Assets and liabilities are measured at fair value on a recurring basis and are summarized below:

Fair Value Measurements at December 31, 2011

				Level 1		Level 2		Level 3		Total

				(In Millions)

Assets
Investments:
	Fixed maturities, available-for-sale:
		Corporate		$	7	$	22,698	$	432	$	23,137
		U.S. Treasury, government and agency			-		3,948		-		3,948
		States and political subdivisions			-		487		53		540
		Foreign governments			-		503		22		525
		Commercial mortgage-backed			-		-		902		902
		Residential mortgage-backed⁽¹⁾			-		1,632		14		1,646
		Asset-backed⁽²⁾			-		92		172		264
		Redeemable preferred stock			203		813		14		1,030
			Subtotal		210		30,173		1,609		31,992
	Other equity investments				66		-		77		143
	Trading securities				457		525		-		982
	Other invested assets:
		Short-term investments			-		132		-		132
		Swaps			-		177		(2)		175
		Futures			(2)		-		-		(2)
		Options			-		7		-		7
		Floors			-		327		-		327
		Swaptions			-		1,029		-		1,029
			Subtotal		(2)		1,672		(2)		1,668
Cash equivalents					2,475		-		-		2,475
Segregated securities					-		1,280		-		1,280
GMIB reinsurance contracts					-		-		10,547		10,547
Separate Accounts' assets					83,672		2,532		215		86,419
		Total Assets		$	86,878	$	36,182	$	12,446	$	135,506

Liabilities
GWBL and other features' liability					-		-		227		227
		Total Liabilities		$	-	$	-	$	227	$	227

Fair Value Measurements at December 31, 2010

				Level 1		Level 2		Level 3		Total

				(In Millions)

Assets
Investments:
	Fixed maturities, available-for-sale:
		Corporate		$	7	$	21,405	$	320	$	21,732
		U.S. Treasury, government and agency			-		1,916		-		1,916
		States and political subdivisions			-		462		49		511
		Foreign governments			-		539		21		560
		Commercial mortgage-backed			-		-		1,103		1,103
		Residential mortgage-backed⁽¹⁾			-		1,668		-		1,668
		Asset-backed⁽²⁾			-		98		148		246
		Redeemable preferred stock			207		1,112		2		1,321
			Subtotal		214		27,200		1,643		29,057
	Other equity investments				77		24		73		174
	Trading securities				425		81		-		506
	Other invested assets:
		Short-term investments			-		148		-		148
		Swaps			-		40		-		40
		Options			-		4		-		4
		Floors			-		326		-		326
		Swaptions			-		171		-		171
			Subtotal		-		689		-		689
Cash equivalents					1,693		-		-		1,693
Segregated securities					-		1,110		-		1,110
GMIB reinsurance contracts					-		-		4,606		4,606
Separate Accounts' assets					89,647		2,160		207		92,014
		Total Assets		$	92,056	$	31,264	$	6,529	$	129,849

Liabilities
GWBL and other features' liability				$	-	$	-	$	38	$	38
		Total Liabilities		$	-	$	-	$	38	$	38

(1) Includes publicly traded agency pass-through securities and collateralized obligations.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

In 2011, AFS fixed maturities with fair values of $51 million and $0 million were transferred out of Level 3 and into Level 2 and out of Level 2 and into Level 1, respectively, principally due to the availability of trading activity and/or market observable inputs to measure and validate their fair values. In addition, AFS fixed maturities with fair value of $171 million were transferred into the Level 3 classification. These transfers in the aggregate represent approximately 1.3% of total equity at December 31, 2011. In 2011, the trading restriction period for one of the Company's public securities lapsed, and as a result, $24 million was transferred from a Level 2 classification to a Level 1 classification.

