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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2019

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.



	September 30, 2019
(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 maturity securities:
Government and agencies		$	36,705		$	1,591		$	0		$	38,296
Municipalities		0			1,898			0			1,898
Mortgage- and asset-backed securities		0			226			183			409
Public utilities		0			6,744			206			6,950
Sovereign and supranational		0			1,084			0			1,084
Banks/financial institutions		0			10,621			23			10,644
Other corporate		0			34,435			224			34,659
Total fixed maturity securities		36,705			56,599			636			93,940
Equity securities		677			74			79			830
Other investments		722			0			0			722
Cash and cash equivalents		4,216			0			0			4,216
Other assets:
Foreign currency swaps		0			80			147			227
Foreign currency forwards		0			170			0			170
Foreign currency options		0			1			0			1
Interest rate swaps		0			13			0			13
Total other assets		0			264			147			411
Total assets		$	42,320		$	56,937		$	862		$	100,119
Liabilities:
Other liabilities:
Foreign currency swaps		$	0		$	88		$	139		$	227
Foreign currency forwards		0			168			0			168
Foreign currency options		0			8			0			8
Total liabilities		$	0		$	264		$	139		$	403



	December 31, 2018
(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 maturity securities:
Government and agencies		$	32,993		$	1,349		$	0		$	34,342
Municipalities		0			1,863			0			1,863
Mortgage- and asset-backed securities		0			162			177			339
Public utilities		0			7,062			109			7,171
Sovereign and supranational		0			1,260			0			1,260
Banks/financial institutions		0			8,895			23			8,918
Other corporate		0			28,789			213			29,002
Total fixed maturity securities		32,993			49,380			522			82,895
Equity securities		874			67			46			987
Other investments		152			0			0			152
Cash and cash equivalents		4,337			0			0			4,337
Other assets:
Foreign currency swaps		0			103			182			285
Foreign currency forwards		0			126			0			126
Foreign currency options		0			3			0			3
Interest rate swaps		0			3			0			3
Total other assets		0			235			182			417
Total assets		$	38,356		$	49,682		$	750		$	88,788
Liabilities:
Other liabilities:
Foreign currency swaps		$	0		$	132		$	102		$	234
Foreign currency forwards		0			151			0			151
Foreign currency options		0			1			0			1
Interest rate swaptions		0			1			0			1
Total liabilities		$	0		$	285		$	102		$	387

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.



	September 30, 2019
(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 maturity securities:
Government and agencies		$	22,581		$	28,868		$	366		$	0		$	29,234
Municipalities		835			0			1,114			0			1,114
Mortgage and asset-backed securities		18			0			8			11			19
Public utilities		2,573			0			2,967			0			2,967
Sovereign and supranational		1,187			0			1,384			0			1,384
Banks/financial institutions		930			0			1,030			0			1,030
Other corporate		2,609			0			3,074			0			3,074
Commercial mortgage and other loans		8,284			0			0			8,360			8,360
Other investments ⁽¹⁾		30			0			30			0			30
Total assets		$	39,047		$	28,868		$	9,973		$	8,371		$	47,212
Liabilities:
Other policyholders’ funds		$	7,421		$	0		$	0		$	7,341		$	7,341
Notes payable (excluding leases)		6,095			0			5,855			277			6,132
Total liabilities		$	13,516		$	0		$	5,855		$	7,618		$	13,473

⁽¹⁾ Excludes policy loans of $250 and equity method investments of $505, at carrying value



	December 31, 2018
(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 maturity securities:
Government and agencies		$	21,712		$	27,030		$	8		$	0		$	27,038
Municipalities		359			0			469			0			469
Mortgage and asset-backed securities		14			0			0			15			15
Public utilities		2,727			0			2,973			0			2,973
Sovereign and supranational		1,551			0			1,840			0			1,840
Banks/financial institutions		1,445			0			1,583			0			1,583
Other corporate		2,510			0			2,804			0			2,804
Commercial mortgage and other loans		6,919			0			0			6,893			6,893
Other investments ⁽¹⁾		26			0			26			0			26
Total assets		$	37,263		$	27,030		$	9,703		$	6,908		$	43,641
Liabilities:
Other policyholders’ funds		$	7,146		$	0		$	0		$	7,067		$	7,067
Notes payable (excluding leases)		5,765			0			5,606			270			5,876
Total liabilities		$	12,911		$	0		$	5,606		$	7,337		$	12,943

⁽¹⁾ Excludes policy loans of $232 and equity method investments of $377, at carrying value

Fair Value Assets Securities Carried At Fair Value Primary Pricing Sources



	December 31, 2018
(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 maturity securities:
Government and agencies:
Third party pricing vendor		$	32,993		$	1,349		$	0		$	34,342
Total government and agencies		32,993			1,349			0			34,342
Municipalities:
Third party pricing vendor		0			1,863			0			1,863
Total municipalities		0			1,863			0			1,863
Mortgage- and asset-backed securities:
Third party pricing vendor		0			162			0			162
Broker/other		0			0			177			177
Total mortgage- and asset-backed securities		0			162			177			339
Public utilities:
Third party pricing vendor		0			7,062			0			7,062
Broker/other		0			0			109			109
Total public utilities		0			7,062			109			7,171
Sovereign and supranational:
Third party pricing vendor		0			1,260			0			1,260
Total sovereign and supranational		0			1,260			0			1,260
Banks/financial institutions:
Third party pricing vendor		0			8,895			0			8,895
Broker/other		0			0			23			23
Total banks/financial institutions		0			8,895			23			8,918
Other corporate:
Third party pricing vendor		0			28,789			0			28,789
Broker/other		0			0			213			213
Total other corporate		0			28,789			213			29,002
Total securities available for sale		$	32,993		$	49,380		$	522		$	82,895
Equity securities, carried at fair value:
Third party pricing vendor		$	874		$	67		$	0		$	941
Broker/other		0			0			46			46
Total equity securities		$	874		$	67		$	46		$	987

The following tables present the pricing sources for the fair values of the Company's fixed maturity and equity securities.



	September 30, 2019
(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 maturity securities:
Government and agencies:
Third party pricing vendor		$	36,705		$	1,591		$	0		$	38,296
Total government and agencies		36,705			1,591			0			38,296
Municipalities:
Third party pricing vendor		0			1,898			0			1,898
Total municipalities		0			1,898			0			1,898
Mortgage- and asset-backed securities:
Third party pricing vendor		0			226			0			226
Broker/other		0			0			183			183
Total mortgage- and asset-backed securities		0			226			183			409
Public utilities:
Third party pricing vendor		0			6,744			0			6,744
Broker/other		0			0			206			206
Total public utilities		0			6,744			206			6,950
Sovereign and supranational:
Third party pricing vendor		0			1,084			0			1,084
Total sovereign and supranational		0			1,084			0			1,084
Banks/financial institutions:
Third party pricing vendor		0			10,575			0			10,575
Broker/other		0			46			23			69
Total banks/financial institutions		0			10,621			23			10,644
Other corporate:
Third party pricing vendor		0			34,432			0			34,432
Broker/other		0			3			224			227
Total other corporate		0			34,435			224			34,659
Total securities available for sale		$	36,705		$	56,599		$	636		$	93,940
Equity securities, carried at fair value:
Third party pricing vendor		$	677		$	74		$	0		$	751
Broker/other		0			0			79			79
Total equity securities		$	677		$	74		$	79		$	830

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



	September 30, 2019
(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 maturity securities:
Government and agencies:
Third party pricing vendor		$	28,868		$	366		$	0		$	29,234
Total government and agencies		28,868			366			0			29,234
Municipalities:
Third party pricing vendor		0			1,114			0			1,114
Total municipalities		0			1,114			0			1,114
Mortgage- and asset-backed securities:
Third party pricing vendor		0			8			0			8
Broker/other		0			0			11			11
Total mortgage- and asset-backed securities		0			8			11			19
Public utilities:
Third party pricing vendor		0			2,967			0			2,967
Total public utilities		0			2,967			0			2,967
Sovereign and supranational:
Third party pricing vendor		0			1,384			0			1,384
Total sovereign and supranational		0			1,384			0			1,384
Banks/financial institutions:
Third party pricing vendor		0			1,030			0			1,030
Total banks/financial institutions		0			1,030			0			1,030
Other corporate:
Third party pricing vendor		0			3,074			0			3,074
Total other corporate		0			3,074			0			3,074
Total securities held to maturity		$	28,868		$	9,943		$	11		$	38,822



