Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.

The assets and liabilities measured at estimated fair value on a recurring basis, including those items for which the Company has elected the FVO, were determined as described below. These estimated fair values and their corresponding placement in the fair value hierarchy are summarized as follows:

				June 30, 2011
			Fair Value Measurements at Reporting Date Using
			Quoted Prices in
			Active Markets for		Significant Other		Significant		Total
			Identical Assets		Observable		Unobservable		Estimated
			and Liabilities		Inputs		Inputs		Fair
			(Level 1)		(Level 2)		(Level 3)		Value

			(In millions)

Assets:
Fixed maturity securities:
	U.S. corporate securities		$	0	$	14,376	$	1,445	$	15,821
	Foreign corporate securities			0		8,144		756		8,900
	U.S. Treasury and agency securities			6,010		2,601		0		8,611
	RMBS			0		6,553		19		6,572
	CMBS			0		2,011		155		2,166
	ABS			0		1,589		308		1,897
	State and political subdivision securities			0		1,833		25		1,858
	Foreign government securities			0		1,010		2		1,012
		Total fixed maturity securities		6,010		38,117		2,710		46,837
Equity securities:
	Non-redeemable preferred stock			0		40		121		161
	Common stock			38		77		32		147
		Total equity securities		38		117		153		308
Other securities:
	FVO general account securities			0		48		0		48
	FVO contractholder-directed unit-linked investments			3,041		0		0		3,041
		Total other securities		3,041		48		0		3,089
Short-term investments (1)				765		1,264		92		2,121
Mortgage loans held by consolidated securitization entities				0		6,697		0		6,697
Derivative assets: (2)
	Interest rate contracts			5		853		5		863
	Foreign currency contracts			0		385		0		385
	Credit contracts			0		5		11		16
	Equity market contracts			1		228		15		244
		Total derivative assets		6		1,471		31		1,508
Net embedded derivatives within asset host contracts (3)				0		0		824		824
Separate account assets (4)				199		69,138		130		69,467
		Total assets	$	10,059	$	116,852	$	3,940	$	130,851

Liabilities:
Derivative liabilities: (2)
	Interest rate contracts		$	5	$	317	$	67	$	389
	Foreign currency contracts			0		96		0		96
	Credit contracts			0		15		1		16
	Equity market contracts			2		0		13		15
		Total derivative liabilities		7		428		81		516
Net embedded derivatives within liability host contracts (3)				0		0		42		42
Long-term debt of consolidated securitization entities				0		6,617		0		6,617
		Total liabilities	$	7	$	7,045	$	123	$	7,175

			December 31, 2010
			Fair Value Measurements at Reporting Date Using
			Quoted Prices in
			Active Markets for		Significant Other		Significant		Total
			Identical Assets		Observable		Unobservable		Estimated
			and Liabilities		Inputs		Inputs		Fair
			(Level 1)		(Level 2)		(Level 3)		Value

			(In millions)

Assets:
Fixed maturity securities:
	U.S. corporate securities		$	0	$	13,864	$	1,510	$	15,374
	Foreign corporate securities			0		7,590		880		8,470
	U.S. Treasury and agency securities			4,616		3,026		34		7,676
	RMBS			0		6,674		35		6,709
	CMBS			0		2,147		130		2,277
	ABS			0		1,301		568		1,869
	State and political subdivision securities			0		1,614		32		1,646
	Foreign government securities			0		889		14		903
		Total fixed maturity securities		4,616		37,105		3,203		44,924
Equity securities:
	Non-redeemable preferred stock			0		54		214		268
	Common stock			43		72		22		137
		Total equity securities		43		126		236		405
Other securities:
	FVO general account securities			0		7		0		7
	FVO contractholder-directed unit-linked investments			2,240		0		0		2,240
		Total other securities		2,240		7		0		2,247
Short-term investments (1)				390		584		173		1,147
Mortgage loans held by consolidated securitization entities				0		6,840		0		6,840
Derivative assets: (2)
	Interest rate contracts			5		804		10		819
	Foreign currency contracts			0		589		0		589
	Credit contracts			0		3		12		15
	Equity market contracts			0		77		20		97
		Total derivative assets		5		1,473		42		1,520
Net embedded derivatives within asset host contracts (3)				0		0		936		936
Separate account assets (4)				76		61,410		133		61,619
		Total assets	$	7,370	$	107,545	$	4,723	$	119,638

Liabilities:
Derivative liabilities: (2)
	Interest rate contracts		$	7	$	315	$	71	$	393
	Foreign currency contracts			0		69		0		69
	Credit contracts			0		21		1		22
	Equity market contracts			0		0		8		8
		Total derivative liabilities		7		405		80		492
Net embedded derivatives within liability host contracts (3)				0		0		259		259
Long-term debt of consolidated securitization entities				0		6,773		0		6,773
		Total liabilities	$	7	$	7,178	$	339	$	7,524

See “— Variable Interest Entities” in Note 2 for discussion of CSEs included in the tables above.

The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows:

Fixed Maturity Securities, Equity Securities, Other Securities and Short-term Investments

When available, the estimated fair value of the Company's fixed maturity securities, equity securities, other securities and short-term investments are based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company's securities holdings and valuation of these securities does not involve management's judgment.

