EQUITABLE FINANCIAL LIFE INSURANCE CO OF AMERICA - FORM 10-Q

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EX-31.2 - EQUITABLE FINANCIAL LIFE INSURANCE CO OF AMERICA	e13101_ex31-2.txt
EX-31.1 - EQUITABLE FINANCIAL LIFE INSURANCE CO OF AMERICA	e13101_ex31-1.txt
EX-32.2 - EQUITABLE FINANCIAL LIFE INSURANCE CO OF AMERICA	e13101_ex32-2.txt
EX-32.1 - EQUITABLE FINANCIAL LIFE INSURANCE CO OF AMERICA	e13101_ex32-1.txt

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2010

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

Commission File Number: 333-65423

	MONY Life Insurance Company of America
	(Exact name of registrant as specified in its charter)

	Arizona		86-0222062
	(State or other jurisdiction of		(I.R.S. Employer
	incorporation or organization)		Identification No.)

1290 Avenue of the Americas, New York, New York		10104
(Address of principal executive offices)		(Zip Code)

	(212) 554-1234
	Registrant’s telephone number, including area code

	Not applicable
(Former name, former address, and former fiscal year if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

[X]

[ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes

[ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [X] (Do not check if a smaller reporting company)	Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

[ ]

[X]

As of November 10, 2010, 2,500,000 shares of the registrant’s Common Stock were outstanding.

Page 1 of 41

REDUCED DISCLOSURE FORMAT:

Registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.

MONY LIFE INSURANCE COMPANY OF AMERICA

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2010

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
Item 1:	Financial Statements (Unaudited)
	· Balance Sheets, September 30, 2010 and December 31, 2009	4
	· Statements of Loss, Three Months and Nine Months Ended September 30, 2010 and 2009	5
	· Statements of Shareholder’s Equity, Nine Months Ended September 30, 2010 and 2009	6
	· Statements of Cash Flows, Nine Months Ended September 30, 2010 and 2009	7
	· Notes to Financial Statements	8
Item 2:	Management’s Discussion and Analysis of Financial Condition and
	Results of Operations (“Management Narrative”)	37
Item 3:	Quantitative and Qualitative Disclosures About Market Risk*	39
Item 4(T):	Controls and Procedures	39

PART II	OTHER INFORMATION
Item 1:	Legal Proceedings	40
Item 1A:	Risk Factors	40
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds *	40
Item 3:	Defaults Upon Senior Securities *	40
Item 4:	(Removed and Reserved)	40
Item 5:	Other Information	40
Item 6:	Exhibits	40
SIGNATURES		41

*	Omitted pursuant to General Instruction H of Form 10-Q.

FORWARD-LOOKING STATEMENTS

Some of the statements made in this report, including statements made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors” and elsewhere, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, among other things, discussions concerning potential exposure of MONY Life Insurance Company of America to market risks and the impact of new accounting pronouncements, as well as statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions, as indicated by words such as “believes,” “estimates,” “intends,” “anticipates,” “plans,” “expects,” “projects,” “should,” “probably,” “risk,” “target,” “goals,” “objectives,” or similar expressions. MONY Life Insurance Company of America assumes no duty to update any forward-looking statement. Forward-looking statements are based on management’s expectations and beliefs concerning future developments and their potential effects and are subject to risks and uncertainties. Forward-looking statements are not a guarantee of future performance. Actual results could differ materially from those anticipated by forward-looking statements due to a number of important factors, including those discussed under “Risk Factors” in Part I, Item 1A of MONY Life Insurance Company of America’s Annual Report on Form 10-K for the year ended December 31, 2009 and elsewhere in this report.

PART I FINANCIAL INFORMATION

Item 1: Financial Statements

MONY LIFE INSURANCE COMPANY OF AMERICA

BALANCE SHEETS

(UNAUDITED)

	September 30, 2010		December 31, 2009
	(In Millions)

ASSETS
Investments:
Fixed maturities available for sale, at fair value	$	2,039.5	$	1,962.0
Mortgage loans on real estate		143.9		149.1
Policy loans		128.8		124.6
Other invested assets		79.3		81.4
Total investments		2,391.5		2,317.1
Cash and cash equivalents		34.9		56.9
Amounts due from reinsurers		139.1		135.8
Deferred policy acquisition costs		185.2		173.8
Value of business acquired		109.1		147.5
Other assets		31.2		29.6
Separate Accounts’ assets		1,765.9		1,832.2

Total Assets	$	4,656.9	$	4,692.9

LIABILITIES
Policyholders’ account balances	$	1,687.4	$	1,773.9
Future policy benefits and other policyholders liabilities		367.9		360.1
Other liabilities		47.1		37.0
Note payable to affiliate		16.7		19.7
Income taxes payable		134.0		99.9
Separate Accounts’ liabilities		1,765.9		1,832.2
Total liabilities		4,019.0		4,122.8

Commitments and contingent liabilities (Note 10)

SHAREHOLDER’S EQUITY
Common stock, $1.00 par value; 5.0 million shares authorized,
2.5 million issued and outstanding		2.5		2.5
Capital in excess of par value		512.3		511.8
Retained earnings		54.4		66.8
Accumulated other comprehensive income (loss)		68.7		(11.0	)
Total shareholder’s equity		637.9		570.1

Total Liabilities and Shareholder’s Equity	$	4,656.9	$	4,692.9

See Notes to Financial Statements.

MONY LIFE INSURANCE COMPANY OF AMERICA

STATEMENTS OF LOSS

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
	(In Millions)

REVENUES
Universal life and investment-type product
policy fee income	$	31.3		$	34.7		$	93.0		$	97.9
Premiums		10.1			8.9			28.5			30.0
Net investment income		29.5			29.9			89.9			92.0
Investment losses, net:
Total other-than-temporary impairment losses		(30.2	)		(32.3	)		(36.6	)		(45.3	)
Portion of loss recognized in other
comprehensive income		1.2			-			1.7			-
Net impairment losses recognized		(29.0	)		(32.3	)		(34.9	)		(45.3	)
Other investment gains (losses), net		.2			.1			4.6			(.7	)
Total investment losses, net		(28.8	)		(32.2	)		(30.3	)		(46.0	)
Other income		1.6			3.9			6.4			7.6
(Decrease) increase in fair value of reinsurance contracts		(1.7	)		(.6	)		.7			(5.9	)
Total revenues		42.0			44.6			188.2			175.6

BENEFITS AND OTHER DEDUCTIONS
Policyholders’ benefits		20.6			19.6			69.8			62.5
Interest credited to policyholders’ account balances		18.6			17.3			52.1			53.2
Compensation and benefits		7.2			7.1			24.0			21.7
Commissions		8.6			7.6			26.0			22.8
Interest expense		.3			.3			.9			1.1
Amortization of deferred policy acquisition costs
and value of business acquired		7.3			14.5			32.7			21.3
Capitalization of deferred policy acquisition costs		(7.3	)		(7.8	)		(22.3	)		(22.6	)
Rent expense		1.1			1.3			2.6			3.2
Other operating costs and expenses		7.1			6.1			24.6			20.0
Total benefits and other deductions		63.5			66.0			210.4			183.2

Loss before income taxes		(21.5	)		(21.4	)		(22.2	)		(7.6	)
Income tax benefit		8.2			9.7			9.8			6.0

Net Loss	$	(13.3	)	$	(11.7	)	$	(12.4	)	$	(1.6	)

See Notes to Financial Statements.

MONY LIFE INSURANCE COMPANY OF AMERICA

STATEMENTS OF SHAREHOLDER’S EQUITY

NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009

(UNAUDITED)

	2010			2009
	(In Millions)

SHAREHOLDER’S EQUITY
Common stock, at par value, beginning of year and end of period	$	2.5		$	2.5

Capital in excess of par value, beginning of year		511.8			510.8
Changes in capital in excess of par value		.5			.4
Capital in excess of par value, end of period		512.3			511.2

Retained earnings, beginning of year		66.8			55.5
Net loss		(12.4	)		(1.6	)
Impact of implementing new accounting guidance, net of taxes		-			6.4
Retained earnings, end of period		54.4			60.3

Accumulated other comprehensive loss, beginning of year		(11.0	)		(118.4	)
Impact of implementing new accounting guidance, net of taxes		-			(6.4	)
Other comprehensive income		79.7			116.9
Accumulated other comprehensive income (loss), end of period		68.7			(7.9	)

Total Shareholder’s Equity, End of Period	$	637.9		$	566.1

See Notes to Financial Statements.

