Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 08, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | VOYA RETIREMENT INSURANCE & ANNUITY CO | |
Entity Central Index Key | 837,010 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 55,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Investments: | ||
Fixed maturities, available-for-sale, at fair value (amortized cost of $22,190 as of 2018 and $21,774 as of 2017) | $ 22,572 | $ 23,141 |
Fixed maturities, at fair value using the fair value option | 1,171 | 941 |
Equity securities, at fair value (cost of $48 as of 2018 and $45 as of 2017) | 63 | 60 |
Short-term investments | 1 | 25 |
Mortgage loans on real estate, net of valuation allowance of $1 as of 2018 and 2017 | 5,002 | 4,910 |
Policy loans | 212 | 214 |
Limited partnerships/corporations | 568 | 411 |
Derivatives | 163 | 136 |
Securities pledged (amortized cost of $853 as of 2018 and $864 as of 2017) | 907 | 960 |
Other investments | 39 | 0 |
Total investments | 30,698 | 30,798 |
Cash and cash equivalents | 200 | 288 |
Short-term investments under securities loan agreements, including collateral delivered | 724 | 765 |
Accrued investment income | 311 | 304 |
Premiums receivable and reinsurance recoverable | 1,455 | 1,496 |
Deferred policy acquisition costs, Value of business acquired and Sales inducements to contract owners | 1,001 | 766 |
Notes receivable from affiliate | 0 | 175 |
Short-term loan to affiliate | 0 | 80 |
Due from affiliates | 60 | 60 |
Property and equipment | 63 | 64 |
Other assets | 171 | 140 |
Assets held in separate accounts | 74,181 | 73,036 |
Total assets | 108,864 | 107,972 |
Liabilities and Shareholder's Equity | ||
Future policy benefits and contract owner account balances | 30,183 | 29,669 |
Payable for securities purchased | 22 | 79 |
Payables under securities loan agreements, including collateral held | 844 | 845 |
Short-term debt | 1 | 0 |
Long-term debt | 4 | 5 |
Due to affiliates | 64 | 61 |
Derivatives | 70 | 85 |
Current income tax payable to Parent | 13 | 23 |
Deferred income taxes | 62 | 187 |
Other liabilities | 254 | 401 |
Liabilities related to separate accounts | 74,181 | 73,036 |
Total liabilities | 105,698 | 104,391 |
Commitments and Contingencies (Note 9) | ||
Shareholder's equity: | ||
Common stock (100,000 shares authorized, 55,000 issued and outstanding as of 2018 and 2017; $50 par value per share) | 3 | 3 |
Additional paid-in capital | 2,729 | 2,730 |
Accumulated other comprehensive income (loss) | 260 | 818 |
Retained earnings (deficit) | 174 | 30 |
Total shareholder's equity | 3,166 | 3,581 |
Total liabilities and shareholder's equity | $ 108,864 | $ 107,972 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets Parenthetical - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, amortized cost | $ 22,190 | $ 21,774 |
Equity securities, cost | 48 | 45 |
Mortgage loans on real estate valuation allowance | 1 | 1 |
Securities pledged, amortized costs | $ 853 | $ 864 |
Common stock, par value (USD per share) | $ 50 | $ 50 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 55,000 | 55,000 |
Common stock, shares outstanding | 55,000 | 55,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Net investment income | $ 397 | $ 378 | $ 779 | $ 757 |
Fee income | 175 | 177 | 349 | 367 |
Premiums | 8 | 9 | 22 | 24 |
Broker-dealer commission revenue | 27 | 42 | 68 | 86 |
Net realized capital gains (losses): | ||||
Total other-than-temporary impairments | 0 | 0 | (9) | 0 |
Less: Portion of other-than-temporary impairments recognized in Other comprehensive income (loss) | 1 | 0 | 1 | 0 |
Net other-than-temporary impairments recognized in earnings | (1) | 0 | (10) | 0 |
Other net realized capital gains (losses) | (82) | (47) | (160) | (103) |
Total net realized capital gains (losses) | (83) | (47) | (170) | (103) |
Other revenue | 2 | 2 | 2 | 2 |
Total revenues | 526 | 561 | 1,050 | 1,133 |
Benefits and expenses: | ||||
Interest credited and other benefits to contract owners/policyholders | 200 | 245 | 398 | 480 |
Operating expenses | 178 | 192 | 286 | 411 |
Broker-dealer commission expense | 27 | 42 | 68 | 86 |
Net amortization of Deferred policy acquisition costs and Value of business acquired | 17 | 134 | 82 | 136 |
Total benefits and expenses | 422 | 613 | 834 | 1,113 |
Income (loss) before income taxes | 104 | (52) | 216 | 20 |
Income tax expense (benefit) | 5 | (26) | 30 | (8) |
Net income (loss) | $ 99 | $ (26) | $ 186 | $ 28 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 99 | $ (26) | $ 186 | $ 28 |
Other comprehensive income (loss), before tax: | ||||
Unrealized gains/losses on securities | (218) | 205 | (700) | 284 |
Other-than-temporary impairments | 0 | 0 | 7 | 2 |
Pension and other postretirement benefits liability | 0 | (1) | (1) | (1) |
Other comprehensive income (loss), before tax | (218) | 204 | (694) | 285 |
Income tax expense (benefit) related to items of other comprehensive income (loss) | (40) | 71 | (148) | 99 |
Other comprehensive income (loss), after tax | (178) | 133 | (546) | 186 |
Comprehensive income (loss) | $ (79) | $ 107 | $ (360) | $ 214 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Shareholder's Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Deficit) |
Beginning Balance at Dec. 31, 2016 | $ 3,377 | $ 3 | $ 2,994 | $ 560 | $ (180) |
Comprehensive income (loss): | |||||
Net income (loss) | 28 | 0 | 0 | 0 | 28 |
Other comprehensive income (loss), after tax | 186 | 0 | 0 | 186 | 0 |
Comprehensive income (loss) | 214 | ||||
Dividends paid and distributions of capital | (261) | 0 | (261) | 0 | 0 |
Employee related benefits | 0 | 0 | 0 | 0 | 0 |
Ending Balance at Jun. 30, 2017 | 3,330 | 3 | 2,733 | 746 | (152) |
Increase (Decrease) in Stockholders' Equity | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | Accounting Standards Update 2014-09 | 72 | 0 | 0 | 0 | 72 |
Cumulative Effect of New Accounting Principle in Period of Adoption | Accounting Standards Update 2016-01 | 0 | 0 | 0 | (12) | 12 |
Beginning Balance (Scenario, Previously Reported [Member]) at Dec. 31, 2017 | 3,581 | 3 | 2,730 | 818 | 30 |
Beginning Balance at Dec. 31, 2017 | 3,581 | ||||
Balance as adjusted at Dec. 31, 2017 | 3,653 | 3 | 2,730 | 806 | 114 |
Comprehensive income (loss): | |||||
Net income (loss) | 186 | 0 | 0 | 0 | 186 |
Other comprehensive income (loss), after tax | (546) | 0 | 0 | (546) | 0 |
Comprehensive income (loss) | (360) | ||||
Dividends paid and distributions of capital | (126) | 0 | 0 | 0 | (126) |
Employee related benefits | (1) | 0 | (1) | 0 | 0 |
Ending Balance at Jun. 30, 2018 | $ 3,166 | $ 3 | $ 2,729 | $ 260 | $ 174 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Net cash provided by operating activities | $ 628 | $ 428 |
Proceeds from the sale, maturity, disposal or redemption of: | ||
Fixed maturities | 2,318 | 2,277 |
Equity securities | 0 | 0 |
Mortgage loans on real estate | 309 | 257 |
Limited partnerships/corporations | 27 | 37 |
Acquisition of: | ||
Fixed maturities | (3,067) | (1,898) |
Equity securities | (3) | (2) |
Mortgage loans on real estate | (402) | (850) |
Limited partnerships/corporations | (165) | (65) |
Derivatives, net | (22) | 169 |
Policy loans, net | 2 | 5 |
Short-term investments, net | 24 | 29 |
Short-term loan to affiliate, net | 80 | 0 |
Collateral received (delivered), net | 40 | (161) |
Other investments, net | (39) | 0 |
Net cash used in investing activities | (898) | (202) |
Cash Flows from Financing Activities: | ||
Deposits received for investment contracts | 1,838 | 1,249 |
Maturities and withdrawals from investment contracts | (1,511) | (1,316) |
Settlements on deposit contracts | (19) | (33) |
Dividends paid and distributions of capital | (126) | (261) |
Net cash provided by (used in) financing activities | 182 | (361) |
Net decrease in cash and cash equivalents | (88) | (135) |
Cash and cash equivalents, beginning of period | 288 | 561 |
Cash and cash equivalents, end of period | $ 200 | $ 426 |
Business, Basis of Presentation
Business, Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Business, Basis of Presentation and Significant Accounting Policies | Business, Basis of Presentation and Significant Accounting Policies Business Voya Retirement Insurance and Annuity Company ("VRIAC") is a stock life insurance company domiciled in the State of Connecticut. VRIAC and its wholly owned subsidiaries (collectively, the "Company") provide financial products and services in the United States. VRIAC is authorized to conduct its insurance business in all states and in the District of Columbia and in Guam, Puerto Rico and the Virgin Islands. Prior to May 2013, Voya Financial, Inc. ("Voya Financial"), together with its subsidiaries, including the Company was an indirect, wholly-owned subsidiary of ING Groep N.V. ("ING Group" or "ING"), a global financial services holding company based in The Netherlands. In May 2013, Voya Financial, Inc., completed its initial public offering of common stock, including the issuance and sale of common stock by Voya Financial, Inc. and the sale of shares of common stock owned indirectly by ING Group. Between October 2013 and March 2015, ING Group completed the sale of its remaining shares of common stock of Voya Financial, Inc. in a series of registered public offerings. VRIAC is a direct, wholly owned subsidiary of Voya Holdings Inc. ("Parent"), which is a direct, wholly owned subsidiary of Voya Financial, Inc. As of June 1, 2018, Directed Services LLC ("DSL") was divested pursuant to the transaction described below. Subsequent to the transaction, VRIAC has one wholly owned non-insurance subsidiary, Voya Financial Partners, LLC ("VFP"). On June 1, 2018, VRIAC's ultimate parent, Voya Financial, consummated a series of transactions (collectively, the "Transaction'') pursuant to a Master Transaction Agreement dated December 20, 2017 (the "MTA") with VA Capital Company LLC ("VA Capital") and Athene Holding Ltd ("Athene"). As part of the Transaction, VA Capital's wholly owned subsidiary Venerable Holdings Inc. ("Venerable") acquired certain of Voya Financial's assets, including all of the shares of capital stock of Voya Insurance and Annuity Company ("VIAC"), the Company's Iowa-domiciled insurance affiliate, as well as the membership interests of DSL, the Company's broker-dealer subsidiary. Following the closing of the Transaction, VRIAC acquired a 9.99% equity interest in VA Capital. The Company offers qualified and nonqualified annuity contracts that include a variety of funding and payout options for individuals and employer-sponsored retirement plans qualified under Internal Revenue Code Sections 401, 403, 408, 457 and 501, as well as nonqualified deferred compensation plans and related services. The Company's products are offered primarily to employer-sponsored groups in the health care, government and education markets (collectively "tax exempt markets"), small to mid-sized corporations and individuals. The Company also provides stable value investment options, including separate account guaranteed investment contracts (e.g., GICs) and synthetic GICs, to institutional clients. Pension risk transfer group annuity solutions were previously offered to institutional plan sponsors who needed to transfer their defined benefit plan obligations to the Company. The Company discontinued sales of these solutions in late 2016 to better align business activities to the Company's priorities. The Company's products are generally distributed through pension professionals, independent agents and brokers, third-party administrators, banks, consultants, dedicated financial guidance, planning and advisory representatives associated with Voya Financial, Inc.'s retail broker-dealer, Voya Financial Advisors, Inc. ("Voya Financial Advisors"). Products offered by the Company include deferred and immediate (i.e., payout) annuity contracts. Company products also include programs offered to qualified plans and nonqualified deferred compensation plans that package administrative and record-keeping services, participant education, and retirement readiness planning tools along with a variety of investment options, including proprietary and non-proprietary mutual funds and variable and fixed investment options. In addition, the Company offers wrapper agreements entered into with retirement plans, which contain certain benefit responsive guarantees (i.e., guarantees of principal and previously accrued interest for benefits paid under the terms of the plan) with respect to portfolios of plan-owned assets not invested with the Company. Stable value products are also provided to institutional plan sponsors where the Company may or may not be providing other employer sponsored products and services. The Company has one operating segment. Basis of Presentation The accompanying Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and are unaudited. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Those estimates are inherently subject to change and actual results could differ from those estimates. The Condensed Consolidated Financial Statements include the accounts of VRIAC and its wholly owned subsidiaries, Voya Financial Partners, LLC ("VFP") and Directed Services LLC ("DSL"). Intercompany transactions and balances have been eliminated. As of June 1, 2018, DSL was divested pursuant to the Transaction. The accompanying Condensed Consolidated Financial Statements reflect adjustments (including normal, recurring adjustments) necessary to present fairly the financial position of the Company as of June 30, 2018 , its results of operations and comprehensive income for the three and six months ended June 30, 2018 and 2017 , and its changes in shareholder's equity and statements of cash flows for the six months ended June 30, 2018 and 2017 , in conformity with U.S. GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2017 Consolidated Balance Sheet is from the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K, filed with the SEC. Therefore, these unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K. Significant Accounting Policies Investments Effective January 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2016-01 "Financial Instruments-Overall (ASC Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01") (See the Adoption of New Pronouncements section below). As a result, the Company measures its equity securities at fair value and recognizes any changes in fair value in net income. Prior to adoption, equity securities were designated as available-for-sale and reported at fair value with unrealized capital gains (losses) recorded in Accumulated other comprehensive income (loss) ("AOCI"). Recognition of Revenue As of January 1, 2018, the Company changed its method for recognizing costs to obtain and fulfill certain financial services contracts upon the adoption of ASU 2014-09, "Revenue from Contracts with Customers (ASC Topic 606)" ("ASU 2014-09"). (See the Adoption of New Pronouncements section below.) Financial services revenue is disaggregated by type of service in the following table and represents approximately 12.5% and 13.1% of total revenue for the three and six months ended June 30, 2018 , respectively. For the three and six months ended June 30, 2018 , a portion of the revenue recognized in the current period from distribution services is related to performance obligations satisfied in previous periods. Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Service Line Recordkeeping & administration $ 29 $ 57 Distribution & shareholder servicing 37 81 Total financial services revenue $ 66 $ 138 Receivables of $26 are included in Other assets on the Condensed Consolidated Balance Sheet as of June 30, 2018 . Financial Services Revenue Revenue for various financial services is measured based on consideration specified in a contract with a customer and excludes any amounts collected on behalf of third parties. For recordkeeping and administration services, the Company recognizes revenue as services are provided, generally over time. In addition, the Company may arrange for sub-advisory services for a customer under certain contracts. Revenue is recognized when the Company has satisfied a performance obligation by transferring control of a service to a customer. Contract terms are typically less than one year, and consideration is generally variable and due as services are rendered. For distribution and shareholder servicing revenue, the Company provides distribution services at a point in time and shareholder services over time. Such revenue is recognized when the Company has satisfied a performance obligation and related consideration is received. Contract terms are less than one year, and consideration is variable. For distribution services, revenue may be recognized in periods subsequent to when the Company has satisfied a performance obligation, as a component of related consideration is constrained under certain contracts. For a description of principal activities from which the Company generates revenue, see the Business section above for further information. Revenue for various financial services is recorded in Fee income or Other revenue in the Condensed Consolidated Statements of Operations. Contract Costs Contract cost assets represent costs incurred to obtain or fulfill a contract that are expected to be recovered and, thus, have been capitalized and are subject to amortization. Capitalized contract costs include incremental costs of obtaining a contract and fulfillment costs that relate directly to a contract and generate or enhance resources of the Company that are used to satisfy performance obligations. The Company defers (1) incremental commissions and variable compensation paid to the Company's direct sales force, consultant channel, and intermediary partners, as a result of obtaining certain financial services contracts and (2) account set-up expenses on certain recordkeeping contracts. The Company expenses as incurred deferrable contract costs for which the amortization period would be one year or less (based on the U.S. GAAP practical expedient) and other contract-related costs. The Company periodically reviews contract cost assets for impairment. Capitalized contract costs are included in Other assets on the Condensed Consolidated Balance Sheets, and costs expensed as incurred are included in Operating expenses in the Condensed Consolidated Statements of Operations. As of June 30, 2018 , contract cost assets were $92 . Capitalized contract costs are amortized on a straight-line basis over the estimated lives of the contracts, which typically range from 5 to 15 years. This method is consistent with the transfer of services to which the assets relate. For the three and six months ended June 30, 2018 , amortization expenses of $4 and $9 , respectively, were recorded in Operating expenses in the Condensed Consolidated Statements of Operations. There was no impairment loss in relation to the contract costs capitalized. Adoption of New Pronouncements Derecognition of Nonfinancial Assets In February 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-05, “Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (ASC Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance & Accounting for Partial Sales of Nonfinancial Assets” (“ASU 2017-05”), which requires entities to apply certain recognition and measurement principles in ASU 2014-09, “Revenue from Contracts with Customers (ASC Topic 606)” (see Revenue from Contracts with Customers below) when they derecognize nonfinancial assets and in substance nonfinancial assets through sale or transfer, and the counterparty is not a customer. The provisions of ASU 2017-05 were adopted January 1, 2018 using the modified retrospective approach. The adoption had no effect on the Company’s financial condition, results of operations, or cash flows. Statement of Cash Flows In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (ASC Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments provide guidance on eight specific cash flow issues. The provisions of ASU 2016-15 were adopted on January 1, 2018 using the retrospective approach. The adoption had no effect on the Company’s financial condition, results of operations, or cash flows. Share-Based Compensation In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (ASC Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies the accounting for share-based payment award transactions with respect to: • The income tax consequences of awards, • The impact of forfeitures on the recognition of expense for awards, • Classification of awards as either equity or liabilities, and • Classification on the statement of cash flows. The provisions of ASU 2016-09 were adopted by the Company on January 1, 2017 using the transition method prescribed for each applicable provision: • On a prospective basis, all excess tax benefits and tax deficiencies related to share-based compensation will be reported in Net income (loss), rather than Additional paid-in capital. Prior year excess tax benefits will remain in Additional paid-in capital. • The Company elected to retrospectively adopt the requirement to present cash inflows related to excess tax benefits as operating activities. For the six months ended June 30, 2017 , the Company had no excess tax benefits. The adoption of the remaining provisions of ASU 2016-09 had no effect on the Company's financial condition, results of operations, or cash flows. Financial Instruments - Recognition and Measurement In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (ASC Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which requires: • Equity investments (except those consolidated or accounted for under the equity method) to be measured at fair value with changes in fair value recognized in net income. • Elimination of the disclosure of methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost. • The use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes. • Separate presentation in other comprehensive income of the portion of the total change in fair value of a liability resulting from a change in own credit risk if the liability is measured at fair value under the fair value option. • Separate presentation on the balance sheet or financial statement notes of financial assets and financial liabilities by measurement category and form of financial asset. The Company adopted the provisions of ASU 2016-01 on January 1, 2018 using a modified retrospective approach, except for certain provisions that were required to be applied prospectively. The impact to the January 1, 2018 Condensed Consolidated Balance Sheets was a $12 increase, net of tax, to Retained earnings (deficit) with a corresponding decrease of $12 , net of tax, to AOCI to recognize the unrealized gain associated with Equity securities. The provisions that required prospective adoption had no effect on the Company's financial condition, results of operations, or cash flows. Under previous guidance, prior to January 1, 2018, Equity securities were classified as available for sale with changes in fair value recognized in Other comprehensive income (loss). Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when, or as, the entity satisfies a performance obligation under the contract. ASU 2014-09 also updated the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In addition, the FASB issued various amendments during 2016 to clarify the provisions and implementation guidance of ASU 2014-09. Revenue recognition for insurance contracts and financial instruments is explicitly scoped out of the guidance. The Company adopted the provisions of ASU 2014-09 on January 1, 2018, using the modified retrospective approach. The adoption had no impact on revenue recognition. However, the adoption resulted in a $90 increase in Other assets to capitalize costs to obtain and fulfill certain financial services contracts. This adjustment was offset by a related $18 decrease in Deferred income taxes, resulting in a net $72 increase to Retained earnings (deficit) on the Condensed Consolidated Balance Sheet as of January 1, 2018. In addition, disclosures have been updated to reflect accounting policy changes made as a result of the implementation of ASU 2014-09. (See the Significant Accounting Policies section above.) Comparative information has not been adjusted and continues to be reported under previous revenue recognition guidance. As of June 30, 2018 the adoption of ASU 2014-09 resulted in a $92 increase in Other assets, offset by a related $19 decrease in Deferred income taxes, resulting in a net $73 increase to Retained earnings (deficit) on the Condensed Consolidated Balance Sheet. For the three months ended June 30, 2018 , the adoption resulted in an immaterial impact on Operating expenses on the Condensed Consolidated Statement of Operations. For the six months ended June 30, 2018, the adoption resulted in a $1 increase in Operating expenses on the Condensed Consolidated Statement of Operations. For the six months ended June 30, 2018 , adopting the provisions of ASU 2014-09 had no impact on Net cash provided by operating activities. Future Adoption of Accounting Pronouncements Reclassification of Certain Tax Effects In February 2018, the FASB issued ASU 2018-02, "Income Statement-Reporting Comprehensive Income (ASC Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted Tax Cuts and Jobs Act of 2017 ("Tax Reform"). Stranded tax effects arise because U.S. GAAP requires that the impact of a change in tax laws or rates on deferred tax liabilities and assets be reported in net income, even if related to items recognized within accumulated other comprehensive income. The amount of the reclassification would be based on the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate, applied to deferred tax liabilities and assets reported within accumulated other comprehensive income. The provisions of ASU 2018-02 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Initial adoption of ASU 2018-02 may be reported either in the period of adoption or on a retrospective basis in each period in which the effect of the change in the U.S. federal corporate income tax rate resulting from Tax Reform is recognized. The Company is currently evaluating the provisions of ASU 2018-02. Derivatives & Hedging In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic ASC 815): Targeted Improvements to Accounting for Hedging Activities " ("ASU 2017-12"), which enables entities to better portray risk management activities in their financial statements, as follows: • Expands an entity's ability to hedge nonfinancial and financial risk components and reduces complexity in accounting for fair value hedges of interest rate risk, • Eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item, • Eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness, and • Modifies required disclosures. The provisions of ASU 2017-12 are effective for fiscal years beginning after December 15, 2018, including interim periods, with early adoption permitted. Initial adoption of ASU 2017-12 is required to be reported using a modified retrospective approach, with the exception of the presentation and disclosure requirements which are required to be applied prospectively. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2017-12. Debt Securities In March 2017, the FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (ASC Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities" ("ASU 2017-08"), which shortens the amortization period for certain callable debt securities held at a premium by requiring the premium to be amortized to the earliest call date. The provisions of ASU 2017-08 are effective for fiscal years beginning after December 15, 2018, including interim periods, with early adoption permitted. Initial adoption of ASU 2017-08 is required to be reported using a modified retrospective approach. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2017-08. Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which: • Introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, • Modifies the impairment model for available-for-sale debt securities, and • Provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. The provisions of ASU 2016-13 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. Initial adoption of ASU 2016-13 is required to be reported on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, except for certain provisions that are required to be applied prospectively. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2016-13. Leases In February 2016, the FASB issued ASU 2016-02, "Leases (ASC Topic 842)" ("ASU 2016-02"), which requires lessees to recognize a right-of-use asset and a lease liability for all leases with terms of more than 12 months. The lease liability will be measured as the present value of the lease payments, and the asset will be based on the liability. For income statement purposes, expense recognition will depend on the lessee's classification of the lease as either finance, with a front-loaded amortization expense pattern similar to current capital leases, or operating, with a straight-line expense pattern similar to current operating leases. Lessor accounting will be similar to the current model, and lessors will be required to classify leases as operating, direct financing, or sales-type. ASU 2016-02 also replaces the sale-leaseback guidance to align with the new revenue recognition standard, addresses statement of operation and statement of cash flow classification, and requires additional disclosures for all leases. In addition, the FASB issued various amendments during 2018 to clarify and simplify the provisions and implementation guidance of ASU 2016-02. The provisions of ASU 2016-02 are effective on a modified retrospective basis for fiscal years beginning after December 15, 2018, including interim periods, with early adoption permitted. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2016-02. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 20% < 20% > 20% < 20% > 20% June 30, 2018 Six months or less below amortized cost $ 7,813 $ 82 $ 183 $ 23 1,568 11 More than six months and twelve months or less below amortized cost 1,434 1 82 — 310 1 More than twelve months below amortized cost 1,308 79 96 22 278 5 Total $ 10,555 $ 162 $ 361 $ 45 2,156 17 December 31, 2017 Six months or less below amortized cost $ 1,883 $ 67 $ 30 $ 38 433 7 More than six months and twelve months or less below amortized cost 128 7 4 2 37 1 More than twelve months below amortized cost 1,661 72 53 21 335 7 Total $ 3,672 $ 146 $ 87 $ 61 805 15 Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, by market sector for instances in which fair value declined below amortized cost by greater than or less than 20% were as follows as of the dates indicated: Amortized Cost Unrealized Capital Losses Number of Securities < 20% > 20% < 20% > 20% < 20% > 20% June 30, 2018 U.S. Treasuries $ 28 $ — $ 1 $ — 6 — State, municipalities and political subdivisions 296 — 8 — 145 — U.S. corporate public securities 3,084 23 113 6 655 2 U.S. corporate private securities 1,904 67 72 18 215 2 Foreign corporate public securities and foreign governments 1,215 14 50 3 276 4 Foreign corporate private securities 1,336 56 47 18 122 4 Residential mortgage-backed 964 1 38 — 382 4 Commercial mortgage-backed 1,106 — 27 — 217 — Other asset-backed 622 1 5 — 138 1 Total $ 10,555 $ 162 $ 361 $ 45 2,156 17 December 31, 2017 U.S. Treasuries $ 30 $ — $ — $ — 6 — State, municipalities and political subdivisions 130 — 4 — 96 — U.S. corporate public securities 828 6 24 2 167 2 U.S. corporate private securities 743 66 18 20 71 2 Foreign corporate public securities and foreign governments 254 7 7 2 61 1 Foreign corporate private securities 288 66 8 37 35 6 Residential mortgage-backed 746 — 19 — 194 3 Commercial mortgage-backed 511 — 6 — 131 — Other asset-backed 142 1 1 — 44 1 Total $ 3,672 $ 146 $ 87 $ 61 805 15 Investments with fair values less than amortized cost are included in the Company's other-than-temporary impairments analysis. Impairments were recognized as disclosed in the "Evaluating Securities for Other-Than-Temporary Impairments" section below. The Company evaluates non-agency RMBS and ABS for "other-than-temporary impairments" each quarter based on actual and projected cash flows, after considering the quality and updated loan-to-value ratios reflecting current home prices of underlying collateral, forecasted loss severity, the payment priority within the tranche structure of the security and amount of any credit enhancements. The Company's assessment of current levels of cash flows compared to estimated cash flows at the time the securities were acquired (typically pre-2008) indicates the amount and the pace of projected cash flows from the underlying collateral has generally been lower and slower, respectively. However, since cash flows are typically projected at a trust level, the impairment review incorporates the security's position within the trust structure as well as credit enhancement remaining in the trust to determine whether an impairment is warranted. Therefore, while lower and slower cash flows will impact the trust, the effect on the valuation of a particular security within the trust will also be dependent upon the trust structure. Where the assessment continues to project full recovery of principal and interest on schedule, the Company has not recorded an impairment. Based on this analysis, the Company determined that the remaining investments in an unrealized loss position were not other-than-temporarily impaired and therefore no further other-than-temporary impairment was necessary. Troubled Debt Restructuring The Company invests in high quality, well performing portfolios of commercial mortgage loans and private placements. Under certain circumstances, modifications are granted to these contracts. Each modification is evaluated as to whether a troubled debt restructuring has occurred. A modification is a troubled debt restructuring when the borrower is in financial difficulty and the creditor makes concessions. Generally, the types of concessions may include reducing the face amount or maturity amount of the debt as originally stated, reducing the contractual interest rate, extending the maturity date at an interest rate lower than current market interest rates and/or reducing accrued interest. The Company considers the amount, timing and extent of the concession granted in determining any impairment or changes in the specific valuation allowance recorded in connection with the troubled debt restructuring. A valuation allowance may have been recorded prior to the quarter when the loan is modified in a troubled debt restructuring. Accordingly, the carrying value (net of the specific valuation allowance) before and after modification through a troubled debt restructuring may not change significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. As of June 30, 2018 , the Company did no t have any new commercial mortgage loan or private placement troubled debt restructuring. As of December 31, 2017 , the Company did no t have any new commercial mortgage loan troubled debt restructuring and had one private placement troubled debt restructuring with a pre-modification and post modification carrying value of $3 . As of June 30, 2018 and December 31, 2017 , the Company did no t have any commercial mortgage loans or private placements modified in a troubled debt restructuring with a subsequent payment default. Mortgage Loans on Real Estate The Company's mortgage loans on real estate are all commercial mortgage loans held for investment, which are reported at amortized cost, less impairment write-downs and allowance for losses. The Company diversifies its commercial mortgage loan portfolio by geographic region and property type to reduce concentration risk. The Company manages risk when originating commercial mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate. Subsequently, the Company continuously evaluates mortgage loans based on relevant current information including a review of loan-specific credit quality, property characteristics and market trends. Loan performance is monitored on a loan-specific basis through the review of submitted appraisals, operating statements, rent revenues and annual inspection reports, among other items. This review ensures properties are performing at a consistent and acceptable level to secure the debt. The components to evaluate debt service coverage are received and reviewed at least annually to determine the level of risk. The following table summarizes the Company's investment in mortgage loans as of the dates indicated: June 30, 2018 December 31, 2017 Impaired Non Impaired Total Impaired Non Impaired Total Commercial mortgage loans $ 4 $ 4,999 $ 5,003 $ 4 $ 4,907 $ 4,911 Collective valuation allowance for losses N/A (1 ) (1 ) N/A (1 ) (1 ) Total net commercial mortgage loans $ 4 $ 4,998 $ 5,002 $ 4 $ 4,906 $ 4,910 N/A- Not Applicable There were no impairments taken on the mortgage loan portfolio for the three and six months ended June 30, 2018 and 2017 . The following table summarizes the activity in the allowance for losses for commercial mortgage loans for the periods indicated: June 30, 2018 December 31, 2017 Collective valuation allowance for losses, balance at January 1 $ 1 $ 1 Addition to (reduction of) allowance for losses — — Collective valuation allowance for losses, end of period $ 1 $ 1 The carrying values and unpaid principal balances of impaired mortgage loans were as follows as of the dates indicated: June 30, 2018 December 31, 2017 Impaired loans without allowances for losses $ 4 $ 4 Less: Allowances for losses on impaired loans — — Impaired loans, net $ 4 $ 4 Unpaid principal balance of impaired loans $ 6 $ 6 As of June 30, 2018 and December 31, 2017 the Company did not have any impaired loans with allowances for losses. The Company defines delinquent mortgage loans consistent with industry practice as 60 days past due . The Company's policy is to recognize interest income until a loan becomes 90 days delinquent or foreclosure proceedings are commenced, at which point interest accrual is discontinued. Interest accrual is not resumed until the loan is brought current. There were no mortgage loans in the Company's portfolio in process of foreclosure as of June 30, 2018 and December 31, 2017 . There were no loans 30 days or less in arrears, with respect to principal and interest as of June 30, 2018 and December 31, 2017 . The following tables present information on the average investment during the period in impaired loans and interest income recognized on impaired and troubled debt restructured loans for the periods indicated: Three Months Ended June 30, 2018 2017 Impaired loans, average investment during the period (amortized cost) (1) $ 4 $ 5 Interest income recognized on impaired loans, on an accrual basis (1) — — Interest income recognized on impaired loans, on a cash basis (1) — — Interest income recognized on troubled debt restructured loans, on an accrual basis — — (1) Includes amounts for Troubled debt restructured loans. Six Months Ended June 30, 2018 2017 Impaired loans, average investment during the period (amortized cost) (1) $ 4 $ 5 Interest income recognized on impaired loans, on an accrual basis (1) — — Interest income recognized on impaired loans, on a cash basis (1) — — Interest income recognized on troubled debt