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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions	12 Months Ended
Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Revenues
Property-liability insurance premiums (net of reinsurance ceded of $1,056, $1,139 and $1,356)	$ 26,194	$ 26,967	$ 27,233
Life and annuity premiums and contract charges (net of reinsurance ceded of $838, $900 and $966)	1,958	1,895	1,866
Net investment income	4,444	5,622	6,435
Realized capital gains and losses:
Total other-than-temporary impairment losses	(2,376)	(3,735)	(310)
Portion of loss recognized in other comprehensive income	457
Net other-than-temporary impairment loss recognized in earnings	(1,919)	(3,735)	(310)
Sales and other realized capital gains and losses	1,336	(1,355)	1,545
Total realized capital gains and losses	(583)	(5,090)	1,235
Total revenues	32,013	29,394	36,769
Costs and expenses
Property-liability insurance claims and claims expense (net of reinsurance ceded of $415, $620 and $370)	18,746	20,064	17,667
Life and annuity contract benefits (net of reinsurance ceded of $642, $1,150 and $671)	1,617	1,612	1,589
Interest credited to contractholder funds (net of reinsurance ceded of $32, $43 and $48)	2,126	2,411	2,681
Amortization of deferred policy acquisition costs	4,754	4,679	4,704
Operating costs and expenses	3,007	3,273	3,103
Restructuring and related charges	130	23	29
Interest expense	392	351	333
Total costs and expenses	30,772	32,413	30,106
Gain (loss) on disposition of operations	7	(6)	(10)
Income (loss) from operations before income tax expense (benefit)	1,248	(3,025)	6,653
Income tax expense (benefit)	394	(1,346)	2,017
Net income (loss)	$ 854	$ (1,679)	$ 4,636
Earnings per share:
Net income (loss) per share - Basic (in dollars per share)	$ 1.58	$ (3.06)	$ 7.80
Weighted average shares - Basic (in shares)	539.6	548.3	594.2
Net income (loss) per share - Diluted (in dollars per share)	$ 1.58	$ (3.06)	$ 7.76
Weighted average shares - Diluted (in shares)	540.9	548.3	597.5
Cash dividends declared (in dollars per share)	$ 0.80	$ 1.64	$ 1.52

Investments

12 Months Ended

Dec. 31, 2009

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. Investments

Fair values

The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows:

($ in millions)				Gross unrealized

($ in millions)		Amortized cost		Gross unrealized					Fair value
		Amortized cost		Gains		Losses			Fair value
At December 31, 2009
U.S. government and agencies		$	7,333	$	219	$	(16	)	$	7,536
Municipal			21,683		537		(940	)		21,280
Corporate			32,770		1,192		(847	)		33,115
Foreign government			2,906		306		(15	)		3,197
RMBS			9,487		130		(1,630	)		7,987
CMBS			3,511		30		(955	)		2,586
ABS			3,514		62		(550	)		3,026
Redeemable preferred stock			39		1		(1	)		39

	Total fixed income securities	$	81,243	$	2,477	$	(4,954	)	$	78,766

At December 31, 2008
U.S. government and agencies		$	3,272	$	963	$	(1	)	$	4,234
Municipal			23,565		467		(2,184	)		21,848
Corporate			31,040		463		(3,876	)		27,627
Foreign government			2,206		544		(75	)		2,675
RMBS			8,010		93		(1,538	)		6,565
CMBS			5,840		10		(2,004	)		3,846
ABS			3,135		5		(1,353	)		1,787
Redeemable preferred stock			36		—		(10	)		26

	Total fixed income securities	$	77,104	$	2,545	$	(11,041	)	$	68,608

Scheduled maturities

The scheduled maturities for fixed income securities are as follows at December 31, 2009:

($ in millions)		Amortized cost		Fair value

Due in one year or less		$	2,264	$	2,282
Due after one year through five years			23,558		24,096
Due after five years through ten years			14,667		15,120
Due after ten years			27,753		26,255

			68,242		67,753
RMBS and ABS			13,001		11,013

	Total	$	81,243	$	78,766

Actual maturities may differ from those scheduled as a result of prepayments by the issuers. Because of the potential for prepayment on RMBS and ABS, they are not categorized by contractual maturity. The CMBS are categorized by contractual maturity because they generally are not subject to prepayment risk.

Net investment income

Net investment income for the years ended December 31 is as follows:

($ in millions)			2009			2008			2007

Fixed income securities			$	3,998		$	4,783		$	5,459
Equity securities				80			120			114
Mortgage loans				498			618			600
Limited partnership interests				17			62			293
Short-term investments				27			195			221
Other				(10	)		54			191

	Investment income, before expense			4,610			5,832			6,878
	Investment expense			(166	)		(210	)		(443	)

		Net investment income	$	4,444		$	5,622		$	6,435

Realized capital gains and losses

Realized capital gains and losses by security type for the years ended December 31 are as follows:

($ in millions)		2009			2008			2007

Fixed income securities		$	(302	)	$	(2,781	)	$	(126	)
Equity securities			181			(1,149	)		1,086
Mortgage loans			(144	)		(94	)		(1	)
Limited partnership interests			(446	)		(194	)		225
Derivatives			206			(821	)		62
Other			(78	)		(51	)		(11	)

	Realized capital gains and losses	$	(583	)	$	(5,090	)	$	1,235

Realized capital gains and losses by transaction type for the years ended December 31 are as follows:

($ in millions)	2009			2008			2007

Impairment write-downs ⁽¹⁾	$	(1,562	)	$	(1,983	)	$	(163	)
Change in intent write-downs ⁽²⁾		(357	)		(1,752	)		(147	)

Net OTTI losses recognized in earnings		(1,919	)		(3,735	)		(310	)
Sales		1,272			(464	)		1,483
Valuation of derivative instruments		367			(1,280	)		(77	)
Settlements of derivative instruments		(162	)		486			139
EMA LP income ⁽³⁾		(141	)		(97	)		—