MONY LIFE INSURANCE COMPANY OF AMERICA

STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009

(UNAUDITED)

	2010			2009
	(In Millions)

Net loss	$	(12.4	)	$	(1.6	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Interest credited to policyholders’ account balances		52.1			53.2
Universal life and investment-type product policy fee income		(93.0	)		(97.9	)
Change in accrued investment income		(3.2	)		(3.4	)
Investment losses, net		30.3			46.0
Change in deferred policy acquisition costs and
value of business acquired		10.4			(1.3	)
Change in future policy benefits		(2.4	)		(4.4	)
Change in other policyholders liabilities		(2.4	)		(5.3	)
Change in income tax payable		(9.8	)		(5.6	)
Provision for depreciation and amortization		3.5			4.5
Dividend from AllianceBernstein		4.2			2.6
Other, net		13.7			(13.1	)

Net cash used in operating activities		(9.0	)		(26.3	)

Cash flows from investing activities:
Maturities and repayments of fixed maturities and mortgage loans		35.7			85.5
Sales of investments		99.1			59.7
Purchases of investments		(99.9	)		(180.2	)
Other, net		(5.9	)		(2.9	)

Net cash provided by (used in) investing activities		29.0			(37.9	)

Cash flows from financing activities:
Policyholders’ account balances:
Deposits		142.7			136.1
Withdrawals and transfers to Separate Accounts		(181.6	)		(123.4	)
Repayment of note to affiliate		(3.1	)		(2.9	)

Net cash (used in) provided by financing activities		(42.0	)		9.8

Change in cash and cash equivalents		(22.0	)		(54.4	)
Cash and cash equivalents, beginning of year		56.9			115.9

Cash and Cash Equivalents, End of Period	$	34.9		$	61.5

Supplemental cash flow information:
Interest Paid	$	.9		$	1.1
Schedule of non-cash financing activities:
Shared-based Programs	$	.5		$	.4

See Notes to Financial Statements.

MONY LIFE INSURANCE COMPANY OF AMERICA

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

1)	BASIS OF PRESENTATION

The preparation of the accompanying unaudited financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions (including normal, recurring accruals) that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The accompanying unaudited interim financial statements reflect all adjustments necessary in the opinion of management for a fair statement of the financial position of MLOA and its results of operations and cash flows for the periods presented. These statements should be read in conjunction with the audited financial statements of MLOA for the year ended December 31, 2009. The results of operations for the nine months ended September 30, 2010 are not necessarily indicative of the results to be expected for the full year.

The terms “third quarter 2010” and “third quarter 2009” refer to the three months ended September 30, 2010 and 2009, respectively. The terms “first nine months of 2010” and “first nine months of 2009” refer to the nine months ended September 30, 2010 and 2009, respectively.

Certain reclassifications have been made in the amounts presented for prior periods to conform those periods to the current presentation.

2)	ACCOUNTING CHANGES AND NEW ACCOUNTING PRONOUNCEMENTS

Accounting Changes

Beginning second quarter 2009, MLOA implemented the new guidance that modified the recognition guidance for OTTI of debt securities to make it more operational and expanded the presentation and disclosure of OTTI on debt and equity securities in the financial statements. For AFS debt securities in an unrealized loss position, the total fair value loss is to be recognized in earnings as an OTTI if management intends to sell the debt security or more-likely-than-not will be required to sell the debt security before its anticipated recovery. If these criteria are not met, both qualitative and quantitative assessments are required to evaluate the security’s collectability and determine whether an OTTI is considered to have occurred.

The guidance required only the credit loss component of any resulting OTTI to be recognized in earnings, as measured by the shortfall of the present value of the cash flows expected to be collected as compared to the amortized cost basis of the security, while the remainder of the fair value loss is recognized in OCI. In periods subsequent to the recognition of an OTTI, the debt security is accounted for as if it had been purchased on the measurement date of the OTTI, with an amortized cost basis reduced by the amount of the OTTI recognized in earnings.

As required by the transition provisions of this guidance, at April 1, 2009, a cumulative effect adjustment was calculated for all AFS debt securities held for which an OTTI previously was recognized and for which there was no intention or likely requirement to sell the security before recovery of its amortized cost. This resulted in an increase to Retained earnings of $6.4 million at that date with a corresponding decrease to AOCI to reclassify the noncredit portion of these previously recognized OTTI amounts. In addition, at April 1, 2009, the amortized cost basis of the AFS debt securities impacted by the reclassification adjustment was increased by $13.6 million, equal to the amount of the cumulative effect adjustment, without giving effect to DAC and tax. The fair value of AFS debt securities at April 1, 2009 was unchanged as a result of the implementation of this guidance.

Loss from continuing operations, net of income taxes, and Net loss attributable to MLOA for third quarter and first nine months of 2009 reflected no increases from recognition in OCI of the noncredit portions of OTTI subsequent to initial implementation of this guidance at April 1, 2009. The financial statements have been modified to separately present the total OTTI recognized in Investment losses net, with an offset for the amount of noncredit OTTI recognized in OCI, on the face of the statements of earnings, and to present the OTTI recognized in AOCI on the face of the statements of equity and comprehensive income for all periods subsequent to implementation of this guidance. In addition, Note 3 has been expanded to include new disclosures about OTTI for debt securities regarding expected cash flows, and credit losses, including the methodologies and significant inputs used to determine those amounts.

New Accounting Pronouncements

In January 2010, the FASB issued new guidance for improving disclosures about fair value measurements. This guidance requires a reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. In addition, for Level 3 fair value measurements, a reporting entity should present separately information about purchases, sales, issuances and settlements. This guidance is effective for interim and annual reporting periods ending on or after December 15, 2009 except for disclosures for Level 3 fair value measurements which are effective for fiscal years beginning after December 15, 2010. These new disclosures have been included in the Notes to MLOA’s financial statements, as appropriate.

In July 2010, the FASB issued new and enhanced disclosure requirements about the credit quality of financing receivables and the allowance for credit losses with the objective of providing greater transparency of credit risk exposures from lending arrangements in the form of loans and receivables and of accounting policies and methodology used to estimate the allowance for credit losses. These disclosure requirements include both qualitative information about credit risk assessment and monitoring and quantitative information about credit quality during and at the end of the reporting period, including current credit indicators, agings of past-due amounts, and carrying amounts of modified, impaired, and non-accrual loans. Several new terms critical to the application of these disclosures, such as "portfolio segments" and "classes," were defined by the FASB to provide guidance with respect to the appropriate level of disaggregation for purpose of reporting this information. Except for disclosures of reporting period activity, or, more specifically, the credit loss allowance rollforward and the lending arrangement modification disclosures, that are effective in the first interim reporting period beginning after December 15, 2010, all other disclosures required by this standard are to be presented for the annual period ending after December 15, 2010. Comparative disclosures are not required for earlier periods presented for comparative purposes at initial adoption. Management is currently evaluating the reporting impact of implementation.

In October 2010, the FASB issued new guidance for accounting for costs associated with acquiring or renewing insurance contracts, which amends current accounting guidance for insurance companies, to address which costs related to the acquisition of new or renewal insurance contracts qualify for deferral. The guidance allows insurance entities to defer costs related to the acquisition of new or renewal insurance contracts that are:

·	incremental direct costs of the contract acquisition (i.e., would not have been incurred had the acquisition activity not occurred),
·	a portion of the employee’s compensation and fringe benefits related to certain activities for successful contract acquisitions, or
·	direct-response advertising costs as defined in current accounting guidance for capitalized advertising costs.

An insurance entity would expense as incurred all other costs related to the acquisition of new or renewal insurance contracts. The amendments in the guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and can be applied either prospectively or retrospectively. Early application is permitted at the beginning of an entity’s annual reporting period. Management is currently evaluating the impact of adoption.

3)	INVESTMENTS

Fixed Maturities and Equity Securities

The following table provides information relating to fixed maturities classified as AFS; no equity securities were classified as AFS at September 30, 2010 or at December 31, 2009.

Available-for Sale-Securities by Classification

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(3)
	(In Millions)
September 30, 2010:
Fixed maturities:
Corporate	$	1,592.8	$	158.9	$	2.1	$	1,749.6	$	-
U.S. Treasury, government and agency (4)		87.1		3.6		-		90.7		-
States and political subdivisions		20.9		.4		-		21.3		-
Foreign governments		4.1		.2		-		4.3		-
Commercial mortgage-backed		85.6		.1		45.7		40.0		1.9
Residential mortgage-backed (1)		36.5		1.8		-		38.3		-
Asset-backed (2)		9.7		1.4		-		11.1		-
Redeemable preferred stock		88.0		-		3.8		84.2		-
Total at September 30, 2010	$	1,924.7	$	166.4	$	51.6	$	2,039.5	$	1.9

December 31, 2009
Fixed maturities:
Corporate	$	1,588.9	$	72.6	$	18.9	$	1,642.6	$	-
U.S. Treasury, government and agency		71.5		1.1		2.2		70.4		-
States and political subdivisions		19.4		-		1.3		18.1		-
Foreign governments		4.1		.1		.1		4.1		-
Commercial mortgage-backed		120.2		-		56.7		63.5		.2
Residential mortgage-backed (1)		49.0		1.2		-		50.2		-
Asset-backed (2)		9.7		.6		.1		10.2		-
Redeemable preferred stock		123.4		-		20.5		102.9		-
Total at December 31, 2009	$	1,986.2	$	75.6	$	99.8	$	1,962.0	$	.2

(1)	Includes publicly traded agency pass-through securities and collateralized mortgage obligations.

(2)	Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

(3)	Amounts represent OTTI losses in AOCI, which were not included in earnings in accordance with current accounting guidance.

(4)	Reflects $15.4 million of amortized cost of FDIC insured bonds that were reported as Corporate in 2009 and moved to U.S. Treasury, government and agency in 2010.

As further described in Note 5, MLOA determines the fair values of fixed maturities and equity securities based upon quoted prices in active markets, when available, or through the use of alternative approaches when market quotes are not readily accessible or available. These alternative approaches include matrix or model pricing and use of independent pricing services, each supported by reference to principal market trades or other observable market assumptions for similar securities. More specifically, the matrix pricing approach to fair value is a discounted cash flow methodology that incorporates market interest rates commensurate with the credit quality and duration of the investment.