restructured loans, on an accrual basis — — (1) Includes amounts for Troubled debt restructured loans. Loan-to-value ("LTV") and debt service coverage ("DSC") ratios are measures commonly used to assess the risk and quality of mortgage loans. The LTV ratio, calculated at time of origination, is expressed as a percentage of the amount of the loan relative to the value of the underlying property. A LTV ratio in excess of 100% indicates the unpaid loan amount exceeds the underlying collateral. The DSC ratio, based upon the most recently received financial statements, is expressed as a percentage of the amount of a property’s net income to its debt service payments. A DSC ratio of less than 1.0 indicates that a property’s operations do not generate sufficient income to cover debt payments. These ratios are utilized as part of the review process described above. The following table presents the LTV ratios as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Loan-to-Value Ratio: 0% - 50% $ 360 $ 341 >50% - 60% 1,275 1,256 >60% - 70% 3,024 3,042 >70% - 80% 323 262 >80% and above 21 10 Total Commercial mortgage loans $ 5,003 $ 4,911 (1) Balances do not include collective valuation allowance for losses. The following table presents the DSC ratios as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Debt Service Coverage Ratio: Greater than 1.5x $ 3,883 $ 3,902 >1.25x - 1.5x 398 340 >1.0x - 1.25x 629 600 Less than 1.0x 53 54 Commercial mortgage loans secured by land or construction loans 40 15 Total Commercial mortgage loans $ 5,003 $ 4,911 (1) Balances do not include collective valuation allowance for losses. Properties collateralizing mortgage loans are geographically dispersed throughout the United States, as well as diversified by property type, as reflected in the following tables as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Gross Carrying Value % of Total Gross Carrying Value % of Total Commercial Mortgage Loans by U.S. Region: Pacific $ 1,007 20.1 % $ 985 20.1 % South Atlantic 999 20.0 % 982 20.0 % Middle Atlantic 1,053 21.1 % 1,097 22.4 % West South Central 580 11.6 % 552 11.2 % Mountain 486 9.7 % 457 9.3 % East North Central 481 9.6 % 468 9.5 % New England 76 1.5 % 77 1.6 % West North Central 279 5.6 % 243 4.9 % East South Central 42 0.8 % 50 1.0 % Total Commercial mortgage loans $ 5,003 100.0 % $ 4,911 100.0 % (1) Balances do not include collective valuation allowance for losses. June 30, 2018 (1) December 31, 2017 (1) Gross Carrying Value % of Total Gross Carrying Value % of Total Commercial Mortgage Loans by Property Type: Retail $ 1,376 27.5 % $ 1,383 28.1 % Industrial 1,345 26.9 % 1,326 27.0 % Apartments 1,022 20.4 % 948 19.3 % Office 825 16.5 % 829 16.9 % Hotel/Motel 175 3.5 % 177 3.6 % Mixed Use 48 1.0 % 52 1.1 % Other 212 4.2 % 196 4.0 % Total Commercial mortgage loans $ 5,003 100.0 % $ 4,911 100.0 % (1) Balances do not include collective valuation allowance for losses. The following table presents mortgages by year of origination as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Year of Origination: 2018 $ 224 $ — 2017 1,139 1,086 2016 894 867 2015 666 703 2014 518 538 2013 623 644 2012 and prior 939 1,073 Total Commercial mortgage loans $ 5,003 $ 4,911 (1) Balances do not include collective valuation allowance for losses. Evaluating Securities for Other-Than-Temporary Impairments The Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, including fixed maturity securities in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily impaired. The following tables identify the Company's credit-related and intent-related impairments included in the Condensed Consolidated Statements of Operations, excluding impairments included in Other comprehensive income (loss) by type for the periods indicated: Three Months Ended June 30, 2018 2017 Impairment No. of Securities Impairment No. of Securities U.S. corporate public securities $ — — $ — * 1 Foreign corporate private securities (1) — — — — Residential mortgage-backed 1 21 — * 7 Commercial mortgage-backed — — — * 1 Total $ 1 21 $ — * 9 (1) Primarily U.S. dollar denominated. *Less than $1. Six Months Ended June 30, 2018 2017 Impairment No. of Securities Impairment No. of Securities U.S. corporate public securities $ — — $ — * 1 Foreign corporate private securities (1) 9 1 — — Residential mortgage-backed 1 24 — * 11 Commercial mortgage-backed — — — * 1 Total $ 10 25 $ — * 13 (1) Primarily U.S. dollar denominated. *Less than $1. The above table includes $1 and $10 of write-downs related to credit impairments for the three and six months ended June 30, 2018 , respectively, in Other-than-temporary impairments, which are recognized in the Condensed Consolidated Statements of Operations. The above table includes immaterial write-downs related to credit impairments for the three and six months months ended June 30, 2017 . The remaining write-downs for the three and six months ended June 30, 2018 and June 30, 2017 related to intent impairments are immaterial. The Company may sell securities during the period in which fair value has declined below amortized cost for fixed maturities. In certain situations, new factors, including changes in the business environment, can change the Company’s previous intent to continue holding a security. Accordingly, these factors may lead the Company to record additional intent related capital losses. The following tables present the amount of credit impairments on fixed maturities for which a portion of the OTTI loss was recognized in Other comprehensive income (loss) and the corresponding changes in such amounts for the periods indicated: Three Months Ended June 30, 2018 2017 " id="sjs-B4" xml:space="preserve">Investments Fixed Maturities and Equity Securities Available-for-sale and fair value option ("FVO") fixed maturities were as follows as of June 30, 2018 : Amortized Cost Gross Unrealized Capital Gains Gross Unrealized Capital Losses Embedded Derivatives (2) Fair Value OTTI (3)(4) Fixed maturities: U.S. Treasuries $ 464 $ 84 $ 1 $ — $ 547 $ — U.S. Government agencies and authorities — — — — — — State, municipalities and political subdivisions 751 20 8 — 763 — U.S. corporate public securities 7,968 369 119 — 8,218 — U.S. corporate private securities 3,684 95 90 — 3,689 — Foreign corporate public securities and foreign governments (1) 2,481 90 53 — 2,518 — Foreign corporate private securities (1) 3,274 62 65 — 3,271 — Residential mortgage-backed securities: Agency 1,998 48 32 4 2,018 — Non-Agency 883 46 6 5 928 4 Total Residential mortgage-backed securities 2,881 94 38 9 2,946 4 Commercial mortgage-backed securities 1,627 13 27 — 1,613 — Other asset-backed securities 1,084 6 5 — 1,085 2 Total fixed maturities, including securities pledged 24,214 833 406 9 24,650 6 Less: Securities pledged 853 70 16 — 907 — Total fixed maturities $ 23,361 $ 763 $ 390 $ 9 $ 23,743 $ 6 (1) Primarily U.S. dollar denominated. (2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) Represents Other-than-Temporary-Impairments ("OTTI") reported as a component of Other comprehensive income (loss). (4) Amount excludes $148 of net unrealized gains on impaired available-for-sale securities. Available-for-sale and FVO fixed maturities and equity securities were as follows as of December 31, 2017 : Amortized Cost Gross Unrealized Capital Gains Gross Unrealized Capital Losses Embedded Derivatives (2) Fair Value OTTI (3)(4) Fixed maturities: U.S. Treasuries $ 547 $ 109 $ — $ — $ 656 $ — U.S. Government agencies and authorities 3 — — — 3 — State, municipalities and political subdivisions 842 40 4 — 878 — U.S. corporate public securities 8,476 786 26 — 9,236 — U.S. corporate private securities 3,387 148 38 — 3,497 — Foreign corporate public securities and foreign governments (1) 2,594 192 9 — 2,777 — Foreign corporate private securities (1) 3,105 155 45 — 3,215 7 Residential mortgage-backed securities: Agency 1,878 65 17 6 1,932 — Non-Agency 639 54 2 6 697 4 Total Residential mortgage-backed securities 2,517 119 19 12 2,629 4 Commercial mortgage-backed securities 1,437 39 6 — 1,470 — Other asset-backed securities 671 11 1 — 681 2 Total fixed maturities, including securities pledged 23,579 1,599 148 12 25,042 13 Less: Securities pledged 864 104 8 — 960 — Total fixed maturities 22,715 1,495 140 12 24,082 13 Equity securities 45 15 — — 60 — Total fixed maturities and equity securities investments $ 22,760 $ 1,510 $ 140 $ 12 $ 24,142 $ 13 (1) Primarily U.S. dollar denominated. (2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) Represents OTTI reported as a component of Other comprehensive income (loss). (4) Amount excludes $190 of net unrealized gains on impaired available-for-sale securities. The amortized cost and fair value of fixed maturities, including securities pledged, as of June 30, 2018 , are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called or prepaid. Mortgage-backed securities ("MBS") and Other asset-backed securities ("ABS") are shown separately because they are not due at a single maturity date. Amortized Fair Due to mature: One year or less $ 464 $ 468 After one year through five years 4,244 4,311 After five years through ten years 5,901 5,863 After ten years 8,013 8,364 Mortgage-backed securities 4,508 4,559 Other asset-backed securities 1,084 1,085 Fixed maturities, including securities pledged $ 24,214 $ 24,650 The investment portfolio is monitored to maintain a diversified portfolio on an ongoing basis. Credit risk is mitigated by monitoring concentrations by issuer, sector and geographic stratification and limiting exposure to any one issuer. As of June 30, 2018 and December 31, 2017 , the Company did no t have any investments in a single issuer, other than obligations of the U.S. Government and government agencies, with a carrying value in excess of 10% of the Company's Total shareholder's equity. The following tables present the composition of the U.S. and foreign corporate securities within the fixed maturity portfolio by industry category as of the dates indicated: Amortized Cost Gross Unrealized Capital Gains Gross Unrealized Capital Losses Fair Value June 30, 2018 Communications $ 1,162 $ 55 $ 18 $ 1,199 Financial 2,805 125 38 2,892 Industrial and other companies 7,629 221 149 7,701 Energy 1,886 83 51 1,918 Utilities 2,854 103 52 2,905 Transportation 725 19 13 731 Total $ 17,061 $ 606 $ 321 $ 17,346 December 31, 2017 Communications $ 1,145 $ 114 $ 1 $ 1,258 Financial 2,750 185 4 2,931 Industrial and other companies 7,953 532 65 8,420 Energy 1,970 159 33 2,096 Utilities 2,725 216 11 2,930 Transportation 697 52 2 747 Total $ 17,240 $ 1,258 $ 116 $ 18,382 Fixed Maturities and Equity Securities: The Company's fixed maturities are currently designated as available-for-sale, except those accounted for using the FVO. Prior to the adoption of ASU 2016-01 as of January 1, 2018, equity securities were also designated as available-for-sale. Available-for-sale securities are reported at fair value and unrealized capital gains (losses) on these securities are recorded directly in AOCI and presented net of related changes in Deferred policy acquisition costs ("DAC"), Value of business acquired ("VOBA") and Deferred income taxes. In addition, certain fixed maturities have embedded derivatives, which are reported with the host contract on the Condensed Consolidated Balance Sheets. The Company has elected the FVO for certain of its fixed maturities to better match the measurement of assets and liabilities in the Condensed Consolidated Statements of Operations. Certain collateralized mortgage obligations ("CMOs"), primarily interest-only and principal-only strips, are accounted for as hybrid instruments and reported at fair value with changes in the fair value recorded in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. The Company invests in various categories of CMOs, including CMOs that are not agency-backed, that are subject to different degrees of risk from changes in interest rates and defaults. The principal risks inherent in holding CMOs are prepayment and extension risks related to significant decreases and increases in interest rates resulting in the prepayment of principal from the underlying mortgages, either earlier or later than originally anticipated. As of June 30, 2018 and December 31, 2017 , approximately 53.8% and 52.1% , respectively, of the Company’s CMO holdings, were invested in the above mentioned types of CMOs such as interest-only or principal-only strips, that are subject to more prepayment and extension risk than traditional CMOs. Public corporate fixed maturity securities are distinguished from private corporate fixed maturity securities based upon the manner in which they are transacted. Public corporate fixed maturity securities are issued initially through market intermediaries on a registered basis or pursuant to Rule 144A under the Securities Act of 1933 (the "Securities Act") and are traded on the secondary market through brokers acting as principal. Private corporate fixed maturity securities are originally issued by borrowers directly to investors pursuant to Section 4(a)(2) of the Securities Act, and are traded in the secondary market directly with counterparties, either without the participation of a broker or in agency transactions. Repurchase Agreements As of June 30, 2018 and December 31, 2017 , the Company did no t have any securities pledged in dollar rolls, repurchase agreement transactions or reverse repurchase agreements. Securities Lending The Company engages in securities lending whereby certain securities from its portfolio are loaned to other institutions, through a lending agent, for short periods of time. The Company has the right to approve any institution with whom the lending agent transacts on its behalf. Initial collateral is required at a rate of 102% of the market value of the loaned securities. The lending agent retains the collateral and invests it in high quality liquid assets on behalf of the Company. The market value of the loaned securities is monitored on a daily basis with additional collateral obtained or refunded as the market value of the loaned securities fluctuates. The lending agent indemnifies the Company against losses resulting from the failure of a counterparty to return securities pledged where collateral is insufficient to cover the loss. As of June 30, 2018 and December 31, 2017 , the fair value of loaned securities was $745 and $799 , respectively, and is included in Securities pledged on the Condensed Consolidated Balance Sheets. If cash is received as collateral, the lending agent retains the cash collateral and invests it in short-term liquid assets on behalf of the Company. As of June 30, 2018 and December 31, 2017 , cash collateral retained by the lending agent and invested in short-term liquid assets on the Company's behalf was $711 and $744 , respectively, and is recorded in Short-term investments under securities loan agreements, including collateral delivered on the Condensed Consolidated Balance Sheets. As of June 30, 2018 and December 31, 2017 , liabilities to return collateral of $711 and $744 , respectively, are included in Payables under securities loan agreements, including collateral held, on the Condensed Consolidated Balance Sheets. The Company accepts non-cash collateral in the form of securities. The securities retained as collateral by the lending agent may not be sold or re-pledged, except in the event of default, and are not reflected on the Company’s Condensed Consolidated Balance Sheets. This collateral generally consists of U.S. Treasury, U.S. Government agency securities and MBS pools. As of June 30, 2018 and December 31, 2017 , the fair value of securities retained as collateral by the lending agent on the Company’s behalf was $60 and $61 , respectively. The following table presents borrowings under securities lending transactions by class of collateral pledged for the dates indicated: June 30, 2018 (1)(2) December 31, 2017 (1)(2) U.S. Treasuries $ 179 $ 177 U.S. corporate public securities 429 460 Short-term Investments 1 — Foreign corporate public securities and foreign governments 162 168 Payables under securities loan agreements $ 771 $ 805 (1) As of June 30, 2018 and December 31, 2017 , borrowings under securities lending transactions include cash collateral of $711 and $744 , respectively. (2) As of June 30, 2018 and December 31, 2017 , borrowings under securities lending transactions include non-cash collateral of $60 and $61 , respectively. The Company's securities lending activities are conducted on an overnight basis, and all securities loaned can be recalled at any time. The Company does not offset assets and liabilities associated with its securities lending program. Variable Interest Entities ("VIEs") The Company holds certain VIEs for investment purposes. VIEs may be in the form of private placement securities, structured securities, securitization transactions or limited partnerships. The Company has reviewed each of its holdings and determined that consolidation of these investments in the Company’s financial statements is not required, as the Company is not the primary beneficiary, because the Company does not have both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation or right to potentially significant losses or benefits, for any of its investments in VIEs. The Company did not provide any non-contractual financial support and its carrying value represents the Company’s exposure to loss. The carrying value of the investments in VIEs was $568 and $411 as of June 30, 2018 and December 31, 2017 , respectively; these investments are included in Limited partnerships/corporations on the Condensed Consolidated Balance Sheets. Income and losses recognized on these investments are reported in Net investment income in the Condensed Consolidated Statements of Operations. Securitizations The Company invests in various tranches of securitization entities, including Residential mortgage-backed securities ("RMBS"), Commercial mortgage-backed securities ("CMBS") and ABS. Through its investments, the Company is not obligated to provide any financial or other support to these entities. Each of the RMBS, CMBS and ABS entities are thinly capitalized by design and considered VIEs. The Company's involvement with these entities is limited to that of a passive investor. The Company has no unilateral right to appoint or remove the servicer, special servicer or investment manager, which are generally viewed to have the power to direct the activities that most significantly impact the securitization entities' economic performance, in any of these entities, nor does the Company function in any of these roles. The Company, through its investments or other arrangements, does not have the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity. Therefore, the Company is not the primary beneficiary and does not consolidate any of the RMBS, CMBS and ABS entities in which it holds investments. These investments are accounted for as investments available-for-sale as described in the Fair Value Measurements Note to these Condensed Consolidated Financial Statements and unrealized capital gains (losses) on these securities are recorded directly in AOCI, except for certain RMBS that are accounted for under the FVO, for which changes in fair value are reflected in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. The Company’s maximum exposure to loss on these structured investments is limited to the amount of its investment. Unrealized Capital Losses Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of June 30, 2018 : Six Months or Less Below Amortized Cost More Than Six Months and Twelve Months or Less Below Amortized Cost More Than Twelve Months Below Amortized Cost Total Fair Value Unrealized Capital Losses Fair Value Unrealized Capital Losses Fair Value Unrealized Capital Losses Fair Value Unrealized Capital Losses U.S. Treasuries $ 13 $ — $ 2 $ 1 $ 12 $ — $ 27 $ 1 State, municipalities and political subdivisions 196 3 27 1 65 4 288 8 U.S. corporate public securities 2,384 70 407 26 197 23 2,988 119 U.S. corporate private securities 1,258 26 180 11 443 53 1,881 90 Foreign corporate public securities and foreign governments 994 32 105 9 77 12 1,176 53 Foreign corporate private securities 1,107 46 67 3 153 16 1,327 65 Residential mortgage-backed 423 7 191 14 313 17 927 38 Commercial mortgage-backed 735 10 311 15 33 2 1,079 27 Other asset-backed 547 3 58 1 13 1 618 5 Total $ 7,657 $ 197 $ 1,348 $ 81 $ 1,306 $ 128 $ 10,311 $ 406 Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of December 31, 2017 : Six Months or Less More Than Six More Than Twelve Total Fair Unrealized Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasuries $ 18 $ — $ — $ — $ 12 $ — $ 30 $ — State, municipalities and political subdivisions 34 — 1 — 91 4 126 4 U.S. corporate public securities 504 11 — — 304 15 808 26 U.S. corporate private securities 226 2 46 2 499 34 771 38 Foreign corporate public securities and foreign governments 148 1 5 — 99 8 252 9 Foreign corporate private securities 135 38 13 — 161 7 309 45 Residential mortgage-backed 263 5 26 1 438 13 727 19 Commercial mortgage-backed 436 5 19 — 50 1 505 6 Other asset-backed 95 1 9 — 38 — 142 1 Total $ 1,859 $ 63 $ 119 $ 3 $ 1,692 $ 82 $ 3,670 $ 148 Of the unrealized capital losses aged more than twelve months, the average market value of the related fixed maturities was 91.1% and 95.4% of the average book value as of June 30, 2018 and December 31, 2017 , respectively. Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive months as indicated in the tables below, were as follows as of the dates indicated: Amortized Cost Unrealized Capital Losses Number of Securities < 20% > 20% < 20% > 20% < 20% > 20% June 30, 2018 Six months or less below amortized cost $ 7,813 $ 82 $ 183 $ 23 1,568 11 More than six months and twelve months or less below amortized cost 1,434 1 82 — 310 1 More than twelve months below amortized cost 1,308 79 96 22 278 5 Total $ 10,555 $ 162 $ 361 $ 45 2,156 17 December 31, 2017 Six months or less below amortized cost $ 1,883 $ 67 $ 30 $ 38 433 7 More than six months and twelve months or less below amortized cost 128 7 4 2 37 1 More than twelve months below amortized cost 1,661 72 53 21 335 7 Total $ 3,672 $ 146 $ 87 $ 61 805 15 Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, by market sector for instances in which fair value declined below amortized cost by greater than or less than 20% were as follows as of the dates indicated: Amortized Cost Unrealized Capital Losses Number of Securities < 20% > 20% < 20% > 20% < 20% > 20% June 30, 2018 U.S. Treasuries $ 28 $ — $ 1 $ — 6 — State, municipalities and political subdivisions 296 — 8 — 145 — U.S. corporate public securities 3,084 23 113 6 655 2 U.S. corporate private securities 1,904 67 72 18 215 2 Foreign corporate public securities and foreign governments 1,215 14 50 3 276 4 Foreign corporate private securities 1,336 56 47 18 122 4 Residential mortgage-backed 964 1 38 — 382 4 Commercial mortgage-backed 1,106 — 27 — 217 — Other asset-backed 622 1 5 — 138 1 Total $ 10,555 $ 162 $ 361 $ 45 2,156 17 December 31, 2017 U.S. Treasuries $ 30 $ — $ — $ — 6 — State, municipalities and political subdivisions 130 — 4 — 96 — U.S. corporate public securities 828 6 24 2 167 2 U.S. corporate private securities 743 66 18 20 71 2 Foreign corporate public securities and foreign governments 254 7 7 2 61 1 Foreign corporate private securities 288 66 8 37 35 6 Residential mortgage-backed 746 — 19 — 194 3 Commercial mortgage-backed 511 — 6 — 131 — Other asset-backed 142 1 1 — 44 1 Total $ 3,672 $ 146 $ 87 $ 61 805 15 Investments with fair values less than amortized cost are included in the Company's other-than-temporary impairments analysis. Impairments were recognized as disclosed in the "Evaluating Securities for Other-Than-Temporary Impairments" section below. The Company evaluates non-agency RMBS and ABS for "other-than-temporary impairments" each quarter based on actual and projected cash flows, after considering the quality and updated loan-to-value ratios reflecting current home prices of underlying collateral, forecasted loss severity, the payment priority within the tranche structure of the security and amount of any credit enhancements. The Company's assessment of current levels of cash flows compared to estimated cash flows at the time the securities were acquired (typically pre-2008) indicates the amount and the pace of projected cash flows from the underlying collateral has generally been lower and slower, respectively. However, since cash flows are typically projected at a trust level, the impairment review incorporates the security's position within the trust structure as well as credit enhancement remaining in the trust to determine whether an impairment is warranted. Therefore, while lower and slower cash flows will impact the trust, the effect on the valuation of a particular security within the trust will also be dependent upon the trust structure. Where the assessment continues to project full recovery of principal and interest on schedule, the Company has not recorded an impairment. Based on this analysis, the Company determined that the remaining investments in an unrealized loss position were not other-than-temporarily impaired and therefore no further other-than-temporary impairment was necessary. Troubled Debt Restructuring The Company invests in high quality, well performing portfolios of commercial mortgage loans and private placements. Under certain circumstances, modifications are granted to these contracts. Each modification is evaluated as to whether a troubled debt restructuring has occurred. A modification is a troubled debt restructuring when the borrower is in financial difficulty and the creditor makes concessions. Generally, the types of concessions may include reducing the face amount or maturity amount of the debt as originally stated, reducing the contractual interest rate, extending the maturity date at an interest rate lower than current market interest rates and/or reducing accrued interest. The Company considers the amount, timing and extent of the concession granted in determining any impairment or changes in the specific valuation allowance recorded in connection with the troubled debt restructuring. A valuation allowance may have been recorded prior to the quarter when the loan is modified in a troubled debt restructuring. Accordingly, the carrying value (net of the specific valuation allowance) before and after modification through a troubled debt restructuring may not change significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. As of June 30, 2018 , the Company did no t have any new commercial mortgage loan or private placement troubled debt restructuring. As of December 31, 2017 , the Company did no t have any new commercial mortgage loan troubled debt restructuring and had one private placement troubled debt restructuring with a pre-modification and post modification carrying value of $3 . As of June 30, 2018 and December 31, 2017 , the Company did no t have any commercial mortgage loans or private placements modified in a troubled debt restructuring with a subsequent payment default. Mortgage Loans on Real Estate The Company's mortgage loans on real estate are all commercial mortgage loans held for investment, which are reported at amortized cost, less impairment write-downs and allowance for losses. The Company diversifies its commercial mortgage loan portfolio by geographic region and property type to reduce concentration risk. The Company manages risk when originating commercial mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate. Subsequently, the Company continuously evaluates mortgage loans based on relevant current information including a review of loan-specific credit quality, property characteristics and market trends. Loan performance is monitored on a loan-specific basis through the review of submitted appraisals, operating statements, rent revenues and annual inspection reports, among other items. This review ensures properties are performing at a consistent and acceptable level to secure the debt. The components to evaluate debt service coverage are received and reviewed at least annually to determine the level of risk. The following table summarizes the Company's investment in mortgage loans as of the dates indicated: June 30, 2018 December 31, 2017 Impaired Non Impaired Total Impaired Non Impaired Total Commercial mortgage loans $ 4 $ 4,999 $ 5,003 $ 4 $ 4,907 $ 4,911 Collective valuation allowance for losses N/A (1 ) (1 ) N/A (1 ) (1 ) Total net commercial mortgage loans $ 4 $ 4,998 $ 5,002 $ 4 $ 4,906 $ 4,910 N/A- Not Applicable There were no impairments taken on the mortgage loan portfolio for the three and six months ended June 30, 2018 and 2017 . The following table summarizes the activity in the allowance for losses for commercial mortgage loans for the periods indicated: June 30, 2018 December 31, 2017 Collective valuation allowance for losses, balance at January 1 $ 1 $ 1 Addition to (reduction of) allowance for losses — — Collective valuation allowance for losses, end of period $ 1 $ 1 The carrying values and unpaid principal balances of impaired mortgage loans were as follows as of the dates indicated: June 30, 2018 December 31, 2017 Impaired loans without allowances for losses $ 4 $ 4 Less: Allowances for losses on impaired loans — — Impaired loans, net $ 4 $ 4 Unpaid principal balance of impaired loans $ 6 $ 6 As of June 30, 2018 and December 31, 2017 the Company did not have any impaired loans with allowances for losses. The Company defines delinquent mortgage loans consistent with industry practice as 60 days past due . The Company's policy is to recognize interest income until a loan becomes 90 days delinquent or foreclosure proceedings are commenced, at which point interest accrual is discontinued. Interest accrual is not resumed until the loan is brought current. There were no mortgage loans in the Company's portfolio in process of foreclosure as of June 30, 2018 and December 31, 2017 . There were no loans 30 days or less in arrears, with respect to principal and interest as of June 30, 2018 and December 31, 2017 . The following tables present information on the average investment during the period in impaired loans and interest income recognized on impaired and troubled debt restructured loans for the periods indicated: Three Months Ended June 30, 2018 2017 Impaired loans, average investment during the period (amortized cost) (1) $ 4 $ 5 Interest income recognized on impaired loans, on an accrual basis (1) — — Interest income recognized on impaired loans, on a cash basis (1) — — Interest income recognized on troubled debt restructured loans, on an accrual basis — — (1) Includes amounts for Troubled debt restructured loans. Six Months Ended June 30, 2018 2017 Impaired loans, average investment during the period (amortized cost) (1) $ 4 $ 5 Interest income recognized on impaired loans, on an accrual basis (1) — — Interest income recognized on impaired loans, on a cash basis (1) — — Interest income recognized on troubled debt restructured loans, on an accrual basis — — (1) Includes amounts for Troubled debt restructured loans. Loan-to-value ("LTV") and debt service coverage ("DSC") ratios are measures commonly used to assess the risk and quality of mortgage loans. The LTV ratio, calculated at time of origination, is expressed as a percentage of the amount of the loan relative to the value of the underlying property. A LTV ratio in excess of 100% indicates the unpaid loan amount exceeds the underlying collateral. The DSC ratio, based upon the most recently received financial statements, is expressed as a percentage of the amount of a property’s net income to its debt service payments. A DSC ratio of less than 1.0 indicates that a property’s operations do not generate sufficient income to cover debt payments. These ratios are utilized as part of the review process described above. The following table presents the LTV ratios as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Loan-to-Value Ratio: 0% - 50% $ 360 $ 341 >50% - 60% 1,275 1,256 >60% - 70% 3,024 3,042 >70% - 80% 323 262 >80% and above 21 10 Total Commercial mortgage loans $ 5,003 $ 4,911 (1) Balances do not include collective valuation allowance for losses. The following table presents the DSC ratios as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Debt Service Coverage Ratio: Greater than 1.5x $ 3,883 $ 3,902 >1.25x - 1.5x 398 340 >1.0x - 1.25x 629 600 Less than 1.0x 53 54 Commercial mortgage loans secured by land or construction loans 40 15 Total Commercial mortgage loans $ 5,003 $ 4,911 (1) Balances do not include collective valuation allowance for losses. Properties collateralizing mortgage loans are geographically dispersed throughout the United States, as well as diversified by property type, as reflected in the following tables as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Gross Carrying Value % of Total Gross Carrying Value % of Total Commercial Mortgage Loans by U.S. Region: Pacific $ 1,007 20.1 % $ 985 20.1 % South Atlantic 999 20.0 % 982 20.0 % Middle Atlantic 1,053 21.1 % 1,097 22.4 % West South Central 580 11.6 % 552 11.2 % Mountain 486 9.7 % 457 9.3 % East North Central 481 9.6 % 468 9.5 % New England 76 1.5 % 77 1.6 % West North Central 279 5.6 % 243 4.9 % East South Central 42 0.8 % 50 1.0 % Total Commercial mortgage loans $ 5,003 100.0 % $ 4,911 100.0 % (1) Balances do not include collective valuation allowance for losses. June 30, 2018 (1) December 31, 2017 (1) Gross Carrying Value % of Total Gross Carrying Value % of Total Commercial Mortgage Loans by Property Type: Retail $ 1,376 27.5 % $ 1,383 28.1 % Industrial 1,345 26.9 % 1,326 27.0 % Apartments 1,022 20.4 % 948 19.3 % Office 825 16.5 % 829 16.9 % Hotel/Motel 175 3.5 % 177 3.6 % Mixed Use 48 1.0 % 52 1.1 % Other 212 4.2 % 196 4.0 % Total Commercial mortgage loans $ 5,003 100.0 % $ 4,911 100.0 % (1) Balances do not include collective valuation allowance for losses. The following table presents mortgages by year of origination as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Year of Origination: 2018 $ 224 $ — 2017 1,139 1,086 2016 894 867 2015 666 703 2014 518 538 2013 623 644 2012 and prior 939 1,073 Total Commercial mortgage loans $ 5,003 $ 4,911 (1) Balances do not include collective valuation allowance for losses. Evaluating Securities for Other-Than-Temporary Impairments The Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, including fixed maturity securities in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily impaired. The following tables identify the Company's credit-related and intent-related impairments included in the Condensed Consolidated Statements of Operations, excluding impairments included in Other comprehensive income (loss) by type for the periods indicated: Three Months Ended June 30, 2018 2017 Impairment No. of Securities Impairment No. of Securities U.S. corporate public securities $ — — $ — * 1 Foreign corporate private securities (1) — — — — Residential mortgage-backed 1 21 — * 7 Commercial mortgage-backed — — — * 1 Total $ 1 21 $ — * 9 (1) Primarily U.S. dollar denominated. *Less than $1. Six Months Ended June 30, 2018 2017 Impairment No. of Securities Impairment No. of Securities U.S. corporate public securities $ — — $ — * 1 Foreign corporate private securities (1) 9 1 — — Residential mortgage-backed 1 24 — * 11 Commercial mortgage-backed — — — * 1 Total $ 10 25 $ — * 13 (1) Primarily U.S. dollar denominated. *Less than $1. The above table includes $1 and $10 of write-downs related to credit impairments for the three and six months ended June 30, 2018 , respectively, in Other-than-temporary impairments, which are recognized in the Condensed Consolidated Statements of Operations. The above table includes immaterial write-downs related to credit impairments for the three and six months months ended June 30, 2017 . The remaining write-downs for the three and six months ended June 30, 2018 and June 30, 2017 related to intent impairments are immaterial. The Company may sell securities during the period in which fair value has declined below amortized cost for fixed maturities. In certain situations, new factors, including changes in the business environment, can change the Company’s previous intent to continue holding a security. Accordingly, these factors may lead the Company to record additional intent related capital losses. The following tables present the amount of credit impairments on fixed maturities for which a portion of the OTTI loss was recognized in Other comprehensive income (loss) and the corresponding changes in such amounts for the periods indicated: Three Months Ended June 30, 2018 2017 |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company enters into the following types of derivatives: Interest rate caps: The Company uses interest rate cap contracts to hedge the interest rate exposure arising from duration mismatches between assets and liabilities. Interest rate caps are also used to hedge interest rate exposure if rates rise above a specified level. Such increases in rates will require the Company to incur additional expenses. The future payout from the interest rate caps fund this increased exposure. The Company pays an upfront premium to purchase these caps. The Company utilizes these contracts in non-qualifying hedging relationships. Interest rate swaps: Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and/or liabilities. Interest rate swaps are also used to hedge the interest rate risk associated with the value of assets it owns or in an anticipation of acquiring them. Using interest rate swaps, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest payments, calculated by reference to an agreed upon notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made to/from the counterparty at each due date. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships. Foreign exchange swaps: The Company uses foreign exchange or currency swaps to reduce the risk of change in the value, yield or cash flows associated with certain foreign denominated invested assets. Foreign exchange swaps represent contracts that require the exchange of foreign currency cash flows against U.S. dollar cash flows at regular periods, typically quarterly or semi-annually. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships. Credit default swaps: Credit default swaps are used to reduce credit loss exposure with respect to certain assets that the Company owns, or to assume credit exposure on certain assets that the Company does not own. Payments are made to, or received from, the counterparty at specified intervals. In the event of a default on the underlying credit exposure, the Company will either receive a payment (purchased credit protection) or will be required to make a payment (sold credit protection) equal to the par minus recovery value of the swap contract. The Company utilizes these contracts in non-qualifying hedging relationships. Currency forwards: The Company utilizes currency forward contracts to hedge currency exposure related to invested assets. The Company utilizes these contracts in non-qualifying hedging relationships. Futures: The Company uses interest rate futures contracts to hedge its exposure to market risks due to changes in interest rates. The Company enters into exchange traded futures with regulated futures commissions that are members of the exchange. The Company also posts initial and variation margins, with the exchange, on a daily basis. The Company utilizes exchange-traded futures in non-qualifying hedging relationships. The Company may also use futures contracts as a hedge against an increase in certain equity indices. Such increases may result in increased payments to the holders of fixed index annuity ("FIA") contracts. Swaptions: A swaption is an option to enter into a swap with a forward starting effective date. The Company uses swaptions to hedge the interest rate exposure associated with the minimum crediting rate and book value guarantees embedded in the retirement products that the Company offers. Increases in interest rates will generate losses on assets that are backing such liabilities. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium when it purchases the swaption. The Company utilizes these contracts in non-qualifying hedging relationships. Options: The Company uses equity options to hedge against an increase in various equity indices. Such increases may result in increased payments to the holders of the FIA contracts. The Company pays an upfront premium to purchase these options. The Company utilizes these options in non-qualifying hedging relationships. Managed custody guarantees ("MCGs"): The Company issues certain credited rate guarantees on variable fixed income portfolios that represent stand-alone derivatives. The market value is partially determined by, among other things, levels of or changes in interest rates, prepayment rates and credit ratings/spreads. Embedded derivatives: The Company also invests in certain fixed maturity instruments and has issued certain products that contain embedded derivatives for which market value is at least partially determined by, among other things, levels of or changes in domestic and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates, equity rates, or credit ratings/spreads. In addition, the Company has entered into coinsurance with funds withheld arrangements, which contain embedded derivatives. The Company's use of derivatives is limited mainly to economic hedging to reduce the Company's exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk, exchange rate risk and equity market risk. It is the Company's policy not to offset amounts recognized for derivative instruments and amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement, which provides the Company with the legal right of offset. However, in accordance with the Chicago Mercantile Exchange ("CME") rule changes related to the variation margin payments, effective the first quarter of 2017, the Company is required to adjust the derivative balances with the variation margin payments related to our cleared derivatives executed through CME. The notional amounts and fair values of derivatives were as follows as of the dates indicated: June 30, 2018 December 31, 2017 Notional Amount Asset Fair Value Liability Fair Value Notional Amount Asset Fair Value Liability Fair Value Derivatives: Qualifying for hedge accounting (1) Cash flow hedges: Interest rate contracts $ 35 $ — $ — $ 35 $ — $ — Foreign exchange contracts 584 2 44 533 — 52 Derivatives: Non-qualifying for hedge accounting (1) Interest rate contracts 17,929 148 19 18,769 117 20 Foreign exchange contracts 14 1 — 26 — — Equity contracts 126 5 4 154 9 7 Credit contracts 639 7 3 771 10 6 Embedded derivatives and Managed custody guarantees: Within fixed maturity investments N/A 9 — N/A 12 — Within products N/A — 79 N/A — 117 Within reinsurance agreements N/A — (70 ) N/A — (21 ) Total $ 172 $ 79 $ 148 $ 181 (1) Open derivative contracts are reported as Derivatives assets or liabilities on the Condensed Consolidated Balance Sheets at fair value. N/A - Not Applicable Based on the notional amounts, a substantial portion of the Company’s derivative positions was not designated or did not qualify for hedge accounting as part of a hedging relationship as of June 30, 2018 and December 31, 2017 . The Company utilizes derivative contracts mainly to hedge exposure to variability in cash flows, interest rate risk, credit risk, foreign exchange risk and equity market risk. The majority of derivatives used by the Company are designated as product hedges, which hedge the exposure arising from insurance liabilities or guarantees embedded in the contracts the Company offers through various product lines. These derivatives do not qualify for hedge accounting as they do not meet the criteria of being "highly effective" as outlined in ASC Topic 815, but do provide an economic hedge, which is in line with the Company’s risk management objectives. The Company also uses derivatives contracts to hedge its exposure to various risks associated with the investment portfolio. The Company does not seek hedge accounting treatment for certain of these derivatives as they generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules outlined in ASC Topic 815. The Company also uses credit default swaps coupled with other investments in order to produce the investment characteristics of otherwise permissible investments that do not qualify as effective accounting hedges under ASC Topic 815. Although the Company has not elected to net its derivative exposures, the notional amounts and fair values of Over-The-Counter ("OTC") and cleared derivatives excluding exchange traded contracts and forward contracts (To Be Announced mortgage-backed securities) are presented in the tables below as of the dates indicated: June 30, 2018 Notional Amount Asset Fair Value Liability Fair Value Credit contracts $ 639 $ 7 $ 3 Equity contracts 126 5 4 Foreign exchange contracts 598 3 44 Interest rate contracts 15,713 148 19 163 70 Counterparty netting (1) (37 ) (37 ) Cash collateral netting (1) (122 ) — Securities collateral netting (1) — (30 ) Net receivables/payables $ 4 $ 3 (1) Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements. December 31, 2017 Notional Amount Asset Fair Value Liability Fair Value Credit contracts $ 771 $ 10 $ 6 Equity contracts 154 9 7 Foreign exchange contracts 559 — 52 Interest rate contracts 17,286 117 20 136 85 Counterparty netting (1) (50 ) (50 ) Cash collateral netting (1) (84 ) — Securities collateral netting (1) — (30 ) Net receivables/payables $ 2 $ 5 (1) Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements. Collateral Under the terms of the OTC Derivative International Swaps and Derivatives Association, Inc. ("ISDA") agreements, the Company may receive from, or deliver to, counterparties, collateral to assure that terms of the ISDA agreements will be met with regard to the Credit Support Annex ("CSA"). The terms of the CSA call for the Company to pay interest on any cash received equal to the Federal Funds rate. To the extent cash collateral is received and delivered, it is included in Payables under securities loan agreements, including collateral held and Short-term investments under securities loan agreements, including collateral delivered, respectively, on the Condensed Consolidated Balance Sheets and is reinvested in short-term investments. Collateral held is used in accordance with the CSA to satisfy any obligations. Investment grade bonds owned by the Company are the source of noncash collateral posted, which is reported in Securities pledged on the Condensed Consolidated Balance Sheets. As of June 30, 2018 , the Company held $11 and $113 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. As of December 31, 2017 , the Company held $11 and $74 of net cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. In addition, as of June 30, 2018 , the Company delivered $162 of securities and held no securities as collateral. As of December 31, 2017 , the Company delivered $161 of securities and held no securities as collateral. Net realized gains (losses) on derivatives were as follows for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Derivatives: Qualifying for hedge accounting (1) Cash flow hedges: Interest rate contracts $ — $ — $ — $ — Foreign exchange contracts 3 1 4 8 Derivatives: Non-qualifying for hedge accounting (2) Interest rate contracts 2 (2 ) 7 (5 ) Foreign exchange contracts 1 2 — — Equity contracts — — — 1 Credit contracts — 2 — 3 Embedded derivatives and Managed custody guarantees: Within fixed maturity investments (2) (2 ) (1 ) (4 ) (3 ) Within products (2) 12 (9 ) 32 11 Within reinsurance agreements (3) 20 (14 ) 49 (16 ) Total $ 36 $ (21 ) $ 88 $ (1 ) (1) Changes in value for effective fair value hedges are recorded in Other net realized capital gains (losses). Changes in fair value upon disposal for effective cash flow hedges are amortized through Net investment income and the ineffective portion is recorded in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. For the three and six months ended June 30, 2018 and 2017 , ineffective amounts were immaterial. (2) Changes in value are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) Changes in value are included in Interest credited and other benefits to contract owners/policyholders in the Condensed Consolidated Statements of Operations. Credit Default Swaps The Company has entered into various credit default swaps. When credit default swaps are sold, the Company assumes credit exposure to certain assets that it does not own. Credit default swaps may also be purchased to reduce credit exposure in the Company's portfolio. Credit default swaps involve a transfer of credit risk from one party to another in exchange for periodic payments. As of June 30, 2018 , the fair values of credit default swaps of $7 and $3 were included in Derivatives assets and Derivatives liabilities, respectively, on the Condensed Consolidated Balance Sheets. As of December 31, 2017 , the fair values of credit default swaps of $10 and $6 were included in Derivatives assets and Derivatives liabilities, respectively, on the Condensed Consolidated Balance Sheets. As of June 30, 2018 and December 31, 2017 , the maximum potential future exposure to the Company was $422 and $497 , respectively, on credit default swaps. These instruments are typically written for a maturity period of 5 years and contain no recourse provisions. If the Company's current debt and claims paying ratings were downgraded in the future, the terms in the Company's derivative agreements may be triggered, which could negatively impact overall liquidity. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair Value Measurement The Company categorizes its financial instruments into a three-level hierarchy based on the priority of the inputs to the valuation technique, pursuant to ASU 2011-04, "Fair Value Measurements (ASC Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP" ("ASU 2011-04"). The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. When available, the estimated fair value of financial instruments is based on quoted prices in active markets that are readily and regularly obtainable. When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies, including discounted cash flow methodologies, matrix pricing or other similar techniques. The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 : Level 1 Level 2 Level 3 Total Assets: Fixed maturities, including securities pledged: U.S. Treasuries $ 489 $ 58 $ — $ 547 U.S. Government agencies and authorities — — — — State, municipalities and political subdivisions — 763 — 763 U.S. corporate public securities — 8,200 18 8,218 U.S. corporate private securities — 2,951 738 3,689 Foreign corporate public securities and foreign governments (1) — 2,518 — 2,518 Foreign corporate private securities (1) — 3,149 122 3,271 Residential mortgage-backed securities — 2,913 33 2,946 Commercial mortgage-backed securities — 1,597 16 1,613 Other asset-backed securities — 988 97 1,085 Total fixed maturities, including securities pledged 489 23,137 1,024 24,650 Equity securities 10 — 53 63 Derivatives: Interest rate contracts — 148 — 148 Foreign exchange contracts — 3 — 3 Equity contracts — 5 — 5 Credit contracts — 7 — 7 Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements 924 — 1 925 Assets held in separate accounts 68,652 5,491 38 74,181 Total assets $ 70,075 $ 28,791 $ 1,116 $ 99,982 Percentage of Level to Total 70 % 29 % 1 % 100 % Liabilities: Derivatives: Guaranteed benefit derivatives: FIA $ — $ — $ 16 $ 16 Stabilizer and MCGs — — 63 63 Other derivatives: Interest rate contracts — 19 — 19 Foreign exchange contracts — 44 — 44 Equity contracts — 4 — 4 Credit contracts — 3 — 3 Embedded derivative on reinsurance — (70 ) — (70 ) Total liabilities $ — $ — $ 79 $ 79 (1) Primarily U.S. dollar denominated. The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 : Level 1 Level 2 Level 3 Total Assets: Fixed maturities, including securities pledged: U.S. Treasuries $ 597 $ 59 $ — $ 656 U.S. Government agencies and authorities — 3 — 3 State, municipalities and political subdivisions — 878 — 878 U.S. corporate public securities — 9,210 26 9,236 U.S. corporate private securities — 2,855 642 3,497 Foreign corporate public securities and foreign governments (1) — 2,777 — 2,777 Foreign corporate private securities (1) — 3,123 92 3,215 Residential mortgage-backed securities — 2,608 21 2,629 Commercial mortgage-backed securities — 1,463 7 1,470 Other asset-backed securities — 638 43 681 Total fixed maturities, including securities pledged 597 23,614 831 25,042 Equity securities, available-for-sale 10 — 50 60 Derivatives: Interest rate contracts — 117 — 117 Foreign exchange contracts — — — — Equity contracts — 9 — 9 Credit contracts — 10 — 10 Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements 1,078 — — 1,078 Assets held in separate accounts 67,966 5,059 11 73,036 Total assets $ 69,651 $ 28,809 $ 892 $ 99,352 Percentage of Level to total 70 % 29 % 1 % 100 % Liabilities: Derivatives: Guaranteed benefit derivatives: FIA $ — $ — $ 20 $ 20 Stabilizer and MCGs — — 97 97 Other derivatives: Interest rate contracts — 20 — 20 Foreign exchange contracts — 52 — 52 Equity contracts — 7 — 7 Credit contracts — 6 — 6 Embedded derivative on reinsurance — (21 ) — (21 ) Total liabilities $ — $ 64 $ 117 $ 181 (1) Primarily U.S. dollar denominated. Valuation of Financial Assets and Liabilities at Fair Value Certain assets and liabilities are measured at estimated fair value on the Company's Condensed Consolidated Balance Sheets. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The exit price and the transaction (or entry) price will be the same at initial recognition in many circumstances. However, in certain cases, the transaction price may not represent fair value. The fair value of a liability is based on the amount that would be paid to transfer a liability to a third-party with an equal credit standing. Fair value is required to be a market-based measurement that is determined based on a hypothetical transaction at the measurement date, from a market participant's perspective. The Company considers three broad valuation approaches when a quoted price is unavailable: (i) the market approach, (ii) the income approach and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given the instrument being measured and the availability of sufficient inputs. The Company prioritizes the inputs to fair valuation approaches and allows for the use of unobservable inputs to the extent that observable inputs are not available. The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of exit price and the fair value hierarchy as prescribed in ASC Topic 820. Valuations are obtained from third-party commercial pricing services, brokers and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from third-party commercial pricing services are non-binding. The Company reviews the assumptions and inputs used by third-party commercial pricing services for each reporting period in order to determine an appropriate fair value hierarchy level. The documentation and analysis obtained from third-party commercial pricing services are reviewed by the Company, including in-depth validation procedures confirming the observability of inputs. The valuations are reviewed and validated monthly through the internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades or monitoring of trading volumes. Fixed maturities: The fair values for actively traded marketable bonds are determined based upon the quoted market prices and are classified as Level 1 assets. Assets in this category primarily include certain U.S. Treasury securities. For fixed maturities classified as Level 2 assets, fair values are determined using a matrix-based market approach, based on prices obtained from third-party commercial pricing services and the Company’s matrix and analytics-based pricing models, which in each case incorporate a variety of market observable information as valuation inputs. The market observable inputs used for these fair value measurements, by fixed maturity asset class, are as follows: U.S. Treasuries: Fair value is determined using third-party commercial pricing services, with the primary inputs being stripped interest and principal U.S. Treasury yield curves that represent a U.S. Treasury zero-coupon curve. U.S. government agencies and authorities, State, municipalities and political subdivisions: Fair value is determined using third-party commercial pricing services, with the primary inputs being U.S. Treasury yield curves, trades of comparable securities, credit spreads off benchmark yields and issuer ratings. U.S. corporate public securities, Foreign corporate public securities and foreign governments: Fair value is determined using third-party commercial pricing services, with the primary inputs being benchmark yields, trades of comparable securities, issuer ratings, bids and credit spreads off benchmark yields. U.S. corporate private securities and Foreign corporate private securities: Fair values are determined using a matrix and analytics-based pricing model. The model incorporates the current level of risk-free interest rates, current corporate credit spreads, credit quality of the issuer and cash flow characteristics of the security. The model also considers a liquidity spread, the value of any collateral, the capital structure of the issuer, the presence of guarantees, and prices and quotes for comparably rated publicly traded securities. RMBS, CMBS and ABS: Fair value is determined using third-party commercial pricing services, with the primary inputs being credit spreads off benchmark yields, prepayment speed assumptions, current and forecasted loss severity, debt service coverage ratios, collateral type, payment priority within tranche and the vintage of the loans underlying the security. Generally, the Company does not obtain more than one vendor price from pricing services per instrument. The Company uses a hierarchy process in which prices are obtained from a primary vendor and, if that vendor is unable to provide the price, the next vendor in the hierarchy is contacted until a price is obtained or it is determined that a price cannot be obtained from a commercial pricing service. When a price cannot be obtained from a commercial pricing service, independent broker quotes are solicited. Securities priced using independent broker quotes are classified as Level 3. Broker quotes and prices obtained from pricing services are reviewed and validated through an internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades or monitoring of trading volumes. After review, for those instruments where the price is determined to be appropriate, the unadjusted price provided is used for financial statement valuation. If it is determined that the price is questionable, another price may be requested from a different vendor. The internal valuation committee then reviews all prices for the instrument again, along with information from the review, to determine which price best represents exit price for the instrument. Fair values of privately placed bonds are determined primarily using a matrix-based pricing model and are generally classified as Level 2 assets. The model considers the current level of risk-free interest rates, current corporate spreads, the credit quality of the issuer and cash flow characteristics of the security. Also considered are factors such as the net worth of the borrower, the value of collateral, the capital structure of the borrower, the presence of guarantees and the Company's evaluation of the borrower's ability to compete in its relevant market. Using this data, the model generates estimated market values which the Company considers reflective of the fair value of each privately placed bond. Equity securities : Fair values of publicly traded equity securities are based upon quoted market price and are classified as Level 1 assets. Other equity securities, typically private equities or equity securities not traded on an exchange, are valued by other sources such as analytics or brokers and are classified as Level 2 or Level 3 assets. Derivatives : Derivatives are carried at fair value, which is determined using the Company's derivative accounting system in conjunction with observable key financial data from third party sources, such as yield curves, exchange rates, S&P 500 Index prices, London Interbank Offered Rates ("LIBOR") and Overnight Index Swap ("OIS") rates. The Company uses OIS for valuations of collateralized interest rate derivatives, which are obtained from third-party sources. For those derivatives that are unable to be valued by the accounting system, the Company typically utilizes values established by third-party brokers. Counterparty credit risk is considered and incorporated in the Company's valuation process through counterparty credit rating requirements and monitoring of overall exposure. It is the Company's policy to transact only with investment grade counterparties with a credit rating of A- or better. The Company's nonperformance risk is also considered and incorporated in the Company's valuation process. Valuations for the Company's futures and interest rate forward contracts are based on unadjusted quoted prices from an active exchange and, therefore, are classified as Level 1. The Company also has certain credit default swaps and options that are priced by third party vendors or by using models that primarily use market observable inputs, but contain inputs that are not observable to market participants, which have been classified as Level 3. The remaining derivative instruments are valued based on market observable inputs and are classified as Level 2. Cash and cash equivalents, Short-term investments and Short-term investments under securities loan agreement : The carrying amounts for cash reflect the assets' fair values. The fair values for cash equivalents and most short-term investments are determined based on quoted market prices. These assets are classified as Level 1. Other short-term investments are valued and classified in the fair value hierarchy consistent with the policies described herein, depending on investment type. Assets held in separate accounts : Assets held in separate accounts are reported at the quoted fair values of the underlying investments in the separate accounts. The underlying investments include mutual funds, short-term investments and cash, the valuations of which are based upon a quoted market price and are included in Level 1. Fixed maturity valuations are obtained from third-party commercial pricing services and brokers and are classified in the fair value hierarchy consistent with the policy described above for fixed maturities. Guaranteed benefit derivatives : The index-crediting feature in the Company's FIA contract is an embedded derivative that is required to be accounted for separately from the host contract. The fair value of the obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by market implied assumptions. These derivatives are classified as Level 3 liabilities in the fair value hierarchy. The Company records reserves for Stabilizer and MCG contracts containing guaranteed credited rates. The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is required to be reported at fair value. The estimated fair value is determined based on the present value of projected future claims, minus the present value of future guaranteed premiums. At inception of the contract, the Company projects a guaranteed premium to be equal to the present value of the projected future claims. The income associated with the contracts is projected using relevant actuarial and capital market assumptions, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by using stochastic techniques under a variety of risk neutral scenarios and other market implied assumptions. These derivatives are classified as Level 3 liabilities. The discount rate used to determine the fair value of the embedded derivatives and stand-alone derivative includes an adjustment for nonperformance risk. The nonperformance risk adjustment incorporates a blend of observable, similarly rated peer holding company credit default swap spreads, adjusted to reflect the credit quality of the Company, the issuer of the guarantee, as well as an adjustment to reflect the priority of policyholder claims. The Company's valuation actuaries are responsible for the policies and procedures for valuing the embedded derivatives, reflecting the capital markets and actuarial valuation inputs and nonperformance risk in the estimate of the fair value of the embedded derivatives. The actuarial and capital market assumptions for each liability are approved by each product's Chief Risk Officer ("CRO"), including an independent annual review by the CRO. Models used to value the embedded derivatives must comply with the Company's governance policies. Quarterly, an attribution analysis is performed to quantify changes in fair value measurements and a sensitivity analysis is used to analyze the changes. The changes in fair value measurements are also compared to corresponding movements in the hedge target to assess the validity of the attributions. The results of the attribution analysis are reviewed by the valuation actuaries, responsible CFOs, Controllers, CROs and/or others as nominated by management. Embedded derivatives on reinsurance: The carrying value of embedded derivatives is estimated based upon the change in the fair value of the assets supporting the funds withheld payable under reinsurance agreements. The fair value of the embedded derivatives is based on market observable inputs and is classified as Level 2. Transfers in and out of Level 1 and 2 There were no securities transferred between Level 1 and Level 2 for the three and six months ended June 30, 2018 and 2017 . The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. Level 3 Financial Instruments The fair values of certain assets and liabilities are determined using prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (i.e., Level 3 as defined by ASC Topic 820), including but not limited to liquidity spreads for investments within markets deemed not currently active. These valuations, whether derived internally or obtained from a third-party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability. In addition, the Company has determined, for certain financial instruments, an active market is such a significant input to determine fair value that the presence of an inactive market may lead to classification in Level 3. In light of the methodologies employed to obtain the fair values of financial assets and liabilities classified as Level 3, additional information is presented below. The following tables summarize the change in fair value of the Company’s Level 3 assets and liabilities and transfers in and out of Level 3 for the period indicated: Three Months Ended June 30, 2018 Fair Value as of April 1 Total Realized/Unrealized Gains (Losses) Included in: Purchases Issuances Sales Settlements Transfers into Level 3 (3) Transfers out of Level 3 (3) Fair Value as of June 30 Change In Unrealized Gains (Losses) Included in Earnings (4) Net Income OCI Fixed maturities, including securities pledged: U.S. Corporate public securities $ 15 $ — $ — $ 3 $ — $ — $ — $ — $ — $ 18 $ — U.S. Corporate private securities 651 — (3 ) 91 — (5 ) (8 ) 12 — 738 — Foreign corporate private securities (1) 101 — 2 75 — (56 ) — — — 122 — Residential mortgage-backed securities 73 (1 ) (1 ) 19 — (40 ) — — (17 ) 33 2 Commercial mortgage-backed securities — — — 16 — — — — — 16 — Other asset-backed securities 126 — (1 ) 57 — — (1 ) 21 (105 ) 97 — Total fixed maturities, including securities pledged 966 (1 ) (3 ) 261 — (101 ) (9 ) 33 (122 ) 1,024 2 Equity securities 48 2 — 3 — — — — — 53 2 Derivatives: Guaranteed benefit derivatives: Stabilizer and MCGs (2) (77 ) 13 — — — — 1 — — (63 ) — FIA (2) (18 ) (1 ) — — — — 3 — — (16 ) — Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreement — — — 1 — — — — — 1 — Assets held in separate accounts (5) 11 — — 27 — — — — — 38 — (1) Primarily U.S. dollar denominated. (2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. (4) For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (5) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company. Six Months Ended June 30, 2018 Fair Value as of January 1 Total Realized/Unrealized Gains (Losses) Included in: Purchases Issuances Sales Settlements Transfers into Level 3 (3) Transfers out of Level 3 (3) Fair Value as of June 30 Change in Unrealized Gains (Losses) Included in Earnings (4) Net Income OCI Fixed maturities, including securities pledged: U.S. Corporate public securities $ 26 $ — $ — $ 3 $ — $ (5 ) $ — $ — $ (6 ) $ 18 $ — U.S. Corporate private securities 642 — (18 ) 103 — (5 ) (4 ) 20 — 738 — Foreign corporate private securities (1) 92 (9 ) 20 75 — (56 ) — — — 122 (9 ) Residential mortgage-backed securities 21 (3 ) — 20 — — — — (5 ) 33 (3 ) Commercial mortgage-backed securities 7 — — 16 — — — — (7 ) 16 — Other asset-backed securities 43 — (2 ) 57 — — (2 ) 22 (21 ) 97 — Total fixed maturities, including securities pledged 831 (12 ) — 274 — (66 ) (6 ) 42 (39 ) 1,024 (12 ) Equity securities 50 — — 3 — — — — — 53 — Derivatives: Guaranteed benefit derivatives: Stabilizer and MCGs (2) (97 ) 34 — — (1 ) — 1 — — (63 ) — FIA (2) (20 ) (2 ) — — 1 — 5 — — (16 ) — Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreements — — — 1 — — — — — 1 — Assets held in separate accounts (5) 11 — — 27 — — — — — 38 — (1) Primarily U.S. dollar denominated. (2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. (4) For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (5) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company. The following tables summarize the change in fair value of the Company’s Level 3 assets and liabilities and transfers in and out of Level 3 for the periods indicated: Three Months Ended June 30, 2017 Fair Value as of April 1 Total Realized/Unrealized Gains (Losses) Included in: Purchases Issuances Sales Settlements Transfers into Level 3 (3) Transfers out of Level 3 (3) Fair Value as of June 30 Change In Unrealized Gains (Losses) Included in Earnings (4) Net Income OCI Fixed maturities, including securities pledged: U.S. Corporate public securities $ 30 $ — $ — $ 6 $ — $ — $ 1 $ — $ (10 ) $ 27 $ — U.S. Corporate private securities 565 — 4 8 — — (1 ) 28 (9 ) 595 — Foreign corporate private securities (1) 161 — — — — — — — (33 ) 128 — Residential mortgage-backed securities 30 (2 ) 1 17 — — — 1 (10 ) 37 (2 ) Commercial mortgage-backed securities 6 — — 2 — — (2 ) — — 6 — Other asset-backed securities 23 — — 24 — — — — (11 ) 36 — Total fixed maturities, including securities pledged 815 (2 ) 5 57 — — (2 ) 29 (73 ) 829 (2 ) Equity securities, available-for-sale 50 — 1 — — — — — — 51 — Derivatives: Guaranteed benefit derivatives: Stabilizer and MCGs (2) (131 ) (9 ) — — (1 ) — — — — (141 ) — FIA (2) (23 ) — — — — — — — — (23 ) — Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreement — — — — — — — — — — — Assets held in separate accounts (5) 13 — — 1 — (3 ) — — (8 ) 3 — (1) Primarily U.S. dollar denominated. (2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. (4) For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (5) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company. Six Months Ended June 30, 2017 Fair Value as of January 1 Total Realized/Unrealized Gains (Losses) Included in: Purchases Issuances Sales Settlements Transfers into Level 3 (3) Transfers out of Level 3 (3) Fair Value as of June 30 Change in Unrealized Gains (Losses) Included in Earnings (4) Net Income OCI Fixed maturities, including securities pledged: U.S. Corporate public securities $ 7 $ — $ — $ 11 $ — $ — $ — $ 9 $ — $ 27 $ — U.S. Corporate private securities 525 — 4 45 — — (2 ) 32 (9 ) 595 — Foreign corporate private securities (1) 154 — (1 ) 18 — — (10 ) — (33 ) 128 — Residential mortgage-backed securities 21 (3 ) — 17 — — — 2 — 37 (4 ) Commercial mortgage-backed securities 10 — — 2 — — (3 ) — (3 ) 6 — Other asset-backed securities 27 — 1 24 — — (1 ) — (15 ) 36 — Total fixed maturities, including securities pledged 744 (3 ) 4 117 — — (16 ) 43 (60 ) 829 (4 ) Equity securities, available-for-sale 48 — 1 2 — — — — — 51 — Derivatives: Guaranteed benefit derivatives: Stabilizer and MCGs (2) (151 ) 12 — — (2 ) — — — — (141 ) — FIA (2) (23 ) (1 ) — — — — 1 — — (23 ) — Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreements — — — — — — — — — — — Assets held in separate accounts (5) 6 — — 6 — (3 ) — 2 (8 ) 3 — (1) Primarily U.S. dollar denominated. (2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. (4) For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (5) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company. For the three and six months ended June 30, 2018 and 2017 , the transfers in and out of Level 3 for fixed maturities and separate accounts were due to the variation in inputs relied upon for valuation each quarter. Securities that are primarily valued using independent broker quotes when prices are not available from one of the commercial pricing services are reflected as transfers into Level 3. When securities are valued using more widely available information, the securities are transferred out of Level 3 and into Level 1 or 2, as appropriate. Significant Unobservable Inputs The Company's Level 3 fair value measurements of its fixed maturities, equity securities and equity and credit derivative contracts are primarily based on broker quotes for which the quantitative detail of the unobservable inputs is neither provided nor reasonably corroborated, thus negating the ability to perform a sensitivity analysis. The Company performs a review of broker quotes by performing a monthly price variance comparison and back tests broker quotes to recent trade prices. Quantitative information about the significant unobservable inputs used in the Company's Level 3 fair value measurements of its guaranteed benefit derivatives is presented in the following sections and table. Significant unobservable inputs used in the fair value measurements of FIAs include nonperformance risk and policyholder behavior assumptions, such as lapses and partial withdrawals. The significant unobservable inputs used in the fair value measurement of the Stabilizer embedded derivatives and MCG derivative are interest rate implied volatility, nonperformance risk, lapses and policyholder deposits. Such inputs are monitored quarterly. Following is a description of selected inputs: Interest Rate Volatility: A term-structure model is used to approximate implied volatility for the swap rates for the Stabilizer and MCG fair value measurements. Where no implied volatility is readily available in the market, an alternative approach is applied based on historical volatility. Nonperformance Risk: For the estimate of the fair value of embedded derivatives associated with the Company's product guarantees, the Company uses a blend of observable, similarly rated peer company credit default swap spreads, adjusted to reflect the credit quality of the Company and the priority of policyholder claims. Actuarial Assumptions: Management regularly reviews actuarial assumptions, which are based on the Company's experience and periodically reviewed against industry standards. Industry standards and Company experience may be limited on certain products. The following table presents the unobservable inputs for Level 3 fair value measurements as of June 30, 2018 : Range (1) Unobservable Input FIA Stabilizer / MCG Interest rate implied volatility — 0.1% to 6.5% Nonperformance risk 0.07% to 1.2% 0.07% to 1.2% Actuarial Assumptions: Partial Withdrawals 0% to 7% — Lapses 0% to 42% (2) 0% to 50% (3) Policyholder Deposits (4) — 0% to 50% (3) (1) Represents the range of reasonable assumptions that management has used in its fair value calculations. (2) Lapse rates tend to be lower during the contractual surrender charge period and higher after the surrender charge period ends; the highest lapse rates occur in the year immediately after the end of the surrender charge period. (3) Stabilizer contracts with recordkeeping agreements have different range of lapse and policyholder deposit assumptions from Stabilizer (Investment only) and MCG contracts as shown below: Percentage of Plans Overall Range of Lapse Rates Range of Lapse Rates for 85% of Plans Overall Range of Policyholder Deposits Range of Policyholder Deposits for 85% of Plans Stabilizer (Investment Only) and MCG Contracts 92 % 0-25% 0-15% 0-30% 0-15% Stabilizer with Recordkeeping Agreements 8 % 0-50% 0-30% 0-50% 0-25% Aggregate of all plans 100 % 0-50% 0-30% 0-50% 0-25% (4) Measured as a percentage of assets under management or assets under administration. The following table presents the unobservable inputs for Level 3 fair value measurements as of December 31, 2017 : Range ( |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs and Value of Business Acquired | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Policy Acquisition Costs and Present Value of Future Insurance Profits, Net [Abstract] | |
