INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2015

Available-for-sale Securities

	December 31, 2014
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair   Value
Securities available for sale, carried at fair value:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	17,341		$	1,740		$	0		$	19,081
Municipalities		88			9			0			97
Mortgage- and asset-backed securities		351			35			0			386
Public utilities		1,691			226			5			1,912
Sovereign and supranational		799			163			0			962
Banks/financial institutions		2,752			325			189			2,888
Other corporate		3,479			531			48			3,962
Total yen-denominated		26,501			3,029			242			29,288
Dollar-denominated:
U.S. government and agencies		100			17			0			117
Municipalities		961			201			2			1,160
Mortgage- and asset-backed securities		185			31			0			216
Public utilities		5,061			960			36			5,985
Sovereign and supranational		343			111			0			454
Banks/financial institutions		2,943			775			8			3,710
Other corporate		22,291			2,682			330			24,643
Total dollar-denominated		31,884			4,777			376			36,285
Total fixed maturities		58,385			7,806			618			65,573
Perpetual securities:
Yen-denominated:
Banks/financial institutions		2,132			223			92			2,263
Other corporate		183			48			0			231
Dollar-denominated:
Banks/financial institutions		125			50			0			175
Total perpetual securities		2,440			321			92			2,669
Equity securities		19			9			0			28
Total securities available for sale		$	60,844		$	8,136		$	710		$	68,270

The amortized cost for our investments in debt and perpetual securities, the cost for equity securities and the fair values of these investments are shown in the following tables.

	March 31, 2015
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair   Value
Securities available for sale, carried at fair value:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	17,230		$	1,509		$	0		$	18,739
Municipalities		88			7			0			95
Mortgage- and asset-backed securities		344			33			0			377
Public utilities		1,707			261			0			1,968
Sovereign and supranational		794			218			0			1,012
Banks/financial institutions		2,693			321			190			2,824
Other corporate		3,515			589			37			4,067
Total yen-denominated		26,371			2,938			227			29,082
Dollar-denominated:
U.S. government and agencies		101			16			0			117
Municipalities		962			206			3			1,165
Mortgage- and asset-backed securities		213			31			0			244
Public utilities		5,211			1,062			23			6,250
Sovereign and supranational		340			116			0			456
Banks/financial institutions		3,001			835			5			3,831
Other corporate		23,410			3,002			238			26,174
Total dollar-denominated		33,238			5,268			269			38,237
Total fixed maturities		59,609			8,206			496			67,319
Perpetual securities:
Yen-denominated:
Banks/financial institutions		2,014			249			84			2,179
Other corporate		183			36			0			219
Dollar-denominated:
Banks/financial institutions		112			51			1			162
Total perpetual securities		2,309			336			85			2,560
Equity securities		19			9			0			28
Total securities available for sale		$	61,937		$	8,551		$	581		$	69,907

Held-to-maturity Securities

	March 31, 2015
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair   Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	20,084		$	2,891		$	0		$	22,975
Municipalities		346			66			0			412
Mortgage- and asset-backed securities		42			2			0			44
Public utilities		3,269			263			29			3,503
Sovereign and supranational		2,564			235			8			2,791
Banks/financial institutions		4,947			193			86			5,054
Other corporate		3,010			328			15			3,323
Total yen-denominated		34,262			3,978			138			38,102
Total securities held to maturity		$	34,262		$	3,978		$	138		$	38,102

	December 31, 2014
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	20,023		$	3,195		$	0		$	23,218
Municipalities		346			71			0			417
Mortgage- and asset-backed securities		43			3			0			46
Public utilities		3,342			281			20			3,603
Sovereign and supranational		2,556			272			14			2,814
Banks/financial institutions		4,932			231			78			5,085
Other corporate		3,000			326			12			3,314
Total yen-denominated		34,242			4,379			124			38,497
Total securities held to maturity		$	34,242		$	4,379		$	124		$	38,497

Investments Classified by Contractual Maturity Date

The contractual maturities of our investments in fixed maturities at March 31, 2015, were as follows:

	Aflac Japan						Aflac U.S.
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair   Value
Available for sale:
Due in one year or less		$	311		$	339		$	65		$	68
Due after one year through five years		2,173			2,539			626			725
Due after five years through 10 years		10,658			11,346			1,666			1,803
Due after 10 years		34,092			38,783			9,108			10,721
Mortgage- and asset-backed securities		397			451			37			46
Total fixed maturities available for sale		$	47,631		$	53,458		$	11,502		$	13,363
Held to maturity:
Due in one year or less		$	109		$	114		$	0		$	0
Due after one year through five years		1,374			1,472			0			0
Due after five years through 10 years		2,151			2,341			0			0
Due after 10 years		30,587			34,131			0			0
Mortgage- and asset-backed securities		41			44			0			0
Total fixed maturities held to maturity		$	34,262		$	38,102		$	0		$	0