Realized capital gains and losses	$	(583	)	$	(5,090	)	$	1,235

(1): Beginning April 1, 2009 for fixed income securities, impairment write-downs reflect the credit loss component of issue specific other-than-temporary declines in fair value where the amortized cost basis is not expected to be entirely recovered. For periods prior to April 1, 2009 for fixed income securities and all periods for equity securities, impairment write-downs reflect issue specific other-than-temporary declines in fair value, including instances where the Company could not reasonably assert that the recovery period would be temporary.
(2): Beginning April 1, 2009 for fixed income securities, change in intent write-downs reflect instances where the Company has made a decision to sell the security or it is more likely than not the Company will be required to sell the security before recovery of its amortized cost basis. For periods prior to April 1, 2009 for fixed income securities and all periods for equity securities, change in intent write-downs reflect instances where the Company could not assert a positive intent to hold until recovery.
(3): Beginning in the fourth quarter of 2008, income from EMA LP is reported in realized capital gains and losses. EMA LP income for periods prior to the fourth quarter of 2008 is reported in net investment income.

Gross gains of $1.21 billion, $718 million and $268 million and gross losses of $373 million, $485 million and $293 million were realized on sales of fixed income securities during 2009, 2008 and 2007, respectively.

Other-than-temporary impairment losses by asset type for the year ended December 31, 2009 are as follows:

($ in millions)			Total			Included in OCI			Net

Fixed income securities:
	Municipal		$	(140	)	$	(10	)	$	(130	)
	Corporate			(213	)		13			(226	)
	Foreign government			(17	)		—			(17	)
	RMBS			(672	)		(384	)		(288	)
	CMBS			(411	)		(102	)		(309	)
	ABS			(208	)		26			(234	)

		Total fixed income securities		(1,661	)		(457	)		(1,204	)
Equity securities				(264	)		—			(264	)
Mortgage loans				(103	)		—			(103	)
Limited partnership interests				(308	)		—			(308	)
Other				(40	)		—			(40	)

		Other-than-temporary impairment losses	$	(2,376	)	$	(457	)	$	(1,919	)

The total amount of other-than-temporary impairment losses included in accumulated other comprehensive income for fixed income securities at December 31, 2009, which were not included in earnings, are presented in the following table. The amount excludes $192 million of net unrealized gains related to changes in valuation of the fixed income securities subsequent to the impairment measurement date.

($ in millions)

Municipal		$	(10	)
Corporate			(51	)
RMBS			(594	)
CMBS			(127	)
ABS			(89	)

	Total	$	(871	)

A rollforward of the amount recognized in earnings related to credit losses for fixed income securities is presented in the following table.

($ in millions)

Beginning balance of cumulative credit loss for securities held at April 1, 2009	$	(1,357	)
Additional credit loss for securities previously other-than-temporarily impaired		(136	)
Additional credit loss for securities not previously other-than-temporarily impaired		(518	)
Reduction in credit loss for securities disposed or collected		824
Reduction in credit loss for securities other-than-temporarily impaired to fair value		—
Change in credit loss due to accretion of increase in cash flows and time value of cash flows for securities previously other-than-temporarily impaired		—

Ending balance at December 31, 2009	$	(1,187	)

The Company uses its best estimate of future cash flows expected to be collected from the fixed income security discounted at the security's original or current effective rate, as appropriate, to calculate a recovery value and determine whether a credit loss exists. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of cash flows expected to be collected. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, foreign exchange rates, the financial condition of the iss ue or issuer(s), expected defaults, expected recoveries, the value of underlying collateral and current subordination levels, vintage, geographic concentration, available reserves or escrows, third party guarantees and other credit enhancements. Additionally, other information, such as industry analyst reports and forecasts, sector credit ratings, financial condition of the bond insurer for insured fixed income securities, and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral may be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement. If the estimated recovery value is less than the amortized cost of the security, a credit loss exists and an other-than-temporary impairment for the difference between the estimated recovery value and amortized cost is recorded in earnings. The unrealized loss deemed to be related to factors other t han credit remains classified in OCI. If the Company determines that the fixed income security does not have sufficient cash flow or other information to determine a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and is recorded in earnings.

Unrealized net capital gains and losses

Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows:

						Gross unrealized

			Fair value			Gross unrealized					Unrealized net gains (losses)
($ in millions) At December 31, 2009			Fair value			Gains		Losses			Unrealized net gains (losses)
Fixed income securities ⁽¹⁾			$	78,766		$	2,477	$	(4,954	)	$	(2,477	)
Equity securities				5,024			381		(202	)		179
Short-term investments				3,056			—		—			—
Derivative instruments ⁽²⁾				(20	)		2		(25	)		(23	)

	Unrealized net capital gains and losses, pre-tax											(2,321	)
Amounts recognized for:
	Insurance reserves ⁽³⁾											—
	DAC and DSI ⁽⁴⁾											990

		Amounts recognized										990
	Deferred income taxes											461

	Unrealized net capital gains and losses, after-tax										$	(870	)

(1): Unrealized net capital gains and losses for fixed income securities as of December 31, 2009 comprises $(679) million related to unrealized net capital losses on fixed income securities with OTTI and $(1,798) million related to other unrealized net capital gains and losses.
(2): Included in the fair value of derivative securities are $(2) million classified as assets and $18 million classified as liabilities.
(3): The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although the Company evaluates premium deficiencies on the combined performance of life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to annuity buy-outs and certain payout annuities with life contingencies.
(4): The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.

					Gross unrealized

			Fair value		Gross unrealized					Unrealized net gains (losses)
At December 31, 2008			Fair value		Gains		Losses			Unrealized net gains (losses)
Fixed income securities			$	68,608	$	2,545	$	(11,041	)	$	(8,496	)
Equity securities				2,805		112		(444	)		(332	)
Short-term investments				8,906		4		(1	)		3
Derivative instruments ⁽¹⁾				15		25		(14	)		11

	Unrealized net capital gains and losses, pre-tax										(8,814	)
Amounts recognized for:
	Insurance reserves										(378	)
	DAC and DSI										3,500

		Amounts recognized									3,122
	Deferred income taxes										1,954

	Unrealized net capital gains and losses, after-tax									$	(3,738	)

(1): Included in the fair value of derivative securities are $4 million classified as assets and $(11) million classified as liabilities.