When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other similar techniques. The inputs in applying these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity and management's assumptions regarding estimated duration, liquidity and estimated future cash flows. Accordingly, the estimated fair values are based on available market information and management's judgments about financial instruments.

The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such observable inputs include benchmarking prices for similar assets in active markets, quoted prices in markets that are not active and observable yields and spreads in the market.

When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management's judgment or estimation and cannot be supported by reference to market activity. Even though unobservable, these inputs are assumed to be consistent with what other market participants would use when pricing such securities and are considered appropriate given the circumstances.

The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company's securities holdings.

The Company consolidates certain securitization entities that hold commercial mortgage loans. These commercial mortgage loans held by CSEs, for which the Company has elected the FVO, are presented within mortgage loans in the consolidated balance sheets. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models for OTC derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models.

The significant inputs to the pricing models for most OTC derivatives are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Significant inputs that are observable generally include: interest rates, foreign currency exchange rates, interest rate curves, credit curves and volatility. However, certain OTC derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. Significant inputs that are unobservable generally include: independent broker quotes, credit correlation assumptions, references to emerging market currencies and inputs that are outside the observable portion of the interest rate curve, credit curve, volatility or other relevant market measure. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and are assumed to be consistent with what other market participants would use when pricing such instruments.

The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its derivative positions using the standard swap curve which includes a spread to the risk free rate. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with the standard swap curve. As the Company and its significant derivative counterparties consistently execute trades at such pricing levels, additional credit risk adjustments are not currently required in the valuation process. The Company's ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. The evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period.

Most inputs for OTC derivatives are mid market inputs but, in certain cases, bid level inputs are used when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company's derivatives and could materially affect net income.

Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees and embedded derivatives related to funds withheld on ceded reinsurance. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income.

The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs are embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances in the consolidated balance sheets.

The fair value of these guarantees is estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market assumptions related to the projected cash flows over the expected lives of the contracts. A risk neutral valuation methodology is used under which the cash flows from the guarantees are projected under multiple capital market scenarios using observable risk free rates, currency exchange rates and observable and estimated implied volatilities.

The valuation of these guarantee liabilities includes adjustments for nonperformance risk and for a risk margin related to non-capital market inputs. Both of these adjustments are captured as components of the spread which, when combined with the risk free rate, is used to discount the cash flows of the liability for purposes of determining its fair value.

The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife's debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to MetLife.

Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income.

The Company assumed, from an affiliated insurance company, the risk associated with certain GMIBs and GMWBs. These embedded derivatives are included in other policy-related balances in the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on these assumed risks is determined using a methodology consistent with that described previously for the guarantees directly written by the Company.

The Company ceded, to an affiliated reinsurance company, the risk associated with certain of the GMIBs, GMABs and GMWBs described above that are also accounted for as embedded derivatives. In addition to ceding risks associated with guarantees that are accounted for as embedded derivatives, the Company also cedes, to the same affiliated reinsurance company, certain directly written GMIBs that are accounted for as insurance (i.e., not as embedded derivatives), but where the reinsurance contract contains an embedded derivative. These embedded derivatives are included within premiums, reinsurance and other receivables in the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on these ceded risks is determined using a methodology consistent with that described previously for the guarantees directly written by the Company. Because the direct guarantee is not accounted for at fair value, significant fluctuations in net income may occur as the change in fair value of the embedded derivative on the ceded risk is being recorded in net income without a corresponding and offsetting change in fair value of the direct guarantee.

As part of its regular review of critical accounting estimates, the Company periodically assesses inputs for estimating nonperformance risk (commonly referred to as “own credit”) in fair value measurements. During the second quarter of 2010, the Company completed a study that aggregated and evaluated data, including historical recovery rates of insurance companies, as well as policyholder behavior observed over the prior two years as the recent financial crisis evolved. As a result, at the end of the second quarter of 2010, the Company refined the way in which it incorporates expected recovery rates into the nonperformance risk adjustment for purposes of estimating the fair value of investment-type contracts and embedded derivatives within insurance contracts. For the three months ended June 30, 2010, the Company recognized income of $19 million, net of DAC and income tax, relating to the change in fair value associated with nonperformance risk for embedded derivatives within the above mentioned guaranteed minimum benefit guarantees and associated reinsurance. The Company recognized a gain of $60 million, net of DAC and income tax, relating to implementing the refinement at June 30, 2010.

The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as previously described in “— Fixed Maturity Securities, Equity Securities, Other Securities and Short-term Investments.” The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities in the consolidated balance sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income.

Separate account assets are carried at estimated fair value and reported as a summarized total on the consolidated balance sheets. The estimated fair value of separate account assets is based on the estimated fair value of the underlying assets owned by the separate account. Assets within the Company's separate accounts include: mutual funds, fixed maturity securities, equity securities, derivatives, other limited partnership interests, short-term investments and cash and cash equivalents. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

The Company has elected the FVO for the long-term debt of CSEs, which are carried at estimated fair value. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities

A description of the significant valuation techniques and inputs to the determination of estimated fair value for the more significant asset and liability classes measured at fair value on a recurring basis is as follows:

The Company determines the estimated fair value of its investments using primarily the market approach and the income approach. The use of quoted prices for identical assets and matrix pricing or other similar techniques are examples of market approaches, while the use of discounted cash flow methodologies is an example of the income approach. The Company attempts to maximize the use of observable inputs and minimize the use of unobservable inputs in selecting whether the market or income approach is used.

