XML 38 R26.htm IDEA: XBRL DOCUMENT

Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Outstanding Derivative Instruments With Off-Balance-Sheet Risks



	As of September 30, 2018						As of December 31, 2017
	Notional		Fair Value				Notional		Fair Value
	Amounts		Asset		Liability		Amounts		Asset		Liability
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	2,827	$	121	$	42	$	3,007	$	46	$	84
Foreign currency contracts (1)		2,085		104		71		1,804		79		79
Total cash flow hedges		4,912		225		113		4,811		125		163
Fair value hedges:
Interest rate contracts (1)		1,268		30		112		1,438		254		174
Non-Qualifying Hedges
Interest rate contracts (1)		90,138		318		233		72,937		657		127
Foreign currency contracts (1)		87		-		-		22		-		-
Equity market contracts (1)		24,967		534		140		31,090		562		557
Credit contracts (1)		-		-		-		52		-		-
Embedded derivatives:
Guaranteed living benefit ("GLB")
direct (2)		-		1,648		-		-		903		-
GLB ceded (2) (3)		-		35		193		-		51		67
Reinsurance related (4)		-		-		20		-		-		57
Indexed annuity and IUL contracts (2) (5)		-		44		1,571		-		11		1,418
Total derivative instruments	$	121,372	$	2,834	$	2,382	$	110,350	$	2,563	$	2,563

⁽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 September 30, 2018
	Less Than		1 - 5		6 - 10		11 - 30		Over 30
	1 Year		Years		Years		Years		Years		Total
Interest rate contracts (1)	$	10,907	$	14,802	$	47,193	$	20,118	$	1,213	$	94,233
Foreign currency contracts (2)		141		256		635		1,130		10		2,172
Equity market contracts		18,103		3,615		115		14		3,120		24,967
Total derivative instruments
with notional amounts	$	29,151	$	18,673	$	47,943	$	21,262	$	4,343	$	121,372

⁽¹⁾

As of September 30, 2018, 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 September 30, 2018, 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 Nine
	Months Ended
	September 30,
	2018			2017
Unrealized Gain (Loss) on Derivative Instruments
Balance as of beginning-of-year	$	(29	)	$	49
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period:
Cumulative effect from adoption of
new accounting standard		(6	)		-
Cash flow hedges:
Interest rate contracts		117			(15	)
Foreign currency contracts		(19	)		46
Change in foreign currency exchange rate adjustment		69			(119	)
Change in DAC, VOBA, DSI and DFEL		8			(3	)
Income tax benefit (expense)		(37	)		32
Less:
Reclassification adjustment for gains (losses)
included in net income (loss):
Cash flow hedges:
Interest rate contracts (1)		3			3
Interest rate contracts (2)		(6	)		(13	)
Foreign currency contracts (1)		18			12
Foreign currency contracts (3)		-			5
Associated amortization of DAC, VOBA, DSI and DFEL		(1	)		(1	)
Income tax benefit (expense)		(3	)		(2	)
Balance as of end-of-period	$	92		$	(14	)

⁽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 Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Qualifying Hedges
Cash flow hedges:
Interest rate contracts (1)	$	1		$	2		$	3		$	3
Interest rate contracts (2)		(4	)		(5	)		(6	)		(13	)
Foreign currency contracts (1)		7			4			18			12
Foreign currency contracts (3)		-			-			-			5
Total cash flow hedges		4			1			15			7
Fair value hedges:
Interest rate contracts (1)		(2	)		(5	)		(11	)		(18	)
Interest rate contracts (2)		5			6			11			21
Interest rate contracts (3)		17			2			64			2
Total fair value hedges		20			3			64			5
Non-Qualifying Hedges
Interest rate contracts (3)		(167	)		18			(577	)		161
Foreign currency contracts (3)		-			1			2			1
Equity market contracts (3)		(199	)		(347	)		(280	)		(1,163	)
Equity market contracts (4)		10			6			11			21
Embedded derivatives:					-						-
GLB (3)		333			233			603			784
Reinsurance related (3)		5			3			37			3
Indexed annuity and IUL contracts (3)		(164	)		(46	)		(175	)		(230	)
Total derivative instruments	$	(158	)	$	(128	)	$	(300	)	$	(411	)

⁽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 Nine
	Months Ended						Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Offset to net investment income	$	8		$	6		$	21		$	15
Offset to realized gain (loss)		-			-			-			5
Offset to interest and debt expense		(4	)		(5	)		(6	)		(13	)

Open Credit Default Swap Liabilities

As of December 31, 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

12/20/2022

(3)

(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.

Collateral Support Agreements



		As of			As of
	September 30,			December 31,
		2018			2017
Maximum potential payout		$	-		$	52
Less: Counterparty thresholds			-			-
Maximum collateral potentially required to post		$	-		$	52

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



	As of September 30, 2018					As of December 31, 2017
	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-	$	36	$	(22	)	$	116	$	(1	)
A+		177		(111	)		242		(453	)
A		40		(1	)		170		(120	)
A-		113		-			237		(3	)
BBB+		-		-			-		(4	)
	$	366	$	(134	)	$	765	$	(581	)

Schedule Of Offsetting Assets And Liabilities



		As of September 30, 2018
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total

Financial Assets
Gross amount of recognized assets		$	957			$	1,727	$	2,684
Gross amounts offset			(251	)			-		(251	)
Net amount of assets			706				1,727		2,433
Gross amounts not offset:
Cash collateral			(366	)			-		(366	)
Non-cash collateral			(80	)			-		(80	)
Net amount		$	260			$	1,727	$	1,987

Financial Liabilities
Gross amount of recognized liabilities		$	879			$	1,784	$	2,663
Gross amounts offset			(149	)			-		(149	)
Net amount of liabilities			730				1,784		2,514
Gross amounts not offset:
Cash collateral			(134	)			-		(134	)
Non-cash collateral			(420	)			-		(420	)
Net amount		$	176			$	1,784	$	1,960


		As of December 31, 2017
					Embedded
	Derivative				Derivative
	Instruments				Instruments			Total

Financial Assets
Gross amount of recognized assets		$	1,301			$	965	$	2,266
Gross amounts offset			(386	)			-		(386	)
Net amount of assets			915				965		1,880
Gross amounts not offset:
Cash collateral			(765	)			-		(765	)
Net amount		$	150			$	965	$	1,115

Financial Liabilities
Gross amount of recognized liabilities		$	955			$	1,542	$	2,497
Gross amounts offset			(296	)			-		(296	)
Net amount of liabilities			659				1,542		2,201
Gross amounts not offset:
Cash collateral			(581	)			-		(581	)
Net amount		$	78			$	1,542	$	1,620