FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2016

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 as of December 31.



	2016
(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		$	25,387		$	827		$	0		$	26,214
Municipalities		0			1,295			0			1,295
Mortgage- and asset-backed securities		0			1,139			198			1,337
Public utilities		0			7,667			16			7,683
Sovereign and supranational		0			1,469			0			1,469
Banks/financial institutions		0			6,038			25			6,063
Other corporate		0			29,699			0			29,699
Total fixed maturities		25,387			48,134			239			73,760
Perpetual securities:
Banks/financial institutions		0			1,420			0			1,420
Other corporate		0			213			0			213
Total perpetual securities		0			1,633			0			1,633
Equity securities		1,300			6			3			1,309
Other assets:
Foreign currency swaps		0			365			125			490
Foreign currency forwards		0			672			0			672
Foreign currency options		0			43			0			43
Credit default swaps		0			0			2			2
Total other assets		0			1,080			127			1,207
Other investments		276			0			0			276
Cash and cash equivalents		4,859			0			0			4,859
Total assets		$	31,822		$	50,853		$	369		$	83,044
Liabilities:
Foreign currency swaps		$	0		$	84		$	146		$	230
Foreign currency forwards		0			1,717			0			1,717
Foreign currency options		0			51			0			51
Total liabilities		$	0		$	1,852		$	146		$	1,998



	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		$	18,669		$	607		$	0		$	19,276
Municipalities		0			1,208			0			1,208
Mortgage- and asset-backed securities		0			362			220			582
Public utilities		0			7,479			0			7,479
Sovereign and supranational		0			1,407			0			1,407
Banks/financial institutions		0			5,993			26			6,019
Other corporate		0			29,378			0			29,378
Total fixed maturities		18,669			46,434			246			65,349
Perpetual securities:
Banks/financial institutions		0			1,742			0			1,742
Other corporate		0			205			0			205
Total perpetual securities		0			1,947			0			1,947
Equity securities		489			6			3			498
Other assets:
Foreign currency swaps		0			462			101			563
Foreign currency forwards		0			107			0			107
Foreign currency options		0			5			0			5
Credit default swaps		0			0			1			1
Total other assets		0			574			102			676
Other investments		176			0			0			176
Cash and cash equivalents		4,350			0			0			4,350
Total assets		$	23,684		$	48,961		$	351		$	72,996
Liabilities:
Foreign currency swaps		$	0		$	21		$	293		$	314
Foreign currency forwards		0			49			0			49
Foreign currency options		0			8			0			8
Total liabilities		$	0		$	78		$	293		$	371

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 as of December 31.



	2016
(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		$	20,702		$	26,040		$	0		$	0		$	26,040
Municipalities		350			0			457			0			457
Mortgage and asset-backed securities		30			0			10			22			32
Public utilities		3,201			0			3,536			0			3,536
Sovereign and supranational		2,602			0			2,877			0			2,877
Banks/financial institutions		3,731			0			3,900			0			3,900
Other corporate		2,734			0			3,179			0			3,179
Other investments		1,174			0			0			1,142			1,142
Total assets		$	34,524		$	26,040		$	13,959		$	1,164		$	41,163
Liabilities:
Other policyholders’ funds		$	6,659		$	0		$	0		$	6,540		$	6,540
Notes payable (excluding capital leases)		5,339			0			0			5,530			5,530
Total liabilities		$	11,998		$	0		$	0		$	12,070		$	12,070



				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		$	20,004		$	23,391		$	0		$	0		$	23,391
Municipalities		341			0			415			0			415
Mortgage and asset-backed securities		36			0			12			26			38
Public utilities		3,092			0			3,203			0			3,203
Sovereign and supranational		2,555			0			2,711			0			2,711
Banks/financial institutions		4,431			0			4,546			0			4,546
Other corporate		3,000			0			3,216			0			3,216
Other investments		118			0			0			118			118
Total assets		$	33,577		$	23,391		$	14,103		$	144		$	37,638
Liabilities:
Other policyholders’ funds		$	6,285		$	0		$	0		$	6,160		$	6,160
Notes payable (excluding capital leases)		4,951			0			0			5,256			5,256
Total liabilities		$	11,236		$	0		$	0		$	11,416		$	11,416

Amounts have been adjusted for the adoption of accounting guidance on January 1, 2016 related to debt issuance costs.

