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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2017

Outstanding Derivative Instruments With Off-Balance-Sheet Risks



	As of June 30, 2017						As of December 31, 2016
	Notional		Fair Value				Notional		Fair Value
	Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	3,607	$	47	$	92	$	3,552	$	68	$	122
Foreign currency contracts (1)		1,512		116		21		1,177		153		10
Total cash flow hedges		5,119		163		113		4,729		221		132
Fair value hedges:
Interest rate contracts (1)		1,477		263		182		1,512		258		182
Non-Qualifying Hedges
Interest rate contracts (1)		78,622		766		151		70,290		985		701
Foreign currency contracts (1)		8		-		-		14		-		-
Equity market contracts (1)		29,704		529		390		28,315		541		616
Credit contracts (1)		63		-		-		66		-		-
Embedded derivatives:
Guaranteed living benefit ("GLB") (2)		-		298		-		-		-		-
GLB (3)		-		-		-		-		-		371
Reinsurance related (4)		-		-		53		-		-		53
Indexed annuity and IUL contracts (5)		-		-		1,268		-		-		1,139
Total derivative instruments	$	114,993	$	2,019	$	2,157	$	104,926	$	2,005	$	3,194

⁽¹⁾

Reported in derivative investments and other liabilities on our Consolidated Balance Sheets.

⁽²⁾

Reported in other assets on our Consolidated Balance Sheets.

⁽³⁾

Reported in other liabilities on our Consolidated Balance Sheets.

⁽⁴⁾

Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets.

⁽⁵⁾

Reported in future contract benefits on our Consolidated Balance Sheets.

Maturity Of The Notional Amounts Of Derivative Financial Instruments



	Remaining Life as of June 30, 2017
	Less Than		1 - 5		6 - 10		11 - 30		Over 30
	1 Year		Years		Years		Years		Years		Total
Interest rate contracts (1)	$	15,024	$	22,369	$	30,174	$	14,926	$	1,213	$	83,706
Foreign currency contracts (2)		19		151		378		962		10		1,520
Equity market contracts		17,594		9,784		869		15		1,442		29,704
Credit contracts		-		63		-		-		-		63
Total derivative instruments
with notional amounts	$	32,637	$	32,367	$	31,421	$	15,903	$	2,665	$	114,993

⁽¹⁾

As of June 30, 2017, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was April 2067.

⁽²⁾

As of June 30, 2017, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049.

Change In Our Unrealized Gain On Derivative Instruments In Accumulated OCI



	For the Six
	Months Ended
	June 30,
	2017			2016
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	49		$	132
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period:
Cash flow hedges:
Interest rate contracts		1			(240	)
Foreign currency contracts		45			32
Change in foreign currency exchange rate adjustment		(75	)		35
Change in DAC, VOBA, DSI and DFEL		(8	)		(6	)
Income tax benefit (expense)		13			62
Less:
Reclassification adjustment for gains (losses)
included in net income (loss):
Cash flow hedges:
Interest rate contracts (1)		2			4
Interest rate contracts (2)		(9	)		(2	)
Foreign currency contracts (1)		9			3
Foreign currency contracts (3)		5			4
Associated amortization of DAC, VOBA, DSI and DFEL		(2	)		(1	)
Income tax benefit (expense)		(2	)		(3	)
Balance as of end-of-period	$	22		$	10

⁽¹⁾

The OCI offset is reported within net investment income on our Consolidated Statements of Comprehensive Income (Loss).

⁽²⁾

The OCI offset is reported within interest and debt expense on our Consolidated Statements of Comprehensive Income (Loss).

⁽³⁾

The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

Gains (Losses) On Derivative Instruments Recorded Within Income (Loss) From Continuing Operations



	For the Three						For the Six
	Months Ended						Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1		$	3		$	2		$	4
Interest rate contracts (2)		(5	)		(2	)		(9	)		(2	)
Foreign currency contracts (1)		4			1			9			3
Foreign currency contracts (3)		-			-			5			4
Total cash flow hedges		-			2			7			9
Fair value hedges:
Interest rate contracts (1)		(6	)		(7	)		(13	)		(15	)
Interest rate contracts (2)		7			8			15			16
Interest rate contracts (3)		(9	)		(32	)		-			(86	)
Total fair value hedges		(8	)		(31	)		2			(85	)
Non-Qualifying Hedges
Interest rate contracts (3)		193			614			143			1,590
Foreign currency contracts (3)		(2	)		(7	)		1			(3	)
Equity market contracts (3)		(289	)		(252	)		(817	)		(582	)
Equity market contracts (4)		5			3			14			2
Credit contracts (3)		-			(4	)		-			(7	)
Embedded derivatives:
GLB (3)		72			(542	)		669			(1,505	)
Reinsurance related (3)		(3	)		(23	)		-			(47	)
Indexed annuity and IUL contracts (3)		(64	)		(19	)		(184	)		(12	)
Total derivative instruments	$	(96	)	$	(259	)	$	(165	)	$	(640	)

⁽¹⁾

Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss).

