FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Hierarchy, Assets and Liabilities Measured on Recurring Basis

The following tables present the fair value hierarchy levels of the Company's assets and liabilities that are measured and carried at fair value on a recurring basis.



	March 31, 2015
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities available for sale, carried at fair value:
Fixed maturities:
Government and agencies		$	18,361		$	495		$	0		$	18,856
Municipalities		0			1,260			0			1,260
Mortgage- and asset-backed securities		0			400			221			621
Public utilities		0			8,218			0			8,218
Sovereign and supranational		0			1,468			0			1,468
Banks/financial institutions		0			6,629			26			6,655
Other corporate		0			30,241			0			30,241
Total fixed maturities		18,361			48,711			247			67,319
Perpetual securities:
Banks/financial institutions		0			2,191			150			2,341
Other corporate		0			219			0			219
Total perpetual securities		0			2,410			150			2,560
Equity securities		19			6			3			28
Other assets:
Foreign currency swaps		0			528			109			637
Foreign currency forwards		0			64			0			64
Credit default swaps		0			0			1			1
Interest rate swaps		0			4			0			4
Total other assets		0			596			110			706
Other investments		179			0			0			179
Cash and cash equivalents		4,363			0			0			4,363
Total assets		$	22,922		$	51,723		$	510		$	75,155
Liabilities:
Foreign currency swaps		$	0		$	1		$	392		$	393
Foreign currency forwards		0			165			0			165
Foreign currency options		0			15			0			15
Interest rate swaptions		0			26			0			26
Total liabilities		$	0		$	207		$	392		$	599



	December 31, 2014
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities available for sale, carried at fair value:
Fixed maturities:
Government and agencies		$	18,683		$	515		$	0		$	19,198
Municipalities		0			1,257			0			1,257
Mortgage- and asset-backed securities		0			379			223			602
Public utilities		0			7,897			0			7,897
Sovereign and supranational		0			1,416			0			1,416
Banks/financial institutions		0			6,572			26			6,598
Other corporate		0			28,605			0			28,605
Total fixed maturities		18,683			46,641			249			65,573
Perpetual securities:
Banks/financial institutions		0			2,289			149			2,438
Other corporate		0			231			0			231
Total perpetual securities		0			2,520			149			2,669
Equity securities		19			6			3			28
Other assets:
Foreign currency swaps		0			640			106			746
Foreign currency forwards		0			56			0			56
Total other assets		0			696			106			802
Other investments		171			0			0			171
Cash and cash equivalents		4,658			0			0			4,658
Total assets		$	23,531		$	49,863		$	507		$	73,901
Liabilities:
Foreign currency swaps		$	0		$	0		$	318		$	318
Foreign currency forwards		0			1,912			0			1,912
Foreign currency options		0			33			0			33
Interest rate swaptions		0			160			0			160
Total liabilities		$	0		$	2,105		$	318		$	2,423

Fair Value Hierarchy Levels of Assets and Liabilities Carried at Cost or Amortized Cost

The following tables present the carrying amount and fair value categorized by fair value hierarchy level for the Company's financial instruments that are not carried at fair value.



	March 31, 2015
(In millions)	Carrying Value			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Government and agencies		$	20,084		$	22,975		$	0		$	0		$	22,975
Municipalities		346			0			412			0			412
Mortgage and asset-backed securities		42			0			14			30			44
Public utilities		3,269			0			3,503			0			3,503
Sovereign and supranational		2,564			0			2,791			0			2,791
Banks/financial institutions		4,947			0			5,054			0			5,054
Other corporate		3,010			0			3,323			0			3,323
Total assets		$	34,262		$	22,975		$	15,097		$	30		$	38,102
Liabilities:
Other policyholders’ funds		$	6,139		$	0		$	0		$	6,005		$	6,005
Notes payable (excluding capital leases)		6,268			0			0			6,924			6,924
Total liabilities		$	12,407		$	0		$	0		$	12,929		$	12,929



	December 31, 2014
(In millions)	Carrying Value			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Government and agencies		$	20,023		$	23,218		$	0		$	0		$	23,218
Municipalities		346			0			417			0			417
Mortgage and asset-backed securities		43			0			15			31			46
Public utilities		3,342			0			3,603			0			3,603
Sovereign and supranational		2,556			0			2,814			0			2,814
Banks/financial institutions		4,932			0			5,085			0			5,085
Other corporate		3,000			0			3,314			0			3,314
Total assets		$	34,242		$	23,218		$	15,248		$	31		$	38,497
Liabilities:
Other policyholders’ funds		$	6,031		$	0		$	0		$	5,905		$	5,905
Notes payable (excluding capital leases)		5,268			0			0			5,835			5,835
Total liabilities		$	11,299		$	0		$	0		$	11,740		$	11,740

Fair Value Assets Available-for-Sale Securities Primary Pricing Sources

The following tables present the pricing sources for the fair values of our fixed maturities, perpetual securities, and equity securities.



