SEC Comment Letter for PRUDENTIAL FINANCIAL INC (PFH, PRH, PRS, PRU) (CIK 0001137774) (PFH) — Aug 29, 2011
PRUDENTIAL FINANCIAL INC (PFH, PRH, PRS, PRU) (CIK 0001137774)
Date: Aug. 29, 2011 · CIK: 0001137774 · Accession: 0000000000-11-051661
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-16707
Letter
August 29, 2011 Via E-mail Peter Sayre Senior Vice President and Principal Accounting Officer Prudential Financial, Inc. 751 Broad Street Newark, New Jersey 07102 Re: Prudential Financial, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010 Filed February 25, 2011 File No. 001-16707
Dear Mr. Sayre: We have reviewed your August 10, 2011 respon se to our verbal comment conveyed on August 1, 2011. We have an additional comment unrel ated to our previous comments, in which we ask you to provide us with informati on so we may better understand your accounting. Please respond to this letter within te n business days by providing the requested information or by advising us when you will provide the requested response. If you do not believe the comment applies to your facts a nd circumstances, please tell us why in your response. Please furnish us a letter on EDGAR under the form type label CORRESP that keys your response to our comment.
After reviewing the information provided, we may have additional comments and/or request that you amend your filing. Notes To Consolidated Financial Statements
11. Certain Nontraditional Long-Duration Contracts Liabilities For Guarantee Benefits, page 322
1. With respect to your variable annuity contra cts, it appears that you are accounting for certain future policy benefit guarantees as bi furcated embedded derivatives recorded at fair value with changes in fair value each period included in “Realized investment gains (losses), net.” These include at a minimum the following guarantees “GMAB”, “GMWB” and “GMIWB”. Your discussi on of Variable Annuity Optional Living Benefit Features (page 161 of MD&A) states that these guarantees primarily relate to “the optional living benefit features” of your Individual Annuities segment. Please provide us a more detailed description of th ese products which identifies what features within each led you to conclude that they were bifurcated embedded derivatives. Cite the
Peter Sayre Prudential Financial, Inc. August 29, 2011 Page 2
specific authoritative literature you used to support your conclusions, including your consideration of the guidance in ASC 815-10-15 paragraphs 52-53 and ASC 815-15-55 paragraphs 57-61 in arriving at your conclu sions for the accounting method applied for each product. Please contact James Peklenk, Staff Accountant, at (202) 551-3661 or Mary Mast, Senior Accountant, at (202) 551-3613 if you have any questions regarding the comment. In this regard, do not hesitate to contact me at (202) 551-3679. Sincerely, /s/ Jim B. Rosenberg Jim B. Rosenberg Senior Assistant Chief Accountant
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August 29, 2011 Via E-mail Peter Sayre Senior Vice President and Principal Accounting Officer Prudential Financial, Inc. 751 Broad Street Newark, New Jersey 07102 Re: Prudential Financial, Inc. Form 10-K for the Fiscal Year Ended December 31, 2010 Filed February 25, 2011 File No. 001-16707 Dear Mr. Sayre: We have reviewed your August 10, 2011 respon se to our verbal comment conveyed on August 1, 2011. We have an additional comment unrel ated to our previous comments, in which we ask you to provide us with informati on so we may better understand your accounting. Please respond to this letter within te n business days by providing the requested information or by advising us when you will provide the requested response. If you do not believe the comment applies to your facts a nd circumstances, please tell us why in your response. Please furnish us a letter on EDGAR under the form type label CORRESP that keys your response to our comment. After reviewing the information provided, we may have additional comments and/or request that you amend your filing. Notes To Consolidated Financial Statements 11. Certain Nontraditional Long-Duration Contracts Liabilities For Guarantee Benefits, page 322 1. With respect to your variable annuity contra cts, it appears that you are accounting for certain future policy benefit guarantees as bi furcated embedded derivatives recorded at fair value with changes in fair value each period included in “Realized investment gains (losses), net.” These include at a minimum the following guarantees “GMAB”, “GMWB” and “GMIWB”. Your discussi on of Variable Annuity Optional Living Benefit Features (page 161 of MD&A) states that these guarantees primarily relate to “the optional living benefit features” of your Individual Annuities segment. Please provide us a more detailed description of th ese products which identifies what features within each led you to conclude that they were bifurcated embedded derivatives. Cite the Peter Sayre Prudential Financial, Inc. August 29, 2011 Page 2 specific authoritative literature you used to support your conclusions, including your consideration of the guidance in ASC 815-10-15 paragraphs 52-53 and ASC 815-15-55 paragraphs 57-61 in arriving at your conclu sions for the accounting method applied for each product. Please contact James Peklenk, Staff Accountant, at (202) 551-3661 or Mary Mast, Senior Accountant, at (202) 551-3613 if you have any questions regarding the comment. In this regard, do not hesitate to contact me at (202) 551-3679. Sincerely, /s/ Jim B. Rosenberg Jim B. Rosenberg Senior Assistant Chief Accountant