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<div style="font-size:12pt"><p>Note 1 — Basis of Presentation<br /><br />The Consolidated Financial Statements include the accounts of CIGNA Corporation, its significant subsidiaries, and variable interest entities of which CIGNA Corporation is the primary beneficiary (referred to collectively as “the Company”). Intercompany transactions and accounts have been eliminated in consolidation. These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (GAAP).  <br /><br />The interim consolidated financial statements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported. The interim consolidated financial statements and notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Form 10-K for the year ended December 31, 2008.<br /><br />The preparation of interim consolidated financial statements necessarily relies heavily on estimates. This and certain other factors, such as the seasonal nature of portions of the health care and related benefits business as well as competitive and other market conditions, call for caution in estimating full year results based on interim results of operations.<br /><br />In preparing these interim consolidated financial statements, the Company has evaluated events that occurred between the balance sheet date and November 5, 2009. <br /><br />Certain reclassifications and restatements have been made to prior period amounts to conform to the current presentation. In addition, certain restatements have been made in connection with the adoption of new accounting pronouncements. See Note 2 for further information. <br /><br />Discontinued operations for the nine months ended September 30, 2009 primarily represented a tax benefit associated with a past divestiture, resolved at the completion of the 2005 and 2006 IRS examinations.<br /><br />Discontinued operations for the third quarter of 2008 included a gain of $1 million after-tax from the settlement of certain issues related to a past divestiture. Discontinued operations for the nine months ended September 30, 2008 included a gain of $3 million after-tax from the settlement of certain issues related to a past divestiture.<br /><br />Unless otherwise indicated, amounts in these Notes exclude the effects of discontinued operations.        </p></div>
<div style="font-size:12pt"><p>Note 2 — Recent Accounting Pronouncements <br /><br />Accounting Standards Codification. The Financial Accounting Standards Board (FASB) has established the Accounting Standards Codification (Codification or ASC) as the single source of authoritative accounting guidance effective for reporting in the third quarter of 2009. Therefore, the Company will use the Codification section or description when referring to GAAP except for very recent guidance that has not yet been incorporated into the Codification.<br /><br />Other-than-temporary impairments. On April 1, 2009, the Company adopted the FASB’s updated guidance for evaluating whether an impairment is other than temporary for fixed maturities with declines in fair value below amortized cost (ASC 320). It requires assessing the Company’s intent to sell or whether it is more likely than not that the Company will be required to sell such fixed maturities before their fair values recover. If so, an impairment loss is recognized in net income for the excess of the amortized cost over fair value. The Company must also determine if it does not expect to recover the amortized cost of fixed maturities with declines in fair value (even if it does not intend to sell or will not be required to sell these fixed maturities). In this case, the credit portion of the impairment loss is recognized in net income and the non-credit portion of an impairment loss is recognized in a separate component of shareholders’ equity. A reclassification adjustment from retained earnings to accumulated other comprehensive income was required for previously impaired fixed maturities that have a non-credit loss as of the date of adoption, less related tax effects. <br /><br />The cumulative effect of adoption increased the Company’s retained earnings with an offsetting decrease to accumulated other comprehensive income of $18 million, with no overall change to shareholders’ equity. See Note 9 for information on the Company’s other-than-temporary impairments including additional required disclosures.<br /> <br />Noncontrolling interests in subsidiaries. Effective January 1, 2009, the Company adopted the FASB’s updated guidance on accounting for noncontrolling interests (ASC 810) through retroactive restatement of prior financial statements and reclassified $6 million of noncontrolling interest as of January 1, 2009 and 2008 from Accounts payable, accrued expenses and other liabilities to Noncontrolling interest in total equity. In addition, for the nine months ended September 30, 2008, net income of $2 million attributable to the noncontrolling interest has been reclassified to be included in net income, with a reduction to net income to determine net income attributable to the Company’s shareholders (“shareholders’ net income”). <br /><br />Earnings per share. Effective January 1, 2009, the Company adopted the FASB’s updated earnings per share guidance (ASC 260) for determining participating securities which requires unvested restricted stock awards that contain rights to nonforfeitable dividends to be included in the denominator of both basic and diluted earnings per share (“EPS”) calculations. Prior period EPS data have been restated to reflect the adoption of this guidance. See Note 4 for the effects of this guidance on previously reported EPS amounts.<br /><br />Business combinations. Effective January 1, 2009, the Company adopted the FASB’s guidance on accounting for business combinations (ASC 805) that requires fair value measurements for all future acquisitions, including contingent purchase price and certain contingent assets or liabilities of the entity to be acquired, requires acquisition related and restructuring costs to be expensed as incurred and requires changes in tax items after the acquisition date to be reported in income tax expense. There were no effects to the Company’s Consolidated Financial Statements at adoption. <br /><br />Derivatives disclosures. Effective January 1, 2009, the Company expanded its disclosures on derivatives and hedging activities to comply with the FASB’s updated guidance (ASC 815) that requires the Company to disclose the purpose for using derivative instruments, their accounting treatment and related effects on financial condition, results of operations and liquidity. See Note 10 for information on the Company’s derivative financial instruments including these additional required disclosures. <br /><br />Fair value measurements.  Effective January 1, 2008, the Company adopted the FASB’s fair value disclosure and measurement guidance (ASC 820) that expands disclosures about fair value measurements and clarifies how to measure fair value by focusing on the price that would be received when selling an asset or paid to transfer a liability (exit price). In addition, the FASB amended the fair value guidance in 2008 to provide additional guidance for determining the fair value of a financial asset when the market for that instrument is not active. See Note 8 for information on the Company’s fair value measurements. <br /><br />The Company carries certain financial instruments at fair value in the financial statements including approximately $13.8 billion in invested assets at September 30, 2009.  The Company also carries derivative instruments at fair value, including assets and liabilities for reinsurance contracts covering guaranteed minimum income benefits (GMIB assets and liabilities) under certain variable annuity contracts issued by other insurance companies and related retrocessional contracts. The Company also reports separate account assets at fair value; however, changes in the fair values of these assets accrue directly to policyholders and are not included in the Company’s revenues and expenses.  At the adoption of this fair value guidance, there were no effects to the Company’s measurements of fair values for financial instruments other than for GMIB assets and liabilities discussed below. In addition, there were no effects to the Company’s measurements of financial assets of adopting the FASB’s 2008 amendment to this fair value guidance.<br /> <br />At adoption, the Company was required to change certain assumptions used to estimate the fair values of GMIB assets and liabilities. Because there is no market for these contracts, the assumptions used to estimate their fair values at adoption were determined using a hypothetical market participant’s view of exit price, rather than using historical market data and actual experience to establish the Company’s future expectations.  Certain of these assumptions have limited or no observable market data so determining an exit price requires the Company to exercise significant judgment and make critical accounting estimates. On adoption, the Company recorded a charge of $131 million after-tax, net of reinsurance ($202 million pre-tax), in Run-off Reinsurance.<br /><br />The Company’s results of operations related to this business are expected to continue to be volatile in future periods because several underlying assumptions will be based on current market-observable inputs which will likely change each period.  See Note 8 for additional information.<br /><br />During the first nine months of 2009, the Company adopted FASB guidance that clarifies how to determine fair value for various assets and liabilities with no material effects to the Company’s Consolidated Financial Statements.<br /><br />In the third quarter of 2009, the FASB issued guidance on measuring the fair value of liabilities and for investments in certain entities to provide a practical alternative under certain conditions to determine the fair value of these investments using their net asset value or its equivalent. The Company expects no material effects on its Consolidated Financial Statements at adoption in the fourth quarter of 2009.<br /><br />Transfers of financial assets. In 2009, the FASB issued SFAS No. 166 “Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140,” which changes the requirements for recognizing the transfer of financial assets and requires additional disclosures about a transferor’s continuing involvement in transferred financial assets. The guidance also eliminates the concept of a “qualifying special purpose entity” when assessing transfers of financial instruments. The recognition and measurement provisions of this guidance must be applied to transfers that occur on or after January 1, 2010. On adoption, the Company does not expect a material effect to the results of operations or financial condition.<br /><br />Variable interest entities. In 2009, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 167, “Amendments to FASB Interpretation No. 46(R),” which amended guidance requiring periodic qualitative analyses to determine whether a variable interest entity must be consolidated by the Company. In addition, this guidance requires the Company to disclose any significant judgments and assumptions made in determining whether it must consolidate a variable interest entity. Any changes in consolidated entities resulting from these requirements must be applied through retrospective restatement of prior financial statements beginning in 2010. The Company is presently evaluating the impact of these new requirements.</p></div>
<div style="font-size:12pt"><p>Note 3 — Acquisitions and Dispositions <br /><br />The Company may from time to time acquire or dispose of assets, subsidiaries or lines of business.  Significant transactions are described below.<br /><br />Great-West Healthcare Acquisition.  On April 1, 2008, the Company acquired the Healthcare division of Great-West Life and Annuity, Inc. (“Great-West Healthcare” or the “acquired business”) through 100% indemnity reinsurance agreements and the acquisition of certain affiliates and other assets and liabilities of Great-West Healthcare. The purchase price of approximately $1.5 billion consisted of a payment to the seller of approximately $1.4 billion for the net assets acquired and the assumption of net liabilities under the reinsurance agreement of approximately $0.1 billion.  Great-West Healthcare primarily sells medical plans on a self-funded basis with stop loss coverage to select and regional employer groups.  Great-West Healthcare’s offerings also include the following specialty products:  stop loss, life, disability, medical, dental, vision, prescription drug coverage, and accidental death and dismemberment insurance.  The acquisition, which was accounted for as a purchase, was financed through a combination of cash and the issuance of both short and long-term debt.<br /><br />In the first quarter of 2009, the Company completed its allocation of the total purchase price to the tangible and intangible net assets acquired based on management's estimates of their fair values without material changes from December 31, 2008. <br /></p><p>The results of Great-West Healthcare are included in the Company’s Consolidated Financial Statements from the date of acquisition.<br /><br />The following table presents selected unaudited pro forma information for the Company assuming the acquisition had occurred as of January 1, 2008.  The pro forma information does not purport to represent what the Company’s actual results would have been if the acquisition had occurred as of that date or what such results will be for any future periods.        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="607"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>(Unaudited)</b></td></tr><tr><td height="34" style="background-color: #FFFFFF;" align="left" width="607"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="34"><b>Nine Months Ended September 30,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="607"><i>(In millions, except per share amounts)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="607">Total revenues</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 14,652 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="607">Shareholders' income from continuing operations</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 526 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="607">Shareholders' net income</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 529 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="607">Earnings per share:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="607">  Shareholders' income from continuing operations</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="607">    Basic</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1.89 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="607">    Diluted</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1.87 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="607">  Shareholders' net income</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="607">    Basic</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1.90 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="607">    Diluted</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1.88 </td></tr></table></div>
<div style="font-size:12pt"><p>Note 4 — Earnings Per Share<br /><br />Basic and diluted earnings per share were computed as follows:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><i> </i></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td><td width="95" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Effect of </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><i>(In millions, except per share amounts)</i></td><td width="118" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Basic</b></td><td width="95" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Dilution</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Diluted</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Three Months Ended September 30,</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="43"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="20"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="425"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Shareholders' income from continuing operations</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 329 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 329 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Shares (in thousands):</td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Weighted average</td><td height="17" style="background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 274,398 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 274,398 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Options</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,732 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,732 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Total shares</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 274,398 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,732 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 276,130 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>EPS</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1.20 </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (0.01)</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1.19 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="425"><b>2008 </b></td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Shareholders' income from continuing operations</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 170 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 170 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Shares (in thousands):</td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Weighted average</td><td height="17" style="background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 275,141 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 275,141 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Options</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,665 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,665 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Total shares</b></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 275,141 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,665 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 276,806 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>EPS</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 0.62 </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 0.62 </td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><i> </i></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td><td width="95" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Effect of </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><i>(In millions, except per share amounts)</i></td><td width="118" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Basic</b></td><td width="95" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Dilution</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Diluted</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Nine Months Ended September 30,</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="43"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="20"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="425"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Shareholders' income from continuing operations</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 971 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 971 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Shares (in thousands):</td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"><b> </b></td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Weighted average</td><td height="17" style="background-color: #FFFFFF;" align="right" width="43"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 273,698 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 273,698 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Options</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 993 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 993 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Total shares</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"><b> </b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 273,698 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 993 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 274,691 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>EPS</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"><b>$</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3.55 </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75">(0.01)</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3.54 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="425"><b>2008 </b></td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Shareholders' income from continuing operations</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 498 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 498 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Shares (in thousands):</td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="425">Weighted average</td><td height="17" style="background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 278,912 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 278,912 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425">Options </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,035 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,035 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>Total shares</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 278,912 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2,035 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 280,947 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="425"><b>EPS</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="43">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1.79 </td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="20">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (0.02)</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1.77 </td></tr></table><p>As described in Note 2, effective in 2009, the Company adopted the FASB’s new guidance for determining participating securities which requires the Company’s unvested restricted stock awards to be included in weighted average shares instead of being considered a common stock equivalent. Prior period share information has been restated as follows. <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="355"><b> </b></td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"><b> </b></td><td width="357" align="center" colspan="7" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Three Months Ended September 30,2008</b></td></tr><tr><td height="17" width="355" align="left"> </td><td height="17" width="19" align="left"> </td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Basic</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Diluted</b></td></tr><tr><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="355"><i> </i></td><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="19"><i> </i></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>As originally reported</b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>As adjusted</b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>As originally reported</b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>As adjusted</b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="355">Shareholders' income from continuing operations</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 0.62 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 0.62 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 0.62 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 0.62 </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="355"><b> </b></td><td height="17" style="border-top: 2px solid #000000;" align="right" width="19"><b> </b></td><td width="357" align="center" colspan="7" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Nine Months Ended September 30,2008</b></td></tr><tr><td height="17" width="355" align="left"> </td><td height="17" width="19" align="right"> </td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Basic</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Diluted</b></td></tr><tr><td height="34" style="border-bottom: 1px solid #000000;" align="left" width="355"><i> </i></td><td height="34" style="border-bottom: 1px solid #000000;" align="right" width="19"><i> </i></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>As originally reported</b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="19"><b> </b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>As adjusted</b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>As originally reported</b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td><td height="34" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>As adjusted</b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="355">Shareholders' income from continuing operations</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 1.80 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 1.79 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 1.78 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 1.77 </td></tr></table><p>The following outstanding employee stock options were not included in the computation of diluted earnings per share because their effect would have increased diluted earnings per share (antidilutive) as their exercise price was greater than the average share price of the Company's common stock for the period.<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="396"><i> </i></td><td width="148" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Three Months Ended</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="34"> </td><td width="148" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Nine Months Ended </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="396"> </td><td width="148" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>September 30,</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="34"> </td><td width="148" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>September 30,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="396"><i>(In millions)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="74"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="74"><b>2008 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="34"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="74"><b>2009 </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="74"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="396">Antidilutive options</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="74">8.7 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="74">4.9 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="34"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="74">10.0 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="74">4.5 </td></tr></table><p>The Company held 77,475,700 shares of common stock in Treasury as of September 30, 2009, and 78,693,702 shares as of September 30, 2008.        </p></div>
<div style="font-size:12pt"><p>Note 5 — Health Care Medical Claims Payable<br /><br />Medical claims payable for the Health Care segment reflects estimates of the ultimate cost of claims that have been incurred but not yet reported, those which have been reported but not yet paid (reported claims in process) and other medical expense payable, which primarily comprises accruals for provider incentives and other amounts payable to providers. Incurred but not yet reported comprises the majority of the reserve balance as follows:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;" height="17"><b>September 30,</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;" height="17"><b>December 31,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="523"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523">Incurred but not yet reported</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 814 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 782 </td></tr><tr><td height="17" width="523" align="left">Reported claims in process</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 101 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 114 </td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;" align="left" width="523">Other medical expense payable</td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="75"> 17 </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="75"> 28 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="523">Medical claims payable</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 932 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 924 </td></tr></table><p>Activity in medical claims payable was as follows:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="18" style="border-top: 1px solid #000000;" align="left" width="523"> </td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="18"><b>For the period ended</b></td></tr><tr><td height="18" width="523" align="left"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;" height="18"><b>September 30,</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;" height="18"><b>December 31,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="523"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523">Balance at January 1,</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 924 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 975 </td></tr><tr><td height="17" width="523" align="left">Less: Reinsurance and other amounts recoverable</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 211 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 258 </td></tr><tr><td height="17" width="523" align="left">Balance at January 1, net</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 713 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 717 </td></tr><tr><td height="3" width="523" align="left"> </td><td height="3" width="19" align="right"> </td><td height="3" width="75" align="right"> </td><td height="3" width="19" align="right"> </td><td height="3" width="75" align="right"> </td></tr><tr><td height="17" width="523" align="left">Acquired April 1, 2008 net</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 90 </td></tr><tr><td height="5" width="523" align="left"> </td><td height="5" width="19" align="right"> </td><td height="5" width="75" align="right"> </td><td height="5" width="19" align="right"> </td><td height="5" width="75" align="right"> </td></tr><tr><td height="16" width="523" align="left">Incurred claims related to:</td><td height="16" width="19" align="right"> </td><td height="16" width="75" align="right"> </td><td height="16" width="19" align="right"> </td><td height="16" width="75" align="right"> </td></tr><tr><td height="17" width="523" align="left">   Current year</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 5,265 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 7,312 </td></tr><tr><td height="17" width="523" align="left">   Prior years</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (39)</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> (60)</td></tr><tr><td height="17" width="523" align="left">   Total incurred</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 5,226 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 7,252 </td></tr><tr><td height="17" width="523" align="left">Paid claims related to:</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> </td></tr><tr><td height="17" width="523" align="left">   Current year</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 4,560 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 6,716 </td></tr><tr><td height="17" width="523" align="left">   Prior years</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 643 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 630 </td></tr><tr><td height="17" width="523" align="left">   Total paid</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 5,203 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 7,346 </td></tr><tr><td height="17" width="523" align="left">Ending Balance, net</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 736 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 713 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="523">Add: Reinsurance and other amounts recoverable</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 196 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 211 </td></tr><tr><td height="16" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="523">Ending Balance</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 932 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 924 </td></tr></table><p>Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims for minimum premium products and certain administrative services only business where the right of offset does not exist. See Note 11 for additional information on reinsurance. For the nine months ended September 30, 2009, actual experience differed from the Company’s key assumptions resulting in favorable incurred claims related to prior years’ medical claims payable of $39 million, or 0.5% of the current year incurred claims as reported for the year ended December 31, 2008. Actual completion factors resulted in a reduction in medical claims payable of $18 million, or 0.2% of the current year incurred claims as reported for the year ended December 31, 2008 for the insured book of business. Actual medical cost trend resulted in a reduction in medical claims payable of $21 million, or 0.3% of the current year incurred claims as reported for the year ended December 31, 2008 for the insured book of business.<br /><br />For the year ended December 31, 2008, actual experience differed from the Company's key assumptions, resulting in favorable incurred claims related to prior years’ medical claims payable of $60 million, or 0.9% of the current year incurred claims as reported for the year ended December 31, 2007. Actual completion factors resulted in a reduction of the medical claims payable of $29 million, or 0.4% of the current year incurred claims as reported for the year ended December 31, 2007 for the insured book of business. Actual medical cost trend resulted in a reduction of the medical claims payable of $31 million, or 0.5% of the current year incurred claims as reported for the year ended December 31, 2007 for the insured book of business.<br /><br />The favorable impacts in 2009 and 2008 relating to completion factors and medical cost trend variances are primarily due to the release of the provision for moderately adverse conditions, which is a component of the assumptions for both completion factors and medical cost trend, established for claims incurred related to prior years. This release was substantially offset by the provision for moderately adverse conditions established for claims incurred related to the current year.<br /><br />The corresponding impact of prior year development on shareholders’ net income was not material for the three months and nine months ended September 30, 2009 and 2008. The change in the amount of the incurred claims related to prior years in the medical claims payable liability does not directly correspond to an increase or decrease in the Company's shareholders’ net income recognized for the following reasons:<br /><br />First, due to the nature of the Company's retrospectively experience-rated business, only adjustments to medical claims payable on accounts in deficit affect shareholders’ net income. An increase or decrease to medical claims payable on accounts in deficit, in effect, accrues to the Company and directly impacts shareholders’ net income. An account is in deficit when the accumulated medical costs and administrative charges, including profit charges, exceed the accumulated premium received. Adjustments to medical claims payable on accounts in surplus accrue directly to the policyholder with no impact on the Company’s shareholders’ net income. An account is in surplus when the accumulated premium received exceeds the accumulated medical costs and administrative charges, including profit charges.<br /><br />Second, the Company consistently recognizes the actuarial best estimate of the ultimate liability within a level of confidence, as required by actuarial standards of practice, which require that the liabilities be adequate under moderately adverse conditions. As the Company establishes the liability for each incurral year, the Company ensures that its assumptions appropriately consider moderately adverse conditions. When a portion of the development related to the prior year incurred claims is offset by an increase determined appropriate to address moderately adverse conditions for the current year incurred claims, the Company does not consider that offset amount as having any impact on shareholders’ net income.<br /><br />The determination of liabilities for Health Care medical claims payable required the Company to make critical accounting estimates. See Note 2(O) to the Consolidated Financial Statements in the Company’s 2008 Form 10-K.</p></div>
