XML 39 R26.htm IDEA: XBRL DOCUMENT v3.21.1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
 3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of March 31, 2021:
 Measurement
Category		Level 1Level 2Level 3Total
 (Dollars In Millions)
Assets:    
Fixed maturity securities - AFS    
Residential mortgage-backed securities4$— $6,903 $— $6,903 
Commercial mortgage-backed securities4— 2,393 32 2,425 
Other asset-backed securities4— 1,096 440 1,536 
U.S. government-related securities4483 477 — 960 
State, municipals, and political subdivisions4— 4,119 — 4,119 
Other government-related securities4— 642 — 642 
Corporate securities4— 48,951 1,406 50,357 
Redeemable preferred stocks4150 66 — 216 
Total fixed maturity securities - AFS633 64,647 1,878 67,158 
Fixed maturity securities - trading    
Residential mortgage-backed securities3— 181 — 181 
Commercial mortgage-backed securities3— 213 — 213 
Other asset-backed securities3— 74 101 175 
U.S. government-related securities328 7 — 35 
State, municipals, and political subdivisions3— 282 — 282 
Other government-related securities3— 16 16 32 
Corporate securities3— 1,761 11 1,772 
Redeemable preferred stocks311 — — 11 
Total fixed maturity securities - trading39 2,534 128 2,701 
Total fixed maturity securities672 67,181 2,006 69,859 
Equity securities3618 123 741 
Other long-term investments(1)
3 & 464 1,271 289 1,624 
Short-term investments3484 177 — 661 
Total investments1,838 68,629 2,418 72,885 
Cash3565 — — 565 
Assets related to separate accounts    
Variable annuity312,699 — — 12,699 
Variable universal life31,646 — — 1,646 
Total assets measured at fair value on a recurring basis$16,748 $68,629 $2,418 $87,795 
Liabilities:    
Annuity account balances(2)
3$— $— $66 $66 
Other liabilities(1)
3 & 426 939 1,686 2,651 
Total liabilities measured at fair value on a recurring basis$26 $939 $1,752 $2,717 
Measurement category 3 represents fair value through net income (loss) and 4 represents fair value through other comprehensive income (loss).
(1) Includes certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.
The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of December 31, 2020:
 Measurement
Category		Level 1Level 2Level 3Total
 (Dollars In Millions)
Assets:    
Fixed maturity securities - AFS    
Residential mortgage-backed securities4$— $6,668 $— $6,668 
Commercial mortgage-backed securities4— 2,502 32 2,534 
Other asset-backed securities4— 1,143 435 1,578 
U.S. government-related securities41,015 500 — 1,515 
State, municipals, and political subdivisions4— 4,420 — 4,420 
Other government-related securities4— 717 — 717 
Corporate securities4— 50,675 1,432 52,107 
Redeemable preferred stocks4125 69 — 194 
Total fixed maturity securities - AFS1,140 66,694 1,899 69,733 
Fixed maturity securities - trading    
Residential mortgage-backed securities3— 209 — 209 
Commercial mortgage-backed securities3— 214 — 214 
Other asset-backed securities3— 91 72 163 
U.S. government-related securities379 12 — 91 
State, municipals, and political subdivisions3— 282 — 282 
Other government-related securities3— 30 — 30 
Corporate securities3— 1,843 17 1,860 
Redeemable preferred stocks313 — — 13 
Total fixed maturity securities - trading92 2,681 89 2,862 
Total fixed maturity securities1,232 69,375 1,988 72,595 
Equity securities3566 — 101 667 
Other long-term investments(1)
3 & 452 1,285 299 1,636 
Short-term investments3403 59 — 462 
Total investments2,253 70,719 2,388 75,360 
Cash3656 — — 656 
Assets related to separate accounts    
Variable annuity312,378 — — 12,378 
Variable universal life31,287 — — 1,287 
Total assets measured at fair value on a recurring basis$16,574 $70,719 $2,388 $89,681 
Liabilities:    
Annuity account balances(2)
3$— $— $67 $67 
Other liabilities(1)
3 & 414 867 2,238 3,119 
Total liabilities measured at fair value on a recurring basis$14 $867 $2,305 $3,186 
Measurement category 3 represents fair value through net income (loss) and 4 represents fair value through other comprehensive income (loss).
(1) Includes certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.
