PART II ITEM 8 Financial Statements and Supplementary Data The fair values of plan assets by category and by the fair value hierarchy as defined by GAAP are as follows. See Note 11 for a description of how fair value is determined, including the level within the fair value hierarchy and the procedures the Company uses to validate fair value measurements. (1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments. (1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments. Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs December 31, 2012 (In millions) (Level 1) (Level 2) (Level 3) Total Plan assets at fair value: Fixed maturities: Federal government and agency $ - $ 4 $ - $ 4 Corporate - 416 27 443 Mortgage and other asset-backed - 8 5 13 Fund investments and pooled separate accounts (1) - 519 3 522 TOTAL FIXED MATURITIES - 947 35 982 Equity securities: Domestic 1,202 4 10 1,216 International, including funds and pooled separate accounts (1) 158 149 - 307 TOTAL EQUITY SECURITIES 1,360 153 10 1,523 Real estate and mortgage loans, including pooled separate accounts (1) - - 351 351 Securities partnerships - - 328 328 Hedge funds - - 327 327 Guaranteed deposit account contract - - 47 47 Cash equivalents - 107 - 107 TOTAL PLAN ASSETS AT FAIR VALUE $ 1,360 $ 1,207 $ 1,098 $ 3,665 Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs December 31, 2011 (In millions) (Level 1) (Level 2) (Level 3) Total Plan assets at fair value: Fixed maturities: Federal government and agency $ - $ 5 $ - $ 5 Corporate - 332 7 339 Mortgage and other asset-backed - 8 2 10 Fund investments and pooled separate accounts (1) - 546 3 549 TOTAL FIXED MATURITIES - 891 12 903 Equity securities: Domestic 1,153 1 14 1,168 International, including funds and pooled separate accounts (1) 141 137 - 278 TOTAL EQUITY SECURITIES 1,294 138 14 1,446 Real estate and mortgage loans, including pooled separate accounts (1) - - 303 303 Securities partnerships - - 314 314 Hedge Fund - - 148 148 Guaranteed deposit account contract - - 39 39 Cash equivalents - 145 - 145 TOTAL PLAN ASSETS AT FAIR VALUE $ 1,294 $ 1,174 $ 830 $ 3,298 Plan assets in Level 1 include exchange-listed equity securities. Level 2 assets primarily include: Because many fixed maturities do not trade daily, fair values are often derived using recent trades of securities with similar features and characteristics. When recent trades are not available, pricing models are used to determine these prices. These models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads fixed income and international equity funds priced using their daily net asset value that is the exit price; and GLYPH<127> fixed maturities valued using recent trades of similar securities or pricing models as described below. GLYPH<127> 90 CIGNA CORPORATION -  2012 Form  10-K