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Recent Accounting Pronouncements | 12 Months Ended
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Dec. 31, 2011
Recent Accounting Pronouncements [Abstract] |
Recent Accounting Pronouncements | Note 3: Recent Accounting Pronouncements Recently Adopted Accounting Standards Disclosures about the Credit Quality of Financing Receivables and Allowance for Credit Losses (ASU 2010-20) In July 2010, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2010-20, "Receivables (Topic 310)—Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses." ASU 2010-20 provides amended disclosure requirements related to certain financing receivables and related allowance for credit losses. The disclosure provisions are effective for the Company for the year ended December 31, 2010. These amended requirements are related only to disclosures, and do not affect the Company's consolidated balance sheets, results of operations or cash flows. The Company accounts for its insurance premiums receivable in accordance with Accounting Standards Codification 944, "Financial Guarantee Insurance Contracts." Refer to "Note 5: Insurance Premiums" for disclosures related to the Company's receivable for insurance premiums. Scope Exception Related to Embedded Credit Derivatives (ASU 2010-11) In March 2010, the FASB issued ASU 2010-11, "Derivatives and Hedging (Topic 815)—Scope Exception Related to Embedded Credit Derivatives," to clarify that embedded credit derivatives created by the subordination of one financial instrument to another qualifies for the scope exception and should not be subject to potential bifurcation and separate accounting. Other embedded credit derivative features are considered embedded derivatives and subject to potential bifurcation, provided that the contract is not a derivative in its entirety. The Company adopted this standard in the third quarter of 2010. The adoption of this standard did not have a material effect on the Company's consolidated balance sheets, results of operations, or cash flows. Improving Disclosures about Fair Value Measurements (ASU 2010-06) In January 2010, the FASB issued ASU 2010-06, "Fair Value Measurements and Disclosures (Topic 820)—Improving Disclosures about Fair Value Measurements," to require additional disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. The standard also clarifies existing disclosures about the level of disaggregation, valuation techniques and inputs to fair value measurements. The Company adopted this standard as of the first quarter of 2010 except for the requirement to provide the Level 3 activity of purchases, sales issuances and settlements on a gross basis, which the Company adopted in the first quarter of 2011. As this standard only affects disclosures related to fair value, the adoption of this standard did not affect the Company's consolidated balance sheets, results of operations, or cash flows. Refer to "Note 7: Fair Value of Financial Instruments" for these disclosures. Consolidation of Variable Interest Entities (ASU 2009-17) In December 2009, the FASB issued ASU 2009-17, "Consolidations (Topic 810)—Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities," to require the holder of a variable interest(s) in a VIE to determine whether it holds a controlling financial interest in a VIE. A holder of a variable interest (or combination of variable interests) that has a controlling financial interest in a VIE is considered the primary beneficiary and is required to consolidate the VIE. The accounting guidance deems controlling financial interest as both (a) the power to direct the activities of a VIE that most significantly impact the VIEs economic performance and (b) the obligation to absorb losses or the rights to receive benefits of the VIE that could potentially be significant to the VIE. This accounting guidance eliminates the more quantitative approach for determining the primary beneficiary of a VIE. The accounting guidance requires an ongoing reassessment of whether a holder of a variable interest is the primary beneficiary of a VIE. The Company adopted this standard in the first quarter of 2010. Refer to "Note 4: Variable Interest Entities" for additional information. Upon the adoption of the accounting guidance, the Company recognized a cumulative transition adjustment of $319 million, net of tax, as a decrease to its beginning retained earnings balance as of January 1, 2010 as a result of consolidated VIEs. The cumulative transition adjustment represents the recognized changes in assets and liabilities resulting from the adoption, including the impact of the fair value option election for certain of the financial assets and liabilities, offset in part by the elimination of intercompany balances with the consolidated VIEs. The Company also recognized a cumulative transition adjustment of $3 million, net of tax, as a decrease to its beginning retained earnings balance as of January 1, 2010, related to the deconsolidation of VIEs as a result of the implementation of this accounting guidance. This adjustment was the result of the deconsolidation of the assets and liabilities of previously consolidated VIEs, offset in part by