	March 31, 2015
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities available for sale, carried at fair value:
Fixed maturities:
Government and agencies:
Third party pricing vendor		$	18,361		$	495		$	0		$	18,856
Total government and agencies		18,361			495			0			18,856
Municipalities:
Third party pricing vendor		0			1,260			0			1,260
Total municipalities		0			1,260			0			1,260
Mortgage- and asset-backed securities:
Third party pricing vendor		0			400			0			400
Broker/other		0			0			221			221
Total mortgage- and asset-backed securities		0			400			221			621
Public utilities:
Third party pricing vendor		0			8,218			0			8,218
Total public utilities		0			8,218			0			8,218
Sovereign and supranational:
Third party pricing vendor		0			1,468			0			1,468
Total sovereign and supranational		0			1,468			0			1,468
Banks/financial institutions:
Third party pricing vendor		0			6,629			0			6,629
Broker/other		0			0			26			26
Total banks/financial institutions		0			6,629			26			6,655
Other corporate:
Third party pricing vendor		0			30,241			0			30,241
Total other corporate		0			30,241			0			30,241
Total fixed maturities		18,361			48,711			247			67,319
Perpetual securities:
Banks/financial institutions:
Third party pricing vendor		0			2,191			0			2,191
Broker/other		0			0			150			150
Total banks/financial institutions		0			2,191			150			2,341
Other corporate:
Third party pricing vendor		0			219			0			219
Total other corporate		0			219			0			219
Total perpetual securities		0			2,410			150			2,560
Equity securities:
Third party pricing vendor		19			6			0			25
Broker/other		0			0			3			3
Total equity securities		19			6			3			28
Total securities available for sale		$	18,380		$	51,127		$	400		$	69,907



	December 31, 2014
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities available for sale, carried at fair value:
Fixed maturities:
Government and agencies:
Third party pricing vendor		$	18,683		$	515		$	0		$	19,198
Total government and agencies		18,683			515			0			19,198
Municipalities:
Third party pricing vendor		0			1,257			0			1,257
Total municipalities		0			1,257			0			1,257
Mortgage- and asset-backed securities:
Third party pricing vendor		0			379			0			379
Broker/other		0			0			223			223
Total mortgage- and asset-backed securities		0			379			223			602
Public utilities:
Third party pricing vendor		0			7,897			0			7,897
Total public utilities		0			7,897			0			7,897
Sovereign and supranational:
Third party pricing vendor		0			1,416			0			1,416
Total sovereign and supranational		0			1,416			0			1,416
Banks/financial institutions:
Third party pricing vendor		0			6,514			0			6,514
Broker/other		0			58			26			84
Total banks/financial institutions		0			6,572			26			6,598
Other corporate:
Third party pricing vendor		0			28,605			0			28,605
Total other corporate		0			28,605			0			28,605
Total fixed maturities		18,683			46,641			249			65,573
Perpetual securities:
Banks/financial institutions:
Third party pricing vendor		0			2,289			0			2,289
Broker/other		0			0			149			149
Total banks/financial institutions		0			2,289			149			2,438
Other corporate:
Third party pricing vendor		0			231			0			231
Total other corporate		0			231			0			231
Total perpetual securities		0			2,520			149			2,669
Equity securities:
Third party pricing vendor		19			6			0			25
Broker/other		0			0			3			3
Total equity securities		19			6			3			28
Total securities available for sale		$	18,702		$	49,167		$	401		$	68,270

Fair Value Assets Held-To-Maturity Securities Primary Pricing Sources



	December 31, 2014
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Government and agencies:
Third party pricing vendor		$	23,218		$	0		$	0		$	23,218
Total government and agencies		23,218			0			0			23,218
Municipalities:
Third party pricing vendor		0			417			0			417
Total municipalities		0			417			0			417
Mortgage- and asset-backed securities:
Third party pricing vendor		0			15			0			15
Broker/other		0			0			31			31
Total mortgage- and asset-backed securities		0			15			31			46
Public utilities:
Third party pricing vendor		0			3,603			0			3,603
Total public utilities		0			3,603			0			3,603
Sovereign and supranational:
Third party pricing vendor		0			2,814			0			2,814
Total sovereign and supranational		0			2,814			0			2,814
Banks/financial institutions:
Third party pricing vendor		0			5,085			0			5,085
Total banks/financial institutions		0			5,085			0			5,085
Other corporate:
Third party pricing vendor		0			3,287			0			3,287
Broker/other		0			27			0			27
Total other corporate		0			3,314			0			3,314
Total securities held to maturity		$	23,218		$	15,248		$	31		$	38,497



