Our business activities routinely deal with fluctuations in interest rates, equity prices, currency exchange rates and other asset and liability prices. We use derivative instruments to mitigate or reduce certain of these risks. We have established policies for managing each of these risks, including prohibitions on derivatives market-making and other speculative derivatives activities. These policies require the use of derivative instruments in concert with other techniques to reduce or mitigate these risks. While we use derivatives to mitigate or reduce risks, certain derivatives do not meet the accounting requirements to be designated as hedging instruments and are denoted as “derivatives not designated as hedges” in the following disclosures. For derivatives that meet the accounting requirements to be designated as hedges, the following disclosures for these derivatives are denoted as “derivatives designated as hedges,” which include cash flow hedges.

	Derivative assets						Derivative liabilities
			Fair value						Fair value
	Balance						Balance
(Amounts in millions)	sheet classification		2018		2017		sheet classification		2018		2017
Derivatives designated as hedges
Cash flow hedges:
Interest rate swaps		Other invested assets	$	42	$	74		Other liabilities	$	102	$	25
Foreign currency swaps		Other invested assets		6		1		Other liabilities		—		—
Total cash flow hedges				48		75				102		25
Total derivatives designated as hedges				48		75				102		25
Derivatives not designated as hedges
Interest rate swaps in a foreign currency		Other invested assets		74		105		Other liabilities		—		—
Interest rate caps and floors		Other invested assets		7		—		Other liabilities		—		—
Foreign currency swaps		Other invested assets		—		11		Other liabilities		23		—
Equity index options		Other invested assets		39		80		Other liabilities		—		—
Financial futures		Other invested assets		—		—		Other liabilities		—		—
Equity return swaps		Other invested assets		—		—		Other liabilities		1		2
Other foreign currency contracts		Other invested assets		10		5		Other liabilities		42		20
GMWB embedded derivatives		Reinsurance recoverable (1)		20		14		Policyholder account balances (2)		337		250
Fixed index annuity embedded derivatives		Other assets		—		—		Policyholder account balances (3)		389		419
Indexed universal life embedded derivatives		Reinsurance recoverable		—		—		Policyholder account balances (4)		12		14
Total derivatives not designated as hedges				150		215				804		705
Total derivatives			$	198	$	290			$	906	$	730

(1)	Represents embedded derivatives associated with the reinsured portion of our GMWB liabilities.
(2)	Represents the embedded derivatives associated with our GMWB liabilities, excluding the impact of reinsurance.
(3)	Represents the embedded derivatives associated with our fixed index annuity liabilities.
(4)	Represents the embedded derivatives associated with our indexed universal life liabilities.

The activity associated with derivative instruments can generally be measured by the change in notional value over the periods presented. However, for GMWB, fixed index annuity embedded derivatives and indexed universal life embedded derivatives, the change between periods is best illustrated by the number of policies. The following tables represent activity associated with derivative instruments as of the dates indicated:

			December 31,				Maturities/			December 31,
(Notional in millions)	Measurement		2017		Additions		terminations			2018
Derivatives designated as hedges
Cash flow hedges:
Interest rate swaps		Notional	$	11,155	$	1,645	$	(2,876	)	$	9,924
Foreign currency swaps		Notional		22		58		—			80
Total cash flow hedges				11,177		1,703		(2,876	)		10,004
Total derivatives designated as hedges				11,177		1,703		(2,876	)		10,004
Derivatives not designated as hedges
Interest rate swaps		Notional		4,679		—		(5	)		4,674
Interest rate swaps in a foreign currency		Notional		2,793		117		(345	)		2,565
Interest rate caps and floors		Notional		—		2,810		(186	)		2,624
Foreign currency swaps		Notional		349		133		(29	)		453
Credit default swaps		Notional		39		—		(39	)		—
Equity index options		Notional		2,420		2,848		(2,640	)		2,628
Financial futures		Notional		1,283		5,377		(5,245	)		1,415
Equity return swaps		Notional		96		3		(82	)		17
Other foreign currency contracts		Notional		471		1,739		(1,130	)		1,080
Total derivatives not designated as hedges				12,130		13,027		(9,701	)		15,456
Total derivatives			$	23,307	$	14,730	$	(12,577	)	$	25,460

			December 31,				Maturities/			December 31,
(Number of policies)	Measurement		2017		Additions		terminations			2018
Derivatives not designated as hedges
GMWB embedded derivatives		Policies		30,450		—		(2,564	)		27,886
Fixed index annuity embedded derivatives		Policies		17,067		—		(603	)		16,464
Indexed universal life embedded derivatives		Policies		985		—		(56	)		929

Certain derivative instruments are designated as cash flow hedges. The changes in fair value of these instruments are recorded as a component of OCI. We designate and account for the following as cash flow hedges when they have met the effectiveness requirements: (i) various types of interest rate swaps to convert floating rate investments to fixed rate investments; (ii) various types of interest rate swaps to convert floating rate liabilities into fixed rate liabilities; (iii) receive U.S. dollar fixed on foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments; (iv) forward starting interest rate swaps to hedge against changes in interest rates associated with future fixed rate bond purchases and/or interest income; and (v) other instruments to hedge the cash flows of various forecasted transactions.