Change in unrealized net capital gains and losses

The change in unrealized net capital gains and losses for the years ended December 31 is as follows:

($ in millions)			2009			2008			2007

Fixed income securities			$	6,019		$	(9,452	)	$	(1,584	)
Equity securities				511			(1,322	)		(761	)
Short-term investments				(3	)		3			—
Derivative instruments				(34	)		44			(16	)

		Total		6,493			(10,727	)		(2,361	)
Amounts recognized for:
	Insurance reserves			378			681			70
	DAC and DSI			(2,510	)		2,988			467

		(Decrease) increase in amounts recognized		(2,132	)		3,669			537
	Deferred income taxes			(1,493	)		2,432			638

	Increase (decrease) in unrealized net capital gains and losses		$	2,868		$	(4,626	)	$	(1,186	)

Portfolio monitoring

The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income and equity security whose carrying value may be other-than-temporarily impaired.

For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made a decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, the security's decline in fair value is deemed other than temporary and is recorded in earnings.

If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates if it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security by comparing the estimated recovery value calculated by discounting the best estimate of future cash flows at the security's original or current effective rate, as appropriate, with the amortized cost of the security. If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, the credit loss component of the impairment is recorded in earnings, with the remaining amount of the unrealized loss deemed to be related to other factors and recognized in OCI.

For equity securities, the Company considers various factors, including whether the Company has the intent and ability to hold the equity security for a period of time sufficient to recover its cost basis. Where the Company lacks the intent and ability to hold to recovery, or believes the recovery period is extended, the equity security's decline in fair value is considered other than temporary and is recorded in earnings. For equity securities managed by a third party, the Company has contractually retained its decision making authority as it pertains to selling equity securities that are in an unrealized loss position.

The Company's portfolio monitoring process includes a quarterly review of all securities through a screening process which identifies instances where the fair value compared to amortized cost for fixed income securities and cost for equity securities is below established thresholds, and also includes the monitoring of other criteria such as ratings, ratings downgrades or payment defaults. The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential other-than-temporary impairment using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company's evaluation of other-than-temporary impairment for these fixed income and equity securities are assumptions and estimates about the financial condition of the issue or issuer and its future earn ings potential. Some of the factors considered in evaluating whether a decline in fair value is other than temporary are: 1) the length of time and extent to which the fair value has been less than amortized cost for fixed income securities, or cost for equity securities; 2) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; and 3) the specific reasons that a security is in a significant unrealized loss position, including overall market conditions which could affect liquidity.

The following table summarizes the gross unrealized losses and fair value of fixed income and equity securities by the length of time that individual securities have been in a continuous unrealized loss position.

($ in millions)			Less than 12 months							12 months or more

			Number of issues		Fair value		Unrealized losses			Number of issues		Fair value		Unrealized losses			Total unrealized losses
At December 31, 2009
Fixed income securities
	U.S. government and agencies			38	$	3,523	$	(16	)		—	$	—	$	—		$	(16	)
	Municipal			761		3,646		(123	)		747		5,024		(817	)		(940	)
	Corporate			399		5,072		(178	)		421		5,140		(669	)		(847	)
	Foreign government			50		505		(15	)		1		1		—			(15	)
	RMBS			387		1,092		(23	)		453		2,611		(1,607	)		(1,630	)
	CMBS			25		232		(4	)		259		1,790		(951	)		(955	)
	ABS			39		352		(20	)		173		1,519		(530	)		(550	)
	Redeemable preferred stock			1		—		—			1		21		(1	)		(1	)

		Total fixed income securities (1)		1,700		14,422		(379	)		2,055		16,106		(4,575	)		(4,954	)
Equity securities				1,665		1,349		(113	)		28		450		(89	)		(202	)

		Total fixed income and equity securities		3,365	$	15,771	$	(492	)		2,083	$	16,556	$	(4,664	)	$	(5,156	)

Investment grade fixed income securities				1,587	$	13,891	$	(293	)		1,561	$	13,127	$	(2,848	)	$	(3,141	)
Below investment grade fixed income securities				113		531		(86	)		494		2,979		(1,727	)		(1,813	)

		Total fixed income securities		1,700	$	14,422	$	(379	)		2,055	$	16,106	$	(4,575	)	$	(4,954	)

At December 31, 2008
Fixed income securities
	U.S. government and agencies			5	$	230	$	(1	)		—	$	—	$	—		$	(1	)
	Municipal			2,648		11,981		(1,983	)		117		598		(201	)		(2,184	)
	Corporate			1,632		14,827		(2,050	)		448		4,504		(1,826	)		(3,876	)
	Foreign government			58		349		(63	)		3		13		(12	)		(75	)
	RMBS			465		1,875		(457	)		317		1,685		(1,081	)		(1,538	)
	CMBS			295		2,729		(797	)		179		899		(1,207	)		(2,004	)
	ABS			81		551		(124	)		181		1,092		(1,229	)		(1,353	)
	Redeemable preferred stock			3		17		(10	)		1		1		—			(10	)

		Total fixed income securities		5,187		32,559		(5,485	)		1,246		8,792		(5,556	)		(11,041	)
Equity securities				325		1,897		(398	)		10		53		(46	)		(444	)

		Total fixed income and equity securities		5,512	$	34,456	$	(5,883	)		1,256	$	8,845	$	(5,602	)	$	(11,485	)

Investment grade fixed income securities				4,687	$	30,484	$	(4,813	)		1,081	$	7,988	$	(4,961	)	$	(9,774	)
Below investment grade fixed income securities				500		2,075		(672	)		165		804		(595	)		(1,267	)

		Total fixed income securities		5,187	$	32,559	$	(5,485	)		1,246	$	8,792	$	(5,556	)	$	(11,041	)

(1): Gross unrealized losses resulting from factors other than credit on fixed income securities with other-than-temporary impairments for which the Company has recorded a credit loss in earnings total $20 million for the less than 12 month category and $729 million for the 12 months or greater category.

