Allstate (ALL)

Securities loaned and security repurchase and resale

        The Company's business activities include securities lending transactions, securities sold under agreements to repurchase ("repurchase agreements"), and securities purchased under agreements to resell ("resale agreements"), which are used primarily to generate net investment income. The proceeds received from repurchase agreements also provide a source of liquidity. For repurchase agreements and securities lending transactions used to generate net investment income, the proceeds received are reinvested in short-term investments or fixed income securities. These transactions are short-term in nature, usually 30 days or less.

        The Company receives cash collateral for securities loaned in an amount generally equal to 102% and 105% of the fair value of domestic and foreign securities, respectively, and records the related obligations to return the collateral in other liabilities and accrued expenses or other investments. The carrying value of these obligations approximates fair value because of their relatively short-term nature. The Company monitors the market value of securities loaned on a daily basis and obtains additional collateral as necessary under the terms of the agreements to mitigate counterparty credit risk. The Company maintains the right and ability to redeem the securities loaned on short notice. Substantially all of the Company's securities loaned are placed with large banks.

        The Company's policy is to take possession or control of securities under resale agreements. Securities to be repurchased under repurchase agreements are the same, or substantially the same, as the securities transferred. The Company's obligations to return the funds received under repurchase agreements are carried at the amount at which the securities will subsequently be reacquired, including accrued interest, as specified in the respective agreements and are classified as other liabilities and accrued expenses or other investments. The carrying value of these obligations approximates fair value because of their relatively short-term nature.

Securities loaned and security repurchase and resale

        The Company's business activities include securities lending transactions, securities sold under agreements to repurchase ("repurchase
agreements"), and securities purchased under agreements to resell ("resale agreements"), which are used primarily to generate net investment income. The proceeds received from repurchase agreements
also provide a source of liquidity. For repurchase agreements and securities lending transactions used to generate net investment income, the proceeds received are reinvested in short-term
investments or fixed income securities. These transactions are short-term in nature, usually 30 days or less.

        The
Company receives cash collateral for securities loaned in an amount generally equal to 102% and 105% of the fair value of domestic and foreign securities, respectively, and records
the related obligations to return the collateral in other liabilities and accrued expenses or other investments. The carrying value of these obligations approximates fair value because of their
relatively short-term nature. The Company monitors the market value of securities loaned on a daily basis and obtains additional collateral as necessary under the terms of the agreements
to mitigate counterparty credit risk. The Company maintains the right and ability to redeem the securities loaned on short notice. Substantially all of the Company's securities loaned are placed with
large banks.

        The
Company's policy is to take possession or control of securities under resale agreements. Securities to be repurchased under repurchase agreements are the same, or substantially the
same, as the securities transferred. The Company's obligations to return the funds received under repurchase agreements are carried at the amount at which the securities will subsequently be
reacquired, including accrued interest, as specified in the respective agreements and are classified as other liabilities and accrued expenses or other investments. The carrying value of these
obligations approximates fair value because of their relatively short-term nature.

Securities loaned and security repurchase and resale

        The Company's business activities include securities lending programs with third parties, mostly large brokerage firms. At December 31, 2007 and 2006, fixed income and equity securities with a carrying value of $3.29 billion and $3.45 billion, respectively, were on loan under these agreements. In return, the Company receives cash that it invests and includes in short-term investments and fixed income securities, with an offsetting liability recorded in other liabilities and accrued expenses to account for the Company's obligation to return the collateral. Interest income on collateral, net of fees, was $19 million, $10 million and $8 million, for the years ended December 31, 2007, 2006 and 2005, respectively.