The contractual maturities of AFS fixed maturities (excluding redeemable preferred stock) at September 30, 2010 are shown in the table below. Bonds not due at a single maturity date have been included in the table in the year of final maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Available-for-Sale Fixed Maturities

Contractual Maturities at September 30, 2010

	Amortized
	Cost		Fair Value
	(In Millions)

Due in one year or less	$	111.5	$	112.9
Due in years two through five		690.9		749.1
Due in years six through ten		752.0		840.2
Due after ten years		150.5		163.7
Subtotal		1,704.9		1,865.9
Commercial mortgage-backed securities		85.6		40.0
Residential mortgage-backed securities		36.5		38.3
Asset-backed securities		9.7		11.1
Total	$	1,836.7	$	1,955.3

For the first nine months of 2010 and 2009, proceeds received on sales of fixed maturities classified as AFS amounted to $63.1 million and $60.0 million, respectively. Gross gains of $3.1 million and $4.3 million and gross losses of $2.2 million and $2.8 million were realized on these sales for the first nine months of 2010 and 2009, respectively. The change in unrealized investment gains (losses) related to fixed maturities classified as AFS for the first nine months of 2010 and 2009 amounted to $139.0 million and $226.4 million, respectively.

MLOA’s management, with the assistance of its investment advisors, monitors the investment performance of its portfolio and reviews AFS securities with unrealized losses for OTTI. Integral to this review is an assessment made each quarter, on a security-by-security basis, by the Investments Under Surveillance Committee, of various indicators of credit deterioration to determine whether the investment security is expected to recover. This assessment includes, but is not limited to, consideration of the duration and severity of the unrealized loss, failure, if any, of the issuer of the security to make scheduled payments, actions taken by rating agencies, adverse conditions specifically related to the security or sector, the financial strength, liquidity, and continued viability of the issuer and, for equity securities only, the intent and ability to hold the investment until recovery, and results in identification of specific securities for which OTTI is recognized.

If there is no intent to sell or likely requirement to dispose of the fixed maturity security before its recovery, only the credit loss component of any resulting OTTI is recognized in earnings and the remainder of the fair value loss is recognized in OCI. The amount of credit loss is the shortfall of the present value of the cash flows expected to be collected as compared to the amortized cost basis of the security. The present value is calculated by discounting management’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment. Projections of future cash flows are based on assumptions regarding probability of default and estimates regarding the amount and timing of recoveries. These assumptions and estimates require use of management judgment and consider internal credit analyses as well as market observable data relevant to the collectability of the security. For mortgage and asset-backed securities, projected future cash flows also include assumptions regarding prepayments and underlying collateral value.

MLOA recognized OTTI on AFS fixed maturities as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2010		2009		2010		2009
	(In Millions)

Credit losses recognized in earnings	$	29.0	$	32.3	$	34.9	$	45.3
Non-credit losses recognized in OCI		1.2		-		1.7		-
Total OTTI	$	30.2	$	32.3	$	36.6	$	45.3

At September 30, 2010, no additional OTTI was recognized in earnings related to AFS fixed maturities as MLOA did not intend to sell and did not expect to be required to sell these impaired fixed maturities prior to recovering their amortized cost.

The following table sets forth the amount of credit loss impairments on fixed maturity securities held by MLOA, at the dates indicated and the corresponding changes in such amounts.

Fixed Maturities - Credit Loss Impairments


	2010			2009
	(In Millions)

Balance at January 1,	$	(53.6	)	$	(32.8	)
Cumulative adjustment related to implementing new accounting guidance on April 1, 2009		-			13.6
Previously recognized impairments on securities that matured, paid, prepaid or sold		25.1			-
Previously recognized impairments on securities impaired to fair value this period (1)		-			-
Impairments recognized this period on securities not previously impaired		(4.7	)		(13.0	)
Additional impairments this period on securities previously impaired		(1.2	)		-
Increases due to passage of time on previously recorded credit losses		-			-
Accretion of previously recognized impairments due to increases in expected cash flows		-			-
Balances at June 30,		(34.4	)		(32.2	)
Previously recognized impairments on securities that matured, paid, prepaid or sold		-			2.1
Previously recognized impairments on securities impaired to fair value this period (1)		-			-
Impairments recognized this period on securities not previously impaired		-			(32.2	)
Additional impairments this period on securities previously impaired		(29.0	)		-
Increases due to passage of time on previously recorded credit losses		-			-
Accretion of previously recognized impairments due to increases in expected cash flows		-			-
Balance at September 30,	$	(63.4	)	$	(62.3	)

(1)	Represents circumstances where MLOA determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

Net unrealized investment gains (losses) on fixed maturities and equity securities classified as AFS are included in the balance sheets as a component of AOCI. The table below presents these amounts as of the dates indicated:

	September 30,			December 31,
	2010			2009
	(In Millions)
AFS Securities:
Fixed maturities:
With OTTI loss	$	(1.5	)	$	(.4	)
All other		116.3			(23.8	)
Equity securities		-			-
Net Unrealized Gains (Losses)	$	114.8		$	(24.2	)

Changes in net unrealized investment gains (losses) recognized in AOCI include reclassification adjustments to reflect amounts realized in Net earnings for the current period that had been part of OCI in earlier periods. The tables that follow below present a rollforward of net unrealized investment gains (losses) recognized in AOCI, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other:

Net Unrealized Gains (Losses) on Fixed Maturities with OTTI Losses

											AOCI
	Net							Deferred			Loss
	Unrealized							Income			Related to Net
	(Losses)							Tax			Unrealized
	Gains on			DAC and		Policyholders		Asset			Investment
	Investments			VOBA		Liabilities		(Liability)			Gains (Losses)
	(In Millions)

Balance, July 1, 2010	$	.3		$	-	$	-	$	(.1	)	$	.2
Net investment gains
arising during the period		(.6	)		-		-		-			(.6	)
Reclassification adjustment for
OTTI losses:
Included in Net loss		-			-		-		-			-
Excluded from Net loss (1)		(1.2	)		-		-		-			(1.2	)
Impact of net unrealized investment
gains on:
DAC and VOBA		-			.1		-		-			.1
Deferred income taxes		-			-		-		.6			.6
Policyholders liabilities		-			-		-		-			-
Balance, September 30, 2010	$	(1.5	)	$	.1	$	-	$	.5		$	(.9	)

Balance, January 1, 2010	$	(.3	)	$	.1	$	-	$	.1		$	(.1	)
Net investment gains
arising during the period		(.7	)		-		-		-			(.7	)
Reclassification adjustment for
OTTI losses:
Included in Net loss		1.2			-		-		-			1.2
Excluded from Net loss (1)		(1.7	)		-		-		-			(1.7	)
Impact of net unrealized investment
gains on:
DAC and VOBA		-			-		-		-			-
Deferred income taxes		-			-		-		.4			.4
Policyholders liabilities		-			-		-		-			-
Balance, September 30, 2010	$	(1.5	)	$	.1	$	-	$	.5		$	(.9	)

(1)	Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

Net Unrealized Gains (Losses) on Fixed Maturities with OTTI Losses

												AOCI
	Net								Deferred			Gain
	Unrealized								Income			Related to Net
	Gains								Tax			Unrealized
	(Losses) on			DAC and			Policyholders		(Liability)			Investment
	Investments			VOBA			Liabilities		Asset			Gains (Losses)
	(In Millions)

Balance, July 1, 2009	$	(30.3	)	$	7.3		$	-	$	8.0		$	(15.0	)
Net investment gains
arising during the period		-
Reclassification adjustment for
OTTI losses:
Included in Net loss		32.1			-			-		-			32.1
Excluded from Net loss (1)		-			-			-		-			-
Impact of net unrealized investment
losses on:
DAC and VOBA		-			(7.4	)		-		-			(7.4	)
Deferred income taxes		-			-			-		(8.6	)		(8.6	)
Policyholders liabilities		-			-			-		-			-
Balance, September 30, 2009	$	1.8		$	(.1	)	$	-	$	(.6	)	$	1.1

Balance, March 31, 2009	$	-		$	-		$	-	$	-		$	-
Cumulative impact of implementing
new guidance		(11.9	)		3.3			-		3.0			(5.6	)
Net investment gains
arising during the period		13.7			-			-		-			13.7
Reclassification adjustment for
OTTI losses:
Included in Net loss		-			-			-		-			-
Excluded from Net loss (1)		-			-			-		-			-
Impact of net unrealized investment
losses on:
DAC and VOBA		-			(3.4	)		-		-			(3.4	)
Deferred income taxes		-			-			-		(3.6	)		(3.6	)
Policyholders liabilities		-			-			-		-			-
Balance, September 30, 2009	$	1.8		$	(.1	)	$	-	$	(.6	)	$	1.1

(1)	Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

All Other Net Unrealized Investment Gains (Losses) in AOCI

												AOCI
	Net											Gain
	Unrealized								Deferred			Related to Net
	Gains								Income			Unrealized
	(Losses) on			DAC and			Policyholders		Tax			Investment
	Investments			VOBA			Liabilities		Liability			Gains (Losses)
	(In Millions)

