Aetna 2013 Annual Report Download - page 116

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Annual Report- Page 110
The changes in the balances of Level 3 financial assets during 2013 was as follows:
(Millions) Foreign
Securities
Commercial
Mortgage-
backed
Securities Equity
Securities Other Total
Beginning balance $ 52.7 $ 20.1 $ 22.1 $ 100.9 $ 195.8
Net realized and unrealized capital gains (losses):
Included in earnings .5 4.0 2.8 (3.7) 3.6
Included in other comprehensive income (3.4) (3.8) 21.2 (4.0) 10.0
Other (1) (.2) — 11.2 1.1 12.1
Purchases 41.5 3.1 13.0 31.9 89.5
Sales (27.2) (2.5) (26.1) (13.8) (69.6)
Settlements (5.4) (10.4) — (16.0) (31.8)
Transfers out of Level 3, net (14.6) (3.0) — (27.5) (45.1)
Ending balance $ 43.9 $ 7.5 $ 44.2 $ 68.9 $ 164.5
(1) Reflects realized and unrealized capital gains and losses on investments supporting our experience-rated and discontinued products,
which do not impact our operating results.
The change in the balance of Level 3 financial assets during 2012 was as follows:
(Millions) Foreign
Securities
Commercial
Mortgage-
backed
Securities Equity
Securities Other Total
Beginning balance $ 49.4 $ 29.5 $ 36.7 $ 103.4 $ 219.0
Net realized and unrealized capital gains (losses):
Included in earnings 1.6 3.0 .8 (1.0) 4.4
Included in other comprehensive income 2.9 (1.1) (.2) 4.7 6.3
Other (1) .7 — 7.5 .5 8.7
Purchases 50.0 5.1 7.2 25.6 87.9
Sales (36.2) (4.9) (12.2) (6.2) (59.5)
Settlements (1.2) (6.1) — (17.4) (24.7)
Transfers out of Level 3, net (14.5) (5.4) (17.7) (8.7) (46.3)
Ending balance $ 52.7 $ 20.1 $ 22.1 $ 100.9 $ 195.8
(1) Reflects realized and unrealized capital gains and losses on investments supporting our experience-rated and discontinued products,
which do not impact our operating results.
The total gross transfers into (out of) Level 3 during the years ended December 31, 2013 and 2012 were as follows:
(Millions) 2013 2012
Gross transfers into Level 3 $ 3.8 $ 1.8
Gross transfers out of Level 3 (48.9) (48.1)
Net transfers out of Level 3 $ (45.1) $ (46.3)
Gross transfers out of Level 3 during 2013 primarily related to securities of States, municipalities and political
subdivisions; U.S. corporate debt securities; and Foreign debt securities. The fair value of securities transferred out
of Level 3 had been based on broker quotes and is now based primarily on a matrix pricing model, which uses
quoted market prices of debt securities with similar characteristics. Gross transfers into Level 3 during 2013
primarily were due to quoted prices for certain securities no longer being available in active markets. Gross
transfers out of Level 3 during 2012 primarily relate to equity securities that were valued using quoted prices in an
active market and debt securities that were valued using observable inputs.