the recognition of financial interests in these deconsolidated VIEs which were previously eliminated in consolidation. The adjustments to retained earnings were offset by a reduction of accumulated other comprehensive loss, net of deferred taxes of $349 million. This reduction was a result of reclassifying assets of VIEs, which the Company had consolidated prior to ASU 2009-17, for which the fair value election was made for the assets of these VIEs. Prior to the adoption of ASU 2009-17, the assets of these VIEs were carried as available-for-sale with unrealized gains and losses reflected in accumulated other comprehensive loss. The following table summarizes the adjustments made to the Company's consolidated assets, liabilities and equity by transition method of consolidation as of January 1, 2010:
|  | Increase/(Decrease) |
In millions |  | Fair Value Option |  |  | Unpaid Principal Balance |  |  | Deconsolidated VIEs |  |  | Total |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total investments |  | $ | (593 | ) |  | $ | (3,058 | ) |  | $ | (172 | ) |  | $ | (3,823 | )
Accrued investment income |  |  | (3 | ) |  |  | (3 | ) |  |  | — |  |  |  | (6 | )
Premiums receivable |  |  | (23 | ) |  |  | (127 | ) |  |  | — |  |  |  | (150 | )
Deferred acquisition costs |  |  | (7 | ) |  |  | — |  |  |  | — |  |  |  | (7 | )
Insurance loss recoverable |  |  | (594 | ) |  |  | — |  |  |  | — |  |  |  | (594 | )
Current income taxes |  |  | — |  |  |  | 14 |  |  |  | — |  |  |  | 14 |
Deferred income taxes, net |  |  | 10 |  |  |  | (3 | ) |  |  | 2 |  |  |  | 9 |
Other assets |  |  | (484 | ) |  |  | 5 |  |  |  | — |  |  |  | (479 | )
Assets of consolidated VIEs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  |  | 320 |  |  |  | — |  |  |  | — |  |  |  | 320 |
Investments held-to-maturity |  |  | — |  |  |  | 4,798 |  |  |  | — |  |  |  | 4,798 |
Fixed-maturity securities at fair value |  |  | 5,507 |  |  |  | — |  |  |  | — |  |  |  | 5,507 |
Loans receivable at fair value |  |  | 2,002 |  |  |  | — |  |  |  | — |  |  |  | 2,002 |
Loan repurchase commitments |  |  | 436 |  |  |  | — |  |  |  | — |  |  |  | 436 |
Derivative assets |  |  | 30 |  |  |  | — |  |  |  | — |  |  |  | 30 |
Other assets |  |  | 37 |  |  |  | 16 |  |  |  | — |  |  |  | 53 |
Total assets |  |  | 6,638 |  |  |  | 1,642 |  |  |  | (170 | ) |  |  | 8,110 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unearned premium revenue |  |  | (46 | ) |  |  | (92 | ) |  |  | — |  |  |  | (138 | )
Loss and loss adjustment expense reserves |  |  | (364 | ) |  |  | — |  |  |  | — |  |  |  | (364 | )
Medium-term notes |  |  | — |  |  |  | (1,429 | ) |  |  | — |  |  |  | (1,429 | )
Long-term debt |  |  | — |  |  |  | (433 | ) |  |  | — |  |  |  | (433 | )
Payable for investments purchased |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | (1 | )
Derivative liabilities |  |  | (33 | ) |  |  | (9 | ) |  |  | — |  |  |  | (42 | )
Other liabilities |  |  | (8 | ) |  |  | (2 | ) |  |  | — |  |  |  | (10 | )
Liabilities of consolidated VIEs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Variable interest entity notes |  |  | 6,358 |  |  |  | 3,170 |  |  |  | (252 | ) |  |  | 9,276 |
Long-term debt |  |  | — |  |  |  | 433 |  |  |  | — |  |  |  | 433 |
Derivative liabilities |  |  | 764 |  |  |  | 9 |  |  |  | — |  |  |  | 773 |
Other liabilities |  |  | — |  |  |  | 18 |  |  |  | — |  |  |  | 18 |
Total liabilities |  |  | 6,670 |  |  |  | 1,665 |  |  |  | (252 | ) |  |  | 8,083 |
Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retained earnings |  |  | (296 | ) |  |  | (23 | ) |  |  | (3 | ) |  |  | (322 | )
Accumulated other comprehensive income (loss) |  |  | 264 |  |  |  | — |  |  |  | 85 |  |  |  | 349 |
Total equity |  | $ | (32 | ) |  | $ | (23 | ) |  | $ | 82 |  |  | $ | 27 |
In connection with the adoption of the amended accounting guidance, the Company has elected the fair value option for eligible financial assets and financial liabilities for most, but not all, of the consolidated VIEs. The Company elected the fair value option for certain VIEs designed as RMBS securitizations, multi-sector CDOs, and CRE CDOs. Financial assets and financial liabilities of consolidated VIEs designed as life insurance securitizations collateralized by surplus notes issued by life insurance companies that can only be used to settle obligations of the respective VIEs were measured at the unpaid principal balance as of January 1, 2010. The financial assets of such VIEs are classified as held-to-maturity investments on the Company's consolidated balance sheets. The Company elected the fair value option for the consolidated VIEs designed as RMBS securitizations, multi-sector CDOs, and CRE CDOs because fair value was considered a more appropriate measurement model for the financial assets and financial liabilities to represent the economic performance and business activity of the respective VIEs. The Company did not elect the fair value option for consolidated VIEs designed as life insurance securitizations because a held-to-maturity classification for the financial assets held by the consolidated VIEs was considered a more appropriate measurement model to represent the economic