<div style="font-size:12pt"><p>Note 6 — Cost Reduction<br /><br />During 2009, the Company continued its previously announced comprehensive review to reduce the operating expenses of its ongoing businesses. As a result, the Company recognized severance related charges in other operating expenses as follows:<br /><br /></p><ul><li>during the third quarter of 2009, a charge of $10 million pre-tax ($7 million after-tax), for severance resulting from reductions of approximately 230 positions in its workforce; and<br /></li><li>during the second quarter of 2009, a charge of $14 million pre-tax ($9 million after-tax), for severance resulting from reductions of approximately 480 positions in its workforce.<br /></li></ul><p><br />Substantially all of these charges were recorded in the Health Care segment, and are expected to be paid in cash by June 30, 2010.<br /><br />Cost reduction activity for 2009 was as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="453"><i>(In millions)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Severance</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Real estate</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="453">Balance, January 1, 2009</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 44 </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 11 </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 55 </td></tr><tr><td height="17" width="453" align="left">Add: Second quarter 2009 charge</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 14 </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> - </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="right"> 14 </td></tr><tr><td height="17" width="453" align="left">Add: Third quarter 2009 charge</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 10 </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 10 </td></tr><tr><td height="17" width="453" align="left">   Subtotal - cost reduction actions</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 68 </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 11 </td><td height="17" style="border-top: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 79 </td></tr><tr><td height="17" width="453" align="left">Less: Payments </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 36 </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 3 </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 39 </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;" align="left" width="453">Balance, September 30, 2009</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 32 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="left" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 8 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="left" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 40 </td></tr></table></div>
<div style="font-size:12pt"><p>Note 7 ― Guaranteed Minimum Death Benefit Contracts<br /><br />The Company’s reinsurance operations, which were discontinued in 2000 and are now an inactive business in run-off mode, reinsured guaranteed minimum death benefits (GMDB), also known as variable annuity death benefits (VADBe), under certain variable annuities issued by other insurance companies.  These variable annuities are essentially investments in mutual funds combined with a death benefit.  The Company has equity and other market exposures as a result of this product. In periods of declining equity markets and in periods of flat equity markets following a decline, the Company’s liabilities for these guaranteed minimum death benefits increase. Conversely, in periods of rising equity markets, the Company’s liabilities for these guaranteed minimum death benefits decrease.<br /><br />In order to substantially reduce the equity market exposures relating to guaranteed minimum death benefit contracts, the Company operates a dynamic hedge program (GMDB equity hedge program), using exchange-traded futures contracts. The hedge program is designed to substantially offset both positive and negative impacts of changes in equity markets on the GMDB liability. The hedge program involves detailed, daily monitoring of equity market movements and rebalancing the futures contracts within established parameters. While the hedge program is actively managed, it may not exactly offset changes in the GMDB liability due to, among other things, divergence between the performance of the underlying mutual funds and the hedge instruments, high levels of volatility in the equity markets, and differences between actual contractholder behavior and what is assumed. In addition, underlying mutual fund data is not reported and incorporated into the required hedge position on a real time basis, which also impacts the performance of the hedge program. Although this hedge program does not qualify for GAAP hedge accounting, it is an economic hedge because it is designed and operated to substantially reduce equity market exposures resulting from this product. The results of these futures contracts are included in other revenue and amounts reflecting corresponding changes in liabilities for these GMDB contracts are included in benefits and expenses, consistent with GAAP when a premium deficiency exists.<br /><br /><br />The GMDB reinsurance business is considered premium deficient because the expected present value of future claims and expenses exceeds the expected present value of future premiums and investment income using revised assumptions based on actual and expected experience. The Company performs a reserve review on a quarterly basis using current market conditions and assumptions. Under premium deficiency accounting if the recorded reserve is determined insufficient, an increase to the reserve is reflected as a charge to current period income. Consistent with GAAP, the Company does not recognize gains on premium deficient long duration products. <br /><br />The Company had future policy benefit reserves for GMDB contracts of $1.4 billion as of September 30, 2009, and $1.6 billion as of December 31, 2008.   The determination of liabilities for GMDB requires the Company to make critical accounting estimates.  The Company estimates its liabilities for GMDB exposures using a complex internal model run using many scenarios and based on assumptions regarding lapse, future partial surrenders, mortality, interest rates (mean investment performance and discount rate) and volatility. Lapse refers to the full surrender of an annuity prior to a contractholder’s death. Future partial surrender refers to the fact that most contractholders have the ability to withdraw substantially all of their mutual fund investments while retaining the death benefit coverage in effect at the time of the withdrawal. Mean investment performance refers to market rates to be earned over the life of the GMDB equity hedge program, and market volatility refers to market fluctuation. These assumptions are based on the Company’s experience and future expectations over the long-term period, consistent with the long-term nature of this product. The Company regularly evaluates these assumptions and changes its estimates if actual experience or other evidence suggests that assumptions should be revised.  If actual experience differs from the assumptions (including lapse, future partial surrenders, mortality, interest rates and volatility) used in estimating these liabilities, the result could have a material adverse effect on the Company’s consolidated results of operations, and in certain situations, could have a material adverse effect on the Company’s financial condition.<br /><br />The following provides information about the Company’s reserving methodology and assumptions for GMDB as of September 30, 2009:<br /><br /></p><ul><li>The reserve represents estimates of the present value of net amounts expected to be paid, less the present value of net future premiums.  Included in net amounts expected to be paid is the excess of the guaranteed death benefits over the values of the contractholders’ accounts (based on underlying equity and bond mutual fund investments).<br /></li><li>The reserve includes an estimate for future partial surrenders that essentially lock in the death benefit for a particular policy based on annual election rates that vary from 0-20% depending on the net amount at risk for each policy and whether surrender charges apply.<br /></li><li>The mean investment performance assumption is 5% considering the Company’s GMDB equity hedge program using futures contracts.  This is reduced by fund fees ranging from 1-3% across all funds.  The results of futures contracts are reflected in the liability calculation as a component of investment returns.<br /></li><li>The volatility assumption is based on a review of historical monthly returns for each key index (e.g. S&P 500) over a period of at least ten years. Volatility represents the dispersion of historical returns compared to the average historical return (standard deviation) for each index. The assumption is 16-30%, varying by equity fund type; 4-10%, varying by bond fund type; and 2% for money market funds. These volatility assumptions are used along with the mean investment performance assumption to project future return scenarios.<br /></li><li>The discount rate is 5.75%.<br /></li><li>The mortality assumption is 70-75% of the 1994 Group Annuity Mortality table, with 1% annual improvement beginning January 1, 2000.<br /></li><li>The annual lapse rate assumption is 0-21%, depending on contract type, policy duration and the ratio of the net amount at risk to account value.<br /></li><li>The reserve includes a provision for future policy maintenance and hedging expenses.<br /></li></ul><p><br />Although the year to date results include a first quarter charge of $73 million pre-tax ($47 million after-tax) to strengthen GMDB reserves, no additional reserve strengthening has been required for GMDB since the first quarter of 2009, primarily due to the stabilization and recovery of equity markets. The components of the first quarter charge were:<br /><br /></p><ul><li>adverse impacts of overall market declines of $50 million pre-tax ($32 million after-tax). This is comprised of (a) $39 million pre-tax ($25 million after-tax) primarily related to the provision for future partial surrenders, and (b) $11 million pre-tax ($7 million after-tax) related to declines in the values of contractholders’ non-equity investments such as bond funds, neither of which is included in the GMDB equity hedge program;<br /></li><li>adverse volatility-related impacts of $11 million pre-tax ($7 million after-tax) due to turbulent equity market conditions, including higher than expected claims and the performance of the diverse mix of equity fund investments held by contractholders being different than expected; and<br /></li><li>adverse interest rate impacts of $12 million pre-tax ($8 million after-tax). Interest rate risk is not covered by the GMDB equity hedge program, and the interest rate returns on the futures contracts were less than the Company’s long-term assumption for mean investment performance.<br /></li></ul><p><br />Activity in future policy benefit reserves for the GMDB business was as follows:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523"> </td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="18"><b>For the period ended</b></td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="523"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="18"><b>September 30,</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="18"><b>December 31,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523">Balance at January 1</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,609 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 848 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="523">Add: Unpaid Claims</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 34 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 21 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="523">Less: Reinsurance and other amounts recoverable</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 83 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 19 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="523">Balance at January 1, net</td><td height="16" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,560 </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 850 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="523">Add: Incurred benefits</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (86)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 822 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="523">Less: Paid benefits</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 139 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 112 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="523">Ending balance, net</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,335 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,560 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="523">Less: Unpaid Claims</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 39 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 34 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523">Add: Reinsurance and other amounts recoverable</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 56 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 83 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523">Ending balance</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,352 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,609 </td></tr></table><p>Benefits paid and incurred are net of ceded amounts.  Incurred benefits reflect the favorable or unfavorable impact of a rising or falling equity market on the liability, and include the charges discussed above.  As discussed below, losses or gains have been recorded in other revenues as a result of the GMDB equity hedge program to reduce equity market exposures.</p><p>As of September 30, 2009, the aggregate value of the underlying mutual fund investments was $17.1 billion.  The death benefit coverage in force as of that date (representing the estimated amount of death claims that the Company would have to pay if all of the approximately 600,000 contractholders had submitted death claims as of that date) was $7.7 billion. As of December 31, 2008, the aggregate value of the underlying mutual fund investments was $16.3 billion. The death benefit coverage in force as of that date (representing the estimated amount of death claims that the Company would have to pay if all of the approximately 650,000 contractholders had submitted death claims as of that date) was $11.1 billion.  The death benefit coverage in force represents the excess of the guaranteed benefit amount over the value of the underlying mutual fund investments.<br /><br />As discussed above, the Company operates a GMDB equity hedge program to substantially reduce the equity market exposures of this business by selling exchange-traded futures contracts, which are expected to rise in value as the equity market declines and decline in value as the equity market rises. In addition, the Company uses foreign currency futures contracts to reduce the international equity market and foreign currency risks associated with this business. The notional amount of futures contract positions held by the Company at September 30, 2009 was $1.2 billion.  The Company recorded in other revenues pre-tax losses of $161 million for the three months ended September 30, 2009 and $232 million for the nine months ended September 30, 2009, and pre-tax gains of $70 million for the three months ended September 30, 2008 and $118 million for the nine months ended September 30, 2008.<br /><br />The Company has also written reinsurance contracts with issuers of variable annuity contracts that provide annuitants with certain guarantees related to minimum income benefits (GMIB). All reinsured GMIB policies also have a GMDB benefit reinsured by the Company. See Note 8 for further information.</p></div>
<div style="font-size:12pt"><p>Note 8 ― Fair Value Measurements<br /><br />The Company carries certain financial instruments at fair value in the financial statements including fixed maturities, equity securities, short-term investments and derivatives.  Other financial instruments are measured at fair value under certain conditions, such as when impaired or, for commercial mortgage loans, when classified as “held for sale.”<br /><br />Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date.  A liability’s fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor.<br /><br />Fair values are based on quoted market prices when available.  When market prices are not available, fair value is generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality.  In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair value using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price.  These valuation techniques involve some level of estimation and judgment by the Company which becomes significant with increasingly complex instruments or pricing models.  Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input used.<br /><br />The Company’s financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP.  The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement.  For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).   The levels of the fair value hierarchy are as follows:<br /><br /></p><ul><li>Level 1 – Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date.  Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets.<br /></li><li>Level 2 –  Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument.  Such inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.<br /></li><li>Level 3 – Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement.  Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.<br /></li></ul><p>Financial Assets and Financial Liabilities Carried at Fair Value <br /><br />The following tables provide information as of September 30, 2009 and December 31, 2008 about the Company’s financial assets and liabilities carried at fair value.  Similar disclosures for separate account assets, which are also recorded at fair value on the Company’s Consolidated Balance Sheets, are provided separately as gains and losses related to these assets generally accrue directly to policyholders.<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="334"><b>September 30, 2009</b><sup><b></b></sup></td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="15" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"><i>(In millions)</i><sup><i></i></sup></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="15"><b>Quoted Prices in Active Markets for Identical Assets
