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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Financial Assets and Financial Liabilities Carried at Fair Value

The following table provides information as of June 30, 2022 and December 31, 2021 about the Company's financial assets and liabilities carried at fair value. Separate account assets are also recorded at fair value on the Company's Consolidated Balance Sheets and are reported separately in the Separate Accounts section below as gains and losses related to these assets generally accrue directly to policyholders.


(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
	As of June 30, 2022		As of December 31, 2021		As of June 30, 2022		As of December 31, 2021		As of June 30, 2022		As of December 31, 2021		As of June 30, 2022		As of December 31, 2021
Financial assets at fair value
Debt securities
Federal government and agency	$	148	$	147	$	205	$	240	$	—	$	—	$	353	$	387
State and local government	—		—		145		171		—		—		145		171
Foreign government	—		—		2,331		2,611		—		5		2,331		2,616
Corporate	—		—		10,327		12,606		427		660		10,754		13,266
Mortgage and other asset-backed	—		—		282		418		85		100		367		518
Total debt securities	148		147		13,290		16,046		512		765		13,950		16,958
Equity securities (1)	9		16		417		160		—		31		426		207
Short-term investments	—		—		199		428		—		—		199		428
Derivative assets	—		—		258		143		—		—		258		143
Financial liabilities at fair value
Derivative liabilities	$	—	$	—	$	54	$	33	$	—	$	—	$	54	$	33

(1) Excludes certain equity securities that have no readily determinable fair value.

Fair Value and Significant Unobservable Inputs Used in Pricing Debt Securities

The following table summarizes the fair value and significant unobservable inputs that were developed directly by the Company and used in pricing these debt securities as of June 30, 2022 and December 31, 2021. The range and weighted average basis point ("bps") amounts for liquidity reflect the Company's best estimates of the unobservable adjustments a market participant would make to calculate these fair values.


	Fair Value as of					Unobservable Adjustment Range (Weighted Average by Quantity) as of
(Fair value in millions )	June 30, 2022		December 31, 2021		Unobservable input June 30, 2022	June 30, 2022		December 31, 2021
Debt securities
Corporate and government debt securities	$	426	$	664	Liquidity	60 - 1200 (320)	bps	60 - 1060 (410)	bps
Mortgage and other asset-backed securities	85		100		Liquidity	60 - 500 (180)	bps	60 - 390 (100)	bps
Other debt securities	1		1
Total Level 3 debt securities	$	512	$	765

Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes the changes in financial assets and financial liabilities classified in Level 3 for the three and six months ended June 30, 2022 and 2021. Gains and losses reported in the table may include net changes in fair value that are attributable to both observable and unobservable inputs.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Debt and Equity Securities
Beginning balance	$	686	$	903	$	796	$	854
Total gains (losses) included in shareholders' net income	(2)		(1)		10		(11)
Gains (losses) included in other comprehensive income	(13)		7		(28)		(9)
Gains (losses) required to adjust future policy benefits for settlement annuities (1)	(11)		1		(23)		(7)
Purchases, sales and settlements
Purchases	27		42		76		71

Settlements	(71)		(9)		(152)		(25)
Total purchases, sales and settlements	(44)		33		(76)		46
Transfers into/(out of) Level 3
Transfers into Level 3	17		37		118		123
Transfers out of Level 3	(121)		(126)		(285)		(142)
Total transfers into/(out of) Level 3	(104)		(89)		(167)		(19)
Ending balance	$	512	$	854	$	512	$	854
Total gains (losses) included in Shareholders' net income attributable to instruments held at the reporting date	$	(3)	$	(1)	$	(2)	$	(12)
Change in unrealized gains or losses included in Other comprehensive income (loss), net of tax for assets held at the end of the reporting period	$	(11)	$	7	$	(25)	$	(9)

(1) Amounts do not accrue to shareholders.

Fair Values of Separate Account Assets

Fair values of Separate account assets at June 30, 2022 and December 31, 2021 were as follows:


(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Guaranteed separate accounts (See Note 18)	$	208	$	227	$	228	$	276	$	—	$	—	$	436	$	503
Non-guaranteed separate accounts (1)	212		1,130		6,326		6,406		249		334		6,787		7,870
Subtotal	$	420	$	1,357	$	6,554	$	6,682	$	249	$	334	7,223		8,373
Non-guaranteed separate accounts priced at net asset value ("NAV") as a practical expedient (1)													920		842
Total													8,143		9,215
Separate account assets of businesses classified as held for sale (2)													(648)		(878)
Separate account assets per Consolidated Balance Sheets													$	7,495	$	8,337

(1)Non-guaranteed separate accounts include $4.2 billion as of June 30, 2022 and $4.5 billion as of December 31, 2021 in assets supporting the Company's pension plans, including $0.2 billion classified in Level 3 as of June 30, 2022 and $0.3 billion as of December 31, 2021.

(2)Investments related to the international life, accident and supplemental benefits businesses that are held for sale. See Note 5 to the Consolidated Financial Statements for additional information.

Additional Information on Separate Account Assets Priced at NAV

Separate account investments in securities partnerships, real estate and hedge funds are generally valued based on the separate account's ownership share of the equity of the investee (NAV as a practical expedient), including changes in the fair values of its underlying investments. Substantially all of these assets support the Cigna pension plans. The following table provides additional information on these investments:


	Fair Value as of				Unfunded Commitment as of June 30, 2022		Redemption Frequency (if currently eligible)	Redemption Notice Period
(In millions)	June 30, 2022		December 31, 2021
Securities partnerships	$	540	$	513	$	252	Not applicable	Not applicable
Real estate funds	376		325		—		Quarterly	30 - 90 days
Hedge funds	4		4		—		Up to annually, varying by fund	30 - 90 days
Total	$	920	$	842	$	252

Fair Value Disclosures for Financial Instruments Not Carried at Fair Value

The following table includes the Company's financial instruments not recorded at fair value, however fair value disclosure is required at June 30, 2022 and December 31, 2021. In addition to universal life products and finance leases, financial instruments that are carried in the Company's Consolidated Financial Statements at amounts that approximate fair value are excluded from the following table:


	Classification in Fair Value Hierarchy	June 30, 2022				December 31, 2021
(In millions)		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,499	$	1,579	$	1,598	$	1,566
Long-term debt, including current maturities, excluding finance leases	Level 2	$	30,062	$	31,526	$	35,621	$	31,593

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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