performance and business activity of the respective VIEs. The Company's conduit segment includes two VIEs that were consolidated prior to adoption and remain consolidated under this amended accounting guidance. Financial assets held by the consolidated VIEs in the conduit segment were classified as investments held-to-maturity, both prior to and subsequent to the adoption of the amended accounting guidance. Refer to "Note 7: Fair Value of Financial Instruments" for additional disclosures related to the fair value option election for the financial assets and liabilities of the consolidated VIEs. Transfers of Financial Assets (ASU 2009-16) In December 2009, the FASB issued ASU 2009-16, "Transfers and Servicing (Topic 860)—Accounting for Transfers of Financial Assets," to eliminate the concept of a qualified special purpose entity. The accounting guidance also clarifies whether a transferor has surrendered control over transferred financial assets and meets the conditions to derecognize transferred financial assets or a portion of an entire financial asset that meets the definition of a participating interest. The accounting guidance requires enhanced disclosures about transfers of financial assets and a transferor's continuing involvement with transferred financial assets. The Company adopted this standard in the first quarter of 2010. The effects of adoption of this standard are included in the transition adjustment for the adoption of ASU 2009-17. Recent Accounting Developments Disclosures about Offsetting Assets and Liabilities (ASU 2011-11) In December 2011, the FASB issued ASU 2011-11, "Balance Sheet (Topic 210)—Disclosures about Offsetting Assets and Liabilities." ASU 2011-11 creates new disclosure requirements about the nature of the Company's rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The disclosure requirements are effective for the Company beginning in the first quarter 2013. This standard will only affect the Company's disclosures and will not affect the Company's consolidated balance sheets, results of operations, or cash flows. Testing Goodwill for Impairment (ASU 2011-08) In September 2011, the FASB issued ASU 2011-08, "Intangibles – Goodwill and Other (Topic 350)—Testing Goodwill for Impairment." Under the revised guidance, an entity has an option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The new guidance is effective for the Company beginning January 1, 2012 with early adoption permitted. The Company did not early adopt the guidance. The adoption of this standard will not have a material effect on the Company's consolidated balance sheets, results of operations, or cash flows. Presentation of Comprehensive Income (ASU 2011-05) In June 2011, the FASB issued ASU 2011-05, "Comprehensive Income (Topic 220)—Presentation of Comprehensive Income." This amendment eliminates the current option to report other comprehensive income and its components in the statements of changes in equity. The amendment does not change what currently constitutes net income and other comprehensive income. The new guidance is effective for the Company beginning January 1, 2012. In December 2011, the FASB issued ASU 2011-12 "Comprehensive Income (Topic 220)—Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05," which defers certain aspects of ASU 2011-05 related to the presentation of reclassification adjustments. These standards will only affect the Company's presentation of comprehensive income and will not affect the Company's consolidated balance sheets, results of operations, or cash flows. The new presentation will be included in the Company's Quarterly Report on Form 10-Q for the quarter ending March 31, 2012. Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04) In May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement (Topic 820)—Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs". This amendment results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between GAAP and International Financial Reporting Standards. The new guidance is effective for the Company beginning January 1, 2012. This standard is expected to only affect the Company's disclosures related to fair value; therefore, the adoption of this standard is not expected to affect the Company's consolidated balance sheets, results of operations, or cash flows. Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts (ASU 2010-26) In October 2010, the FASB issued ASU 2010-26, "Financial Services—Insurance (Topic 944)—Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts." This amendment specifies which costs incurred in the acquisition of new and renewal insurance contracts should be capitalized. The new guidance is effective for the Company beginning January 1, 2012 with early adoption as of January 1, 2011 permitted. The Company did not early adopt the guidance as of January 1, 2011. The adoption of this standard will not have a material effect on the Company's consolidated balance sheets, results of operations, or cash flows.

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- Definition The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + References No definition available. + Details
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