The Hartford 2008 Annual Report Download - page 417

policyholder also has the
option, after a specified time
period, to reset the GRB to the
then-current account value, if
greater. The notional value of
the embedded derivative is the
GRB balance. For a further
discussion, see the Derivative
Instruments section of Note 1.
GMWB reinsurance contracts
The Company has entered into
reinsurance arrangements to
offset a portion of its risk
exposure to the GMWB for the
remaining lives of covered
variable annuity contracts.
Reinsurance contracts covering
GMWB are accounted for as
free-standing derivatives. The
notional amount of the
reinsurance contracts is the
GRB amount. 11,437 6,579 1,302 128 1,073 127
GMWB hedging instruments
The Company enters into
derivative contracts to partially
economically hedge exposure
to the volatility associated with
the portion of the GMWB
liabilities which are not
reinsured. These derivative
contracts include customized
swaps, interest rate swaps and
futures, and equity swaps, put
and call options, and futures, on
certain indices including the
S&P 500 index, EAFE index,
and NASDAQ index. 18,620 21,357 2,664 642 3,374 257
F-55
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009