Deferred Policy Acquisition Costs and Value of Business Acquired | Deferred Policy Acquisition Costs and Value of Business Acquired The following tables present a rollforward of DAC and VOBA for the periods indicated: 2018 DAC VOBA Total Balance as of January 1, 2018 $ 385 $ 367 $ 752 Deferrals of commissions and expenses 27 3 30 Amortization: Amortization, excluding unlocking (36 ) (36 ) (72 ) Unlocking (1) (32 ) (15 ) (47 ) Interest accrued 18 19 (2) 37 Net amortization included in the Condensed Consolidated Statements of Operations (50 ) (32 ) (82 ) Change due to unrealized capital gains/losses on available-for-sale securities 129 158 287 Balance as of June 30, 2018 $ 491 $ 496 $ 987 2017 DAC VOBA Total Balance as of January 1, 2017 $ 476 $ 537 $ 1,013 Deferrals of commissions and expenses 39 3 42 Amortization: Amortization, excluding unlocking (37 ) (39 ) (76 ) Unlocking (1) (47 ) (56 ) (103 ) Interest accrued 19 24 (2) 43 Net amortization included in the Condensed Consolidated Statements of Operations (65 ) (71 ) (136 ) Change due to unrealized capital gains/losses on available-for-sale securities (56 ) (70 ) (126 ) Balance as of June 30, 2017 $ 394 $ 399 $ 793 (1) Includes the impacts of annual review of assumptions which typically occurs in the third quarter; and retrospective and prospective unlocking. Additionally, the 2018 amounts include unfavorable unlocking of DAC and VOBA of $25 and $18 , respectively, associated with an update to assumptions related to customer consents of changes to guaranteed minimum interest rate provisions. The 2017 amounts include unfavorable unlocking for DAC and VOBA of $48 and $80 , respectively, associated with consent acceptances received from customers and expected future acceptances of customer consents to changes related to guaranteed minimum interest rate provisions of certain retirement plan contracts with fixed investment options. (2) Interest accrued at the following rates for VOBA: 5.5% to 7.0% during 2018 and 2017 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Shareholder’s equity included the following components of AOCI as of the dates indicated: June 30, 2018 2017 Fixed maturities, net of OTTI $ 427 $ 1,326 Equity securities — 16 Derivatives 119 169 DAC/VOBA and Sales inducements adjustment on available-for-sale securities (146 ) (450 ) Premium deficiency reserve adjustment (61 ) (110 ) Other — — Unrealized capital gains (losses), before tax 339 951 Deferred income tax asset (liability) (83 ) (210 ) Unrealized capital gains (losses), after tax 256 741 Pension and other postretirement benefits liability, net of tax 4 5 AOCI $ 260 $ 746 Changes in AOCI, including the reclassification adjustments recognized in the Condensed Consolidated Statements of Operations were as follows for the periods indicated: Three Months Ended June 30, 2018 Before-Tax Amount Income Tax After-Tax Amount Available-for-sale securities: Fixed maturities $ (377 ) $ 71 $ (306 ) Equity securities — (2) — — Other — — — OTTI — — — Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations 19 (4 ) 15 DAC/VOBA and Sales inducements 93 (19 ) 74 Premium deficiency reserve adjustment 21 (4 ) 17 Change in unrealized gains/losses on available-for-sale securities (244 ) 44 (200 ) Derivatives: Derivatives 32 (1) (6 ) 26 Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations (6 ) 2 (4 ) Change in unrealized gains/losses on derivatives 26 (4 ) 22 Pension and other postretirement benefits liability: Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations — — — Change in pension and other postretirement benefits liability — — — Change in Other comprehensive income (loss) $ (218 ) $ 40 $ (178 ) (1) See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information. (2) Balance reclassified to Retained earnings due to adoption of ASU 2016-01. Six Months Ended June 30, 2018 Before-Tax Amount Income Tax After-Tax Amount Available-for-sale securities: Fixed maturities $ (1,064 ) $ 224 (4) $ (840 ) Equity securities — (3) — — Other (5 ) 1 (4 ) OTTI 7 (1 ) 6 Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations 33 (7 ) 26 DAC/VOBA and Sales inducements 287 (1) (60 ) 227 Premium deficiency reserve adjustment 54 (11 ) 43 Change in unrealized gains/losses on available-for-sale securities (688 ) 146 (542 ) Derivatives: Derivatives 7 (2) (1 ) 6 Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations (12 ) 3 (9 ) Change in unrealized gains/losses on derivatives (5 ) 2 (3 ) Pension and other postretirement benefits liability: Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations (1 ) — (1 ) Change in pension and other postretirement benefits liability (1 ) — (1 ) Change in Other comprehensive income (loss) $ (694 ) $ 148 $ (546 ) (1) See the Deferred Policy Acquisition Costs and Value of Business Acquired Note to these Condensed Consolidated Financial Statements for additional information. (2) See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information. (3) Balance reclassified to Retained earnings due to adoption of ASU 2016-01. (4) Amount includes $6 valuation allowance. See the Income Taxes Note these Condensed Consolidated Financial Statements for additional information. Three Months Ended June 30, 2017 Before-Tax Amount Income Tax After-Tax Amount Available-for-sale securities: Fixed maturities $ 328 $ (114 ) $ 214 Equity securities — — — Other — — — OTTI — — — Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations 2 (1 ) 1 DAC/VOBA and Sales inducements (93 ) 33 (60 ) Premium deficiency reserve adjustment (16 ) 5 (11 ) Change in unrealized gains/losses on available-for-sale securities 221 (77 ) 144 Derivatives: Derivatives (10 ) (1) 4 (6 ) Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations (6 ) 2 (4 ) Change in unrealized gains/losses on derivatives (16 ) 6 (10 ) Pension and other postretirement benefits liability: Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations (1 ) — (1 ) Change in pension and other postretirement benefits liability (1 ) — (1 ) Change in Other comprehensive income (loss) $ 204 $ (71 ) $ 133 (1) See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information. Six Months Ended June 30, 2017 Before-Tax Amount Income Tax After-Tax Amount Available-for-sale securities: Fixed maturities $ 441 $ (153 ) $ 288 Equity securities 1 — 1 Other — — — OTTI 2 (1 ) 1 Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations 20 (7 ) 13 DAC/VOBA and Sales inducements (126 ) (1) 44 (82 ) Premium deficiency reserve adjustment (21 ) 7 (14 ) Change in unrealized gains/losses on available-for-sale securities 317 (110 ) 207 Derivatives: Derivatives (19 ) (2) 7 (12 ) Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations (12 ) 4 (8 ) Change in unrealized gains/losses on derivatives (31 ) 11 (20 ) Pension and other postretirement benefits liability: Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations (1 ) — (1 ) Change in pension and other postretirement benefits liability (1 ) — (1 ) Change in Other comprehensive income (loss) $ 285 $ (99 ) $ 186 (1) See the Deferred Policy Acquisition Costs and Value of Business Acquired Note to these Condensed Consolidated Financial Statements for additional information. (2) See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act ("Tax Reform"). Tax Reform makes broad changes to U.S. federal tax law, including, but not limited to (1) reducing the U.S. federal corporate tax rate from 35% to 21%; (2) changing the computations of the dividends received deduction, tax reserves, and deferred acquisition costs; and (3) eliminating the net operating loss ("NOL") carryback and limiting the NOL carryforward deduction to 80% of taxable income for losses arising in taxable years beginning after December 31, 2017. The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address situations where a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting under ASC Topic 740 for certain income tax effects of Tax Reform for the reporting period of enactment. SAB 118 allows the Company to provide a provisional estimate of the impacts of Tax Reform during a measurement period similar to the measurement period used when accounting for business combinations. Adjustments to provisional estimates and additional impacts from Tax Reform must be recorded as they are identified during the measurement period as provided for in SAB 118. In 2017 in reliance on SAB 118, the Company provisionally remeasured its deferred tax assets and liabilities based on the 21% tax rate at which they are expected to reverse in the future. For the six months ended June 30, 2018, the Company adjusted its provisional estimate related to its calculation of tax reserves. The Company continues to analyze the effects of Tax Reform and will record adjustments and additional impacts from Tax Reform as they are identified during the measurement period as provided for in SAB 118. The Company's effective tax rate for the three months ended June 30, 2018 was 5.6% . The effective tax rate differed from the statutory rate of 21% for the three months ended June 30, 2018 primarily due to the effect of the dividends received deduction ("DRD") and change in the valuation allowance. The Company's effective tax rate for the six months ended June 30, 2018 was 14.1% . The effective tax rate differed from the statutory rate of 21% for the six months ended June 30, 2018 primarily due to the effect of the DRD, partially offset by the change in the valuation allowance. The Company's effective tax rates for the three and six months ended June 30, 2017 were 49.3% and (37.3)% , respectively. The effective tax rate differed from the statutory rate of 35% for the three and six months ended June 30, 2017 primarily due to the effect of the DRD. Tax Sharing Agreement The results of the Company's operations are included in the consolidated tax return of Voya Financial, Inc. Generally, the Company's consolidated financial statements recognize the current and deferred income tax consequences that result from the Company's activities during the current and preceding periods pursuant to the provisions of Income Taxes (ASC Topic 740) as if the Company were a separate taxpayer rather than a member of Voya Financial, Inc.'s consolidated income tax return group with the exception of any net operating loss carryforwards and capital loss carryforwards, which are recorded pursuant to the tax sharing agreement. If the Company instead were to follow a separate taxpayer approach without any exceptions, there would be no impact to income tax expense (benefit) for the periods indicated above. Also, any current tax benefit related to the Company's tax attributes realized by virtue of its inclusion in the consolidated tax return of Voya Financial, Inc. would have been recorded directly to equity rather than income. Under the tax sharing agreement, Voya Financial, Inc. will pay the Company for the tax benefits of ordinary and capital losses only in the event that the consolidated tax group actually uses the tax benefit of losses generated. Tax Regulatory Matters During 2018, the Internal Revenue Service ("IRS") completed its examination of the Company's returns through tax year 2016. The audit settlements did not have a material impact on the Company. The Company is currently under audit by the IRS, and it is expected that the examination of the tax year 2017 will be finalized within the next twelve months. The Company and the IRS have agreed to participate in the Compliance Assurance Process for the tax years 2017 and 2018. |
Financing Agreements
Financing Agreements | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Financing Agreements | Financing Agreements Reciprocal Loan Agreement The Company maintains a reciprocal loan agreement with Voya Financial, Inc., an affiliate, to facilitate the handling of unanticipated short-term cash requirements that arise in the ordinary course of business. Under this agreement, which became effective in June 2001 and expires on April 1, 2021, either party can borrow from the other up to 3.0% of the Company’s statutory admitted assets as of the preceding December 31 . Effective January 2014, interest on any borrowing by either the Company or Voya Financial, Inc. is charged at a rate based on the prevailing market rate for similar third-party borrowings or securities. Under this agreement, the Company incurred immaterial interest expense and interest income for the three months and six months ended June 30, 2018 . The Company did no t incur interest expense for the three months ended June 30, 2017 and incurred immaterial interest expense for the six months ended June 30, 2017 . The Company earned $1 in interest income for the three months and six months ended June 30, 2017 . As of December 31, 2017 , the Company had an outstanding receivable of $80 and no outstanding payable. During the six months ended June 30, 2018 , the outstanding receivable was settled and there were no outstanding receivable/payable from/to Voya Financial, Inc. under the reciprocal loan agreement. For information on the Company's additional financing agreements, see the Financing Agreements Note in the Consolidated Financial Statements in Part II, Item 8. in the Company's Annual Report on Form 10-K . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Through the normal course of investment operations, the Company commits to either purchase or sell securities, mortgage loans, or money market instruments, at a specified future date and at a specified price or yield. The inability of counterparties to honor these commitments may result in either a higher or lower replacement cost. Also, there is likely to be a change in the value of the securities underlying the commitments. As of June 30, 2018 , the Company had off-balance sheet commitments to acquire mortgage loans of $89 and purchase limited partnerships and private placement investments of $519 . Restricted Assets The Company is required to maintain assets on deposit with various regulatory authorities to support its insurance operations. The Company may also post collateral in connection with certain securities lending, repurchase agreements, funding agreements, letter of credit ("LOC") and derivative transactions as described further in this note. The components of the fair value of the restricted assets were as follows as of the dates indicated: June 30, 2018 December 31, 2017 Fixed maturity collateral pledged to FHLB (1) $ 737 $ — FHLB restricted stock (2) 39 — Other fixed maturities-state deposits 13 13 Cash and cash equivalents 5 5 Securities pledged (3) 907 960 Total restricted assets $ 1,701 $ 978 (1) Included in Fixed maturities, available for sale, at fair value on the Condensed Consolidated Balance Sheets. (2) Included in Other investments on the Condensed Consolidated Balance Sheets. (3) Includes the fair value of loaned securities of $745 and $799 as of June 30, 2018 and December 31, 2017 , respectively. In addition, as of June 30, 2018 and December 31, 2017 , the Company delivered securities as collateral of $162 and $161 , respectively. Loaned securities and securities delivered as collateral are included in Securities pledged on the Condensed Consolidated Balance Sheets. Federal Home Loan Bank Funding On January 18, 2018, the Company became a member of the Federal Home Loan Bank of Boston (“FHLB”). The Company is required to pledge collateral to back funding agreements issued to the FHLB. As of June 30, 2018 , the Company had $627 in non-putable funding agreements, which are included in Future policy benefits and contract owner account balances on the Condensed Consolidated Balance Sheets. As of June 30, 2018 , assets with a market value of approximately $737 collateralized the FHLB funding agreements. Assets pledged to the FHLB are included in Fixed maturities, available-for-sale, at fair value on the Condensed Consolidated Balance Sheets. Litigation, Regulatory Matters and Loss Contingencies Litigation, regulatory and other loss contingencies arise in connection with the Company's activities as a diversified financial services firm. The Company is a defendant in a number of litigation matters arising from the conduct of its business, both in the ordinary course and otherwise. In some of these matters, claimants seek to recover very large or indeterminate amounts, including compensatory, punitive, treble and exemplary damages. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages and other relief. Claimants are not always required to specify the monetary damages they seek or they may be required only to state an amount sufficient to meet a court's jurisdictional requirements. Moreover, some jurisdictions allow claimants to allege monetary damages that far exceed any reasonably possible verdict. The variability in pleading requirements and past experience demonstrates that the monetary and other relief that may be requested in a lawsuit or claim often bears little relevance to the merits or potential value of a claim. Litigation against the Company includes a variety of claims including negligence, breach of contract, fraud, violation of regulation or statute, breach of fiduciary duty, negligent misrepresentation, failure to supervise, elder abuse and other torts. As with other financial services companies, the Company periodically receives informal and formal requests for information from various state and federal governmental agencies and self-regulatory organizations in connection with inquiries and investigations of the products and practices of the Company or the financial services industry. It is the practice of the Company to cooperate fully in these matters. Regulatory investigations, exams, inquiries and audits could result in regulatory action against the Company. The potential outcome of such action is difficult to predict but could subject the Company to adverse consequences, including, but not limited to, settlement payments, additional payments to beneficiaries, and additional escheatment of funds deemed abandoned under state laws. They may also result in fines and penalties and changes to the Company's procedures for the identification and escheatment of abandoned property or the correction of processing errors and other financial liability. The outcome of a litigation or regulatory matter is difficult to predict and the amount or range of potential losses associated with these or other loss contingencies, requires significant management judgment. It is not possible to predict the ultimate outcome or to provide reasonably possible losses or ranges of losses for all pending regulatory matters, litigation, and other loss contingencies. While it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company's financial position, based on information currently known, management believes that neither the outcome of pending litigation and regulatory matters, nor potential liabilities associated with other loss contingencies, are likely to have such an effect. However, given the large and indeterminate amounts sought in certain litigation and the inherent unpredictability of all such matters, it is possible that an adverse outcome in certain of the Company's litigation or regulatory matters, or liabilities arising from other loss contingencies, could, from time to time, have a material adverse effect upon the Company's results of operations or cash flows in a particular quarterly or annual period. For some matters, the Company is able to estimate a possible range of loss. For such matters in which a loss is probable, an accrual has been made. For matters where the Company, however, believes a loss is reasonably possible, but not probable, no accrual is required. For matters for which an accrual has been made, but there remains a reasonably possible range of loss in excess of the amounts accrued or for matters where no accrual is required, the Company develops an estimate of the unaccrued amounts of the reasonably possible range of losses. As of June 30, 2018 , the Company estimates the aggregate range of reasonably possible losses, in excess of any amounts accrued for these matters as of such date, is not material to the Company. For other matters, the Company is currently not able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from plaintiffs and other parties, investigation of factual allegations, rulings by a court on motions or appeals, analysis by experts and the progress of settlement discussions. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation and regulatory contingencies and updates the Company's accruals, disclosures and reasonably possible losses or ranges of loss based on such reviews. Litigation includes Dezelan v. Voya Retirement Insurance and Annuity Company (USDC District of Connecticut, No. 3:16-cv-1251)(filed July 26, 2016), a putative class action in which plaintiff, a participant in a 403(b) Plan, seeks to represent a class of plans whose assets are invested in VRIAC “Group Annuity Contract Stable Value Funds.” Plaintiff alleges that VRIAC has violated the Employee Retirement Income Security Act of 1974 by charging unreasonable fees and setting its own compensation in connection with stable value products. Plaintiff seeks declaratory and injunctive relief, disgorgement of profits, damages and attorney’s fees. The Company denies the allegations, which it believes are without merit, and intends to defend the case vigorously. On July 19, 2017, the district court granted the Company's motion to dismiss, but permitted the plaintiff to file an amended complaint. The plaintiff has filed a first amended complaint, and the Company moved to dismiss that complaint on September 18, 2017. Litigation also includes Goetz v. Voya Financial and Voya Retirement Insurance and Annuity Company (USDC District of Delaware, No. 1:17-cv-1289) (filed September 8, 2017), a putative class action in which plaintiff, a participant in a 401(k) plan, seeks to represent other participants in the plan as well as a class of similarly situated plans that “contract with [Voya] for recordkeeping and other services.” Plaintiff alleges that “Voya” breached its fiduciary duty to the plan and other plan participants by charging unreasonable and excessive recordkeeping fees, and that “Voya” distributed materially false and misleading 404a-5 administrative and fund fee disclosures to conceal its excessive fees. The Company denies the allegations, which it believes are without merit, and intends to defend the case vigorously. Plaintiff filed an amended complaint on January 4, 2018, and the Company filed a motion to dismiss the amended complaint of February 8, 2018. |
Related Party
Related Party | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Operating Agreements Prior to May 1, 2017, DSL was the investment adviser to certain U.S. registered investment companies that are investment options under certain of the Company’s variable insurance products. Consequently, DSL was party to various intercompany management and revenue sharing agreements, whereby DSL earned revenues and incurred expenses associated with these intercompany agreements. Effective May 1, 2017, Voya Investments, LLC, ("VIL") an affiliate, was appointed as investment adviser to these U.S. registered investment companies and DSL no longer provided these advisory and certain other related services to its affiliates. While this change has an impact on the Company’s and DSL’s total revenues and total expenses, the net impact on the Company’s Net income (loss) is expected to be insignificant. As of June 1, 2018, DSL was divested pursuant to the Transaction. For the three and six months ended June 30, 2018 , revenues with affiliated entities related to the operating agreements disclosed in the Related Party Transactions Note in the Consolidated Financial Statements in Part II, Item 8. in the Company's Annual Report on Form 10-K and reflecting changes to certain of these operating agreements described above were $58 and $144 , respectively. For the three and six months ended June 30, 2017 , revenues with affiliated entities related to the aforementioned operating agreements, as amended were $110 and $257 , respectively. For the three and six months ended June 30, 2018 , expenses with affiliated entities related to the aforementioned operating agreements, as amended, were $143 and $311 , respectively. For the three and six months ended June 30, 2017 , expenses with affiliated entities related to the aforementioned operating agreements, as amended, were $178 and $379 , respectively. Reinsurance Agreements Effective January 1, 2018, the Company recaptured its coinsurance agreement with Langhorne I, LLC (“Langhorne”) to manage the reserve and capital requirements in connection with a portion of its Stabilizer and Managed Custody Guarantee, which resulted in the Company recording a $74 pre-tax gain on recapture of reinsured business that was reported in Operating expenses in the Condensed Consolidated Statement of Operations. This agreement was accounted for under the deposit method. As of June 30, 2018 and December 31, 2017 , the Company had deposit assets of $36 and $63 , respectively, and deposit liabilities of $77 and $135 , respectively. Deposit assets and liabilities are included in Other assets and Other liabilities, respectively, on the Condensed Consolidated Balance Sheets. For further information, see the Related Party Transactions Note in the Consolidated Financial Statements in Part II, Item 8. in the Company's Annual Report on Form 10-K . |
Business, Basis of Presentati18
Business, Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and are unaudited. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Those estimates are inherently subject to change and actual results could differ from those estimates. The Condensed Consolidated Financial Statements include the accounts of VRIAC and its wholly owned subsidiaries, Voya Financial Partners, LLC ("VFP") and Directed Services LLC ("DSL"). Intercompany transactions and balances have been eliminated. As of June 1, 2018, DSL was divested pursuant to the Transaction. The accompanying Condensed Consolidated Financial Statements reflect adjustments (including normal, recurring adjustments) necessary to present fairly the financial position of the Company as of June 30, 2018 , its results of operations and comprehensive income for the three and six months ended June 30, 2018 and 2017 , and its changes in shareholder's equity and statements of cash flows for the six months ended June 30, 2018 and 2017 , in conformity with U.S. GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2017 Consolidated Balance Sheet is from the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K, filed with the SEC. Therefore, these unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K. |
Adoption of New Pronouncements | Adoption of New Pronouncements Derecognition of Nonfinancial Assets In February 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-05, “Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (ASC Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance & Accounting for Partial Sales of Nonfinancial Assets” (“ASU 2017-05”), which requires entities to apply certain recognition and measurement principles in ASU 2014-09, “Revenue from Contracts with Customers (ASC Topic 606)” (see Revenue from Contracts with Customers below) when they derecognize nonfinancial assets and in substance nonfinancial assets through sale or transfer, and the counterparty is not a customer. The provisions of ASU 2017-05 were adopted January 1, 2018 using the modified retrospective approach. The adoption had no effect on the Company’s financial condition, results of operations, or cash flows. Statement of Cash Flows In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (ASC Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments provide guidance on eight specific cash flow issues. The provisions of ASU 2016-15 were adopted on January 1, 2018 using the retrospective approach. The adoption had no effect on the Company’s financial condition, results of operations, or cash flows. Share-Based Compensation In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (ASC Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies the accounting for share-based payment award transactions with respect to: • The income tax consequences of awards, • The impact of forfeitures on the recognition of expense for awards, • Classification of awards as either equity or liabilities, and • Classification on the statement of cash flows. The provisions of ASU 2016-09 were adopted by the Company on January 1, 2017 using the transition method prescribed for each applicable provision: • On a prospective basis, all excess tax benefits and tax deficiencies related to share-based compensation will be reported in Net income (loss), rather than Additional paid-in capital. Prior year excess tax benefits will remain in Additional paid-in capital. • The Company elected to retrospectively adopt the requirement to present cash inflows related to excess tax benefits as operating activities. For the six months ended June 30, 2017 , the Company had no excess tax benefits. The adoption of the remaining provisions of ASU 2016-09 had no effect on the Company's financial condition, results of operations, or cash flows. Financial Instruments - Recognition and Measurement In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (ASC Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which requires: • Equity investments (except those consolidated or accounted for under the equity method) to be measured at fair value with changes in fair value recognized in net income. • Elimination of the disclosure of methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost. • The use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes. • Separate presentation in other comprehensive income of the portion of the total change in fair value of a liability resulting from a change in own credit risk if the liability is measured at fair value under the fair value option. • Separate presentation on the balance sheet or financial statement notes of financial assets and financial liabilities by measurement category and form of financial asset. The Company adopted the provisions of ASU 2016-01 on January 1, 2018 using a modified retrospective approach, except for certain provisions that were required to be applied prospectively. The impact to the January 1, 2018 Condensed Consolidated Balance Sheets was a $12 increase, net of tax, to Retained earnings (deficit) with a corresponding decrease of $12 , net of tax, to AOCI to recognize the unrealized gain associated with Equity securities. The provisions that required prospective adoption had no effect on the Company's financial condition, results of operations, or cash flows. Under previous guidance, prior to January 1, 2018, Equity securities were classified as available for sale with changes in fair value recognized in Other comprehensive income (loss). Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when, or as, the entity satisfies a performance obligation under the contract. ASU 2014-09 also updated the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In addition, the FASB issued various amendments during 2016 to clarify the provisions and implementation guidance of ASU 2014-09. Revenue recognition for insurance contracts and financial instruments is explicitly scoped out of the guidance. The Company adopted the provisions of ASU 2014-09 on January 1, 2018, using the modified retrospective approach. The adoption had no impact on revenue recognition. However, the adoption resulted in a $90 increase in Other assets to capitalize costs to obtain and fulfill certain financial services contracts. This adjustment was offset by a related $18 decrease in Deferred income taxes, resulting in a net $72 increase to Retained earnings (deficit) on the Condensed Consolidated Balance Sheet as of January 1, 2018. In addition, disclosures have been updated to reflect accounting policy changes made as a result of the implementation of ASU 2014-09. (See the Significant Accounting Policies section above.) Comparative information has not been adjusted and continues to be reported under previous revenue recognition guidance. As of June 30, 2018 the adoption of ASU 2014-09 resulted in a $92 increase in Other assets, offset by a related $19 decrease in Deferred income taxes, resulting in a net $73 increase to Retained earnings (deficit) on the Condensed Consolidated Balance Sheet. For the three months ended June 30, 2018 , the adoption resulted in an immaterial impact on Operating expenses on the Condensed Consolidated Statement of Operations. For the six months ended June 30, 2018, the adoption resulted in a $1 increase in Operating expenses on the Condensed Consolidated Statement of Operations. For the six months ended June 30, 2018 , adopting the provisions of ASU 2014-09 had no impact on Net cash provided by operating activities. Future Adoption of Accounting Pronouncements Reclassification of Certain Tax Effects In February 2018, the FASB issued ASU 2018-02, "Income Statement-Reporting Comprehensive Income (ASC Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" ("ASU 2018-02"), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted Tax Cuts and Jobs Act of 2017 ("Tax Reform"). Stranded tax effects arise because U.S. GAAP requires that the impact of a change in tax laws or rates on deferred tax liabilities and assets be reported in net income, even if related to items recognized within accumulated other comprehensive income. The amount of the reclassification would be based on the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate, applied to deferred tax liabilities and assets reported within accumulated other comprehensive income. The provisions of ASU 2018-02 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Initial adoption of ASU 2018-02 may be reported either in the period of adoption or on a retrospective basis in each period in which the effect of the change in the U.S. federal corporate income tax rate resulting from Tax Reform is recognized. The Company is currently evaluating the provisions of ASU 2018-02. Derivatives & Hedging In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic ASC 815): Targeted Improvements to Accounting for Hedging Activities " ("ASU 2017-12"), which enables entities to better portray risk management activities in their financial statements, as follows: • Expands an entity's ability to hedge nonfinancial and financial risk components and reduces complexity in accounting for fair value hedges of interest rate risk, • Eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item, • Eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness, and • Modifies required disclosures. The provisions of ASU 2017-12 are effective for fiscal years beginning after December 15, 2018, including interim periods, with early adoption permitted. Initial adoption of ASU 2017-12 is required to be reported using a modified retrospective approach, with the exception of the presentation and disclosure requirements which are required to be applied prospectively. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2017-12. Debt Securities In March 2017, the FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (ASC Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities" ("ASU 2017-08"), which shortens the amortization period for certain callable debt securities held at a premium by requiring the premium to be amortized to the earliest call date. The provisions of ASU 2017-08 are effective for fiscal years beginning after December 15, 2018, including interim periods, with early adoption permitted. Initial adoption of ASU 2017-08 is required to be reported using a modified retrospective approach. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2017-08. Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which: • Introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments, • Modifies the impairment model for available-for-sale debt securities, and • Provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. The provisions of ASU 2016-13 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. Initial adoption of ASU 2016-13 is required to be reported on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, except for certain provisions that are required to be applied prospectively. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2016-13. Leases In February 2016, the FASB issued ASU 2016-02, "Leases (ASC Topic 842)" ("ASU 2016-02"), which requires lessees to recognize a right-of-use asset and a lease liability for all leases with terms of more than 12 months. The lease liability will be measured as the present value of the lease payments, and the asset will be based on the liability. For income statement purposes, expense recognition will depend on the lessee's classification of the lease as either finance, with a front-loaded amortization expense pattern similar to current capital leases, or operating, with a straight-line expense pattern similar to current operating leases. Lessor accounting will be similar to the current model, and lessors will be required to classify leases as operating, direct financing, or sales-type. ASU 2016-02 also replaces the sale-leaseback guidance to align with the new revenue recognition standard, addresses statement of operation and statement of cash flow classification, and requires additional disclosures for all leases. In addition, the FASB issued various amendments during 2018 to clarify and simplify the provisions and implementation guidance of ASU 2016-02. The provisions of ASU 2016-02 are effective on a modified retrospective basis for fiscal years beginning after December 15, 2018, including interim periods, with early adoption permitted. The Company is currently in the process of determining the impact of adoption of the provisions of ASU 2016-02. |
