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Fair Value (Tables)
 6 Months Ended
Jun. 30, 2016
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
Assets and liabilities measured at fair value on a recurring basis are presented in the following tables.
June 30, 2016
 
 
 
 
 
 
Total
Assets/Liabilities
at Fair Value
(In millions)
Level 1
 
Level 2
 
Level 3
 
Assets
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Corporate and other bonds
$
—

 
$
18,972

 
$
242

 
$
19,214

States, municipalities and political subdivisions
—

 
13,771

 
2

 
13,773

Asset-backed:
 
 
 
 
 
 
 
Residential mortgage-backed
—

 
5,055

 
134

 
5,189

Commercial mortgage-backed
—

 
2,152

 
11

 
2,163

Other asset-backed
—

 
886

 
45

 
931

Total asset-backed
—

 
8,093

 
190

 
8,283

U.S. Treasury and obligations of government-sponsored enterprises
91

 
1

 
—

 
92

Foreign government
—

 
460

 
—

 
460

Redeemable preferred stock
35

 
—

 
—

 
35

Total fixed maturity securities
126

 
41,297

 
434

 
41,857

Equity securities
104

 
—

 
19

 
123

Other invested assets
—

 
5

 
—

 
5

Short term investments
339

 
950

 
—

 
1,289

Life settlement contracts, included in Other assets
—

 
—

 
67

 
67

Total assets
$
569

 
$
42,252

 
$
520

 
$
43,341

Liabilities
 
 
 
 
 

 
 

Other liabilities
$
—

 
$
8

 
$
—

 
$
8

Total liabilities
$
—

 
$
8

 
$
—

 
$
8

December 31, 2015
 
 
 
 
 
 
Total
Assets/Liabilities
at Fair Value
(In millions)
Level 1
 
Level 2
 
Level 3
 
Assets
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
Corporate and other bonds
$
—

 
$
17,592

 
$
168

 
$
17,760

States, municipalities and political subdivisions
—

 
13,172

 
2

 
13,174

Asset-backed:
 
 
 
 
 
 
 

Residential mortgage-backed
—

 
4,938

 
134

 
5,072

Commercial mortgage-backed
—

 
2,175

 
22

 
2,197

Other asset-backed
—

 
868

 
53

 
921

Total asset-backed
—

 
7,981

 
209

 
8,190

U.S. Treasury and obligations of government-sponsored enterprises
66

 
1

 
—

 
67

Foreign government
—

 
346

 
—

 
346

Redeemable preferred stock
35

 
—

 
—

 
35

Total fixed maturity securities
101

 
39,092

 
379

 
39,572

Equity securities
177

 
—

 
20

 
197

Other invested assets
—

 
17

 
—

 
17

Short term investments
448

 
1,134

 
—

 
1,582

Life settlement contracts, included in Other assets
—

 
—

 
74

 
74

Total assets
$
726

 
$
40,243

 
$
473

 
$
41,442

Liabilities
 
 
 
 
 

 
 

Other liabilities
$
—

 
$
(5
)
 
$
—

 
$
(5
)
Total liabilities
$
—

 
$
(5
)
 
$
—

 
$
(5
)
Table of reconciliation for assets and liablities measured at fair value on a recurring basis using significant unobservable inputs
The tables below present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).
Level 3
(In millions)
Balance as of
April 1,
2016
 
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in Net income (loss)*
 
Net change in unrealized appreciation (depreciation) included in Other comprehensive income (loss)
 
Purchases
 
Sales
 
Settlements
 
Transfers into
Level 3
 
Transfers out
of Level 3
 
Balance as of
June 30,
2016
 
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2016 recognized in Net income (loss)*
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
193

 
$
1

 
$
3

 
$
94

 
$
(20
)
 
$
(7
)
 
$
—

 
$
(22
)
 
$
242

 
$
—

States, municipalities and political subdivisions
2

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2

 
—

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Residential mortgage-backed
128

 
1

 
(1
)
 
10

 
—

 
(4
)
 
—

 
—

 
134

 
—

Commercial mortgage-backed
27

 
—

 
—

 
—

 
—

 
(9
)
 
3

 
(10
)
 
