The Hartford 2008 Annual Report Download - page 411

Table of Contents
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. Investments and Derivative Instruments (continued)
Derivative Instruments
The Company utilizes a variety of derivative instruments, including swaps, caps, floors, forwards, futures and options
through one of four Company-approved objectives: to hedge risk arising from interest rate, equity market, credit spread
including issuer default, price or currency exchange rate risk or volatility; to manage liquidity; to control transaction costs;
or to enter into replication transactions.
On the date the derivative contract is entered into, the Company designates the derivative as a fair-value hedge, a cash-flow
hedge, a foreign-currency hedge, a net investment hedge, or held for other investment and/or risk management purposes.
The Company’s derivative transactions are used in strategies permitted under the derivative use plans required by the State
of Connecticut, the State of Illinois, and the State of New York insurance departments.
Derivative instruments are recorded in the Consolidated Balance Sheets at fair value and are presented as assets or liabilities
as determined by calculating the net position, taking into account income accruals and cash collateral held, for each
derivative counterparty by legal entity. The fair value of derivative instruments, excluding income accruals and cash
collateral held, are presented as of December 31, as follows:
Asset Values Liability Values
2008 2007 2008 2007
Fixed maturities, available-for-sale $ — $ — $ 3 $ —
Other investments 1,576 528 — —
Reinsurance recoverables 1,302 128 — —
Other policyholder funds and benefits payable — 2 6,628 737
Consumer notes — — 5 5
Other liabilities [1] [2] 1,862 — — 617
Total $ 4,740 $ 658 $ 6,636 $ 1,359
[1] Included in Other liabilities on the balance sheet is a liability value of $2,531 and $114 related to derivative collateral
as of December 31, 2008 and 2007, respectively.
[2] Included in Other liabilities in the above schedule is a liability value of $163 and $0 related to Allianz SE warrants as
of December 31, 2008 and 2007, respectively.
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009