Investments | Fixed Maturities and Equity Securities: The Company's fixed maturities are currently designated as available-for-sale, except those accounted for using the FVO. Prior to the adoption of ASU 2016-01 as of January 1, 2018, equity securities were also designated as available-for-sale. Available-for-sale securities are reported at fair value and unrealized capital gains (losses) on these securities are recorded directly in AOCI and presented net of related changes in Deferred policy acquisition costs ("DAC"), Value of business acquired ("VOBA") and Deferred income taxes. In addition, certain fixed maturities have embedded derivatives, which are reported with the host contract on the Condensed Consolidated Balance Sheets. The Company has elected the FVO for certain of its fixed maturities to better match the measurement of assets and liabilities in the Condensed Consolidated Statements of Operations. Certain collateralized mortgage obligations ("CMOs"), primarily interest-only and principal-only strips, are accounted for as hybrid instruments and reported at fair value with changes in the fair value recorded in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. The Company invests in various categories of CMOs, including CMOs that are not agency-backed, that are subject to different degrees of risk from changes in interest rates and defaults. The principal risks inherent in holding CMOs are prepayment and extension risks related to significant decreases and increases in interest rates resulting in the prepayment of principal from the underlying mortgages, either earlier or later than originally anticipated. As of June 30, 2018 and December 31, 2017 , approximately 53.8% and 52.1% , respectively, of the Company’s CMO holdings, were invested in the above mentioned types of CMOs such as interest-only or principal-only strips, that are subject to more prepayment and extension risk than traditional CMOs. Public corporate fixed maturity securities are distinguished from private corporate fixed maturity securities based upon the manner in which they are transacted. Public corporate fixed maturity securities are issued initially through market intermediaries on a registered basis or pursuant to Rule 144A under the Securities Act of 1933 (the "Securities Act") and are traded on the secondary market through brokers acting as principal. Private corporate fixed maturity securities are originally issued by borrowers directly to investors pursuant to Section 4(a)(2) of the Securities Act, and are traded in the secondary market directly with counterparties, either without the participation of a broker or in agency transactions. Repurchase Agreements As of June 30, 2018 and December 31, 2017 , the Company did no t have any securities pledged in dollar rolls, repurchase agreement transactions or reverse repurchase agreements. Securities Lending The Company engages in securities lending whereby certain securities from its portfolio are loaned to other institutions, through a lending agent, for short periods of time. The Company has the right to approve any institution with whom the lending agent transacts on its behalf. Initial collateral is required at a rate of 102% of the market value of the loaned securities. The lending agent retains the collateral and invests it in high quality liquid assets on behalf of the Company. The market value of the loaned securities is monitored on a daily basis with additional collateral obtained or refunded as the market value of the loaned securities fluctuates. The lending agent indemnifies the Company against losses resulting from the failure of a counterparty to return securities pledged where collateral is insufficient to cover the loss. As of June 30, 2018 and December 31, 2017 , the fair value of loaned securities was $745 and $799 , respectively, and is included in Securities pledged on the Condensed Consolidated Balance Sheets. If cash is received as collateral, the lending agent retains the cash collateral and invests it in short-term liquid assets on behalf of the Company. As of June 30, 2018 and December 31, 2017 , cash collateral retained by the lending agent and invested in short-term liquid assets on the Company's behalf was $711 and $744 , respectively, and is recorded in Short-term investments under securities loan agreements, including collateral delivered on the Condensed Consolidated Balance Sheets. As of June 30, 2018 and December 31, 2017 , liabilities to return collateral of $711 and $744 , respectively, are included in Payables under securities loan agreements, including collateral held, on the Condensed Consolidated Balance Sheets. The Company's securities lending activities are conducted on an overnight basis, and all securities loaned can be recalled at any time. The Company does not offset assets and liabilities associated with its securities lending program. Variable Interest Entities ("VIEs") The Company holds certain VIEs for investment purposes. VIEs may be in the form of private placement securities, structured securities, securitization transactions or limited partnerships. The Company has reviewed each of its holdings and determined that consolidation of these investments in the Company’s financial statements is not required, as the Company is not the primary beneficiary, because the Company does not have both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation or right to potentially significant losses or benefits, for any of its investments in VIEs. The Company did not provide any non-contractual financial support and its carrying value represents the Company’s exposure to loss. The carrying value of the investments in VIEs was $568 and $411 as of June 30, 2018 and December 31, 2017 , respectively; these investments are included in Limited partnerships/corporations on the Condensed Consolidated Balance Sheets. Income and losses recognized on these investments are reported in Net investment income in the Condensed Consolidated Statements of Operations. Securitizations The Company invests in various tranches of securitization entities, including Residential mortgage-backed securities ("RMBS"), Commercial mortgage-backed securities ("CMBS") and ABS. Through its investments, the Company is not obligated to provide any financial or other support to these entities. Each of the RMBS, CMBS and ABS entities are thinly capitalized by design and considered VIEs. The Company's involvement with these entities is limited to that of a passive investor. The Company has no unilateral right to appoint or remove the servicer, special servicer or investment manager, which are generally viewed to have the power to direct the activities that most significantly impact the securitization entities' economic performance, in any of these entities, nor does the Company function in any of these roles. The Company, through its investments or other arrangements, does not have the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the entity. Therefore, the Company is not the primary beneficiary and does not consolidate any of the RMBS, CMBS and ABS entities in which it holds investments. These investments are accounted for as investments available-for-sale as described in the Fair Value Measurements Note to these Condensed Consolidated Financial Statements and unrealized capital gains (losses) on these securities are recorded directly in AOCI, except for certain RMBS that are accounted for under the FVO, for which changes in fair value are reflected in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. The Company’s maximum exposure to loss on these structured investments is limited to the amount of its investment. |
Derivatives | Based on the notional amounts, a substantial portion of the Company’s derivative positions was not designated or did not qualify for hedge accounting as part of a hedging relationship as of June 30, 2018 and December 31, 2017 . The Company utilizes derivative contracts mainly to hedge exposure to variability in cash flows, interest rate risk, credit risk, foreign exchange risk and equity market risk. The majority of derivatives used by the Company are designated as product hedges, which hedge the exposure arising from insurance liabilities or guarantees embedded in the contracts the Company offers through various product lines. These derivatives do not qualify for hedge accounting as they do not meet the criteria of being "highly effective" as outlined in ASC Topic 815, but do provide an economic hedge, which is in line with the Company’s risk management objectives. The Company also uses derivatives contracts to hedge its exposure to various risks associated with the investment portfolio. The Company does not seek hedge accounting treatment for certain of these derivatives as they generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules outlined in ASC Topic 815. The Company also uses credit default swaps coupled with other investments in order to produce the investment characteristics of otherwise permissible investments that do not qualify as effective accounting hedges under ASC Topic 815. Derivative Financial Instruments The Company enters into the following types of derivatives: Interest rate caps: The Company uses interest rate cap contracts to hedge the interest rate exposure arising from duration mismatches between assets and liabilities. Interest rate caps are also used to hedge interest rate exposure if rates rise above a specified level. Such increases in rates will require the Company to incur additional expenses. The future payout from the interest rate caps fund this increased exposure. The Company pays an upfront premium to purchase these caps. The Company utilizes these contracts in non-qualifying hedging relationships. Interest rate swaps: Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and/or liabilities. Interest rate swaps are also used to hedge the interest rate risk associated with the value of assets it owns or in an anticipation of acquiring them. Using interest rate swaps, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest payments, calculated by reference to an agreed upon notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made to/from the counterparty at each due date. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships. Foreign exchange swaps: The Company uses foreign exchange or currency swaps to reduce the risk of change in the value, yield or cash flows associated with certain foreign denominated invested assets. Foreign exchange swaps represent contracts that require the exchange of foreign currency cash flows against U.S. dollar cash flows at regular periods, typically quarterly or semi-annually. The Company utilizes these contracts in qualifying hedging relationships as well as non-qualifying hedging relationships. Credit default swaps: Credit default swaps are used to reduce credit loss exposure with respect to certain assets that the Company owns, or to assume credit exposure on certain assets that the Company does not own. Payments are made to, or received from, the counterparty at specified intervals. In the event of a default on the underlying credit exposure, the Company will either receive a payment (purchased credit protection) or will be required to make a payment (sold credit protection) equal to the par minus recovery value of the swap contract. The Company utilizes these contracts in non-qualifying hedging relationships. Currency forwards: The Company utilizes currency forward contracts to hedge currency exposure related to invested assets. The Company utilizes these contracts in non-qualifying hedging relationships. Futures: The Company uses interest rate futures contracts to hedge its exposure to market risks due to changes in interest rates. The Company enters into exchange traded futures with regulated futures commissions that are members of the exchange. The Company also posts initial and variation margins, with the exchange, on a daily basis. The Company utilizes exchange-traded futures in non-qualifying hedging relationships. The Company may also use futures contracts as a hedge against an increase in certain equity indices. Such increases may result in increased payments to the holders of fixed index annuity ("FIA") contracts. Swaptions: A swaption is an option to enter into a swap with a forward starting effective date. The Company uses swaptions to hedge the interest rate exposure associated with the minimum crediting rate and book value guarantees embedded in the retirement products that the Company offers. Increases in interest rates will generate losses on assets that are backing such liabilities. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium when it purchases the swaption. The Company utilizes these contracts in non-qualifying hedging relationships. Options: The Company uses equity options to hedge against an increase in various equity indices. Such increases may result in increased payments to the holders of the FIA contracts. The Company pays an upfront premium to purchase these options. The Company utilizes these options in non-qualifying hedging relationships. Managed custody guarantees ("MCGs"): The Company issues certain credited rate guarantees on variable fixed income portfolios that represent stand-alone derivatives. The market value is partially determined by, among other things, levels of or changes in interest rates, prepayment rates and credit ratings/spreads. Embedded derivatives: The Company also invests in certain fixed maturity instruments and has issued certain products that contain embedded derivatives for which market value is at least partially determined by, among other things, levels of or changes in domestic and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates, equity rates, or credit ratings/spreads. In addition, the Company has entered into coinsurance with funds withheld arrangements, which contain embedded derivatives. The Company's use of derivatives is limited mainly to economic hedging to reduce the Company's exposure to cash flow variability of assets and liabilities, interest rate risk, credit risk, exchange rate risk and equity market risk. It is the Company's policy not to offset amounts recognized for derivative instruments and amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement, which provides the Company with the legal right of offset. However, in accordance with the Chicago Mercantile Exchange ("CME") rule changes related to the variation margin payments, effective the first quarter of 2017, the Company is required to adjust the derivative balances with the variation margin payments related to our cleared derivatives executed through CME. |
Fair Value Measurement | Valuation of Financial Assets and Liabilities at Fair Value Certain assets and liabilities are measured at estimated fair value on the Company's Condensed Consolidated Balance Sheets. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The exit price and the transaction (or entry) price will be the same at initial recognition in many circumstances. However, in certain cases, the transaction price may not represent fair value. The fair value of a liability is based on the amount that would be paid to transfer a liability to a third-party with an equal credit standing. Fair value is required to be a market-based measurement that is determined based on a hypothetical transaction at the measurement date, from a market participant's perspective. The Company considers three broad valuation approaches when a quoted price is unavailable: (i) the market approach, (ii) the income approach and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given the instrument being measured and the availability of sufficient inputs. The Company prioritizes the inputs to fair valuation approaches and allows for the use of unobservable inputs to the extent that observable inputs are not available. The Company utilizes a number of valuation methodologies to determine the fair values of its financial assets and liabilities in conformity with the concepts of exit price and the fair value hierarchy as prescribed in ASC Topic 820. Valuations are obtained from third-party commercial pricing services, brokers and industry-standard, vendor-provided software that models the value based on market observable inputs. The valuations obtained from third-party commercial pricing services are non-binding. The Company reviews the assumptions and inputs used by third-party commercial pricing services for each reporting period in order to determine an appropriate fair value hierarchy level. The documentation and analysis obtained from third-party commercial pricing services are reviewed by the Company, including in-depth validation procedures confirming the observability of inputs. The valuations are reviewed and validated monthly through the internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades or monitoring of trading volumes. Fixed maturities: The fair values for actively traded marketable bonds are determined based upon the quoted market prices and are classified as Level 1 assets. Assets in this category primarily include certain U.S. Treasury securities. For fixed maturities classified as Level 2 assets, fair values are determined using a matrix-based market approach, based on prices obtained from third-party commercial pricing services and the Company’s matrix and analytics-based pricing models, which in each case incorporate a variety of market observable information as valuation inputs. The market observable inputs used for these fair value measurements, by fixed maturity asset class, are as follows: U.S. Treasuries: Fair value is determined using third-party commercial pricing services, with the primary inputs being stripped interest and principal U.S. Treasury yield curves that represent a U.S. Treasury zero-coupon curve. U.S. government agencies and authorities, State, municipalities and political subdivisions: Fair value is determined using third-party commercial pricing services, with the primary inputs being U.S. Treasury yield curves, trades of comparable securities, credit spreads off benchmark yields and issuer ratings. U.S. corporate public securities, Foreign corporate public securities and foreign governments: Fair value is determined using third-party commercial pricing services, with the primary inputs being benchmark yields, trades of comparable securities, issuer ratings, bids and credit spreads off benchmark yields. U.S. corporate private securities and Foreign corporate private securities: Fair values are determined using a matrix and analytics-based pricing model. The model incorporates the current level of risk-free interest rates, current corporate credit spreads, credit quality of the issuer and cash flow characteristics of the security. The model also considers a liquidity spread, the value of any collateral, the capital structure of the issuer, the presence of guarantees, and prices and quotes for comparably rated publicly traded securities. RMBS, CMBS and ABS: Fair value is determined using third-party commercial pricing services, with the primary inputs being credit spreads off benchmark yields, prepayment speed assumptions, current and forecasted loss severity, debt service coverage ratios, collateral type, payment priority within tranche and the vintage of the loans underlying the security. Generally, the Company does not obtain more than one vendor price from pricing services per instrument. The Company uses a hierarchy process in which prices are obtained from a primary vendor and, if that vendor is unable to provide the price, the next vendor in the hierarchy is contacted until a price is obtained or it is determined that a price cannot be obtained from a commercial pricing service. When a price cannot be obtained from a commercial pricing service, independent broker quotes are solicited. Securities priced using independent broker quotes are classified as Level 3. Broker quotes and prices obtained from pricing services are reviewed and validated through an internal valuation committee price variance review, comparisons to internal pricing models, back testing to recent trades or monitoring of trading volumes. After review, for those instruments where the price is determined to be appropriate, the unadjusted price provided is used for financial statement valuation. If it is determined that the price is questionable, another price may be requested from a different vendor. The internal valuation committee then reviews all prices for the instrument again, along with information from the review, to determine which price best represents exit price for the instrument. Fair values of privately placed bonds are determined primarily using a matrix-based pricing model and are generally classified as Level 2 assets. The model considers the current level of risk-free interest rates, current corporate spreads, the credit quality of the issuer and cash flow characteristics of the security. Also considered are factors such as the net worth of the borrower, the value of collateral, the capital structure of the borrower, the presence of guarantees and the Company's evaluation of the borrower's ability to compete in its relevant market. Using this data, the model generates estimated market values which the Company considers reflective of the fair value of each privately placed bond. Equity securities : Fair values of publicly traded equity securities are based upon quoted market price and are classified as Level 1 assets. Other equity securities, typically private equities or equity securities not traded on an exchange, are valued by other sources such as analytics or brokers and are classified as Level 2 or Level 3 assets. Derivatives : Derivatives are carried at fair value, which is determined using the Company's derivative accounting system in conjunction with observable key financial data from third party sources, such as yield curves, exchange rates, S&P 500 Index prices, London Interbank Offered Rates ("LIBOR") and Overnight Index Swap ("OIS") rates. The Company uses OIS for valuations of collateralized interest rate derivatives, which are obtained from third-party sources. For those derivatives that are unable to be valued by the accounting system, the Company typically utilizes values established by third-party brokers. Counterparty credit risk is considered and incorporated in the Company's valuation process through counterparty credit rating requirements and monitoring of overall exposure. It is the Company's policy to transact only with investment grade counterparties with a credit rating of A- or better. The Company's nonperformance risk is also considered and incorporated in the Company's valuation process. Valuations for the Company's futures and interest rate forward contracts are based on unadjusted quoted prices from an active exchange and, therefore, are classified as Level 1. The Company also has certain credit default swaps and options that are priced by third party vendors or by using models that primarily use market observable inputs, but contain inputs that are not observable to market participants, which have been classified as Level 3. The remaining derivative instruments are valued based on market observable inputs and are classified as Level 2. Cash and cash equivalents, Short-term investments and Short-term investments under securities loan agreement : The carrying amounts for cash reflect the assets' fair values. The fair values for cash equivalents and most short-term investments are determined based on quoted market prices. These assets are classified as Level 1. Other short-term investments are valued and classified in the fair value hierarchy consistent with the policies described herein, depending on investment type. Assets held in separate accounts : Assets held in separate accounts are reported at the quoted fair values of the underlying investments in the separate accounts. The underlying investments include mutual funds, short-term investments and cash, the valuations of which are based upon a quoted market price and are included in Level 1. Fixed maturity valuations are obtained from third-party commercial pricing services and brokers and are classified in the fair value hierarchy consistent with the policy described above for fixed maturities. Guaranteed benefit derivatives : The index-crediting feature in the Company's FIA contract is an embedded derivative that is required to be accounted for separately from the host contract. The fair value of the obligation is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by market implied assumptions. These derivatives are classified as Level 3 liabilities in the fair value hierarchy. The Company records reserves for Stabilizer and MCG contracts containing guaranteed credited rates. The guarantee is treated as an embedded derivative or a stand-alone derivative (depending on the underlying product) and is required to be reported at fair value. The estimated fair value is determined based on the present value of projected future claims, minus the present value of future guaranteed premiums. At inception of the contract, the Company projects a guaranteed premium to be equal to the present value of the projected future claims. The income associated with the contracts is projected using relevant actuarial and capital market assumptions, including benefits and related contract charges, over the anticipated life of the related contracts. The cash flow estimates are produced by using stochastic techniques under a variety of risk neutral scenarios and other market implied assumptions. These derivatives are classified as Level 3 liabilities. The discount rate used to determine the fair value of the embedded derivatives and stand-alone derivative includes an adjustment for nonperformance risk. The nonperformance risk adjustment incorporates a blend of observable, similarly rated peer holding company credit default swap spreads, adjusted to reflect the credit quality of the Company, the issuer of the guarantee, as well as an adjustment to reflect the priority of policyholder claims. The Company's valuation actuaries are responsible for the policies and procedures for valuing the embedded derivatives, reflecting the capital markets and actuarial valuation inputs and nonperformance risk in the estimate of the fair value of the embedded derivatives. The actuarial and capital market assumptions for each liability are approved by each product's Chief Risk Officer ("CRO"), including an independent annual review by the CRO. Models used to value the embedded derivatives must comply with the Company's governance policies. Quarterly, an attribution analysis is performed to quantify changes in fair value measurements and a sensitivity analysis is used to analyze the changes. The changes in fair value measurements are also compared to corresponding movements in the hedge target to assess the validity of the attributions. The results of the attribution analysis are reviewed by the valuation actuaries, responsible CFOs, Controllers, CROs and/or others as nominated by management. Embedded derivatives on reinsurance: The carrying value of embedded derivatives is estimated based upon the change in the fair value of the assets supporting the funds withheld payable under reinsurance agreements. The fair value of the embedded derivatives is based on market observable inputs and is classified as Level 2. Transfers in and out of Level 1 and 2 There were no securities transferred between Level 1 and Level 2 for the three and six months ended June 30, 2018 and 2017 . The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. Level 3 Financial Instruments The fair values of certain assets and liabilities are determined using prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (i.e., Level 3 as defined by ASC Topic 820), including but not limited to liquidity spreads for investments within markets deemed not currently active. These valuations, whether derived internally or obtained from a third-party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability. In addition, the Company has determined, for certain financial instruments, an active market is such a significant input to determine fair value that the presence of an inactive market may lead to classification in Level 3. In light of the methodologies employed to obtain the fair values of financial assets and liabilities classified as Level 3, additional information is presented below. |
Business, Basis of Presentati19
Business, Basis of Presentation and Significant Accounting Policies Business, Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Financial services revenue is disaggregated by type of service in the following table and represents approximately 12.5% and 13.1% of total revenue for the three and six months ended June 30, 2018 , respectively. For the three and six months ended June 30, 2018 , a portion of the revenue recognized in the current period from distribution services is related to performance obligations satisfied in previous periods. Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Service Line Recordkeeping & administration $ 29 $ 57 Distribution & shareholder servicing 37 81 Total financial services revenue $ 66 $ 138 |
Schedule of Prospective Adoption of New Accounting Pronouncements | Comparative information has not been adjusted and continues to be reported under previous revenue recognition guidance. As of June 30, 2018 the adoption of ASU 2014-09 resulted in a $92 increase in Other assets, offset by a related $19 decrease in Deferred income taxes, resulting in a net $73 increase to Retained earnings (deficit) on the Condensed Consolidated Balance Sheet. For the three months ended June 30, 2018 , the adoption resulted in an immaterial impact on Operating expenses on the Condensed Consolidated Statement of Operations. For the six months ended June 30, 2018, the adoption resulted in a $1 increase in Operating expenses on the Condensed Consolidated Statement of Operations. For the six months ended June 30, 2018 , adopting the provisions of ASU 2014-09 had no impact on Net cash provided by operating activities. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Available-for-sale Securities Including Securities Pledged [Line Items] | |
Marketable Securities | Available-for-sale and fair value option ("FVO") fixed maturities were as follows as of June 30, 2018 : Amortized Cost Gross Unrealized Capital Gains Gross Unrealized Capital Losses Embedded Derivatives (2) Fair Value OTTI (3)(4) Fixed maturities: U.S. Treasuries $ 464 $ 84 $ 1 $ — $ 547 $ — U.S. Government agencies and authorities — — — — — — State, municipalities and political subdivisions 751 20 8 — 763 — U.S. corporate public securities 7,968 369 119 — 8,218 — U.S. corporate private securities 3,684 95 90 — 3,689 — Foreign corporate public securities and foreign governments (1) 2,481 90 53 — 2,518 — Foreign corporate private securities (1) 3,274 62 65 — 3,271 — Residential mortgage-backed securities: Agency 1,998 48 32 4 2,018 — Non-Agency 883 46 6 5 928 4 Total Residential mortgage-backed securities 2,881 94 38 9 2,946 4 Commercial mortgage-backed securities 1,627 13 27 — 1,613 — Other asset-backed securities 1,084 6 5 — 1,085 2 Total fixed maturities, including securities pledged 24,214 833 406 9 24,650 6 Less: Securities pledged 853 70 16 — 907 — Total fixed maturities $ 23,361 $ 763 $ 390 $ 9 $ 23,743 $ 6 (1) Primarily U.S. dollar denominated. (2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) Represents Other-than-Temporary-Impairments ("OTTI") reported as a component of Other comprehensive income (loss). (4) Amount excludes $148 of net unrealized gains on impaired available-for-sale securities. Available-for-sale and FVO fixed maturities and equity securities were as follows as of December 31, 2017 : Amortized Cost Gross Unrealized Capital Gains Gross Unrealized Capital Losses Embedded Derivatives (2) Fair Value OTTI (3)(4) Fixed maturities: U.S. Treasuries $ 547 $ 109 $ — $ — $ 656 $ — U.S. Government agencies and authorities 3 — — — 3 — State, municipalities and political subdivisions 842 40 4 — 878 — U.S. corporate public securities 8,476 786 26 — 9,236 — U.S. corporate private securities 3,387 148 38 — 3,497 — Foreign corporate public securities and foreign governments (1) 2,594 192 9 — 2,777 — Foreign corporate private securities (1) 3,105 155 45 — 3,215 7 Residential mortgage-backed securities: Agency 1,878 65 17 6 1,932 — Non-Agency 639 54 2 6 697 4 Total Residential mortgage-backed securities 2,517 119 19 12 2,629 4 Commercial mortgage-backed securities 1,437 39 6 — 1,470 — Other asset-backed securities 671 11 1 — 681 2 Total fixed maturities, including securities pledged 23,579 1,599 148 12 25,042 13 Less: Securities pledged 864 104 8 — 960 — Total fixed maturities 22,715 1,495 140 12 24,082 13 Equity securities 45 15 — — 60 — Total fixed maturities and equity securities investments $ 22,760 $ 1,510 $ 140 $ 12 $ 24,142 $ 13 (1) Primarily U.S. dollar denominated. (2) Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) Represents OTTI reported as a component of Other comprehensive income (loss). (4) Amount excludes $190 of net unrealized gains on impaired available-for-sale securities. |
Investments Classified by Contractual Maturity Date | The amortized cost and fair value of fixed maturities, including securities pledged, as of June 30, 2018 , are shown below by contractual maturity. Actual maturities may differ from contractual maturities as securities may be restructured, called or prepaid. Mortgage-backed securities ("MBS") and Other asset-backed securities ("ABS") are shown separately because they are not due at a single maturity date. Amortized Fair Due to mature: One year or less $ 464 $ 468 After one year through five years 4,244 4,311 After five years through ten years 5,901 5,863 After ten years 8,013 8,364 Mortgage-backed securities 4,508 4,559 Other asset-backed securities 1,084 1,085 Fixed maturities, including securities pledged $ 24,214 $ 24,650 |
U.S. and Foreign Corporate Securities by Industry | The following tables present the composition of the U.S. and foreign corporate securities within the fixed maturity portfolio by industry category as of the dates indicated: Amortized Cost Gross Unrealized Capital Gains Gross Unrealized Capital Losses Fair Value June 30, 2018 Communications $ 1,162 $ 55 $ 18 $ 1,199 Financial 2,805 125 38 2,892 Industrial and other companies 7,629 221 149 7,701 Energy 1,886 83 51 1,918 Utilities 2,854 103 52 2,905 Transportation 725 19 13 731 Total $ 17,061 $ 606 $ 321 $ 17,346 December 31, 2017 Communications $ 1,145 $ 114 $ 1 $ 1,258 Financial 2,750 185 4 2,931 Industrial and other companies 7,953 532 65 8,420 Energy 1,970 159 33 2,096 Utilities 2,725 216 11 2,930 Transportation 697 52 2 747 Total $ 17,240 $ 1,258 $ 116 $ 18,382 |
Schedule of Securities Borrowed Under Securities Lending Transactions | The following table presents borrowings under securities lending transactions by class of collateral pledged for the dates indicated: June 30, 2018 (1)(2) December 31, 2017 (1)(2) U.S. Treasuries $ 179 $ 177 U.S. corporate public securities 429 460 Short-term Investments 1 — Foreign corporate public securities and foreign governments 162 168 Payables under securities loan agreements $ 771 $ 805 (1) As of June 30, 2018 and December 31, 2017 , borrowings under securities lending transactions include cash collateral of $711 and $744 , respectively. |
Schedule of Unrealized Loss on Investments | Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of June 30, 2018 : Six Months or Less Below Amortized Cost More Than Six Months and Twelve Months or Less Below Amortized Cost More Than Twelve Months Below Amortized Cost Total Fair Value Unrealized Capital Losses Fair Value Unrealized Capital Losses Fair Value Unrealized Capital Losses Fair Value Unrealized Capital Losses U.S. Treasuries $ 13 $ — $ 2 $ 1 $ 12 $ — $ 27 $ 1 State, municipalities and political subdivisions 196 3 27 1 65 4 288 8 U.S. corporate public securities 2,384 70 407 26 197 23 2,988 119 U.S. corporate private securities 1,258 26 180 11 443 53 1,881 90 Foreign corporate public securities and foreign governments 994 32 105 9 77 12 1,176 53 Foreign corporate private securities 1,107 46 67 3 153 16 1,327 65 Residential mortgage-backed 423 7 191 14 313 17 927 38 Commercial mortgage-backed 735 10 311 15 33 2 1,079 27 Other asset-backed 547 3 58 1 13 1 618 5 Total $ 7,657 $ 197 $ 1,348 $ 81 $ 1,306 $ 128 $ 10,311 $ 406 Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market sector and duration were as follows as of December 31, 2017 : Six Months or Less More Than Six More Than Twelve Total Fair Unrealized Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasuries $ 18 $ — $ — $ — $ 12 $ — $ 30 $ — State, municipalities and political subdivisions 34 — 1 — 91 4 126 4 U.S. corporate public securities 504 11 — — 304 15 808 26 U.S. corporate private securities 226 2 46 2 499 34 771 38 Foreign corporate public securities and foreign governments 148 1 5 — 99 8 252 9 Foreign corporate private securities 135 38 13 — 161 7 309 45 Residential mortgage-backed 263 5 26 1 438 13 727 19 Commercial mortgage-backed 436 5 19 — 50 1 505 6 Other asset-backed 95 1 9 — 38 — 142 1 Total $ 1,859 $ 63 $ 119 $ 3 $ 1,692 $ 82 $ 3,670 $ 148 |
Schedule of Mortgage Loans Real Estate and Valuation Allowance | The following table summarizes the Company's investment in mortgage loans as of the dates indicated: June 30, 2018 December 31, 2017 Impaired Non Impaired Total Impaired Non Impaired Total Commercial mortgage loans $ 4 $ 4,999 $ 5,003 $ 4 $ 4,907 $ 4,911 Collective valuation allowance for losses N/A (1 ) (1 ) N/A (1 ) (1 ) Total net commercial mortgage loans $ 4 $ 4,998 $ 5,002 $ 4 $ 4,906 $ 4,910 N/A- Not Applicable |
Allowance for Credit Losses on Financing Receivables | The following table summarizes the activity in the allowance for losses for commercial mortgage loans for the periods indicated: June 30, 2018 December 31, 2017 Collective valuation allowance for losses, balance at January 1 $ 1 $ 1 Addition to (reduction of) allowance for losses — — Collective valuation allowance for losses, end of period $ 1 $ 1 |
Impaired Financing Receivables | The carrying values and unpaid principal balances of impaired mortgage loans were as follows as of the dates indicated: June 30, 2018 December 31, 2017 Impaired loans without allowances for losses $ 4 $ 4 Less: Allowances for losses on impaired loans — — Impaired loans, net $ 4 $ 4 Unpaid principal balance of impaired loans $ 6 $ 6 The following tables present information on the average investment during the period in impaired loans and interest income recognized on impaired and troubled debt restructured loans for the periods indicated: Three Months Ended June 30, 2018 2017 Impaired loans, average investment during the period (amortized cost) (1) $ 4 $ 5 Interest income recognized on impaired loans, on an accrual basis (1) — — Interest income recognized on impaired loans, on a cash basis (1) — — Interest income recognized on troubled debt restructured loans, on an accrual basis — — (1) Includes amounts for Troubled debt restructured loans. Six Months Ended June 30, 2018 2017 Impaired loans, average investment during the period (amortized cost) (1) $ 4 $ 5 Interest income recognized on impaired loans, on an accrual basis (1) — — Interest income recognized on impaired loans, on a cash basis (1) — — Interest income recognized on troubled debt restructured loans, on an accrual basis — — (1) Includes amounts for Troubled debt restructured loans. |
Loans Receivable, Grouped by Loan to Value and Debt Service Coverage Ratio | The following table presents the LTV ratios as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Loan-to-Value Ratio: 0% - 50% $ 360 $ 341 >50% - 60% 1,275 1,256 >60% - 70% 3,024 3,042 >70% - 80% 323 262 >80% and above 21 10 Total Commercial mortgage loans $ 5,003 $ 4,911 (1) Balances do not include collective valuation allowance for losses. The following table presents the DSC ratios as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Debt Service Coverage Ratio: Greater than 1.5x $ 3,883 $ 3,902 >1.25x - 1.5x 398 340 >1.0x - 1.25x 629 600 Less than 1.0x 53 54 Commercial mortgage loans secured by land or construction loans 40 15 Total Commercial mortgage loans $ 5,003 $ 4,911 (1) Balances do not include collective valuation allowance for losses. |
Mortgage Loans by Geographic Location of Collateral | Properties collateralizing mortgage loans are geographically dispersed throughout the United States, as well as diversified by property type, as reflected in the following tables as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Gross Carrying Value % of Total Gross Carrying Value % of Total Commercial Mortgage Loans by U.S. Region: Pacific $ 1,007 20.1 % $ 985 20.1 % South Atlantic 999 20.0 % 982 20.0 % Middle Atlantic 1,053 21.1 % 1,097 22.4 % West South Central 580 11.6 % 552 11.2 % Mountain 486 9.7 % 457 9.3 % East North Central 481 9.6 % 468 9.5 % New England 76 1.5 % 77 1.6 % West North Central 279 5.6 % 243 4.9 % East South Central 42 0.8 % 50 1.0 % Total Commercial mortgage loans $ 5,003 100.0 % $ 4,911 100.0 % (1) Balances do not include collective valuation allowance for losses. |
Mortgage Loans by Property Type of Collateral | June 30, 2018 (1) December 31, 2017 (1) Gross Carrying Value % of Total Gross Carrying Value % of Total Commercial Mortgage Loans by Property Type: Retail $ 1,376 27.5 % $ 1,383 28.1 % Industrial 1,345 26.9 % 1,326 27.0 % Apartments 1,022 20.4 % 948 19.3 % Office 825 16.5 % 829 16.9 % Hotel/Motel 175 3.5 % 177 3.6 % Mixed Use 48 1.0 % 52 1.1 % Other 212 4.2 % 196 4.0 % Total Commercial mortgage loans $ 5,003 100.0 % $ 4,911 100.0 % (1) Balances do not include collective valuation allowance for losses. |
Mortgage Loans by Year of Origination | The following table presents mortgages by year of origination as of the dates indicated: June 30, 2018 (1) December 31, 2017 (1) Year of Origination: 2018 $ 224 $ — 2017 1,139 1,086 2016 894 867 2015 666 703 2014 518 538 2013 623 644 2012 and prior 939 1,073 Total Commercial mortgage loans $ 5,003 $ 4,911 (1) Balances do not include collective valuation allowance for losses. |
