The Hartford 2012 Annual Report Download - page 186

Table of Contents
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

Financial Instruments Not Carried at Fair Value
The following table presents carrying amounts and fair values of The Hartford’s financial instruments not carried at fair value and not included in the above
fair value discussion as of December 31, 2012 and 2011.
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 
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











Policy loans Level 3 $1,997 $2,165 $2,001 $2,153
Mortgage loans Level 3 6,711 6,933 5,728 5,977

Other policyholder funds and benefits payable [1] Level 3 $9,558 $9,910 $10,343 $11,238
Senior notes [2] Level 2 5,706 7,071 4,481 4,623
Junior subordinated debentures [2] Level 2 1,100 1,265 500 498
Private placement junior subordinated debentures
[2] Level 3 — — 1,235 1,932
Consumer notes [3] Level 3 159 159 310 305
[1] Excludes guarantees on variable annuities, group accident and health and universal life insurance contracts, including corporate owned life
insurance.
[2] Included in long-term debt in the Consolidated Balance Sheets, except for current maturities, which are included in short-term debt.
[3] Excludes amounts carried at fair value and included in preceding disclosures.
The Company has not made any changes in its valuation methodologies for the following assets and liabilities during the years ended December 31, 2012 or
December 31, 2011.
•Fair value for policy loans and consumer notes were estimated using discounted cash flow calculations using current interest rates adjusted for estimated
loan durations.
•Fair values for mortgage loans were estimated using discounted cash flow calculations based on current lending rates for similar type loans. Current
lending rates reflect changes in credit spreads and the remaining terms of the loans.
•Fair values for other policyholder funds and benefits payable, not carried at fair value, are estimated based on the cash surrender values of the
underlying policies or by estimating future cash flows discounted at current interest rates adjusted for credit risk.
•Fair values for senior notes and junior subordinated debentures are determined using the market approach based on reported trades, benchmark interest
rates and issuer spread for the Company which may consider credit default swaps.
•Fair values for private placement junior subordinated debentures are based primarily on market quotations from independent third party brokers.
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