Aetna 2012 Annual Report Download - page 20

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Annual Report- Page 14
The activity in the reserve for anticipated future losses on discontinued products for the last three years (pretax)
was:
(Millions) 2012 2011 2010
Reserve, beginning of period $ 896.3 $ 884.8 $ 789.2
Operating loss (2.0) (16.9) (15.4)
Net realized capital gains 84.2 28.4 111.0
Reserve, end of period $ 978.5 $ 896.3 $ 884.8
In 2012, our discontinued products reflected net realized capital gains, primarily attributable to gains from the sale
of debt securities partially offset by losses from other investments. 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. During 2012, 2011 and 2010, 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,
2012 reflects our best estimate of anticipated future losses. Specifically, we evaluated these results in 2012, 2011
and 2010 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, 2012, 2011 or 2010.
INVESTMENTS
At December 31, 2012 and 2011 our investment portfolio consisted of the following:
(Millions) 2012 2011
Debt and equity securities available for sale $ 18,827.8 $ 17,390.8
Mortgage loans 1,643.6 1,648.5
Other investments 1,448.7 1,255.7
Total investments $ 21,920.1 $ 20,295.0
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, 2012 and 2011:
(Millions) 2012 2011
Experience-rated products $ 1,660.3 $ 1,645.0
Discontinued products 3,675.5 3,646.0
Remaining products (1) 16,584.3 15,004.0
Total investments $ 21,920.1 $ 20,295.0
(1) At December 31, 2012, we held investments of approximately $929.2 million related to the conversion of an existing group annuity
contract from a participating to a non-participating contract, which are included in our total investments of the Large Case Pensions
segment supporting non-experience-rated products. These investments are legally segregated and are not subject to claims that arise out
of our business and only support Aetna's future policy benefit obligations under that group annuity contract. Refer to Note 2 of Notes to
Consolidated Financial Statements beginning on page 82 for additional information.