Aetna 2011 Annual Report Download - page 18

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Annual Report- Page 12
The activity in the reserve for anticipated future losses on discontinued products for the last three years (pretax)
was:
(Millions)
Reserve, beginning of period
Operating loss
Net realized capital gains (losses)
Cumulative effect of new accounting standard as of April 1, 2009 (1)
Reserve, end of period
2011
$ 884.8
(16.9)
28.4
—
$ 896.3
2010
$ 789.2
(15.4)
111.0
—
$ 884.8
2009
$ 790.4
(34.8)
(8.5)
42.1
$ 789.2
(1) The adoption of new accounting guidance for other-than-temporary impairments ("OTTI") of debt securities issued in 2009 resulted
in a cumulative effect adjustment at April 1, 2009. Refer to Note 2 beginning on page 66 for additional information. This amount
is not reflected in accumulated other comprehensive loss and retained earnings in shareholders' equity since the results of
discontinued products do not impact our operating results.
In 2011, our discontinued products reflected net realized capital gains (primarily attributable to gains from the sale
of debt securities partially offset by losses from derivative transactions). In 2010, our discontinued products
reflected net realized capital gains (primarily attributable to gains from the sale of debt securities and investment
real estate). In 2009, discontinued products reflected net realized capital losses (attributable to the unfavorable
investment conditions that existed during the first half of 2009). During 2011, 2010 and 2009, our discontinued
products also reflected operating losses.
We review the adequacy of the discontinued products reserve quarterly and, as a result, the reserve at December 31,
2011 reflects our best estimate of anticipated future losses. Specifically, we evaluated these results in 2011, 2010
and 2009 against expectations of future cash flows assumed in estimating this reserve and do not believe an
adjustment to this reserve was required at December 31, 2011, 2010 or 2009.
INVESTMENTS
At December 31, 2011 and 2010 our investment portfolio consisted of the following:
(Millions)
Debt and equity securities available for sale
Mortgage loans
Other investments
Total investments
2011
$ 17,390.8
1,648.5
1,255.7
$ 20,295.0
2010
$ 16,961.6
1,509.8
1,244.6
$ 19,716.0
The risks associated with investments supporting experience-rated pension and annuity products in our Large Case
Pensions business are assumed by the contract holders and not by us (subject to, among other things, certain
minimum guarantees).
As a result of the foregoing, investment risks associated with our experience-rated and discontinued products
generally do not impact our operating results. Our investment portfolio supported the following products at
December 31, 2011 and 2010:
(Millions)
Experience-rated products
Discontinued products
Remaining products
Total investments
2011
$ 1,645.0
3,646.0
15,004.0
$ 20,295.0
2010
$ 1,690.2
3,712.3
14,313.5
$ 19,716.0