Other than Temporary Impairment, Credit Losses Recognized in Earnings | The following tables identify the Company's credit-related and intent-related impairments included in the Condensed Consolidated Statements of Operations, excluding impairments included in Other comprehensive income (loss) by type for the periods indicated: Three Months Ended June 30, 2018 2017 Impairment No. of Securities Impairment No. of Securities U.S. corporate public securities $ — — $ — * 1 Foreign corporate private securities (1) — — — — Residential mortgage-backed 1 21 — * 7 Commercial mortgage-backed — — — * 1 Total $ 1 21 $ — * 9 (1) Primarily U.S. dollar denominated. *Less than $1. Six Months Ended June 30, 2018 2017 Impairment No. of Securities Impairment No. of Securities U.S. corporate public securities $ — — $ — * 1 Foreign corporate private securities (1) 9 1 — — Residential mortgage-backed 1 24 — * 11 Commercial mortgage-backed — — — * 1 Total $ 10 25 $ — * 13 (1) Primarily U.S. dollar denominated. *Less than $1. The following tables present the amount of credit impairments on fixed maturities for which a portion of the OTTI loss was recognized in Other comprehensive income (loss) and the corresponding changes in such amounts for the periods indicated: Three Months Ended June 30, 2018 2017 Balance at April 1 $ 6 $ 8 Additional credit impairments: On securities previously impaired — — Reductions: Increase in cash flows — — * Securities sold, matured, prepaid or paid down 1 1 Balance at June 30 $ 5 $ 7 *Less than $1. Six Months Ended June 30, 2018 2017 Balance at January 1 $ 16 $ 9 Additional credit impairments: On securities previously impaired — — Reductions: Increase in cash flows — — * Securities sold, matured, prepaid or paid down 11 2 Balance at June 30 $ 5 $ 7 *Less than $1. |
Net Investment Income | The following table summarizes Net investment income for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Fixed maturities $ 341 $ 325 $ 664 $ 651 Equity securities 1 2 2 3 Mortgage loans on real estate 54 53 107 104 Policy loans 3 3 5 6 Short-term investments and cash equivalents 1 — 2 — Other 15 12 34 27 Gross investment income 415 395 814 791 Less: Investment expenses 18 17 35 34 Net investment income $ 397 $ 378 $ 779 $ 757 |
Realized Gain (Loss) on Investments | Net realized capital gains (losses) were as follows for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Fixed maturities, available-for-sale, including securities pledged $ (19 ) $ (1 ) $ (33 ) $ (21 ) Fixed maturities, at fair value option (82 ) (38 ) (181 ) (97 ) Equity securities 2 — — — Derivatives 6 2 11 6 Embedded derivatives - fixed maturities (2 ) (1 ) (4 ) (2 ) Guaranteed benefit derivatives 12 (9 ) 32 11 Other investments — — 5 — Net realized capital gains (losses) $ (83 ) $ (47 ) $ (170 ) $ (103 ) After-tax net realized capital gains (losses) $ (61 ) $ (31 ) $ (140 ) $ (67 ) |
Gain (Loss) on Investments | Proceeds from the sale of fixed maturities and equity securities, available-for-sale and the related gross realized gains and losses, before tax, were as follows for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Proceeds on sales $ 1,180 $ 561 $ 1,840 $ 1,638 Gross gains 7 6 11 11 Gross losses 20 7 27 25 |
Duration | |
Available-for-sale Securities Including Securities Pledged [Line Items] | |
Schedule of Unrealized Loss on Investments | Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive months as indicated in the tables below, were as follows as of the dates indicated: Amortized Cost Unrealized Capital Losses Number of Securities < 20% > 20% < 20% > 20% < 20% > 20% June 30, 2018 Six months or less below amortized cost $ 7,813 $ 82 $ 183 $ 23 1,568 11 More than six months and twelve months or less below amortized cost 1,434 1 82 — 310 1 More than twelve months below amortized cost 1,308 79 96 22 278 5 Total $ 10,555 $ 162 $ 361 $ 45 2,156 17 December 31, 2017 Six months or less below amortized cost $ 1,883 $ 67 $ 30 $ 38 433 7 More than six months and twelve months or less below amortized cost 128 7 4 2 37 1 More than twelve months below amortized cost 1,661 72 53 21 335 7 Total $ 3,672 $ 146 $ 87 $ 61 805 15 |
Market Sector (Type of Security) | |
Available-for-sale Securities Including Securities Pledged [Line Items] | |
Schedule of Unrealized Loss on Investments | Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, by market sector for instances in which fair value declined below amortized cost by greater than or less than 20% were as follows as of the dates indicated: Amortized Cost Unrealized Capital Losses Number of Securities < 20% > 20% < 20% > 20% < 20% > 20% June 30, 2018 U.S. Treasuries $ 28 $ — $ 1 $ — 6 — State, municipalities and political subdivisions 296 — 8 — 145 — U.S. corporate public securities 3,084 23 113 6 655 2 U.S. corporate private securities 1,904 67 72 18 215 2 Foreign corporate public securities and foreign governments 1,215 14 50 3 276 4 Foreign corporate private securities 1,336 56 47 18 122 4 Residential mortgage-backed 964 1 38 — 382 4 Commercial mortgage-backed 1,106 — 27 — 217 — Other asset-backed 622 1 5 — 138 1 Total $ 10,555 $ 162 $ 361 $ 45 2,156 17 December 31, 2017 U.S. Treasuries $ 30 $ — $ — $ — 6 — State, municipalities and political subdivisions 130 — 4 — 96 — U.S. corporate public securities 828 6 24 2 167 2 U.S. corporate private securities 743 66 18 20 71 2 Foreign corporate public securities and foreign governments 254 7 7 2 61 1 Foreign corporate private securities 288 66 8 37 35 6 Residential mortgage-backed 746 — 19 — 194 3 Commercial mortgage-backed 511 — 6 — 131 — Other asset-backed 142 1 1 — 44 1 Total $ 3,672 $ 146 $ 87 $ 61 805 15 |
Derivative Financial Instrume21
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The notional amounts and fair values of derivatives were as follows as of the dates indicated: June 30, 2018 December 31, 2017 Notional Amount Asset Fair Value Liability Fair Value Notional Amount Asset Fair Value Liability Fair Value Derivatives: Qualifying for hedge accounting (1) Cash flow hedges: Interest rate contracts $ 35 $ — $ — $ 35 $ — $ — Foreign exchange contracts 584 2 44 533 — 52 Derivatives: Non-qualifying for hedge accounting (1) Interest rate contracts 17,929 148 19 18,769 117 20 Foreign exchange contracts 14 1 — 26 — — Equity contracts 126 5 4 154 9 7 Credit contracts 639 7 3 771 10 6 Embedded derivatives and Managed custody guarantees: Within fixed maturity investments N/A 9 — N/A 12 — Within products N/A — 79 N/A — 117 Within reinsurance agreements N/A — (70 ) N/A — (21 ) Total $ 172 $ 79 $ 148 $ 181 (1) Open derivative contracts are reported as Derivatives assets or liabilities on the Condensed Consolidated Balance Sheets at fair value. N/A - Not Applicable |
Offsetting Assets and Liabilities | Although the Company has not elected to net its derivative exposures, the notional amounts and fair values of Over-The-Counter ("OTC") and cleared derivatives excluding exchange traded contracts and forward contracts (To Be Announced mortgage-backed securities) are presented in the tables below as of the dates indicated: June 30, 2018 Notional Amount Asset Fair Value Liability Fair Value Credit contracts $ 639 $ 7 $ 3 Equity contracts 126 5 4 Foreign exchange contracts 598 3 44 Interest rate contracts 15,713 148 19 163 70 Counterparty netting (1) (37 ) (37 ) Cash collateral netting (1) (122 ) — Securities collateral netting (1) — (30 ) Net receivables/payables $ 4 $ 3 (1) Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements. December 31, 2017 Notional Amount Asset Fair Value Liability Fair Value Credit contracts $ 771 $ 10 $ 6 Equity contracts 154 9 7 Foreign exchange contracts 559 — 52 Interest rate contracts 17,286 117 20 136 85 Counterparty netting (1) (50 ) (50 ) Cash collateral netting (1) (84 ) — Securities collateral netting (1) — (30 ) Net receivables/payables $ 2 $ 5 (1) Represents the netting of receivable balances with payable balances, net of collateral, for the same counterparty under eligible netting agreements. |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | Net realized gains (losses) on derivatives were as follows for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Derivatives: Qualifying for hedge accounting (1) Cash flow hedges: Interest rate contracts $ — $ — $ — $ — Foreign exchange contracts 3 1 4 8 Derivatives: Non-qualifying for hedge accounting (2) Interest rate contracts 2 (2 ) 7 (5 ) Foreign exchange contracts 1 2 — — Equity contracts — — — 1 Credit contracts — 2 — 3 Embedded derivatives and Managed custody guarantees: Within fixed maturity investments (2) (2 ) (1 ) (4 ) (3 ) Within products (2) 12 (9 ) 32 11 Within reinsurance agreements (3) 20 (14 ) 49 (16 ) Total $ 36 $ (21 ) $ 88 $ (1 ) (1) Changes in value for effective fair value hedges are recorded in Other net realized capital gains (losses). Changes in fair value upon disposal for effective cash flow hedges are amortized through Net investment income and the ineffective portion is recorded in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. For the three and six months ended June 30, 2018 and 2017 , ineffective amounts were immaterial. (2) Changes in value are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) Changes in value are included in Interest credited and other benefits to contract owners/policyholders in the Condensed Consolidated Statements of Operations. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 : Level 1 Level 2 Level 3 Total Assets: Fixed maturities, including securities pledged: U.S. Treasuries $ 489 $ 58 $ — $ 547 U.S. Government agencies and authorities — — — — State, municipalities and political subdivisions — 763 — 763 U.S. corporate public securities — 8,200 18 8,218 U.S. corporate private securities — 2,951 738 3,689 Foreign corporate public securities and foreign governments (1) — 2,518 — 2,518 Foreign corporate private securities (1) — 3,149 122 3,271 Residential mortgage-backed securities — 2,913 33 2,946 Commercial mortgage-backed securities — 1,597 16 1,613 Other asset-backed securities — 988 97 1,085 Total fixed maturities, including securities pledged 489 23,137 1,024 24,650 Equity securities 10 — 53 63 Derivatives: Interest rate contracts — 148 — 148 Foreign exchange contracts — 3 — 3 Equity contracts — 5 — 5 Credit contracts — 7 — 7 Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements 924 — 1 925 Assets held in separate accounts 68,652 5,491 38 74,181 Total assets $ 70,075 $ 28,791 $ 1,116 $ 99,982 Percentage of Level to Total 70 % 29 % 1 % 100 % Liabilities: Derivatives: Guaranteed benefit derivatives: FIA $ — $ — $ 16 $ 16 Stabilizer and MCGs — — 63 63 Other derivatives: Interest rate contracts — 19 — 19 Foreign exchange contracts — 44 — 44 Equity contracts — 4 — 4 Credit contracts — 3 — 3 Embedded derivative on reinsurance — (70 ) — (70 ) Total liabilities $ — $ — $ 79 $ 79 (1) Primarily U.S. dollar denominated. The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 : Level 1 Level 2 Level 3 Total Assets: Fixed maturities, including securities pledged: U.S. Treasuries $ 597 $ 59 $ — $ 656 U.S. Government agencies and authorities — 3 — 3 State, municipalities and political subdivisions — 878 — 878 U.S. corporate public securities — 9,210 26 9,236 U.S. corporate private securities — 2,855 642 3,497 Foreign corporate public securities and foreign governments (1) — 2,777 — 2,777 Foreign corporate private securities (1) — 3,123 92 3,215 Residential mortgage-backed securities — 2,608 21 2,629 Commercial mortgage-backed securities — 1,463 7 1,470 Other asset-backed securities — 638 43 681 Total fixed maturities, including securities pledged 597 23,614 831 25,042 Equity securities, available-for-sale 10 — 50 60 Derivatives: Interest rate contracts — 117 — 117 Foreign exchange contracts — — — — Equity contracts — 9 — 9 Credit contracts — 10 — 10 Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements 1,078 — — 1,078 Assets held in separate accounts 67,966 5,059 11 73,036 Total assets $ 69,651 $ 28,809 $ 892 $ 99,352 Percentage of Level to total 70 % 29 % 1 % 100 % Liabilities: Derivatives: Guaranteed benefit derivatives: FIA $ — $ — $ 20 $ 20 Stabilizer and MCGs — — 97 97 Other derivatives: Interest rate contracts — 20 — 20 Foreign exchange contracts — 52 — 52 Equity contracts — 7 — 7 Credit contracts — 6 — 6 Embedded derivative on reinsurance — (21 ) — (21 ) Total liabilities $ — $ 64 $ 117 $ 181 (1) Primarily U.S. dollar denominated. |
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables summarize the change in fair value of the Company’s Level 3 assets and liabilities and transfers in and out of Level 3 for the period indicated: Three Months Ended June 30, 2018 Fair Value as of April 1 Total Realized/Unrealized Gains (Losses) Included in: Purchases Issuances Sales Settlements Transfers into Level 3 (3) Transfers out of Level 3 (3) Fair Value as of June 30 Change In Unrealized Gains (Losses) Included in Earnings (4) Net Income OCI Fixed maturities, including securities pledged: U.S. Corporate public securities $ 15 $ — $ — $ 3 $ — $ — $ — $ — $ — $ 18 $ — U.S. Corporate private securities 651 — (3 ) 91 — (5 ) (8 ) 12 — 738 — Foreign corporate private securities (1) 101 — 2 75 — (56 ) — — — 122 — Residential mortgage-backed securities 73 (1 ) (1 ) 19 — (40 ) — — (17 ) 33 2 Commercial mortgage-backed securities — — — 16 — — — — — 16 — Other asset-backed securities 126 — (1 ) 57 — — (1 ) 21 (105 ) 97 — Total fixed maturities, including securities pledged 966 (1 ) (3 ) 261 — (101 ) (9 ) 33 (122 ) 1,024 2 Equity securities 48 2 — 3 — — — — — 53 2 Derivatives: Guaranteed benefit derivatives: Stabilizer and MCGs (2) (77 ) 13 — — — — 1 — — (63 ) — FIA (2) (18 ) (1 ) — — — — 3 — — (16 ) — Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreement — — — 1 — — — — — 1 — Assets held in separate accounts (5) 11 — — 27 — — — — — 38 — (1) Primarily U.S. dollar denominated. (2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. (4) For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (5) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company. Six Months Ended June 30, 2018 Fair Value as of January 1 Total Realized/Unrealized Gains (Losses) Included in: Purchases Issuances Sales Settlements Transfers into Level 3 (3) Transfers out of Level 3 (3) Fair Value as of June 30 Change in Unrealized Gains (Losses) Included in Earnings (4) Net Income OCI Fixed maturities, including securities pledged: U.S. Corporate public securities $ 26 $ — $ — $ 3 $ — $ (5 ) $ — $ — $ (6 ) $ 18 $ — U.S. Corporate private securities 642 — (18 ) 103 — (5 ) (4 ) 20 — 738 — Foreign corporate private securities (1) 92 (9 ) 20 75 — (56 ) — — — 122 (9 ) Residential mortgage-backed securities 21 (3 ) — 20 — — — — (5 ) 33 (3 ) Commercial mortgage-backed securities 7 — — 16 — — — — (7 ) 16 — Other asset-backed securities 43 — (2 ) 57 — — (2 ) 22 (21 ) 97 — Total fixed maturities, including securities pledged 831 (12 ) — 274 — (66 ) (6 ) 42 (39 ) 1,024 (12 ) Equity securities 50 — — 3 — — — — — 53 — Derivatives: Guaranteed benefit derivatives: Stabilizer and MCGs (2) (97 ) 34 — — (1 ) — 1 — — (63 ) — FIA (2) (20 ) (2 ) — — 1 — 5 — — (16 ) — Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreements — — — 1 — — — — — 1 — Assets held in separate accounts (5) 11 — — 27 — — — — — 38 — (1) Primarily U.S. dollar denominated. (2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. (4) For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (5) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company. The following tables summarize the change in fair value of the Company’s Level 3 assets and liabilities and transfers in and out of Level 3 for the periods indicated: Three Months Ended June 30, 2017 Fair Value as of April 1 Total Realized/Unrealized Gains (Losses) Included in: Purchases Issuances Sales Settlements Transfers into Level 3 (3) Transfers out of Level 3 (3) Fair Value as of June 30 Change In Unrealized Gains (Losses) Included in Earnings (4) Net Income OCI Fixed maturities, including securities pledged: U.S. Corporate public securities $ 30 $ — $ — $ 6 $ — $ — $ 1 $ — $ (10 ) $ 27 $ — U.S. Corporate private securities 565 — 4 8 — — (1 ) 28 (9 ) 595 — Foreign corporate private securities (1) 161 — — — — — — — (33 ) 128 — Residential mortgage-backed securities 30 (2 ) 1 17 — — — 1 (10 ) 37 (2 ) Commercial mortgage-backed securities 6 — — 2 — — (2 ) — — 6 — Other asset-backed securities 23 — — 24 — — — — (11 ) 36 — Total fixed maturities, including securities pledged 815 (2 ) 5 57 — — (2 ) 29 (73 ) 829 (2 ) Equity securities, available-for-sale 50 — 1 — — — — — — 51 — Derivatives: Guaranteed benefit derivatives: Stabilizer and MCGs (2) (131 ) (9 ) — — (1 ) — — — — (141 ) — FIA (2) (23 ) — — — — — — — — (23 ) — Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreement — — — — — — — — — — — Assets held in separate accounts (5) 13 — — 1 — (3 ) — — (8 ) 3 — (1) Primarily U.S. dollar denominated. (2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. (4) For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (5) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company. Six Months Ended June 30, 2017 Fair Value as of January 1 Total Realized/Unrealized Gains (Losses) Included in: Purchases Issuances Sales Settlements Transfers into Level 3 (3) Transfers out of Level 3 (3) Fair Value as of June 30 Change in Unrealized Gains (Losses) Included in Earnings (4) Net Income OCI Fixed maturities, including securities pledged: U.S. Corporate public securities $ 7 $ — $ — $ 11 $ — $ — $ — $ 9 $ — $ 27 $ — U.S. Corporate private securities 525 — 4 45 — — (2 ) 32 (9 ) 595 — Foreign corporate private securities (1) 154 — (1 ) 18 — — (10 ) — (33 ) 128 — Residential mortgage-backed securities 21 (3 ) — 17 — — — 2 — 37 (4 ) Commercial mortgage-backed securities 10 — — 2 — — (3 ) — (3 ) 6 — Other asset-backed securities 27 — 1 24 — — (1 ) — (15 ) 36 — Total fixed maturities, including securities pledged 744 (3 ) 4 117 — — (16 ) 43 (60 ) 829 (4 ) Equity securities, available-for-sale 48 — 1 2 — — — — — 51 — Derivatives: Guaranteed benefit derivatives: Stabilizer and MCGs (2) (151 ) 12 — — (2 ) — — — — (141 ) — FIA (2) (23 ) (1 ) — — — — 1 — — (23 ) — Cash and cash equivalents, short-term investments, and short-term investments under securities loan agreements — — — — — — — — — — — Assets held in separate accounts (5) 6 — — 6 — (3 ) — 2 (8 ) 3 — (1) Primarily U.S. dollar denominated. (2) All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure because it is impracticable to track realized and unrealized gains (losses) separately on a contract-by-contract basis. These amounts are included in Other net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (3) The Company’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period. (4) For financial instruments still held as of June 30, amounts are included in Net investment income and Total net realized capital gains (losses) in the Condensed Consolidated Statements of Operations. (5) The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income (loss) for separate account assets are offset by an equal amount for separate account liabilities, which results in a net zero impact on Net income (loss) for the Company. |
Fair Value Inputs, Liabilities, Quantitative Information | The following table presents the unobservable inputs for Level 3 fair value measurements as of June 30, 2018 : Range (1) Unobservable Input FIA Stabilizer / MCG Interest rate implied volatility — 0.1% to 6.5% Nonperformance risk 0.07% to 1.2% 0.07% to 1.2% Actuarial Assumptions: Partial Withdrawals 0% to 7% — Lapses 0% to 42% (2) 0% to 50% (3) Policyholder Deposits (4) — 0% to 50% (3) (1) Represents the range of reasonable assumptions that management has used in its fair value calculations. (2) Lapse rates tend to be lower during the contractual surrender charge period and higher after the surrender charge period ends; the highest lapse rates occur in the year immediately after the end of the surrender charge period. (3) Stabilizer contracts with recordkeeping agreements have different range of lapse and policyholder deposit assumptions from Stabilizer (Investment only) and MCG contracts as shown below: Percentage of Plans Overall Range of Lapse Rates Range of Lapse Rates for 85% of Plans Overall Range of Policyholder Deposits Range of Policyholder Deposits for 85% of Plans Stabilizer (Investment Only) and MCG Contracts 92 % 0-25% 0-15% 0-30% 0-15% Stabilizer with Recordkeeping Agreements 8 % 0-50% 0-30% 0-50% 0-25% Aggregate of all plans 100 % 0-50% 0-30% 0-50% 0-25% (4) Measured as a percentage of assets under management or assets under administration. The following table presents the unobservable inputs for Level 3 fair value measurements as of December 31, 2017 : Range (1) Unobservable Input FIA Stabilizer / MCG Interest rate implied volatility — 0.1% to 6.3% Nonperformance risk 0.02% to 1.1% 0.02% to 1.1% Actuarial Assumptions: Partial Withdrawals 0.5% to 7% — Lapses 0% to 42% (2) 0% to 50% (3) Policyholder Deposits (4) — 0% to 50% (3) (1) Represents the range of reasonable assumptions that management has used in its fair value calculations. (2) Lapse rates tend to be lower during the contractual surrender charge period and higher after the surrender charge period ends; the highest lapse rates occur in the year immediately after the end of the surrender charge period. (3) Stabilizer contracts with recordkeeping agreements have different range of lapse and policyholder deposit assumptions from Stabilizer (Investment only) and MCG contracts as shown below: Percentage of Plans Overall Range of Lapse Rates Range of Lapse Rates for 85% of Plans Overall Range of Policyholder Deposits Range of Policyholder Deposits for 85% of Plans Stabilizer (Investment Only) and MCG Contracts 92 % 0-25% 0-15% 0-30% 0-15% Stabilizer with Recordkeeping Agreements 8 % 0-50% 0-30% 0-50% 0-25% Aggregate of all plans 100 % 0-50% 0-30% 0-50% 0-25% (4) Measured as a percentage of assets under management or assets under administration. |
Fair Value, by Balance Sheet Grouping | The carrying values and estimated fair values of the Company’s financial instruments as of the dates indicated: June 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value Assets: Fixed maturities, including securities pledged $ 24,650 $ 24,650 $ 25,042 $ 25,042 Equity securities 63 63 60 60 Mortgage loans on real estate 5,002 5,018 4,910 4,924 Policy loans 212 212 214 214 Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements 925 925 1,078 1,078 Derivatives 163 163 136 136 Notes receivable from affiliate — — 175 222 Short-term loan to affiliate — — 80 80 Other Investments 39 39 — — Assets held in separate accounts 74,181 74,181 73,036 73,036 Liabilities: Investment contract liabilities: Funding agreements without fixed maturities and deferred annuities (1) 25,391 28,025 25,314 29,431 Funding agreements with fixed maturities 627 637 — — Supplementary contracts, immediate annuities and other 347 383 365 418 Deposit liabilities 77 114 135 198 Derivatives: Guaranteed benefit derivatives: FIA 16 16 20 20 Stabilizer and MCGs 63 63 97 97 Other derivatives 70 70 85 85 Short-term debt 1 1 — — Long-term debt 4 4 5 5 Embedded derivatives on reinsurance (70 ) (70 ) (21 ) (21 ) (1) Certain amounts included in Funding agreements without fixed maturities and deferred annuities are also reflected within the Guaranteed benefit derivatives section of the table above. |
Deferred Policy Acquisition C23
Deferred Policy Acquisition Costs and Value of Business Acquired (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Policy Acquisition Costs and Present Value of Future Insurance Profits, Net [Abstract] | |
Deferred Policy Acquisition Costs and Value of Business Acquired | The following tables present a rollforward of DAC and VOBA for the periods indicated: 2018 DAC VOBA Total Balance as of January 1, 2018 $ 385 $ 367 $ 752 Deferrals of commissions and expenses 27 3 30 Amortization: Amortization, excluding unlocking (36 ) (36 ) (72 ) Unlocking (1) (32 ) (15 ) (47 ) Interest accrued 18 19 (2) 37 Net amortization included in the Condensed Consolidated Statements of Operations (50 ) (32 ) (82 ) Change due to unrealized capital gains/losses on available-for-sale securities 129 158 287 Balance as of June 30, 2018 $ 491 $ 496 $ 987 2017 DAC VOBA Total Balance as of January 1, 2017 $ 476 $ 537 $ 1,013 Deferrals of commissions and expenses 39 3 42 Amortization: Amortization, excluding unlocking (37 ) (39 ) (76 ) Unlocking (1) (47 ) (56 ) (103 ) Interest accrued 19 24 (2) 43 Net amortization included in the Condensed Consolidated Statements of Operations (65 ) (71 ) (136 ) Change due to unrealized capital gains/losses on available-for-sale securities (56 ) (70 ) (126 ) Balance as of June 30, 2017 $ 394 $ 399 $ 793 |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Shareholder’s equity included the following components of AOCI as of the dates indicated: June 30, 2018 2017 Fixed maturities, net of OTTI $ 427 $ 1,326 Equity securities — 16 Derivatives 119 169 DAC/VOBA and Sales inducements adjustment on available-for-sale securities (146 ) (450 ) Premium deficiency reserve adjustment (61 ) (110 ) Other — — Unrealized capital gains (losses), before tax 339 951 Deferred income tax asset (liability) (83 ) (210 ) Unrealized capital gains (losses), after tax 256 741 Pension and other postretirement benefits liability, net of tax 4 5 AOCI $ 260 $ 746 |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | Changes in AOCI, including the reclassification adjustments recognized in the Condensed Consolidated Statements of Operations were as follows for the periods indicated: Three Months Ended June 30, 2018 Before-Tax Amount Income Tax After-Tax Amount Available-for-sale securities: Fixed maturities $ (377 ) $ 71 $ (306 ) Equity securities — (2) — — Other — — — OTTI — — — Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations 19 (4 ) 15 DAC/VOBA and Sales inducements 93 (19 ) 74 Premium deficiency reserve adjustment 21 (4 ) 17 Change in unrealized gains/losses on available-for-sale securities (244 ) 44 (200 ) Derivatives: Derivatives 32 (1) (6 ) 26 Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations (6 ) 2 (4 ) Change in unrealized gains/losses on derivatives 26 (4 ) 22 Pension and other postretirement benefits liability: Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations — — — Change in pension and other postretirement benefits liability — — — Change in Other comprehensive income (loss) $ (218 ) $ 40 $ (178 ) (1) See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information. (2) Balance reclassified to Retained earnings due to adoption of ASU 2016-01. Six Months Ended June 30, 2018 Before-Tax Amount Income Tax After-Tax Amount Available-for-sale securities: Fixed maturities $ (1,064 ) $ 224 (4) $ (840 ) Equity securities — (3) — — Other (5 ) 1 (4 ) OTTI 7 (1 ) 6 Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations 33 (7 ) 26 DAC/VOBA and Sales inducements 287 (1) (60 ) 227 Premium deficiency reserve adjustment 54 (11 ) 43 Change in unrealized gains/losses on available-for-sale securities (688 ) 146 (542 ) Derivatives: Derivatives 7 (2) (1 ) 6 Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations (12 ) 3 (9 ) Change in unrealized gains/losses on derivatives (5 ) 2 (3 ) Pension and other postretirement benefits liability: Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations (1 ) — (1 ) Change in pension and other postretirement benefits liability (1 ) — (1 ) Change in Other comprehensive income (loss) $ (694 ) $ 148 $ (546 ) (1) See the Deferred Policy Acquisition Costs and Value of Business Acquired Note to these Condensed Consolidated Financial Statements for additional information. (2) See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information. (3) Balance reclassified to Retained earnings due to adoption of ASU 2016-01. (4) Amount includes $6 valuation allowance. See the Income Taxes Note these Condensed Consolidated Financial Statements for additional information. Three Months Ended June 30, 2017 Before-Tax Amount Income Tax After-Tax Amount Available-for-sale securities: Fixed maturities $ 328 $ (114 ) $ 214 Equity securities — — — Other — — — OTTI — — — Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations 2 (1 ) 1 DAC/VOBA and Sales inducements (93 ) 33 (60 ) Premium deficiency reserve adjustment (16 ) 5 (11 ) Change in unrealized gains/losses on available-for-sale securities 221 (77 ) 144 Derivatives: Derivatives (10 ) (1) 4 (6 ) Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations (6 ) 2 (4 ) Change in unrealized gains/losses on derivatives (16 ) 6 (10 ) Pension and other postretirement benefits liability: Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations (1 ) — (1 ) Change in pension and other postretirement benefits liability (1 ) — (1 ) Change in Other comprehensive income (loss) $ 204 $ (71 ) $ 133 (1) See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information. Six Months Ended June 30, 2017 Before-Tax Amount Income Tax After-Tax Amount Available-for-sale securities: Fixed maturities $ 441 $ (153 ) $ 288 Equity securities 1 — 1 Other — — — OTTI 2 (1 ) 1 Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations 20 (7 ) 13 DAC/VOBA and Sales inducements (126 ) (1) 44 (82 ) Premium deficiency reserve adjustment (21 ) 7 (14 ) Change in unrealized gains/losses on available-for-sale securities 317 (110 ) 207 Derivatives: Derivatives (19 ) (2) 7 (12 ) Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations (12 ) 4 (8 ) Change in unrealized gains/losses on derivatives (31 ) 11 (20 ) Pension and other postretirement benefits liability: Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations (1 ) — (1 ) Change in pension and other postretirement benefits liability (1 ) — (1 ) Change in Other comprehensive income (loss) $ 285 $ (99 ) $ 186 (1) See the Deferred Policy Acquisition Costs and Value of Business Acquired Note to these Condensed Consolidated Financial Statements for additional information. (2) See the Derivative Financial Instruments Note to these Condensed Consolidated Financial Statements for additional information. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Restricted Assets | The components of the fair value of the restricted assets were as follows as of the dates indicated: June 30, 2018 December 31, 2017 Fixed maturity collateral pledged to FHLB (1) $ 737 $ — FHLB restricted stock (2) 39 — Other fixed maturities-state deposits 13 13 Cash and cash equivalents 5 5 Securities pledged (3) 907 960 Total restricted assets $ 1,701 $ 978 (1) Included in Fixed maturities, available for sale, at fair value on the Condensed Consolidated Balance Sheets. (2) Included in Other investments on the Condensed Consolidated Balance Sheets. (3) Includes the fair value of loaned securities of $745 and $799 as of June 30, 2018 and December 31, 2017 , respectively. In addition, as of June 30, 2018 and December 31, 2017 , the Company delivered securities as collateral of $162 and $161 , respectively. Loaned securities and securities delivered as collateral are included in Securities pledged on the Condensed Consolidated Balance Sheets. |
Business, Basis of Presentati26
Business, Basis of Presentation and Significant Accounting Policies - Narrative (Details) | 6 Months Ended |
Jun. 30, 2018segment | |
Schedule of Equity Transactions [Line Items] | |
Number of Operating Segments | 1 |
Business, Basis of Presentati27
Business, Basis of Presentation and Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||||||
Revenue from contract with customer excluding assessed tax percentage | 12.50% | 13.10% | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 66 | $ 138 | ||||
Capitalized Contract Cost, Net | 92 | 92 | ||||
Capitalized Contract Cost, Amortization | 4 | 9 | ||||
Capitalized Contract Cost, Impairment Loss | 0 | |||||
Other assets | 171 | 171 | $ 140 | |||
Deferred income taxes | 62 | 62 | 187 | |||
Retained earnings (deficit) | 174 | 174 | 30 | |||
Operating expenses | 178 | $ 192 | 286 | $ 411 | ||
Net cash provided by operating activities | 628 | $ 428 | ||||
Recordkeeping & administration | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 29 | 57 | ||||
Distribution & shareholder servicing | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 37 | 81 | ||||
Accounting Standards Update 2014-09 | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Accounts Receivable, Net | 26 | $ 26 | ||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 72 | |||||
Minimum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||
Maximum | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 15 years | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 72 | |||||
Other assets | (92) | $ (92) | 90 | |||
Deferred Income Tax Liabilities, Net | $ 18 | |||||
Deferred income taxes | (19) | (19) | ||||
Retained earnings (deficit) | $ (73) | (73) | ||||
Operating expenses | 1 | |||||
Net cash provided by operating activities | $ 0 |
Investments - Fixed Maturities
Investments - Fixed Maturities and Equity Securities (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Embedded Derivatives | $ 12 | ||
OTTI | 13 | ||
Securities pledged, Amortized Cost | $ 853 | 864 | |
Total equity securities, Amortized Cost | 48 | 45 | |
Total fixed maturities and equity securities, Amortized Cost | 22,760 | ||
Total fixed maturities and equity securities, Gross Unrealized Capital Gains | 1,510 | ||
Total fixed maturities and equity securities, Gross Unrealized Capital Losses | 140 | ||
Total fixed maturities and equity securities, Fair Value | 24,142 | ||
Impaired available-for-sale securities | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Net unrealized gains on impaired available-for-sale securities | 148 | $ 190 | |
U.S. Treasuries | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 464 | 547 | |
Fixed maturities, Gross Unrealized Capital Gains | 84 | 109 | |
Fixed maturities, Gross Unrealized Capital Losses | 1 | 0 | |
Embedded Derivatives | 0 | 0 | |
Fixed maturities, including securities pledged, Fair Value | 547 | 656 | |
OTTI | 0 | 0 | |
U.S. government agencies and authorities | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 0 | 3 | |
Fixed maturities, Gross Unrealized Capital Gains | 0 | 0 | |
Fixed maturities, Gross Unrealized Capital Losses | 0 | 0 | |
Embedded Derivatives | 0 | 0 | |
Fixed maturities, including securities pledged, Fair Value | 0 | 3 | |
OTTI | 0 | 0 | |
State, municipalities and political subdivisions | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 751 | 842 | |
Fixed maturities, Gross Unrealized Capital Gains | 20 | 40 | |
Fixed maturities, Gross Unrealized Capital Losses | 8 | 4 | |
Embedded Derivatives | 0 | 0 | |
Fixed maturities, including securities pledged, Fair Value | 763 | 878 | |
OTTI | 0 | 0 | |
U.S. corporate public securities | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 7,968 | 8,476 | |
Fixed maturities, Gross Unrealized Capital Gains | 369 | 786 | |
Fixed maturities, Gross Unrealized Capital Losses | 119 | 26 | |
Embedded Derivatives | 0 | 0 | |
Fixed maturities, including securities pledged, Fair Value | 8,218 | 9,236 | |
OTTI | 0 | 0 | |
U.S. corporate private securities | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 3,684 | 3,387 | |
Fixed maturities, Gross Unrealized Capital Gains | 95 | 148 | |
Fixed maturities, Gross Unrealized Capital Losses | 90 | 38 | |
Embedded Derivatives | 0 | 0 | |
Fixed maturities, including securities pledged, Fair Value | 3,689 | 3,497 | |
OTTI | 0 | 0 | |
Foreign corporate public securities and foreign governments | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 2,481 | 2,594 | |
Fixed maturities, Gross Unrealized Capital Gains | 90 | 192 | |
Fixed maturities, Gross Unrealized Capital Losses | 53 | 9 | |
Embedded Derivatives | 0 | 0 | |
Fixed maturities, including securities pledged, Fair Value | 2,518 | 2,777 | |
OTTI | 0 | 0 | |
Foreign corporate private securities | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 3,274 | 3,105 | |
Fixed maturities, Gross Unrealized Capital Gains | 62 | 155 | |
Fixed maturities, Gross Unrealized Capital Losses | 65 | 45 | |
Embedded Derivatives | 0 | 0 | |
Fixed maturities, including securities pledged, Fair Value | 3,271 | 3,215 | |
OTTI | 0 | 7 | |
Residential mortgage-backed | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 2,881 | 2,517 | |
Fixed maturities, Gross Unrealized Capital Gains | 94 | 119 | |
Fixed maturities, Gross Unrealized Capital Losses | 38 | 19 | |
Embedded Derivatives | 9 | 12 | |
Fixed maturities, including securities pledged, Fair Value | 2,946 | 2,629 | |
OTTI | 4 | 4 | |
Agency | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 1,998 | 1,878 | |
Fixed maturities, Gross Unrealized Capital Gains | 48 | 65 | |
Fixed maturities, Gross Unrealized Capital Losses | 32 | 17 | |
Embedded Derivatives | 4 | 6 | |
Fixed maturities, including securities pledged, Fair Value | 2,018 | 1,932 | |
OTTI | 0 | 0 | |
Non-Agency | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 883 | 639 | |
Fixed maturities, Gross Unrealized Capital Gains | 46 | 54 | |
Fixed maturities, Gross Unrealized Capital Losses | 6 | 2 | |
Embedded Derivatives | 5 | 6 | |
Fixed maturities, including securities pledged, Fair Value | 928 | 697 | |
OTTI | 4 | 4 | |
Commercial mortgage-backed | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 1,627 | 1,437 | |
Fixed maturities, Gross Unrealized Capital Gains | 13 | 39 | |
Fixed maturities, Gross Unrealized Capital Losses | 27 | 6 | |
Embedded Derivatives | 0 | 0 | |
Fixed maturities, including securities pledged, Fair Value | 1,613 | 1,470 | |
OTTI | 0 | 0 | |
Other asset-backed securities | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 1,084 | 671 | |
Fixed maturities, Gross Unrealized Capital Gains | 6 | 11 | |
Fixed maturities, Gross Unrealized Capital Losses | 5 | 1 | |
Embedded Derivatives | 0 | 0 | |
Fixed maturities, including securities pledged, Fair Value | 1,085 | 681 | |
OTTI | 2 | 2 | |
Fixed maturities | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Fixed maturities, including securities pledged, Amortized Cost | 24,214 | 23,579 | |
Fixed maturities, Gross Unrealized Capital Gains | 833 | 1,599 | |
Fixed maturities, Gross Unrealized Capital Losses | 406 | 148 | |
Embedded Derivatives | 9 | 12 | |
Fixed maturities, including securities pledged, Fair Value | 24,650 | 25,042 | |
OTTI | 6 | 13 | |
Securities pledged, Amortized Cost | 853 | 864 | |
Securities pledged, Gross Unrealized Capital Gains | 70 | 104 | |
Securities pledged, Gross Unrealized Capital Losses | 16 | 8 | |
Securities pledged | 907 | 960 | |
Total fixed maturities, less securities pledged, Amortized Cost | 23,361 | 22,715 | |
Total fixed maturities, less securities pledged, Gross Unrealized Capital Gains | 763 | 1,495 | |
Total fixed maturities, less securities pledged, Gross Unrealized Capital Losses | 390 | 140 | |
Total fixed maturities, less securities pledged, Fair Value | $ 23,743 | 24,082 | |
Equity securities | |||
Available-for-sale Securities Including Securities Pledged [Line Items] | |||
Embedded Derivatives | 0 | ||
OTTI | 0 | ||
Total equity securities, Amortized Cost | 45 | ||
Equity securities, Gross Unrealized Capital Gains | 15 | ||
Equity securities, Gross Unrealized Capital Losses | 0 | ||
Equity securities | $ 60 |
Investments - Debt Maturities (
Investments - Debt Maturities (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Fixed maturities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