11

 
—

Other asset-backed
50

 
—

 
2

 
35

 
(25
)
 
(1
)
 
—

 
(16
)
 
45

 
—

Total asset-backed
205

 
1

 
1

 
45

 
(25
)
 
(14
)
 
3

 
(26
)
 
190

 
—

Total fixed maturity securities
400

 
2

 
4

 
139

 
(45
)
 
(21
)
 
3

 
(48
)
 
434

 
—

Equity securities
19

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
19

 
—

Life settlement contracts
72

 
6

 
—

 
—

 
—

 
(11
)
 
—

 
—

 
67

 
(3
)
Total
$
491

 
$
8

 
$
4

 
$
139

 
$
(45
)
 
$
(32
)
 
$
3

 
$
(48
)
 
$
520

 
$
(3
)

Level 3
(In millions)
Balance as of
April 1,
2015
 
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in Net income (loss)*
 
Net change in unrealized appreciation (depreciation) included in Other comprehensive income (loss)
 
Purchases
 
Sales
 
Settlements
 
Transfers into
Level 3
 
Transfers out
of Level 3
 
Balance as of
June 30,
2015
 
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2015 recognized in Net income (loss)*
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
186

 
$
(2
)
 
$
(1
)
 
$
—

 
$
—

 
$
(7
)
 
$
—

 
$
(35
)
 
$
141

 
$
(3
)
States, municipalities and political subdivisions
86

 
—

 
—

 
—

 
—

 
(1
)
 
—

 
—

 
85

 
—

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Residential mortgage-backed
232

 
1

 
(2
)
 
—

 
—

 
(11
)
 
—

 
(13
)
 
207

 
—

Commercial mortgage-backed
64

 
1

 
(1
)
 
9

 
—

 
(1
)
 
17

 
(2
)
 
87

 
—

Other asset-backed
553

 
2

 
1

 
47

 
(90
)
 
(17
)
 
—

 
(6
)
 
490

 
—

Total asset-backed
849

 
4

 
(2
)
 
56

 
(90
)
 
(29
)
 
17

 
(21
)
 
784

 
—

Total fixed maturity securities
1,121

 
2

 
(3
)
 
56

 
(90
)
 
(37
)
 
17

 
(56
)
 
1,010

 
(3
)
Equity securities
13

 
—

 
3

 
—

 
—

 
—

 
—

 
—

 
16

 
—

Life settlement contracts
79

 
4

 
—

 
—

 
—

 
(8
)
 
—

 
—

 
75

 
(2
)
Total
$
1,213

 
$
6

 
$
—

 
$
56

 
$
(90
)
 
$
(45
)
 
$
17

 
$
(56
)
 
$
1,101

 
$
(5
)


















Level 3
(In millions)
Balance as of
January 1, 2016
 
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in Net income (loss)*
 
Net change in unrealized appreciation (depreciation) included in Other comprehensive income (loss)
 
Purchases
 
Sales
 
Settlements
 
Transfers into
Level 3
 
Transfers out
of Level 3
 
Balance as of
June 30,
2016
 
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2016 recognized in Net income (loss)*
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
168

 
$
—

 
$
7

 
$
147

 
$
(36
)
 
$
(10
)
 
$
—

 
$
(34
)
 
$
242

 
$
—

States, municipalities and political subdivisions
2

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2

 
—

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Residential mortgage-backed
134

 
2

 
(1
)
 
10

 
—

 
(9
)
 
—

 
(2
)
 
134

 
—

Commercial mortgage-backed
22

 
—

 
—

 
9

 
—

 
(9
)
 
3

 
(14
)
 
11

 
—

Other asset-backed
53

 
—

 
2

 
35

 
(25
)
 
(1
)
 
2

 
(21
)
 
45

 
—

Total asset-backed
209

 
2

 
1

 
54

 
(25
)
 
(19
)
 
5

 
(37
)
 
190

 
—

Total fixed maturity securities
379

 
2

 
8

 
201

 
(61
)
 
(29
)
 
5

 
(71
)
 
434

 
—

Equity securities
20

 
—

 
(1
)
 
—

 
—

 
—

 
—

 
—

 
19

 
—

Life settlement contracts
74

 
10

 
—

 
—

 
—

 
(17
)
 