Balance, July 1, 2010	$	36.8		$	(2.2	)	$	-	$	(12.1	)	$	22.5
Net investment gains
arising during the period		49.4			-			-		-			49.4
Reclassification adjustment for
OTTI losses:
Included in Net loss		28.9			-			-		-			28.9
Excluded from Net loss (1)		1.2			-			-		-			1.2
Impact of net unrealized investment
losses on:
DAC and VOBA		-			(6.8	)		-		-			(6.8	)
Deferred income taxes		-			-			-		(25.5	)		(25.5	)
Policyholders liabilities		-			-			-		-			-
Balance, September 30, 2010	$	116.3		$	(9.0	)	$	-	$	(37.6	)	$	69.7

Balance, January 1, 2010	$	(23.8	)	$	7.5		$	-	$	5.7		$	(10.6	)
Net investment gains
arising during the period		106.8			-			-		-			106.8
Reclassification adjustment for
OTTI losses:
Included in Net loss		31.6			-			-		-			31.6
Excluded from Net loss (1)		1.7			-			-		-			1.7
Impact of net unrealized investment
losses on:
DAC and VOBA		-			(16.5	)		-		-			(16.5	)
Deferred income taxes		-			-			-		(43.3	)		(43.3	)
Policyholders liabilities		-			-			-		-			-
Balance, September 30, 2010	$	116.3		$	(9.0	)	$	-	$	(37.6	)	$	69.7

(1)	Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

All Other Net Unrealized Investment Gains (Losses) in AOCI

												AOCI
	Net								Deferred			Loss
	Unrealized								Income			Related to Net
	(Losses)								Tax			Unrealized
	Gains on			DAC and			Policyholders		Asset			Investment
	Investments			VOBA			Liabilities		(Liability)			Gains (Losses)
	(In Millions)

Balance, July 1, 2009	$	(112.8	)	$	27.2		$	-	$	29.9		$	(55.7	)
Net investment gains
arising during the period		92.7			-			-		-			92.7
Reclassification adjustment for
OTTI losses:
Included in Net loss		.3			-			-		-			.3
Excluded from Net loss (1)		-			-			-		-			-
Impact of net unrealized investment
losses on:
DAC and VOBA		-			(20.9	)		-		-			(20.9	)
Deferred income taxes		-			-			-		(25.2	)		(25.2	)
Policyholders liabilities		-			-			-		-			-
Balance, September 30, 2009	$	(19.8	)	$	6.3		$	-	$	4.7		$	(8.8	)

Balance, January 1, 2009	$	(244.4	)	$	62.2		$	-	$	63.8		$	(118.4	)
Cumulative impact of implementing
new guidance		(1.7	)		.5			-		.4			(.8	)
Net investment gains
arising during the period		183.0			-			-		-			183.0
Reclassification adjustment for
OTTI losses:
Included in Net loss		43.3			-			-		-			43.3
Excluded from Net loss (1)		-			-			-		-			-
Impact of net unrealized investment
losses on:
DAC and VOBA		-			(56.4	)		-		-			(56.4	)
Deferred income taxes		-			-			-		(59.5	)		(59.5	)
Policyholders liabilities		-			-			-		-			-
Balance, September 30, 2009	$	(19.8	)	$	6.3		$	-	$	4.7		$	(8.8	)

(1)	Represents “transfers out” related to the portion of OTTI losses during the period that were not recognized in earnings for securities with no prior OTTI loss.

The following tables disclose the fair values and gross unrealized losses of the 92 issues at September 30, 2010 and the 145 issues at December 31, 2009 of fixed maturities that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the specified periods at the dates indicated:

	September 30, 2010
	Less Than 12 Months				12 Months or Longer					Total
			Gross				Gross					Gross
			Unrealized				Unrealized					Unrealized
	Fair Value		Losses		Fair Value		Losses			Fair Value		Losses
	(In Millions)

Fixed maturities:
Corporate	$	-	$	-	$	66.6	$	(2.1	)	$	66.6	$	(2.1	)
U.S. Treasury,
government and agency		-		-		1.9		-			1.9		-
States and political
subdivisions		-		-		3.3		-			3.3		-
Foreign governments		-		-		-		-			-		-
Commercial mortgage-backed		-		-		38.4		(45.7	)		38.4		(45.7	)
Residential mortgage-backed		-		-		-		-			-		-
Asset-backed		-		-		.6		-			.6		-
Redeemable preferred stock		-		-		76.9		(3.8	)		76.9		(3.8	)

Total	$	-	$	-	$	187.7	$	(51.6	)	$	187.7	$	(51.6	)

	December 31, 2009
	Less Than 12 Months (1)					12 Months or Longer (1)					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
	(In Millions)

Fixed maturities:
Corporate	$	159.5	$	(4.4	)	$	176.7	$	(14.5	)	$	336.2	$	(18.9	)
U.S. Treasury,
government and agency		39.4		(2.2	)		-		-			39.4		(2.2	)
States and political
subdivisions		15.3		(1.2	)		1.7		(.1	)		17.0		(1.3	)
Foreign governments		1.9		(.1	)		-		-			1.9		(.1	)
Commercial mortgage-backed		2.8		(1.4	)		60.7		(55.3	)		63.5		(56.7	)
Residential mortgage-backed		-		-			-		-			-		-
Asset-backed		5.4		(.1	)		-		-			5.4		(.1	)
Redeemable preferred stock		.1		-			97.4		(20.5	)		97.5		(20.5	)

Total	$	224.4	$	(9.4	)	$	336.5	$	(90.4	)	$	560.9	$	(99.8	)

(1)	The month count for aging of unrealized losses was reset back to historical unrealized loss month counts for securities impacted by the adoption of new guidance.

MLOA’s investments in fixed maturity securities do not include concentrations of credit risk of any single issuer greater than 10% of the shareholder’s equity of MLOA, other than securities of the U.S. government, U.S. government agencies and certain securities guaranteed by the U.S. government. MLOA maintains a diversified portfolio of corporate securities across industries and issuers and does not have exposure to any single issuer in excess of 1.15% of total investments. The largest exposure to a single issuer of corporate securities held at September 30, 2010 and December 31, 2009 were $27.5 million and $39.9 million, respectively. Corporate high yield securities, consisting primarily of public high yield bonds, are classified as other than investment grade by the various rating agencies, i.e., a rating below Baa3/BBB- or the NAIC designation of 3 (medium grade), 4 or 5 (below investment grade) or 6 (in or near default). At September 30, 2010 and December 31, 2009, respectively, approximately $191.6 million and $179.0 million, or 10.0% and 9.0%, of the $1,924.7 million and $1,986.2 million aggregate amortized cost of fixed maturities held by MLOA were considered to be other than investment grade. These securities had net unrealized losses of $43.1 million and $56.2 million at September 30, 2010 and December 31, 2009, respectively.

MLOA does not originate, purchase or warehouse residential mortgages and is not in the mortgage servicing business. MLOA’s fixed maturity investment portfolio includes RMBS backed by subprime and Alt-A residential mortgages comprised of loans made by banks or mortgage lenders to residential borrowers with lower credit ratings. The criteria used to categorize such subprime borrowers include FICO scores, interest rates charged, debt-to-income ratios and loan-to-value ratios. Alt-A residential mortgages are mortgage loans where the risk profile falls between prime and subprime; borrowers typically have clean credit histories but the mortgage loan has an increased risk profile due to higher loan-to-value and debt-to-income ratios and/or inadequate documentation of the borrowers’ income. At September 30, 2010 and December 31, 2009, MLOA owned $4.7 million and $4.8 million, respectively, in RMBS backed by subprime residential mortgage loans and no RMBS backed by Alt-A residential mortgage loans. RMBS backed by subprime and Alt-A residential mortgages are fixed income investments supporting General Account liabilities.

At September 30, 2010, the carrying value of fixed maturities which were non-income producing for the twelve months preceding that date was $3.1 million.

For the third quarter and first nine months of 2010 and 2009, Net investment income is shown net of investment expenses of $1.2 million, $3.2 million, $1.2 million and $3.5 million, respectively.

Mortgage Loans

Investment valuation allowances for mortgage loans totaled $2.0 million and $2.3 million at September 30, 2010 and December 31, 2009, respectively.

At both September 30, 2010 and December 31, 2009, there were no impaired mortgage loans without investment valuation allowances. During the first nine months of 2010 and 2009, respectively, MLOA’s average recorded investment in impaired mortgage loans was $10.6 million and $5.4 million. Interest income recognized on impaired mortgage loans for the first nine months of 2010 and 2009, respectively, of $0.4 million and $0.2 million.

Mortgage loans on real estate are placed on nonaccrual status once management believes the collection of accrued interest is doubtful. Once mortgage loans on real estate are classified as nonaccrual loans, interest income is recognized under the cash basis of accounting and the resumption of the interest accrual would commence only after all past due interest has been collected or the mortgage loan on real estate has been restructured to where the collection of interest is considered likely. At September 30, 2010 and December 31, 2009, respectively, the carrying values of mortgage loans on real estate that had been classified as nonaccrual loans were $8.5 million and $8.3 million.

Equity Investments

The following table presents MLOA’s investment in 2.6 million units in AllianceBernstein, an affiliate, which is included in Other invested assets:

	Nine Months Ended
	September 30,
	2010				2009
	(In Millions)

Balances, beginning of year		$	78.5			$	81.7
Equity in net earnings			2.5				3.4
Dividends received			(4.2	)			(2.6	)
Balances, End of Period		$	76.8			$	82.5

MLOA holds equity in limited partnership interests and other equity method investments that primarily invest in securities considered to be other than investment grade. The carrying values of September 30, 2010 and December 31, 2009 were $2.4 million and $2.7 million, respectively.