While certain investments have been classified as Level 1 from the use of unadjusted quoted prices for identical investments supported by high volumes of trading activity and narrow bid/ask spreads, most investments have been classified as Level 2 because the significant inputs used to measure the fair value on a recurring basis of the same or similar investment are market observable or can be corroborated using market observable information for the full term of the investment. Level 3 investments include those where estimated fair values are based on significant unobservable inputs that are supported by little or no market activity and may reflect our own assumptions about what factors market participants would use in pricing these investments.

Fixed Maturity Securities, Equity Securities, Other Securities and Short-term Investments

These securities are comprised of U.S. Treasury securities, exchange traded common stock, exchange traded registered mutual fund interests included in other securities and short-term money market securities, including U.S. Treasury bills. Valuation of these securities is based on unadjusted quoted prices in active markets that are readily and regularly available. Contractholder-directed unit-linked investments reported within other securities include certain registered mutual fund interests priced using daily net asset value (“NAV”) provided by the fund managers.

These assets and liabilities are comprised of exchange-traded derivatives. Valuation of these assets and liabilities is based on unadjusted quoted prices in active markets that are readily and regularly available.

These assets are comprised of (i) securities that are similar in nature to the fixed maturity securities, equity securities and short-term investments referred to above; and (ii) certain exchange-traded derivatives, including financial futures. Valuation of these assets is based on unadjusted quoted prices in active markets that are readily and regularly available.

Fixed Maturity Securities, Equity Securities, Other Securities and Short-term Investments

This level includes fixed maturity securities and equity securities priced principally by independent pricing services using observable inputs. Other securities and short-term investments within this level are of a similar nature and class to the Level 2 securities described below.

U.S. corporate and foreign corporate securities. These securities are principally valued using the market and income approaches. Valuation is based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques that use standard market observable inputs such as benchmark yields, spreads off benchmark yields, new issuances, issuer rating, duration, and trades of identical or comparable securities. Investment grade privately placed securities are valued using discounted cash flow methodologies using standard market observable inputs, and inputs derived from, or corroborated by, market observable data including market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or privately traded issues that incorporate the credit quality and industry sector of the issuer. This level also includes certain below investment grade privately placed fixed maturity securities priced by independent pricing services that use observable inputs.

Structured securities comprised of RMBS, CMBS and ABS. These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques using standard market inputs including spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, rating, weighted average coupon, weighted average maturity, average delinquency rates, geographic region, debt-service coverage ratios and issuance-specific information including, but not limited to: collateral type, payment terms of the underlying assets, payment priority within the tranche, structure of the security, deal performance and vintage of loans.

U.S. Treasury and agency securities. These securities are principally valued using the market approach. Valuation is based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques using standard market observable inputs such as benchmark U.S. Treasury yield curve, the spread off the U.S. Treasury curve for the identical security and comparable securities that are actively traded.

Foreign government and state and political subdivision securities. These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques using standard market observable inputs including benchmark U.S. Treasury or other yields, issuer ratings, broker-dealer quotes, issuer spreads and reported trades of similar securities, including those within the same sub-sector or with a similar maturity or credit rating.

Common and non-redeemable preferred stock. These securities are principally valued using the market approach where market quotes are available but are not considered actively traded. Valuation is based principally on observable inputs including quoted prices in markets that are not considered active.

These commercial mortgage loans are principally valued using the market approach. The principal market for these commercial loan portfolios is the securitization market. The Company uses the quoted securitization market price of the obligations of the CSEs to determine the estimated fair value of these commercial loan portfolios. These market prices are determined principally by independent pricing services using observable inputs.

This level includes all types of derivative instruments utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivative instruments with unobservable inputs as described in Level 3. These derivatives are principally valued using an income approach.

Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves and repurchase rates.

Option-based — Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves and interest rate volatility.

Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves, currency spot rates and cross currency basis curves.

Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, credit curves and recovery rates.

Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, spot equity index levels and dividend yield curves.

Option-based — Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve, spot equity index levels, dividend yield curves and equity volatility.

These assets are comprised of investments that are similar in nature to the fixed maturity securities, equity securities and short-term investments referred to above. Also included are certain mutual funds without readily determinable fair values given prices are not published publicly. Valuation of the mutual funds is based upon quoted prices or reported NAV provided by the fund managers.

The estimated fair value of the long-term debt of the Company's CSEs is based on quoted prices when traded as assets in active markets or, if not available, based on market standard valuation methodologies, consistent with the Company's methods and assumptions used to estimate the fair value of comparable fixed maturity securities.

In general, investments classified within Level 3 use many of the same valuation techniques and inputs as described in Level 2 Measurements. However, if key inputs are unobservable, or if the investments are less liquid and there is very limited trading activity, the investments are generally classified as Level 3. The use of independent non-binding broker quotations to value investments generally indicates there is a lack of liquidity or a lack of transparency in the process to develop the valuation estimates generally causing these investments to be classified in Level 3.