As of December 31, 2009, $1.55 billion of unrealized losses are related to securities with an unrealized loss position less than 20% of cost or amortized cost, the degree of which suggests that these securities do not pose a high risk of being other-than-temporarily impaired. Of the $1.55 billion, $1.20 billion are related to unrealized losses on investment grade fixed income securities. Investment grade is defined as a security having a rating of Aaa, Aa, A or Baa from Moody's, a rating of AAA, AA, A or BBB from S&P, Fitch, Dominion or Realpoint, a rating of aaa, aa, a or bbb from A.M. Best, or a comparable internal rating if an externally provided rating is not available, which is consistent with the National Association of Insurance Commissioners ("NAIC") rating. Unrealized losses on investment grade securit ies are principally related to rising interest rates or changes in credit spreads since the securities were acquired.

As of December 31, 2009, the remaining $3.61 billion of unrealized losses are related to securities in unrealized loss positions greater than or equal to 20% of cost or amortized cost. Investment grade securities comprising $1.94 billion of these unrealized losses were evaluated based on factors such as discounted cash flows, the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations, such as recent financings or bank loans, cash flows from operations, collateral or the position of a subsidiary with respect to its parent's bankruptcy. Of the $3.61 billion, $1.63 billion are related to below investment grade fixed income securities and $35 million are related to equity securities. Of these amounts, $1.47 amp;nbsp;billion of the below investment grade fixed income securities had been in an unrealized loss position for a period of twelve or more consecutive months as of Decembernbsp;31, 2009. Unrealized losses on below investment grade securities are principally related to RMBS, ABS and CMBS and were the result of wider credit spreads than at initial purchase which was largely due to the impact of macroeconomic conditions and credit market deterioration on real estate valuations. Securities in an unrealized loss position were evaluated based on discounted cash flows and credit ratings, as well as the performance of the underlying collateral relative to the securities' positions in the securities' respective capital structure. RMBS and ABS in an unrealized loss position were evaluated with credit enhancements from bond insurers where applicable. Municipal bonds in an unrealized loss position were evaluated based on the quality of the underlying security, as well as with credit enhancements from bond insure rs, where applicable. Unrealized losses on equity securities are primarily related to equity market fluctuations. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;As of Decembernbsp;31, 2009, the Company has not made a decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis. As of Decembernbsp;31, 2009, the Company had the intent and ability to hold the equity securities with unrealized losses for a period of time sufficient for them to recover./font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"bLimited partnership impairment /b/font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;As of Decembernbsp;31, 2009 and 2008, the carrying value of equity method limited partnership interests totaled $1.64nbsp;billion and $1.56nbsp;billion, respectively. The Company recognizes a loss in value for equity method investments when evidence demonstrates that it is other-than-temporarily impaired. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain an earnings potential that would justify the carrying amount of the investment. In 2009, 2008 and 2007, the Company had write-downs of $11nbsp;million, $29nbsp;million and $18nbsp;million, respectively, related to equity method limited partnership interests. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;As of Decembernbsp;31, 2009 and 2008, the carrying value for cost method limited partnership interests was $1.10nbsp;billion and $1.23nbsp;billion, respectively, which primarily included limited partnership interests in fund investments. The fair value for cost method investments is estimated to be equivalent to the reported net asset value of the underlying funds. To determine if an other-than-temporary impairment has occurred, the Company evaluates whether an impairment indicator has occurred in the period that may have a significant adverse effect on the carrying value of the investment. Impairment indicators may include: actual recent cash flows received being significantly less than expected cash flows; reduced valuations based on financing completed at a lower value; completed sale of a material underlying investment at a price significantly lower than expected; significantly reduced valuations of the investments held by limited partnerships; or any other adverse events since the last financial statements received that might affect the fair value of the investee's capital. Additionally, the Company uses a screening process to identify those investments whose net asset value is below established thresholds for certain periods of time, and investments that are performing below expectations, for further consideration. In 2009, 2008 and 2007, the Company had write-downs of $297nbsp;million, $83nbsp;million and $6nbsp;million, respectively, related to cost method investments that were other-than-temporarily impaired./font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"bMortgage loan impairment /b/font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;A mortgage loan is impaired when it is probable that the Company will not collect the contractual principal and interest. The net carrying value of impaired loans at Decembernbsp;31, 2009 and 2008 was $409nbsp;million and $163nbsp;million, respectively. Total valuation allowances of $95nbsp;million and $4nbsp;million were held on impaired loans at Decembernbsp;31, 2009 and 2008, respectively. The Company recognized $97nbsp;million and $4nbsp;million of realized capital losses related to increases in the valuation allowances on impaired loans for the years ended Decembernbsp;31, 2009 and 2008, respectively. There were no valuation allowances prior to Decembernbsp;31, 2008. Realized capital losses recognized on mortgage loans held for sale totaled $6nbsp;million, $74nbsp;million and $30nbsp;million fo r the years ended Decembernbsp;31, 2009, 2008 and 2007 respectively. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;Interest income for impaired loans is recognized on an accrual basis if payments are expected to continue to be received. Accrual of income is suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable. The Company recognized interest income on impaired loans of $7nbsp;million, $6nbsp;million and $0.2nbsp;million during 2009, 2008 and 2007, respectively. The average balance of impaired loans was $327nbsp;million, $44nbsp;million and $3nbsp;million during 2009, 2008 and 2007, respectively./font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"bInvestment concentration for municipal bond and commercial mortgage portfolios/b/font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The Company maintains a diversified portfolio of municipal bonds. The following table shows the principal geographic distribution of municipal bond issuers represented in the Company's portfolio. No other state represents more than 5% of the portfolio at Decembernbsp;31. /font/p div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 25%; WIDTH: 50%; PADDING-TOP: 0pt; POSITION: relative" p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"!-- COMMAND=ADD_TABLEWIDTH,"100%" --/font/p !-- User-specified TAGGED TABLE -- div align="center" table cellspacing="0" cellpadding="0" width="100%" border="0" tr style="HEIGHT: 0px"!-- TABLE COLUMN WIDTHS SET -- td style="FONT-FAMILY: arial" align="left"/td td style="FONT-FAMILY: arial" width="12"/td td style="FONT-FAMILY: arial" align="right" width="6"/td td style="FONT-FAMILY: arial" width="65"/td td style="FONT-FAMILY: arial" width="12"/td td style="FONT-FAMILY: arial" align="right" width="6"/td td style="FONT-FAMILY: arial" width="65"/td td style="FONT-FAMILY: arial" width="12"/td!-- TABLE COLUMN WIDTHS END --/tr tr style="HEIGHT: 0px" valign="bottom" th style="FONT-FAMILY: arial" align="left"font size="2"b(%nbsp;ofnbsp;municipalnbsp;bondnbsp;portfolionbsp;carryingnbsp;value)/b/fontbr //th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" align="center" colspan="2"font size="2"b2009 /b/font/th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" align="center" colspan="2"font size="2"b2008 /b/font/th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"California/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"13.3/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"12.1/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Texas/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"8.9/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"10.3/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Florida/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"5.9/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"5.5/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Illinois/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"5.3/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"4.7/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr/table/div !-- end of user-specified TAGGED TABLE --/div p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The Company's mortgage loans are collateralized by a variety of commercial real estate property types located throughout the United States. Substantially all of the commercial mortgage loans are non-recourse to the borrower. The following table shows the principal geographic distribution of commercial real estate represented in the Company's mortgage portfolio. No other state represented more than 5% of the portfolio at Decembernbsp;31. /font/p div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 25%; WIDTH: 50%; PADDING-TOP: 0pt; POSITION: relative" p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"!-- COMMAND=ADD_TABLEWIDTH,"100%" --/font/p !-- User-specified TAGGED TABLE -- div align="center" table cellspacing="0" cellpadding="0" width="100%" border="0" tr style="HEIGHT: 0px"!-- TABLE COLUMN WIDTHS SET -- td style="FONT-FAMILY: arial" align="left"/td td style="FONT-FAMILY: arial" width="12"/td td style="FONT-FAMILY: arial" align="right" width="6"/td td style="FONT-FAMILY: arial" width="65"/td td style="FONT-FAMILY: arial" width="12"/td td style="FONT-FAMILY: arial" align="right" width="6"/td td style="FONT-FAMILY: arial" width="65"/td td style="FONT-FAMILY: arial" width="12"/td!