In 2010, AFS fixed maturities with fair values of $204 million and $56 million were transferred out of Level 3 and into Level 2 and out of Level 2 and into Level 1, respectively, principally due to the availability of trading activity and/or market observable inputs to measure and validate their fair values. In addition, AFS fixed maturities with fair value of $66 million were transferred into the Level 3 classification. These transfers in the aggregate represent approximately 2.0% of total equity at December 31, 2010.

The table below presents a reconciliation for all Level 3 assets and liabilities at December 31, 2011 and 2010, respectively.

Level 3 Instruments
Fair Value Measurements

								State and
								Political				Commercial		Residential
								Sub-		Foreign		Mortgage-		Mortgage-		Asset-
						Corporate		divisions		Govts		backed		backed		backed

						(In Millions)

Balance, January 1, 2011						$	320	$	49	$	21	$	1,103	$	-	$	148
	Total gains (losses), realized and
		unrealized, included in:
			Earnings (loss) as:
				Net investment income (loss)			1		-		-		2		-		-
				Investment gains (losses), net			-		-		-		(30)		-		1
					Subtotal		1		-		-		(28)		-		1
			Other comprehensive income (loss)				(2)		5		(1)		(34)		(1)		2
Purchases							117		-		1		-		-		21
Issuances							-		-		-		-		-		-
Sales							(52)		(2)		-		(139)		(5)		(33)
Settlements							-		-		-		-		-		-
Transfers into Level 3⁽²⁾							100		1		1		-		20		33
Transfers out of Level 3⁽²⁾							(52)		-		-		-		-		-
Balance, December 31, 2011⁽¹⁾						$	432	$	53	$	22	$	902	$	14	$	172

Balance, January 1, 2010						$	466	$	47	$	21	$	1,490	$	-	$	217
	Total gains (losses), realized and
		unrealized, included in:
			Earnings (loss) as:
				Net investment income (loss)			4		-		-		2		-		-
				Investment gains (losses), net			6		-		-		(271)		-		1
					Subtotal	$	10	$	-	$	-	$	(269)	$	-	$	1
			Other comprehensive income (loss)				3		3		-		119		-		14
	Purchases/issuances						22		-		-		-		-		-
	Sales/settlements						(88)		(1)		-		(237)		-		(40)
	Transfers into/out of Level 3⁽²⁾						(93)		-		-		-		-		(44)
Balance, December 31, 2010⁽¹⁾						$	320	$	49	$	21	$	1,103	$	-	$	148

						Redeem-										GWBL
						able		Other		Other		GMIB		Separate		and Other
						Preferred		Equity		Invested		Reinsurance		Accounts		Features
						Stock		Investments⁽¹⁾		Assets		Asset		Assets		Liability

						(In Millions)

Balance, January 1, 2011						$	2	$	73	$	-	$	4,606	$	207	$	38
	Total gains (losses), realized and
		unrealized, included in:
		Earnings (loss) as:
			Net investment income (loss)				-		-		(2)		-		-		-
			Investment gains (losses), net				-		1		-		-		-		-
			Increase (decrease) in the fair value
				of reinsurance contracts			-		-		-		5,737		17		-
			Policyholders' benefits				-		-		-		-		-		170
					Subtotal		-		1		(2)		5,737		17		170
		Other comprehensive income (loss)					(1)		6		-		-		-		-
Purchases							-		2		-		204		4		19
Issuances							-		-		-		-		-		-
Sales							(2)		(5)		-		-		(11)		-
Settlements							-		-		-		-		(2)		-
Transfers into Level 3⁽²⁾							15		-		-		-		-		-
Transfers out of Level 3⁽²⁾							-		-		-		-		-		-
Balance, December 31, 2011						$	14	$	77	$	(2)	$	10,547	$	215	$	227