This level includes fixed maturity securities and equity securities priced principally by independent broker quotations or market standard valuation methodologies using inputs that are not market observable or cannot be derived principally from or corroborated by observable market data. Short-term investments within this level are of a similar nature and class to the Level 3 securities described below; accordingly, the valuation techniques and significant market standard observable inputs used in their valuation are also similar to those described below.

U.S. corporate and foreign corporate securities. These securities, including financial services industry hybrid securities classified within fixed maturity securities, are principally valued using the market and income approaches. Valuations are based primarily on matrix pricing or other similar techniques that utilize unobservable inputs or cannot be derived principally from, or corroborated by, observable market data, including illiquidity premiums and spread adjustments to reflect industry trends or specific credit-related issues. Valuations may be based on independent non-binding broker quotations. Generally, below investment grade privately placed or distressed securities included in this level are valued using discounted cash flow methodologies which rely upon significant, unobservable inputs and inputs that cannot be derived principally from, or corroborated by, observable market data.

Structured securities comprised of RMBS, CMBS and ABS. These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques that utilize inputs that are unobservable or cannot be derived principally from, or corroborated by, observable market data, or are based on independent non-binding broker quotations. Below investment grade securities and ABS supported by sub-prime mortgage loans included in this level are valued based on inputs including quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2, and certain of these securities are valued based on independent non-binding broker quotations.

Foreign government and state and political subdivision securities. These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques, however these securities are less liquid and certain of the inputs are based on very limited trading activity.

Common and non-redeemable preferred stock. These securities, including privately held securities and financial services industry hybrid securities classified within equity securities, are principally valued using the market and income approaches. Valuations are based primarily on matrix pricing or other similar techniques using inputs such as comparable credit rating and issuance structure. Equity securities valuations determined with discounted cash flow methodologies use inputs such as earnings multiples based on comparable public companies, and industry-specific non-earnings based multiples. Certain of these securities are valued based on independent non-binding broker quotations.

These derivatives are principally valued using an income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. These valuation methodologies generally use the same inputs as described in the corresponding sections above for Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data.

Non-option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve and LIBOR basis curves.

Option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR basis curves and interest rate volatility.

Non-option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR basis curves and cross currency basis curves. Certain of these derivatives are valued based on independent non-binding broker quotations.

Non-option-based — Significant unobservable inputs may include credit correlation, repurchase rates, and the extrapolation beyond observable limits of the swap yield curve and credit curves. Certain of these derivatives are valued based on independent non-binding broker quotations.

Non-option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves.

Option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves and equity volatility.

These embedded derivatives are principally valued using an income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curve, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curve and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin.

These embedded derivatives are principally valued using an income approach. The valuation techniques and significant market standard unobservable inputs used in their valuation are similar to those previously described for Direct and Assumed Guaranteed Minimum Benefits and also include counterparty credit spreads.

These embedded derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve and the fair value of assets within the reference portfolio. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the fair value of certain assets within the reference portfolio which are not observable in the market and cannot be derived principally from, or corroborated by, observable market data.

These assets are comprised of investments that are similar in nature to the fixed maturity securities and equity securities referred to above. Separate account assets within this level also include other limited partnership interests. Other limited partnership interests are valued giving consideration to the value of the underlying holdings of the partnerships and by applying a premium or discount, if appropriate, for factors such as liquidity, bid/ask spreads, the performance record of the fund manager or other relevant variables which may impact the exit value of the particular partnership interest.

During the three months and six months ended June 30, 2011 and 2010, transfers between Levels 1 and 2 were not significant.

Overall, transfers into and/or out of Level 3 are attributable to a change in the observability of inputs. Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Transfers into and/or out of any level are assumed to occur at the beginning of the period. Significant transfers into and/or out of Level 3 assets and liabilities for the three months and six months ended June 30, 2011 and 2010 are summarized below.

Transfers into Level 3 resulted primarily from current market conditions characterized by a lack of trading activity, decreased liquidity and credit ratings downgrades (e.g., from investment grade to below investment grade) which have resulted in decreased transparency of valuations and an increased use of broker quotations and unobservable inputs to determine estimated fair value.

During both the three months and six months ended June 30, 2011, transfers into Level 3 for fixed maturity securities of $14 million were principally comprised of certain foreign corporate securities. During the three months and six months ended June 30, 2010, transfers into Level 3 for fixed maturity securities of $224 million and $256 million, respectively, were principally comprised of certain CMBS and U.S. and foreign corporate securities.

Transfers out of Level 3 resulted primarily from increased transparency of both new issuances that subsequent to issuance and establishment of trading activity, became priced by independent pricing services and existing issuances that, over time, the Company was able to obtain pricing from, or corroborate pricing received from, independent pricing services with observable inputs or increases in market activity and upgraded credit ratings. With respect to derivatives, transfers out of Level 3 resulted primarily from increased transparency related to the observable portion of the swap yield curve or the observable portion of the equity volatility surface.

During the three months and six months ended June 30, 2011, transfers out of Level 3 for fixed maturity securities of $344 million and $425 million, respectively, were principally comprised of certain ABS, U.S. and foreign corporate securities. During the three months and six months ended June 30, 2010, transfers out of Level 3 for fixed maturity securities of $99 million and $239 million, respectively, and transfers out of Level 3 for separate account assets of less than $1 million and $4 million, respectively, were principally comprised of certain U.S. and foreign corporate securities, ABS and CMBS.