				Gain (loss)
	Gain (loss)			reclassified into
	recognized			net income		Classification of gain (loss)
(Amounts in millions)	in OCI			from OCI		reclassified into net income
Interest rate swaps hedging assets	$	(261	)	$	153		Net investment income
Interest rate swaps hedging assets		—			9		Net investment gains (losses)
Interest rate swaps hedging liabilities		16			—		Interest expense
Foreign currency swaps		4			—		Net investment income
Total	$	(241	)	$	162

				Gain (loss)
				reclassified into		Classification of gain		Gain (loss)		Classification of gain
	Gain (loss)			net income (loss)		(loss) reclassified into		recognized in		(loss) recognized in
(Amounts in millions)	recognized in OCI			from OCI		net income (loss)		net income (loss) (1)		net income (loss)
Interest rate swaps hedging assets	$	96		$	131		Net investment income	$	2		Net investment gains (losses)
Interest rate swaps hedging assets		—			8		Net investment gains (losses)		—		Net investment gains (losses)
Foreign currency swaps		(2	)		—		Net investment income		—		Net investment gains (losses)
Total	$	94		$	139			$	2

				Gain (loss)
				reclassified into		Classification of gain		Gain (loss)		Classification of gain
	Gain (loss)			net income (loss)		(loss) reclassified into		recognized in		(loss) recognized in
(Amounts in millions)	recognized in OCI			from OCI		net income (loss)		net income (loss) (1)		net income (loss)
Interest rate swaps hedging assets	$	198		$	112		Net investment income	$	3		Net investment gains (losses)
Interest rate swaps hedging assets		—			2		Net investment gains (losses)		—		Net investment gains (losses)
Interest rate swaps hedging liabilities		(5	)		—		Interest expense		—		Net investment gains (losses)
Inflation indexed swaps		(5	)		2		Net investment income		—		Net investment gains (losses)
Inflation indexed swaps		—			7		Net investment gains (losses)		—		Net investment gains (losses)
Foreign currency swaps		(4	)		—		Net investment income		—		Net investment gains (losses)
Foreign currency swaps		—			—		Net investment gains (losses)		5		Net investment gains (losses)
Total	$	184		$	123			$	8

(Amounts in millions)	2018			2017			2016
Derivatives qualifying as effective accounting hedges as of January 1	$	2,065		$	2,085		$	2,045
Cumulative effect of changes in accounting:
Stranded tax effects		12			—			—
Changes to the hedge accounting model, net of deferred taxes of $(1), $— and $—		2			—			—
Total cumulative effect of changes in accounting		14			—			—
Current period increases (decreases) in fair value, net of deferred taxes of $50, $(56) and $(64)		(194	)		38			120
Reclassification to net (income) loss, net of deferred taxes of $58, $81 and $43		(104	)		(58	)		(80	)
Derivatives qualifying as effective accounting hedges as of December 31	$	1,781		$	2,065		$	2,085

The total of derivatives designated as cash flow hedges of $1,781 million, net of taxes, recorded in stockholders’ equity as of December 31, 2018 is expected to be reclassified to net income (loss) in the future, concurrently with and primarily offsetting changes in interest expense and interest income on floating rate instruments and interest income on future fixed rate bond purchases. Of this amount, $109 million, net of taxes, is expected to be reclassified to net income (loss) in the next 12 months. Actual amounts may vary from this amount as a result of market conditions. All forecasted transactions associated with qualifying cash flow hedges are expected to occur by 2057. During the years ended December 31, 2018, 2017 and 2016, we reclassified $9 million, $6 million and $10 million, respectively, to net income (loss) in connection with forecasted transactions that were no longer considered probable of occurring.

We also enter into certain non-qualifying derivative instruments such as: (i) interest rate swaps and financial futures to mitigate interest rate risk as part of managing regulatory capital positions; (ii) credit default swaps to enhance yield and reproduce characteristics of investments with similar terms and credit risk; (iii) equity index options, equity return swaps, interest rate swaps and financial futures to mitigate the risks associated with liabilities that have guaranteed minimum benefits, fixed index annuities and indexed universal life; (iv) interest rate swaps, interest rate swaps in a foreign currency and interest rate caps and floors where the hedging relationship does not qualify for hedge accounting; (v) credit default swaps to mitigate loss exposure to certain credit risk; (vi) foreign currency swaps, options and forward contracts to mitigate currency risk associated with non-functional currency investments held by certain foreign subsidiaries and future dividends or other cash flows from certain foreign subsidiaries to our holding company; and (vii) equity index options to mitigate certain macroeconomic risks associated with certain foreign subsidiaries. Additionally, we provide GMWBs on certain variable annuities that are required to be bifurcated as embedded derivatives. We also offer fixed index annuity and indexed universal life products and have reinsurance agreements with certain features that are required to be bifurcated as embedded derivatives.