-- TABLE COLUMN WIDTHS END --/tr tr style="HEIGHT: 0px" valign="bottom" th style="FONT-FAMILY: arial" align="left"font size="2"b(% of commercial mortgage portfolio carrying value)/b/fontbr //th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" align="center" colspan="2"font size="2"b2009 /b/font/th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" align="center" colspan="2"font size="2"b2008 /b/font/th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"California/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"22.6/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"20.6/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Illinois/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"9.4/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"9.2/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"New York/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"6.3/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"5.7/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Pennsylvania/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"6.0/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"6.2/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"New Jersey/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"5.9/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"6.1/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Texas/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"5.0/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"7.0/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr/table/div !-- end of user-specified TAGGED TABLE --/div p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The types of properties collateralizing the commercial mortgage loans at Decembernbsp;31 are as follows: /font/p div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 25%; WIDTH: 50%; PADDING-TOP: 0pt; POSITION: relative" p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"!-- COMMAND=ADD_TABLEWIDTH,"100%" --/font/p !-- User-specified TAGGED TABLE -- div align="center" table cellspacing="0" cellpadding="0" width="100%" border="0" tr style="HEIGHT: 0px"!-- TABLE COLUMN WIDTHS SET -- td style="FONT-FAMILY: arial" align="left" width="10"/td td style="FONT-FAMILY: arial" align="left"/td td style="FONT-FAMILY: arial" width="12"/td td style="FONT-FAMILY: arial" align="right" width="6"/td td style="FONT-FAMILY: arial" width="65"/td td style="FONT-FAMILY: arial" width="12"/td td style="FONT-FAMILY: arial" align="right" width="6"/td td style="FONT-FAMILY: arial" width="65"/td td style="FONT-FAMILY: arial" width="12"/td!-- TABLE COLUMN WIDTHS END --/tr tr style="HEIGHT: 0px" valign="bottom" th style="FONT-FAMILY: arial" align="left" colspan="2"font size="2"b(%nbsp;ofnbsp;commercialnbsp;mortgagenbsp;portfolionbsp;carryingnbsp;value)/b/fontbr //th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" align="center" colspan="2"font size="2"b2009 /b/font/th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" align="center" colspan="2"font size="2"b2008 /b/font/th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Office buildings/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"35.3/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"32.4/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Retail/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"24.2/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"24.3/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Warehouse/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"23.2/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"23.0/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Apartment complex/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"11.9/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"15.5/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Other/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"5.4/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"4.8/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial"font size="0"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Total/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"100.0/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"100.0/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td/tr tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td/tr/table/div !-- end of user-specified TAGGED TABLE --/div p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The contractual maturities of the commercial mortgage loan portfolio as of Decembernbsp;31, 2009 for loans that were not in foreclosure are as follows: /font/p div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 25%; WIDTH: 50%; PADDING-TOP: 0pt; POSITION: relative" p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"!-- COMMAND=ADD_TABLEWIDTH,"100%" --/font/p !-- User-specified TAGGED TABLE -- div align="center" table cellspacing="0" cellpadding="0" width="100%" border="0" tr style="HEIGHT: 0px"!-- TABLE COLUMN WIDTHS SET -- td style="FONT-FAMILY: arial" align="left" width="10"/td td style="FONT-FAMILY: arial" align="left"/td td style="FONT-FAMILY: arial" width="12"/td td style="FONT-FAMILY: arial" align="right" width="6"/td td style="FONT-FAMILY: arial" width="65"/td td style="FONT-FAMILY: arial" width="12"/td td style="FONT-FAMILY: arial" align="right" width="6"/td td style="FONT-FAMILY: arial" width="65"/td td style="FONT-FAMILY: arial" width="12"/td td style="FONT-FAMILY: arial" align="right" width="6"/td td style="FONT-FAMILY: arial" width="65"/td td style="FONT-FAMILY: arial" width="12"/td!-- TABLE COLUMN WIDTHS END --/tr tr style="HEIGHT: 0px" valign="bottom" th style="FONT-FAMILY: arial" align="left" colspan="2"font size="2"b($ in millions)br / nbsp;/b/fontbr //th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" align="center" colspan="2"font size="2"bNumber ofbr / loans /b/font/th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" align="center" colspan="2"font size="2"bCarryingbr / value /b/font/th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" align="center" colspan="2"font size="2"bPercent /b/font/th th style="FONT-FAMILY: arial"font size="2"nbsp;/font/th/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"2010/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"78/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"$/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"959/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"12.2/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"2011/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"82/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"1,144/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"14.5/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"2012/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"98/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"1,115/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"14.1/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"2013/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"73/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"676/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"8.6/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Thereafter/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"394/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"3,988/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"50.6/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td/tr tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td/tr tr style="HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial"font size="0"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" p style="MARGIN-LEFT: 10pt; TEXT-INDENT: -10pt; FONT-FAMILY: arial"font size="2"Total/font/p/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"725/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"$/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"7,882/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"nbsp;/font/td td style="FONT-FAMILY: arial" valign="bottom" align="right"font size="2"100.0/font/td td style="FONT-FAMILY: arial" valign="bottom"font size="2"%/font/td/tr tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top" td style="FONT-FAMILY: arial" valign="bottom" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: arial" valign="bottom" align="right" colspan="2"nbsp;/td td style="FONT-FAMILY: arial" valign="bottom"nbsp;/td/tr/table/div !-- end of user-specified TAGGED TABLE --/div p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;In 2009, $853nbsp;million of commercial mortgage loans were contractually due. Of these, 67% were paid as due, 23% were extended generally for less than one year, 9% have been refinanced and 1% were foreclosed or in the process of foreclosure. As of Decembernbsp;31, 2009, the Company has five loans totaling $49nbsp;million that are in foreclosure. Additionally, the Company has $72nbsp;million of delinquent loans that are not in the process of foreclosure. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"bConcentration of credit risk /b/font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;At Decembernbsp;31, 2009, the Company is not exposed to any credit concentration risk of a single issuer and its affiliates greater than 10% of the Company's shareholders' equity./font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"bSecurities loaned /b/font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The Company's business activities include securities lending programs with third parties, mostly large banks. At Decembernbsp;31, 2009 and 2008, fixed income and equity securities with a carrying value of $434nbsp;million and $307nbsp;million, respectively, were on loan under these agreements. In return, the Company receives cash that it invests and includes in short-term investments and fixed income securities, with an offsetting liability recorded in other liabilities and accrued expenses to account for the Company's obligation to return the collateral. Interest income on collateral, net of fees, was $2nbsp;million, $48nbsp;million and $19nbsp;million, for the years ended Decembernbsp;31, 2009, 2008 and 2007, respectively. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"bOther investment information /b/font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;Included in fixed income securities are below investment grade assets totaling $4.98nbsp;billion and $3.28nbsp;billion at Decembernbsp;31, 2009 and 2008, respectively. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;At Decembernbsp;31, 2009, fixed income securities and short-term investments with a carrying value of $267nbsp;million were on deposit with regulatory authorities as required by law. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;At Decembernbsp;31, 2009, the carrying value of fixed income securities that were non-income producing was $11nbsp;million. No other investments were non-income producing at Decembernbsp;31, 2009./font/p/td/tr/table