(Level 1)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="15"><b>Significant Other Observable Inputs
(Level 2)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="15"><b>Significant Unobservable Inputs
(Level 3)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="15"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334">Financial assets at fair value:<sup></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">Fixed maturities:<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Federal government and agency <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 44 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 577 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 622 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  State and local government<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,566 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,566 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Foreign government<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,040 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 17 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,057 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Corporate <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8,041 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 489 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8,530 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Federal agency mortgage-backed <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 35 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 35 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Other mortgage-backed <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 117 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 6 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 123 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Other asset-backed <sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 92 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 463 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 555 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">Total fixed maturities<sup> (1)</sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 44 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 12,468 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 976 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13,488 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Equity securities <sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 78 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 24 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 104 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">    Subtotal<sup></sup></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 12,546 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,000 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13,592 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Short-term investments<sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 201 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 201 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">GMIB assets<sup> (2)</sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 614 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 614 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Other derivative assets<sup> (3)</sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 19 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 19 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="334">Total financial assets at fair value, excluding separate accounts<sup></sup></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 12,766 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 1,614 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 14,426 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="334">Financial liabilities at fair value:<sup></sup></td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">GMIB liabilities <sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 1,126 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 1,126 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Other derivative liabilities<sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 28 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 28 </td></tr><tr><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="334">Total financial liabilities at fair value<sup></sup></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 28 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,126 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,154 </td></tr><tr><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="334"> <sup></sup></td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="738" colspan="10" align="left"><i>(1) Fixed maturities includes $392 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $60 million of appreciation for securities classified in Level 3.</i></td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="738" colspan="10" align="left"><i>(2) The Guaranteed Minimum Income Benefit (GMIB) assets represent retrocessional contracts in place from two external reinsurers which cover 55% of the exposures on these contracts. The assets are net of a liability of $14 million for the future cost of reinsurance.</i></td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="738" colspan="10" align="left"><i>(3) Other derivative assets includes $15 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $4 million of interest rate swaps not designated as accounting hedges.</i></td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="334">December 31, 2008<sup></sup></td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334"><i>(In millions)</i><sup><i></i></sup></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Quoted Prices in Active Markets for Identical Assets
(Level 1)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Other Observable Inputs
(Level 2)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Unobservable Inputs
(Level 3)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Total</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="334">Financial assets at fair value:<sup></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">Fixed maturities:<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Federal government and agency <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 38 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 724 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 762 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  State and local government<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,486 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,486 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Foreign government<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 923 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 21 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 944 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Corporate <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 6,526 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 330 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 6,856 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Federal agency mortgage-backed <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 37 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 37 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Other mortgage-backed <sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 121 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 4 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 125 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">  Other asset-backed <sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 57 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 514 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 571 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="334">Total fixed maturities<sup> (1)</sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 38 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10,874 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 869 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,781 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Equity securities <sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 8 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 84 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 20 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 112 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">    Subtotal<sup></sup></td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 10,958 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 889 </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 11,893 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Short-term investments<sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 236 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 236 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">GMIB assets<sup> (2)</sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 953 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 953 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Other derivative assets<sup> (3)</sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 45 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 45 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="334">Total financial assets at fair value, excluding separate accounts<sup></sup></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 11,239 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 1,842 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 13,127 </td></tr><tr><td height="16" style="background-color: #FFFFFF;" align="left" width="334">Financial liabilities at fair value:<sup></sup></td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="16" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">GMIB liabilities <sup></sup></td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 1,757 </td><td height="15" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="15" style="background-color: #FFFFFF;" align="right" width="75"> 1,757 </td></tr><tr><td height="15" style="background-color: #FFFFFF;" align="left" width="334">Other derivative liabilities<sup></sup></td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 36 </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 36 </td></tr><tr><td height="16" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="334">Total financial liabilities at fair value<sup></sup></td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 36 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,757 </td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="16" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,793 </td></tr><tr><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="334"> <sup></sup></td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="15" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="739" colspan="10" align="left"><i>(1) Fixed maturities includes $514 million of net appreciation required to adjust future policy benefits for the run-off settlement annuity business including $111 million of appreciation for securities classified in Level 3.</i></td></tr><tr><td height="8" style="background-color: #FFFFFF;" align="left" width="334"><i> </i><sup><i></i></sup></td><td height="8" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="739" colspan="10" align="left"><i>(2) The Guaranteed Minimum Income Benefit (GMIB) assets represent retrocessional contracts in place from two external reinsurers which cover 55% of the exposures on these contracts. The assets are net of a liability of $17 million for the future cost of reinsurance.</i></td></tr><tr><td height="8" style="background-color: #FFFFFF;" align="left" width="334"><i> </i><sup><i></i></sup></td><td height="8" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="8" style="background-color: #FFFFFF;" align="left" width="75"><i> </i></td></tr><tr><td rowspan="2" height="30" style="background-color: #FFFFFF;" width="739" colspan="10" align="left"><i>(3) Other derivative assets include $40 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $5 million of interest rate swaps not designated as accounting hedges.</i></td></tr></table><p>Level 1 Financial Assets<br /><br />Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities. Given the narrow definition of Level 1 and the Company's investment asset strategy to maximize investment returns, a relatively small portion of the Company’s investment assets are classified in this category. <br /><br />Level 2 Financial Assets and Financial Liabilities<br /><br />Fixed maturities and equity securities.  Approximately 92% of the Company’s investments in fixed maturities and equity securities are classified in Level 2 including most public and private corporate debt and equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks.  Because many fixed maturities and preferred stocks do not trade daily, fair values are often derived using recent trades of securities with similar features and characteristics.  When recent trades are not available, pricing models are used to determine these prices.  These models calculate fair values by discounting future cash flows at estimated market interest rates.  Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset.<br /><br />Typical inputs and assumptions to pricing models include, but are not limited to, benchmark yields, reported trades, broker-dealer quotes, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events.  For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating.<br /><br />Short-term investments. Short-term investments are carried at fair value, which approximates cost. On a regular basis the Company compares market prices for these securities to recorded amounts to validate that current carrying amounts approximate exit prices. The short-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2. <br /><br />Other derivatives. Amounts classified in Level 2 represent over-the-counter instruments such as interest rate and foreign currency swap contracts.  Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices.  Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives.  However, the Company is largely protected by collateral arrangements with counterparties, and determined that no adjustment for credit risk was required as of September 30, 2009 or December 31, 2008.  The nature and use of these other derivatives are described in Note 10.<br /><br />Level 3 Financial Assets and Financial Liabilities<br /><br />The Company classifies certain newly issued, privately placed, complex or illiquid securities, as well as assets and liabilities relating to GMIB in Level 3.<br /><br />Fixed maturities and equity securities.  Approximately 7% of fixed maturities and equity securities are priced using significant unobservable inputs and classified in this category, including:</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;" height="17"><b>September 30,</b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;" height="17"><b>December 31,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="523"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523">Mortgage and asset-backed securities</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 469 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 518 </td></tr><tr><td height="17" width="523" align="left">Primarily private corporate bonds</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 434 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 270 </td></tr><tr><td height="16" style="border-bottom: 1px solid #000000;" align="left" width="523">Subordinated loans and private equity investments</td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="75"> 97 </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="16" style="border-bottom: 1px solid #000000;" align="right" width="75"> 101 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="523">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 1,000 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 889 </td></tr></table><p>Fair values of mortgage and asset-backed securities and corporate bonds are determined using pricing models that incorporate the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads and liquidity of assets with similar characteristics.  For mortgage and asset-backed securities, inputs and assumptions to pricing may also include collateral attributes and prepayment speeds.  Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research as well as the issuer’s financial statements in its evaluation. Subordinated loans and private equity investments are valued at transaction price in the absence of market data indicating a change in the estimated fair values.<br /> </p><p>Guaranteed minimum income benefit contracts.  Because cash flows of the GMIB liabilities and assets are affected by equity markets and interest rates but are without significant life insurance risk and are settled in lump sum payments, the Company reports these liabilities and assets as derivatives at fair value. The Company estimates the fair value of the assets and liabilities for GMIB contracts using assumptions regarding capital markets (including market returns, interest rates and market volatilities of the underlying equity and bond mutual fund investments), future annuitant and retrocessionaire behavior (including mortality, lapse, annuity election rates and retrocessional credit), as well as risk and profit charges. At adoption of the FASB’s new guidance for fair value measurements in 2008, the Company updated assumptions to reflect those that the Company believes a hypothetical market participant would use to determine a current exit price for these contracts, and recorded a charge to shareholders’ net income as described in Note 2. As certain assumptions used to estimate fair values for these contracts are largely unobservable, the Company classifies GMIB assets and liabilities in Level 3. The Company considered the following in determining the view of a hypothetical market participant:<br /><br /></p><ul><li>that the most likely transfer of these assets and liabilities would be through a reinsurance transaction with an independent insurer having a market capitalization and credit rating similar to that of the Company; and<br /></li><li>that because this block of contracts is in run-off mode, an insurer looking to acquire these contracts would have similar existing contracts with related administrative and risk management capabilities.