	March 31, 2015
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Government and agencies:
Third party pricing vendor		$	22,975		$	0		$	0		$	22,975
Total government and agencies		22,975			0			0			22,975
Municipalities:
Third party pricing vendor		0			412			0			412
Total municipalities		0			412			0			412
Mortgage- and asset-backed securities:
Third party pricing vendor		0			14			0			14
Broker/other		0			0			30			30
Total mortgage- and asset-backed securities		0			14			30			44
Public utilities:
Third party pricing vendor		0			3,503			0			3,503
Total public utilities		0			3,503			0			3,503
Sovereign and supranational:
Third party pricing vendor		0			2,791			0			2,791
Total sovereign and supranational		0			2,791			0			2,791
Banks/financial institutions:
Third party pricing vendor		0			4,804			0			4,804
Broker/other		0			250			0			250
Total banks/financial institutions		0			5,054			0			5,054
Other corporate:
Third party pricing vendor		0			3,296			0			3,296
Broker/other		0			27			0			27
Total other corporate		0			3,323			0			3,323
Total securities held to maturity		$	22,975		$	15,097		$	30		$	38,102

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

Transfers between Hierarchy Levels and Level 3 Rollforward

There were no transfers between Level 1 and 2 for the three-month periods ended March 31, 2015 and 2014.

The following tables present the changes in fair value of our available-for-sale investments and derivatives classified as Level 3.



Three Months Ended March 31, 2015
	Fixed Maturities											Perpetual Securities		Equity Securities		Derivatives ⁽¹⁾
(In millions)	Mortgage- and Asset- Backed Securities			Public Utilities		Sovereign and Supranational		Banks/ Financial Institutions		Other Corporate		Banks/ Financial Institutions				Interest Rate Swaps		Foreign Currency Swaps			Credit Default Swaps		Total
Balance, beginning of period	$	223		$	0	$	0	$	26	$	0	$	149	$	3	$	0	$	(212	)	$	0	$	189
Realized investment gains (losses) included in earnings	0			0		0		0		0		0		0		0		(83		)	1		(82		)
Unrealized gains (losses) included in other comprehensive income (loss)	(1		)	0		0		0		0		1		0		0		(4		)	0		(4		)
Purchases, issuances, sales and settlements:
Purchases	0			0		0		0		0		0		0		0		0			0		0
Issuances	0			0		0		0		0		0		0		0		0			0		0
Sales	0			0		0		0		0		0		0		0		0			0		0
Settlements	(1		)	0		0		0		0		0		0		0		16			0		15
Transfers into Level 3	0			0		0		0		0		0		0		0		0			0		0
Transfers out of Level 3	0			0		0		0		0		0		0		0		0			0		0
Balance, end of period	$	221		$	0	$	0	$	26	$	0	$	150	$	3	$	0	$	(283	)	$	1	$	118
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses)	$	0		$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	(83	)	$	1	$	(82	)

⁽¹⁾ Derivative assets and liabilities are presented net



Three Months Ended March 31, 2014
	Fixed Maturities											Perpetual Securities		Equity Securities		Derivatives ⁽¹⁾
(In millions)	Mortgage- and Asset- Backed Securities			Public Utilities		Sovereign and Supranational		Banks/ Financial Institutions		Other Corporate		Banks/ Financial Institutions				Interest Rate Swaps			Foreign Currency Swaps			Credit Default Swaps			Total
Balance, beginning of period	$	369		$	0	$	0	$	23	$	0	$	52	$	3	$	1		$	(99	)	$	(3	)	$	346
Realized investment gains (losses) included in earnings	0			0		0		0		0		0		0		(1		)	(10		)	2			(9		)
Unrealized gains (losses) included in other comprehensive income (loss)	(104		)	0		0		2		0		4		0		0			(1		)	0			(99		)
Purchases, issuances, sales and settlements:
Purchases	0			0		0		0		0		0		0		0			0			0			0
Issuances	0			0		0		0		0		0		0		0			0			0			0
Sales	0			0		0		0		0		0		0		0			0			0			0
Settlements	(3		)	0		0		0		0		0		0		0			24			0			21
Transfers into Level 3	0			0		0		0		0		0		0		0			0			0			0
Transfers out of Level 3	0			0		0		0		0		0		0		0			0			0			0
Balance, end of period	$	262		$	0	$	0	$	25	$	0	$	56	$	3	$	0		$	(86	)	$	(1	)	$	259
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses)	$	0		$	0	$	0	$	0	$	0	$	0	$	0	$	(1	)	$	(10	)	$	2		$	(9	)