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income (loss)	$ 854	$ (1,679)	$ 4,636
Other comprehensive income (loss), after-tax, changes in:
Unrealized net capital gains and losses	3,446	(4,626)	(1,186)
Unrealized foreign currency translation adjustments	41	(74)	53
Unrecognized pension and other postretirement benefit cost	(214)	(724)	765
Other comprehensive income (loss), after-tax	3,273	(5,424)	(368)
Comprehensive income (loss)	$ 4,127	$ (7,103)	$ 4,268

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Investments
Fixed income securities, at fair value (amortized cost $81,243 and $77,104)	$ 78,766	$ 68,608
Equity securities, at fair value (cost $4,845 and $3,137)	5,024	2,805
Mortgage loans	7,935	10,229
Limited partnership interests	2,744	2,791
Short-term, at fair value (amortized cost $3,056 and $8,903)	3,056	8,906
Other	2,308	2,659
Total investments	99,833	95,998
Cash	612	415	$ 422
Premium installment receivables, net	4,839	4,842
Deferred policy acquisition costs	5,470	8,542
Reinsurance recoverables, net	6,355	6,403
Accrued investment income	864	884
Deferred income taxes	1,870	3,794
Property and equipment, net	990	1,059
Goodwill	875	874
Other assets	1,872	3,748
Separate Accounts	9,072	8,239
Total assets	132,652	134,798
Liabilities
Reserve for property-liability insurance claims and claims expense	19,167	19,456
Reserve for life-contingent contract benefits	12,910	12,881
Contractholder funds	52,582	58,413
Unearned premiums	9,822	10,024
Claim payments outstanding	742	790
Other liabilities and accrued expenses	5,726	6,663
Long-term debt	5,910	5,659
Separate Accounts	9,072	8,239
Total liabilities	$ 115,931	$ 122,125
Commitments and Contingent Liabilities (Note 6, 7 and 13)
Equity
Preferred stock, $1 par value, 25 million shares authorized, none issued	$ 0	$ 0
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 537 million and 536 million shares outstanding	9	9
Additional capital paid-in	3,172	3,130
Retained income	31,492	30,207
Deferred ESOP expense	(47)	(49)
Treasury stock, at cost (363 million and 364 million shares)	(15,828)	(15,855)
Unrealized net capital gains and losses:
Unrealized net capital losses on fixed income securities with OTTI	(441)
Other unrealized net capital gains and losses	(1,072)	(5,767)
Unrealized adjustment to DAC, DSI and insurance reserves	643	2,029
Total unrealized net capital gains and losses	(870)	(3,738)
Unrealized foreign currency translation adjustments	46	5
Unrecognized pension and other postretirement benefit cost	(1,282)	(1,068)
Total accumulated other comprehensive loss	(2,106)	(4,801)
Total shareholders' equity	16,692	12,641
Noncontrolling interest	29	32
Total equity	16,721	12,673	$ 21,902
Total liabilities and equity	$ 132,652	$ 134,798