The following tables summarize the change of all assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3), including realized and unrealized gains (losses) of all assets and (liabilities) and realized and unrealized gains (losses) of all assets and (liabilities) still held at the end of the respective time periods:

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Fixed Maturity Securities:
							U.S.								State and
			U.S.		Foreign		Treasury								Political		Foreign
			Corporate		Corporate		and Agency								Subdivision		Government
			Securities		Securities		Securities		RMBS		CMBS		ABS		Securities		Securities

			(In millions)

Three Months Ended June 30, 2011:
Balance, beginning of period			$	1,428	$	782	$	32	$	18	$	152	$	561	$	32	$	2
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		1		0		0		0		0		0		0
		Net investment gains (losses)		4		(19)		0		0		2		(2)		0		0
		Net derivative gains (losses)		0		0		0		0		0		0		0		0
	Other comprehensive income (loss)			12		18		0		0		0		(3)		(7)		0
Purchases (3)				64		293		0		1		18		8		0		0
Sales (3)				(42)		(286)		0		0		(9)		(20)		0		0
Issuances (3)				0		0		0		0		0		0		0		0
Settlements (3)				0		0		0		0		0		0		0		0
Transfers into Level 3 (4)				3		11		0		0		0		0		0		0
Transfers out of Level 3 (4)				(24)		(44)		(32)		0		(8)		(236)		0		0
Balance, end of period			$	1,445	$	756	$	0	$	19	$	155	$	308	$	25	$	2

Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2011 included in earnings:
		Net investment income	$	0	$	1	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	0	$	(6)	$	0	$	0	$	0	$	(3)	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Equity Securities:						Net Derivatives: (5)
			Non-
			redeemable						Interest		Foreign				Equity		Net		Separate
			Preferred		Common		Short-term		Rate		Currency		Credit		Market		Embedded		Account
			Stock		Stock		Investments		Contracts		Contracts		Contracts		Contracts		Derivatives (6)		Assets (7)

			(In millions)

Three Months Ended June 30, 2011:
Balance, beginning of period			$	219	$	31	$	82	$	(75)	$	0	$	11	$	6	$	647	$	130
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		0		0		0		0		0		0		0		0
		Net investment gains (losses)		(24)		0		0		0		0		0		0		0		(1)
		Net derivative gains (losses)		0		0		0		1		0		0		(4)		126		0
	Other comprehensive income (loss)			24		1		0		12		0		0		0		0		0
Purchases (3)				0		0		58		0		0		0		0		0		2
Sales (3)				(98)		0		(48)		0		0		0		0		0		0
Issuances (3)				0		0		0		0		0		0		0		0		0
Settlements (3)				0		0		0		0		0		(1)		0		9		0
Transfers into Level 3 (4)				0		0		0		0		0		0		0		0		0
Transfers out of Level 3 (4)				0		0		0		0		0		0		0		0		(1)
Balance, end of period			$	121	$	32	$	92	$	(62)	$	0	$	10	$	2	$	782	$	130

Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2011 included in earnings:
		Net investment income	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	(5)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	1	$	0	$	0	$	(4)	$	126	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Fixed Maturity Securities:
							U.S.								State and
			U.S.		Foreign		Treasury								Political		Foreign
			Corporate		Corporate		and Agency								Subdivision		Government
			Securities		Securities		Securities		RMBS		CMBS		ABS		Securities		Securities

			(In millions)

Three Months Ended June 30, 2010:
Balance, beginning of period			$	1,510	$	953	$	32	$	28	$	48	$	521	$	48	$	7
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		2		(1)		0		0		0		0		0		0
		Net investment gains (losses)		0		5		0		0		1		(1)		0		0
		Net derivative gains (losses)		0		0		0		0		0		0		0		0
	Other comprehensive income (loss)			28		(29)		2		1		7		14		1		0
Purchases, sales, issuances and
	settlements (3)			38		(100)		0		17		(5)		27		(2)		0
Transfers into Level 3 (4)				54		66		0		21		73		10		0		0
Transfers out of Level 3 (4)				(23)		(38)		0		0		(24)		(6)		(8)		0
Balance, end of period			$	1,609	$	856	$	34	$	67	$	100	$	565	$	39	$	7

Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2010 included in earnings:
		Net investment income	$	2	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	(1)	$	0	$	0	$	0	$	1	$	(1)	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Equity Securities:						Net Derivatives: (5)
			Non-
			redeemable						Interest		Foreign				Equity		Net		Separate
			Preferred		Common		Short-term		Rate		Currency		Credit		Market		Embedded		Account
			Stock		Stock		Investments		Contracts		Contracts		Contracts		Contracts		Derivatives (6)		Assets (7)

			(In millions)