<br /></li></ul><p><br />These GMIB assets and liabilities are estimated with a complex internal model using many scenarios to determine the present value of net amounts expected to be paid, less the present value of net future premiums expected to be received adjusted for risk and profit charges that the Company estimates a hypothetical market participant would require to assume this business. Net amounts expected to be paid include the excess of the expected value of the income benefits over the values of the annuitants’ accounts at the time of annuitization. Generally, market return, interest rate and volatility assumptions are based on market observable information.  Assumptions related to annuitant behavior reflect the Company’s belief that a hypothetical market participant would consider the actual and expected experience of the Company as well as other relevant and available industry resources in setting policyholder behavior assumptions.   The significant assumptions used to value the GMIB assets and liabilities as of September 30, 2009 were as follows:<br /><br />        The market return and discount rate assumptions are based on the market-observable LIBOR swap curve.<br />        The projected interest rate used to calculate the reinsured income benefits is indexed to the 7-year Treasury Rate at the time of annuitization (claim interest rate) based on contractual terms.  That rate was 2.93% at September 30, 2009 and must be projected for future time periods. These projected rates vary by economic scenario and are determined by an interest rate model using current interest rate curves and the prices of instruments available in the market including various interest rate caps and zero-coupon bonds. For a subset of the business, there is a contractually guaranteed floor of 3% for the claim interest rate.<br />        The market volatility assumptions for annuitants’ underlying mutual fund investments that are modeled based on the S&P 500, Russell 2000 and NASDAQ Composite are based on the market-implied volatility for these indices for three to seven years grading to historical volatility levels thereafter. For the remaining 57% of underlying mutual fund investments modeled based on other indices (with insufficient market-observable data), volatility is based on the average historical level for each index over the past 10 years.  Using this approach, volatility ranges from 17% to 33% for equity funds, 4% to 11% for bond funds and 1% to 2% for money market funds.<br />        The mortality assumption is 70% of the 1994 Group Annuity Mortality table, with 1% annual improvement beginning January 1, 2000.<br />        The annual lapse rate assumption reflects experience that differs by the company issuing the underlying variable annuity contracts, ranges from 2% to 23% and depends on the time since contract issue and the relative value of the guarantee.<br />        The annual annuity election rate assumption reflects experience that differs by the company issuing the underlying variable annuity contracts and depends on the annuitant’s age, the relative value of the guarantee and whether a contractholder has had a previous opportunity to elect the benefit.  Immediately after the expiration of the waiting period, the assumed probability that an individual will annuitize their variable annuity contract is up to 80%.  For the second and subsequent annual opportunities to elect the benefit, the assumed probability of election is up to 30%. Actual data is still emerging for the Company as well as the industry and the estimates are based on this limited data.<br />        The risk and profit charge assumption is based on the Company’s estimate of the capital and return on capital that would be required by a hypothetical market participant.<br /><br />In addition, the Company has considered other assumptions related to model, expense and nonperformance risk in calculating the GMIB liability.<br /><br />The Company regularly evaluates each of the assumptions used in establishing these assets and liabilities by considering how a hypothetical market participant would set assumptions at each valuation date.  Capital markets assumptions are expected to change at each valuation date reflecting current observable market conditions. Other assumptions may also change based on a hypothetical market participant’s view of actual experience as it emerges over time or other factors that impact the net liability.  If the emergence of future experience or future assumptions differs from the assumptions used in estimating these assets and liabilities, the resulting impact could be material to the Company’s consolidated results of operations, and in certain situations, could be material to the Company’s financial condition. <br /><br />GMIB liabilities are reported in the Company’s Consolidated Balance Sheets in Accounts payable, accrued expenses and other liabilities.  GMIB assets associated with these contracts represent net receivables in connection with reinsurance that the Company has purchased from two external reinsurers and are reported in the Company’s Consolidated Balance Sheets in Other assets, including other intangibles.  As of September 30, 2009, Standard & Poor’s (S&P) has given a financial strength rating of AA to one reinsurer and a financial strength rating of A- to the parent company that guarantees the receivable from the other reinsurer.</p><p>Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value <br /><br />The following tables summarize the changes in financial assets and financial liabilities classified in Level 3 for the three months and nine months ended September 30, 2009 and 2008.  These tables exclude separate account assets as changes in fair values of these assets accrue directly to policyholders. Gains and losses reported in these tables may include changes in fair value that are attributable to both observable and unobservable inputs.</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"><b>For the Three Months Ended September 30, 2009</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="27" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"> <sup></sup></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>Fixed Maturities & Equity Securities</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Assets</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Liabilities</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Net</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"><i>(In millions)</i><sup><i></i></sup></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362">Balance at 7/1/09<sup></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 923 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 685 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,224)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (539)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362"><b>Gains (losses) included in shareholders' net income:</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">  Results of GMIB<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (27)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 19 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">  Other<sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (9)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362"><b>Total gains (losses) included in shareholders' net income</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (9)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (27)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 19 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">Gains included in other comprehensive income<sup></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 36 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">Gains required to adjust future policy benefits for settlement annuities<sup> (1)</sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 56 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">Purchases, issuances, settlements<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 7 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (44)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 52 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">Transfers out of Level 3<sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (13)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="362"><b>Balance at 9/30/09</b><sup><b></b></sup></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 1,000 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 614 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (1,126)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (512)</td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="362"><b>Total gains (losses) included in income attributable to </b><sup><b></b></sup></td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"><b>  instruments held at the reporting date</b><sup><b></b></sup></td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (9)</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (27)</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 19 </td></tr><tr><td height="9" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"><b> </b><sup><b></b></sup></td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="775" align="left" colspan="10" style="background-color: #FFFFFF;" height="17"><i>(1) Amounts do not accrue to shareholders.</i></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"><i> </i><sup><i></i></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"><i> </i></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"><b>For the Three Months Ended September 30, 2008</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"> <sup></sup></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>Fixed Maturities & Equity Securities</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Assets</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Liabilities</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Net</b></td></tr><tr><td height="27" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"><i>(In millions)</i><sup><i></i></sup></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362">Balance at 7/1/08<sup></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 695 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 447 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (836)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (389)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362"><b>Gains (losses) included in shareholders' net income:</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">  Results of GMIB, excluding adoption effect<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 123 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (221)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (98)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">  Other<sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 4 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362"><b>Total gains (losses) included in shareholders' net income</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 4 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 123 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (221)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (98)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">Gains included in other comprehensive income<sup></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">Gains required to adjust future policy benefits for settlement annuities<sup> (1)</sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 41 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">Purchases, issuances, settlements<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (9)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (18)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 25 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 7 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="362">Transfers into Level 3<sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 15 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="362"><b>Balance at 9/30/08</b><sup><b></b></sup></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 749 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 552 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (1,032)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (480)</td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="362"><b>Total gains (losses) included in income attributable to </b><sup><b></b></sup></td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"><b>  instruments held at the reporting date</b><sup><b></b></sup></td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 3 </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 123 </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (221)</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (98)</td></tr><tr><td height="9" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="362"> <sup></sup></td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="775" align="left" colspan="10" style="background-color: #FFFFFF;" height="17"><i>(1) Amounts do not accrue to shareholders.</i></td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"><b>For the Nine Months Ended September 30, 2009</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="27" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"> <sup></sup></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>Fixed Maturities & Equity Securities</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Assets</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Liabilities</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Net</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"><i>(In millions)</i><sup><i></i></sup></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355">Balance at 1/1/09<sup></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 889 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 953 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (1,757)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (804)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355"><b>Gains (losses) included in shareholders' net income:</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">  Results of GMIB<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (263)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 478 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 215 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">  Other<sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (19)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355"><b>Total gains (losses) included in shareholders' net income</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (19)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (263)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 478 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 215 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">Gains included in other comprehensive income<sup></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 46 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">Losses required to adjust future policy benefits for settlement annuities<sup> (1)</sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (51)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">Purchases, issuances, settlements<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (3)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (76)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 153 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 77 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">Transfers into Level 3<sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 138 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="355"><b>Balance at 9/30/09</b><sup><b></b></sup></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 1,000 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 614 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (1,126)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (512)</td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="355"><b>Total gains (losses) included in income attributable to </b><sup><b></b></sup></td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"><b>  instruments held at the reporting date</b><sup><b></b></sup></td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (19)</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (263)</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 478 </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> $ </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 215 </td></tr><tr><td height="9" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"><b> </b><sup><b></b></sup></td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="758" align="left" colspan="10" style="background-color: #FFFFFF;" height="17"><i>(1) Amounts do not accrue to shareholders.