FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 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.



	June 30, 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		$	17,177		$	540		$	0		$	17,717
Municipalities		0			1,155			0			1,155
Mortgage- and asset-backed securities		0			383			214			597
Public utilities		0			7,776			0			7,776
Sovereign and supranational		0			1,437			0			1,437
Banks/financial institutions		0			6,364			25			6,389
Other corporate		0			29,371			0			29,371
Total fixed maturities		17,177			47,026			239			64,442
Perpetual securities:
Banks/financial institutions		0			2,011			0			2,011
Other corporate		0			203			0			203
Total perpetual securities		0			2,214			0			2,214
Equity securities		20			6			3			29
Other assets:
Foreign currency swaps		0			510			99			609
Foreign currency forwards		0			142			0			142
Credit default swaps		0			0			1			1
Total other assets		0			652			100			752
Other investments		173			0			0			173
Cash and cash equivalents		3,103			0			0			3,103
Total assets		$	20,473		$	49,898		$	342		$	70,713
Liabilities:
Foreign currency swaps		$	0		$	4		$	322		$	326
Foreign currency forwards		0			176			0			176
Total liabilities		$	0		$	180		$	322		$	502



	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.



	June 30, 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		$	19,708		$	22,249		$	0		$	0		$	22,249
Municipalities		339			0			397			0			397
Mortgage and asset-backed securities		39			0			13			28			41
Public utilities		3,209			0			3,295			0			3,295
Sovereign and supranational		2,516			0			2,688			0			2,688
Banks/financial institutions		4,528			0			4,550			0			4,550
Other corporate		2,954			0			3,145			0			3,145
Other investments		26			0			0			26			26
Total assets		$	33,319		$	22,249		$	14,088		$	54		$	36,391
Liabilities:
Other policyholders’ funds		$	6,083		$	0		$	0		$	5,962		$	5,962
Notes payable (excluding capital leases)		5,412			0			0			5,628			5,628
Total liabilities		$	11,495		$	0		$	0		$	11,590		$	11,590



	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.



	June 30, 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		$	17,177		$	540		$	0		$	17,717
Total government and agencies		17,177			540			0			17,717
Municipalities:
Third party pricing vendor		0			1,155			0			1,155
Total municipalities		0			1,155			0			1,155
Mortgage- and asset-backed securities:
Third party pricing vendor		0			383			0			383
Broker/other		0			0			214			214
Total mortgage- and asset-backed securities		0			383			214			597
Public utilities:
Third party pricing vendor		0			7,776			0			7,776
Total public utilities		0			7,776			0			7,776
Sovereign and supranational:
Third party pricing vendor		0			1,437			0			1,437
Total sovereign and supranational		0			1,437			0			1,437
Banks/financial institutions:
Third party pricing vendor		0			6,364			0			6,364
Broker/other		0			0			25			25
Total banks/financial institutions		0			6,364			25			6,389
Other corporate:
Third party pricing vendor		0			29,371			0			29,371
Total other corporate		0			29,371			0			29,371
Total fixed maturities		17,177			47,026			239			64,442
Perpetual securities:
Banks/financial institutions:
Third party pricing vendor		0			2,011			0			2,011
Total banks/financial institutions		0			2,011			0			2,011
Other corporate:
Third party pricing vendor		0			203			0			203
Total other corporate		0			203			0			203
Total perpetual securities		0			2,214			0			2,214
Equity securities:
Third party pricing vendor		20			6			0			26
Broker/other		0			0			3			3
Total equity securities		20			6			3			29
Total securities available for sale		$	17,197		$	49,246		$	242		$	66,685



	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



	June 30, 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		$	22,249		$	0		$	0		$	22,249
Total government and agencies		22,249			0			0			22,249
Municipalities:
Third party pricing vendor		0			397			0			397
Total municipalities		0			397			0			397
Mortgage- and asset-backed securities:
Third party pricing vendor		0			13			0			13
Broker/other		0			0			28			28
Total mortgage- and asset-backed securities		0			13			28			41
Public utilities:
Third party pricing vendor		0			3,295			0			3,295
Total public utilities		0			3,295			0			3,295
Sovereign and supranational:
Third party pricing vendor		0			2,688			0			2,688
Total sovereign and supranational		0			2,688			0			2,688
Banks/financial institutions:
Third party pricing vendor		0			4,468			0			4,468
Broker/other		0			82			0			82
Total banks/financial institutions		0			4,550			0			4,550
Other corporate:
Third party pricing vendor		0			3,118			0			3,118
Broker/other		0			27			0			27
Total other corporate		0			3,145			0			3,145
Total securities held to maturity		$	22,249		$	14,088		$	28		$	36,365

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- and six-month periods ended June 30, 2015 and 2014, respectively.

