The Hartford 2013 Annual Report Download - page 180

F-44
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, 2013 and 2012.
December 31, 2013 December 31, 2012
Fair Value
Hierarchy
Level Carrying Amount Fair Value Carrying Amount Fair Value
Assets
Policy loans Level 3 $ 1,420 $ 1,480 $ 1,997 $ 2,165
Mortgage loans Level 3 5,598 5,641 6,711 6,933
Liabilities
Other policyholder funds and benefits payable [1] Level 3 $ 9,152 $ 9,352 $ 9,558 $ 9,910
Senior notes [2] Level 2 5,206 5,845 5,706 7,071
Junior subordinated debentures [2] Level 2 1,100 1,271 1,100 1,265
Revolving Credit Facility Level 2 238 238 — —
Consumer notes [3] Level 3 82 82 159 159
[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, 2013 or December 31, 2012.
• 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.
Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. Fair Value Measurements (continued)