Fair Values of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2012

Fair Values of Assets and Liabilities

Schedule of balances of assets and liabilities measured at fair value on a recurring basis

	December 31, 2012
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Available-for-Sale securities:
Fixed maturities:
Corporate debt securities	$	—	$	15,387	$	1,654	$	17,041
Residential mortgage backed securities	—		3,598		23		3,621
Commercial mortgage backed securities	—		2,834		170		3,004
State and municipal obligations	—		1,122		—		1,122
Asset backed securities	—		715		156		871
Foreign government bonds and obligations	—		224		—		224
U.S. government and agencies obligations	10		39		—		49
Total Available-for-Sale securities: Fixed maturities	10		23,919		2,003		25,932
Common stocks	2		2		—		4
Cash equivalents	—		264		—		264
Other assets:
Interest rate derivative contracts	—		2,191		—		2,191
Equity derivative contracts	285		936		—		1,221
Foreign currency derivative contracts	—		6		—		6
Total other assets	285		3,133		—		3,418
Separate account assets	—		69,395		—		69,395
Total assets at fair value	$	297	$	96,713	$	2,003	$	99,013
Liabilities
Future policy benefits:
EIA embedded derivatives	$	—	$	2	$	—	$	2
IUL embedded derivatives	—		45		—		45
GMWB and GMAB embedded derivatives	—		—		833		833
Total future policy benefits	—		47		833		880		(1)
Other liabilities:
Interest rate derivative contracts	—		1,486		—		1,486
Equity derivative contracts	258		1,535		—		1,793
Total other liabilities	258		3,021		—		3,279
Total liabilities at fair value	$	258	$	3,068	$	833	$	4,159

(1) The Company’s adjustment for nonperformance risk resulted in a $389 million cumulative decrease to the embedded derivative liability.

	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(in millions)
Assets
Available-for-Sale securities:
Fixed maturities:
Corporate debt securities	$	—	$	15,076	$	1,342	$	16,418
Residential mortgage backed securities	—		4,310		58		4,368
Commercial mortgage backed securities	—		3,615		16		3,631
State and municipal obligations	—		1,096		—		1,096
Asset backed securities	—		716		133		849
Foreign government bonds and obligations	—		144		—		144
U.S. government and agencies obligations	10		47		—		57
Other structured investments	—		—		14		14
Total Available-for-Sale securities: Fixed maturities	10		25,004		1,563		26,577
Common stocks	1		1		—		2
Trading securities	—		25		—		25
Cash equivalents	—		809		—		809
Other assets:
Interest rate derivative contracts	—		1,801		—		1,801
Equity derivative contracts	274		1,041		—		1,315
Credit derivative contracts	—		1		—		1
Foreign currency derivative contracts	—		7		—		7
Total other assets	274		2,850		—		3,124
Separate account assets	—		63,174		—		63,174
Total assets at fair value	$	285	$	91,863	$	1,563	$	93,711
Liabilities
Future policy benefits:
EIA embedded derivatives	$	—	$	2	$	—	$	2
IUL embedded derivatives	—		3		—		3
GMWB and GMAB embedded derivatives	—		—		1,585		1,585
Total future policy benefits	—		5		1,585		1,590		(1)
Other liabilities:
Interest rate derivative contracts	—		1,198		—		1,198
Equity derivative contracts	297		734		—		1,031
Foreign currency derivative contracts	—		10		—		10
Total other liabilities	297		1,942		—		2,239
Total liabilities at fair value	$	297	$	1,947	$	1,585	$	3,829

(1) The Company’s adjustment for nonperformance risk resulted in a $506 million cumulative decrease to the embedded derivative liability.

Summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis

	Available-for-Sale Securities: Fixed Maturities																		Future Policy Benefits:
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Other Structured Investments			Total			GMWB and GMAB Embedded Derivatives
	(in millions)
Balance, January 1, 2012	$	1,342		$	58		$	16		$	133		$	14		$	1,563		$	(1,585	)
Total gains (losses) included in:
Net income	(1		)	(7		)	1			1			—			(6		)(1)	948		(2)
Other comprehensive income	12			10			7			2			1			32			—
Purchases	444			31			8			—			—			483			—
Sales	—			—			—			—			—			—			—
Issues	—			—			—			—			—			—			(188		)
Settlements	(153		)	(12		)	—			(2		)	—			(167		)	(8		)
Transfers into Level 3	10			25			146			22			—			203			—
Transfers out of Level 3	—			(82		)	(8		)	—			(15		)	(105		)	—
Balance, December 31, 2012	$	1,654		$	23		$	170		$	156		$	—		$	2,003		$	(833	)
Changes in unrealized gains (losses) relating to assets and liabilities held at December 31, 2012 included in:
Net investment income	$	(1	)	$	—		$	1		$	1		$	—		$	1		$	—
Benefits, claims, losses and settlement expenses	—			—			—			—			—			—			908

(1) Represents a $7 million loss included in net realized investment gains (losses) and a $1 million gain included in net investment income in the Consolidated Statements of Income.