We also had, prior to the fourth quarter of 2017, derivatives related to securitization entities where we were required to consolidate the related securitization entity as a result of our involvement in the structure. The counterparties for these derivatives typically only had recourse to the securitization entity. The interest rate swaps used for these entities were typically used to effectively convert the interest payments on the assets of the securitization entity to the same basis as the interest rate on the borrowings issued by the securitization entity. Credit default swaps were utilized in certain securitization entities to enhance the yield payable on the borrowings issued by the securitization entity and also included a settlement feature that allows the securitization entity to provide the par value of assets in the securitization entity for the amount of any losses incurred under the credit default swap.

(Amounts in millions)	2018			2017			2016			Classification of gain (loss) recognized in net income (loss)
Interest rate swaps	$	3		$	4		$	12			Net investment gains (losses)
Interest rate swaps in a foreign currency		(5	)		70			28			Net investment gains (losses)
Interest rate swaps related to securitization entities (1)		—			—			(10	)		Net investment gains (losses)
Foreign currency swaps		(37	)		14			4			Net investment gains (losses)
Credit default swaps		—			—			1			Net investment gains (losses)
Credit default swaps related to securitization entities (1)		—			7			18			Net investment gains (losses)
Equity index options		(34	)		57			10			Net investment gains (losses)
Financial futures		26			(43	)		(111	)		Net investment gains (losses)
Equity return swaps		(5	)		(22	)		(1	)		Net investment gains (losses)
Other foreign currency contracts		(26	)		5			(4	)		Net investment gains (losses)
GMWB embedded derivatives		(54	)		78			76			Net investment gains (losses)
Fixed index annuity embedded derivatives		15			(84	)		(22	)		Net investment gains (losses)
Indexed universal life embedded derivatives		13			8			10			Net investment gains (losses)
Total derivatives not designated as hedges	$	(104	)	$	94		$	11

Most of our derivative arrangements with counterparties require the posting of collateral upon meeting certain net exposure thresholds. For derivatives related to securitization entities, there are no arrangements that require either party to provide collateral and the recourse of the derivative counterparty is typically limited to the assets held by the securitization entity and there is no recourse to any entity other than the securitization entity.

	2018									2017
(Amounts in millions)	Derivatives assets (1)			Derivatives liabilities (2)			Net derivatives			Derivatives ‎ assets (1)			Derivatives liabilities (2)			Net derivatives
Amounts presented in the balance sheet:
Gross amounts recognized	$	185		$	169		$	16		$	278		$	47		$	231
Gross amounts offset in the balance sheet		—			—			—			—			—			—
Net amounts presented in the balance sheet		185			169			16			278			47			231
Gross amounts not offset in the balance sheet:
Financial instruments (3)		(66	)		(66	)		—			(23	)		(23	)		—
Collateral received		(84	)		—			(84	)		(170	)		—			(170	)
Collateral pledged		—			(536	)		536			—			(288	)		288
Over collateralization		10			433			(423	)		—			264			(264	)
Net amount	$	45		$	—		$	45		$	85		$	—		$	85

(1)	Included $6 million and $2 million of accruals on derivatives classified as other assets and does not include amounts related to embedded derivatives as of December 31, 2018 and 2017, respectively.
(2)	Does not include amounts related to embedded derivatives and derivatives related to securitization entities as of December 31, 2018 and 2017.
(3)	Amounts represent derivative assets and/or liabilities that are presented gross within the balance sheet but are held with the same counterparty where we have a master netting arrangement. This adjustment results in presenting the net asset and net liability position for each counterparty.

Except for derivatives related to securitization entities, several of our master swap agreements contain credit downgrade provisions that allow either party to assign or terminate derivative transactions if the other party’s long-term unsecured debt rating or financial strength rating is below the limit defined in the applicable agreement. Beginning in 2018, we have renegotiated with many of our counterparties to remove the credit downgrade provisions from the master swap agreements. If the provisions defined in these agreements had been triggered as of December 31, 2018 and 2017, we could have been allowed to claim $45 million and $85 million, respectively. There were no amounts that we would have been required to disburse as of December 31, 2018 and 2017. The chart above excludes embedded derivatives and derivatives related to securitization entities as those derivatives are not subject to master netting arrangements. As of December 31, 2018, no counterparties exercised their rights to terminate or revise the terms of their transactions with us.

We previously sold protection under single name credit default swaps in combination with purchasing a security to replicate characteristics of similar investments based on the credit quality and term of the credit default swap. Credit default triggers for single name reference entities followed the Credit Derivatives Physical Settlement Matrix published by the International Swaps and Derivatives Association. Under these terms, credit default triggers were defined as bankruptcy, failure to pay or restructuring, if applicable. Our maximum exposure to credit loss equaled the notional value for credit default swaps. In the event of default for credit default swaps, we were typically required to pay the protection holder the full notional value less a recovery rate determined at auction. Our remaining single name credit default swaps matured during the third quarter of 2018.