⁽¹⁾ Derivative assets and liabilities are presented net

Fair Value Inputs Assets Quantitative Information

December 31, 2014

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Assets:

Securities available for sale, carried at fair value:

Fixed maturities:

Mortgage- and asset-backed securities

223

Consensus pricing

Offered quotes

N/A

^(d)

Banks/financial institutions

Consensus pricing

Offered quotes

N/A

^(d)

Perpetual securities:

Banks/financial institutions

149

Consensus pricing

Offered quotes

N/A

^(d)

Equity securities

Net asset value

Offered quotes

$1-$677 ($6)

Other assets:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

CDS spreads

16 - 105 bps

Foreign exchange rates

20.50%

^(c)

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

Foreign exchange rates

20.50%

^(c)

Total assets

507

(a) Inputs derived from U.S. long-term rates to accommodate long maturity nature of our swaps

(b) Inputs derived from Japan long-term rates to accommodate long maturity nature of our swaps

(d) N/A represents securities where we receive unadjusted broker quotes and for which there is no transparency into the providers' valuation techniques or unobservable inputs.

The following tables summarize the significant unobservable inputs used in the valuation of our Level 3 available-for-sale investments and derivatives. Included in the tables are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments.

March 31, 2015

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Assets:

Securities available for sale, carried at fair value:

Fixed maturities:

Mortgage- and asset-backed securities

221

Consensus pricing

Offered quotes

N/A

^(e)

Banks/financial institutions

Consensus pricing

Offered quotes

N/A

^(e)

Perpetual securities:

Banks/financial institutions

150

Consensus pricing

Offered quotes

N/A

^(e)

Equity securities

Net asset value

Offered quotes

$1 - $679 ($6)

Other assets:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

2.02% - 2.39%

^(b)

Interest rates (JPY)

.58% - 1.36%

^(c)

CDS spreads

20 - 110 bps

Foreign exchange rates

20.32%

^(d)

105

Discounted cash flow

Interest rates (USD)

2.02% - 2.39%

^(b)

Interest rates (JPY)

.58% - 1.36%

^(c)

Foreign exchange rates

20.32%

^(d)

Credit default swaps

Discounted cash flow

Base correlation

59% - 62%

^(a)

CDS spreads

93 bps

Recovery rate

36.69%

Total assets

510

(a) Range of base correlation for our bespoke tranche for attachment and detachment points corresponding to market indices

(b) Inputs derived from U.S. long-term rates to accommodate long maturity nature of our swaps

(d) Based on 10 year volatility of JPY/USD exchange rate

(e) N/A represents securities where we receive unadjusted broker quotes and for which there is no transparency into the providers' valuation techniques or unobservable inputs.

Fair Value Inputs Liabilities Quantitative Information

December 31, 2014

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Liabilities:

Foreign currency swaps

176

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

CDS spreads

16 - 105 bps

Foreign exchange rates

20.50%

^(c)

111

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

CDS spreads

13 - 145 bps

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

Foreign exchange rates

20.50%

^(c)

Total liabilities

318

(a) Inputs derived from U.S. long-term rates to accommodate long maturity nature of our swaps

(b) Inputs derived from Japan long-term rates to accommodate long maturity nature of our swaps

March 31, 2015

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Liabilities:

Foreign currency swaps

212

Discounted cash flow

Interest rates (USD)

2.02% - 2.39%

^(a)

Interest rates (JPY)

.58% - 1.36%

^(b)

CDS spreads

20 - 110 bps

Foreign exchange rates

20.32%

^(c)

161

Discounted cash flow

Interest rates (USD)

2.02% - 2.39%

^(a)

Interest rates (JPY)

.58% - 1.36%

^(b)

CDS spreads

16 - 151 bps

Discounted cash flow

Interest rates (USD)

2.02% - 2.39%

^(a)

Interest rates (JPY)

.58% - 1.36%

^(b)

Foreign exchange rates

20.32%

^(c)

Total liabilities

392

(a) Inputs derived from U.S. long-term rates to accommodate long maturity nature of our swaps

(b) Inputs derived from Japan long-term rates to accommodate long maturity nature of our swaps

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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