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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurements [Tables] [Abstract]

Financial assets and liabilities carried at fair value

September 30, 2013
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	93	$	631	$	-	$	724
State and local government		-		2,196		-		2,196
Foreign government		-		1,154		23		1,177
Corporate		-		9,973		534		10,507
Federal agency mortgage-backed		-		83		-		83
Other mortgage-backed		-		66		1		67
Other asset-backed		-		284		607		891
Total fixed maturities⁽¹⁾		93		14,387		1,165		15,645
Equity securities		8		71		61		140
Subtotal		101		14,458		1,226		15,785
Short-term investments		-		763		-		763
GMIB assets⁽²⁾		-		-		853		853
Other derivative assets⁽³⁾		-		3		-		3
Total financial assets at fair value, excluding separate accounts	$	101	$	15,224	$	2,079	$	17,404
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	841	$	841
Other derivative liabilities⁽³⁾		-		21		-		21
Total financial liabilities at fair value	$	-	$	21	$	841	$	862

(1) Fixed maturities included $517 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $65 million of appreciation for securities classified in Level 3.

(2) The GMIB assets represent retrocessional contracts in place from three external reinsurers that cover the exposures on these contracts. See Note 6 for additional information.

(3) Other derivative assets and other derivative liabilities reflected foreign currency and interest rate swaps qualifying as cash flow hedges. See Note 10 for additional information.

December 31, 2012
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	156	$	746	$	-	$	902
State and local government		-		2,437		-		2,437
Foreign government		-		1,298		24		1,322
Corporate		-		11,201		695		11,896
Federal agency mortgage-backed		-		122		-		122
Other mortgage-backed		-		88		1		89
Other asset-backed		-		340		597		937
Total fixed maturities⁽¹⁾		156		16,232		1,317		17,705
Equity securities		4		73		34		111
Subtotal		160		16,305		1,351		17,816
Short-term investments		-		154		-		154
GMIB assets⁽²⁾		-		-		622		622
Other derivative assets⁽³⁾		-		41		-		41
Total financial assets at fair value, excluding separate accounts	$	160	$	16,500	$	1,973	$	18,633
Financial liabilities at fair value:
GMIB liabilities	$	-	$	-	$	1,170	$	1,170
Other derivative liabilities⁽³⁾		-		31		-		31
Total financial liabilities at fair value	$	-	$	31	$	1,170	$	1,201

(1) Fixed maturities included $875 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $108 million of appreciation for securities classified in Level 3.

(2) The GMIB assets represent retrocessional contracts in place from two external reinsurers that cover 55% of the exposures on these contracts.

(3) Other derivative assets included $5 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $36 million of interest rate swaps not designated as accounting hedges. Other derivative liabilities reflected foreign currency and interest rate swaps qualifying as cash flow hedges. See Note 10 for additional information.

Level 3 financial assets and financial liabilities

	September 30,		December 31,
(In millions)	2013		2012
Other asset and mortgage-backed securities - valued using pricing models	$	608	$	598
Corporate and government fixed maturities - valued using pricing models		430		596
Corporate fixed maturities - valued at transaction price		127		123
Equity securities - valued at transaction price		61		34
Total	$	1,226	$	1,351

Level 3 Fair Value And Significant Unobservable Inputs Developed Directly By Company


As of September 30, 2013			Unobservable Input	Unobservable Adjustment to Discount Rates Range (Weighted Average) in Basis Points
(In millions except basis points)		Fair Value	Unobservable Input
Other asset and mortgage-backed securities	$	595	Liquidity	60 - 610 (170)
			Weighting of credit spreads	120 - 2,170 (310)
Corporate and government fixed maturities	$	295	Liquidity	70 - 350 (170)


As of December 31, 2012			Unobservable Input	Unobservable Adjustment to Discount Rates Range (Weighted Average) in Basis Points
(In millions except basis points)		Fair Value	Unobservable Input
Other asset and mortgage-backed securities	$	584	Liquidity	60 - 410 (140)
			Weighting of credit spreads	50 - 4,540 (410)
Corporate and government fixed maturities	$	439	Liquidity	20 - 640 (190)

Changes in level 3 financial assets and liabilities carried at fair value

For the Three Months Ended September 30, 2013
	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at July 1, 2013	$	1,209	$	945	$	(922)	$	23
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		(81)		81		-
Other		3		10		(16)		(6)
Total gains (losses) included in shareholders' net income		3		(71)		65		(6)
Losses included in other comprehensive income		(1)		-		-		-
Losses required to adjust future policy benefits for settlement annuities⁽¹⁾		(8)		-		-		-
Purchases, sales and settlements:
Purchases		64		-		-		-
Sales		(18)		-		-		-
Settlements		(35)		(21)		16		(5)
Total purchases, sales and settlements		11		(21)		16		(5)
Transfers into/(out of) Level 3:
Transfers into Level 3		32		-		-		-
Transfers out of Level 3		(20)		-		-		-
Total transfers into/(out of) Level 3		12		-		-		-
Balance at September 30, 2013	$	1,226	$	853	$	(841)	$	12
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	2	$	(71)	$	65	$	(6)

(1) Amounts do not accrue to shareholders.










For the Three Months Ended September 30, 2012
	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at July 1, 2012	$	1,128	$	707	$	(1,332)	$	(625)
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		(78)		131		53
Other		1		-		-		-
Total gains (losses) included in shareholders' net income		1		(78)		131		53
Gains included in other comprehensive income		11		-		-		-
Losses required to adjust future policy benefits for settlement annuities⁽¹⁾		(15)		-		-		-
Purchases and settlements:
Purchases		39		-		-		-
Settlements		(15)		(4)		17		13
Total purchases and settlements		24		(4)		17		13
Transfers into/(out of) Level 3:
Transfers into Level 3		36		-		-		-
Transfers out of Level 3		(4)		-		-		-
Total transfers into/(out of) Level 3		32		-		-		-
Balance at September 30, 2012	$	1,181	$	625	$	(1,184)	$	(559)
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	2	$	(78)	$	131	$	53

(1) Amounts do not accrue to shareholders.