Three Months Ended June 30, 2010:
Balance, beginning of period			$	242	$	34	$	1	$	6	$	18	$	7	$	7	$	258	$	146
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		0		0		0		0		0		0		0		0
		Net investment gains (losses)		14		4		0		0		0		0		0		0		(3)
		Net derivative gains (losses)		0		0		0		5		(10)		(4)		39		333		0
	Other comprehensive income (loss)			(12)		(6)		0		0		0		7		0		0		0
Purchases, sales, issuances and
	settlements (3)			(55)		12		12		(2)		0		0		0		21		(3)
Transfers into Level 3 (4)				0		0		0		0		0		0		0		0		0
Transfers out of Level 3 (4)				0		0		0		0		0		0		0		0		0
Balance, end of period			$	189	$	44	$	13	$	9	$	8	$	10	$	46	$	612	$	140

Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2010 included in earnings:
		Net investment income	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	6	$	(10)	$	(5)	$	38	$	332	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Fixed Maturity Securities:
							U.S.								State and
			U.S.		Foreign		Treasury								Political		Foreign
			Corporate		Corporate		and Agency								Subdivision		Government
			Securities		Securities		Securities		RMBS		CMBS		ABS		Securities		Securities

			(In millions)

Six Months Ended June 30, 2011:
Balance, beginning of period			$	1,510	$	880	$	34	$	35	$	130	$	568	$	32	$	14
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		2		1		0		0		0		0		0		0
		Net investment gains (losses)		3		(17)		0		0		0		(8)		0		0
		Net derivative gains (losses)		0		0		0		0		0		0		0		0
	Other comprehensive income (loss)			21		35		0		0		17		8		(7)		0
Purchases (3)				88		296		0		0		18		16		0		0
Sales (3)				(91)		(392)		(1)		0		(10)		(49)		0		(12)
Issuances (3)				0		0		0		0		0		0		0		0
Settlements (3)				0		0		0		0		0		0		0		0
Transfers into Level 3 (4)				3		11		0		0		0		0		0		0
Transfers out of Level 3 (4)				(91)		(58)		(33)		(16)		0		(227)		0		0
Balance, end of period			$	1,445	$	756	$	0	$	19	$	155	$	308	$	25	$	2

Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2011 included in earnings:
		Net investment income	$	2	$	1	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	0	$	(6)	$	0	$	0	$	0	$	(5)	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Equity Securities:						Net Derivatives: (5)
			Non-
			redeemable						Interest		Foreign				Equity		Net		Separate
			Preferred		Common		Short-term		Rate		Currency		Credit		Market		Embedded		Account
			Stock		Stock		Investments		Contracts		Contracts		Contracts		Contracts		Derivatives (6)		Assets (7)

			(In millions)

Six Months Ended June 30, 2011:
Balance, beginning of period			$	214	$	22	$	173	$	(61)	$	0	$	11	$	12	$	677	$	133
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		0		0		0		0		0		0		0		0
		Net investment gains (losses)		(24)		1		(1)		0		0		0		0		0		(5)
		Net derivative gains (losses)		0		0		0		2		0		1		(10)		73		0
	Other comprehensive income (loss)			28		5		0		4		0		0		0		0		0
Purchases (3)				0		9		92		0		0		0		0		0		3
Sales (3)				(97)		(5)		(172)		0		0		0		0		0		(1)
Issuances (3)				0		0		0		0		0		(1)		0		0		0
Settlements (3)				0		0		0		0		0		(1)		0		32		0
Transfers into Level 3 (4)				0		0		0		0		0		0		0		0		0
Transfers out of Level 3 (4)				0		0		0		(7)		0		0		0		0		0
Balance, end of period			$	121	$	32	$	92	$	(62)	$	0	$	10	$	2	$	782	$	130

Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2011 included in earnings:
		Net investment income	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	(5)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	2	$	0	$	1	$	(10)	$	75	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Fixed Maturity Securities:
							U.S.								State and
			U.S.		Foreign		Treasury								Political		Foreign
			Corporate		Corporate		and Agency								Subdivision		Government
			Securities		Securities		Securities		RMBS		CMBS		ABS		Securities		Securities

			(In millions)

Six Months Ended June 30, 2010:
Balance, beginning of period			$	1,605	$	994	$	33	$	25	$	45	$	537	$	32	$	16
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		4		(1)		0		0		0		0		0		0
		Net investment gains (losses)		1		(1)		0		0		0		0		0		0
		Net derivative gains (losses)		0		0		0		0		0		0		0		0
	Other comprehensive income (loss)			67		15		3		3		10		25		7		0
Purchases, sales, issuances and
	settlements (3)			(62)		(158)		(2)		17		0		45		0		0
Transfers into Level 3 (4)				76		77		0		22		72		9		0		0
Transfers out of Level 3 (4)				(82)		(70)		0		0		(27)		(51)		0		(9)
Balance, end of period			$	1,609	$	856	$	34	$	67	$	100	$	565	$	39	$	7

Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2010 included in earnings:
		Net investment income	$	3	$	(1)	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	(4)	$	0	$	0	$	0	$	0	$	(1)	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Equity Securities:						Net Derivatives: (5)
			Non-
			redeemable						Interest		Foreign				Equity		Net		Separate
			Preferred		Common		Short-term		Rate		Currency		Credit		Market		Embedded		Account
			Stock		Stock		Investments		Contracts		Contracts		Contracts		Contracts		Derivatives (6)		Assets (7)

			(In millions)