</i></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="355"><i> </i><sup><i></i></sup></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"><i> </i></td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"><b>For the Nine Months Ended September 30, 2008</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"> <sup></sup></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>Fixed Maturities & Equity Securities</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Assets</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Liabilities</b></td><td rowspan="2" height="44" style="border-top: 1px solid #000000;background-color: #FFFFFF;" width="94" colspan="2" align="center"><b>GMIB Net</b></td></tr><tr><td height="27" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"><i>(In millions)</i><sup><i></i></sup></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355">Balance at 1/1/08<sup></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 732 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 173 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (313)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (140)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355"><b>Gains (losses) included in shareholders' net income:</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">  Effect of adoption of new fair value measurement guidance<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 244 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (446)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (202)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">  Results of GMIB, excluding adoption effect<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 190 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (341)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (151)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">  Other<sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355"><b>Total gains (losses) included in shareholders' net income</b><sup><b></b></sup></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 434 </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (787)</td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (353)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">Gains required to adjust future policy benefits for settlement annuities<sup> (1)</sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 7 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">Purchases, issuances, settlements<sup></sup></td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (55)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 68 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 13 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">Transfers into Level 3<sup></sup></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 5 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="355"><b>Balance at 9/30/08</b><sup><b></b></sup></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 749 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 552 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (1,032)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (480)</td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="355"><b>Total gains (losses) included in income attributable to </b><sup><b></b></sup></td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="18" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"><b>  instruments held at the reporting date</b><sup><b></b></sup></td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 6 </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> 434 </td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (787)</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> (353)</td></tr><tr><td height="9" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"> <sup></sup></td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 3px double #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="758" align="left" colspan="10" style="background-color: #FFFFFF;" height="17"><i>(1) Amounts do not accrue to shareholders.</i></td></tr></table><p>As noted in the tables above, total gains and losses included in shareholders’ net income are reflected in the following captions in the Consolidated Statements of Income:<br /> <br /></p><ul><li>other-than-temporary impairments on debt securities, net; other realized investment gains (losses) and net investment income for amounts related to fixed maturities and equity securities; and<br /></li><li>guaranteed minimum income benefits (income) expense for amounts related to GMIB assets and liabilities.<br /></li></ul><p><br />Reclassifications impacting Level 3 financial instruments are reported as transfers in or out of the Level 3 category as of the beginning of the quarter in which the transfer occurs. Therefore gains and losses in income only reflect activity for the period the instrument was classified in Level 3. Typically, investments that transfer out of Level 3 are classified in Level 2 as market data on the securities becomes more readily available.<br /><br />The company provided reinsurance for insurance companies that offer a guaranteed minimum income benefit, and then retroceded a portion of the risk to other insurance companies. Because these GMIB reinsurance arrangements remain in effect at the reporting date, the Company has reflected the total gain or loss for the period as the total gain or loss included in income attributable to instruments still held at the reporting date.  However, the Company reduces the GMIB assets and liabilities resulting from these reinsurance arrangements when annuitants lapse, die, elect their benefit, or reach the age after which the right to elect their benefit expires.<br /><br />Under FASB’s guidance for fair value measurements, the Company’s GMIB assets and liabilities are expected to be volatile in future periods because the underlying assumptions will be based largely on market-observable inputs at the close of each reporting period including interest rates and market-implied volatilities.<br /> <br />The net pre-tax gain for GMIB was $19 million for the three months ended September 30, 2009, and was primarily due to the following factors:<br /></p><ul><li>increases in underlying account values in the period, driven by favorable equity market and bond fund returns, resulting in reduced exposures ($50 million); and <br /></li><li>updates to the risk and profit charge estimates ($7 million)<br /></li></ul><p><br />These favorable effects were partially offset by:<br /></p><ul><li>decreases in interest rates ($31 million); and<br /></li><li>other amounts, including experience varying from assumptions, model and in-force updates ($7 million)<br /></li></ul><p><br />For the nine months ended September 30, 2009, the net pre-tax gain for GMIB was $215 million, and was primarily due to the following factors: <br /></p><ul><li>increases in interest rates ($175 million); <br /></li><li>increases in underlying account values in the period, driven by favorable equity market and bond fund returns, resulting in reduced exposures ($82 million); and <br /></li><li>updates to the risk and profit charge estimates ($25 million).<br /></li></ul><p><br />These favorable effects were partially offset by:<br /></p><ul><li>increases to the annuitization assumption, reflecting higher utilization experience ($21 million);<br /></li><li>updates to the lapse assumption ($14 million); and<br /></li><li>other amounts, including experience varying from assumptions, model and in-force updates ($32 million).<br /></li></ul><p><br />For the three months ended September 30, 2008, the increase in the net GMIB liability was primarily driven by the decline in underlying account values in the period, driven by declines in equity markets and bond fund returns and decreases in interest rates since June 30, 2008. Excluding the charge for the effect of adoption of FASB’s guidance for fair value measurement, the increase in the net GMIB liability for the nine months ended September 30, 2008 was primarily driven by the impact of declines in underlying account values in the period, driven by declines in equity markets and bond fund returns, resulting in increased exposure and decreases in interest rates since December 31, 2007.</p><p>Separate account assets<br /><br />Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company’s revenues and expenses.  As of September 30, 2009 and December 31, 2008 separate account assets were as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="257"><b>September 30, 2009</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"><b> </b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"><b> </b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"><b> </b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td></tr><tr><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="257"><i>(In millions)</i></td><td width="129" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Quoted Prices in Active Markets for Identical Assets
(Level 1)</b></td><td width="129" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Other Observable Inputs
(Level 2)</b></td><td width="129" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Unobservable Inputs
(Level 3)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Total</b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="257">Guaranteed separate accounts (See Note 17)</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 265 </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 1,538 </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> - </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,803 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="257">Non-guaranteed separate accounts (1)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 1,660 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 2,917 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 584 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 5,161 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="257"><b>Total separate account assets</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 1,925 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 4,455 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 584 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 6,964 </td></tr><tr><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="257"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="738" align="left" colspan="9" style="background-color: #FFFFFF;" height="17"><i>(1) Non-guaranteed separate accounts include $2.3 billion in assets supporting the Company's pension plans, including $553 million classified in Level 3.</i></td></tr><tr><td height="17" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="257"><i> </i></td><td height="17" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"><i> </i></td><td height="17" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"><i> </i></td><td height="17" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"><i> </i></td><td height="17" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><i> </i></td><td height="17" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"><i> </i></td></tr><tr><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="257"><b>December 31, 2008</b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="19"><b> </b></td><td width="129" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" height="18"><b> </b></td><td width="129" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="18"><b> </b></td><td width="129" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="18"><b> </b></td><td height="18" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"><b> </b></td></tr><tr><td height="17" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="257"><i>(In millions)</i></td><td width="129" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Quoted Prices in Active Markets for Identical Assets
(Level 1)</b></td><td width="129" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Other Observable Inputs
(Level 2)</b></td><td width="129" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Significant Unobservable Inputs
(Level 3)</b></td><td width="94" align="center" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Total</b></td></tr><tr><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="257">Guaranteed separate accounts (See Note 17)</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 233 </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 1,557 </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> - </td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,790 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="257">Non-guaranteed separate accounts (1)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 1,093 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 2,506 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 475 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 4,074 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="left" width="257"><b>Total separate account assets</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 1,326 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 4,063 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 475 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 5,864 </td></tr><tr><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="257"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="110"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td width="738" align="left" colspan="9" style="background-color: #FFFFFF;" height="17"><i>(1) Non-guaranteed separate accounts include $1.5 billion in assets supporting the Company's pension plans, including $435 million classified in Level 3.</i></td></tr></table><p>Separate account assets in Level 1 include exchange-listed equity securities.  Level 2 assets primarily include:<br /><br /></p><ul><li>equity securities and corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and<br /></li><li>actively-traded institutional and retail mutual fund investments and separate accounts priced using the daily net asset value which is their exit price.<br /></li></ul><p><br />Separate account assets classified in Level 3 include investments primarily in securities partnerships and real estate generally valued based on the separate account’s ownership share of the equity of the investee including changes in the fair values of its underlying investments. <br /><br />The following tables summarize the changes in separate account assets reported in Level 3 for the three months and nine months ended September 30, 2009 and 2008.        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;" height="17"><b>Three Months Ended</b></td></tr><tr><td height="17" width="523" align="left"><b> </b></td><td width="188" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;" align="left" width="523"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="18"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="18"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523">Balance at 7/1</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 625 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 417 </td></tr><tr><td height="18" width="523" align="left">Policyholder gains (losses) (1)</td><td height="18" width="19" align="right"> </td><td height="18" width="75" align="right"> (18)</td><td height="18" width="19" align="right"> </td><td height="18" width="75" align="right"> 1 </td></tr><tr><td height="17" width="523" align="left">Purchases, issuances, settlements</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> (23)</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 13 </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;" align="left" width="523">Transfers out of Level 3 </td><td height="18" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-bottom: 1px solid #000000;" align="right" width="75"> - </td><td height="18" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-bottom: 1px solid #000000;" align="right" width="75"> (2)</td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="523">Balance at 9/30</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 584 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 429 </td></tr><tr><td height="7" style="border-top: 1px solid #000000;" align="left" width="523"> </td><td height="7" style="border-top: 2px solid #000000;" align="left" width="19"> </td><td height="7" style="border-top: 2px solid #000000;" align="left" width="75"> </td><td height="7" style="border-top: 2px solid #000000;" align="left" width="19"> </td><td height="7" style="border-top: 2px solid #000000;" align="left" width="75"> </td></tr><tr><td width="711" align="left" height="17" colspan="5"><i>(1) Includes losses of $20 million and gains of $1 million attributable to instruments still held at September 30, 2009 and September 30, 2008 respectively.</i></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="523"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;" height="17"><b>Nine Months Ended </b></td></tr><tr><td height="17" width="523" align="left"><b> </b></td><td width="188" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="17"><b>September 30,</b></td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;" align="left" width="523"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="18"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="18"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="523">Balance at 1/1</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 475 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 403 </td></tr><tr><td height="18" width="523" align="left">Policyholder gains (losses) (1)</td><td height="18" width="19" align="right"> </td><td height="18" width="75" align="right"> (85)</td><td height="18" width="19" align="right"> </td><td height="18" width="75" align="right"> 21 </td></tr><tr><td height="17" width="523" align="left">Purchases, issuances, settlements</td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 34 </td><td height="17" width="19" align="right"> </td><td height="17" width="75" align="right"> 22 </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;" align="left" width="523">Transfers in (out) of Level 3 </td><td height="18" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-bottom: 1px solid #000000;" align="right" width="75"> 160 </td><td height="18" style="border-bottom: 1px solid #000000;" align="right" width="19"> </td><td height="18" style="border-bottom: 1px solid #000000;" align="right" width="75"> (17)</td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="523">Balance at 9/30</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 584 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;" align="right" width="75"> 429 </td></tr><tr><td height="6" style="border-top: 1px solid #000000;" align="left" width="523"> </td><td height="6" style="border-top: 2px solid #000000;" align="left" width="19"> </td><td height="6" style="border-top: 2px solid #000000;" align="left" width="75"> </td><td height="6" style="border-top: 2px solid #000000;" align="left" width="19"> </td><td height="6" style="border-top: 2px solid #000000;" align="left" width="75"> </td></tr><tr><td width="711" align="left" height="17" colspan="5"><i>(1) Includes losses of $88 million and gains of $6 million attributable to instruments still held at September 30, 2009 and September 30, 2008 respectively.</i></td></tr><tr><td height="17" width="523" align="left"> </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="left"> </td><td height="17" width="19" align="left"> </td><td height="17" width="75" align="left"> </td></tr></table><p>Assets and Liabilities Measured at Fair Value under Certain Conditions<br /><br />Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions, such as investments in real estate entities when they become impaired. During the nine months ended September 30, 2009, impaired real estate entities carried at cost of $41 million were written down to their fair values of $8 million, resulting in realized investment losses of $33 million. These fair value measurements were based on discounted cash flow analyses using significant unobservable inputs, and were classified in Level 3. For the three months ended September 30, 2009 and the twelve months ended December 31, 2008, the amounts required to adjust these assets and liabilities to their fair values were not significant.        <br />        </p><p>Fair Value Disclosures for Financial Instruments Not Carried at Fair Value <br /><br />Most financial instruments that are subject to fair value disclosure requirements are carried in the Company’s consolidated financial statements at amounts that approximate fair value. The following table provides the fair values and carrying values of the Company’s financial instruments not recorded at fair value that are subject to fair value disclosure requirements at September 30, 2009 and December 31, 2008:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="355"><i>(In millions)</i></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"> </td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>September 30, 2009</b></td><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="19"><b> </b></td><td width="169" align="center" colspan="3" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>December 31, 2008</b></td></tr><tr><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="355"> </td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Fair Value</b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Carrying Value</b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Fair Value</b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="19"><b> </b></td><td height="29" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="75"><b>Carrying Value</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;" align="left" width="355">Commercial mortgage loans </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 3,393 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 3,607 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 3,401 </td><td height="17" style="border-top: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;" align="right" width="75"> 3,617 </td></tr><tr><td height="17" width="355" align="left">Contractholder deposit funds, excluding universal life products</td><td height="17" width="19" align="right">$</td><td height="17" width="75" align="right"> 932 </td><td height="17" width="19" align="right">$</td><td height="17" width="75" align="right"> 934 </td><td height="17" width="19" align="right">$</td><td height="17" width="75" align="right"> 889 </td><td height="17" width="19" align="right">$</td><td height="17" width="75" align="right"> 915 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="355">Long-term debt, excluding capital leases</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 2,430 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 2,427 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 1,684 </td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;" align="right" width="75"> 2,077 </td></tr></table><p>The fair values presented in the table above have been estimated using market information when available. The following is a description of the valuation methodologies and inputs used by the Company to determine fair value.<br /><br />Commercial mortgage loans. The Company estimates the fair value of commercial mortgage loans generally by discounting the contractual cash flows at estimated market interest rates that reflect the Company’s assessment of the credit quality of the loans. Market interest rates are derived by calculating the appropriate spread over comparable U.S. Treasury rates, based on the property type, quality rating and average life of the loan. The quality ratings reflect the relative risk of the loan, considering debt service coverage, the loan to value ratio and other factors. Fair values of impaired mortgage loans are based on the estimated fair value of the underlying collateral generally determined using an internal discounted cash flow model.<br /><br />Contractholder deposit funds, excluding universal life products. Generally, these funds do not have stated maturities. Approximately 45% of these balances can be withdrawn by the customer at any time without prior notice or penalty. The fair value for these contracts is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. Most of the remaining contractholder deposit funds are reinsured by the buyers of the individual life and annuity and retirement benefits businesses. The fair value for these contracts is determined using the fair value of these buyers’ assets supporting these reinsured contracts. The Company had a reinsurance recoverable equal to the carrying value of these reinsured contracts.<br /> <br />Long-term debt, excluding capital leases. The fair value of long-term debt is based on quoted market prices for recent trades. When quoted market prices are not available, fair value is estimated using a discounted cash flow analysis and the Company’s estimated current borrowing rate for debt of similar terms and remaining maturities.<br /><br />Fair values of off-balance-sheet financial instruments were not material. <br /></p></div>
<div style="font-size:12pt"><p>Note 9 — Investments<br /><br />Total Realized Investment Gains and Losses<br /><br />The following total realized gains and losses on investments include other-than-temporary impairments on debt securities but exclude amounts required to adjust future policy benefits for the run-off settlement annuity business:<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="336"> </td><td width="197" align="center" colspan="4" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Three Months Ended</b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Nine Months Ended </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="336"> </td><td width="197" align="center" colspan="4" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>September 30,</b></td><td width="188" align="center" colspan="4" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>September 30,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="336"><i>(In millions)</i></td><td width="103" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2008 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="336">Fixed maturities</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="28">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 2 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (67)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (9)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (108)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="336">Equity securities</td><td height="17" style="background-color: #FFFFFF;" align="right" width="28"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 16 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (20)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 10 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (19)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="336">Commercial mortgage loans</td><td height="17" style="background-color: #FFFFFF;" align="right" width="28"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (4)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 3 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (4)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="336">Other investments, including derivatives</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="28"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 61 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (37)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 98 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="336">Realized investment gains (losses), before income taxes</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="28"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 14 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (23)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (40)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (28)</td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="336">Less income tax expense (benefits)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="28"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 5 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (8)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (16)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (10)</td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="336">Net realized investment gains (losses)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="28">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 9 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (15)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (24)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (18)</td></tr></table><p>Included in pre-tax realized investment gains (losses) above were other-than-temporary impairments on debt securities, asset write-downs and changes in valuation reserves as follows: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"> </td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Three Months Ended</b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Nine Months Ended </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355"> </td><td width="188" align="center" colspan="4" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>September 30,</b></td><td width="188" align="center" colspan="4" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>September 30,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"><i>(in millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2008 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355">Credit-related (1)</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 18 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 23 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 72 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 27 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355">Other (2)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 3 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 40 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 12 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 64 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 21 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 63 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 84 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 91 </td></tr><tr><td height="9" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="9" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="731" align="left" colspan="9" style="background-color: #FFFFFF;" height="48"><i>(1) Credit-related losses include other-than-temporary declines in value of fixed maturities and equity securities, and impairments of commercial mortgage loans and real estate entities. The amount related to credit losses on fixed maturities for which a portion of the impairment was recognized in other comprehensive income was not significant.</i></td></tr><tr><td height="5" style="background-color: #FFFFFF;" align="left" width="355"> </td><td height="5" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="5" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="5" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="5" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="5" style="background-color: #FFFFFF;" align="right" width="19"><b> </b></td><td height="5" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="5" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="5" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td width="731" align="left" colspan="9" style="background-color: #FFFFFF;" height="29"><i>(2) Prior to adoption of new GAAP guidance for other-than-temporary impairments on April 1, 2009, other primarily represented the impact of rising market yields on investments where the Company could not demonstrate the intent and ability to hold until recovery.</i></td></tr></table><p>Fixed Maturities and Equity Securities <br /><br />Securities in the following table are included in fixed maturities and equity securities on the Company’s Consolidated Balance Sheets. These securities are carried at fair value with changes in fair value reported in other realized investment gains and interest and dividends reported in net investment income. The Company’s hybrid investments include preferred stock or debt securities with call or conversion features. The Company elected fair value accounting for certain hybrid securities to simplify accounting and mitigate volatility in results of operations and financial condition.</p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="449"> </td><td width="129" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>As of September 30,</b></td><td width="129" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>As of December 31,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="449"><i>(In millions)</i></td><td width="129" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="129" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="449">Included in fixed maturities:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="110"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="110"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="449">  Trading securities (amortized cost: $8; $13)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="110"> 9 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="110"> 13 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="449">  Hybrid securities (amortized cost: $32; $10)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 36 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 10 </td></tr><tr><td height="18" style="background-color: #FFFFFF;" align="left" width="449">      Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 45 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 23 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="449"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="449">Included in equity securities:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="110"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="110"> </td></tr><tr><td height="18" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="449">  Hybrid securities (amortized cost: $110; $123)</td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 79 </td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="110"> 84 </td></tr></table><p>Fixed maturities and equity securities included $239 million at September 30, 2009, which were pledged as collateral to brokers as required under certain futures contracts. These fixed maturities and equity securities were primarily corporate securities.<br /><br />The following information about fixed maturities excludes trading and hybrid securities. The amortized cost and fair value by contractual maturity periods for fixed maturities were as follows at September 30, 2009: <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Amortized</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Fair </b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523"><i>(in millions)</i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Cost</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Value</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523">Due in one year or less</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 692 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 701 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="523">Due after one year through five years</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 3,813 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 4,023 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="523">Due after five years through ten years</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 4,770 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 5,094 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="523">Due after ten years</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,494 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,913 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523">Mortgage and other asset-backed securities</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 662 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 712 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="523">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 12,431 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13,443 </td></tr></table><p>Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations, with or without penalties. Also, in some cases the Company may extend maturity dates.<br /><br />Mortgage-backed assets consist principally of commercial mortgage-backed securities and collateralized mortgage obligations of which $38 million were residential mortgages and home equity lines of credit, all of which were originated using standard underwriting practices and are not considered sub-prime loans.