XML 116 R23.htm IDEA: XBRL DOCUMENT

Investment Income and Gains and Losses

12 Months Ended

Dec. 31, 2012

Investment Income And Gains And Losses [Abstract]

Note 15— Investment Income and Gains and Losses

Net Investment Income

The components of pre-tax net investment income for the years ended December 31 were as follows:

(In millions)	2012		2011		2010
Fixed maturities	$	843	$	817	$	788
Equity securities		4		6		6
Commercial mortgage loans		192		218		221
Policy loans		74		86		90
Real estate		(2)		(2)		(2)
Other long-term investments		59		48		29
Short-term investments and cash		14		10		11
		1,184		1,183		1,143
Less investment expenses		40		37		38
Net investment income	$	1,144	$	1,146	$	1,105

Net investment income for separate accounts (that is not reflected in the Company's revenues) was $181 million for 2012, $207 million for 2011, and $163 million for 2010.

B. Realized Investment Gains and Losses

The following realized gains and losses on investments for the years ended December 31 exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

(In millions)	2012		2011		2010
Fixed maturities	$	48	$	50	$	87
Equity securities		4		(1)		5
Commercial mortgage loans		(9)		(16)		(23)
Real estate		(1)		(6)		3
Other investments, including derivatives		2		35		3
Realized investment gains (losses), before income taxes		44		62		75
Less income taxes (benefits)		13		21		25
Net realized investment gains (losses)	$	31	$	41	$	50

Included in pre-tax realized investment gains (losses) above were asset write-downs and changes in valuation reserves as follows:


(in millions)	2012		2011		2010
Credit related (1)	$	(20)	$	(28)	$	(38)
Other		(2)		(25)		(1)
Total	$	(22)	$	(53)	$	(39)

(1) Credit-related losses include other-than-temporary declines in fair value of fixed maturities and equity securities and changes in valuation reserves and asset write-downs related to commercial mortgage loans and investments in real estate entities. There were no credit losses on fixed maturities for which a portion of the impairment was recognized in other comprehensive income.

The Company recognized pre-tax gains of $5 million in 2012, compared with pre-tax losses of $7 million in 2011 and pre-tax gains of $7 million in 2010 on hybrid securities.

Realized investment gains in 2011 in other investments, including derivatives, represent primarily gains on sale of real estate properties held in joint ventures.

Realized investment gains that are not reflected in the Company's revenues for the years ended December 31 were as follows:

(In millions)	2012		2011		2010
Separate accounts	$	206	$	210	$	191
Investment gains required to adjust future policy benefits for the run-off settlement annuity business	$	21	$	8	$	18

Sales information for available-for-sale fixed maturities and equity securities, for the years ended December 31 were as follows:

(In millions)	2012		2011		2010
Proceeds from sales	$	591	$	876	$	826
Gross gains on sales	$	37	$	53	$	46
Gross losses on sales	$	(2)	$	(7)	$	(3)

- Definition

Tabular disclosure of investment income derived from investments in debt and equity securities consisting of interest income earned from investments in debt securities and on cash and cash equivalents, dividend income from investments in equity securities, and income or expense derived from the amortization of investment related discounts or premiums, respectively. This item does not include realized or unrealized gains or losses on the sale or holding of investments in debt and equity securities required to be included in earnings for the period or for other than temporary losses related to investments in debt and equity securities which are included in realized losses in the period recognized.

+ References+ Details