4) VALUE OF BUSINESS ACQUIRED

The following table presents MLOA’s VOBA asset as of September 30, 2010 and December 31, 2009:

	Gross			Accumulated
	Carrying			Amortization
	Amount			and Other (1)				Net
	(In Millions)

VOBA

September 30, 2010		$	416.5		$	(307.4	)		$	109.1

December 31, 2009		$	416.5		$	(269.0	)		$	147.5

(1)	Includes reactivity to unrealized investment gains (losses) and the impact of the December 31, 2005 MODCO recapture.

For the third quarter and first nine months of 2010 and of 2009, total amortization expense related to VOBA was $4.2 million, $21.9 million, $7.8 million and $15.2 million, respectively. VOBA amortization is estimated to range between $25.5 million and $14.0 million annually through 2014.

5)	FAIR VALUE DISCLOSURES

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance established a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, and identifies three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices for identical instruments in active markets. Level 1 fair values generally are supported by market transactions that occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, and inputs to model-derived valuations that are directly observable or can be corroborated by observable market data.
Level 3	Unobservable inputs supported by little or no market activity and often requiring significant management judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant components of value that market participants would use in pricing the asset or liability.

MLOA defines fair value as the quoted market prices for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are measured using present value or other valuation techniques. The fair value determinations are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of the timing and amount of expected future cash flows and the credit standing of counterparties. Such adjustments do not reflect any premium or discount that could result from offering for sale at one time MLOA’s entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair values cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument.

Assets measured at fair value on a recurring basis are summarized below:

Fair Value Measurements at September 30, 2010

	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets
Investments:
Fixed maturities, available-for-sale:
Corporate	$	-	$	1,728.9	$	20.7	$	1,749.6
U.S. Treasury, government
and agency		-		90.7		-		90.7
States and political subdivisions		-		21.3		-		21.3
Foreign governments		-		4.3		-		4.3
Commercial mortgage-backed		-		-		40.0		40.0
Residential mortgage- backed (1)		-		38.3		-		38.3
Asset-backed (2)		-		5.4		5.7		11.1
Redeemable preferred stock		20.8		63.4		-		84.2
Subtotal		20.8		1,952.3		66.4		2,039.5
Other equity investments		.9		-		-		.9
Cash equivalents		30.6		-		-		30.6
GMIB reinsurance contracts		-		-		2.1		2.1
Separate Accounts’ assets		1,751.6		14.3		-		1,765.9
Total Assets	$	1,803.9	$	1,966.6	$	68.5	$	3,839.0

(1)	Includes publicly traded agency pass-through securities and collateralized obligations.

(2)	Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

Fair Value Measurements at December 31, 2009

	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets
Investments:
Fixed maturities, available-for-sale:
Corporate	$	-	$	1,618.9	$	23.7	$	1,642.6
U.S. Treasury, government
and agency		-		70.4		-		70.4
States and political subdivisions		-		18.1		-		18.1
Foreign governments		-		4.1		-		4.1
Commercial mortgage-backed		-		-		63.5		63.5
Residential mortgage-backed (1)		-		50.2		-		50.2
Asset-backed (2)		-		4.7		5.5		10.2
Redeemable preferred stock		17.3		80.0		5.6		102.9
Subtotal		17.3		1,846.4		98.3		1,962.0
Other equity investments		.8		-		-		.8
Cash equivalents		51.5		-		-		51.5
GMIB reinsurance contracts		-		-		1.4		1.4
Separate Accounts’ assets		1,817.5		14.7		-		1,832.2
Total Assets	$	1,887.1	$	1,861.1	$	99.7	$	3,847.9

(1) Includes publicly traded agency pass-through securities and collateralized obligations.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

At September 30, 2010 and December 31, 2009, respectively, investments classified as Level 1 comprise approximately 47.0% and 49.1% of invested assets measured at fair value on a recurring basis and primarily include redeemable preferred stock, cash and cash equivalents and Separate Accounts assets. Fair value measurements classified as Level 1 include exchange-traded prices of fixed maturities, equity securities and derivative contracts, and net asset values for transacting subscriptions and redemptions of mutual fund shares held by Separate Accounts. Cash equivalents classified as Level 1 include money market accounts, overnight commercial paper and highly liquid debt instruments purchased with an original maturity of three months or less, and are carried at cost as a proxy for fair value measurement due to their short-term nature.

At September 30, 2010 and December 31, 2009, respectively, investments classified as Level 2 comprise approximately 51.3% and 48.3% of invested assets measured at fair value on a recurring basis and primarily include U.S. government and agency securities and certain corporate debt securities, such as private fixed maturities. As market quotes generally are not readily available or accessible for these securities, their fair value measures are determined utilizing relevant information generated by market transactions involving comparable securities and often are based on model pricing techniques that effectively discount prospective cash flows to present value using appropriate sector-adjusted credit spreads commensurate with the security’s duration, also taking into consideration issuer-specific credit quality and liquidity. These valuation methodologies have been studied and evaluated by MLOA and the resulting prices determined to be representative of exit values.

Observable inputs generally used to measure the fair value of securities classified as Level 2 include benchmark yields, reported secondary trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data. Additional observable inputs are used when available, and as may be appropriate, for certain security types, such as prepayment, default, and collateral information for the purpose of measuring the fair value of mortgage- and asset-backed securities. At September 30, 2010 and December 31, 2009, respectively, approximately $38.3 million and $50.1 million of AAA-rated mortgage- and asset-backed securities are classified as Level 2, including commercial mortgage obligations, for which the observability of market inputs to their pricing models is supported by sufficient, albeit more recently contracted, market activity in these sectors.

At September 30, 2010 and December 31, 2009, respectively, investments classified as Level 3 comprise approximately 1.7% and 2.6% of invested assets measured at fair value on a recurring basis and primarily include corporate debt securities. Determinations to classify fair value measures within Level 3 of the valuation hierarchy generally are based upon the significance of the unobservable factors to the overall fair value measurement. Included in the Level 3 classification at September 30, 2010 and December 31, 2009, respectively, were approximately $19.2 million and $32.5 million of fixed maturities with indicative pricing obtained from brokers that otherwise could not be corroborated to market observable data. MLOA applies various due-diligence procedures, as considered appropriate, to validate these non-binding broker quotes for reasonableness, based on its understanding of the markets, including use of internally-developed assumptions about inputs a market participant would use to price the security. In addition, approximately $45.6 million and $69.1 million of mortgage- and asset-backed securities, including CMBS, are classified as Level 3 at September 30, 2010 and December 31, 2009, respectively. Prior to fourth quarter 2008, pricing of the CMBS was sourced from a third-party service, whose process placed significant reliance on market trading activity. Beginning in fourth quarter 2008, the lack of sufficient observable trading data made it difficult, at best, to validate prices of CMBS below the senior AAA tranche. Consequently, MLOA instead applied a risk-adjusted present value technique to the projected cash flows of these securities, as adjusted for origination year, default metrics, and level of subordination, with the objective of maximizing observable inputs, and weighted the result with a 10% attribution to pricing sourced from the third party service. At September 30, 2010, MLOA continued to apply this methodology to measure the fair value of CMBS below the senior AAA tranche, having established ongoing insufficient frequency and volume of observable trading activity in these securities.

Level 3 also includes the GMIB reinsurance asset which is accounted for as a derivative contract. The GMIB reinsurance asset reflects the present value of reinsurance premiums and recoveries and risk margins over a range of market consistent economic scenarios. The valuation of the GMIB asset incorporates significant non-observable assumptions related to policyholder behavior, risk margins and projections of equity Separate Account funds consistent with the S&P 500 Index. Incremental adjustment is made to the resulting fair values of the GMIB asset to reflect change in the claims-paying ratings of counterparties to the reinsurance treaties of MLOA. After giving consideration to collateral arrangements, MLOA had no need to adjust the fair value of its GMIB asset at September 30, 2010 to recognize incremental counterparty non-performance risk.

In the first nine months of 2010, AFS fixed maturities with fair values of $8.6 million and $0.9 million were transferred out of Level 3 and into Level 2 and out of Level 2 and into Level 1, respectively, principally due to the availability of trading activity and/or market observable inputs to measure and validate their fair values. In addition, AFS fixed maturities with fair value of $1.7 million were transferred into the Level 3 classification. These transfers in the aggregate represent approximately 1.8% of total equity at September 30, 2010.