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 as of December 31.



	2016
(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		$	25,387		$	827		$	0		$	26,214
Total government and agencies		25,387			827			0			26,214
Municipalities:
Third party pricing vendor		0			1,295			0			1,295
Total municipalities		0			1,295			0			1,295
Mortgage- and asset-backed securities:
Third party pricing vendor		0			1,139			0			1,139
Broker/other		0			0			198			198
Total mortgage- and asset-backed securities		0			1,139			198			1,337
Public utilities:
Third party pricing vendor		0			7,667			0			7,667
Broker/other		0			0			16			16
Total public utilities		0			7,667			16			7,683
Sovereign and supranational:
Third party pricing vendor		0			1,469			0			1,469
Total sovereign and supranational		0			1,469			0			1,469
Banks/financial institutions:
Third party pricing vendor		0			6,038			0			6,038
Broker/other		0			0			25			25
Total banks/financial institutions		0			6,038			25			6,063
Other corporate:
Third party pricing vendor		0			29,699			0			29,699
Total other corporate		0			29,699			0			29,699
Total fixed maturities		25,387			48,134			239			73,760
Perpetual securities:
Banks/financial institutions:
Third party pricing vendor		0			1,420			0			1,420
Total banks/financial institutions		0			1,420			0			1,420
Other corporate:
Third party pricing vendor		0			213			0			213
Total other corporate		0			213			0			213
Total perpetual securities		0			1,633			0			1,633
Equity securities:
Third party pricing vendor		1,300			6			0			1,306
Broker/other		0			0			3			3
Total equity securities		1,300			6			3			1,309
Total securities available for sale		$	26,687		$	49,773		$	242		$	76,702



	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		$	18,669		$	607		$	0		$	19,276
Total government and agencies		18,669			607			0			19,276
Municipalities:
Third party pricing vendor		0			1,208			0			1,208
Total municipalities		0			1,208			0			1,208
Mortgage- and asset-backed securities:
Third party pricing vendor		0			362			0			362
Broker/other		0			0			220			220
Total mortgage- and asset-backed securities		0			362			220			582
Public utilities:
Third party pricing vendor		0			7,479			0			7,479
Total public utilities		0			7,479			0			7,479
Sovereign and supranational:
Third party pricing vendor		0			1,407			0			1,407
Total sovereign and supranational		0			1,407			0			1,407
Banks/financial institutions:
Third party pricing vendor		0			5,993			0			5,993
Broker/other		0			0			26			26
Total banks/financial institutions		0			5,993			26			6,019
Other corporate:
Third party pricing vendor		0			29,378			0			29,378
Total other corporate		0			29,378			0			29,378
Total fixed maturities		18,669			46,434			246			65,349
Perpetual securities:
Banks/financial institutions:
Third party pricing vendor		0			1,742			0			1,742
Total banks/financial institutions		0			1,742			0			1,742
Other corporate:
Third party pricing vendor		0			205			0			205
Total other corporate		0			205			0			205
Total perpetual securities		0			1,947			0			1,947
Equity securities:
Third party pricing vendor		489			6			0			495
Broker/other		0			0			3			3
Total equity securities		489			6			3			498
Total securities available for sale		$	19,158		$	48,387		$	249		$	67,794