(2) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income.

	Available-for-Sale Securities: Fixed Maturities																		Future Policy Benefits:
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Other Structured Investments			Total			GMWB and GMAB Embedded Derivatives
	(in millions)
Balance, January 1, 2011	$	1,317		$	2,697		$	30		$	148		$	13		$	4,205		$	(421	)
Total gains (losses) included in:
Net income	7			49			—			2			1			59		(1)	(1,007		)(2)
Other comprehensive income	12			(75		)	—			(6		)	(2		)	(71		)	—
Purchases	178			26			71			—			3			278			—
Sales	(50		)	(3		)	—			—			—			(53		)	—
Issues	—			—			—			—			—			—			(149		)
Settlements	(117		)	(471		)	—			(3		)	(1		)	(592		)	(8		)
Transfers into Level 3	7			—			1			—			—			8			—
Transfers out of Level 3	(12		)	(2,165		)	(86		)	(8		)	—			(2,271		)	—
Balance, December 31, 2011	$	1,342		$	58		$	16		$	133		$	14		$	1,563		$	(1,585	)
Changes in unrealized gains (losses) relating to assets and liabilities held at December 31, 2011 included in:
Net investment income	$	—		$	—		$	—		$	1		$	—		$	1		$	—
Net realized investment gains (losses)	—			(23		)	—			—			1			(22		)	—
Benefits, claims, losses and settlement expenses	—			—			—			—			—			—			(1,035		)

(1) Represents a $26 million loss included in net realized investment gains (losses) and an $85 million gain included in net investment income in the Consolidated Statements of Income.

(2) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income.

	Available-for-Sale Securities: Fixed Maturities																Future Policy Benefits:
	Corporate Debt Securities		Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Other Structured Investments		Total			GMWB and GMAB Embedded Derivatives
	(in millions)
Balance, January 1, 2010	$	1,239	$	2,868		$	72		$	119		$	11	$	4,309		$	(299	)
Total gains (losses) included in:
Net income	1		55			1			5			2		64		(1)	4		(2)
Other comprehensive income	30		202			10			10			—		252			—
Purchases, sales, issues and settlements, net	22		(428		)	91			27			—		(288		)	(126		)
Transfers into Level 3	25		—			—			—			—		25			—
Transfers out of Level 3	—		—			(144		)	(13		)	—		(157		)	—
Balance, December 31, 2010	$	1,317	$	2,697		$	30		$	148		$	13	$	4,205		$	(421	)
Changes in unrealized gains (losses) relating to assets and liabilities held at December 31, 2010 included in:
Net investment income	$	—	$	79		$	—		$	4		$	—	$	83		$	—
Net realized investment gains (losses)	—		(26		)	—			—			—		(26		)	—
Benefits, claims, losses and settlement expenses	—		—			—			—			—		—			(15		)

(1) Represents a $21 million loss included in net realized investment gains (losses) and an $85 million gain included in net investment income in the Consolidated Statements of Income.

(2) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income.

Significant unobservable inputs used in the fair value measurements

	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(in millions)
Corporate debt securities (private placements)	$	1,624	Discounted cash flow	Yield/spread to U.S. Treasuries	1.1% – 8.5% (2.2%)
GMWB and GMAB embedded derivatives	$	833	Discounted cash flow	Utilization of guaranteed withdrawals(1)	0.0% – 56.4%
				Surrender rate	0.0% – 56.3%
				Market volatility(2)	5.6% – 21.2%
				Nonperformance risk(3)	97 bps

(1) The utilization of the guaranteed withdrawals represents the percentage of policyholders that will begin withdrawing in any given year.

(2) Market volatility is implied volatility of fund of funds.

(3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivative.

Schedule of carrying value and the estimated fair value of financial instruments that are not reported at fair value

	December 31, 2012										December 31, 2011
	Carrying		Fair Value								Carrying		Fair
	Value		Level 1		Level 2		Level 3		Total		Value		Value
	(in millions)
Financial Assets
Mortgage loans, net	$	3,389	$	—	$	—	$	3,568	$	3,568	$	2,473	$	2,650
Policy loans	752		—		—		725		725		739		713
Other investments	309		—		292		24		316		308		311
Restricted cash	86		86		—		—		86		26		26
Financial Liabilities
Future policy benefits	$	14,701	$	—	$	—	$	15,982	$	15,982	$	15,064	$	16,116
Separate account liabilities	360		—		360		—		360		345		345
Line of credit with Ameriprise Financial	150		—		—		150		150		300		300
Borrowings under repurchase agreements	501		—		500		—		500		504		502
Other liabilities	144		—		—		142		142		267		263