        As part of its business activities, the Company sells securities under agreements to repurchase and programs to purchase securities under agreements to resell. At December 31, 2007, the Company had no securities that were subject to repurchase agreements. At December 31, 2006, the Company had $196 million of securities that were subject to repurchase agreements. Of these securities, none were

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subject to resale agreements. As part of these programs, the Company receives cash or securities that it invests or holds in short-term or fixed income securities. For repurchase agreements, an offsetting liability is recorded in other liabilities and accrued expenses to account for the Company's obligation to return these funds. Interest income recorded as a result of the program was $(10) million, $3 million and $21 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Securities loaned and security repurchase and resale

        The Company's business activities include securities lending programs with third parties, mostly large brokerage firms. At December 31, 2007 and 2006,
fixed income and equity securities with a carrying value of $3.29 billion and $3.45 billion, respectively, were on loan under these agreements. In return, the Company receives cash that
it invests and includes in short-term investments and fixed income securities, with an offsetting liability recorded in other liabilities and accrued expenses to account for the Company's obligation
to return the collateral. Interest income on collateral, net of fees, was $19 million, $10 million and $8 million, for the years ended December 31, 2007, 2006 and 2005,
respectively.

        As
part of its business activities, the Company sells securities under agreements to repurchase and programs to purchase securities under agreements to resell. At December 31,
2007, the Company had no securities that were subject to repurchase agreements. At December 31, 2006, the Company had $196 million of securities that were subject to repurchase
agreements. Of these securities, none were

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subject
to resale agreements. As part of these programs, the Company receives cash or securities that it invests or holds in short-term or fixed income securities. For repurchase agreements, an
offsetting liability is recorded in other liabilities and accrued expenses to account for the Company's obligation to return these funds. Interest income recorded as a result of the program was $(10)
million, $3 million and $21 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Securities loaned and security repurchase and resale

        The Company's business activities include securities lending programs with third parties, mostly large brokerage firms. At December 31, 2006 and 2005, fixed income securities with a carrying value of $3.59 billion and $3.26 billion, respectively, were on loan under these agreements. In return, the Company receives cash that it invests and includes in short-term investments and fixed income securities, with an offsetting liability recorded in other liabilities and accrued expenses to account for the Company's obligation to return the collateral. Interest income on collateral, net of fees, was $10 million, $8 million and $6 million, for the years ended December 31, 2006, 2005 and 2004, respectively.

        As part of its business activities, the Company sells securities under agreements to repurchase, primarily including a mortgage dollar roll program, and programs to purchase securities under agreements to resell. At December 31, 2006 and 2005, the Company had $196 million and $444 million, respectively, of securities that were subject to repurchase agreements. Of these securities, none were subject to resale agreements in 2006 and $45 million were subject to resale agreements in 2005. As part of these programs, the Company receives cash or securities that it invests or holds in short-term or fixed income securities. For repurchase agreements, an offsetting liability is recorded in other liabilities and accrued expenses to account for the Company's obligation to return these funds. Interest income recorded as a result of the program was $3 million, $21 million and $47 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Securities loaned and security repurchase and resale

        The Company participates in securities lending programs with third parties, mostly large brokerage firms. At December 31, 2005 and 2004, fixed income securities with a carrying value of $3.26 billion and $2.89 billion, respectively, were on loan under these agreements. In return, the Company receives cash that it invests and includes in short-term investments and fixed income securities, with an offsetting liability recorded in other liabilities and accrued expenses to account for the Company's obligation to return the collateral. Interest income on collateral, net of fees, was $8 million, $6 million and $6 million, for the years ended December 31, 2005, 2004 and 2003, respectively.

        The Company participates in programs to sell securities under agreements to repurchase, primarily including a mortgage dollar roll program, and programs to purchase securities under agreements to resell. At December 31, 2005 and 2004, the Company had $444 million and $1.39 billion, respectively, of securities that were subject to repurchase agreements, and $45 million and $20 million, respectively, that were subject to resale agreements. As part of these programs, the Company receives cash or securities that it invests or holds in short-term or fixed income securities. For repurchase agreements, an offsetting liability is recorded in other liabilities and accrued expenses to account for the Company's obligation to return these funds. Interest income recorded as a result of the program was $21 million, $47 million, and $39 million for the years ended December 31, 2005, 2004 and 2003, respectively.

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Other investment information

        Included in fixed income securities are below investment grade assets totaling $5.13 billion and $5.64 billion at December 31, 2005 and 2004, respectively.

        At December 31, 2005, fixed income securities with a carrying value of $268 million were on deposit with regulatory authorities as required by law.

        At December 31, 2005, the carrying value of investments that were non-income producing, excluding equity securities, was $44 million of fixed income securities.