FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2017

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, 2017
(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		$	28,457		$	863		$	0		$	29,320
Municipalities		0			1,322			0			1,322
Mortgage- and asset-backed securities		0			309			195			504
Public utilities		0			7,827			16			7,843
Sovereign and supranational		0			1,386			0			1,386
Banks/financial institutions		0			6,521			24			6,545
Other corporate		0			30,122			35			30,157
Total fixed maturities		28,457			48,350			270			77,077
Perpetual securities:
Banks/financial institutions		0			1,551			0			1,551
Other corporate		0			219			0			219
Total perpetual securities		0			1,770			0			1,770
Equity securities		1,339			6			4			1,349
Other assets:
Foreign currency swaps		0			174			144			318
Foreign currency forwards		0			235			0			235
Foreign currency options		0			25			0			25
Credit default swaps		0			0			2			2
Total other assets		0			434			146			580
Other investments		141			0			0			141
Cash and cash equivalents		4,205			0			0			4,205
Total assets		$	34,142		$	50,560		$	420		$	85,122
Liabilities:
Foreign currency swaps		$	0		$	99		$	125		$	224
Foreign currency forwards		0			853			0			853
Foreign currency options		0			22			0			22
Total liabilities		$	0		$	974		$	125		$	1,099



	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

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, 2017
(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		$	21,493		$	26,607		$	0		$	0		$	26,607
Municipalities		363			0			467			0			467
Mortgage and asset-backed securities		30			0			10			22			32
Public utilities		3,324			0			3,693			0			3,693
Sovereign and supranational		2,702			0			3,009			0			3,009
Banks/financial institutions		3,650			0			3,830			0			3,830
Other corporate		2,839			0			3,285			0			3,285
Other investments ⁽¹⁾		1,309			0			0			1,288			1,288
Total assets		$	35,710		$	26,607		$	14,294		$	1,310		$	42,211
Liabilities:
Other policyholders’ funds		$	6,945		$	0		$	0		$	6,824		$	6,824
Notes payable (excluding capital leases)		5,230			0			5,226			266			5,492
Total liabilities		$	12,175		$	0		$	5,226		$	7,090		$	12,316

⁽¹⁾ Excludes policy loans of $197 and equity method investments of $54, at carrying value



	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

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



	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

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



	March 31, 2017
(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		$	28,457		$	863		$	0		$	29,320
Total government and agencies		28,457			863			0			29,320
Municipalities:
Third party pricing vendor		0			1,322			0			1,322
Total municipalities		0			1,322			0			1,322
Mortgage- and asset-backed securities:
Third party pricing vendor		0			309			0			309
Broker/other		0			0			195			195
Total mortgage- and asset-backed securities		0			309			195			504
Public utilities:
Third party pricing vendor		0			7,827			0			7,827
Broker/other		0			0			16			16
Total public utilities		0			7,827			16			7,843
Sovereign and supranational:
Third party pricing vendor		0			1,386			0			1,386
Total sovereign and supranational		0			1,386			0			1,386
Banks/financial institutions:
Third party pricing vendor		0			6,521			0			6,521
Broker/other		0			0			24			24
Total banks/financial institutions		0			6,521			24			6,545
Other corporate:
Third party pricing vendor		0			30,122			0			30,122
Broker/other		0			0			35			35
Total other corporate		0			30,122			35			30,157
Total fixed maturities		28,457			48,350			270			77,077
Perpetual securities:
Banks/financial institutions:
Third party pricing vendor		0			1,551			0			1,551
Total banks/financial institutions		0			1,551			0			1,551
Other corporate:
Third party pricing vendor		0			219			0			219
Total other corporate		0			219			0			219
Total perpetual securities		0			1,770			0			1,770
Equity securities:
Third party pricing vendor		1,339			6			0			1,345
Broker/other		0			0			4			4
Total equity securities		1,339			6			4			1,349
Total securities available for sale		$	29,796		$	50,126		$	274		$	80,196

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



	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 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