The table below presents a reconciliation for all Level 3 assets for third quarter and the first nine months of 2010 and 2009, respectively:

Level 3 Instruments

Fair Value Measurements

(In Millions)

						State and					Residen-
				US Treasury,		Political		Commercial			tial
				Government		Sub-		Mortgage-			Mortgage			Asset-
	Corporate			And Agency		divisions		backed			backed			backed
Discrete third quarter:
Balance, July 1, 2010	$	20.6		$	-	$	-	$	42.8			$	-		$	5.6
Total gains (losses),
realized and unrealized,
included in:
Loss as:
Net investment income		-			-		-		-				-			-
Investment losses, net		-			-		-		(29.0	)			-			-
Decrease in the
fair value of the
reinsurance contracts		-			-		-		-				-			-
Subtotal		-			-		-		(29.0	)			-			-
Other comprehensive
income		.3			-		-		26.2				-			.1
Purchases/issuances		-			-		-		-				-			-
Sales/settlements		(.2	)		-		-		-				-			-
Transfers into/out of
Level 3 (2)		-			-		-		-				-			-
Balance, September 30, 2010	$	20.7		$	-	$	-	$	40.0			$	-		$	5.7

First nine months of 2010:
Balance, January 1, 2010	$	23.8		$	-	$	-	$	63.6			$	-		$	5.5
Total gains (losses),
realized and unrealized,
included in:
Loss as:
Net investment income		(.1	)		-		-		.2				-			-
Investment losses, net		-			-		-		(34.9	)			-			-
Increase in the
fair value of the
reinsurance contracts		-			-		-		-				-			-
Subtotal		(.1	)		-		-		(34.7	)			-			-
Other comprehensive
income		1.5			-		-		11.1				-			.3
Purchases/issuances		4.4			-		-		-				-			-
Sales/settlements		(2.0	)		-		-		-				-			(.1	)
Transfers into/out of
Level 3 (2)		(6.9	)		-		-		-				-			-
Balance, September 30, 2010	$	20.7		$	-	$	-	$	40.0			$	-		$	5.7

(1)	Includes Trading securities’ Level 3 amount.

(2)	Transfers into/out of Level 3 classification are reflected at beginning-of-period fair values.

	Redeem-					Other
	able			Other		Invested		GMIB			Separate
	Preferred			Equity		Assets		Reinsurance			Accounts
	Stock			Investments(1)		Other		Contracts			Assets
Discrete third quarter:
Balance, July 1, 2010	$	-		$	-	$	-	$	3.8			$	-
Total gains (losses),
realized and unrealized,
included in:
Loss as:
Net investment income		-			-		-		-				-
Investment losses, net		-			-		-		-				-
Decrease in the
fair value of the
reinsurance contracts		-			-		-		(1.7	)			-
Subtotal		-			-		-		(1.7	)			-
Other comprehensive
income		-			-		-		-				-
Purchases/issuances		-			-		-		-
Sales/settlements		-			-		-		-				-
Transfers into/out of
Level 3 (2)		-			-		-		-				-
Balance, September 30, 2010	$	-		$	-	$	-	$	2.1			$	-

First nine months of 2010:
Balance, January 1, 2010	$	5.4		$	-	$	-	$	1.4			$	-
Total gains (losses),
realized and unrealized,
included in:
Loss as:
Net investment income		-			-		-		-				-
Investment losses, net		2.1			-		-		-				-
Increase in the
fair value of the
reinsurance contracts		-			-		-		.7				-
Subtotal		2.1			-		-		.7				-
Other comprehensive
income		-			-		-		-				-
Purchases/issuances		-			-		-		-
Sales/settlements		(7.5	)		-		-		-				-
Transfers into/out of
Level 3 (2)		-			-		-		-				-
Balance, September 30, 2010	$	-		$	-	$	-	$	2.1			$	-

(1)	Includes Trading securities’ Level 3 amount.

(2)	Transfers into/out of Level 3 classification are reflected at beginning-of-period fair values.

	Corporate			US Treasury, Government And Agency		State and Political Sub- divisions		Commercial Mortgage- backed			Residen- tial Mortgage backed		Asset- backed


Discrete third quarter:
Balance, July 1, 2009	$	42.1		$	-	$	-	$	85.1		$	-	$	5.0
Total gains (losses),
realized and unrealized,
included in:
Loss as:
Net investment income		-			-		-		.1			-		-
Investment losses, net		-			-		-		(10.7	)		-		-
Decrease in the
fair value of the
reinsurance contracts		-			-		-		-			-		-
Subtotal		-			-		-		(10.6	)		-		-
Other comprehensive
income		2.6			-		-		(4.3	)		-		.2
Purchases/issuances		-			-		5.0		-			-		-
Sales/settlements		(.2	)		-		-		-			-		-
Transfers into/out of
Level 3 (2)		-			-		-		-			-		-
Balance, September 30, 2009	$	44.5		$	-	$	5.0	$	70.2		$	-	$	5.2

First nine months of 2009:
Balance, January 1, 2009	$	51.1		$	-	$	-	$	86.5		$	-	$	5.0
Total gains (losses),
realized and unrealized,
included in:
Loss as:
Net investment income		(.1	)		-		-		.2			-		-
Investment losses, net		-			-		-		(10.7	)		-		-
Decrease in the
fair value of the
reinsurance contracts		-			-		-		-			-		-
Subtotal		(.1	)		-		-		(10.5	)		-		-
Other comprehensive
income		1.0			-		-		(5.8	)		-		.2
Purchases/issuances		-			-		5.0		-			-		-
Sales/settlements		(7.5	)		-		-		-			-		-
Transfers into/out of
Level 3 (2)		-			-		-		-			-		-
Balance, September 30, 2009	$	44.5		$	-	$	5.0	$	70.2		$	-	$	5.2

(1)	Includes Trading securities’ Level 3 amount.

(2)	Transfers into/out of Level 3 classification are reflected at beginning-of-period fair values.

	Redeem- able Preferred Stock			Other Equity Investments(1)		Other Invested Assets		GMIB Reinsurance Contracts			Separate Accounts Assets

Discrete third quarter:
Balance, July 1, 2009	$	-		$	-	$	-	$	3.0		$	-
Total gains (losses),
realized and unrealized,
included in:
Loss as:
Net investment income		-			-		-		-			-
Investment losses, net		(21.6	)		-		-		-			-
Decrease in the
fair value of the
reinsurance contracts		-			-		-		(.7	)		-
Subtotal		(21.6	)		-		-		(.7	)		-
Other comprehensive
income		24.5			-		-		-			-
Purchases/issuances		-			-		-		.2			-
Sales/settlements		-			-		-		-			-
Transfers into/out of
Level 3 (2)		6.0			-		-		-			-
Balance, September 30, 2009	$	8.9		$	-	$	-	$	2.5		$	-

First nine months of 2009:
Balance, January 1, 2009	$	-		$	-	$	-	$	8.3		$	-
Total gains (losses),
realized and unrealized,
included in:
Loss as:
Net investment income		-			-		-		-			-
Investment losses net		(21.6	)		-		-		-			-
Decrease in the
fair value of the
reinsurance contracts		-			-		-		(6.3	)		-
Subtotal		(21.6	)		-		-		(6.3	)		-
Other comprehensive
income		19.1			-		-		-			-
Purchases/issuances		-			-		-		.5			-
Sales/settlements		-			-		-		-			-
Transfers into/out of
Level 3 (2)		11.4			-		-		-			-
Balance, September 30, 2009	$	8.9		$	-	$	-	$	2.5		$	-

(1)	Includes Trading securities’ Level 3 amount.

(2)	Transfers into/out of Level 3 classification are reflected at beginning-of-period fair values.

The table below details changes in unrealized gains (losses) for third quarter and first nine months of 2010 and 2009 by category for Level 3 assets still held at September 30, 2010 and 2009, respectively:

	Loss
					Decrease in
	Net		Investment		Fair Value of
	Investment		Losses,		Reinsurance
	Income		Net		Contracts			OCI
	(In Millions)
Level 3 Instruments
Third Quarter 2010
Still Held at September 30, 2010:
Change in unrealized gains
or losses:
Fixed maturities,
available-for-sale:
Corporate	$	-	$	-	$	-		$	.3
U.S. Treasury, government
and agency		-		-		-			-
State and political
subdivisions		-		-		-			-
Commercial
mortgage-backed		-		-		-			26.2
Residential
mortgage-backed		-		-		-			-
Asset-backed		-		-		-			.1
Redeemable preferred stock		-		-		-			-
Subtotal		-		-		-			26.6
Equity securities,
available-for-sale		-		-		-			-
Other equity investments		-		-		-			-
Cash equivalents		-		-		-			-
GMIB reinsurance contracts		-		-		(1.7	)		-
Separate Accounts’ assets		-		-		-			-
Total	$	-	$	-	$	(1.7	)	$	26.6

	Loss
					Increase in
	Net		Investment		Fair Value of
	Investment		Losses,		Reinsurance
	Income		Net		Contracts		OCI
	(In Millions)
Level 3 Instruments
First Nine Months of 2010
Still Held at September 30, 2010:
Change in unrealized gains
or losses:
Fixed maturities,
available-for-sale:
Corporate	$	-	$	-	$	-	$	1.5
U.S. Treasury, government
and agency		-		-		-		-
State and political
subdivisions		-		-		-		-
Commercial
mortgage-backed		-		-		-		11.0
Residential
mortgage-backed		-		-		-		-
Asset-backed		-		-		-		.2
Redeemable preferred stock		-		-		-		-
Subtotal		-		-		-		12.7
Equity securities,
available-for-sale		-		-		-		-
Other equity investments		-		-		-		-
Cash equivalents		-		-		-		-
GMIB reinsurance contracts		-		-		.7		-
Separate Accounts’ assets		-		-		-		-
Total	$	-	$	-	$	.7	$	12.7

