change in our unrealized gain on derivative instruments in accumulated OCI

						For the Three
						Months Ended
						March 31,
						2012		2011
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year						$	119	$	(15)
Other comprehensive income (loss):
Cumulative effect from adoption of new accounting standards							-		3
	Unrealized holding gains (losses) arising during the year:
		Cash flow hedges:
			Interest rate contracts				(40)		(6)
			Foreign currency contracts				(3)		2
		Fair value hedges:
			Interest rate contracts				1		1
	Change in foreign currency exchange rate adjustment						(9)		(9)
	Change in DAC, VOBA, DSI and DFEL						4		4
	Income tax benefit (expense)						15		3
	Less:
		Reclassification adjustment for gains (losses) included in net income (loss):
			Cash flow hedges:
				Interest rate contracts⁽¹⁾			(6)		(1)
				Interest rate contracts⁽²⁾			-		1
				Foreign currency contracts⁽¹⁾			2		2
			Fair value hedges:
				Interest rate contracts⁽²⁾			1		1
		Associated amortization of DAC, VOBA, DSI and DFEL					-		1
		Income tax benefit (expense)					1		(1)
					Balance as of end-of-period	$	89	$	(20)

Gains (losses) on derivative instruments recorded within income (loss) from continuing operations

				For the Three
				Months Ended
				March 31,
				2012		2011
Qualifying Hedges
Cash flow hedges:
	Interest rate contracts⁽¹⁾			$	(7)	$	(1)
	Foreign currency contracts⁽¹⁾				2		1
		Total cash flow hedges			(5)		-
Fair value hedges:
	Interest rate contracts⁽²⁾				12		13
		Total fair value hedges			12		13
Non-Qualifying Hedges
Interest rate contracts⁽¹⁾					(3)		(6)
Interest rate contracts⁽³⁾					(413)		(61)
Foreign currency contracts⁽³⁾					(4)		(5)
Equity market contracts⁽³⁾					(672)		(199)
Equity market contracts⁽⁴⁾					(135)		(19)
Credit contracts⁽³⁾					3		4
Embedded derivatives:
	Indexed annuity contracts⁽³⁾				104		48
	GLB reserves⁽³⁾				1,153		289
	Reinsurance related⁽³⁾				10		11
	AFS securities⁽¹⁾				-		1
			Total derivative instruments	$	50	$	76

Gains (losses) on derivative instruments designated as cash flow hedges

		For the Three
		Months Ended
		March 31,
		2012		2011
Gain (loss) recognized as a component of OCI with
	the offset to net investment income	$	(4)	$	-

Gains (losses) on derivative instruments designated as fair value hedges

		For the Three
		Months Ended
		March 31,
		2012		2011
Gain (loss) recognized as a component of OCI with
	the offset to interest expense	$	1	$	1

Open credit default swap liabilities

As of March 31, 2012

Credit

Reason

Nature

Rating of

Number

Maximum

for

Underlying

Fair

Potential

Maturity

Entering

Recourse

Obligation⁽¹⁾

Instruments

Value⁽²⁾

Payout

12/20/2012⁽³⁾

⁽⁵⁾

⁽⁶⁾

BBB+

12/20/2016⁽⁴⁾

⁽⁵⁾

⁽⁶⁾

BBB+

(7)

03/20/2017⁽⁴⁾

⁽⁵⁾

⁽⁶⁾

BBB

(3)

(10)

148

As of December 31, 2011

Credit

Reason

Nature

Rating of

Number

Maximum

for

Underlying

Fair

Potential

Maturity

Entering

Recourse

Obligation⁽¹⁾

Instruments

Value⁽²⁾

Payout

12/20/2012⁽³⁾

⁽⁵⁾

⁽⁶⁾

BBB+

12/20/2016⁽⁴⁾

⁽⁵⁾

⁽⁶⁾

BBB+

(12)

03/20/2017⁽⁴⁾

⁽⁵⁾

⁽⁶⁾

BBB

(4)

(16)

148

Collateral support agreements

				As of			As of
			March 31,			December 31,
				2012			2011
Maximum potential payout				$	148		$	148
Less:
	Counterparty thresholds				-			-
		Maximum collateral potentially required to post		$	148		$	148

	As of March 31, 2012				As of December 31, 2011
	Collateral		Collateral		Collateral		Collateral
	Posted by		Posted by		Posted by		Posted by
S&P	Counter-		LNC		Counter-		LNC
Credit	Party		(Held by		Party		(Held by
Rating of	(Held by		Counter-		(Held by		Counter-
Counterparty	LNC)		Party)		LNC)		Party)

AA	$	34	$	-	$	35	$	-
AA-		59		(3)		219		-
A+		624		-		848		-
A		1,232		(82)		1,681		(120)
A-		335		(31)		387		-
BBB		2		-		-		-
	$	2,286	$	(116)	$	3,170	$	(120)

- Definition

This element may be used to tag a single block of text that encapsulates the entire credit derivatives disclosure including data and tables. This disclosures provides pertinent information by sellers of credit derivatives, about each credit derivative, or each group of similar credit derivatives, including (a) the nature of the credit derivative - its term, how it arose, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative; (b) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative; (c) the current fair value of the credit derivative; and (d) the nature of any recourse provisions under the credit derivative, and any assets held either as collateral or by third parties. A credit derivative is a derivative instrument (1) in which one or more of its underlyings are related to the credit risk of a specified entity (or a group of entities) or an index based on the credit risk of a group of entities and (2) that exposes the seller to potential loss from credit-risk-related events specified in the contract. Examples of credit derivatives within the scope of this paragraph include, but are not limited to, credit default swaps, credit spread options, and credit index products; also includes a hybrid instrument that has an embedded credit derivative (for example, a credit-linked note).

+ References+ Details