Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Value Hierarchy for Assets Measured at Fair Value on a Recurring Basis

The following tables illustrate the fair value hierarchy for those assets measured at fair value on a recurring basis at September 30, 2017, and December 31, 2016. We do not have any material liabilities carried at fair value. There were no transfers between Level 1 and Level 2.



(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2017			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Fixed maturities, available for sale:
Corporate	$	—	$	5,782	$	1	$	5,783
States, municipalities and political subdivisions	—		4,229		5		4,234
Commercial mortgage-backed	—		288		—		288
Government-sponsored enterprises	—		204		—		204
United States government	16		—		—		16
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		5		—		5
Subtotal	16		10,518		6		10,540
Common equities, available for sale	5,808		—		—		5,808
Nonredeemable preferred equities, available for sale	—		217		—		217
Separate accounts taxable fixed maturities	—		783		—		783
Top Hat savings plan mutual funds and common equity (included in Other assets)	30		—		—		30
Total	$	5,854	$	11,518	$	6	$	17,378

At December 31, 2016
Fixed maturities, available for sale:
Corporate	$	—	$	5,703	$	78	$	5,781
States, municipalities and political subdivisions	—		3,828		—		3,828
Commercial mortgage-backed	—		287		—		287
Government-sponsored enterprises	—		164		—		164
United States government	10		—		—		10
Foreign government	—		10		—		10
Convertibles and bonds with warrants attached	—		5		—		5
Subtotal	10		9,997		78		10,085
Common equities, available for sale	5,123		—		—		5,123
Nonredeemable preferred equities, available for sale	—		211		—		211
Separate accounts taxable fixed maturities	—		750		—		750
Top Hat savings plan mutual funds and common equity (included in Other assets)	24		—		—		24
Total	$	5,157	$	10,958	$	78	$	16,193

Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)



(Dollars in millions)	Asset fair value measurements using significant unobservable inputs (Level 3)
	Corporate fixed maturities			Taxable fixed maturities - separate accounts			States, municipalities and political subdivisions fixed maturities		Nonredeemable preferred equities		Total
Beginning balance, July 1, 2017	$	1		$	—		$	5	$	—	$	6
Total gains or losses (realized/unrealized):
Included in net income	—			—			—		—		—
Included in other comprehensive income	—			—			—		—		—
Purchases	—			—			—		—		—
Sales	—			—			—		—		—
Transfers into Level 3	—			—			—		—		—
Transfers out of Level 3	—			—			—		—		—
Ending balance, September 30, 2017	$	1		$	—		$	5	$	—	$	6

Beginning balance, July 1, 2016	$	52		$	1		$	—	$	—	$	53
Total gains or losses (realized/unrealized):
Included in net income	—			—			—		—		—
Included in other comprehensive income	1			—			—		—		1
Purchases	—			—			—		—		—
Sales	(1		)	—			—		—		(1		)
Transfers into Level 3	—			—			—		—		—
Transfers out of Level 3	(10		)	(1		)	—		—		(11		)
Ending balance, September 30, 2016	$	42		$	—		$	—	$	—	$	42

The following table provides the change in Level 3 assets for the nine months ended September 30:



(Dollars in millions)	Asset fair value measurements using significant unobservable inputs
		Corporate fixed maturities			Taxable fixed maturities - separate accounts			States, municipalities and political subdivisions fixed maturities		Nonredeemable preferred equities			Total
Beginning balance, January 1, 2017		$	78		$	—		$	—	$	—		$	78
Total gains or losses (realized/unrealized):
Included in net income		—			—			—		—			—
Included in other comprehensive income		—			—			—		—			—
Purchases		—			—			5		—			5
Sales		—			—			—		—			—
Transfers into Level 3		—			—			—		—			—
Transfers out of Level 3		(77		)	—			—		—			(77		)
Ending balance, September 30, 2017		$	1		$	—		$	5	$	—		$	6

Beginning balance, January 1, 2016		$	51		$	1		$	—	$	3		$	55
Total gains or losses (realized/unrealized):
Included in net income		—			—			—		—			—
Included in other comprehensive income		1			—			—		(1		)	—
Purchases		22			—			—		—			22
Sales		(1		)	—			—		(2		)	(3		)
Transfers into Level 3		—			—			—		—			—
Transfers out of Level 3		(31		)	(1		)	—		—			(32		)
Ending balance, September 30, 2016		$	42		$	—		$	—	$	—		$	42

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

This table summarizes the book value and principal amounts of our long-term debt:



(Dollars in millions)				Book value				Principal amount
Interest rate		Year of issue		September 30,		December 31,		September 30,		December 31,
Interest rate		Year of issue		2017		2016		2017		2016
6.900	%	1998	Senior debentures, due 2028	$	26	$	26	$	28	$	28
6.920	%	2005	Senior debentures, due 2028	391		391		391		391
6.125	%	2004	Senior notes, due 2034	370		370		374		374
			Total	$	787	$	787	$	793	$	793

Fair Value of Life Policy Loans

The following table shows the fair value of our life policy loans included in other invested assets:



(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2017			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Life policy loans	$	—	$	—	$	41	$	41

At December 31, 2016
Life policy loans	$	—	$	—	$	40	$	40

Debt

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair values of our note payable and long-term debt:



(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2017			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Note payable	$	—	$	17	$	—	$	17
6.900% senior debentures, due 2028	—		34		—		34
6.920% senior debentures, due 2028	—		503		—		503
6.125% senior notes, due 2034	—		459		—		459
Total	$	—	$	1,013	$	—	$	1,013

At December 31, 2016
Note payable	$	—	$	20	$	—	$	20
6.900% senior debentures, due 2028	—		33		—		33
6.920% senior debentures, due 2028	—		488		—		488
6.125% senior notes, due 2034	—		435		—		435
Total	$	—	$	976	$	—	$	976

Deferred Annuities, Structured Settlements, And Other

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Fair Values of Deferred Annuities, Structured Settlements and Other Items

The following table shows fair values of our deferred annuities and structured settlements included in life policy and investment contract reserves:



(Dollars in millions)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At September 30, 2017			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Deferred annuities	$	—	$	—	$	846	$	846
Structured settlements	—		209		—		209
Total	$	—	$	209	$	846	$	1,055

At December 31, 2016
Deferred annuities	$	—	$	—	$	839	$	839
Structured settlements	—		206		—		206
Total	$	—	$	206	$	839	$	1,045