Prudential 2012 Annual Report Download - page 158

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
13. REINSURANCE (continued)
The tables presented below exclude amounts pertaining to the Company’s discontinued operations.
Reinsurance amounts included in the Consolidated Statements of Operations for premiums, policy charges and fees and policyholders’
benefits for the years ended December 31, were as follows:
2012 2011 2010
(in millions)
Direct premiums ....................................................................... $66,566 $25,526 $19,338
Reinsurance assumed .................................................................... 224 128 163
Reinsurance ceded ...................................................................... (1,436) (1,353) (1,263)
Premiums ......................................................................... $65,354 $24,301 $18,238
Direct policy charges and fees ............................................................. $ 4,491 $ 3,894 $ 3,241
Reinsurance assumed .................................................................... 106 124 140
Reinsurance ceded ...................................................................... (108) (94) (58)
Policy charges and fees .............................................................. $ 4,489 $ 3,924 $ 3,323
Direct policyholder benefits .............................................................. $66,075 $24,638 $19,246
Reinsurance assumed .................................................................... 435 289 286
Reinsurance ceded ...................................................................... (1,379) (1,313) (1,247)
Policyholders’ benefits .............................................................. $65,131 $23,614 $18,285
Reinsurance recoverables at December 31, are as follows:
2012 2011
(in millions)
Individual and group annuities(1) ...................................................................... $ 631 $ 722
Life insurance ...................................................................................... 751 661
Other reinsurance ................................................................................... 155 148
Total reinsurance recoverable ..................................................................... $1,537 $1,531
(1) Primarily represents reinsurance recoverables established under the reinsurance arrangements associated with the acquisition of the retirement business
of CIGNA. The Company has recorded related reinsurance payables of $628 million and $713 million at December 31, 2012 and 2011, respectively.
Excluding the reinsurance recoverable associated with the acquisition of the retirement business of CIGNA, four major reinsurance
companies account for approximately 57% of the reinsurance recoverable at December 31, 2012. The Company periodically reviews the
financial condition of its reinsurers, amounts recoverable therefrom, and unearned reinsurance premium, in order to minimize its exposure
to loss from reinsurer insolvencies. If deemed necessary, the Company would secure collateral in the form of a trust, letter of credit, or
funds withheld arrangement to ensure collectability, otherwise, an allowance for uncollectible reinsurance would be recorded.
14. SHORT-TERM AND LONG-TERM DEBT
Short-term Debt
Short-term debt at December 31 is as follows:
2012 2011
(in millions)
Commercial paper:
Prudential Financial ............................................................................. $ 113 $ 296
Prudential Funding, LLC ......................................................................... 359 870
Subtotal commercial paper ............................................................................ 472 1,166
Other notes payable(1) ............................................................................... 100 209
Current portion of long-term debt(2) .................................................................... 1,912 961
Total short-term debt(3) ...................................................................... $2,484 $2,336
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight ................................................. $ 156 $ 545
Daily average commercial paper outstanding ......................................................... $1,194 $1,368
Weighted average maturity of outstanding commercial paper, in days ...................................... 21 21
Weighted average interest rate on outstanding short-term debt(4) ......................................... 0.28% 0.31%
(1) Includes collateralized borrowings from the Federal Home Loan Bank of New York of $100 million and $199 million at December 31, 2012 and 2011,
respectively, discussed in more detail below.
(2) Includes limited and non-recourse borrowings of Prudential Holdings, LLC attributable to the Closed Block Business of $75 million and $0 million at
December 31, 2012 and 2011, respectively
(3) Includes Prudential Financial debt of $1,847 million and $1,252 million at December 31, 2012 and 2011, respectively.
(4) Excludes the current portion of long-term debt.
156 Prudential Financial, Inc. 2012 Annual Report