One year or less, Amortized Cost | $ 464 | |
One year or less, Fair Value | 468 | |
After one year through five years, Amortized Cost | 4,244 | |
After one year through five years, Fair Value | 4,311 | |
After five years through ten years, Amortized Cost | 5,901 | |
After five years through ten years, Fair Value | 5,863 | |
After ten years, Amortized Cost | 8,013 | |
After ten years, Fair Value | 8,364 | |
Fixed maturities, including securities pledged, Amortized Cost | 24,214 | $ 23,579 |
Fixed maturities, including securities pledged, Fair Value | 24,650 | $ 25,042 |
Mortgage-backed securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Without single maturity date, Amortized Cost | 4,508 | |
Without single maturity date, Fair Value | $ 4,559 | |
Percentage collateralized of mortgage backed securities including interest-only strip or principal-only strip | 53.80% | 52.10% |
Other asset-backed securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Without single maturity date, Amortized Cost | $ 1,084 | |
Without single maturity date, Fair Value | 1,085 | |
Fixed maturities, including securities pledged, Amortized Cost | 1,084 | $ 671 |
Fixed maturities, including securities pledged, Fair Value | $ 1,085 | $ 681 |
Investments - Composition of US
Investments - Composition of US and Foreign Corporate Securities (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Communications | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Fixed maturities, including securities pledged, Amortized Cost | $ 1,162 | $ 1,145 |
U.S. and foreign corporate securities, Gross Unrealized Capital Gains | 55 | 114 |
U.S. and foreign corporate securities, Gross Unrealized Capital Losses | 18 | 1 |
Fixed maturities, including securities pledged, Fair Value | 1,199 | 1,258 |
Financial | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Fixed maturities, including securities pledged, Amortized Cost | 2,805 | 2,750 |
U.S. and foreign corporate securities, Gross Unrealized Capital Gains | 125 | 185 |
U.S. and foreign corporate securities, Gross Unrealized Capital Losses | 38 | 4 |
Fixed maturities, including securities pledged, Fair Value | 2,892 | 2,931 |
Industrial and other companies | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Fixed maturities, including securities pledged, Amortized Cost | 7,629 | 7,953 |
U.S. and foreign corporate securities, Gross Unrealized Capital Gains | 221 | 532 |
U.S. and foreign corporate securities, Gross Unrealized Capital Losses | 149 | 65 |
Fixed maturities, including securities pledged, Fair Value | 7,701 | 8,420 |
Energy | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Fixed maturities, including securities pledged, Amortized Cost | 1,886 | 1,970 |
U.S. and foreign corporate securities, Gross Unrealized Capital Gains | 83 | 159 |
U.S. and foreign corporate securities, Gross Unrealized Capital Losses | 51 | 33 |
Fixed maturities, including securities pledged, Fair Value | 1,918 | 2,096 |
Utilities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Fixed maturities, including securities pledged, Amortized Cost | 2,854 | 2,725 |
U.S. and foreign corporate securities, Gross Unrealized Capital Gains | 103 | 216 |
U.S. and foreign corporate securities, Gross Unrealized Capital Losses | 52 | 11 |
Fixed maturities, including securities pledged, Fair Value | 2,905 | 2,930 |
Transportation | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Fixed maturities, including securities pledged, Amortized Cost | 725 | 697 |
U.S. and foreign corporate securities, Gross Unrealized Capital Gains | 19 | 52 |
U.S. and foreign corporate securities, Gross Unrealized Capital Losses | 13 | 2 |
Fixed maturities, including securities pledged, Fair Value | 731 | 747 |
U.S. and Foreign Corporate Securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Fixed maturities, including securities pledged, Amortized Cost | 17,061 | 17,240 |
U.S. and foreign corporate securities, Gross Unrealized Capital Gains | 606 | 1,258 |
U.S. and foreign corporate securities, Gross Unrealized Capital Losses | 321 | 116 |
Fixed maturities, including securities pledged, Fair Value | $ 17,346 | $ 18,382 |
Investments - Repurchase Agreem
Investments - Repurchase Agreement, Securities Lending, VIEs (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Required collateral percentage of market value of loaned securities | 102.00% | |
Securities received as collateral | $ 60 | $ 61 |
Payables under securities loan agreements, including collateral held | 844 | 845 |
Collateralized loan obligations | Not a primary beneficiary of the VIE | ||
Variable Interest Entity, Not Primary Beneficiary, Disclosures [Abstract] | ||
Carrying value of VIE | 568 | 411 |
Securities pledged as collateral | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Fair value of loaned securities | 745 | 799 |
Short-term Investments | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Securities received as collateral | 711 | 744 |
Payables under securities loan agreement, including collateral held | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Payables under securities loan agreements, including collateral held | 711 | 744 |
U.S. Treasuries | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Payables under securities loan agreements, including collateral held | 179 | 177 |
U.S. corporate public securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Payables under securities loan agreements, including collateral held | 429 | 460 |
Short-term Investments | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Payables under securities loan agreements, including collateral held | 1 | 0 |
Foreign corporate public securities and foreign governments | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Payables under securities loan agreements, including collateral held | 162 | 168 |
Payables under securities loan agreements | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Payables under securities loan agreements, including collateral held | $ 771 | $ 805 |
Investments - Unrealized Capita
Investments - Unrealized Capital Losses (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | $ 7,657 | $ 1,859 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 197 | 63 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 1,348 | 119 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 81 | 3 |
More Than Twelve Months Below Amortized Cost, Fair Value | 1,306 | 1,692 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 128 | 82 |
Total, Fair Value | 10,311 | 3,670 |
Total Unrealized Capital Losses | $ 406 | $ 148 |
Average market value of fixed maturities with unrealized capital losses aged more than twelve months | 91.10% | 95.40% |
U.S. Treasuries | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | $ 13 | $ 18 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 0 | 0 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 2 | 0 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 1 | 0 |
More Than Twelve Months Below Amortized Cost, Fair Value | 12 | 12 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 0 | 0 |
Total, Fair Value | 27 | 30 |
Total Unrealized Capital Losses | 1 | 0 |
State, municipalities and political subdivisions | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | 196 | 34 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 3 | 0 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 27 | 1 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 1 | 0 |
More Than Twelve Months Below Amortized Cost, Fair Value | 65 | 91 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 4 | 4 |
Total, Fair Value | 288 | 126 |
Total Unrealized Capital Losses | 8 | 4 |
U.S. corporate public securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | 2,384 | 504 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 70 | 11 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 407 | 0 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 26 | 0 |
More Than Twelve Months Below Amortized Cost, Fair Value | 197 | 304 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 23 | 15 |
Total, Fair Value | 2,988 | 808 |
Total Unrealized Capital Losses | 119 | 26 |
U.S. corporate private securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | 1,258 | 226 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 26 | 2 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 180 | 46 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 11 | 2 |
More Than Twelve Months Below Amortized Cost, Fair Value | 443 | 499 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 53 | 34 |
Total, Fair Value | 1,881 | 771 |
Total Unrealized Capital Losses | 90 | 38 |
Foreign corporate public securities and foreign governments | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | 994 | 148 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 32 | 1 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 105 | 5 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 9 | 0 |
More Than Twelve Months Below Amortized Cost, Fair Value | 77 | 99 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 12 | 8 |
Total, Fair Value | 1,176 | 252 |
Total Unrealized Capital Losses | 53 | 9 |
Foreign corporate private securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | 1,107 | 135 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 46 | 38 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 67 | 13 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 3 | 0 |
More Than Twelve Months Below Amortized Cost, Fair Value | 153 | 161 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 16 | 7 |
Total, Fair Value | 1,327 | 309 |
Total Unrealized Capital Losses | 65 | 45 |
Residential mortgage-backed | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | 423 | 263 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 7 | 5 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 191 | 26 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 14 | 1 |
More Than Twelve Months Below Amortized Cost, Fair Value | 313 | 438 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 17 | 13 |
Total, Fair Value | 927 | 727 |
Total Unrealized Capital Losses | 38 | 19 |
Commercial mortgage-backed | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | 735 | 436 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 10 | 5 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 311 | 19 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 15 | 0 |
More Than Twelve Months Below Amortized Cost, Fair Value | 33 | 50 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 2 | 1 |
Total, Fair Value | 1,079 | 505 |
Total Unrealized Capital Losses | 27 | 6 |
Other asset-backed securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six Months or Less Below Amortized Cost, Fair Value | 547 | 95 |
Six Months or Less Below Amortized Cost, Unrealized Capital Loss | 3 | 1 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Fair Value | 58 | 9 |
More Than Six Months and Twelve Months or Less Below Amortized Cost, Unrealized Capital Loss | 1 | 0 |
More Than Twelve Months Below Amortized Cost, Fair Value | 13 | 38 |
More Than Twelve Months Below Amortized Cost, Unrealized Capital Loss | 1 | 0 |
Total, Fair Value | 618 | 142 |
Total Unrealized Capital Losses | $ 5 | $ 1 |
Investments - Unrealized Capi33
Investments - Unrealized Capital Losses 1 (Details) $ in Millions | Jun. 30, 2018USD ($)securities | Dec. 31, 2017USD ($)securities |
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 197 | $ 63 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 81 | 3 |
More than twelve months below amortized cost, Unrealized Capital Loss | 128 | 82 |
Total Unrealized Capital Losses | 406 | 148 |
Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Amortized Cost | 7,813 | 1,883 |
Six months or less below amortized cost, Unrealized Capital Loss | $ 183 | $ 30 |
Six months or less below amortized cost, Number of Securities | securities | 1,568 | 433 |
More than six months and twelve months or less below amortized cost, Amortized Cost | $ 1,434 | $ 128 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | $ 82 | $ 4 |
More than six months and twelve months or less below amortized cost, Number of Securities | securities | 310 | 37 |
More than twelve months below amortized cost, Amortized Cost | $ 1,308 | $ 1,661 |
More than twelve months below amortized cost, Unrealized Capital Loss | $ 96 | $ 53 |
More than twelve months below amortized cost, Number of Securities | securities | 278 | 335 |
Total Amortized Cost | $ 10,555 | $ 3,672 |
Total Unrealized Capital Losses | $ 361 | $ 87 |
Total Number of Securities | securities | 2,156 | 805 |
Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Amortized Cost | $ 82 | $ 67 |
Six months or less below amortized cost, Unrealized Capital Loss | $ 23 | $ 38 |
Six months or less below amortized cost, Number of Securities | securities | 11 | 7 |
More than six months and twelve months or less below amortized cost, Amortized Cost | $ 1 | $ 7 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | $ 0 | $ 2 |
More than six months and twelve months or less below amortized cost, Number of Securities | securities | 1 | 1 |
More than twelve months below amortized cost, Amortized Cost | $ 79 | $ 72 |
More than twelve months below amortized cost, Unrealized Capital Loss | $ 22 | $ 21 |
More than twelve months below amortized cost, Number of Securities | securities | 5 | 7 |
Total Amortized Cost | $ 162 | $ 146 |
Total Unrealized Capital Losses | $ 45 | $ 61 |
Total Number of Securities | securities | 17 | 15 |
U.S. Treasuries | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 0 | $ 0 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 1 | 0 |
More than twelve months below amortized cost, Unrealized Capital Loss | 0 | 0 |
Total Unrealized Capital Losses | 1 | 0 |
U.S. Treasuries | Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | 28 | 30 |
Total Unrealized Capital Losses | $ 1 | $ 0 |
Total Number of Securities | securities | 6 | 6 |
U.S. Treasuries | Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | $ 0 | $ 0 |
Total Unrealized Capital Losses | $ 0 | $ 0 |
Total Number of Securities | securities | 0 | 0 |
State, municipalities and political subdivisions | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 3 | $ 0 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 1 | 0 |
More than twelve months below amortized cost, Unrealized Capital Loss | 4 | 4 |
Total Unrealized Capital Losses | 8 | 4 |
State, municipalities and political subdivisions | Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | 296 | 130 |
Total Unrealized Capital Losses | $ 8 | $ 4 |
Total Number of Securities | securities | 145 | 96 |
State, municipalities and political subdivisions | Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | $ 0 | $ 0 |
Total Unrealized Capital Losses | $ 0 | $ 0 |
Total Number of Securities | securities | 0 | 0 |
U.S. corporate public securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 70 | $ 11 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 26 | 0 |
More than twelve months below amortized cost, Unrealized Capital Loss | 23 | 15 |
Total Unrealized Capital Losses | 119 | 26 |
U.S. corporate public securities | Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | 3,084 | 828 |
Total Unrealized Capital Losses | $ 113 | $ 24 |
Total Number of Securities | securities | 655 | 167 |
U.S. corporate public securities | Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | $ 23 | $ 6 |
Total Unrealized Capital Losses | $ 6 | $ 2 |
Total Number of Securities | securities | 2 | 2 |
U.S. corporate private securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 26 | $ 2 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 11 | 2 |
More than twelve months below amortized cost, Unrealized Capital Loss | 53 | 34 |
Total Unrealized Capital Losses | 90 | 38 |
U.S. corporate private securities | Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | 1,904 | 743 |
Total Unrealized Capital Losses | $ 72 | $ 18 |
Total Number of Securities | securities | 215 | 71 |
U.S. corporate private securities | Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | $ 67 | $ 66 |
Total Unrealized Capital Losses | $ 18 | $ 20 |
Total Number of Securities | securities | 2 | 2 |
Foreign corporate public securities and foreign governments | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 32 | $ 1 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 9 | 0 |
More than twelve months below amortized cost, Unrealized Capital Loss | 12 | 8 |
Total Unrealized Capital Losses | 53 | 9 |
Foreign corporate public securities and foreign governments | Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | 1,215 | 254 |
Total Unrealized Capital Losses | $ 50 | $ 7 |
Total Number of Securities | securities | 276 | 61 |
Foreign corporate public securities and foreign governments | Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | $ 14 | $ 7 |
Total Unrealized Capital Losses | $ 3 | $ 2 |
Total Number of Securities | securities | 4 | 1 |
Foreign corporate private securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 46 | $ 38 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 3 | 0 |
More than twelve months below amortized cost, Unrealized Capital Loss | 16 | 7 |
Total Unrealized Capital Losses | 65 | 45 |
Foreign corporate private securities | Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | 1,336 | 288 |
Total Unrealized Capital Losses | $ 47 | $ 8 |
Total Number of Securities | securities | 122 | 35 |
Foreign corporate private securities | Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | $ 56 | $ 66 |
Total Unrealized Capital Losses | $ 18 | $ 37 |
Total Number of Securities | securities | 4 | 6 |
Residential mortgage-backed | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 7 | $ 5 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 14 | 1 |
More than twelve months below amortized cost, Unrealized Capital Loss | 17 | 13 |
Total Unrealized Capital Losses | 38 | 19 |
Residential mortgage-backed | Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | 964 | 746 |
Total Unrealized Capital Losses | $ 38 | $ 19 |
Total Number of Securities | securities | 382 | 194 |
Residential mortgage-backed | Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | $ 1 | $ 0 |
Total Unrealized Capital Losses | $ 0 | $ 0 |
Total Number of Securities | securities | 4 | 3 |
Commercial mortgage-backed | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 10 | $ 5 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 15 | 0 |
More than twelve months below amortized cost, Unrealized Capital Loss | 2 | 1 |
Total Unrealized Capital Losses | 27 | 6 |
Commercial mortgage-backed | Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | 1,106 | 511 |
Total Unrealized Capital Losses | $ 27 | $ 6 |
Total Number of Securities | securities | 217 | 131 |
Commercial mortgage-backed | Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | $ 0 | $ 0 |
Total Unrealized Capital Losses | $ 0 | $ 0 |
Total Number of Securities | securities | 0 | 0 |
Other asset-backed securities | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Six months or less below amortized cost, Unrealized Capital Loss | $ 3 | $ 1 |
More than six months and twelve months or less below amortized cost, Unrealized Capital Loss | 1 | 0 |
More than twelve months below amortized cost, Unrealized Capital Loss | 1 | 0 |
Total Unrealized Capital Losses | 5 | 1 |
Other asset-backed securities | Fair value decline below amortized cost less than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | 622 | 142 |
Total Unrealized Capital Losses | $ 5 | $ 1 |
Total Number of Securities | securities | 138 | 44 |
Other asset-backed securities | Fair value decline below amortized cost greater than 20% | ||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||
Total Amortized Cost | $ 1 | $ 1 |
Total Unrealized Capital Losses | $ 0 | $ 0 |
Total Number of Securities | securities | 1 | 1 |
Investments - Troubled Debt Res
Investments - Troubled Debt Restructuring (Details) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018USD ($)loan | Jun. 30, 2017loan | Dec. 31, 2017USD ($)loan | |
Financing Receivable, Modifications [Line Items] | |||
Troubled debt restructured loans, subsequent payment default, number | 0 | 0 | |
Private placement debt | |||
Financing Receivable, Modifications [Line Items] | |||
Troubled debt restructured loans, number | 0 | 0 | 1 |
Pre-modification carrying value | $ | $ 3 | ||
Post-modification carrying value | $ | $ 3 | ||
Commercial mortgage | |||
Financing Receivable, Modifications [Line Items] | |||
Troubled debt restructured loans, number | 0 | 0 |
Investments - Mortgage Loans (D
Investments - Mortgage Loans (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Maximum loan to value ratio generally allowed | 75.00% | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total commercial mortgage loans | $ 5,003,000,000 | $ 4,911,000,000 | ||
Collective valuation allowance for losses | (1,000,000) | (1,000,000) | ||
Total net commercial mortgage loans | 5,002,000,000 | 4,910,000,000 | ||
Impairment of Real Estate | $ 0 | 0 | $ 0 | |
Mortgage loans in process of foreclosure | 0 | 0 | ||
30 days or less in arrears | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans in arrears | 0 | 0 | ||
Impaired | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total commercial mortgage loans | 4,000,000 | 4,000,000 | ||
Total net commercial mortgage loans | 4,000,000 | 4,000,000 | ||
Non Impaired | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total commercial mortgage loans | 4,999,000,000 | 4,907,000,000 | ||
Collective valuation allowance for losses | (1,000,000) | (1,000,000) | ||
Total net commercial mortgage loans | $ 4,998,000,000 | $ 4,906,000,000 |
Investments - Allowance for Loa
Investments - Allowance for Loan Losses (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Collective valuation allowance for losses, beginning of period | $ 1 | $ 1 |
Addition to (reduction of) allowance for losses | 0 | 0 |
Collective valuation allowance for losses, end of period | $ 1 | $ 1 |
Investments - Impaired Loans (D
Investments - Impaired Loans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Impaired loans without valuation allowances | $ 4 | $ 4 | $ 4 | ||
Less: Allowances for losses on impaired loans | 0 | 0 | 0 | ||
Impaired loans, net | 4 | 4 | 4 | ||
Unpaid principal balance of impaired loans | 6 | 6 | $ 6 | ||
Impaired loans, average investment during the period (amortized cost) | 4 | $ 5 | 4 | $ 5 | |
Interest income recognized on impaired loans, on an accrual basis | 0 | 0 | 0 | 0 | |
Interest income recognized on impaired loans, on a cash basis | 0 | 0 | 0 | 0 | |
Interest income recognized on troubled debt restructured loans, on an accrual basis | $ 0 | $ 0 | $ 0 | $ 0 |
Investments - Loans by Loan to
Investments - Loans by Loan to Value (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Schedule of Loans by Loan to Value Ratio [Line Items] | |||
Benchmark loan to value ratio, greater than indicates unpaid loan amount exceeds underlying collateral | 100.00% | 100.00% | |
Total commercial mortgage loans | $ 5,003 | $ 4,911 | |
0% - 50% | |||
Schedule of Loans by Loan to Value Ratio [Line Items] | |||
Loan to Value Ratio, minimum | 0.00% | 0.00% | |
Loan to Value Ratio, maximum | 50.00% | 50.00% | |
Commercial mortgage loans | $ 360 | 341 | |
50% - 60% | |||
Schedule of Loans by Loan to Value Ratio [Line Items] | |||
Loan to Value Ratio, minimum | 50.00% | 50.00% | |
Loan to Value Ratio, maximum | 60.00% | 60.00% | |
Commercial mortgage loans | $ 1,275 | 1,256 | |
60% - 70% | |||
Schedule of Loans by Loan to Value Ratio [Line Items] | |||
Loan to Value Ratio, minimum | 60.00% | 60.00% | |
Loan to Value Ratio, maximum | 70.00% | 70.00% | |
Commercial mortgage loans | $ 3,024 | 3,042 | |
70% - 80% | |||
Schedule of Loans by Loan to Value Ratio [Line Items] | |||
Loan to Value Ratio, minimum | 70.00% | 70.00% | |
Loan to Value Ratio, maximum | 80.00% | 80.00% | |
Commercial mortgage loans | $ 323 | 262 | |
80% and above | |||
Schedule of Loans by Loan to Value Ratio [Line Items] | |||
Loan to Value Ratio, minimum | 80.00% | 80.00% | |
Commercial mortgage loans | $ 21 | $ 10 |
Investments - Loans by Debt Ser
Investments - Loans by Debt Service Coverage Ratio (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Schedule of Loans by Debt Service Coverage Ratio [Line Items] | |||
Benchmark debt service coverage ratio, less than indicates property's operations income is less than debt payments | 100.00% | 100.00% | |
Loans Receivable, Gross, Commercial, Development | $ 40 | $ 15 | |
Total commercial mortgage loans | $ 5,003 | 4,911 | |
Greater than 1.5x | |||
Schedule of Loans by Debt Service Coverage Ratio [Line Items] | |||
Debt Service Coverage Ratio, minimum | 150.00% | 150.00% | |
Commercial mortgage loans | $ 3,883 | 3,902 | |
1.25x - 1.5x | |||
Schedule of Loans by Debt Service Coverage Ratio [Line Items] | |||
Debt Service Coverage Ratio, minimum | 125.00% | 125.00% | |
Debt Service Coverage Ratio, maximum | 150.00% | 150.00% | |
Commercial mortgage loans | $ 398 | 340 | |
1.0x - 1.25x | |||
Schedule of Loans by Debt Service Coverage Ratio [Line Items] | |||
Debt Service Coverage Ratio, minimum | 100.00% | 100.00% | |
Debt Service Coverage Ratio, maximum | 125.00% | 125.00% | |
Commercial mortgage loans | $ 629 | 600 | |
Less than 1.0x | |||
Schedule of Loans by Debt Service Coverage Ratio [Line Items] | |||
Debt Service Coverage Ratio, minimum | 0.00% | 0.00% | |
Debt Service Coverage Ratio, maximum | 100.00% | 100.00% | |
Commercial mortgage loans | $ 53 | $ 54 |
Investments - Loans by U.S. Reg
Investments - Loans by U.S. Region (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 5,003 | $ 4,911 |
Loans by region percentage of total loans | 100.00% | 100.00% |
Pacific | ||
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 1,007 | $ 985 |
Loans by region percentage of total loans | 20.10% | 20.10% |
South Atlantic | ||
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 999 | $ 982 |
Loans by region percentage of total loans | 20.00% | 20.00% |
West South Central | ||
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 580 | $ 552 |
Loans by region percentage of total loans | 11.60% | 11.20% |
Middle Atlantic | ||
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 1,053 | $ 1,097 |
Loans by region percentage of total loans | 21.10% | 22.40% |
East North Central | ||
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 481 | $ 468 |
Loans by region percentage of total loans | 9.60% | 9.50% |
Mountain | ||
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 486 | $ 457 |
Loans by region percentage of total loans | 9.70% | 9.30% |
West North Central | ||
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 279 | $ 243 |
Loans by region percentage of total loans | 5.60% | 4.90% |
East South Central | ||
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 42 | $ 50 |
Loans by region percentage of total loans | 0.80% | 1.00% |
New England | ||
Open Option Contracts Written [Line Items] | ||
Total commercial mortgage loans | $ 76 | $ 77 |
Loans by region percentage of total loans | 1.50% | 1.60% |
Investments - Loans by Property
Investments - Loans by Property Type (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Investment Holdings [Line Items] | ||
Total commercial mortgage loans | $ 5,003 | $ 4,911 |
Loans by property type percentage of total loans | 100.00% | 100.00% |
Retail | ||
Investment Holdings [Line Items] | ||
Total commercial mortgage loans | $ 1,376 | $ 1,383 |
Loans by property type percentage of total loans | 27.50% | 28.10% |
Industrial | ||
Investment Holdings [Line Items] | ||
Total commercial mortgage loans | $ 1,345 | $ 1,326 |
Loans by property type percentage of total loans | 26.90% | 27.00% |
Apartments | ||
Investment Holdings [Line Items] | ||
Total commercial mortgage loans | $ 1,022 | $ 948 |
Loans by property type percentage of total loans | 20.40% | 19.30% |
Office | ||
Investment Holdings [Line Items] | ||
Total commercial mortgage loans | $ 825 | $ 829 |
Loans by property type percentage of total loans | 16.50% | 16.90% |
Hotel/Motel | ||
Investment Holdings [Line Items] | ||
Total commercial mortgage loans | $ 175 | $ 177 |
Loans by property type percentage of total loans | 3.50% | 3.60% |
Mixed Use | ||
Investment Holdings [Line Items] | ||
Total commercial mortgage loans | $ 48 | $ 52 |
Loans by property type percentage of total loans | 1.00% | 1.10% |
Other | ||
Investment Holdings [Line Items] | ||
Total commercial mortgage loans | $ 212 | $ 196 |
Loans by property type percentage of total loans | 4.20% | 4.00% |
Investments - Mortgages by Year
Investments - Mortgages by Year of Origination (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Investment [Line Items] | ||
Total commercial mortgage loans | $ 5,003 | $ 4,911 |
Year of Origination 2018 | ||
Investment [Line Items] | ||
Total commercial mortgage loans | 224 | 0 |
Year of Origination 2017 | ||
Investment [Line Items] | ||
Total commercial mortgage loans | 1,139 | 1,086 |
Year of Origination 2016 | ||
Investment [Line Items] | ||
Total commercial mortgage loans | 894 | 867 |
Year of Origination 2015 | ||
Investment [Line Items] | ||
Total commercial mortgage loans | 666 | 703 |
Year of Origination 2014 | ||
Investment [Line Items] | ||
Total commercial mortgage loans | 518 | 538 |
Year of Origination 2013 | ||
Investment [Line Items] | ||
Total commercial mortgage loans | 623 | 644 |
Year of Origination 2012 and prior | ||
Investment [Line Items] | ||
Total commercial mortgage loans | $ 939 | $ 1,073 |
Investments - OTTI (Details)
Investments - OTTI (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($)securities | Jun. 30, 2017USD ($)securities | Jun. 30, 2018USD ($)securities | Jun. 30, 2017USD ($)securities | |
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Impairment | $ 1 | $ 0 | $ 10 | $ 0 |
No. of Securities | securities | 21 | 9 | 25 | 13 |
Write-downs related to credit impairments | $ 1 | $ 0 | $ 10 | $ 0 |
Impairment, Intent impairments | 0 | 0 | 0 | 0 |
U.S. corporate public securities | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Impairment | $ 0 | $ 0 | $ 0 | $ 0 |
No. of Securities | securities | 0 | 1 | 0 | 1 |
Foreign corporate private securities | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Impairment | $ 0 | $ 0 | $ 9 | $ 0 |
No. of Securities | securities | 0 | 0 | 1 | 0 |
Residential mortgage-backed | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Impairment | $ 1 | $ 0 | $ 1 | $ 0 |
No. of Securities | securities | 21 | 7 | 24 | 11 |
Commercial mortgage-backed | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Impairment | $ 0 | $ 0 | $ 0 | $ 0 |
No. of Securities | securities | 0 | 1 | 0 | 1 |
Investments - OTTI OCI (Details
Investments - OTTI OCI (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other than Temporary Impairment, Recognized in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance, beginning | $ 6 | $ 8 | $ 16 | $ 9 |
Additional Credit Impairments [Abstract] | ||||
On securities previously impaired | 0 | 0 | 0 | 0 |
Reductions [Abstract] | ||||
Increase in cash flows | 0 | 0 | 0 | 0 |
Securities sold, matured, prepaid, or paid down | 1 | 1 | 11 | 2 |
Balance, ending | $ 5 | $ 7 | $ 5 | $ 7 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||
Gross investment income | $ 415 | $ 395 | $ 814 | $ 791 | |
Less: investment expense | 18 | 17 | 35 | 34 | |
Net investment income | 397 | 378 | 779 | 757 | |
Fixed maturities | |||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||
Gross investment income | 341 | 325 | 664 | 651 | |
Investments in fixed maturities that did not produce net income | 1 | 1 | $ 3 | ||
Equity securities | |||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||
Gross investment income | 1 | 2 | 2 | 3 | |
Mortgage loans on real estate | |||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||
Gross investment income | 54 | 53 | 107 | 104 | |
Policy loans | |||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||
Gross investment income | 3 | 3 | 5 | 6 | |
Short-term investments and cash equivalents | |||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||
Gross investment income | 1 | 0 | 2 | 0 | |
Other | |||||
Schedule of Investment Income, Reported Amounts, by Category [Line Items] | |||||
Gross investment income | $ 15 | $ 12 | $ 34 | $ 27 |
Investments - Net Realized Capi
Investments - Net Realized Capital Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Equity Securities, Securities Still Held, Change in Fair Value Recognized through the Income Statement | $ 2 | $ 0 | ||
Realized capital gains (losses) | (83) | $ (47) | (170) | $ (103) |
After-tax net realized capital gains (losses), after tax | (61) | (31) | (140) | (67) |
Proceeds from sale of investments | ||||
Proceeds on sales | 1,180 | 561 | 1,840 | 1,638 |
Gross gains | 7 | 6 | 11 | 11 |
Gross losses | 20 | 7 | 27 | 25 |
Derivatives | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Realized capital gains (losses) | 6 | 2 | 11 | 6 |
Other investments | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Realized capital gains (losses) | 0 | 0 | 5 | 0 |
Fixed Maturities, Available-for-sale, Including Securities Pledged | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Realized capital gains (losses) | (19) | (1) | (33) | (21) |
Fixed maturities, at fair value using the fair value option | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Realized capital gains (losses) | (82) | (38) | (181) | (97) |
Equity securities | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Realized capital gains (losses) | 2 | 0 | 0 | 0 |
Embedded derivatives - fixed maturities | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Realized capital gains (losses) | (2) | (1) | (4) | (2) |
Guaranteed benefit derivatives | ||||
Available-for-sale Securities Including Securities Pledged [Line Items] | ||||
Realized capital gains (losses) | $ 12 | $ (9) | $ 32 | $ 11 |
Derivative Financial Instrume47
Derivative Financial Instruments - Notional and Fair Values (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | $ 172 | $ 148 |
Derivatives, Liability Fair Value | 79 | 181 |
Credit contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 639 | 771 |
Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 15,713 | 17,286 |
Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 598 | 559 |
Equity contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 126 | 154 |
Designated as Hedging Instrument | Cash flow hedges | Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 35 | 35 |
Designated as Hedging Instrument | Cash flow hedges | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 584 | 533 |
Designated as Hedging Instrument | Cash flow hedges | Derivatives | Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | 0 | 0 |
Derivatives, Liability Fair Value | 0 | 0 |
Designated as Hedging Instrument | Cash flow hedges | Derivatives | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | 2 | 0 |
Derivatives, Liability Fair Value | 44 | 52 |
Not Designated as Hedging Instrument | Credit contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 639 | 771 |
Not Designated as Hedging Instrument | Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 17,929 | 18,769 |
Not Designated as Hedging Instrument | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 14 | 26 |
Not Designated as Hedging Instrument | Equity contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Notional Amount | 126 | 154 |
Not Designated as Hedging Instrument | Fixed maturities | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | 9 | 12 |
Derivatives, Liability Fair Value | 0 | 0 |
Not Designated as Hedging Instrument | Within products | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | 0 | 0 |
Derivatives, Liability Fair Value | 79 | 117 |
Not Designated as Hedging Instrument | Reinsurance agreements | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | 0 | 0 |
Derivatives, Liability Fair Value | (70) | (21) |
Not Designated as Hedging Instrument | Derivatives | Credit contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | 7 | 10 |
Derivatives, Liability Fair Value | 3 | 6 |
Not Designated as Hedging Instrument | Derivatives | Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | 148 | 117 |
Derivatives, Liability Fair Value | 19 | 20 |
Not Designated as Hedging Instrument | Derivatives | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | 1 | 0 |
Derivatives, Liability Fair Value | 0 | 0 |
Not Designated as Hedging Instrument | Derivatives | Equity contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, Asset Fair Value | 5 | 9 |
Derivatives, Liability Fair Value | $ 4 | $ 7 |
Derivative Financial Instrume48
Derivative Financial Instruments - Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Offsetting Assets and liabilities [Line Items] | ||
Asset Fair Value | $ 163 | $ 136 |
Liability Fair Value | 70 | 85 |
Counterparty netting, Assets | (37) | (50) |
Counterparty netting, Liabilities | (37) | (50) |
Cash collateral netting, Assets | (122) | (84) |
Cash collateral netting, Liabilities | 0 | 0 |
Securities collateral netting, Assets | 0 | 0 |
Securities collateral netting, Liabilities | (30) | (30) |
Net receivables | 4 | 2 |
Net payables | 3 | 5 |
Credit contracts | ||
Offsetting Assets and liabilities [Line Items] | ||
Notional Amount | 639 | 771 |
Asset Fair Value | 7 | 10 |
Liability Fair Value | 3 | 6 |
Equity contract | ||
Offsetting Assets and liabilities [Line Items] | ||
Notional Amount | 126 | 154 |
Asset Fair Value | 5 | 9 |
Liability Fair Value | 4 | 7 |
Foreign exchange contracts | ||
Offsetting Assets and liabilities [Line Items] | ||
Notional Amount | 598 | 559 |
Asset Fair Value | 3 | 0 |
Liability Fair Value | 44 | 52 |
Interest rate contracts | ||
Offsetting Assets and liabilities [Line Items] | ||
Notional Amount | 15,713 | 17,286 |
Asset Fair Value | 148 | 117 |
Liability Fair Value | $ 19 | $ 20 |
Derivative Financial Instrume49
Derivative Financial Instruments - Net Realized Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | $ 36 | $ (21) | $ 88 | $ (1) |
Other Net Realized Capital Gains (Losses) | Fixed maturities | ||||
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | (2) | (1) | (4) | (3) |
Other Net Realized Capital Gains (Losses) | Within products | ||||
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | 12 | (9) | 32 | 11 |
Interest Credited and Other Benefits to Contract Owners | Reinsurance agreements | ||||
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | 20 | (14) | 49 | (16) |
Designated as Hedging Instrument | Cash flow hedges | Other Net Realized Capital Gains (Losses) | Interest rate contracts | ||||
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | 0 | 0 | 0 | 0 |
Designated as Hedging Instrument | Cash flow hedges | Other Net Realized Capital Gains (Losses) | Foreign exchange contracts | ||||
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | 3 | 1 | 4 | 8 |
Not Designated as Hedging Instrument | Other Net Realized Capital Gains (Losses) | Credit contracts | ||||
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | 0 | 2 | 0 | 3 |
Not Designated as Hedging Instrument | Other Net Realized Capital Gains (Losses) | Interest rate contracts | ||||
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | 2 | (2) | 7 | (5) |