	Loss
					Decrease in
	Net		Investment		Fair Value of
	Investment		Losses,		Reinsurance
	Income		Net		Contracts			OCI
	(In Millions)
Level 3 Instruments
Third Quarter 2009
Still Held at September 30, 2009:
Change in unrealized gains
or losses:
Fixed maturities,
available-for-sale:
Corporate	$	-	$	-	$	-		$	2.6
U.S. Treasury, government
and agency		-		-		-			-
State and political
subdivisions		-		-		-			-
Commercial
mortgage-backed		-		-		-			(4.2	)
Residential
mortgage-backed		-		-		-			-
Asset-backed		-		-		-			.2
Redeemable preferred stock		-		-		-			24.5
Subtotal		-		-		-			23.1
Equity securities,
available-for-sale		-		-		-			-
Other equity investments		-		-		-			-
Cash equivalents		-		-		-			-
GMIB reinsurance contracts		-		-		(.5	)		-
Separate Accounts’ assets		-		-		-			-
Total	$	-	$	-	$	(.5	)	$	23.1

	Loss
					Decrease in
	Net		Investment		Fair Value of
	Investment		Losses,		Reinsurance
	Income		Net		Contracts			OCI
	(In Millions)
Level 3 Instruments
First Nine Months of 2009
Still Held at September 30, 2009:
Change in unrealized gains
or losses:
Fixed maturities,
available-for-sale:
Corporate	$	-	$	-	$	-		$	1.0
U.S. Treasury, government
and agency		-		-		-			-
State and political
subdivisions		-		-		-			-
Commercial
mortgage-backed		-		-		-			(5.8	)
Residential
mortgage-backed		-		-		-			-
Asset-backed		-		-		-			.3
Redeemable preferred stock		-		-		-			19.1
Subtotal		-		-		-			14.6
Equity securities,
available-for-sale		-		-		-			-
Other equity investments		-		-		-			-
Cash equivalents		-		-		-			-
GMIB reinsurance contracts		-		-		(5.8	)		-
Separate Accounts’ assets		-		-		-			-
Total	$	-	$	-	$	(5.8	)	$	14.6

Fair value measurements are required on a non-recurring basis for certain assets, including goodwill, mortgage loans on real estate, equity real estate held for production of income, and equity real estate held for sale, only when an other-than-temporary impairment or other event occurs. When such fair value measurements are recorded, they must be classified and disclosed within the fair value hierarchy. In the third quarter and first nine months of 2010 and 2009, no assets were required to be measured at fair value on a non-recurring basis.

The carrying values and fair values at September 30, 2010 and December 31, 2009 for financial instruments not otherwise disclosed in Note 3 are presented in the table below. Certain financial instruments are exempt from the requirements for fair value disclosure, such as insurance liabilities other than financial guarantees and investment contracts and pension and other postretirement obligations.

	September 30, 2010						December 31, 2009
	Carrying			Fair			Carrying			Fair
	Value			Value			Value			Value
	(In Millions)

Mortgage loans on real estate		$	143.9		$	148.5		$	149.1		$	151.5
Policyholders liabilities:
Investment contracts			287.1			300.7			320.1			317.1
Note payable to affiliate			16.7			16.7			19.7			19.7

Fair values for mortgage loans on real estate are measured by discounting future contractual cash flows using interest rates at which loans with similar characteristics and credit quality would be made. Fair values for foreclosed mortgage loans and problem mortgage loans are limited to the fair value of the underlying collateral if lower.

The fair values for MLOA’s SCNILC, which are included in Policyholders’ account balances, are estimated using projected cash flows discounted at rates reflecting current market rates.

The fair values for single premium deferred annuities, included in Policyholders’ account balances, are estimated as the discounted value of projected cash flows. Expected cash flows are discounted back to the present at current market rates.

Fair values for the note payable to affiliate are determined using contractual cash flows discounted at market interest rates.

6)	GMDB, GMIB AND NO LAPSE GUARANTEE FEATURES

A) Variable Annuity Contracts – GMDB and GMIB

MLOA has certain variable annuity contracts with GMDB and GMIB features in force that guarantee one of the following:

·	Return of Premium: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals);

·	Ratchet: the benefit is the greatest of current account value, premiums paid (adjusted for withdrawals), or the highest account value on any anniversary up to contractually specified ages (adjusted for withdrawals);

·	Roll-Up: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals) accumulated at contractually specified interest rates up to specified ages; or

·	Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit which may include a five year or an annual reset.

The following table summarizes the GMDB and GMIB liabilities, before reinsurance ceded, reflected in the General Account in future policy benefits and other policyholders’ liabilities:

	GMDB			GMIB			Total
	(In Millions)

Balance at January 1, 2010	$	5.1		$	2.6		$	7.7
Paid guarantee benefits		(1.6	)		-			(1.6	)
Other changes in reserve		1.7			(.6	)		1.1
Balance at September 30, 2010	$	5.2		$	2.0		$	7.2

Balance at January 1, 2009	$	5.6		$	3.0		$	8.6
Paid guarantee benefits		(1.7	)		-			(1.7	)
Other changes in reserve		1.1			(.4	)		.7
Balance at September 30, 2009	$	5.0		$	2.6		$	7.6

Related GMDB reinsurance ceded amounts were:

	Nine Months Ended
	September 30,
	2010				2009
	(In Millions)

Balances, beginning of year		$	2.8			$	2.8
Paid guarantee benefits			(.5	)			(.4	)
Other changes in reserve			(.1	)			-
Balances, End of Period		$	2.2			$	2.4

The GMIB reinsurance contracts are considered derivatives and are reported at fair value.

The September 30, 2010 values for variable annuity contracts in force on such date with GMDB and GMIB features are presented in the following table. For contracts with the GMDB feature, the net amount at risk in the event of death is the amount by which the GMDB benefits exceed related account values. For contracts with the GMIB feature, the net amount at risk in the event of annuitization is the amount by which the present value of the GMIB benefits exceeds related account values, taking into account the relationship between current annuity purchase rates and the GMIB guaranteed annuity purchase rates. Since variable annuity contracts with GMDB guarantees may also offer GMIB guarantees in the same contract, the GMDB and GMIB amounts listed are not mutually exclusive:

	Return
	of
	Premium			Ratchet			Roll-Up			Combo			Total
	(Dollars In Millions)
GMDB:
Account values invested in:
General Account	$	133		$	184			N/A		$	27		$	344
Separate Accounts	$	405		$	535			N/A		$	93		$	1,033
Net amount at risk, gross	$	7		$	94			N/A		$	24		$	125
Net amount at risk, net of
amounts reinsured	$	7		$	76			N/A		$	1		$	84
Average attained age
of contractholders		64.5			64.8			N/A			64.4			64.7
Percentage of contractholders
over age 70		22.4	%		22.1	%		N/A			19.0	%		22.1	%
Contractually specified
interest rates		N/A			N/A			N/A			5.0	%		5.0	%

GMIB:
Account values invested in:
General Account		N/A			N/A		$	27			N/A		$	27
Separate Accounts		N/A			N/A		$	93			N/A		$	93
Net amount at risk, gross		N/A			N/A		$	4			N/A		$	4
Net amount at risk, net of
amount reinsured		N/A			N/A		$	-			N/A		$	-
Weighted average years remaining
until annuitization		N/A			N/A			2.3			N/A			2.3
Contractually specified
interest rates		N/A			N/A			5.0	%		N/A			5.0	%

B) Separate Account Investments by Investment Category Underlying GMDB and GMIB Features

The total account values of variable annuity contracts with GMDB and GMIB features include amounts allocated to the guaranteed interest option which is part of the General Account and variable investment options that invest through Separate Accounts in variable insurance trusts. The following table presents the aggregate fair value of assets, by major investment category, held by Separate Accounts that support variable annuity contracts with GMDB and GMIB benefits and guarantees. The investment performance of the assets impacts the related account values and, consequently, the net amount of risk associated with the GMDB and GMIB benefits and guarantees. Since variable annuity contracts with GMDB benefits and guarantees may also offer GMIB benefits and guarantees in each contract, the GMDB and GMIB amounts listed are not mutually exclusive:

Investment in Variable Insurance Trust Mutual Funds

	September 30,		December 31,
	2010		2009
	(In Millions)

GMDB:
Equity	$	841	$	917
Fixed income		123		134
Balanced		19		21
Other		50		60
Total	$	1,033	$	1,132

GMIB:
Equity	$	70	$	73
Fixed income		17		17
Balanced		-		-
Other		6		7
Total	$	93	$	97

C) Variable and Interest-Sensitive Life Insurance Policies - No Lapse Guarantee

The no lapse guarantee feature contained in variable and interest-sensitive life insurance policies keeps them in force in situations where the policy value is not sufficient to cover monthly charges then due. The no lapse guarantee remains in effect so long as the policy meets a contractually specified premium funding test and certain other requirements. At both September 30, 2010 and December 31, 2009, MLOA had liabilities of $0.5 million for no lapse guarantees reflected in the General Account in Future policy benefits and other policyholders liabilities.

7)	RELATED PARTY TRANSACTIONS

Under its service agreement with AXA Equitable, personnel services, employee benefits, facilities, supplies and equipment are provided to MLOA to conduct its business. The associated costs related to the service agreements are allocated to MLOA based on methods that management believes are reasonable, including a review of the nature of such costs and activities performed to support MLOA. As a result of such allocations, MLOA incurred expenses of $12.0 million, $36.7 million, $11.9 million and $38.0 million for the third quarter and first nine months of 2010 and of 2009, respectively. At September 30, 2010 and December 31, 2009, MLOA reported a payable to AXA Equitable in connection with its service agreement of $9.7 million and $8.4 million, respectively.