Balance, January 1, 2010						$	12	$	2	$	300	$	2,256	$	230	$	55
	Total gains (losses), realized and
		unrealized, included in:
		Earnings (loss) as:
			Net investment income (loss)				-		-		-		-		-		-
			Investment gains (losses), net				4		-		-		-		(22)		-
			Increase (decrease) in the fair value
				of reinsurance contracts			-		-		-		2,150		-		-
			Policyholders' benefits				-		-		-		-		-		(34)
					Subtotal	$	4	$	-	$	-	$	2,150	$	(22)	$	(34)
		Other comprehensive income (loss)					-		-		-		-		-		-
	Purchases/issuances						-		60		-		200		2		17
	Sales/settlements						(14)		(1)		-		-		(8)		-
	Transfers into/out of Level 3⁽²⁾						-		12		(300)		-		5		-
Balance, December 31, 2010						$	2	$	73	$	-	$	4,606	$	207	$	38

The table below details changes in unrealized gains (losses) for 2011 and 2010 by category for Level 3 assets and liabilities still held at December 31, 2011 and 2010, respectively:

					Earnings (Loss)
									Increase
					Net		Investment		(Decrease) in the
					Investment		Gains		Fair Value of				Policy-
					Income		(Losses),		Reinsurance				holders'
					(Loss)		Net		Contracts		OCI		Benefits

					(In Millions)
Level 3 Instruments
Full Year 2011
Still Held at December 31, 2011:⁽¹⁾
	Change in unrealized gains (losses):
		Fixed maturities, available-for-sale:
			Corporate		$	-	$	-	$	-	$	1	$	-
			State and political subdivisions			-		-		-		5		-
			Foreign governments			-		-		-		(1)		-
			Commercial mortgage-backed			-		-		-		(40)		-
			Asset-backed			-		-		-		2		-
			Other fixed maturities, available-for-sale			-		-		-		(2)		-
				Subtotal	$	-	$	-	$	-	$	(35)	$	-
			Equity securities, available-for-sale			-		-		-		-		-
		Other invested assets				-		-		-		-		-
		GMIB reinsurance contracts				-		-		5,941		-		-
		Separate Accounts’ assets				-		18		-		-		-
		GWBL and other features’ liability				-		-		-		-		(189)
				Total	$	-	$	18	$	5,941	$	(35)	$	(189)

Level 3 Instruments
Full Year 2010
Still Held at December 31, 2010:⁽¹⁾
	Change in unrealized gains (losses):
		Fixed maturities, available-for-sale:
			Corporate		$	-	$	-	$	-	$	10	$	-
			State and political subdivisions			-		-		-		2		-
			Foreign governments			-		-		-		1		-
			Commercial mortgage-backed			-		-		-		92		-
			Asset-backed			-		-		-		13		-
			Other fixed maturities, available-for-sale			-		-		-		-		-
				Subtotal	$	-	$	-	$	-	$	118	$	-
			Equity securities, available-for-sale			-		-		-		-		-
		Other invested assets				-		-		-		-		-
		GMIB reinsurance contracts				-		-		2,350		-		-
		Separate Accounts’ assets				-		(21)		-		-		-
		GWBL and other features’ liability				-		-		-		-		17
				Total	$	-	$	(21)	$	2,350	$	118	$	17

The carrying values and fair values for financial instruments not otherwise disclosed in Notes 3, 5, 12 and 14 are presented in the table below.

			December 31,
			2011				2010
			Carrying				Carrying
			Value		Fair Value		Value		Fair Value

			(In Millions)
Consolidated:
	Mortgage loans on real estate		$	4,281	$	4,432	$	3,571	$	3,669
	Other limited partnership interests			1,582		1,582		1,451		1,451
	Policyholders liabilities:
		Investment contracts		2,549		2,713		2,609		2,679
	Long-term debt			200		220		200		228
	Loans to affiliates			1,041		1,097		1,045		1,101

Closed Blocks:
	Mortgage loans on real estate		$	1,205	$	1,254	$	981	$	1,015
	Other equity investments			1		1		1		1
	SCNILC liability			6		6		7		7

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities 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) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

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