Six Months Ended June 30, 2010:
Balance, beginning of period			$	258	$	11	$	8	$	2	$	23	$	4	$	18	$	445	$	153
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		0		0		0		0		0		0		0		0
		Net investment gains (losses)		14		4		0		0		0		0		0		0		(3)
		Net derivative gains (losses)		0		0		0		9		(15)		(4)		28		123		0
	Other comprehensive income (loss)			(6)		1		0		0		0		9		0		0		0
Purchases, sales, issuances and
	settlements (3)			(77)		30		5		(2)		0		1		0		44		(6)
Transfers into Level 3 (4)				0		0		0		0		0		0		0		0		0
Transfers out of Level 3 (4)				0		(2)		0		0		0		0		0		0		(4)
Balance, end of period			$	189	$	44	$	13	$	9	$	8	$	10	$	46	$	612	$	140

Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2010 included in earnings:
		Net investment income	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	9	$	(15)	$	(4)	$	28	$	123	$	0

The Company has elected the FVO for the following assets and liabilities held by CSEs: commercial mortgage loans and long-term debt. The following table presents these commercial mortgage loans carried under the FVO at:

The following table presents the long-term debt carried under the FVO related to commercial mortgage loans at:

Interest income on commercial mortgage loans held by CSEs is recorded in net investment income. Interest expense on long-term debt of CSEs is recorded in other expenses. Gains and losses from initial measurement, subsequent changes in estimated fair value and gains or losses on sales of both the commercial mortgage loans and long-term debt are recognized in net investment gains (losses), which is summarized in Note 2.

Certain investments are measured at estimated fair value on a non-recurring basis and are not included in the tables presented above. The amounts below relate to certain investments measured at estimated fair value during the period and still held at the reporting dates.

	Three Months Ended June 30,
	2011						2010

			Estimated		Net				Estimated		Net
	Carrying		Fair		Investment		Carrying		Fair		Investment
	Value Prior to		Value After		Gains		Value Prior to		Value After		Gains
	Measurement		Measurement		(Losses)		Measurement		Measurement		(Losses)

	(In millions)

Mortgage loans, net (1)	$	0	$	8	$	8	$	23	$	23	$	0
Other limited partnership interests (2)	$	3	$	2	$	(1)	$	24	$	17	$	(7)
Real estate joint ventures (3)	$	0	$	0	$	0	$	7	$	3	$	(4)

	Six Months Ended June 30,
	2011						2010
			Estimated		Net				Estimated		Net
	Carrying		Fair		Investment		Carrying		Fair		Investment
	Value Prior to		Value After		Gains		Value Prior to		Value After		Gains
	Measurement		Measurement		(Losses)		Measurement		Measurement		(Losses)

		(In millions)

Mortgage loans, net (1)	$	0	$	8	$	8	$	31	$	23	$	(8)
Other limited partnership interests (2)	$	3	$	2	$	(1)	$	24	$	17	$	(7)
Real estate joint ventures (3)	$	0	$	0	$	0	$	25	$	5	$	(20)

Amounts related to the Company's financial instruments that were not measured at fair value on a recurring basis were as follows:

		June 30, 2011						December 31, 2010
						Estimated						Estimated
		Notional		Carrying		Fair		Notional		Carrying		Fair
		Amount		Value		Value		Amount		Value		Value

		(In millions)

Assets:
Mortgage loans, net (1)				$	5,948	$	6,188			$	5,890	$	6,022
Policy loans				$	1,190	$	1,260			$	1,190	$	1,260
Real estate joint ventures (2)				$	87	$	120			$	79	$	102
Other limited partnership interests (2)				$	103	$	129			$	104	$	116
Short-term investments (3)				$	82	$	82			$	88	$	88
Cash and cash equivalents				$	1,220	$	1,220			$	1,928	$	1,928
Accrued investment income				$	534	$	534			$	559	$	559
Premiums, reinsurance and other receivables (2)				$	5,997	$	6,332			$	5,959	$	6,164
Liabilities:
Policyholder account balances (2)				$	24,273	$	25,952			$	24,622	$	26,061
Payables for collateral under securities loaned and
	other transactions			$	8,201	$	8,201			$	8,103	$	8,103
Long-term debt (4)				$	793	$	965			$	795	$	930
Other liabilities (2)				$	336	$	336			$	294	$	294
Separate account liabilities (2)				$	1,407	$	1,407			$	1,407	$	1,407
Commitments: (5)
Mortgage loan commitments		$	255	$	0	$	(2)	$	270	$	0	$	(2)
Commitments to fund bank credit facilities and
	private corporate bond investments	$	234	$	0	$	(10)	$	315	$	0	$	(12)

The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows:

The assets and liabilities measured at estimated fair value on a recurring basis include: fixed maturity securities, equity securities, other securities, certain short-term investments, mortgage loans held by CSEs, derivative assets and liabilities, net embedded derivatives within asset and liability host contracts, separate account assets and long-term debt of CSEs. These assets and liabilities are described in the section “— Recurring Fair Value Measurements” and, therefore, are excluded from the table above. The estimated fair value for these financial instruments approximates carrying value.

The Company originates mortgage loans principally for investment purposes. These loans are principally carried at amortized cost. The estimated fair value of mortgage loans is primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk.