Various AXA affiliates cede a portion of their life, health and catastrophe insurance business through reinsurance agreements to AXA Cessions, an AXA affiliated reinsurer. AXA Cessions, in turn, retrocedes a quota share portion of these risks to AXA Equitable and MLOA on a one-year term basis. Premiums earned in third quarter and the first nine months of 2010 and 2009 under this arrangement were $(0.1) million, $0.2 million, $(0.3) million and $0.6 million, respectively. Claims and expenses paid in the same respective periods of 2010 and 2009 were $(0.1) million, $0.1 million, $0.2 million and $1.1 million.

MLOA ceded new variable life policies on an excess of retention basis with AXA Equitable and reinsured the no lapse guarantee riders through AXA Bermuda. MLOA reported $0.1 million, $0.3 million, $0.1 million and $0.3 million of ceded premiums for the third quarter and the first nine months of 2010 and of 2009, respectively.

In addition to the AXA Equitable service agreement, MLOA has various other service and investment advisory agreements with affiliates. The expenses incurred by MLOA related to these agreements were $0.5 million, $1.5 million, $0.5 million and $1.5 million for the third quarter and first nine months of 2010 and of 2009, respectively.

8)	SHARE-BASED COMPENSATION

For the third quarter and first nine months of 2010 and 2009, MLOA recognized compensation cost of $0.3 million, $1.1 million, $0.3 million and $0.7 million, respectively, for share-based payment arrangements.

9)	INCOME TAXES

Income taxes for interim periods have been computed using an estimated annual effective tax rate. This rate is revised, if necessary, at the end of each successive interim period to reflect the current estimate of the annual effective tax rate.

10)	LITIGATION

There have been no new material legal proceedings and no material developments in specific litigations previously reported in MLOA’s Notes to Financial Statements for the year ended December 31, 2009.

A number of lawsuits have been filed against life and health insurers in the jurisdictions in which MLOA does business involving insurers’ sales practices, alleged agent misconduct, alleged failure to properly supervise agents, contract administration and other matters. Some of the lawsuits have resulted in the award of substantial judgments against other insurers, including material amounts of punitive damages, or in substantial settlements. In some states, juries have substantial discretion in awarding punitive damages. MLOA, like other life and health insurers, from time to time is involved in such litigations. Some of these actions and proceedings filed against MLOA have been brought on behalf of various alleged classes of claimants and certain of these claimants seek damages of unspecified amounts. While the ultimate outcome of such matters cannot be predicted with certainty, in the opinion of management no such matter is likely to have a material adverse effect on MLOA’s financial position or results of operations. However, it should be noted that the frequency of large damage awards, including large punitive damage awards that bear little or no relation to actual economic damages incurred by plaintiffs in some jurisdictions, continues to create the potential for an unpredictable judgment in any given matter.

11)	COMPREHENSIVE INCOME

The components of comprehensive income follow:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2010			2009			2010			2009
	(In Millions)

Net loss	$	(13.3	)	$	(11.7	)	$	(12.4	)	$	(1.6	)

Change in unrealized gains, net of
reclassification adjustment		46.6			69.0			79.7			116.9
Other comprehensive income		46.6			69.0			79.7			116.9

Comprehensive Income	$	33.3		$	57.3		$	67.3		$	115.3

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis is omitted pursuant to General Instruction H of Form 10-Q. The management narrative for MLOA that follows should be read in conjunction with the Financial Statements and the related Notes to Financial Statements included elsewhere herein, with the information provided under “Forward-looking Statements” included elsewhere in this report and with the management narrative found in the Management’s Discussion and Analysis (“MD&A”) and “Risk Factors” sections included in MLOA’s Annual Report on Form 10-K for the year ended December 31, 2009 (“2009 Form 10-K”).

INTRODUCTION

MLOA’s business and results of operations, cash flows and financial condition are affected by conditions in the financial markets and the economy generally. For more information on how equity market performance, interest rates and volatility in the capital markets impact MLOA’s business and results of operations, see MLOA’s 2009 Form 10-K.

RESULTS OF OPERATIONS

Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009

The income tax benefit increased $3.8 million for the first nine months of 2010 to $9.8 million from $6.0 million in the first nine months of 2009, primarily due to higher pre-tax losses in the first nine months of 2010 as compared to the comparable 2009 period.

Loss before income taxes was $22.2 million for the first nine months of 2010, an increase of $14.6 million from loss of $7.6 million for the first nine months of 2009. Net Loss was $12.4 million for the first nine months of 2010, $10.8 million higher than the $1.6 million net loss reported for the first nine months of 2009.

Revenues. Total revenues for the first nine months of 2010 increased $12.6 million to $188.2 million from $175.6 million for the first nine months of 2009.

Universal life and investment-type product policy fee income decreased $4.9 million for the first nine months of 2010 to $93.0 million from $97.9 million for the first nine months of 2009 primarily due to a decrease in initial fee amortization and capitalization as a result of revised estimates of future reinsurance costs in 2010.

Net investment income decreased $2.1 million for the first nine months of 2010 to $89.9 million from $92.0 million for the first nine months of 2009 principally due to lower investment income on mortgage loans and fixed maturities.

Investment losses, net decreased $15.7 million for the first nine months of 2010 to $30.3 million from $46.0 million for the first nine months of 2009 due to lower writedowns on fixed maturities and higher gains on sales of fixed maturities.

Increase (decrease) in fair value of reinsurance contracts increased $6.6 million for the first nine months of 2010 to $0.7 million from $(5.9) million for the first nine months of 2009; both periods changes reflected market fluctuations.

Benefits and Other Deductions. Total benefits and other deductions for the first nine months of 2010 increased $27.2 million to $210.4 million from $183.2 million for the first nine months of 2009.

Policyholders’ benefits increased $7.3 million for the first nine months of 2010 to $69.8 million from $62.5 million for the first nine months of 2009 principally due to higher death benefits.

Interest credited to policyholders’ account balances decreased $1.1 million for the first nine months of 2010 to $52.1 million from $53.2 million for the first nine months of 2009 principally due to lower account values for annuity products.

Compensation and benefits expense increased $2.3 million to $24.0 million for the first nine months of 2010 from $21.7 million for the first nine months of 2009 due to an increase in share based and other compensation payments.

Commissions increased $3.2 million for the first nine months of 2010 to $26.0 million from $22.8 million in the first nine months of 2009 principally due to higher sales of individual life products.

Amortization of DAC and VOBA increased $11.4 million for the first nine months of 2010 to $32.7 million from $21.3 million for the first nine months of 2009, primarily due to revised estimates of future reinsurance costs and other updates in 2010.

Other operating costs and expenses increased $4.6 million for the first nine months of 2010 to $24.6 million from $20.0 million for the first nine months of 2009, primarily due to the write-off of a miscellaneous asset in 2010.

Premiums and Deposits. Total premiums and deposits for life insurance and annuity products increased by $1.2 million from $204.0 million during the first nine months of 2009 to $205.2 million for the first nine months of 2010. The increase resulted from an increase in sales of new life insurance products of $5.6 million partially offset by a decrease in renewals of life insurance products of $4.4 million.

Surrenders and Withdrawals. When totals for first nine months of 2010 are compared to first nine months of 2009, surrenders and withdrawals decreased from $320.2 million to $311.2 million with a decrease of $0.8 million reported for individual annuities and a $8.2 million decrease for variable and interest-sensitive life products. The annualized annuities surrender rate increased to 16.34% in the first nine months of 2010 from 15.6% in the first nine months of 2009 and the variable and interest-sensitive life surrender rates decreased to 8.28% in the first nine months of 2010 from 9.14% in the first nine months of 2009.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Omitted pursuant to General Instruction H of Form 10-Q.

Item 4(T). CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of MLOA’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended) as of September 30, 2010. Based on that evaluation, management, including the Chief Executive Officer and Chief Financial Officer, concluded that MLOA’s disclosure controls and procedures were effective as of September 30, 2010.

Changes in Internal Control Over Financial Reporting

There has been no change in MLOA’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, MLOA’s internal control over financial reporting.

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings

	There have been no new material legal proceedings and no new material developments in legal proceedings previously reported in the 2009 Form 10-K.

Item 1A.	Risk Factors

	There have been no material changes to the risk factors described in Item 1A, “Risk Factors,” included in the 2009 Form 10-K.

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

	Omitted pursuant to General Instruction H of Form 10-Q.

Item 3.	Defaults Upon Senior Securities

	Omitted pursuant to General Instruction H of Form 10-Q.

Item 4.	(Removed and Reserved)

Item 5.	Other Information

	None

Item 6.

Exhibits

		Number		Description and Method of Filing

		31.1		Certification of the registrant’s Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

		31.2		Certification of the registrant’s Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

		32.1		Certification of the registrant’s Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

		32.2		Certification of the registrant’s Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, MONY Life Insurance Company of America has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:

November 10, 2010

MONY LIFE INSURANCE COMPANY OF AMERICA

		By:	/s/ Richard S. Dziadzio
			Name:	Richard S. Dziadzio
			Title:	Senior Executive Vice President and
				Chief Financial Officer

Date:	November 10, 2010		/s/ Alvin H. Fenichel
			Name:	Alvin H. Fenichel
			Title:	Senior Vice President and
				Chief Accounting Officer

EQUITABLE FINANCIAL LIFE INSURANCE CO OF AMERICA - FORM 10-Q - November 10, 2010

Attached files

EQUITABLE FINANCIAL LIFE INSURANCE CO OF AMERICA Reports