Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value of Assets and Liabilities

Schedule of assets and liabilities that are measured at fair value on a recurring and non-recurring basis

($ in millions)		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs  (Level 2)		Significant unobservable inputs (Level 3)		Counterparty and cash collateral netting		Balance as of March 31, 2014
Assets
Fixed income securities:
U.S. government and agencies	$	2,745	$	1,055	$	6			$	3,806
Municipal		--		8,381		335				8,716
Corporate		--		40,160		999				41,159
Foreign government		--		1,737		--				1,737
ABS		--		3,323		174				3,497
RMBS		--		1,436		2				1,438
CMBS		--		729		54				783
Redeemable preferred stock		--		25		--				25
Total fixed income securities		2,745		56,846		1,570				61,161
Equity securities		4,571		709		17				5,297
Short-term investments		677		1,866		30				2,573
Other investments: Free-standing derivatives		--		183		5	$	(19)		169
Separate account assets		4,878		--		--				4,878
Other assets		2		--		--				2
Assets held for sale		1,688		9,585		347				11,620
Total recurring basis assets		14,561		69,189		1,969		(19)		85,700
Non-recurring basis (1)		--		--		10				10
Total assets at fair value	$	14,561	$	69,189	$	1,979	$	(19)	$	85,710
% of total assets at fair value		17.0 %		80.7 %		2.3 %		-- %		100.0 %
Liabilities
Contractholder funds: Derivatives embedded in life and annuity contracts	$	--	$	--	$	(319)			$	(319)
Other liabilities: Free-standing derivatives		(1)		(132)		(12)	$	7		(138)
Liabilities held for sale		--		--		(230)				(230)
Total recurring basis liabilities		(1)		(132)		(561)		7		(687)
Non-recurring basis (2)		--		--		(10,641)				(10,641)
Total liabilities at fair value	$	(1)	$	(132)	$	(11,202)	$	7	$	(11,328)
% of total liabilities at fair value		-- %		1.2 %		98.9 %		(0.1) %		100.0 %

(1)	Includes $10 million of limited partnership interests written-down to fair value in connection with recognizing other-than-temporary impairments.
(2)	Relates to LBL business held for sale (see Note 3).  The total fair value measurement includes $15,390 million of assets held for sale and $(14,641) million of liabilities held for sale, less $11,620 million of assets and $(230) million of liabilities measured at fair value on a recurring basis.

($ in millions)		Quoted prices  in active  markets for  identical assets (Level 1)		Significant  other  observable  inputs (Level 2)		Significant  unobservable  inputs (Level 3)		Counterparty  and cash  collateral netting		Balance as of December 31, 2013
Assets
Fixed income securities:
U.S. government and agencies	$	1,801	$	1,105	$	7			$	2,913
Municipal		--		8,380		343				8,723
Corporate		--		39,494		1,109				40,603
Foreign government		--		1,824		--				1,824
ABS		--		4,326		192				4,518
RMBS		--		1,472		2				1,474
CMBS		--		786		43				829
Redeemable preferred stock		--		25		1				26
Total fixed income securities		1,801		57,412		1,697				60,910
Equity securities		4,268		697		132				5,097
Short-term investments		752		1,626		15				2,393
Other investments: Free-standing derivatives		--		284		9	$	(24)		269
Separate account assets		5,039		--		--				5,039
Other assets		1		--		--				1
Assets held for sale		1,854		9,812		362				12,028
Total recurring basis assets		13,715		69,831		2,215		(24)		85,737
Non-recurring basis (1)		--		--		24				24
Total assets at fair value	$	13,715	$	69,831	$	2,239	$	(24)	$	85,761
% of total assets at fair value		16.0 %		81.4 %		2.6 %		-- %		100.0 %
Liabilities
Contractholder funds: Derivatives embedded in life and annuity contracts	$	--	$	--	$	(307)			$	(307)
Other liabilities: Free-standing derivatives		--		(194)		(14)	$	11		(197)
Liabilities held for sale		--		--		(246)				(246)
Total recurring basis liabilities		--		(194)		(567)		11		(750)
Non-recurring basis (2)		--		--		(11,088)				(11,088)
Total liabilities at fair value	$	--	$	(194)	$	(11,655)	$	11	$	(11,838)
% of total liabilities at fair value		-- %		1.6 %		98.5 %		(0.1) %		100.0 %