Schedule of the Valuation Method for Material Financial Instruments Included in Level 3, as well as the Unobservable Inputs Used in the Valuation of the Financial Instruments The following tables present the valuation method for material AFS fixed maturity securities and embedded derivative financial instruments included in Level 3, as well as the unobservable inputs used in the valuation of those financial instruments as of March 31, 2021 and December 31, 2020:
March 31, 2021
Fair Value		Valuation
Technique		Unobservable
Input		Range
(Weighted Average)
 (Dollars In Millions)   
Assets:    
Commercial mortgage-backed securities$32 Discounted cash flowSpread over treasury
1.87% - 2.10% (2.02%)
Other asset-backed securities440 Liquidation Liquidation value
$96.50 - $98.38 ($97.17)
Discounted cash flowLiquidity premium
0.64% - 2.29% (1.66%)
Paydown rate
8.88% - 12.47% (11.40%)
Corporate securities1,406 Discounted cash flowSpread over treasury
0.00% - 4.50% (1.79%)
Liabilities:(1)
    
Embedded derivatives - GLWB(2)
$418 Actuarial cash flow modelMortality
88% to 100% of
Ruark 2015 ALB Table

   LapsePL-RBA Predictive Model
   UtilizationPL-RBA Predictive Model
   Nonperformance risk
0.20% - 0.85%
Embedded derivative - FIA583 Actuarial cash flow modelExpenses
$207 per policy
   Withdrawal rate
0.4% - 2.4% prior to age 70, 100% of the RMD for ages 70+ or WB withdrawal rate. Assume underutilized RMD for non-WB policies ages 70-81.
   Mortality
88% to 100% of Ruark 2015 ALB table
   Lapse
0.2% - 50.0%, depending on duration/surrender charge period
Dynamically adjusted for WB moneyness and projected market rates vs credited rates
   Nonperformance risk
0.20% - 0.85%
Embedded derivative - IUL179 Actuarial cash flow modelMortality
36% - 161% of 2015
VBT Primary Tables
94% - 248% of duration 8 point in scale 2015 VBT Primary Tables, depending on type of business
   Lapse
0.375% - 10%, depending on
duration/distribution channel
and smoking class
   Nonperformance risk
0.20% - 0.85%
(1) Excludes modified coinsurance arrangements.
(2) Fair value is presented as a net liability.
December 31, 2020Fair ValueValuation
Technique		Unobservable
Input		Range
(Weighted Average)
 (Dollars In Millions)   
Assets:    
Commercial mortgage-backed securities$32 Discounted cash flowSpread over treasury
2.78% - 2.92% (2.87%)
Other asset-backed securities435 Liquidation Liquidation value
$95 - $97 ($96.19)
Discounted cash flowLiquidity premium
0.54% - 2.3% (1.63%)
Paydown Rate
8.79% - 12.49% (11.39%)
Corporate securities1,432 Discounted cash flowSpread over treasury
0.00% - 4.75% (1.89%)
Liabilities:(1)
    
Embedded derivatives - GLWB(2)
$822 Actuarial cash flow modelMortality
88% to 100% of
Ruark 2015 ALB Table
   LapsePL-RBA Predictive Model
   UtilizationPL-RBA Predictive Model
   Nonperformance risk
0.19% - 0.81%
Embedded derivative - FIA573 Actuarial cash flow modelExpenses
$207 per policy
   Withdrawal rate
0.4% - 2.4% prior to age 70 RMD for
ages 70+
or WB withdrawal rate
Assume underutilized RMD
for non-WB policies age 72-88
   Mortality
88% to 100% or Ruark 2015 ALB table
   Lapse
0.2% - 50.0%, depending on duration/surrender charge period
   Nonperformance risk
0.19% - 0.81%
Embedded derivative - IUL201 Actuarial cash flow modelMortality
36% - 161% of 2015
VBT Primary Tables
94% - 248% of duration
8 point in scale 2015
VBT Primary Tables,
depending on type of business
   Lapse
0.375% - 10%, depending on duration/distribution channel and smoking class
   Nonperformance risk
0.19% - 0.81%
(1) Excludes modified coinsurance arrangements.
(2) Fair value is presented as a net liability.
Schedule of Reconciliation of the Beginning and Ending Balances for Fair Value Measurements, for Which the Company Has Used Significant Unobservable Inputs (Level 3)
The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended March 31, 2021, for which the Company has used significant unobservable inputs (Level 3):
Total
Realized and Unrealized
Gains		Total
Realized and Unrealized
Losses		Total Gains (losses) included in Operations related to Instruments still held at
the 
Reporting
Date
Beginning
Balance		Included
in
Operations		Included
in
Other
Comprehensive
Income (Loss)		Included
in
Operations		Included
in
Other
Comprehensive
Income (Loss)		PurchasesSalesIssuancesSettlementsTransfers
in/out of
Level 3		OtherEnding
Balance
 (Dollars In Millions)
Assets:             
Fixed maturity securities AFS             
Commercial mortgage-backed securities$32 $— $— $— $— $— $— $— $— $— $— $32 $— 
Other asset-backed securities435 — 5 — — — — — — — — 440 — 
Corporate securities1,432 — 1 — (46)10 (32)— — 41 — 1,406 — 
Total fixed maturity securities - available-for-sale1,899 — 6 — (46)10 (32)— — 41 — 1,878 — 
Fixed maturity securities - trading             
Other asset-backed securities71 2 — (1)— 9 — — — 20 — 101 1 
Other government-related securities— — — — — — — — — 16 — 16 — 
Corporate securities18 — — (1)— — (1)— — (5)— 11 — 
Total fixed maturity securities - trading89 2 — (2)— 9 (1)— — 31 — 128 1 
Total fixed maturity securities1,988 2 6 (2)(46)19 (33)— — 72 — 2,006 1 
Equity securities101 — — — — 33 (6)— — (5)— 123 — 
Other long-term investments(1)
298 36 — (45)— — — — — — — 289 (9)
Total investments2,387 38 6 (47)(46)52 (39)— — 67 — 2,418 (8)
Total assets measured at fair value on a recurring basis$2,387 $38 $6 $(47)$(46)$52 $(39)$— $— $67 $— $2,418 $(8)
Liabilities:             
Annuity account balances(2)
$67 $— $— $(1)$— $— $— $— $2 $— $— $66 $— 
Other liabilities(1)
$2,239 $571 $— $(18)$— $— $— $— $— $— $— 1,686 553 
Total liabilities measured at fair value on a recurring basis$2,306 $571 $— $(19)$— $— $— $— $2 $— $— $1,752 $553 
(1) Represents certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.
