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## 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. 

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(1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments. 

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(1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments. 

Plan assets in Level 1 include exchange-listed equity securities. Level 2 assets primarily include: 

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> 

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 