Not Designated as Hedging Instrument | Other Net Realized Capital Gains (Losses) | Foreign exchange contracts | ||||
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | 1 | 2 | 0 | 0 |
Not Designated as Hedging Instrument | Other Net Realized Capital Gains (Losses) | Equity contract | ||||
Derivatives, Fair Value [Line Items] | ||||
Net realized gains (losses) on derivatives | $ 0 | $ 0 | $ 0 | $ 1 |
Derivative Financial Instrume50
Derivative Financial Instruments - Collateral and Credit Default Swaps (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Derivatives, Fair Value [Line Items] | |||
Derivative assets | $ 172 | $ 148 | |
Derivatives liabilities | 79 | 181 | |
Not Designated as Hedging Instrument | Credit contracts | |||
Derivatives, Fair Value [Line Items] | |||
Maximum potential future net exposure on sale of credit default swaps | $ 422 | 497 | |
Maturity period of derivative | 5 years | 5 years | |
Payables under securities loan agreement, including collateral held | Over the Counter [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Cash collateral held for securities loan agreement | $ 11 | 11 | |
Payables under securities loan agreement, including collateral held | Exchange Cleared [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Cash collateral held for securities loan agreement | 113 | 74 | |
Securities pledged as collateral | |||
Derivatives, Fair Value [Line Items] | |||
Cash collateral held for securities loan agreement | 0 | 0 | |
Securities delivered as collateral | 162 | 161 | |
Derivatives | Not Designated as Hedging Instrument | Credit contracts | |||
Derivatives, Fair Value [Line Items] | |||
Derivative assets | 7 | 10 | |
Derivatives liabilities | $ 3 | $ 6 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurement (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Derivatives | $ 163 | $ 136 |
Assets held in separate accounts | 74,181 | 73,036 |
Liabilities: | ||
Derivatives | 70 | 85 |
Fixed maturities | ||
Assets: | ||
Fixed maturities, including securities pledged | 24,650 | 25,042 |
U.S. Treasuries | ||
Assets: | ||
Fixed maturities, including securities pledged | 547 | 656 |
U.S. government agencies and authorities | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 3 |
State, municipalities and political subdivisions | ||
Assets: | ||
Fixed maturities, including securities pledged | 763 | 878 |
U.S. corporate public securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 8,218 | 9,236 |
U.S. corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 3,689 | 3,497 |
Foreign corporate public securities and foreign governments | ||
Assets: | ||
Fixed maturities, including securities pledged | 2,518 | 2,777 |
Foreign corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 3,271 | 3,215 |
Residential mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 2,946 | 2,629 |
Commercial mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 1,613 | 1,470 |
Other asset-backed securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 1,085 | 681 |
Equity securities | ||
Assets: | ||
Equity securities | 60 | |
Assets measured on recurring basis | ||
Assets: | ||
Fixed maturities, including securities pledged | 24,650 | 25,042 |
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreement | 925 | 1,078 |
Assets held in separate accounts | 74,181 | 73,036 |
Total assets, fair value | $ 99,982 | $ 99,352 |
Percentage of Level to total assets | 100.00% | 100.00% |
Liabilities: | ||
Total liabilities, fair value | $ 79 | $ 181 |
Assets measured on recurring basis | FIA | ||
Liabilities: | ||
Product guarantees | 16 | 20 |
Assets measured on recurring basis | Stabilizer and MCGs | ||
Liabilities: | ||
Product guarantees | 63 | 97 |
Assets measured on recurring basis | Credit contracts | ||
Assets: | ||
Derivatives | 7 | 10 |
Liabilities: | ||
Derivatives | 3 | 6 |
Assets measured on recurring basis | Interest rate contracts | ||
Assets: | ||
Derivatives | 148 | 117 |
Liabilities: | ||
Derivatives | 19 | 20 |
Assets measured on recurring basis | Foreign exchange contracts | ||
Assets: | ||
Derivatives | 3 | 0 |
Liabilities: | ||
Derivatives | 44 | 52 |
Assets measured on recurring basis | Equity contract | ||
Assets: | ||
Derivatives | 5 | 9 |
Liabilities: | ||
Derivatives | 4 | 7 |
Assets measured on recurring basis | Embedded derivative on reinsurance | ||
Liabilities: | ||
Embedded derivative on reinsurance | (70) | (21) |
Assets measured on recurring basis | U.S. Treasuries | ||
Assets: | ||
Fixed maturities, including securities pledged | 547 | 656 |
Assets measured on recurring basis | U.S. government agencies and authorities | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 3 |
Assets measured on recurring basis | State, municipalities and political subdivisions | ||
Assets: | ||
Fixed maturities, including securities pledged | 763 | 878 |
Assets measured on recurring basis | U.S. corporate public securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 8,218 | 9,236 |
Assets measured on recurring basis | U.S. corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 3,689 | 3,497 |
Assets measured on recurring basis | Foreign corporate public securities and foreign governments | ||
Assets: | ||
Fixed maturities, including securities pledged | 2,518 | 2,777 |
Assets measured on recurring basis | Foreign corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 3,271 | 3,215 |
Assets measured on recurring basis | Residential mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 2,946 | 2,629 |
Assets measured on recurring basis | Commercial mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 1,613 | 1,470 |
Assets measured on recurring basis | Other asset-backed securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 1,085 | 681 |
Assets measured on recurring basis | Equity securities | ||
Assets: | ||
Equity securities | 63 | 60 |
Assets measured on recurring basis | Level 1 | ||
Assets: | ||
Fixed maturities, including securities pledged | 489 | 597 |
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreement | 924 | 1,078 |
Assets held in separate accounts | 68,652 | 67,966 |
Total assets, fair value | $ 70,075 | $ 69,651 |
Percentage of Level to total assets | 70.00% | 70.00% |
Liabilities: | ||
Total liabilities, fair value | $ 0 | $ 0 |
Assets measured on recurring basis | Level 1 | FIA | ||
Liabilities: | ||
Product guarantees | 0 | 0 |
Assets measured on recurring basis | Level 1 | Stabilizer and MCGs | ||
Liabilities: | ||
Product guarantees | 0 | 0 |
Assets measured on recurring basis | Level 1 | Credit contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 0 | 0 |
Assets measured on recurring basis | Level 1 | Interest rate contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 0 | 0 |
Assets measured on recurring basis | Level 1 | Foreign exchange contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 0 | 0 |
Assets measured on recurring basis | Level 1 | Equity contract | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 0 | 0 |
Assets measured on recurring basis | Level 1 | Embedded derivative on reinsurance | ||
Liabilities: | ||
Embedded derivative on reinsurance | 0 | 0 |
Assets measured on recurring basis | Level 1 | U.S. Treasuries | ||
Assets: | ||
Fixed maturities, including securities pledged | 489 | 597 |
Assets measured on recurring basis | Level 1 | U.S. government agencies and authorities | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 1 | State, municipalities and political subdivisions | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 1 | U.S. corporate public securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 1 | U.S. corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 1 | Foreign corporate public securities and foreign governments | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 1 | Foreign corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 1 | Residential mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 1 | Commercial mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 1 | Other asset-backed securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 1 | Equity securities | ||
Assets: | ||
Equity securities | 10 | 10 |
Assets measured on recurring basis | Level 2 | ||
Assets: | ||
Fixed maturities, including securities pledged | 23,137 | 23,614 |
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreement | 0 | 0 |
Assets held in separate accounts | 5,491 | 5,059 |
Total assets, fair value | $ 28,791 | $ 28,809 |
Percentage of Level to total assets | 29.00% | 29.00% |
Liabilities: | ||
Total liabilities, fair value | $ 0 | $ 64 |
Assets measured on recurring basis | Level 2 | FIA | ||
Liabilities: | ||
Product guarantees | 0 | 0 |
Assets measured on recurring basis | Level 2 | Stabilizer and MCGs | ||
Liabilities: | ||
Product guarantees | 0 | 0 |
Assets measured on recurring basis | Level 2 | Credit contracts | ||
Assets: | ||
Derivatives | 7 | 10 |
Liabilities: | ||
Derivatives | 3 | 6 |
Assets measured on recurring basis | Level 2 | Interest rate contracts | ||
Assets: | ||
Derivatives | 148 | 117 |
Liabilities: | ||
Derivatives | 19 | 20 |
Assets measured on recurring basis | Level 2 | Foreign exchange contracts | ||
Assets: | ||
Derivatives | 3 | 0 |
Liabilities: | ||
Derivatives | 44 | 52 |
Assets measured on recurring basis | Level 2 | Equity contract | ||
Assets: | ||
Derivatives | 5 | 9 |
Liabilities: | ||
Derivatives | 4 | 7 |
Assets measured on recurring basis | Level 2 | Embedded derivative on reinsurance | ||
Liabilities: | ||
Embedded derivative on reinsurance | (70) | (21) |
Assets measured on recurring basis | Level 2 | U.S. Treasuries | ||
Assets: | ||
Fixed maturities, including securities pledged | 58 | 59 |
Assets measured on recurring basis | Level 2 | U.S. government agencies and authorities | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 3 |
Assets measured on recurring basis | Level 2 | State, municipalities and political subdivisions | ||
Assets: | ||
Fixed maturities, including securities pledged | 763 | 878 |
Assets measured on recurring basis | Level 2 | U.S. corporate public securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 8,200 | 9,210 |
Assets measured on recurring basis | Level 2 | U.S. corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 2,951 | 2,855 |
Assets measured on recurring basis | Level 2 | Foreign corporate public securities and foreign governments | ||
Assets: | ||
Fixed maturities, including securities pledged | 2,518 | 2,777 |
Assets measured on recurring basis | Level 2 | Foreign corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 3,149 | 3,123 |
Assets measured on recurring basis | Level 2 | Residential mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 2,913 | 2,608 |
Assets measured on recurring basis | Level 2 | Commercial mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 1,597 | 1,463 |
Assets measured on recurring basis | Level 2 | Other asset-backed securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 988 | 638 |
Assets measured on recurring basis | Level 2 | Equity securities | ||
Assets: | ||
Equity securities | 0 | 0 |
Assets measured on recurring basis | Level 3 | ||
Assets: | ||
Fixed maturities, including securities pledged | 1,024 | 831 |
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreement | 1 | 0 |
Assets held in separate accounts | 38 | 11 |
Total assets, fair value | $ 1,116 | $ 892 |
Percentage of Level to total assets | 1.00% | 1.00% |
Liabilities: | ||
Total liabilities, fair value | $ 79 | $ 117 |
Assets measured on recurring basis | Level 3 | FIA | ||
Liabilities: | ||
Product guarantees | 16 | 20 |
Assets measured on recurring basis | Level 3 | Stabilizer and MCGs | ||
Liabilities: | ||
Product guarantees | 63 | 97 |
Assets measured on recurring basis | Level 3 | Credit contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 0 | 0 |
Assets measured on recurring basis | Level 3 | Interest rate contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 0 | 0 |
Assets measured on recurring basis | Level 3 | Foreign exchange contracts | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 0 | 0 |
Assets measured on recurring basis | Level 3 | Equity contract | ||
Assets: | ||
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 0 | 0 |
Assets measured on recurring basis | Level 3 | Embedded derivative on reinsurance | ||
Liabilities: | ||
Embedded derivative on reinsurance | 0 | 0 |
Assets measured on recurring basis | Level 3 | U.S. Treasuries | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 3 | U.S. government agencies and authorities | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 3 | State, municipalities and political subdivisions | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 3 | U.S. corporate public securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 18 | 26 |
Assets measured on recurring basis | Level 3 | U.S. corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 738 | 642 |
Assets measured on recurring basis | Level 3 | Foreign corporate public securities and foreign governments | ||
Assets: | ||
Fixed maturities, including securities pledged | 0 | 0 |
Assets measured on recurring basis | Level 3 | Foreign corporate private securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 122 | 92 |
Assets measured on recurring basis | Level 3 | Residential mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 33 | 21 |
Assets measured on recurring basis | Level 3 | Commercial mortgage-backed | ||
Assets: | ||
Fixed maturities, including securities pledged | 16 | 7 |
Assets measured on recurring basis | Level 3 | Other asset-backed securities | ||
Assets: | ||
Fixed maturities, including securities pledged | 97 | 43 |
Assets measured on recurring basis | Level 3 | Equity securities | ||
Assets: | ||
Equity securities | $ 53 | $ 50 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Financial Instruments (Details) - Level 3 - Assets measured on recurring basis - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Assets held in separate accounts | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | $ 11 | $ 13 | $ 11 | $ 6 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | 0 | 0 | 0 | 0 |
Total Realized/Unrealized Gains (Losses) Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 27 | 1 | 27 | 6 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | (3) | 0 | (3) |
Settlements | 0 | 0 | 0 | 0 |
Transfers in to Level 3 | 0 | 0 | 0 | 2 |
Transfers out of Level 3 | 0 | (8) | 0 | (8) |
Fair Value, assets, ending balance | 38 | 3 | 38 | 3 |
Change in Unrealized Gains (Losses) Included in Earnings | 0 | 0 | 0 | 0 |
Stabilizer (Investment Only) and MCG Contracts | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Fair Value, Derivatives, beginning balance | (77) | (131) | (97) | (151) |
Total Realized/Unrealized Gains (Losses) Included in Net Income | 13 | (9) | 34 | 12 |
Total Realized/Unrealized Gains (Losses) Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Issues | 0 | (1) | (1) | (2) |
Sales | 0 | 0 | 0 | 0 |
Settlements | 1 | 0 | 1 | 0 |
Transfers in to Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, Derivatives, ending balance | (63) | (141) | (63) | (141) |
Change In Unrealized Gains (Losses) Included in Earnings | 0 | 0 | 0 | 0 |
FIA | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Fair Value, Derivatives, beginning balance | (18) | (23) | (20) | (23) |
Total Realized/Unrealized Gains (Losses) Included in Net Income | (1) | 0 | (2) | (1) |
Total Realized/Unrealized Gains (Losses) Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Issues | 0 | 0 | 1 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 3 | 0 | 5 | 1 |
Transfers in to Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, Derivatives, ending balance | (16) | (23) | (16) | (23) |
Change In Unrealized Gains (Losses) Included in Earnings | 0 | 0 | 0 | 0 |
U.S. corporate public securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | 15 | 30 | 26 | 7 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | 0 | 0 | 0 | 0 |
Total Realized/Unrealized Gains (Losses) Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 3 | 6 | 3 | 11 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | (5) | 0 |
Settlements | 0 | 1 | 0 | 0 |
Transfers in to Level 3 | 0 | 0 | 0 | 9 |
Transfers out of Level 3 | 0 | (10) | (6) | 0 |
Fair Value, assets, ending balance | 18 | 27 | 18 | 27 |
Change in Unrealized Gains (Losses) Included in Earnings | 0 | 0 | 0 | 0 |
U.S. corporate private securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | 651 | 565 | 642 | 525 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | 0 | 0 | 0 | 0 |
Total Realized/Unrealized Gains (Losses) Included in OCI | (3) | 4 | (18) | 4 |
Purchases | 91 | 8 | 103 | 45 |
Issuances | 0 | 0 | 0 | 0 |
Sales | (5) | 0 | (5) | 0 |
Settlements | (8) | (1) | (4) | (2) |
Transfers in to Level 3 | 12 | 28 | 20 | 32 |
Transfers out of Level 3 | 0 | (9) | 0 | (9) |
Fair Value, assets, ending balance | 738 | 595 | 738 | 595 |
Change in Unrealized Gains (Losses) Included in Earnings | 0 | 0 | 0 | 0 |
Foreign corporate private securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | 101 | 161 | 92 | 154 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | 0 | 0 | (9) | 0 |
Total Realized/Unrealized Gains (Losses) Included in OCI | 2 | 0 | 20 | (1) |
Purchases | 75 | 0 | 75 | 18 |
Issuances | 0 | 0 | 0 | 0 |
Sales | (56) | 0 | (56) | 0 |
Settlements | 0 | 0 | 0 | (10) |
Transfers in to Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | (33) | 0 | (33) |
Fair Value, assets, ending balance | 122 | 128 | 122 | 128 |
Change in Unrealized Gains (Losses) Included in Earnings | 0 | 0 | (9) | 0 |
Residential mortgage-backed | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | 73 | 30 | 21 | 21 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | (1) | (2) | (3) | (3) |
Total Realized/Unrealized Gains (Losses) Included in OCI | (1) | 1 | 0 | 0 |
Purchases | 19 | 17 | 20 | 17 |
Issuances | 0 | 0 | 0 | 0 |
Sales | (40) | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in to Level 3 | 0 | 1 | 0 | 2 |
Transfers out of Level 3 | (17) | (10) | (5) | 0 |
Fair Value, assets, ending balance | 33 | 37 | 33 | 37 |
Change in Unrealized Gains (Losses) Included in Earnings | 2 | (2) | (3) | (4) |
Commercial mortgage-backed | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | 0 | 6 | 7 | 10 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | 0 | 0 | 0 | 0 |
Total Realized/Unrealized Gains (Losses) Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 16 | 2 | 16 | 2 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | (2) | 0 | (3) |
Transfers in to Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | (7) | (3) |
Fair Value, assets, ending balance | 16 | 6 | 16 | 6 |
Change in Unrealized Gains (Losses) Included in Earnings | 0 | 0 | 0 | 0 |
Other asset-backed securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | 126 | 23 | 43 | 27 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | 0 | 0 | 0 | 0 |
Total Realized/Unrealized Gains (Losses) Included in OCI | (1) | 0 | (2) | 1 |
Purchases | 57 | 24 | 57 | 24 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | (1) | 0 | (2) | (1) |
Transfers in to Level 3 | 21 | 0 | 22 | 0 |
Transfers out of Level 3 | (105) | (11) | (21) | (15) |
Fair Value, assets, ending balance | 97 | 36 | 97 | 36 |
Change in Unrealized Gains (Losses) Included in Earnings | 0 | 0 | 0 | 0 |
Fixed maturities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | 966 | 815 | 831 | 744 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | (1) | (2) | (12) | (3) |
Total Realized/Unrealized Gains (Losses) Included in OCI | (3) | 5 | 0 | 4 |
Purchases | 261 | 57 | 274 | 117 |
Issuances | 0 | 0 | 0 | 0 |
Sales | (101) | 0 | (66) | 0 |
Settlements | (9) | (2) | (6) | (16) |
Transfers in to Level 3 | 33 | 29 | 42 | 43 |
Transfers out of Level 3 | (122) | (73) | (39) | (60) |
Fair Value, assets, ending balance | 1,024 | 829 | 1,024 | 829 |
Change in Unrealized Gains (Losses) Included in Earnings | 2 | (2) | (12) | (4) |
Equity securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | 48 | 50 | 50 | 48 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | 2 | 0 | 0 | 0 |
Total Realized/Unrealized Gains (Losses) Included in OCI | 0 | 1 | 0 | 1 |
Purchases | 3 | 0 | 3 | 2 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in to Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, assets, ending balance | 53 | 51 | 53 | 51 |
Change in Unrealized Gains (Losses) Included in Earnings | 2 | 0 | 0 | 0 |
Short-term investments and cash equivalents | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Fair Value, assets, beginning balance | 0 | 0 | 0 | 0 |
Total Realized/Unrealized Gains (Losses) Included in Net Income | 0 | 0 | 0 | 0 |
Total Realized/Unrealized Gains (Losses) Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 1 | 0 | 1 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers in to Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair Value, assets, ending balance | 1 | 0 | 1 | 0 |
Change in Unrealized Gains (Losses) Included in Earnings | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Signi
Fair Value Measurements - Significant Unobservable Inputs (Details) | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Actuarial Assumptions, Lapses, threshold percentage | 92.00% | 92.00% | |
Actuarial Assumptions, Policyholder Deposits, threshold percentage | 8.00% | 8.00% | |
Stabilizer Products and Managed Custody Guarantee (MCG) Products [Member] | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Percentage of Plans | 100.00% | 100.00% | |
Stabilizer (Investment Only) and MCG Contracts | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Percentage of Plans | 92.00% | 92.00% | |
Stabilizer with Recordkeeping Agreements | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Percentage of Plans | 8.00% | 8.00% | |
Derivative Financial Instruments, Liabilities | FIA | Market Approach Valuation Technique | Minimum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Interest Rate Implied Volatility | 0.00% | 0.00% | |
Fair Value Inputs, Actuarial Assumptions, Policyholder Deposits | 0.00% | 0.00% | |
Derivative Financial Instruments, Liabilities | FIA | Market Approach Valuation Technique | Maximum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Interest Rate Implied Volatility | 0.00% | 0.00% | |
Fair Value Inputs, Actuarial Assumptions, Policyholder Deposits | 0.00% | 0.00% | |
Derivative Financial Instruments, Liabilities | Stabilizer Products and Managed Custody Guarantee (MCG) Products [Member] | Market Approach Valuation Technique | Minimum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Interest Rate Implied Volatility | 0.10% | 0.10% | |
Fair Value Inputs, Nonperformance Risk | 0.07% | 0.02% | |
Fair Value Input, Actual Assumption, Partial Withdrawal | 0.00% | 0.00% | |
Fair Value Inputs, Actuarial Assumptions, Lapses | 0.00% | 0.00% | |
Actuarial Assumptions, Lapses under percent threshold | 0.00% | 0.00% | |
Fair Value Inputs, Actuarial Assumptions, Policyholder Deposits | 0.00% | 0.00% | |
Actuarial Assumptions, Policyholder Deposits under percent threshold | 0.00% | 0.00% | |
Derivative Financial Instruments, Liabilities | Stabilizer Products and Managed Custody Guarantee (MCG) Products [Member] | Market Approach Valuation Technique | Maximum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Interest Rate Implied Volatility | 6.50% | 6.30% | |
Fair Value Inputs, Nonperformance Risk | 1.20% | 1.10% | |
Fair Value Input, Actual Assumption, Partial Withdrawal | 0.00% | 0.00% | |
Fair Value Inputs, Actuarial Assumptions, Lapses | 50.00% | 50.00% | |
Actuarial Assumptions, Lapses under percent threshold | 30.00% | 30.00% | |
Fair Value Inputs, Actuarial Assumptions, Policyholder Deposits | 50.00% | 50.00% | |
Actuarial Assumptions, Policyholder Deposits under percent threshold | 25.00% | 25.00% | |
Derivative Financial Instruments, Liabilities | Stabilizer (Investment Only) and MCG Contracts | Market Approach Valuation Technique | Minimum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Actuarial Assumptions, Lapses | 0.00% | 0.00% | |
Actuarial Assumptions, Lapses under percent threshold | 0.00% | 0.00% | |
Fair Value Inputs, Actuarial Assumptions, Policyholder Deposits | 0.00% | 0.00% | |
Actuarial Assumptions, Policyholder Deposits under percent threshold | 0.00% | 0.00% | |
Derivative Financial Instruments, Liabilities | Stabilizer (Investment Only) and MCG Contracts | Market Approach Valuation Technique | Maximum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Actuarial Assumptions, Lapses | 25.00% | 25.00% | |
Actuarial Assumptions, Lapses under percent threshold | 15.00% | 15.00% | |
Fair Value Inputs, Actuarial Assumptions, Policyholder Deposits | 30.00% | 30.00% | |
Actuarial Assumptions, Policyholder Deposits under percent threshold | 15.00% | 15.00% | |
Derivative Financial Instruments, Liabilities | Stabilizer with Recordkeeping Agreements | Market Approach Valuation Technique | Minimum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Actuarial Assumptions, Lapses | 0.00% | 0.00% | |
Actuarial Assumptions, Lapses under percent threshold | 0.00% | 0.00% | |
Fair Value Inputs, Actuarial Assumptions, Policyholder Deposits | 0.00% | 0.00% | |
Actuarial Assumptions, Policyholder Deposits under percent threshold | 0.00% | 0.00% | |
Derivative Financial Instruments, Liabilities | Stabilizer with Recordkeeping Agreements | Market Approach Valuation Technique | Maximum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Actuarial Assumptions, Lapses | 50.00% | 50.00% | |
Actuarial Assumptions, Lapses under percent threshold | 30.00% | 30.00% | |
Fair Value Inputs, Actuarial Assumptions, Policyholder Deposits | 50.00% | 50.00% | |
Actuarial Assumptions, Policyholder Deposits under percent threshold | 25.00% | 25.00% | |
Investment Contracts | FIA | Market Approach Valuation Technique | Minimum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Nonperformance Risk | 0.07% | 0.02% | |
Fair Value Input, Actual Assumption, Partial Withdrawal | 0.00% | 0.50% | |
Fair Value Inputs, Actuarial Assumptions, Lapses | 0.00% | 0.00% | |
Investment Contracts | FIA | Market Approach Valuation Technique | Maximum | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Fair Value Inputs, Nonperformance Risk | 1.20% | 1.10% | |
Fair Value Input, Actual Assumption, Partial Withdrawal | 7.00% | 7.00% | |
Fair Value Inputs, Actuarial Assumptions, Lapses | 42.00% | 42.00% |
Fair Value Measurements - Other
Fair Value Measurements - Other Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative assets | $ 163 | $ 136 |
Other investments | 39 | 0 |
Assets held in separate accounts | 74,181 | 73,036 |
Derivatives liabilities | 70 | 85 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities, including securities pledged | 24,650 | 25,042 |
Equity securities | 63 | 60 |
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreement | 925 | 1,078 |
Derivative assets | 163 | 136 |
Notes receivable from affiliates | 0 | 175 |
Short-term loan affiliate | 0 | 80 |
Other investments | 39 | 0 |
Assets held in separate accounts | 74,181 | 73,036 |
Deposit liabilities | 77 | 135 |
Derivatives liabilities | 70 | 85 |
Short-term debt | 1 | 0 |
Long-term debt | 4 | 5 |
Carrying Value | Embedded derivative on reinsurance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Embedded derivative on reinsurance | (70) | (21) |
Carrying Value | Funding agreements without fixed maturities and deferred annuities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 25,391 | 25,314 |
Carrying Value | Funding agreements with fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 627 | 0 |
Carrying Value | Supplementary contracts, immediate annuities and other | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 347 | 365 |
Carrying Value | FIA | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 16 | 20 |
Carrying Value | Stabilizer and MCGs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 63 | 97 |
Carrying Value | Mortgage loans on real estate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans | 5,002 | 4,910 |
Carrying Value | Policy loans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans | 212 | 214 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed maturities, including securities pledged | 24,650 | 25,042 |
Equity securities | 63 | 60 |
Cash and cash equivalents, short-term investments and short-term investments under securities loan agreement | 925 | 1,078 |
Derivative assets | 163 | 136 |
Notes receivable from affiliates | 0 | 222 |
Short-term loan affiliate | 0 | 80 |
Other investments | 39 | 0 |
Assets held in separate accounts | 74,181 | 73,036 |
Deposit liabilities | 114 | 198 |
Derivatives liabilities | 70 | 85 |
Short-term debt | 1 | 0 |
Long-term debt | 4 | 5 |
Fair Value | Embedded derivative on reinsurance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Embedded derivative on reinsurance | (70) | (21) |
Fair Value | Funding agreements without fixed maturities and deferred annuities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 28,025 | 29,431 |
Fair Value | Funding agreements with fixed maturities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 637 | 0 |
Fair Value | Supplementary contracts, immediate annuities and other | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 383 | 418 |
Fair Value | FIA | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 16 | 20 |
Fair Value | Stabilizer and MCGs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Liabilities | 63 | 97 |
Fair Value | Mortgage loans on real estate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans | 5,018 | 4,924 |
Fair Value | Policy loans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans | $ 212 | $ 214 |
Deferred Policy Acquisition C55
Deferred Policy Acquisition Costs and Value of Business Acquired - Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||||
Beginning balance | $ 385 | $ 476 | ||
Deferrals of commissions and expenses | 27 | 39 | ||
Amortization: | ||||
Amortization, excluding unlocking | (36) | (37) | ||
Unlocking | (32) | (47) | ||
Interest accrued | 18 | 19 | ||
Net amortization included in the Condensed Consolidated Statements of Operations | (50) | (65) | ||
Change due to unrealized capital gains/losses on available-for-sale securities | 129 | (56) | ||
Ending balance | $ 491 | $ 394 | 491 | 394 |
Movement Analysis Of Value of Business Acquired VOBA [Roll Forward] | ||||
Beginning balance | 367 | 537 | ||
Deferrals of commissions and expenses | 3 | 3 | ||
Amortization, excluding unlocking | (36) | (39) | ||
Unlocking | (15) | (56) | ||
Interest accrued | 19 | 24 | ||
Net amortization included in the Condensed Consolidated Statements of Operations | (32) | (71) | ||
Change due to unrealized capital gains/losses on available-for-sale securities | 158 | (70) | ||
Ending balance | 496 | 399 | 496 | 399 |
Movement Analysis of Deferred Policy Acquisition Costs and Value of Business Acquired (VOBA) [Roll Forward] | ||||
Beginning balance | 752 | 1,013 | ||
Deferrals of commissions and expenses | 30 | 42 | ||
Amortization, excluding unlocking | (72) | (76) | ||
Unlocking | (47) | (103) | ||
Interest accrued | 37 | 43 | ||
Net amortization included in the Condensed Consolidated Statements of Operations | (17) | (134) | (82) | (136) |
Change due to unrealized capital gains/losses on available-for-sale securities | 287 | (126) | ||
Ending balance | $ 987 | $ 793 | $ 987 | $ 793 |
Minimum | ||||
Movement Analysis of Deferred Policy Acquisition Costs and Value of Business Acquired (VOBA) [Roll Forward] | ||||
Value of Business Acquired (VOBA), Interest accrued percentage | 5.50% | 5.50% | ||
Maximum | ||||
Movement Analysis of Deferred Policy Acquisition Costs and Value of Business Acquired (VOBA) [Roll Forward] | ||||
Value of Business Acquired (VOBA), Interest accrued percentage | 7.00% | 7.00% | ||
Guaranteed minimum interest rates | ||||
Amortization: | ||||
Unlocking | $ 25 | $ 48 | ||
Movement Analysis Of Value of Business Acquired VOBA [Roll Forward] | ||||
Unlocking | $ 18 | $ 80 |
Accumulated Other Comprehensi56
Accumulated Other Comprehensive Income (Loss) - Components of AOCI (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Schedule of Available-for-sale Securities [Line Items] | |||
Derivatives | $ 119 | $ 169 | |
DAC/VOBA and Sales inducements adjustment on available-for-sale securities | (146) | (450) | |
Premium deficiency reserve adjustment | (61) | (110) | |
Other | 0 | 0 | |
Unrealized capital gains (losses), before tax | 339 | 951 | |
Deferred income tax asset (liability) | (83) | (210) | |
Unrealized capital gains (losses), after tax | 256 | 741 | |
Pension and other postretirement benefits liability, net of tax | 4 | 5 | |
AOCI | 260 | $ 818 | 746 |
Fixed maturities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Fixed maturities, net of OTTI | 427 | 1,326 | |
Equity securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Equity securities | $ 0 | $ 16 |
Accumulated Other Comprehensi57
Accumulated Other Comprehensive Income (Loss) - Changes in AOCI, including Reclassification Adjustments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Available-for-sale securities, Before-Tax Amount: | ||||
Other | $ 0 | $ 0 | $ (5) | $ 0 |
Other-than-temporary impairments | 0 | 0 | 7 | 2 |
Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations | 19 | 2 | 33 | 20 |
DAC/VOBA and Sales inducements | 93 | (93) | 287 | (126) |
Premium deficiency reserve adjustment | 21 | (16) | 54 | (21) |
Change in unrealized gains/losses on available-for-sale securities | (244) | 221 | (688) | 317 |
Available-for-sale securities, Income Tax: | ||||
Other | 0 | 0 | 1 | 0 |
OTTI | 0 | 0 | (1) | (1) |
Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations | (4) | (1) | (7) | (7) |
DAC/VOBA and Sales inducements | (19) | 33 | (60) | 44 |
Premium deficiency reserve adjustment | (4) | 5 | (11) | 7 |
Change in unrealized gains/losses on available-for-sale securities | 44 | (77) | 146 | (110) |
Available-for-sale securities, After-Tax Amount: | ||||
Other | 0 | 0 | (4) | 0 |
OTTI | 0 | 0 | 6 | 1 |
Adjustments for amounts recognized in Net realized capital gains (losses) in the Condensed Consolidated Statements of Operations | 15 | 1 | 26 | 13 |
DAC/VOBA and Sales inducements | 74 | (60) | 227 | (82) |
Premium deficiency reserve adjustment | 17 | (11) | 43 | (14) |
Change in unrealized gains/losses on available-for-sale securities | (200) | 144 | (542) | 207 |
Derivatives, Before-Tax Amount: | ||||
Derivatives | 32 | (10) | 7 | (19) |
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations | (6) | (6) | (12) | (12) |
Change in unrealized gains/losses on derivatives | 26 | (16) | (5) | (31) |
Derivatives, Income Tax: | ||||
Derivatives | (6) | 4 | (1) | 7 |
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations | 2 | 2 | 3 | 4 |
Change in unrealized gains/losses on derivatives | (4) | 6 | 2 | 11 |
Derivatives, After-Tax Amount: | ||||
Derivatives | 26 | (6) | 6 | (12) |
Adjustments related to effective cash flow hedges for amounts recognized in Net investment income in the Condensed Consolidated Statements of Operations | (4) | (4) | (9) | (8) |
Change in unrealized gains/losses on derivatives | 22 | (10) | (3) | (20) |
Pension and other post-employment benefit liability, Before-Tax Amount: | ||||
Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations | 0 | (1) | (1) | (1) |
Change in pension and other postretirement benefits liability | 0 | (1) | (1) | (1) |
Pension and other post-employment benefit liability, Income Tax: | ||||
Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations | 0 | 0 | 0 | 0 |
Change in pension and other postretirement benefits liability | 0 | 0 | 0 | 0 |
Pension and other post-employment benefit liability, After-Tax Amount: | ||||
Amortization of prior service cost recognized in Operating expenses in the Condensed Consolidated Statements of Operations | 0 | (1) | (1) | (1) |
Change in pension and other postretirement benefits liability | 0 | (1) | (1) | (1) |
Other comprehensive income (loss), before tax | (218) | 204 | (694) | 285 |
Change in Other comprehensive income (loss) | 40 | (71) | 148 | (99) |
Other comprehensive income (loss), after tax | (178) | 133 | (546) | 186 |
Income Tax Valuation Allowance | 6 | |||
Fixed maturities | ||||
Available-for-sale securities, Before-Tax Amount: | ||||
Fixed maturities | (377) | 328 | (1,064) | 441 |
Available-for-sale securities, Income Tax: | ||||
Fixed maturities | 71 | (114) | 224 | (153) |
Available-for-sale securities, After-Tax Amount: | ||||
Fixed maturities | (306) | 214 | (840) | 288 |
Equity securities | ||||
Available-for-sale securities, Before-Tax Amount: | ||||
Fixed maturities | 0 | 0 | 0 | 1 |
Available-for-sale securities, Income Tax: | ||||
Fixed maturities | 0 | 0 | 0 | 0 |
Available-for-sale securities, After-Tax Amount: | ||||
Fixed maturities | $ 0 | $ 0 | $ 0 | $ 1 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 5.60% | 49.30% | 14.10% | (37.30%) |
Statutory tax rate | 21.00% | 35.00% | 21.00% | 35.00% |
Financing Agreements - Narrativ
Financing Agreements - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | |
Short-term Debt [Line Items] | ||||
Interest Expense, Related Party | $ 0 | $ 0 | ||
Interest Income, Related Party | $ 1,000,000 | $ 1,000,000 | ||
Due from Related Parties | $ 0 | $ 80,000,000 | ||
Voya Financial, Inc. | Affiliated Entity | Reciprocal Loan Agreement | ||||
Short-term Debt [Line Items] | ||||
Percentage of Statutory admitted assets that can be borrowed under Reciprocal Loan Agreement | 3.00% | |||
Due from Related Parties | $ 0 | 80,000,000 | ||
Due to Affiliate | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Loss Contingencies [Line Items] | ||
Fair value of assets pledged as collateral | $ 737 | $ 0 |
Acquisition of mortgage loans | ||
Loss Contingencies [Line Items] | ||
Amount of purchase commitment | 89 | |
Purchase of limited partnerships and private placement investments | ||
Loss Contingencies [Line Items] | ||
Amount of purchase commitment | 519 | |
Federal Home Loan Bank of Boston | Line of Credit | ||
Loss Contingencies [Line Items] | ||
Non-putable funding agreements issued to FHLB | 627 | |
Fair value of assets pledged as collateral | $ 737 |
Commitments and Contingencies61
Commitments and Contingencies - Restricted Assets (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||
Fixed maturity collateral pledged to FHLB | $ 737 | $ 0 |
FHLB restricted stock | 39 | 0 |
Other fixed maturities-state deposits | 13 | 13 |
Restricted Cash and Cash Equivalents | 5 | 5 |
Securities pledged | 907 | 960 |
Total restricted assets | 1,701 | 978 |
Securities pledged as collateral | ||
Loss Contingencies [Line Items] | ||
Fair value of loaned securities | 745 | 799 |
Fair value of securities delivered as collateral | $ 162 | $ 161 |
Related Party - Narrative (Deta
Related Party - Narrative (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Other Affiliates | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue with affiliated entities | $ 58 | $ 110 | $ 144 | $ 257 | ||
Expenses with affiliated entities | 143 | $ 178 | 311 | $ 379 | ||
Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Pre-tax gain on recapture | $ 74 | |||||
Deposit assets | 36 | 36 | $ 63 | |||
Deposit liabilities | $ 77 | $ 77 | $ 135 |