Economic Maturities of Investments in Perpetual Securities

The economic maturities of our investments in perpetual securities, which were all reported as available for sale at March 31, 2015, were as follows:

	Aflac Japan						Aflac U.S.
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair   Value
Due in one year or less		$	182		$	172		$	5		$	5
Due after one year through five years		626			679			0			0
Due after 10 years		1,458			1,648			38			56
Total perpetual securities available for sale		$	2,266		$	2,499		$	43		$	61

Bank and Financial Institution Investments

Our total investments in the bank and financial institution sector, including those classified as perpetual securities, were as follows:

	March 31, 2015						December 31, 2014
	Total Investments in Banks and Financial Institutions Sector (in millions)			Percentage of Total Investment Portfolio			Total Investments in Banks and Financial Institutions Sector (in millions)			Percentage of Total Investment     Portfolio
Fixed maturities:
Amortized cost		$	10,641		11	%		$	10,627		11	%
Fair value		11,709			11			11,683			11
Perpetual securities:
Upper Tier II:
Amortized cost		$	1,434		1	%		$	1,554		2	%
Fair value		1,555			1			1,645			1
Tier I:
Amortized cost		692			1			703			1
Fair value		786			1			793			1
Total:
Amortized cost		$	12,767		13	%		$	12,884		14	%
Fair value		14,050			13			14,121			13

Gain (Loss) on Investments

Information regarding pretax realized gains and losses from investments is as follows:

	Three Months Ended March 31,
(In millions)	2015			2014
Realized investment gains (losses) on securities:
Fixed maturities:
Available for sale:
Gross gains from sales	$	49		$	35
Gross losses from sales	0			(1		)
Net gains (losses) from redemptions	19			7
Other-than-temporary impairment losses	(6		)	(3		)
Total fixed maturities	62			38
Derivatives and other:
Derivative gains (losses)	(49		)	(83		)
Other	0			(1		)
Total derivatives and other	(49		)	(84		)
Total realized investment gains (losses)	$	13		$	(46	)

Other Than Temporary Impairment Losses on Investment Securities

The following table details our pretax other-than-temporary impairment losses by investment category that resulted from our impairment evaluation process.

	Three Months Ended March 31,
(In millions)	2015		2014
Corporate bonds	$	2	$	3
Bank/financial institution bonds	4		0
Total other-than-temporary impairment losses realized (1)	$	6	$	3

⁽¹⁾ Includes $6 and $3 for the three-month periods ended March 31, 2015 and 2014, respectively, from change in intent to sell securities

Net Effect on Shareholders' Equity of Unrealized Gains and Losses from Investment Securities

The net effect on shareholders’ equity of unrealized gains and losses from investment securities was as follows:

(In millions)	March 31, 2015				December 31, 2014
Unrealized gains (losses) on securities available for sale		$	7,970			$	7,426
Deferred income taxes		(2,944		)		(2,754		)
Shareholders’ equity, unrealized gains (losses) on investment securities		$	5,026			$	4,672

Investments Gross Unrealized Loss Aging

The following tables show the fair values and gross unrealized losses of our available-for-sale and held-to-maturity investments that were in an unrealized loss position, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

	March 31, 2015
	Total						Less than 12 months						12 months or longer
(In millions)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Fixed Maturities:
Municipalities:
Dollar-denominated		$	73		$	3		$	51		$	3		$	22		$	0
Public utilities:
Dollar-denominated		795			23			404			9			391			14
Yen-denominated		761			29			421			11			340			18
Sovereign and supranational:
Yen-denominated		366			8			166			0			200			8
Banks/financial institutions:
Dollar-denominated		115			5			115			5			0			0
Yen-denominated		2,324			276			1,107			16			1,217			260
Other corporate:
Dollar-denominated		4,701			238			2,278			88			2,423			150
Yen-denominated		998			52			124			3			874			49
Total fixed maturities		10,133			634			4,666			135			5,467			499
Perpetual securities:
Dollar-denominated		6			1			0			0			6			1
Yen-denominated		719			84			122			3			597			81
Total perpetual securities		725			85			122			3			603			82
Total		$	10,858		$	719		$	4,788		$	138		$	6,070		$	581