—

 
—

 
67

 
(3
)
Total
$
473

 
$
12

 
$
7

 
$
201

 
$
(61
)
 
$
(46
)
 
$
5

 
$
(71
)
 
$
520

 
$
(3
)
















Level 3
(In millions)
Balance as of
January 1, 2015
 
Net realized investment gains (losses) and net change in unrealized appreciation (depreciation) included in Net income (loss)*
 
Net change in unrealized appreciation (depreciation) included in Other comprehensive income (loss)
 
Purchases
 
Sales
 
Settlements
 
Transfers into
Level 3
 
Transfers out
of Level 3
 
Balance as of
June 30,
2015
 
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2015 recognized in Net income (loss)*
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
162

 
$
(1
)
 
$
(1
)
 
$
12

 
$
(12
)
 
$
(21
)
 
$
37

 
$
(35
)
 
$
141

 
$
(3
)
States, municipalities and political subdivisions
94

 
1

 
—

 
—

 
—

 
(10
)
 
—

 
—

 
85

 
—

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Residential mortgage-backed
189

 
2

 
(2
)
 
72

 
—

 
(21
)
 
—

 
(33
)
 
207

 
—

Commercial mortgage-backed
83

 
2

 
—

 
15

 
—

 
(2
)
 
17

 
(28
)
 
87

 
—

Other asset-backed
655

 
3

 
10

 
82

 
(234
)
 
(20
)
 
—

 
(6
)
 
490

 
—

Total asset-backed
927

 
7

 
8

 
169

 
(234
)
 
(43
)
 
17

 
(67
)
 
784

 
—

Total fixed maturity securities
1,183

 
7

 
7

 
181

 
(246
)
 
(74
)
 
54

 
(102
)
 
1,010

 
(3
)
Equity securities
16

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
16

 
—

Life settlement contracts
82

 
17

 
—

 
—

 
—

 
(24
)
 
—

 
—

 
75

 
(1
)
Total
$
1,281

 
$
24

 
$
7

 
$
181

 
$
(246
)
 
$
(98
)
 
$
54

 
$
(102
)
 
$
1,101

 
$
(4
)
Quantitative information about significant unobservable inputs in the fair value measurement of level 3 assets
The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurement of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company.
June 30, 2016
Estimated Fair Value
(In millions)
 
Valuation Technique(s)
 
Unobservable Input(s)
 
Range
 (Weighted Average)
Fixed maturity securities
$
226

 
Discounted cash flow
 
Credit spread
 
1% - 40% (6%)
Life settlement contracts
67

 
Discounted cash flow
 
Discount rate risk premium
 
9%
 
 
 
 
 
Mortality assumption
 
55% - 1676% (162%)
December 31, 2015
Estimated Fair Value
(In millions)
 
Valuation Technique(s)
 
Unobservable Input(s)
 
Range
 (Weighted Average)
Fixed maturity securities
$
138

 
Discounted cash flow
 
Credit spread
 
3% - 184% (6%)
Life settlement contracts
74

 
Discounted cash flow
 
Discount rate risk premium
 
9%
 
 
 
 
 
Mortality assumption
 
55% - 1676% (164%)
Carrying amount and estimated fair value of financial instrument assets and liabilities not measured at fair value
The carrying amount and estimated fair value of the Company's financial assets and liabilities which are not measured at fair value on the Condensed Consolidated Balance Sheets are presented in the following tables.
June 30, 2016
Carrying
Amount
 
Estimated Fair Value
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
Mortgage loans
$
610

 
$
—

 
$
—

 
$
638

 
$
638

Liabilities
 
 
 
 
 
 
 
 
 
Long term debt
$
2,708

 
$
—

 
$
3,024

 
$
—

 
$
3,024


December 31, 2015
Carrying
Amount
 
Estimated Fair Value
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
Mortgage loans
$
678

 
$
—

 
$
—

 
$
688

 
$
688

Liabilities
 
 
 
 
 
 
 
 
 
Short term debt
$
350

 
$
—

 
$
360

 
$
—

 
$
360

Long term debt
2,210

 
—

 
2,433

 
—

 
2,433