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



Three Months Ended June 30, 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	$	221		$	0	$	0	$	26		$	0	$	150		$	3	$	0	$	(283	)	$	1	$	118
Realized investment gains (losses) included in earnings	0			0		0		0			0		0			0		0		58			0		58
Unrealized gains (losses) included in other comprehensive income (loss)	(6		)	0		0		(1		)	0		(3		)	0		0		2			0		(8		)
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		(147		)	0		0		0			0		(147		)
Settlements	(1		)	0		0		0			0		0			0		0		0			0		(1		)
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	$	214		$	0	$	0	$	25		$	0	$	0		$	3	$	0	$	(223	)	$	1	$	20
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	$	58		$	0	$	58

⁽¹⁾ Derivative assets and liabilities are presented net



Three Months Ended June 30, 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	$	262		$	0	$	0	$	25	$	0	$	56		$	3	$	0		$	(86	)	$	(1	)	$	259
Realized investment gains (losses) included in earnings	0			0		0		0		0		0			0		(1		)	24			1			24
Unrealized gains (losses) included in other comprehensive income (loss)	7			0		0		0		0		4			0		0			2			0			13
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		(60		)	0		0			0			0			(60		)
Settlements	(3		)	0		0		0		0		0			0		0			71			0			68
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	$	266		$	0	$	0	$	25	$	0	$	0		$	3	$	(1	)	$	11		$	0		$	304
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	)	$	24		$	1		$	24

⁽¹⁾ Derivative assets and liabilities are presented net



Six Months Ended June 30, 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		(25		)	1		(24		)
Unrealized gains (losses) included in other comprehensive income (loss)	(7		)	0		0		(1		)	0		(2		)	0		0		(2		)	0		(12		)
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		(147		)	0		0		0			0		(147		)
Settlements	(2		)	0		0		0			0		0			0		0		16			0		14
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	$	214		$	0	$	0	$	25		$	0	$	0		$	3	$	0	$	(223	)	$	1	$	20
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	$	(25	)	$	1	$	(24	)

⁽¹⁾ Derivative assets and liabilities are presented net



Six Months Ended June 30, 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		(2		)	14			3			15
Unrealized gains (losses) included in other comprehensive income (loss)	(97		)	0		0		2		0		8			0		0			1			0			(86		)
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		(60		)	0		0			0			0			(60		)
Settlements	(6		)	0		0		0		0		0			0		0			95			0			89
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	$	266		$	0	$	0	$	25	$	0	$	0		$	3	$	(1	)	$	11		$	0		$	304
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	$	(2	)	$	14		$	3		$	15

⁽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.

June 30, 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

214

Consensus pricing

Offered quotes

N/A

^(e)

Banks/financial institutions

Consensus pricing

Offered quotes

N/A

^(e)

Equity securities

Net asset value

Offered quotes

$1 - $667 ($7)

Other assets:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

2.46% - 2.94%

^(b)

Interest rates (JPY)

.63% - 1.48%

^(c)

CDS spreads

29 - 157 bps

Foreign exchange rates

20.29%

^(d)

Discounted cash flow

Interest rates (USD)

2.46% - 2.94%

^(b)

Interest rates (JPY)

.63% - 1.48%

^(c)

Foreign exchange rates

20.29%

^(d)

Credit default swaps

Discounted cash flow

Base correlation

55% - 58%

^(a)

CDS spreads

97 bps

Recovery rate

36.69%

Total assets

342

(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

June 30, 2015

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Liabilities:

Foreign currency swaps

182

Discounted cash flow

Interest rates (USD)

2.46% - 2.94%

^(a)

Interest rates (JPY)

.63% - 1.48%

^(b)

CDS spreads

29 - 157 bps

Foreign exchange rates

20.29%

^(c)

124

Discounted cash flow

Interest rates (USD)

2.46% - 2.94%

^(a)

Interest rates (JPY)

.63% - 1.48%

^(b)

CDS spreads

18 - 164 bps

Discounted cash flow

Interest rates (USD)

2.46% - 2.94%

^(a)

Interest rates (JPY)

.63% - 1.48%

^(b)

Foreign exchange rates

20.29%

^(c)

Total liabilities

322

(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