	December 31, 2014
	Total						Less than 12 months						12 months or longer
(In millions)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Fixed Maturities:
Municipalities:
Dollar-denominated		$	75		$	2		$	53		$	1		$	22		$	1
Public utilities:
Dollar-denominated		1,001			36			164			7			837			29
Yen-denominated		805			25			98			1			707			24
Sovereign and supranational:
Yen-denominated		359			14			0			0			359			14
Banks/financial institutions:
Dollar-denominated		205			8			53			5			152			3
Yen-denominated		1,828			267			166			0			1,662			267
Other corporate:
Dollar-denominated		8,072			330			1,901			62			6,171			268
Yen-denominated		1,151			60			122			2			1,029			58
Total fixed maturities		13,496			742			2,557			78			10,939			664
Perpetual securities:
Yen-denominated		783			92			194			5			589			87
Total perpetual securities		783			92			194			5			589			87
Total		$	14,279		$	834		$	2,751		$	83		$	11,528		$	751

Investments in Unrealized Loss Position

The following table provides more information on our unrealized loss positions.

		March 31, 2015									December 31, 2014
(In millions)	Investments in an Unrealized Loss Position			Gross Unrealized Losses			Gross Unrealized Losses that are Investment Grade			Investments in an Unrealized Loss Position			Gross Unrealized Losses			Gross Unrealized Losses that are Investment Grade
Fixed Maturities:
Public utilities		14	%		7	%		96	%		13	%		7	%		100	%
Sovereign and supranational		3			1			100			3			2			100
Banks/financial institutions		23			39			33			14			33			31
Other corporate		53			41			83			65			47			88
Total fixed maturities		93	%		88	%					95	%		89	%
Perpetual securities		7			12			100			5			11			100
Total		100	%		100	%					100	%		100	%

Securities Lending

The following table presents our security loans outstanding and the corresponding collateral held:

(In millions)	March 31, 2015			December 31, 2014
Security loans outstanding, fair value		$	2,558		$	2,149
Cash collateral on loaned securities		2,615			2,193

Variable Interest Entity, Consolidated

Investments in Variable Interest Entities

The following table presents the amortized cost, fair value and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported.

Investments in Consolidated Variable Interest Entities

	March 31, 2015						December 31, 2014
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Assets:
Fixed maturities, available for sale		$	3,511		$	4,667		$	3,020		$	4,166
Perpetual securities, available for sale		406			432			405			429
Fixed maturities, held to maturity		83			83			83			84
Other assets		110			110			106			106
Total assets of consolidated VIEs		$	4,110		$	5,292		$	3,614		$	4,785
Liabilities:
Other liabilities		$	392		$	392		$	318		$	318
Total liabilities of consolidated VIEs		$	392		$	392		$	318		$	318

Variable Interest Entity, Not Consolidated

Investments in Variable Interest Entities

VIEs-Not Consolidated

The table below reflects the amortized cost, fair value and balance sheet caption in which our investment in VIEs not consolidated are reported.

Investments in Variable Interest Entities Not Consolidated

	March 31, 2015						December 31, 2014
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Assets:
Fixed maturities, available for sale		$	6,159		$	7,089		$	6,104		$	6,937
Perpetual securities, available for sale		312			324			324			330
Fixed maturities, held to maturity		2,488			2,736			2,564			2,829
Total investments in VIEs not consolidated		$	8,959		$	10,149		$	8,992		$	10,096

Perpetual securities:

Schedule of Available-for-sale Securities Reconciliation

Details of our holdings of perpetual securities were as follows:

Perpetual Securities

		March 31, 2015									December 31, 2014
(In millions)	Credit Rating	Amortized Cost			Fair Value			Unrealized Gain (Loss)			Amortized Cost			Fair Value			Unrealized Gain (Loss)
Upper Tier II:
	A		$	61		$	88		$	27		$	61		$	87		$	26
	BBB		1,209			1,235			26			1,330			1,333			3
	BB or lower		164			232			68			163			225			62
Total Upper Tier II			1,434			1,555			121			1,554			1,645			91
Tier I:
	BBB		521			561			40			519			556			37
	BB or lower		171			225			54			184			237			53
Total Tier I			692			786			94			703			793			90
Other subordinated - non-banks:
	BB or lower		183			219			36			183			231			48
Total			$	2,309		$	2,560		$	251		$	2,440		$	2,669		$	229