The following table presents a reconciliation of the beginning and ending balances for fair value measurements for the three months ended March 31, 2020, for which the Company has used significant unobservable inputs (Level 3):
Total
Realized and Unrealized
Gains		Total
Realized and Unrealized
Losses		Total Gains (losses) included in Operations related to Instruments still held at
the 
Reporting
Date
Beginning
Balance		Included
 in
Operations		Included 
in
Other
Comprehensive
Income (Loss)		Included 
in
Operations		Included 
in
Other
Comprehensive
Income (Loss)		PurchasesSalesIssuancesSettlementsTransfers
in/out of
Level 3		OtherEnding
Balance
 (Dollars In Millions)
Assets:             
Fixed maturity securities AFS             
Commercial mortgage-backed securities$10 $— $1 $— $(1)$— $— $— $— $— $— $10 $— 
Other asset-backed securities421 — — — (7)— — — — 22 — 436 — 
Corporate securities1,374 — 2 — (76)24 (50)— — 7 (1)1,280 — 
Total fixed maturity securities - available-for-sale1,805 — 3 — (84)24 (50)— — 29 (1)1,726 — 
Fixed maturity securities - trading             
Other asset-backed securities65 — — (2)— 2 — — — — — 65 (2)
Corporate securities11 — — — — 2 — — — — — 13 — 
Total fixed maturity securities - trading76 — — (2)— 4 — — — — — 78 (2)
Total fixed maturity securities1,881 — 3 (2)(84)28 (50)— — 29 (1)1,804 (2)
Equity securities73 — — — — — — — — — — 73 — 
Other long-term investments(1)
210 14 — (57)— — — — (4)— — 163 (48)
Total investments2,164 14 3 (59)(84)28 (50)— (4)29 (1)2,040 (50)
Total assets measured at fair value on a recurring basis$2,164 $14 $3 $(59)$(84)$28 $(50)$— $(4)$29 $(1)$2,040 $(50)
Liabilities:             
Annuity account balances(2)
$70 $— $— $(1)$— $— $— $— $2 $— $— $69 $— 
Other liabilities(1)
1,018 189 — (433)— — — — — — — 1,262 (244)
Total liabilities measured at fair value on a recurring basis$1,088 $189 $— $(434)$— $— $— $— $2 $— $— $1,331 $(244)
(1) Represents certain freestanding and embedded derivatives.
(2) Represents liabilities related to fixed indexed annuities.
Schedule of the Carrying Amounts and Estimated Fair Value of the Company's Financial Instruments The carrying amounts and estimated fair values of the Company’s financial instruments as of the periods shown below are as follows:
As of
March 31, 2021December 31, 2020
Fair Value
Level		Carrying
Amounts		Fair ValuesCarrying
Amounts		Fair Values
  (Dollars In Millions)
Assets:     
Commercial mortgage loans(1)
3$10,137 $10,862 $10,006 $10,788 
Policy loans31,576 1,576 1,593 1,593 
  Other long-term investments(2)
21,190 1,251 1,186 1,283 
Liabilities:     
Stable value product account balances3$6,655 $6,762 $6,056 $6,231 
Future policy benefits and claims(3)
31,545 1,567 1,580 1,603 
Other policyholders’ funds(4)
3105 112 102 108 
Debt:(5)
     
Subordinated funding obligations
3$110 $112 $110 $121 
Except as noted below, fair values were estimated using quoted market prices.
(1) The carrying amount is net of allowance for credit losses.
(2) Other long-term investments represents a Modco receivable, which is related to invested assets such as fixed income and structured securities, which are legally owned by the ceding company. The fair value is determined in a manner consistent with other similar invested assets held by the Company.
(3) Single premium immediate annuity without life contingencies.
(4) Supplementary contracts without life contingencies.
(5) Excludes immaterial capital lease obligations.