(1)	Includes $8 million of mortgage loans and $16 million of limited partnership interests written-down to fair value in connection with recognizing other-than-temporary impairments.
(2)	Relates to LBL business held for sale (see Note 3).  The total fair value measurement includes $15,593 million of assets held for sale and $(14,899) million of liabilities held for sale, less $12,028 million of assets and $(246) million of liabilities measured at fair value on a recurring basis.

Summary of quantitative information about the significant unobservable inputs

($ in millions)	Fair value		Valuation technique	Unobservable input	Range	Weighted average
March 31, 2014
Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options	$	(264)	Stochastic cash flow model	Projected option cost	1.0 - 2.0 %	1.76%
Liabilities held for sale  – Equity-indexed and forward starting options	$	(230)	Stochastic cash flow model	Projected option cost	1.0 - 2.0 %	1.90%
December 31, 2013
Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options	$	(247)	Stochastic cash flow model	Projected option cost	1.0 - 2.0 %	1.75%
Liabilities held for sale  – Equity-indexed and forward starting options	$	(246)	Stochastic cash flow model	Projected option cost	1.0 - 2.0 %	1.91%

Schedule of the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis

($ in millions)				Total gains (losses) included in:
		Balance as of December 31, 2013		Net income (1)		OCI		Transfers into Level 3		Transfers out of Level 3
Assets
Fixed income securities:
U.S. government and agencies	$	7	$	--	$	--	$	--	$	--
Municipal		343		(4)		5		--		--
Corporate		1,109		5		1		--		(25)
ABS		192		--		(1)		--		(57)
RMBS		2		--		--		--		--
CMBS		43		--		--		5		--
Redeemable preferred stock		1		--		--		--		--
Total fixed income securities		1,697		1		5		5		(82)
Equity securities		132		20		(15)		--		--
Short-term investments		--		--		--		--		--
Free-standing derivatives, net		(5)		(2)		--		--		--
Assets held for sale		362		(1)		2		4		(2)
Total recurring Level 3 assets	$	2,186	$	18	$	(8)	$	9	$	(84)
Liabilities
Contractholder funds: Derivatives embedded in life and annuity contracts	$	(307)	$	(2)	$	--	$	--	$	--
Liabilities held for sale		(246)		17		--		--		--
Total recurring Level 3 liabilities	$	(553)	$	15	$	--	$	--	$	--

		Transfer from held for sale		Purchases/ Issues (2)		Sales		Settlements		Balance as of March 31, 2014
Assets
Fixed income securities:
U.S. government and agencies	$	--	$	--	$	--	$	(1)	$	6
Municipal		--		1		(9)		(1)		335
Corporate		--		16		(87)		(20)		999
ABS		--		44		--		(4)		174
RMBS		--		--		--		--		2
CMBS		4		4		(1)		(1)		54
Redeemable preferred stock		--		--		(1)		--		--
Total fixed income securities		4		65		(98)		(27)		1,570
Equity securities		--		1		(121)		--		17
Short-term investments		--		30		--		--		30
Free-standing derivatives, net		--		2		--		(2)		(7) (3)
Assets held for sale		(4)		--		(8)		(6)		347
Total recurring Level 3 assets	$	--	$	98	$	(227)	$	(35)	$	1,957
Liabilities
Contractholder funds: Derivatives embedded in life and annuity contracts	$	--	$	(11)	$	--	$	1	$	(319)
Liabilities held for sale		--		(4)		--		3		(230)
Total recurring Level 3 liabilities	$	--	$	(15)	$	--	$	4	$	(549)

_____________

(1) The effect to net income totals $33 million and is reported in the Condensed Consolidated Statements of Operations as follows: $20 million in realized capital gains and losses, $2 million in net investment income, $10 million in interest credited to contractholder funds, $5 million in life and annuity contract benefits and $(4) million in loss on disposition of operations.