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (parenthetical) - USD ($) $ in Millions	Dec. 31, 2009	Dec. 31, 2008
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Fixed income securities, amortized cost (in dollars)	$ 81,243	$ 77,104
Equity securities, cost (in dollars)	4,845	3,137
Short-term investments, amortized cost (in dollars)	$ 3,056	$ 8,903
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	900,000,000	900,000,000
Common stock, shares outstanding	537,000,000	536,000,000
Treasury stock, shares	363,000,000	364,000,000

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Increase (decrease) in equity - rollforward
Balance, beginning of year	$ 12,673	$ 21,902
Net income (loss)	854	(1,679)	$ 4,636
Change in unrealized net capital gains and losses	3,446	(4,626)	(1,186)
Change in unrealized foreign currency translation adjustments	41	(74)	53
Change in unrecognized pension and other postretirement benefit cost	(214)	(724)	765
Balance, end of year	16,721	12,673	21,902
Total shareholders' equity
Increase (decrease) in equity - rollforward
Balance, beginning of year	12,641	21,851
Balance, end of year	16,692	12,641	21,851
Common Stock
Increase (decrease) in equity - rollforward
Balance, beginning of year	9	9
Balance, end of year	9	9	9
Additional capital paid-in
Increase (decrease) in equity - rollforward
Balance, beginning of year	3,130	3,052	2,939
Equity incentive plans activity	42	78	113
Balance, end of year	3,172	3,130	3,052
Retained income
Increase (decrease) in equity - rollforward
Balance, beginning of year	30,207	32,796	29,070
Net income (loss)	854	(1,679)	4,636
Dividends ($0.80, $1.64 and $1.52 per share)	(432)	(897)	(901)
Effects of changing pension plan measurement date		(13)
Cumulative effect of change in accounting principle	863		(9)
Balance, end of year	31,492	30,207	32,796
Deferred ESOP expense
Increase (decrease) in equity - rollforward
Balance, beginning of year	(49)	(55)	(72)
Payments	2	6	17
Balance, end of year	(47)	(49)	(55)
Treasury stock
Increase (decrease) in equity - rollforward
Balance, beginning of year	(15,855)	(14,574)	(11,091)
Shares acquired	(3)	(1,323)	(3,604)
Shares reissued under equity incentive plans, net	30	42	121
Balance, end of year	(15,828)	(15,855)	(14,574)
Accumulated other comprehensive income
Increase (decrease) in equity - rollforward
Balance, beginning of year	(4,801)	623	991
Cumulative effect of change in accounting principle	(578)
Change in unrealized net capital gains and losses	3,446	(4,626)	(1,186)
Change in unrealized foreign currency translation adjustments	41	(74)	53
Change in unrecognized pension and other postretirement benefit cost	(214)	(724)	765
Balance, end of year	(2,106)	(4,801)	623
Noncontrolling interest
Increase (decrease) in equity - rollforward
Balance, beginning of year	32	51	92
Change in noncontrolling interest ownership	(3)	(19)	(41)
Noncontrolling gain (loss)	0	0	0
Balance, end of year	$ 29	$ 32	$ 51

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Cash flows from operating activities
Net income (loss)	$ 854	$ (1,679)	$ 4,636
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and other non-cash items	(91)	(376)	(257)
Realized capital gains and losses	583	5,090	(1,235)
(Gain) loss on disposition of operations	(7)	6	10
Interest credited to contractholder funds	2,126	2,411	2,681
Changes in:
Policy benefits and other insurance reserves	(577)	626	(192)
Unearned premiums	(247)	(359)	(74)
Deferred policy acquisition costs	514	141	(37)
Premium installment receivables, net	26	18	(62)
Reinsurance recoverables, net	(85)	(269)	(240)
Income taxes	1,660	(1,864)	(52)
Other operating assets and liabilities	(455)	165	255
Net cash provided by operating activities	4,301	3,910	5,433
Proceeds from sales
Fixed income securities	21,359	22,936	23,462
Equity securities	6,894	9,535	9,127
Limited partnership interests	369	371	800
Mortgage loans	340	279
Other investments	520	171	173
Investment collections
Fixed income securities	5,556	4,269	5,257
Mortgage loans	1,764	844	1,649
Other investments	117	98	395
Investment purchases
Fixed income securities	(29,573)	(14,448)	(26,401)
Equity securities	(8,496)	(9,477)	(7,902)
Limited partnership interests	(784)	(982)	(1,375)
Mortgage loans	(26)	(500)	(2,936)
Other investments	(64)	(140)	(763)
Change in short-term investments, net	5,981	(8,283)	(1,323)
Change in other investments, net	(340)	(474)	(7)
Disposition (acquisition) of operations	12	(120)	3
Purchases of property and equipment, net	(189)	(291)	(274)
Net cash provided by (used in) investing activities	3,440	3,788	(115)
Cash flows from financing activities
Change in short-term debt, net			(12)
Proceeds from issuance of long-term debt	1,003	20	987
Repayment of long-term debt	(752)	(1)	(9)
Contractholder fund deposits	4,150	9,984	8,632
Contractholder fund withdrawals	(11,406)	(15,480)	(10,599)
Dividends paid	(542)	(889)	(901)
Treasury stock purchases	(4)	(1,323)	(3,604)
Shares reissued under equity incentive plans, net	3	33	109
Excess tax benefits on share-based payment arrangements	(5)	3	29
Other	9	(52)	29
Net cash used in financing activities	(7,544)	(7,705)	(5,339)
Net increase (decrease) in cash	197	(7)	(21)
Cash at beginning of year	415	422	443
Cash at end of year	$ 612	$ 415	$ 422