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



	2016
(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		$	26,040		$	0		$	0		$	26,040
Total government and agencies		26,040			0			0			26,040
Municipalities:
Third party pricing vendor		0			457			0			457
Total municipalities		0			457			0			457
Mortgage- and asset-backed securities:
Third party pricing vendor		0			10			0			10
Broker/other		0			0			22			22
Total mortgage- and asset-backed securities		0			10			22			32
Public utilities:
Third party pricing vendor		0			3,536			0			3,536
Total public utilities		0			3,536			0			3,536
Sovereign and supranational:
Third party pricing vendor		0			2,877			0			2,877
Total sovereign and supranational		0			2,877			0			2,877
Banks/financial institutions:
Third party pricing vendor		0			3,900			0			3,900
Total banks/financial institutions		0			3,900			0			3,900
Other corporate:
Third party pricing vendor		0			3,179			0			3,179
Total other corporate		0			3,179			0			3,179
Total securities held to maturity		$	26,040		$	13,959		$	22		$	40,021



	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		$	23,391		$	0		$	0		$	23,391
Total government and agencies		23,391			0			0			23,391
Municipalities:
Third party pricing vendor		0			415			0			415
Total municipalities		0			415			0			415
Mortgage- and asset-backed securities:
Third party pricing vendor		0			12			0			12
Broker/other		0			0			26			26
Total mortgage- and asset-backed securities		0			12			26			38
Public utilities:
Third party pricing vendor		0			3,203			0			3,203
Total public utilities		0			3,203			0			3,203
Sovereign and supranational:
Third party pricing vendor		0			2,711			0			2,711
Total sovereign and supranational		0			2,711			0			2,711
Banks/financial institutions:
Third party pricing vendor		0			4,546			0			4,546
Total banks/financial institutions		0			4,546			0			4,546
Other corporate:
Third party pricing vendor		0			3,189			0			3,189
Broker/other		0			27			0			27
Total other corporate		0			3,216			0			3,216
Total securities held to maturity		$	23,391		$	14,103		$	26		$	37,520

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

The following tables present the changes in fair value of our available-for-sale investments and derivatives classified as Level 3 as of December 31.



2016
	Fixed Maturities								Equity Securities		Derivatives⁽¹⁾
(In millions)	Mortgage- and Asset- Backed Securities			Public Utilities		Banks/ Financial Institutions					Foreign Currency Swaps			Credit Default Swaps		Total
Balance, beginning of period	$	220		$	0	$	26		$	3	$	(192	)	$	1	$	58
Realized investment gains (losses) included in earnings	0			0		0			0		194			1		195
Unrealized gains (losses) included in other comprehensive income (loss)	38			0		(1		)	0		(22		)	0		15
Purchases, issuances, sales and settlements:
Purchases	0			16		0			0		0			0		16
Issuances	0			0		0			0		0			0		0
Sales	0			0		0			0		0			0		0
Settlements	(60		)	0		0			0		(1		)	0		(61		)
Transfers into Level 3	0			0		0			0		0			0		0
Transfers out of Level 3	0			0		0			0		0			0		0
Balance, end of period	$	198		$	16	$	25		$	3	$	(21	)	$	2	$	223
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	$	194		$	1	$	195

⁽¹⁾Derivative assets and liabilities are presented net



2015
	Fixed Maturities					Perpetual Securities			Equity Securities		Derivatives⁽¹⁾
(In millions)	Mortgage- and Asset- Backed Securities			Banks/ Financial Institutions		Banks/ Financial Institutions					Foreign Currency Swaps			Credit Default Swaps		Total
Balance, beginning of period	$	223		$	26	$	149		$	3	$	(212	)	$	0	$	189
Realized investment gains (losses) included in earnings	0			0		0			0		(15		)	1		(14		)
Unrealized gains (losses) included in other comprehensive income (loss)	(1		)	0		(2		)	0		(1		)	0		(4		)
Purchases, issuances, sales and settlements:
Purchases	0			0		0			0		0			0		0
Issuances	0			0		0			0		0			0		0
Sales	0			0		(147		)	0		0			0		(147		)
Settlements	(2		)	0		0			0		36			0		34
Transfers into Level 3	0			0		0			0		0			0		0
Transfers out of Level 3	0			0		0			0		0			0		0
Balance, end of period	$	220		$	26	$	0		$	3	$	(192	)	$	1	$	58
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	$	(15	)	$	1	$	(14	)