(2) Represents purchases for assets and issues for liabilities.

(3) Comprises $5 million of assets and $12 million of liabilities.

($ in millions)				Total gains (losses) included in:
		Balance as of December 31, 2012		Net income (1)		OCI		Transfers into Level 3		Transfers out of Level 3
Assets
Fixed income securities:
U.S. government and agencies	$	8	$	--	$	--	$	--	$	--
Municipal		965		(24)		54		6		--
Corporate		1,617		12		(1)		25		(125)
ABS		251		1		7		18		--
RMBS		3		--		--		--		--
CMBS		52		--		2		--		--
Redeemable preferred stock		1		--		--		--		--
Total fixed income securities		2,897		(11)		62		49		(125)
Equity securities		171		1		1		--		--
Free-standing derivatives, net		(27)		7		--		--		--
Other assets		1		--		--		--		--
Total recurring Level 3 assets	$	3,042	$	(3)	$	63	$	49	$	(125)
Liabilities
Contractholder funds: Derivatives embedded in life and annuity contracts	$	(553)	$	6	$	--	$	--	$	--
Total recurring Level 3 liabilities	$	(553)	$	6	$	--	$	--	$	--

		Purchases		Sales		Issues		Settlements		Balance as of March 31, 2013
Assets
Fixed income securities:
U.S. government and agencies	$	--	$	--	$	--	$	(1)	$	7
Municipal		--		(339)		--		(2)		660
Corporate		264		(199)		--		(17)		1,576
ABS		56		(49)		--		(8)		276
RMBS		--		--		--		--		3
CMBS		1		(17)		--		(1)		37
Redeemable preferred stock		--		--		--		--		1
Total fixed income securities		321		(604)		--		(29)		2,560
Equity securities		--		(1)		--		--		172
Free-standing derivatives, net		1		--		--		(1)		(20) (2)
Other assets		--		--		--		--		1
Total recurring Level 3 assets	$	322	$	(605)	$	--	$	(30)	$	2,713
Liabilities
Contractholder funds: Derivatives embedded in life and annuity contracts	$	--	$	--	$	(24)	$	4	$	(567)
Total recurring Level 3 liabilities	$	--	$	--	$	(24)	$	4	$	(567)

_____________

(1) The effect to net income totals $3 million and is reported in the Condensed Consolidated Statements of Operations as follows: $(10) million in realized capital gains and losses, $7 million in net investment income, $(20) million in interest credited to contractholder funds and $26 million in life and annuity contract benefits.

(2) Comprises $4 million of assets and $24 million of liabilities.

Schedule of gains and losses included in net income for Level 3 assets and liabilities still held at the balance sheet date

($ in millions)		2014		2013
Assets
Fixed income securities:
Municipal	$	(4)	$	(14)
Corporate		3		5
CMBS		--		(1)
Total fixed income securities		(1)		(10)
Equity securities		--		1
Free-standing derivatives, net		--		7
Assets held for sale		(1)		--
Total recurring Level 3 assets	$	(2)	$	(2)
Liabilities
Contractholder funds: Derivatives embedded in life and annuity contracts	$	(2)	$	6
Liabilities held for sale		17		--
Total recurring Level 3 liabilities	$	15	$	6

Schedule of carrying values and fair value estimates of financial instruments not carried at fair value

Financial assets

($ in millions)		March 31, 2014				December 31, 2013
		Carrying value		Fair value		Carrying value		Fair value
Mortgage loans	$	4,472	$	4,686	$	4,721	$	4,871
Cost method limited partnerships		1,346		1,764		1,443		1,835
Bank loans		1,447		1,445		1,242		1,244
Agent loans		348		344		341		325
Assets held for sale		1,350		1,436		1,458		1,532

Financial liabilities

($ in millions)		March 31, 2014				December 31, 2013
		Carrying value		Fair value		Carrying value		Fair value
Contractholder funds on investment contracts	$	15,267	$	15,968	$	15,569	$	16,225
Long-term debt		6,200		6,691		6,201		6,509
Liability for collateral		780		780		624		624
Liabilities held for sale		7,166		7,127		7,417		7,298