<br />Gross unrealized appreciation (depreciation) on fixed maturities (excluding trading securities and hybrid securities) by type of issuer is shown below. <br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="341"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;" align="left" width="75"> </td></tr><tr><td height="17" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="341"> </td><td width="376" align="center" colspan="8" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>September 30, 2009</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Unrealized</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Unrealized</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b> </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341"> </td><td height="17" style="background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="75"><b>Amortized</b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="75"><b>Appre-</b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="75"><b>Depre-</b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="background-color: #FFFFFF;" align="center" width="75"><b>Fair</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"><i>(in millions)</i></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Cost</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>ciation</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>ciation</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="19"><b> </b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Value</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Federal government and agency</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 394 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 228 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 622 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">State and local government</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,335 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 236 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (5)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2,566 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Foreign government</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,017 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 45 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (5)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,057 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Corporate</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8,023 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 570 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (107)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8,486 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Federal agency mortgage-backed</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 33 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 2 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> - </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 35 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">Other mortgage-backed</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 132 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 4 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (14)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 122 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Other asset-backed</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 497 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 74 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (16)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 555 </td></tr><tr><td height="18" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Total</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 12,431 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,159 </td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (147)</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="18" style="border-top: 1px solid #000000;border-bottom: 2px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 13,443 </td></tr></table><p>The above table includes investments with a fair value of $2.4 billion supporting the Company’s run-off settlement annuity business, with gross unrealized appreciation of $439 million and gross unrealized depreciation of $47 million at September 30, 2009. Such unrealized amounts are required to support future policy benefit liabilities of this business and, as such, are not included in accumulated other comprehensive income.<br /><br />Sales information for available-for-sale fixed maturities and equity securities were as follows:<br /></p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"> </td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Three Months Ended</b></td><td width="188" align="center" colspan="4" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Nine Months Ended </b></td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355"> </td><td width="188" align="center" colspan="4" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>September 30,</b></td><td width="188" align="center" colspan="4" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>September 30,</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2008 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2009 </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>2008 </b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355">Proceeds from sales</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 266 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 432 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 676 </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 1,128 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="355">Gross gains on sales</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 24 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 3 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 39 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 8 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="355">Gross losses on sales</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (5)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (8)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"><b>$</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (8)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (31)</td></tr></table><p>Review of declines in fair value. Management reviews fixed maturities and equity securities with a decline in fair value from cost for impairment based on criteria that include:<br /><br /></p><ul><li>length of time and severity of decline;<br /></li><li>financial health and specific near term prospects of the issuer; <br /></li><li>changes in the regulatory, economic or general market environment of the issuer’s industry or geographic region; and<br /></li><li>prior to April 1, 2009, the Company’s ability and intent to hold these fixed maturities until recovery; beginning April 1, 2009, the Company’s intent to sell or the likelihood of a required sale of these fixed maturities prior to their recovery. <br /></li></ul><p><br />When the Company determines it does not expect to recover the amortized cost basis of fixed maturities with declines in fair value (even if it does not intend to sell or will not be required to sell these fixed maturities), the credit portion of the impairment loss is recognized in net income and the non-credit portion, if any, is recognized in a separate component of shareholders’ equity. The credit portion is the difference between the amortized cost basis of the fixed maturity and the net present value of its projected future cash flows. Projected future cash flows are based on qualitative and quantitative factors, including probability of default, and the estimated timing and amount of recovery. For mortgage and asset-backed securities, estimated future cash flows are based on assumptions about the collateral attributes including prepayment speeds, default rates and changes in value. <br /><br />Excluding trading and hybrid securities, as of September 30, 2009, fixed maturities with a decline in fair value from amortized cost (which were primarily investment grade corporate bonds) were as follows, including the length of time of such decline: </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"> </td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Fair </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Amortized </b></td><td width="94" align="center" colspan="2" style="border-top: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Unrealized</b></td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>Number</b></td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341"><i>(In millions)</i></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Value</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Cost</b></td><td width="94" align="center" colspan="2" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" height="17"><b>Depreciation</b></td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="center" width="75"><b>of Issues</b></td></tr><tr><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">Fixed maturities:</td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="border-top: 1px solid #000000;background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">One year or less:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="left" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">   Investment grade</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 679 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 706 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (27)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">169 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">   Below investment grade</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 109 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 119 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (10)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">68 </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">More than one year:</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> </td></tr><tr><td height="17" style="background-color: #FFFFFF;" align="left" width="341">   Investment grade</td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,117 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> 1,212 </td><td height="17" style="background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75"> (95)</td><td height="17" style="background-color: #FFFFFF;" align="right" width="75">174 </td></tr><tr><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="left" width="341">   Below investment grade</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 82 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> 97 </td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="19">$</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75"> (15)</td><td height="17" style="border-bottom: 1px solid #000000;background-color: #FFFFFF;" align="right" width="75">19 </td></tr></table><p>The unrealized depreciation of investment grade fixed maturities is primarily due to increases in market yields since purchase. Approximately $52 million of the unrealized depreciation is due to securities with a decline in value of greater than 20%. The remaining $95 million of the unrealized depreciation is due to securities with declines in value of less than 20%. There were no equity securities with a fair value significantly lower than cost as of September 30, 2009.<br /></p></div>
<div style="font-size:12pt"><p>Note 10 — Derivative Financial Instruments<br /><br />The Company’s investment strategy is to manage the characteristics and risks of investment assets (such as duration, yield, currency and liquidity) to meet the varying demands of the related insurance and contractholder liabilities (such as paying claims, investment returns and withdrawals). As part of this investment strategy, the Company typically uses derivatives to minimize interest rate, foreign currency and equity price risks of chosen investment assets to conform to the characteristics and risks of the related insurance and contractholder liabilities. The Company routinely monitors exposure to credit risk associated with derivatives and diversifies the portfolio among approved dealers of high credit quality to minimize credit risk. In addition, the Company has written or sold contracts to guarantee minimum income benefits and to enhance investment returns. See Note 7 for a discussion of derivatives associated with GMDB contracts and Note 8 for a discussion of derivatives arising from GMIB contracts. <br /><br />The Company uses hedge accounting when derivatives are designated, qualify and are highly effective as hedges. Effectiveness is formally assessed and documented at inception and each period throughout the life of a hedge using various qualitative and quantitative methods appropriate for each hedge, including regression analysis and dollar offset. Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in shareholders’ net income. <br /><br />The Company accounts for derivative instruments as follows:<br /><br /></p><ul><li>Derivatives are reported on the balance sheet at fair value with changes in fair values reported in shareholders’ net income or accumulated other comprehensive income.<br /></li><li>Changes in the fair value of derivatives that hedge market risk related to future cash flows – and that qualify for hedge accounting – are reported in a separate caption in accumulated other comprehensive income. These hedges are referred to as cash flow hedges. <br /></li><li>A change in the fair value of a derivative instrument may not always equal the change in the fair value of the hedged item; this difference is referred to as hedge ineffectiveness. Where hedge accounting is used, the Company reflects hedge ineffectiveness in shareholders’ net income (generally as part of other realized investment gains and losses). <br /></li><li>Features of certain investments and obligations, called embedded derivatives, are accounted for as derivatives. As permitted under GAAP, derivative accounting has not been applied to these features of such investments or obligations existing before January 1, 1999.<br /></li></ul><p><br />Certain subsidiaries of the Company are parties to over-the-counter derivative instruments that contain provisions requiring both parties to such instruments to post collateral depending on net liability thresholds and the party’s financial strength or credit rating. The collateral posting requirements vary by counterparty. The aggregate fair value of derivative instruments with such credit-risk-related contingent features where a subsidiary of the Company was in a net liability position as of September 30, 2009 was $28 million for which the Company was not required to post collateral with its counterparties. If the various contingent features underlying the agreements were triggered as of September 30, 2009, the Company would be required to post collateral equal to the total net liability. Such subsidiaries are parties to certain other derivative instruments that contain termination provisions for which the counterparties could demand immediate payment of the total net liability position if the financial strength rating of the subsidiary were to decline below specified levels. As of September 30, 2009, there was no net liability position under such derivative instruments. <br /> <br />The tables below present information about the nature and accounting treatment of the Company’s primary derivative financial instruments including the Company’s purpose for entering into specific derivative transactions, and their locations in and effect on the financial statements as of and for the three and nine month periods ended September 30, 2009. Derivatives in the Company’s separate accounts are excluded from the tables because associated gains and losses generally accrue directly to policyholders.<br />        </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="12" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="left" width="12"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="left" width="110"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="left" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 2px solid #000000;" height="12"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="center" width="12"><b> </b></td><td width="136" align="center" colspan="2" style="border-top: 2px solid #000000;" height="12"><b> </b></td><td height="12" style="border-top: 2px solid #000000;" align="center" width="12"><b> </b></td><td width="188" align="center" colspan="4" style="border-top: 2px solid #000000;" height="12"><b> </b></td></tr><tr><td height="29" style="border-left: 2px solid #000000;" align="left" width="110"><b>Instrument / Volume of Activity</b></td><td height="29" width="12" align="left"><b> </b></td><td height="29" width="110" align="left"><b>Primary Risk</b></td><td height="29" width="12" align="left"><b> </b></td><td width="136" align="left" height="29" colspan="2"><b>Purpose</b></td><td height="29" width="12" align="left"><b> </b></td><td width="136" align="left" height="29" colspan="2"><b>Cash Flows</b></td><td height="29" width="12" align="left"><b> </b></td><td width="188" align="left" height="29" colspan="4"><b>Accounting Policy</b></td></tr><tr><td height="12" style="border-bottom: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b> </b></td><td height="12" style="border-bottom: 2px solid #000000;" align="left" width="12"><b> </b></td><td height="12" style="border-bottom: 2px solid #000000;" align="left" width="110"> </td><td height="12" style="border-bottom: 2px solid #000000;" align="left" width="12"> </td><td width="136" align="center" colspan="2" style="border-bottom: 2px solid #000000;" height="12"> </td><td height="12" style="border-bottom: 2px solid #000000;" align="center" width="12"> </td><td width="136" align="center" colspan="2" style="border-bottom: 2px solid #000000;" height="12"> </td><td height="12" style="border-bottom: 2px solid #000000;" align="center" width="12"> </td><td width="188" align="center" colspan="4" style="border-bottom: 2px solid #000000;" height="12"> </td></tr><tr><td width="728" align="left" colspan="14" style="border-top: 2px solid #000000;border-bottom: 2px solid #000000;border-left: 2px solid #000000;" height="18"><b>Derivatives Designated as Accounting Hedges - Cash Flow Hedges</b></td></tr><tr><td height="233" style="border-top: 2px solid #000000;border-left: 2px solid #000000;" align="left" width="110"><b>Interest rate swaps — $123 million of par value of related investments
Foreign currency swaps — $179 million of U.S. dollar equivalent par value of related investments
Combination swaps (interest rate and foreign currency) — $54 million of U.S. dollar equivalent par value of related investments</b></td><td height="233" style="border-top: 2px solid #000000;" align="left" width="12"><b> </b></td><td height="233" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="110">Interest rate and foreign currency</td><td height="233" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="233">To hedge the interest and/or foreign currency cash flows of fixed maturities and commercial mortgage loans to match associated liabilities. Currency swaps are primarily euros, Australian dollars, Canadian dollars and British pounds for periods of up to 12 years.</td><td height="233" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="136" align="left" colspan="2" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="233">The Company periodically exchanges cash flows between variable and fixed interest rates and/or between two currencies for both principal and interest. Net interest cash flows are reported in net investment income and included in operating activities.</td><td height="233" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" align="left" width="12"> </td><td width="188" align="left" colspan="4" style="border-top: 2px solid #000000;border-bottom: 1px solid #000000;" height="233">Using cash flow hedge accounting, fair values are reported in other long-term investments or other liabilities and accumulated other comprehensive income and amortized into net investment income or reported in other realized investment gains and losses as interest or principal payments are received.</td></tr><tr><td height="17" style="border-left: 2px solid #000000;" align="left" width="110"> </td><td height="17" width="12" align="left"> </td><td width="606" align="left" colspan="12" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="17"><b>Fair Value Effect on the Financial Statements (in millions)</b><