⁽¹⁾Derivative assets and liabilities are presented net

Fair Value Inputs Assets Quantitative Information

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

220

Consensus pricing

Offered quotes

N/A

^(d)

Banks/financial institutions

Consensus pricing

Offered quotes

N/A

^(d)

Equity securities

Net asset value

Offered quotes

$1-$677 ($7)

Other assets:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

2.20% - 2.62%

^(a)

Interest rates (JPY)

.42% - 1.22%

^(b)

CDS spreads

32 - 147 bps

Foreign exchange rates

20.05%

^(c)

Discounted cash flow

Interest rates (USD)

2.20% - 2.62%

^(a)

Interest rates (JPY)

.42% - 1.22%

^(b)

Foreign exchange rates

20.05%

^(c)

Credit default swaps

Discounted cash flow

Base correlation

53.26% - 58.40%

^(e)

CDS spreads

123 bps

Recovery rate

36.87%

Total assets

351

(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.

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

The following tables summarize the significant unobservable inputs used in the valuation of our Level 3 available-for-sale investments and derivatives as of December 31. Included in the tables are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments.

2016

(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

198

Consensus pricing

Offered quotes

N/A

^(d)

Public utilities

Discounted cash flow

Historical volatility

N/A

^(d)

Banks/financial institutions

Consensus pricing

Offered quotes

N/A

^(d)

Equity securities

Net asset value

Offered quotes

$1 - $701 ($8)

Other assets:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

2.34% - 2.59%

^(a)

Interest rates (JPY)

.22% - .80%

^(b)

CDS spreads

17 - 172 bps

Foreign exchange rates

21.47%

^(c)

Discounted cash flow

Interest rates (USD)

2.34% - 2.59%

^(a)

Interest rates (JPY)

.22% - .80%

^(b)

CDS spreads

16 - 88 bps

Discounted cash flow

Interest rates (USD)

2.34% - 2.59%

^(a)

Interest rates (JPY)

.22% - .80%

^(b)

Foreign exchange rates

21.47%

^(c)

Credit default swaps

Discounted cash flow

Base correlation

52.18% - 56.07%

^(e)

CDS spreads

54 bps

Recovery rate

36.69%

Total assets

369

(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.

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

Fair Value Inputs Liabilities Quantitative Information

2016

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Liabilities:

Foreign currency swaps

113

Discounted cash flow

Interest rates (USD)

2.34% - 2.59%

^(a)

Interest rates (JPY)

.22% - .80%

^(b)

CDS spreads

17 - 172 bps

Foreign exchange rates

21.47%

^(c)

Discounted cash flow

Interest rates (USD)

2.34% - 2.59%

^(a)

Interest rates (JPY)

.22% - .80%

^(b)

CDS spreads

24 - 216 bps

Discounted cash flow

Interest rates (USD)

2.34% - 2.59%

^(a)

Interest rates (JPY)

.22% - .80%

^(b)

Foreign exchange rates

21.47%

^(c)

Total liabilities

146

(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

2015

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Liabilities:

Foreign currency swaps

158

Discounted cash flow

Interest rates (USD)

2.20% - 2.62%

^(a)

Interest rates (JPY)

.42% - 1.22%

^(b)

CDS spreads

32 - 147 bps

Foreign exchange rates

20.05%

^(c)

120

Discounted cash flow

Interest rates (USD)

2.20% - 2.62%

^(a)

Interest rates (JPY)

.42% - 1.22%

^(b)

CDS spreads

35 - 213 bps

Discounted cash flow

Interest rates (USD)

2.20% - 2.62%

^(a)

Interest rates (JPY)

.42% - 1.22%

^(b)

Foreign exchange rates

20.05%

^(c)

Total liabilities

293

(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