For policy loans with fixed interest rates, estimated fair values are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed applying a weighted-average interest rate to the outstanding principal balance of the respective group of policy loans and an estimated average maturity determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk as these loans are fully collateralized by the cash surrender value of the underlying insurance policy. The estimated fair value for policy loans with variable interest rates approximates carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates.

Real estate joint ventures and other limited partnership interests included in the preceding table consist of those investments accounted for using the cost method. The remaining carrying value recognized in the consolidated balance sheets represents investments in real estate carried at cost less accumulated depreciation, or real estate joint ventures and other limited partnership interests accounted for using the equity method, which do not meet the definition of financial instruments for which fair value is required to be disclosed.

The estimated fair values for real estate joint ventures and other limited partnership interests accounted for under the cost method are generally based on the Company's share of the NAV as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments.

Certain short-term investments do not qualify as securities and are recognized at amortized cost in the consolidated balance sheets. For these instruments, the Company believes that there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, short-term investments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality and the Company has determined additional adjustment is not required.

Due to the short-term maturities of cash and cash equivalents, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value generally approximates carrying value. In light of recent market conditions, cash and cash equivalent instruments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality, or sufficient solvency in the case of depository institutions, and the Company has determined additional adjustment is not required.

Due to the short term until settlement of accrued investment income, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, the Company has monitored the credit quality of the issuers and has determined additional adjustment is not required.

Premiums, reinsurance and other receivables in the preceding table are principally comprised of certain amounts recoverable under reinsurance contracts, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivative positions and amounts receivable for securities sold but not yet settled.

Premiums receivable and those amounts recoverable under reinsurance treaties determined to transfer sufficient risk are not financial instruments subject to disclosure and thus have been excluded from the amounts presented in the preceding table. Amounts recoverable under ceded reinsurance contracts, which the Company has determined do not transfer sufficient risk such that they are accounted for using the deposit method of accounting, have been included in the preceding table. The estimated fair value is determined as the present value of expected future cash flows under the related contracts, which were discounted using an interest rate determined to reflect the appropriate credit standing of the assuming counterparty.

The amounts on deposit for derivative settlements essentially represent the equivalent of demand deposit balances and amounts due for securities sold are generally received over short periods such that the estimated fair value approximates carrying value. In light of recent market conditions, the Company has monitored the solvency position of the financial institutions and has determined additional adjustments are not required.

Policyholder account balances in the table above include investment contracts. Embedded derivatives on investment contracts and certain variable annuity guarantees accounted for as embedded derivatives are included in this caption in the consolidated financial statements but excluded from this caption in the table above as they are separately presented in “— Recurring Fair Value Measurements.” The remaining difference between the amounts reflected as policyholder account balances in the preceding table and those recognized in the consolidated balance sheets represents those amounts due under contracts that satisfy the definition of insurance contracts and are not considered financial instruments.

The investment contracts primarily include certain funding agreements, fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities and total control accounts. The fair values for these investment contracts are estimated by discounting best estimate future cash flows using current market risk-free interest rates and adding a spread to reflect the nonperformance risk in the liability.

The estimated fair value for payables for collateral under securities loaned and other transactions approximates carrying value. The related agreements to loan securities are short-term in nature such that the Company believes there is limited risk of a material change in market interest rates. Additionally, because borrowers are cross-collateralized by the borrowed securities, the Company believes no additional consideration for changes in nonperformance risk are necessary.

The estimated fair value of long-term debt is generally determined by discounting expected future cash flows using market rates currently available for debt with similar remaining maturities and reflecting the credit risk of the Company, including inputs when available, from actively traded debt of other companies with similar types of borrowing arrangements. Risk-adjusted discount rates applied to the expected future cash flows can vary significantly based upon the specific terms of each individual arrangement, including, but not limited to: contractual interest rates in relation to current market rates; the structuring of the arrangement; and the nature and observability of the applicable valuation inputs. Use of different risk-adjusted discount rates could result in different estimated fair values.

Other liabilities included in the table above reflect those other liabilities that satisfy the definition of financial instruments subject to disclosure. These items consist primarily of interest payable; amounts due for securities purchased but not yet settled; and funds withheld under reinsurance treaties accounted for as deposit type treaties. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which were not materially different from the carrying values.

Separate account liabilities included in the preceding table represents those balances due to policyholders under contracts that are classified as investment contracts. The remaining amounts presented in the consolidated balance sheets represent those contracts classified as insurance contracts, which do not satisfy the definition of financial instruments.

Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the Company such that the death benefit is equal to the account balance and certain contracts that provide for benefit funding.

Separate account liabilities are recognized in the consolidated balance sheets at an equivalent value of the related separate account assets. Separate account assets, which equal net deposits, net investment income and realized and unrealized investment gains and losses, are fully offset by corresponding amounts credited to the contractholders' liability which is reflected in separate account liabilities. Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as described in the section “— Recurring Fair Value Measurements,” the Company believes the value of those assets approximates the estimated fair value of the related separate account liabilities.

Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilities and Private Corporate Bond Investments

The estimated fair values for mortgage loan commitments that will be held for investment and commitments to fund bank credit facilities and private corporate bonds that will be held for investment reflected in the above table represents the difference between the discounted expected future cash flows using interest rates that incorporate current credit risk for similar instruments on the reporting date and the principal amounts of the commitments.