	December 31, 2018
(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 maturity securities:
Government and agencies:
Third party pricing vendor		$	27,030		$	8		$	0		$	27,038
Total government and agencies		27,030			8			0			27,038
Municipalities:
Third party pricing vendor		0			469			0			469
Total municipalities		0			469			0			469
Mortgage- and asset-backed securities:
Broker/other		0			0			15			15
Total mortgage- and asset-backed securities		0			0			15			15
Public utilities:
Third party pricing vendor		0			2,973			0			2,973
Total public utilities		0			2,973			0			2,973
Sovereign and supranational:
Third party pricing vendor		0			1,840			0			1,840
Total sovereign and supranational		0			1,840			0			1,840
Banks/financial institutions:
Third party pricing vendor		0			1,583			0			1,583
Total banks/financial institutions		0			1,583			0			1,583
Other corporate:
Third party pricing vendor		0			2,804			0			2,804
Total other corporate		0			2,804			0			2,804
Total securities held to maturity		$	27,030		$	9,677		$	15		$	36,722

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

The following tables present the changes in fair value of the Company's investments and derivatives carried at fair value classified as Level 3.



Three Months Ended September 30, 2019
	Fixed Maturity Securities												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	$	183	$	204		$	24			$	199		$	65	$	94		$	0	$	769
Realized investment gains (losses) included in earnings	0		0			0				0			0		(84		)	0		(84		)
Unrealized gains (losses) included in other comprehensive income (loss)	0		4			0				5			0		(2		)	0		7
Purchases, issuances, sales and settlements:
Purchases	0		0			0				19			14		0			0		33
Issuances	0		0			0				0			0		0			0		0
Sales	0		0			0				0			0		0			0		0
Settlements	0		(2		)	0				0			0		0			0		(2		)
Transfers into Level 3	0		0			0				1		⁽²⁾	0		0			0		1
Transfers out of Level 3	0		0			(1		)	⁽²⁾	0			0		0			0		(1		)
Balance, end of period	$	183	$	206		$	23			$	224		$	79	$	8		$	0	$	723
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0	$	0		$	0			$	0		$	0	$	(84	)	$	0	$	(84	)

⁽¹⁾ Derivative assets and liabilities are presented net

⁽²⁾ Transfer due to sector classification change



Three Months Ended September 30, 2018
	Fixed Maturity Securities											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	$	178		$	106		$	23	$	196		$	17			$	110		$	0	$	630
Realized investment gains (losses) included in earnings	0			0			0		0			(1		)		(19		)	0		(20		)
Unrealized gains (losses) included in other comprehensive income (loss)	(6		)	(2		)	0		(4		)	0				(2		)	0		(14		)
Purchases, issuances, sales and settlements:
Purchases	0			0			0		0			0				0			0		0
Issuances	0			0			0		0			0				0			0		0
Sales	0			0			0		0			0				0			0		0
Settlements	0			0			0		(1		)	0				0			0		(1		)
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	$	172		$	104		$	23	$	191		$	16			$	89		$	0	$	595
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0		$	0		$	0	$	0		$	(1	)		$	(19	)	$	0	$	(20	)

⁽¹⁾ Derivative assets and liabilities are presented net



Nine Months Ended September 30, 2019
	Fixed Maturity Securities													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	$	177	$	109			$	23		$	213			$	46	$	80		$	0	$	648
Realized investment gains (losses) included in earnings	0		0				0			0				0		(68		)	0		(68		)
Unrealized gains (losses) included in other comprehensive income (loss)	6		10				1			12				0		(4		)	0		25
Purchases, issuances, sales and settlements:
Purchases	0		0				0			107				33		0			0		140
Issuances	0		0				0			0				0		0			0		0
Sales	0		0				0			(2		)		0		0			0		(2		)
Settlements	0		(4		)		0			0				0		0			0		(4		)
Transfers into Level 3	0		116			⁽²⁾	0			26			⁽²⁾	0		0			0		142
Transfers out of Level 3	0		(25		)	⁽²⁾	(1		)	(132		)	^{(2), (3)}	0		0			0		(158		)
Balance, end of period	$	183	$	206			$	23		$	224			$	79	$	8		$	0	$	723
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0	$	0			$	0		$	0			$	0	$	(68	)	$	0	$	(68	)

