INVESTMENT OPERATIONS (Tables)

12 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Summary of major categories of net investment income

Major categories of net investment income are summarized as follows:

	For The Year Ended December 31,
	2021		2020		2019
			(Recast)		(Recast)
	(Dollars In Millions)
Fixed maturities	$	2,513	$	2,481	$	2,471
Equity securities		27		24		31
Commercial mortgage loans		505		443		389
Investment real estate		1		1		1
Other investment income		156		139		119
		3,202		3,088		3,011
Investment expenses		220		199		186
Net investment income	$	2,982	$	2,889	$	2,825

Summary of net realized investment and derivative gains (losses)

Net gains (losses) — investments and derivatives are summarized as follows:

	For The Year Ended December 31,
	2021		2020		2019
			(Recast)		(Recast)
	(Dollars In Millions)
Realized gains (losses) — investments, net
Fixed maturities	$	46	$	46	$	48
Equity securities		4		—		(3)
Other investments		20		45		9
Total realized gains (losses) — investments, net		70		91		54
Modco trading portfolio		(103)		130		243
Equity securities		(8)		13		50
Change in net expected credit losses — fixed maturities(1)		6		(125)		—
Net impairment losses recognized in operations(2)		—		—		(34)
Commercial mortgage loans		137		(149)		(4)
Gains (losses) — derivatives, net(3)		48		(195)		(368)
Net gains (losses) — investments and derivatives	$	150	$	(235)	$	(59)

(1) Represents net credit losses recognized under FASB ASC 326

(2) Represents other-than-temporary impairment losses recognized in prior periods under FASB ASC 320

(3) Refer to Note 6, Derivative Financial Instruments

Schedule of fair value (proceeds) and gains (losses) on securities in an unrealized gain or loss position

The chart below summarizes the sales proceeds and gains (losses) realized on securities classified as AFS.

	For The Year Ended December 31,
	2021		2020		2019
			(Recast)		(Recast)
	(Dollars In Millions)
Securities in an unrealized gain position:
Sales proceeds	$	1,537	$	2,000	$	2,514
Realized gains	$	47	$	51	$	62
Securities in an unrealized loss position:
Sales proceeds	$	35	$	34	$	547
Realized losses	$	(1)	$	(5)	$	(14)

The following table includes the gross unrealized losses and fair value of the Company’s AFS fixed maturities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2021:

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
	(Dollars In Millions)
Residential mortgage-backed securities	$	4,615	$	(102)	$	15	$	—	$	4,630	$	(102)
Commercial mortgage-backed securities		129		(1)		88		(6)		217		(7)
Other asset-backed securities		249		(1)		47		(1)		296		(2)
U.S. government-related securities		306		(13)		158		(12)		464		(25)
Other government-related securities		76		(2)		—		—		76		(2)
States, municipalities, and political subdivisions	$	37	$	(1)	$	4	$	—	$	41	$	(1)
Corporate securities		4,841		(119)		515		(37)		5,356		(156)
Redeemable preferred stocks		20		—		—		—		20		—
	$	10,273	$	(239)	$	827	$	(56)	$	11,100	$	(295)

The following table includes the gross unrealized losses and fair value of the Company’s AFS fixed maturities, for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2020:

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
	(Recast)
	(Dollars In Millions)
Residential mortgage-backed securities	$	386	$	(1)	$	9	$	—	$	395	$	(1)
Commercial mortgage-backed securities		263		(16)		30		(4)		293		(20)
Other asset-backed securities		146		(2)		326		(5)		472		(7)
U.S. government-related securities		311		(3)		1		—		312		(3)
Other government-related securities		19		—		7		(1)		26		(1)
States, municipalities, and political subdivisions		34		(1)		5		—		39		(1)
Corporate securities	$	1,063	$	(33)	$	728	$	(66)	$	1,791	$	(99)
Redeemable preferred stocks		—		—		—		—		—		—
	$	2,222	$	(56)	$	1,106	$	(76)	$	3,328	$	(132)

Schedule of amortized cost and fair value of the Company's investments classified as available-for-sale

The amortized cost, gross unrealized gains, gross unrealized losses, allowance for expected credit losses, and fair value of the Company’s investments classified as AFS are as follows:

			Gross		Gross		Allowance for
	Amortized		Unrealized		Unrealized		Expected
	Cost		Gains		Losses		Credit Losses		Fair Value
	(Dollars In Millions)
As of December 31, 2021
Fixed maturities:(1)
Residential mortgage-backed securities	$	6,876	$	31	$	(102)	$	—	$	6,805
Commercial mortgage-backed securities		2,239		75		(7)		—		2,307
Other asset-backed securities		1,391		31		(2)		—		1,420
U.S. government-related securities		821		12		(25)		—		808
Other government-related securities		680		75		(2)		—		753
States, municipals, and political subdivisions		3,747		410		(1)		—		4,156
Corporate securities		49,211		4,645		(156)		(1)		53,699
Redeemable preferred stocks		297		10		—		—		307
		65,262		5,289		(295)		(1)		70,255
Short-term investments		780		—		—		—		780
	$	66,042	$	5,289	$	(295)	$	(1)	$	71,035

(1) Included in the total above, as of December 31, 2021, the Company had public utility securities that had an amortized cost and fair value of $6.5 billion and $7.0 billion, respectively and foreign government securities that had an amortized cost and fair value of $620 million and $687 million, respectively.

