1.We note that your non-GAAP measure Spread related earnings is used to evaluate your financial performance excluding market volatility. With regard to this measure, please tell us, and revise your future filings to disclose, how you define market volatility. In addition, tell us how you determined this adjustment is appropriate and whether the impact of market volatility represents normal, recurring activities or if this adjustment results in individually tailored accounting.

non-GAAP measures, together with the relevant US GAAP measures, provides information that may enhance an investor’s understanding of our results of operations and the underlying profitability drivers of our business. The majority of these non-GAAP measures are intended to remove from the results of operations the impact of market volatility (other than with respect to alternative investments), which consists of investment gains (losses), net of offsets and non-operating change in insurance liabilities and related derivatives, net of offsets, both defined below, as well as integration, restructuring and certain other expenses which are not part of our underlying profitability drivers, as such items fluctuate from period to period in a manner inconsistent with these drivers. These measures should be considered supplementary to our results in accordance with US GAAP and should not be viewed as a substitute for the corresponding US GAAP measures. See Non-GAAP Measure Reconciliations for the appropriate reconciliations to the most directly comparable US GAAP measures.

•For one of the Company’s major product lines, fixed indexed annuities (“FIA”), the interest credited to the policyholder’s account is driven in part by the performance of an underlying index, such as the S&P 500. The US GAAP measurement of liability for these products includes an embedded derivative measured at fair value, which drives significant period-to-period volatility in US GAAP earnings from changes in fair value due to movement in forward interest rate curves and equity markets. Such volatility is not reflective of the economic cost of crediting for such products, and as a result, FIA issuers typically exclude the change in fair value of the embedded derivative from non-GAAP operating measures.

•Pursuant to US GAAP guidance, the Company’s funds withheld balances related to modified coinsurance contain embedded derivatives, which are carried at fair value. The fair value of the embedded derivatives is related to the value of the reinsurance counterparty’s underlying assets, and subject to short-term volatility from changes in interest rates and spreads. This creates significant volatility in income before taxes, from changes in value that would be reflected in other comprehensive income instead of income if the Company held the underlying assets directly on its balance sheet. This treatment does not reflect the profitability and performance of the business the Company assumes through reinsurance or the quality of the assets supporting that business.

•The Company also uses a variety of derivative instruments to manage risks, which include equity, interest rate, credit and foreign currency risks, and liability risks associated with the Company’s indexed annuity products and reinsurance agreements. The majority of the Company’s derivatives do not qualify for hedge accounting. The change in fair value of derivative instruments, which are typically shorter in term or duration than the related assets and liabilities, creates short-term volatility in US GAAP earnings that is not reflective of whether the economic hedge is performing as designed.

2.We note your presentation of the non-GAAP measures for Spread related earnings -normalized, Net spread - normalized, and Net investment spread - normalized. Please tell us, and revise your future filings to include a discussion of how and why these measures are used, as well as why they are useful to investors.

The Company will revise future filings to include a discussion of why and how such measures are used and why management believes they are useful to investors. In future filings, the Company will revise the Quarterly Financial Supplement furnished on Form 8-K to include the following language within the Notes to the Financial Supplement:

3.In addition to the above, we note that these non-GAAP measures appear to reflect adjustments to normalize alternative investment income to an 11% long-term return. Please explain how you determined these adjustments are appropriate, including your consideration of whether they represent individually tailored accounting or smoothing. Refer to Questions 100.01, 100.04 and 102.03 of the Division of Corporation Finance’s Compliance & Disclosure Interpretations on Non-GAAP Financial Measures.

Response: