PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements 10.
POLICYHOLDERS’ LIABILITIES (continued) Life insurance liabilities include reserves for death and endowment policy benefits, terminal dividends and certain health benefits.
Individual and group annuities and supplementary contracts liabilities include reserves for life contingent immediate annuities and life contingent group annuities.
Other contract liabilities include unearned revenue and certain other reserves for group, annuities and individual life and health products.
Future policy benefits for individual participating traditional life insurance are based on the net level premium method, calculated using the guaranteed mortality and nonforfeiture interest rates which range from 2.5% to 7.5%.
Participating insurance represented 13% and 15% of domestic individual life insurance in force at December 31, 2009 and 2008, respectively, and 83%, 85% and 87% of domestic individual life insurance premiums for 2009, 2008 and 2007, respectively.
Future policy benefits for individual non-participating traditional life insurance policies, group and individual long-term care policies and individual health insurance policies are generally equal to the aggregate of (1) the present value of future benefit payments and related expenses, less the present value of future net premiums, and (2) any premium deficiency reserves.
Assumptions as to mortality, morbidity and persistency are based on the Company’s experience, and in certain instances, industry experience, when the basis of the reserve is established.
Interest rates used in the determination of the present values range from 1.0% to 9.5%; less than 1% of the reserves are based on an interest rate in excess of 8%.
Future policy benefits for individual and group annuities and supplementary contracts are generally equal to the aggregate of (1) the present value of expected future payments, and (2) any premium deficiency reserves.
Assumptions as to mortality are based on the Company’s experience, and in certain instances, industry experience, when the basis of the reserve is established.
The interest rates used in the determination of the present values range from 1.0% to 14.8%; less than 1% of the reserves are based on an interest rate in excess of 8%.
Future policy benefits for other contract liabilities are generally equal to the present value of expected future payments based on the Company’s experience, except for example, certain group insurance coverages for which future policy benefits are equal to gross unearned premium reserves.
The interest rates used in the determination of the present values range from 1.1% to 6.5%.
Premium deficiency reserves are established, if necessary, when the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for expected future policy benefits and expenses and to recover any unamortized policy acquisition costs.
Premium deficiency reserves have been recorded for the group single premium annuity business, which consists of limited-payment, long-duration traditional and non-participating annuities; structured settlements and single premium immediate annuities with life contingencies; and for certain individual health policies.
Liabilities of $1,649 million and $1,451 million as of December 31, 2009 and 2008, respectively, are included in “Future policy benefits” with respect to these deficiencies, of which $490 million and $200 million as of December 31, 2009 and 2008, respectively, relate to net unrealized gains on securities classified as available for sale.
The Company’s liability for future policy benefits is also inclusive of liabilities for guarantee benefits related to certain nontraditional long-duration life and annuity contracts, which are discussed more fully in Note 11 and are primarily reflected in Other contract liabilities in the table above.
Unpaid claims and claim adjustment expenses primarily reflect the Company’s estimate of future disability claim payments and expenses as well as estimates of claims incurred but not yet reported as of the balance sheet dates related to group disability products.
Unpaid claim liabilities are discounted using interest rates ranging from 0% to 6.4%.
Policyholders’ Account Balances Policyholders’ account balances at December 31, are as follows:
## Table 0 ##
Policyholders’ account balances represent an accumulation of account deposits plus credited interest less withdrawals, expenses and mortality charges, if applicable.
These policyholders’ account balances also include provisions for benefits under non-life contingent payout annuities.
Included in “Funding agreements” at December 31, 2009 and 2008, are $4,996 million and $7,234 million, respectively, related to the Company’s FANIP product which is carried at amortized cost, adjusted for the effective portion of changes in fair value of qualifying derivative financial instruments.
For additional details on the FANIP product see Note 5.
The interest rates associated with such notes range from 0.4% to 5.6%.
Interest crediting rates range from 0% to 12.8% for interest-sensitive life contracts and from 0% to 13.4% for contracts other than interest-sensitive life.
Less than 1% of policyholders’ account balances have interest crediting rates in excess of 8%.
PART II MARKET PRICE OF AND DIVIDENDS ON COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Prudential Financial’s Common Stock was issued to eligible policyholders in Prudential Insurance’s demutualization and sold to investors in Prudential Financial’s initial public offering.
The Common Stock began trading on the New York Stock Exchange under the symbol “PRU” on December 13, 2001.
The following table presents the high and low closing prices for the Common Stock on the New York Stock Exchange during the periods indicated and the dividends declared per share during such periods:
## Table 1 ##
On January 31, 2010, there were 2,372,953 registered holders of record for the Common Stock and 463 million shares outstanding.
The Class B Stock was issued to institutional investors (two subsidiaries of American International Group, Inc.  and Pacific Life Corp. ) in a private placement pursuant to Section 4(2) of the Securities Act of 1933 on the date of demutualization.
There is no established public trading market for the Class B Stock.
During the fourth quarter of 2009 and 2008, Prudential Financial paid an annual dividend of $9.625 per share of Class B Stock.
On January 31, 2010, there were three holders of record for the Class B Stock and 2 million shares outstanding.
Prudential Financial’s Board of Directors currently intends to continue to declare and pay annual dividends on the Common Stock and Class B Stock.
Future dividend decisions will be based on, and affected by, a number of factors including the financial performance of the Financial Services Businesses and Closed Block Business; our overall financial condition, results of operations, cash requirements and future prospects; regulatory restrictions on the payment of dividends by Prudential Financial’s subsidiaries; and such other factors as the Board of Directors may deem relevant.
Dividends payable by Prudential Financial are limited to the amount that would be legally available for payment under New Jersey corporate law.
For additional information on dividends and related regulatory restrictions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 15 to the Consolidated Financial Statements.
In November 2005, Prudential Financial issued in a private placement $2.0 billion of floating rate convertible senior notes, convertible by the holders at any time after issuance into cash and shares of the Company’s Common Stock.
The Company used substantially all of the offering proceeds to purchase an investment grade fixed income investment portfolio as well as to repurchase, under the Company’s 2005 share repurchase authorization, shares of its Common Stock.
In April 2007, Prudential Financial announced its intention to call all such outstanding floating rate convertible senior notes for redemption on May 21, 2007.
Prior to the redemption, substantially all holders elected to convert their senior notes as provided under their terms.
The senior notes required net settlement in shares; therefore, upon conversion, the holders received cash equal to the par amount of the senior notes surrendered for conversion plus accrued interest and shares of Prudential Financial Common Stock for the portion of the settlement amount in excess of the par amount.
The settlement amount in excess of the par amount was based upon the excess of the closing market price of Prudential Financial Common Stock for a 10-day period defined under the terms of the senior notes, or $100.80 per share, over the initial conversion price of $90 per share.
Accordingly, at conversion the Company issued 2,367,887 shares of Common Stock from treasury.
The conversion had no impact on the Company’s results of operations and resulted in a net increase to shareholders’ equity of $44 million, reflecting the tax benefit associated with the conversion of the senior notes.
The payment of principal and accrued interest was funded primarily through the liquidation of the investment grade fixed income investment portfolio purchased with the proceeds from the original issuance of these notes.
In December 2006, Prudential Financial issued in a private placement $2.0 billion of floating rate convertible senior notes, convertible by the holders at any time after issuance into cash and shares of the Company’s Common Stock.
The Company used the majority of the offering proceeds initially to invest in an investment grade fixed income investment portfolio, while the remainder of the proceeds were used for general corporate purposes and to repurchase shares of its Common Stock under the 2006 share repurchase authorization.
On December 12, 2007, $117 million of senior notes were repurchased by Prudential Financial at the request of the holders and prior to this event we liquidated the investment portfolio.
On December 12, 2008 and December 14, 2009, Prudential Financial repurchased $1.879 billion and $2 million of senior notes, respectively, at the request of the holders.
As of December 31, 2009, $2 million of these notes remain outstanding.
In December 2007, Prudential Financial issued in a private placement $3.0 billion of floating rate convertible senior notes, convertible by the holders at any time after issuance into cash and shares of the Company’s Common Stock.
The Company initially used the majority of the offering proceeds to fund operating needs of our subsidiaries, to purchase short-term investment grade fixed income investments and for general corporate purposes, as well as to repurchase shares of its Common Stock under the 2007 share repurchase authorization.
During 2008 and 2009, the Company repurchased, in individually negotiated transactions, $853 million and $297 million of senior notes, respectively, which were offered to the Company by certain holders.
On June 15, 2009 and December 15, 2009, $1.819 billion and $31 million, respectively, of senior notes were repurchased by Prudential Financial at the request of the holders.
As of December 31, 2009, $0.2 million of these notes remain outstanding.
Group Insurance Operating Results The following table sets forth the Group Insurance segment’s operating results for the periods indicated.
## Table 2 ##
(1) Revenues exclude Realized investment gains (losses), net, and related adjustments.
See “—Realized Investment Gains and Losses and General Account Investments—Realized Investment Gains and Losses.
” (2) Benefits and expenses exclude related charges which represent the unfavorable (favorable) impact of Realized investment gains (losses), net, on interest credited to policyholders’ account balances.
Adjusted Operating Income 2009 to 2008 Annual Comparison.
Adjusted operating income decreased $9 million, from $340 million in 2008 to $331 million in 2009.
Results for 2008 include a $20 million benefit from a premium adjustment for updated data on a large group life insurance case.
Also included in the prior year results is a $13 million benefit, as compared to a net benefit of zero in the current year, from refinements in group disability reserves as a result of annual reviews.
Excluding the prior year benefits from the premium adjustment and annual reserve refinements, adjusted operating income increased $24 million due to improved underwriting results in 2009 in both our group life and group disability businesses primarily related to business growth, which was partially offset by a related increase in operating expenses.2008 to 2007 Annual Comparison.
Adjusted operating income increased $54 million, from $286 million in 2007 to $340 million in 2008, primarily reflecting more favorable claims experience in our group life business, as well as growth in our group disability business.
Also included in results for 2008 is a $20 million benefit from a premium adjustment recorded during the first quarter of 2008 for updated data on a large group life insurance case.
Partially offsetting these items was less favorable investment results during 2008.
Both periods reflect the benefit from refinements in group disability reserves as a result of annual reviews.
These annual reviews benefited both periods by $13 million and were primarily associated with our long-term disability products.
Revenues 2009 to 2008 Annual Comparison.
Revenues, as shown in the table above under “—Operating Results,” increased by $325 million, from $4.960 billion in 2008 to $5.285 billion in 2009.
Group life premiums and policy charges and fee income increased by $182 million, from $3.232 billion in 2008 to $3.414 billion in 2009.
This increase primarily reflects growth of business in force resulting from new sales, and continued strong persistency of 94.3% in 2009 compared to 93.3% in 2008.
Also contributing to this increase were higher premiums from retrospectively experience-rated group life business resulting from the increase in policyholder benefits on these contracts, as discussed below.
Partially offsetting the increase in group life premiums is the premium adjustment recorded in 2008 as discussed above.
Group disability premiums and policy charges and fee income, which include long-term care products, increased by $126 million, from $995 million in 2008 to $1.121 billion in 2009.
This increase primarily reflects growth of business in force resulting from new sales, and continued strong persistency of 90.9% in 2009 compared to 85.6% in 2008.2008 to 2007 Annual Comparison.
Revenues increased by $161 million, from $4.799 billion in 2007 to $4.960 billion in 2008.
Group life premiums and policy charges and fee income increased by $54 million, from $3.178 billion in 2007 to $3.232 billion in 2008, primarily reflecting higher premiums from non-retrospectively experience-rated group life business due to the premium adjustment for updated data on a large case as discussed above and growth in business in force, as new sales exceeded the level of lapses in 2008.
Lapse activity remained relatively constant as group life persistency was 94% in 2007 and 93% in 2008.
Group disability premiums and policy charges and fee income, which include long-term care products, increased by $128 million from $867 million in 2007 to $995 million in 2008.
This increase reflects growth in business in force resulting from new sales, which included the assumption of existing liabilities from third parties during 2008, exceeding the level of lapses, which increased as persistency deteriorated from 88% in 2007 to 86% in 2008.
The group life and group disability persistency are reflective of continuing competitive pricing in the marketplace and the pricing discipline we apply in writing business.
Partially offsetting these increases was a decline in net investment income of $24 million, from $671 million in 2007 to $647 million in 2008, as the benefit from growth in invested assets was more than offset by lower investment yields, principally due to lower interest rates on floating rate investments due to rate resets.
## Table 3 ##
(1) Yields are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity.
Yields for fixed maturities are based on amortized cost.
Yields for equity securities are based on cost.
Yields for fixed maturities and short-term investments and cash equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity.
Yields exclude investment income on assets other than those included in invested assets.
Prior periods yields are presented on a basis consistent with the current period presentation.
(2) Includes investment income of securities brokerage, securities trading, banking operations, real estate and relocation services, and asset management operations.
See below for a discussion of the change in the Financial Services Businesses’ yields.
The decrease in net investment income yield attributable to the Closed Block Business for 2009 compared to 2008 was primarily due to the impact of lower interest rates on floating rate investments due to rate resets, higher losses from investments in joint ventures and limited partnerships, driven by depreciation and losses on the underlying assets, and lower income from short-term investments as a result of lower short-term rates.
The following tables set forth the income yield and investment income, excluding realized investment gains (losses) and non-hedge accounting derivative results, for each major investment category of the Financial Services Business general account, excluding the Japanese operations’ portion of the general account which is presented separately below, for the periods indicated.
## Table 4 ##
Notes to Consolidated Financial Statements

<table><tr><td></td><td> 2009</td><td> 2008</td></tr><tr><td></td><td colspan="2"> (in millions)</td></tr><tr><td>Individual annuities</td><td>$22,876</td><td>$20,639</td></tr><tr><td>Group annuities</td><td>22,598</td><td>21,189</td></tr><tr><td>Guaranteed investment contracts and guaranteed interest accounts</td><td>17,301</td><td>20,964</td></tr><tr><td>Funding agreements</td><td>6,581</td><td>7,291</td></tr><tr><td>Interest-sensitive life contracts</td><td>15,968</td><td>14,605</td></tr><tr><td>Dividend accumulation and other</td><td>16,342</td><td>14,925</td></tr><tr><td>Total policyholders’ account balances</td><td>$101,666</td><td>$99,613</td></tr></table>
<table><tr><td></td><td> High</td><td> Low</td><td> Dividends</td></tr><tr><td> 2009:</td><td></td><td></td><td></td></tr><tr><td>Fourth Quarter</td><td>$52.82</td><td>$44.64</td><td>$0.70</td></tr><tr><td>Third Quarter</td><td>54.63</td><td>33.28</td><td>—</td></tr><tr><td>Second Quarter</td><td>46.00</td><td>20.50</td><td>—</td></tr><tr><td>First Quarter</td><td>35.11</td><td>11.29</td><td>—</td></tr><tr><td> 2008:</td><td></td><td></td><td></td></tr><tr><td>Fourth Quarter</td><td>$64.80</td><td>$13.73</td><td>$0.58</td></tr><tr><td>Third Quarter</td><td>86.25</td><td>56.07</td><td>—</td></tr><tr><td>Second Quarter</td><td>82.21</td><td>59.74</td><td>—</td></tr><tr><td>First Quarter</td><td>91.36</td><td>67.36</td><td>—</td></tr></table>
<table><tr><td rowspan="3"></td><td colspan="3">Year ended December 31,</td></tr><tr><td>2009</td><td>2008</td><td>2007</td></tr><tr><td colspan="3">(in millions)</td></tr><tr><td> Operating results:</td><td></td><td></td><td></td></tr><tr><td>Revenues</td><td>$5,285</td><td>$4,960</td><td>$4,799</td></tr><tr><td>Benefits and expenses</td><td>4,954</td><td>4,620</td><td>4,513</td></tr><tr><td>Adjusted operating income</td><td>331</td><td>340</td><td>286</td></tr><tr><td>Realized investment gains (losses), net, and related adjustments(1)</td><td>-227</td><td>-201</td><td>-37</td></tr><tr><td>Related charges-2</td><td>-7</td><td>-1</td><td>-2</td></tr><tr><td>Income from continuing operations before income taxes and equity in earnings of operating joint ventures</td><td>$97</td><td>$138</td><td>$247</td></tr></table>