For the Nine Months Ended September 30, 2013
	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at January 1, 2013	$	1,351	$	622	$	(1,170)	$	(548)
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		(286)		286		-
Other		13		12		(16)		(4)
Total gains (losses) included in shareholders' net income		13		(274)		270		(4)
Losses included in other comprehensive income		(18)		-		-		-
Losses required to adjust future policy benefits for settlement annuities⁽¹⁾		(46)		-		-		-
Purchases, sales and settlements:
Purchases		104		-		-		-
Sales		(48)		-		-		-
Settlements		(96)		505		59		564
Total purchases, sales and settlements		(40)		505		59		564
Transfers into/(out of) Level 3:
Transfers into Level 3		101		-		-		-
Transfers out of Level 3		(135)		-		-		-
Total transfers into/(out of) Level 3		(34)		-		-		-
Balance at September 30, 2013	$	1,226	$	853	$	(841)	$	12
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	6	$	(274)	$	270	$	(4)

(1) Amounts do not accrue to shareholders.

For the Nine Months Ended September 30, 2012
	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at January 1, 2012	$	1,002	$	712	$	(1,333)	$	(621)
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		(65)		98		33
Other		4		-		-		-
Total gains (losses) included in shareholders' net income		4		(65)		98		33
Gains included in other comprehensive income		16		-		-		-
Losses required to adjust future policy benefits for settlement annuities⁽¹⁾		(19)		-		-		-
Purchases and settlements:
Purchases		106		-		-		-
Settlements		(44)		(22)		51		29
Total purchases and settlements		62		(22)		51		29
Transfers into/(out of) Level 3:
Transfers into Level 3		155		-		-		-
Transfers out of Level 3		(39)		-		-		-
Total transfers into/(out of) Level 3		116		-		-		-
Balance at September 30, 2012	$	1,181	$	625	$	(1,184)	$	(559)
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	2	$	(65)	$	98	$	33

(1) Amounts do not accrue to shareholders.

Separate account assets schedule

September 30, 2013
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Guaranteed separate accounts (See Note 17)	$	260	$	281	$	-	$	541
Non-guaranteed separate accounts⁽¹⁾		1,784		4,816		1,015		7,615
Total separate account assets	$	2,044	$	5,097	$	1,015	$	8,156

(1) As of September 30, 2013, non-guaranteed separate accounts included $3.8 billion in assets supporting the Company's pension plans, including $965 million classified in Level 3.

December 31, 2012
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Guaranteed separate accounts (See Note 17)	$	245	$	324	$	-	$	569
Non-guaranteed separate accounts⁽¹⁾		1,925		4,258		1,005		7,188
Total separate account assets	$	2,170	$	4,582	$	1,005	$	7,757

(1) As of December 31, 2012, non-guaranteed separate accounts included $3.4 billion in assets supporting the Company's pension plans, including $956 million classified in Level 3.

Level 3 separate account assets

	Three Months Ended
	September 30,
(In millions)	2013		2012
Balance at July 1	$	1,049	$	952
Policyholder gains ⁽¹⁾		17		21
Purchases, sales and settlements:
Purchases		18		30
Sales		(2)		-
Settlements		(69)		(20)
Total purchases, sales and settlements		(53)		10
Transfers into/(out of) Level 3:
Transfers into Level 3		5		2
Transfers out of Level 3		(3)		-
Total transfers into/(out of) Level 3		2		2
Balance at September 30,	$	1,015	$	985

(1) Included in this amount are gains of $17 million attributable to instruments still held at September 30, 2013 and gains of $20 million attributable to instruments still held at September 30, 2012.

	Nine Months Ended
	September 30,
(In millions)	2013		2012
Balance at January 1	$	1,005	$	750
Policyholder gains⁽¹⁾		46		48
Purchases, sales and settlements:
Purchases		106		230
Sales		(2)		-
Settlements		(138)		(49)
Total purchases, sales and settlements		(34)		181
Transfers into/(out of) Level 3:
Transfers into Level 3		5		7
Transfers out of Level 3		(7)		(1)
Total transfers into/(out of) Level 3		(2)		6
Balance at September 30,	$	1,015	$	985

(1) Included in this amount are gains of $46 million attributable to instruments still held at September 30, 2013 and gains of $41 million attributable to instruments still held at September 30, 2012.

Financial instruments not carried at fair value

(In millions)			September 30, 2013				December 31, 2012
	Classification in the Fair Value Hierarchy		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	2,507	$	2,404	$	2,999	$	2,851
Contractholder deposit funds, excluding universal life products	Level 3	$	1,082	$	1,070	$	1,082	$	1,056
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,529	$	4,992	$	5,821	$	4,986

- Definition

Summarization of information required and determined to be disclosed concerning the fair value of financial instruments (as defined) classified in Level 3, including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities classified in Level 3 would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) the maximum amount of loss the Company is exposed to, based on the gross fair value of the related item; (3) quantitative information about market risks; (4) for items presented in the financial statement for which fair value measurement is elected, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (5) the difference between the aggregate fair value and unpaid principal balance of loans and long-term receivables and long-term debt instruments (as applicable); (6) the amount of gains and losses arising from changes in fair value; and (7) other required (as defined) and desired information.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2), d, e, f

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 10

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 30

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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