⁽²⁾

Reported in interest and debt expense on our Consolidated Statements of Comprehensive Income (Loss).

⁽³⁾

Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).

⁽⁴⁾

Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).

Gains (Losses) On Derivative Instruments Designated As Cash Flow Hedges



	For the Three						For the Six
	Months Ended						Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Offset to net investment income	$	5		$	4		$	11		$	7
Offset to realized gain (loss)		-			-			5			4
Offset to interest and debt expense		(5	)		(2	)		(9	)		(2	)

Open Credit Default Swap Liabilities

As of June 30, 2017

Credit

Reason

Nature

Rating of

Number

Maximum

for

Underlying

Fair

Potential

Credit Contract Type

Maturity

Entering

Recourse

Obligation (1)

Instruments

Value (2)

Payout

Basket credit default swaps

6/20/2022

(3)

(4)

BBB+

As of December 31, 2016

Credit

Reason

Nature

Rating of

Number

Maximum

for

Underlying

Fair

Potential

Credit Contract Type

Maturity

Entering

Recourse

Obligation (1)

Instruments

Value (2)

Payout

Single name credit default swaps

3/20/2017 (5)

(6)

(4)

BBB+

⁽¹⁾

Represents average credit ratings based on the midpoint of the applicable ratings among Moody’s, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings.

⁽²⁾

Broker quotes are used to determine the market value of our credit default swaps.

⁽³⁾

Credit default swaps were entered into in order to hedge the liability exposure on certain variable annuity products.

⁽⁴⁾

Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract.

⁽⁵⁾

These credit default swaps were sold to a counterparty of the consolidated VIEs discussed in Note 4 in our 2016 Form 10-K.

⁽⁶⁾

Credit default swaps were entered into in order to generate income by providing default protection in return for a quarterly payment.

Collateral Support Agreements



		As of			As of
	June 30,			December 31,
		2017			2016
Maximum potential payout		$	63		$	40
Less: Counterparty thresholds			-			-
Maximum collateral potentially required to post		$	63		$	40

Schedule Of Collateral Amounts With Rights To Reclaim Or Obligation To Return Cash



	As of June 30, 2017					As of December 31, 2016
	Collateral		Collateral			Collateral		Collateral
	Posted by		Posted by			Posted by		Posted by
S&P	Counter-		LNC			Counter-		LNC
Credit	Party		(Held by			Party		(Held by
Rating of	(Held by		Counter-			(Held by		Counter-
Counterparty	LNC)		Party)			LNC)		Party)
AA-	$	96	$	-		$	53	$	(32	)
A+		39		(235	)		10		(217	)
A		579		(287	)		466		(381	)
A-		39		-			67		-
BBB+		301		(5	)		298		-
	$	1,054	$	(527	)	$	894	$	(630	)

Schedule Of Offsetting Assets And Liabilities



		As of June 30, 2017
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total

Financial Assets
Gross amount of recognized assets		$	1,600			$	298	$	1,898
Gross amounts offset			(546	)			-		(546	)
Net amount of assets			1,054				298		1,352
Gross amounts not offset:
Cash collateral			(1,054	)			-		(1,054	)
Net amount		$	-			$	298	$	298

Financial Liabilities
Gross amount of recognized liabilities		$	611			$	1,321	$	1,932
Gross amounts offset			(121	)			-		(121	)
Net amount of liabilities			490				1,321		1,811
Gross amounts not offset:
Cash collateral			(527	)			-		(527	)
Net amount		$	(37	)		$	1,321	$	1,284


		As of December 31, 2016
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total

Financial Assets
Gross amount of recognized assets		$	1,470			$	-	$	1,470
Gross amounts offset			(543	)			-		(543	)
Net amount of assets			927				-		927
Gross amounts not offset:
Cash collateral			(894	)			-		(894	)
Net amount		$	33			$	-	$	33

Financial Liabilities
Gross amount of recognized liabilities		$	1,089			$	1,563	$	2,652
Gross amounts offset			(536	)			-		(536	)
Net amount of liabilities			553				1,563		2,116
Gross amounts not offset:
Cash collateral			(630	)			-		(630	)
Net amount		$	(77	)		$	1,563	$	1,486