<table><tr><td></td><td colspan="6">Year Ended December 31, 2008</td></tr><tr><td></td><td colspan="2">Financial Services Businesses</td><td colspan="2">Closed Block Business</td><td colspan="2">Combined</td></tr><tr><td></td><td>Yield-1</td><td>Amount</td><td>Yield-1</td><td>Amount</td><td>Yield-1</td><td>Amount</td></tr><tr><td></td><td colspan="6">($ in millions)</td></tr><tr><td>Fixed maturities</td><td>4.86%</td><td>$5,662</td><td>6.40%</td><td>$2,664</td><td>5.26%</td><td>$8,326</td></tr><tr><td>Trading account assets supporting insurance liabilities</td><td>5.34</td><td>749</td><td>—</td><td>—</td><td>5.34</td><td>749</td></tr><tr><td>Equity securities</td><td>5.01</td><td>223</td><td>3.17</td><td>101</td><td>4.24</td><td>324</td></tr><tr><td>Commercial mortgage and other loans</td><td>6.01</td><td>1,241</td><td>6.60</td><td>541</td><td>6.18</td><td>1,782</td></tr><tr><td>Policy loans</td><td>5.24</td><td>208</td><td>6.42</td><td>336</td><td>5.91</td><td>544</td></tr><tr><td>Short-term investments and cash equivalents</td><td>2.82</td><td>304</td><td>10.67</td><td>101</td><td>3.17</td><td>405</td></tr><tr><td>Other investments</td><td>4.26</td><td>140</td><td>-2.92</td><td>-44</td><td>2.01</td><td>96</td></tr><tr><td>Gross investment income before investment expenses</td><td>4.93</td><td>8,527</td><td>6.05</td><td>3,699</td><td>5.22</td><td>12,226</td></tr><tr><td>Investment expenses</td><td>-0.15</td><td>-295</td><td>-0.24</td><td>-278</td><td>-0.17</td><td>-573</td></tr><tr><td>Investment income after investment expenses</td><td>4.78%</td><td>8,232</td><td>5.81%</td><td>3,421</td><td>5.05%</td><td>11,653</td></tr><tr><td>Investment results of other entities and operations-2</td><td></td><td>228</td><td></td><td>—</td><td></td><td>228</td></tr><tr><td>Total investment income</td><td></td><td>$8,460</td><td></td><td>$3,421</td><td></td><td>$11,881</td></tr></table>
<table><tr><td></td><td colspan="2">Year Ended December 31, 2009</td><td colspan="2">Year Ended December 31, 2008</td></tr><tr><td></td><td>Yield-1</td><td>Amount</td><td>Yield-1</td><td>Amount</td></tr><tr><td></td><td colspan="4">($ in millions)</td></tr><tr><td>Fixed maturities</td><td>5.73%</td><td>$4,172</td><td>6.06%</td><td>$4,348</td></tr><tr><td>Trading account assets supporting insurance liabilities</td><td>5.38</td><td>721</td><td>5.61</td><td>726</td></tr><tr><td>Equity securities</td><td>9.84</td><td>167</td><td>7.73</td><td>150</td></tr><tr><td>Commercial mortgage and other loans</td><td>6.04</td><td>1,070</td><td>6.22</td><td>1,097</td></tr><tr><td>Policy loans</td><td>5.94</td><td>162</td><td>5.87</td><td>158</td></tr><tr><td>Short-term investments and cash equivalents</td><td>0.53</td><td>55</td><td>2.89</td><td>283</td></tr><tr><td>Other investments</td><td>0.39</td><td>9</td><td>0.03</td><td>1</td></tr><tr><td>Gross investment income before investment expenses</td><td>5.27</td><td>6,356</td><td>5.75</td><td>6,763</td></tr><tr><td>Investment expenses</td><td>-0.14</td><td>-110</td><td>-0.13</td><td>-188</td></tr><tr><td>Investment income after investment expenses</td><td>5.13%</td><td>6,246</td><td>5.62%</td><td>6,575</td></tr><tr><td>Investment results of other entities and operations-2</td><td></td><td>136</td><td></td><td>228</td></tr><tr><td>Total investment income</td><td></td><td>$6,382</td><td></td><td>$6,803</td></tr></table>

Question: In the year with largest amount of Policy loans for Amount , what's the increasing rate of Equity securities?
Answer: 0.11333