General	12 Months Ended
General	Dec. 31, 2009
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
General	table style="font-size:10pt; font-family:'Times New Roman',times,serif;" tr td p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"b1.nbsp;nbsp;nbsp;nbsp;General /b/font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"bBasis of presentation /b/font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The accompanying consolidated financial statements include the accounts of The Allstate Corporation and its wholly owned subsidiaries, primarily Allstate Insurance Company ("AIC"), a property-liability insurance company with various property-liability and life and investment subsidiaries, including Allstate Life Insurance Company ("ALIC") (collectively referred to as the "Company" or "Allstate"). These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). All significant intercompany accounts and transactions have been eliminated. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;To conform to the current year presentation, certain amounts in the prior years' consolidated financial statements and notes have been reclassified. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"bNature of operations /b/font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;Allstate is engaged, principally in the United States, in the property-liability insurance, life insurance, retirement and investment product business. Allstate's primary business is the sale of private passenger auto and homeowners insurance. The Company also sells several other personal property and casualty insurance products, life insurance, annuities, funding agreements, and select commercial property and casualty coverages. Allstate primarily distributes its products through exclusive agencies, financial specialists and independent agencies. Certain products are also sold through call centers and the internet./font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The Allstate Protection segment principally sells private passenger auto and homeowners insurance, with earned premiums accounting for 82% of Allstate's 2009 consolidated revenues. Allstate was the country's second largest insurer for both private passenger auto and homeowners insurance as of Decembernbsp;31, 2008. Allstate Protection, through several companies, is authorized to sell certain property-liability products in all 50 states, the District of Columbia and Puerto Rico. The Company is also authorized to sell certain insurance products in Canada. For 2009, the top geographic locations for premiums earned by the Allstate Protection segment were New York, California, Texas, Florida and Pennsylvania. No other jurisdiction accounted for more than 5% of premiums earned for Allstate Protection./font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;Allstate has exposure to catastrophes, an inherent risk of the property-liability insurance business, which have contributed, and will continue to contribute, to material year-to-year fluctuations in the Company's results of operations and financial position (see Notenbsp;7). The nature and level of catastrophic loss caused by natural events (high winds, winter storms, tornadoes, hailstorms, wildfires, tropical storms, hurricanes, earthquakes and volcanoes) and man-made events (terrorism and industrial accidents) experienced in any period cannot be predicted and could be material to results of operations and financial position. The Company considers the greatest areas of potential catastrophe losses due to hurricanes to generally be major metropolitan centers in counties along the eastern and gulf coasts of the United States. The Company considers the greate st areas of potential catastrophe losses due to earthquakes and fires following earthquakes to be major metropolitan areas near fault lines in the states of California, Oregon, Washington, South Carolina, Missouri, Kentucky and Tennessee. The Company also has exposure to asbestos, environmental and other discontinued lines claims (see Notenbsp;13). /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The Allstate Financial segment sells life insurance, retirement and investment products and voluntary accident and health insurance. The principal individual products are fixed annuities; interest-sensitive, traditional and variable life insurance; and voluntary accident and health insurance. The institutional product line consists primarily of funding agreements sold to unaffiliated trusts that use them to back medium-term notes issued to institutional and individual investors. Banking products and services are also offered to customers through the Allstate Bank./font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;Allstate Financial, through several companies, is authorized to sell life insurance and retirement products in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam. For 2009, the top geographic locations for statutory premiums and annuity considerations for the Allstate Financial segment were California, Florida, Texas and New York. No other jurisdiction accounted for more than 5% of statutory premiums and annuity considerations for Allstate Financial. Allstate Financial distributes its products to individuals through multiple distribution channels, including Allstate exclusive agencies, which include exclusive financial specialists, independent agents (including master brokerage agencies and workplace enrolling agents), financial service firms, such as banks and broker-dealers, and specialized structured settlement brokers. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;Allstate has exposure to market risk as a result of its investment portfolio. Market risk is the risk that the Company will incur realized and unrealized net capital losses due to adverse changes in equity, interest, credit spreads, commodity, or currency exchange rates and prices. The Company's primary market risk exposures are to changes in interest rates, credit spreads and equity prices. Interest rate risk is the risk that the Company will incur a loss due to adverse changes in interest rates relative to the interest rate characteristics of its interest bearing assets and liabilities. This risk arises from many of the Company's primary activities, as it invests substantial funds in interest-sensitive assets and issues interest-sensitive liabilities. Interest rate risk includes risks related to changes in U.S. Treasury yields and other key risk-free reference yields. Credit spread risk is the risk that the Company will incur a loss due to adverse changes in credit spreads. This risk arises from many of the Company's primary activities, as the Company invests substantial funds in spread-sensitive fixed income assets. Equity price risk is the risk that the Company will incur losses due to adverse changes in the general levels of the equity markets. /font/p p style="FONT-FAMILY: arial; TEXT-ALIGN: justify"font size="2"nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;The Company monitors economic and regulatory developments that have the potential to impact its business. The ability of banks to affiliate with insurers may have a material adverse effect on all of the Company's product lines by substantially increasing the number, size and financial strength of potential competitors. The Company currently benefits from agreements with financial services entities that market and distribute its products; change in control of these non-affiliated entities could negatively impact the Company's sales. Furthermore, federal and state laws and regulations affect the taxation of insurance companies and life insurance and annuity products. Congress and various state legislatures have considered proposals that, if enacted, could impose a greater tax burden on the Company or could have an adverse impact on the tax treatment of some insuran ce products offered by Allstate Financial, including favorable policyholder tax treatment currently applicable to life insurance and annuities. Legislation that reduced the federal income tax rates applicable to certain dividends and capital gains realized by individuals, or other proposals, if adopted, that reduce the taxation or permit the establishment of certain products or investments that may compete with life insurance or annuities, could have an adverse effect on the Company's financial position or Allstate Financial's ability to sell such products and could result in the surrender of some existing contracts and policies. In addition, changes in the federal estate tax laws could negatively affect the demand for the types of life insurance used in estate planning./font/p/td/tr/table