The Hartford 2014 Annual Report Download - page 156

Table of Contents
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
The Retirement Plans business is included in the Talcott Resolution reporting segment. Retirement Plans total revenues were $706 and its net loss was $39
for the year ended December 31, 2012.
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On January 2, 2013, the Company completed the sale of its Individual Life insurance business to Prudential for consideration of $615 consisting primarily of
a ceding commission. The business sold included variable universal life, universal life, and term life insurance. The sale was structured as a reinsurance
transaction and resulted in a loss on business disposition consisting of a reinsurance loss partially offset by realized capital gains. The Company recognized a
reinsurance loss on business disposition of $533, pre-tax, which included a goodwill impairment charge of $342 and a loss accrual for premium deficiency of
$191, for the year ended December 31, 2012.
Upon closing the Company recognized an additional $940 in reinsurance loss on disposition offset by $940 in realized capital gains for a $0 impact on
income, pre-tax, for the year ended December 31, 2013. In addition, the Company reinsured $8.7 billion of policyholder liabilities and $5.3 billion of
separate account liabilities under indemnity reinsurance arrangements. The reinsurance transaction does not extinguish the Company's primary liability on
the insurance policies issued under the Individual Life business. The Company also transferred invested assets with a carrying value of $8.0 billion, exclusive
of $1.4 billion of assets supporting the modified coinsurance agreement, net of cash transferred in place of short-term investments, to Prudential and
recognized other non-cash decreases in assets totaling $1.8 billion relating to deferred acquisition costs, deferred income taxes, property and equipment and
other assets and other non-cash decreases in liabilities totaling $1.5 billion relating to other liabilities including the $191 loss accrual for premium
deficiency, associated with the disposition. The Company continued to sell life insurance products and riders during the transition period which ended on
June 30, 2014. Prudential has assumed all expenses and risk for these sales through the reinsurance agreement.
The Individual Life business is included in the Talcott Resolution reporting segment. Individual Life total revenues were $1.4 billion and its net loss was
$172 for the year ended December 31, 2012.
For additional information regarding business dispositions, see Note 9 - Goodwill of Notes to Consolidated Financial Statements.
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The following table summarizes invested assets transferred by the Company in 2013 in connection with the sale of the Retirement Plans and Individual Life
businesses.
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
Fixed maturities, at fair value (amortized cost of $13,916) [1] $ 15,349
Equity securities, AFS, at fair value (cost of $35) [2] 37
Fixed maturities, at fair value using the FVO [3] 16
Mortgage loans (net of allowances for loan losses of $1) 1,364
Policy loans, at outstanding balance 582
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[1] Includes $14.7 billion and $670 of securities in level 2 and 3 of the fair value hierarchy, respectively.
[2] All equity securities transferred are included in level 2 of the fair value hierarchy.
[3] All FVO securities transferred are included in level 3 of the fair value hierarchy.
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