Fair Value (Tables)

6 Months Ended

Jun. 30, 2019

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. Corporate bonds and other includes obligations of the U.S. Treasury, government-sponsored enterprises, foreign governments and redeemable preferred stock.



June 30, 2019							Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3		Total Assets/Liabilities at Fair Value
Assets
Fixed maturity securities:
Corporate bonds and other	$	152	$	21,630	$	338	$	22,120
States, municipalities and political subdivisions	—		10,703		—		10,703
Asset-backed	—		8,623		193		8,816
Total fixed maturity securities	152		40,956		531		41,639
Equity securities:
Common stock	129		—		6		135
Non-redeemable preferred stock	51		628		16		695
Total equity securities	180		628		22		830
Short term and other	359		1,052		—		1,411
Total assets	$	691	$	42,636	$	553	$	43,880
Liabilities
Other liabilities	$	—	$	8	$	—	$	8
Total liabilities	$	—	$	8	$	—	$	8



December 31, 2018								Total Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2			Level 3		Total Assets/Liabilities at Fair Value
Assets
Fixed maturity securities:
Corporate bonds and other	$	196	$	19,396		$	222	$	19,814
States, municipalities and political subdivisions	—		10,748			—		10,748
Asset-backed	—		8,787			197		8,984
Total fixed maturity securities	196		38,931			419		39,546
Equity securities:
Common stock	144		—			4		148
Non-redeemable preferred stock	48		570			14		632
Total equity securities	192		570			18		780
Short term and other	216		949			—		1,165
Total assets	$	604	$	40,450		$	437	$	41,491
Liabilities
Other liabilities	$	—	$	(4	)	$	—	$	(4	)
Total liabilities	$	—	$	(4	)	$	—	$	(4	)

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)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities		Total
Balance as of April 1, 2019	$	253		$	—	$	184		$	20	$	457
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			—		—
Reported in Other comprehensive income (loss)	12			—		4			—		16
Total realized and unrealized investment gains (losses)	12			—		4			—		16
Purchases	76			—		—			2		78
Sales	—			—		—			—		—
Settlements	(2		)	—		(4		)	—		(6		)
Transfers into Level 3	—			—		40			—		40
Transfers out of Level 3	(1		)	—		(31		)	—		(32		)
Balance as of June 30, 2019	$	338		$	—	$	193		$	22	$	553
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2019 recognized in Net income (loss)	$	—		$	—	$	—		$	—	$	—
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2019 recognized in Other comprehensive income (loss)	10			—		5			—		15



Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities			Total
Balance as of April 1, 2018	$	100		$	1	$	279		$	18		$	398
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			(1		)	(1		)
Reported in Other comprehensive income (loss)	(1		)	—		(1		)	—			(2		)
Total realized and unrealized investment gains (losses)	(1		)	—		(1		)	(1		)	(3		)
Purchases	2			—		41			—			43
Sales	(5		)	—		—			—			(5		)
Settlements	(2		)	—		(6		)	—			(8		)
Transfers into Level 3	—			—		13			—			13
Transfers out of Level 3	—			—		(53		)	—			(53		)
Balance as of June 30, 2018	$	94		$	1	$	273		$	17		$	385
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2018 recognized in Net income (loss)	$	—		$	—	$	—		$	(1	)	$	(1	)



Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities		Total
Balance as of January 1, 2019	$	222		$	—	$	197		$	18	$	437
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	—			—		—			2		2
Reported in Other comprehensive income (loss)	20			—		7			—		27
Total realized and unrealized investment gains (losses)	20			—		7			2		29
Purchases	132			—		20			2		154
Sales	—			—		—			—		—
Settlements	(4		)	—		(8		)	—		(12		)
Transfers into Level 3	—			—		45			—		45
Transfers out of Level 3	(32		)	—		(68		)	—		(100		)
Balance as of June 30, 2019	$	338		$	—	$	193		$	22	$	553
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2019 recognized in Net income (loss)	$	—		$	—	$	—		$	3	$	3
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2019 recognized in Other comprehensive income (loss)	17			—		8			—		25



Level 3 (In millions)	Corporate bonds and other			States, municipalities and political subdivisions		Asset-backed			Equity securities			Total
Balance as of January 1, 2018	$	98		$	1	$	335		$	20		$	454
Total realized and unrealized investment gains (losses):
Reported in Net investment gains (losses)	(1		)	—		7			(3		)	3
Reported in Other comprehensive income (loss)	(1		)	—		(6		)	—			(7		)
Total realized and unrealized investment gains (losses)	(2		)	—		1			(3		)	(4		)
Purchases	2			—		71			—			73
Sales	(5		)	—		(72		)	—			(77		)
Settlements	(4		)	—		(12		)	—			(16		)
Transfers into Level 3	5			—		13			—			18
Transfers out of Level 3	—			—		(63		)	—			(63		)
Balance as of June 30, 2018	$	94		$	1	$	273		$	17		$	385
Unrealized gains (losses) on Level 3 assets and liabilities held as of June 30, 2018 recognized in Net income (loss)	$	—		$	—	$	—		$	(3	)	$	(3	)

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 measurements 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. The weighted average rate is calculated based on fair value.



June 30, 2019	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Fixed maturity securities	$	381	Discounted cash flow	Credit spread	1% - 5% (2%)



December 31, 2018	Estimated Fair Value (In millions)		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Fixed maturity securities	$	228	Discounted cash flow	Credit spread	1% - 12% (3%)

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, 2019	Carrying Amount		Estimated Fair Value
(In millions)	Carrying Amount		Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	916	$	—	$	—	$	936	$	936
Note receivable	20		—		—		20		20
Liabilities
Long term debt	$	2,678	$	—	$	2,864	$	—	$	2,864



December 31, 2018	Carrying Amount		Estimated Fair Value
(In millions)	Carrying Amount		Level 1		Level 2		Level 3		Total
Assets
Mortgage loans	$	839	$	—	$	—	$	827	$	827
Note receivable	35		—		—		35		35
Liabilities
Long term debt	$	2,680	$	—	$	2,731	$	—	$	2,731