The Hartford 2010 Annual Report Download - page 192

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
F-64
9. Separate Accounts, Death Benefits and Other Insurance Benefit Features (continued)
The following table provides details concerning GMDB and GMIB exposure as of December 31, 2010:
Individual Variable and Group Annuity Account Value by GMDB/GMIB Type
Maximum anniversary value (“MAV”) [1]
Account
Value
(“AV”)
Net Amount
at Risk
(“NAR”) [10]
Retained Net
Amount
at Risk
(“RNAR”) [10]
Weighted Avera
g
e
Attained Age of
Annuitant
MAV only $ 25,546 $ 5,526
$
1,327 68
With 5% rollup [2] 1,752 472 160 68
With Earnings Protection Benefit Rider (EPB) [3] 6,524 883 99 64
With 5% rollup & EPB 724 157 33 67
Total MAV 34,546 7,038 1,619
Asset Protection Benefit (APB) [4] 27,840 2,703 1,736 65
Lifetime Income Benefit (LIB) - Death Benefit [5] 1,319 88 88 63
Reset [6] (5-7 years) 3,699 243 241 68
Return of Premium (“ROP”) [7] /Other 23,427 674 647 65
Subtotal U.S. GMDB [8] $ 90,831 $ 10,746
$
4,331 66
Less: General Account Value with U.S. GMDB 6,865
Subtotal Separate Account Liabilities with GMDB 83,966
Separate Account Liabilities without U.S. GMDB 75,776
Total Separate Account Liabilities $ 159,742
Japan GMDB [9], [11] $ 31,249 $ 8,847
$
7,593 69
Japan GMIB [9], [11] $ 28,835 5,777 5,777 69
[1] MAV GMDB is the greatest of current AV, net premiums paid and the highest AV on any anniversary before age 80 (adjusted for withdrawals).
[2] Rollup GMDB is the greatest of the MAV, current AV, net premium paid and premiums (adjusted for withdrawals) accumulated at generally 5%
simple interest up to the earlier of age 80 or 100% of adjusted premiums.
[3] EPB GMDB is the greatest of the MAV, current AV, or contract value plus a percentage of the contract’s growth. The contract’s growth is AV
less premiums net of withdrawals, subject to a cap of 200% of premiums net of withdrawals.
[4] APB GMDB is the greater of current AV or MAV, not to exceed current AV plus 25% times the greater of net premiums and MAV (each adjusted
for premiums in the past 12 months).
[5] LIB GMDB is the greatest of current AV, net premiums paid, or for certain contracts a benefit amount that ratchets over time, generally based
on market performance.
[6] Reset GMDB is the greatest of current AV, net premiums paid and the most recent five to seven year anniversary AV before age 80 (adjusted for
withdrawals).
[7] ROP GMDB is the greater of current AV and net premiums paid.
[8] AV includes the contract holder’s investment in the separate account and the general account.
[9] GMDB includes a ROP and MAV (before age 80) paid in a single lump sum. GMIB is a guarantee to return initial investment, adjusted for
earnings liquidity, which allows for free withdrawal of earnings, paid through a fixed payout annuity, after a minimum deferral period of 10, 15
or 20 years. The GRB related to the Japan GMIB was $33.9 billion and $28.6 billion as of December 31, 2010 and December 31, 2009,
respectively. The GRB related to the Japan GMAB and GMWB was $707 and $648 as of December 31, 2010 and December 31, 2009,
respectively. These liabilities are not included in the Separate Account as they are not legally insulated from the general account liabilities of the
insurance enterprise. As of December 31, 2010, 54% of RNAR is reinsured to a Hartford affiliate.
[10] NAR is defined as the guaranteed benefit in excess of the current AV for all accounts that are in the money. RNAR represents NAR reduced for
reinsurances. NAR and RNAR are highly sensitive to equity markets movements and increase when equity markets declines.
[11] Policies with a guaranteed living benefit (GMIB in Japan) also have a guaranteed death benefit. The NAR for each benefit is shown in the table
above, however these benefits are not additive. When a policy terminates due to death, any NAR related to GMWB or GMIB is released.
Similarly, when a policy goes into benefit status on a GMWB or GMIB, its GMDB NAR is released.
In the U.S. , account balances of contracts with guarantees were invested in variable separate accounts as follows:
Asset type As of December 31, 2010 As of December 31, 2009
Equity securities (including mutual funds) [1] $ 75,601 $ 75,720
Cash and cash equivalents 8,365 9,298
Total $ 83,966 $ 85,018
[1} As of December 31, 2010 and December 31, 2009, approximately 15% and 16%, respectively, of the equity securities above were invested in
fixed income securities through these funds and approximately 85% and 84%, respectively, were invested in equity securities.
See Note 4a for further information on guaranteed living benefits that are accounted for at fair value, such as GMWB.