As of December 31, 2020 (Recast)
Fixed maturities:(2)
Residential mortgage-backed securities	$	6,510	$	159	$	(1)	$	—	$	6,668
Commercial mortgage-backed securities		2,429		128		(19)		(4)		2,534
Other asset-backed securities		1,546		40		(7)		(1)		1,578
U.S. government-related securities		1,492		26		(3)		—		1,515
Other government-related securities		622		96		(1)		—		717
States, municipals, and political subdivisions		3,902		519		(1)		—		4,420
Corporate securities		46,150		6,074		(99)		(18)		52,107
Redeemable preferred stocks		183		11		—		—		194
		62,834		7,053		(131)		(23)		69,733
Short-term investments		386		—		—		—		386
	$	63,220	$	7,053	$	(131)	$	(23)	$	70,119

(2) Included in the total above, as of December 31, 2020, the Company had public utility securities that had an amortized cost and fair value of $6.3 billion and $7.0 billion, respectively and foreign government securities that had an amortized cost and fair value of $557 million and $644 million, respectively.

Schedule of fair value of trading securities

	As of December 31,
	2021		2020
	(Dollars In Millions)
Fixed maturities:(1)
Residential mortgage-backed securities	$	133	$	209
Commercial mortgage-backed securities		209		214
Other asset-backed securities		185		163
U.S. government-related securities		33		91
Other government-related securities		64		30
States, municipals, and political subdivisions		286		282
Corporate securities		1,875		1,860
Redeemable preferred stocks		8		13
		2,793		2,862
Equity securities		13		20
Short-term investments		82		76
	$	2,888	$	2,958

(1) Included in the total above, as of December 31, 2021, the Company had public utility and foreign government securities that had a fair value of $134 million and $44 million, respectively and as of December 31, 2020, the Company had public utility and foreign government securities that had a fair value of $144 million and $30 million, respectively.

Schedule of amortized cost and fair value of available-for-sale and held-to-maturity fixed maturities, by expected maturity

The amortized cost and fair value of available-for-sale fixed maturities as of December 31, 2021, by expected maturity, are shown below. Expected maturities of securities without a single maturity date are allocated based on estimated rates of prepayment that may differ from actual rates of prepayment.

	Available-for-sale
	Amortized		Fair
	Cost		Value
	(Dollars In Millions)
Due in one year or less	$	1,707	$	1,719
Due after one year through five years		11,046		11,453
Due after five years through ten years		15,434		16,135
Due after ten years		37,075		40,948
	$	65,262	$	70,255

Schedule of allowance for credit losses on fixed maturities

The following chart is a rollforward of the allowance for expected credit losses on fixed maturities classified as AFS:

	For The Year Ended December 31, 2021								For The Year Ended December 31, 2020
	Corporate								Corporate
	Securities		CMBS		ABS		Total		Securities		CMBS		ABS		Total
	(Dollars In Millions)								(Dollars In Millions)
Beginning Balance	$	18	$	4	$	1	$	23	$	—	$	—	$	—	$	—
Additions for securities for which an allowance was not previously recorded		—		—		—		—		62		4		1		67
Adjustments on previously recorded allowances due to change in expected cash flows		(1)		(4)		—		(5)		20		—		1		21
Reductions on previously recorded allowances due to disposal of security in the current period		—		—		(1)		(1)		(1)		—		(1)		(2)
Write-offs of previously recorded allowances due to intent or requirement to sell		(16)		—		—		(16)		(63)		—		—		(63)
Ending Balance	$	1	$	—	$	—	$	1	$	18	$	4	$	1	$	23

Summary of change in unrealized gains (losses), net of income tax, on fixed maturity and equity securities, classified as available-for-sale

The change in unrealized gains (losses), net of allowance for expected credit losses and income taxes, on fixed maturities classified as AFS is summarized as follows:

	For The Year Ended December 31,
	2021		2020		2019
			(Recast)		(Recast)
	(Dollars In Millions)
Fixed maturities	$	(1,523)	$	3,271	$	4,219