⁽¹⁾ Derivative assets and liabilities are presented net

⁽²⁾ Transfer due to sector classification change

⁽³⁾ Transfer due to availability of observable market inputs



Nine Months Ended September 30, 2018
	Fixed Maturity Securities												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	$	175		$	68		$	25		$	146		$	16		$	22	$	1		$	453
Realized investment gains (losses) included in earnings	0			0			0			0			(1		)	65		(1		)	63
Unrealized gains (losses) included in other comprehensive income (loss)	(3		)	(4		)	(2		)	(6		)	0			2		0			(13		)
Purchases, issuances, sales and settlements:
Purchases	0			40			0			55			1			0		0			96
Issuances	0			0			0			0			0			0		0			0
Sales	0			0			0			0			0			0		0			0
Settlements	0			0			0			(4		)	0			0		0			(4		)
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	$	172		$	104		$	23		$	191		$	16		$	89	$	0		$	595
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0		$	0		$	0		$	0		$	(1	)	$	65	$	(1	)	$	63

⁽¹⁾ Derivative assets and liabilities are presented net

Fair Value Measurement Inputs and Valuation Techniques

Level 3 Significant Unobservable Input Sensitivity

The following tables summarize the significant unobservable inputs used in the valuation of the Company's Level 3 investments and derivatives carried at fair value. Included in the tables are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments.

September 30, 2019

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Assets:

Securities available for sale, carried at fair value:

Fixed maturity securities:

Mortgage- and asset-backed securities

183

Consensus pricing

Offered quotes

N/A

^(a)

Public utilities

206

Discounted cash flow

Credit spreads

N/A

^(a)

Banks/financial institutions

Consensus pricing

Offered quotes

N/A

^(a)

Other corporate

224

Discounted cash flow

Credit spreads

N/A

^(a)

Equity securities

Net asset value

Offered quotes

N/A

^(a)

Other assets:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

1.43% - 1.63%

^(b)

Interest rates (JPY)

(.03)% - .32%

^(c)

CDS spreads

12 - 106 bps

Discounted cash flow

Interest rates (USD)

1.43% - 1.63%

^(b)

Interest rates (JPY)

(.03)% - .32%

^(c)

Total assets

862

Liabilities:

Other liabilities:

Foreign currency swaps

132

Discounted cash flow

Interest rates (USD)

1.43% - 1.63%

^(b)

Interest rates (JPY)

(.03)% - .32%

^(c)

CDS spreads

22 - 176 bps

Discounted cash flow

Interest rates (USD)

1.43% - 1.63%

^(b)

Interest rates (JPY)

(.03)% - .32%

^(c)

Total liabilities

139

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

(b) Inputs derived from U.S. long-term rates to accommodate long maturity nature of the Company's swaps

December 31, 2018

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Assets:

Securities available for sale, carried at fair value:

Fixed maturity securities:

Mortgage- and asset-backed securities

177

Consensus pricing

Offered quotes

N/A

^(a)

Public utilities

109

Discounted cash flow

Credit spreads

N/A

^(a)

Banks/financial institutions

Consensus pricing

Offered quotes

N/A

^(a)

Other corporate

213

Discounted cash flow

Credit spreads

N/A

^(a)

Equity securities

Net asset value

Offered quotes

N/A

^(a)

Other assets:

Foreign currency swaps

125

Discounted cash flow

Interest rates (USD)

2.75% - 2.84%

^(b)

Interest rates (JPY)

.18% - .71%

^(c)

CDS spreads

19 - 120 bps

Discounted cash flow

Interest rates (USD)

2.75% - 2.84%

^(b)

Interest rates (JPY)

.18% - .71%

^(c)

Total assets

750

Liabilities:

Other liabilities:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

2.75% - 2.84%

^(b)

Interest rates (JPY)

.18% - .71%

^(c)

CDS spreads

28 - 211 bps

Discounted cash flow

Interest rates (USD)

2.75% - 2.84%

^(b)

Interest rates (JPY)

.18% - .71%

^(c)

Total liabilities

102

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

(b) Inputs derived from U.S. long-term rates to accommodate long maturity nature of the Company's swaps