	March 31, 2017
(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		$	26,607		$	0		$	0		$	26,607
Total government and agencies		26,607			0			0			26,607
Municipalities:
Third party pricing vendor		0			467			0			467
Total municipalities		0			467			0			467
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			3,693			0			3,693
Total public utilities		0			3,693			0			3,693
Sovereign and supranational:
Third party pricing vendor		0			3,009			0			3,009
Total sovereign and supranational		0			3,009			0			3,009
Banks/financial institutions:
Third party pricing vendor		0			3,830			0			3,830
Total banks/financial institutions		0			3,830			0			3,830
Other corporate:
Third party pricing vendor		0			3,285			0			3,285
Total other corporate		0			3,285			0			3,285
Total securities held to maturity		$	26,607		$	14,294		$	22		$	40,923

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, 2017 and 2016, 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 March 31, 2017
	Fixed Maturities										Equity Securities			Derivatives ⁽¹⁾
(In millions)	Mortgage- and Asset- Backed Securities			Public Utilities		Banks/ Financial Institutions			Other Corporate					Foreign Currency Swaps			Credit Default Swaps		Total
Balance, beginning of period	$	198		$	16	$	25		$	0	$	3		$	(21	)	$	2	$	223
Realized investment gains (losses) included in earnings	0			0		0			0		0			38			0		38
Unrealized gains (losses) included in other comprehensive income (loss)	6			0		(1		)	0		0			2			0		7
Purchases, issuances, sales and settlements:
Purchases	0			0		0			35		2			0			0		37
Issuances	0			0		0			0		0			0			0		0
Sales	0			0		0			0		(1		)	0			0		(1		)
Settlements	(9		)	0		0			0		0			0			0		(9		)
Transfers into Level 3	0			0		0			0		0			0			0		0
Transfers out of Level 3	0			0		0			0		0			0			0		0
Balance, end of period	$	195		$	16	$	24		$	35	$	4		$	19		$	2	$	295
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		$	38		$	0	$	38

⁽¹⁾ Derivative assets and liabilities are presented net



Three Months Ended March 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		125			1		126
Unrealized gains (losses) included in other comprehensive income (loss)	21			0		0		0		4			0		25
Purchases, issuances, sales and settlements:
Purchases	0			0		0		0		0			0		0
Issuances	0			0		0		0		0			0		0
Sales	0			0		0		0		0			0		0
Settlements	(4		)	0		0		0		0			0		(4		)
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	$	237		$	0	$	26	$	3	$	(63	)	$	2	$	205
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	$	125		$	1	$	126

⁽¹⁾ Derivative assets and liabilities are presented net

Fair Value Inputs Assets Quantitative Information

December 31, 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

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, 2017

(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

195

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)

Other corporate

Discounted cash flow

Historical volatility

N/A

^(e)

Equity securities

Net asset value

Offered quotes

$1 - $728 ($8)

Other assets:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

2.18% - 2.45%

^(a)

Interest rates (JPY)

.20% - .73%

^(b)

CDS spreads

11 - 147 bps

Foreign exchange rates

21.34%

^(c)

Discounted cash flow

Interest rates (USD)

2.18% - 2.45%

^(a)

Interest rates (JPY)

.20% - .73%

^(b)

CDS spreads

10 - 79 bps

Discounted cash flow

Interest rates (USD)

2.18% - 2.45%

^(a)

Interest rates (JPY)

.20% - .73%

^(b)

Foreign exchange rates

21.34%

^(c)

Credit default swaps

Discounted cash flow

Base correlation

61.55% - 66.55%

^(e)

CDS spreads

48 bps

Recovery rate

36.69%

Total assets

420

(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

December 31, 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

March 31, 2017

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Liabilities:

Foreign currency swaps

106

Discounted cash flow

Interest rates (USD)

2.18% - 2.45%

^(a)

Interest rates (JPY)

.20% - .73%

^(b)

CDS spreads

11 - 147 bps

Foreign exchange rates

21.34%

^(c)

Discounted cash flow

Interest rates (USD)

2.18% - 2.45%

^(a)

Interest rates (JPY)

.20% - .73%

^(b)

CDS spreads

15 - 168 bps

Discounted cash flow

Interest rates (USD)

2.18% - 2.45%

^(a)

Interest rates (JPY)

.20% - .73%

^(b)

Foreign exchange rates

21.34%

^(c)

Total liabilities

125

(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