Fair Value (Tables)

12 Months Ended

Dec. 31, 2015

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized in the tables below:

December 31, 2015

Level 1

Level 2

Level 3

Total

(In millions)

Fixed maturity securities:

Corporate and other bonds

17,601

168

17,769

States, municipalities and political subdivisions

13,172

13,174

Asset-backed:

Residential mortgage-backed

4,938

134

5,072

Commercial mortgage-backed

2,175

2,197

Other asset-backed

868

921

Total asset-backed

7,981

209

8,190

U.S. Treasury and obligations of government-sponsored enterprises

Foreign government

346

Redeemable preferred stock

Fixed maturities available-for-sale

101

39,101

379

39,581

Fixed maturities trading

120

Total fixed maturities

101

39,136

464

39,701

Equity securities available-for-sale

177

197

Equity securities trading

554

555

Total equity securities

731

752

Short term investments

3,600

1,134

4,734

Other invested assets

102

146

Receivables

Life settlement contracts

Payable to brokers

(196

)

(196)


December 31, 2014	Level 1			Level 2			Level 3		Total

(In millions)

Fixed maturity securities:
Corporate and other bonds	$	32		$	18,692		$	162	$	18,886
States, municipalities and political subdivisions					12,646			94		12,740
Asset-backed:
Residential mortgage-backed					5,044			189		5,233
Commercial mortgage-backed					2,061			83		2,144
Other asset-backed					580			655		1,235

Total asset-backed					7,685			927		8,612
U.S. Treasury and obligations of government-sponsored enterprises		28			3					31
Foreign government		41			413					454
Redeemable preferred stock		30			12					42

Fixed maturities available-for-sale		131			39,451			1,183		40,765
Fixed maturities trading					30			90		120

Total fixed maturities	$	131		$	39,481		$	1,273	$	40,885


Equity securities available-for-sale	$	145		$	61		$	16	$	222
Equity securities trading		505						1		506

Total equity securities	$	650		$	61		$	17	$	728


Short term investments	$	4,989		$	963				$	5,952
Other invested assets		102			41					143
Receivables		2			7					9
Life settlement contracts							$	82		82
Payable to brokers		(546	)		(6	)				(552	)

Reconciliations of Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

The tables below present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2015 and 2014:


																			Unrealized
																			Gains
																			(Losses)
																			Recognized in
			Net Realized Gains																Net Income
			(Losses) and Net Change																on Level
			in Unrealized Gains																3 Assets and
			(Losses)										Transfers		Transfers				Liabilities
	Balance,		Included in		Included in								into		out of		Balance,		Held at
2015	January 1		Net Income		OCI		Purchases		Sales		Settlements		Level 3		Level 3		December 31		December 31

(In millions)

Fixed maturity securities:
Corporate and other bonds	$	162	$	(2)	$	(3)	$	65	$	(13)	$	(35)	$	40	$	(46)	$	168	$	(2)
States, municipalities and political subdivisions		94		1								(10)				(83)		2
Asset-backed:
Residential mortgage-backed		189		5		(3)		81				(35)		14		(117)		134
Commercial mortgage-backed		83		7		(4)		23				(17)		17		(87)		22
Other asset-backed		655		3		3		130		(263)		(52)		7		(430)		53

Total asset-backed		927		15		(4)		234		(263)		(104)		38		(634)		209		-

Fixed maturities available-for-sale		1,183		14		(7)		299		(276)		(149)		78		(763)		379		(2)
Fixed maturities trading		90		(3)						(2)								85		(3)

Total fixed maturities	$	1,273	$	11	$	(7)	$	299	$	(278)	$	(149)	$	78	$	(763)	$	464	$	(5)


Equity securities available-for-sale	$	16			$	(1)	$	4					$	1			$	20
Equity securities trading		1	$	1				1	$	(2)								1	$	1

Total equity securities	$	17	$	1	$	(1)	$	5	$	(2)	$	-	$	1	$	-	$	21	$	1


Life settlement contracts	$	82	$	25							$	(33)					$	74	$	1
Derivative financial instruments, net									$	3								3


																									Unrealized
																									Gains
																									(Losses)
																									Recognized in
				Net Realized Gains																					Net Income
				(Losses) and Net Change																					on Level
				in Unrealized Gains																					3 Assets and
				(Losses)														Transfers		Transfers					Liabilities
	Balance,			Included in			Included in											into		out of			Balance,		Held at
2014	January 1			Net Income			OCI			Purchases		Sales			Settlements			Level 3		Level 3			December 31		December 31

(In millions)

Fixed maturity securities:
Corporate and other bonds	$	204		$	2		$	(1	)	$	33	$	(23	)	$	(16	)	$	18	$	(55	)	$	162
States, municipalities and political subdivisions		71			1			4			14		(10	)					14					94
Asset-backed:
Residential mortgage-backed		331			(21	)		61			94		(174	)		(72	)		32		(62	)		189
Commercial mortgage-backed		151			7			(6	)		28		(60	)		(29	)		43		(51	)		83
Other asset-backed		446			2			(6	)		488		(111	)		(117	)				(47	)		655	$	(1)

Total asset-backed		928			(12	)		49			610		(345	)		(218	)		75		(160	)		927		(1)

Fixed maturities available-for-sale		1,203			(9	)		52			657		(378	)		(234	)		107		(215	)		1,183		(1)
Fixed maturities trading		80			11								(1	)										90		11

Total fixed maturities	$	1,283		$	2		$	52		$	657	$	(379	)	$	(234	)	$	107	$	(215	)	$	1,273	$	10


Equity securities available-for-sale	$	11		$	3		$	(6	)	$	16	$	(8	)									$	16
Equity securities trading		8			(1	)							(6	)										1	$	1

Total equity securities	$	19		$	2		$	(6	)	$	16	$	(14	)	$	-		$	-	$	-		$	17	$	1


Life settlement contracts	$	88		$	33										$	(39	)						$	82	$	8
Separate account business		1																		$	(1	)		-
Derivative financial instruments, net		(3	)		1							$	2											-		2

Quantitative Information about Significant Unobservable Inputs Utilized by Company in Fair Value Measurements of Level 3 Assets

The following tables present quantitative information about the significant unobservable inputs utilized by the Company in the fair value measurements of Level 3 assets. Valuations for assets and liabilities not presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of unobservable inputs from these broker quotes is neither provided nor reasonably available to the Company.

Range

Estimated

Valuation

Unobservable

(Weighted

December 31, 2015

Fair Value

Techniques

Inputs

Average)

(In millions)

Fixed maturity securities

$ 138

Discounted cash flow

Credit spread

3% – 184% (6%)

Life settlement contracts

Discounted cash flow

Discount rate risk premium

Mortality assumption

55% – 1,676% (164%)

December 31, 2014

Fixed maturity securities

$ 101

Discounted cash flow

Credit spread

2% – 13% (3%)

Equity securities

Market approach

Private offering price

$12 – $4,391 per share

($600 per share)

Life settlement contracts

Discounted cash flow

Discount rate risk premium

Mortality assumption

55% – 1,676% (163%)

Carrying Amount, Estimated Fair Value and Level of Fair Value Hierarchy of Company's Financial Assets and Liabilities

The carrying amounts reported on the Consolidated Balance Sheets for cash and short term investments not carried at fair value and certain other assets and liabilities approximate fair value due to the short term nature of these items.


	Carrying		Estimated Fair Value
December 31, 2015	Amount		Level 1	Level 2		Level 3		Total

(In millions)

Assets:
Other invested assets, primarily mortgage loans	$	678				$	688	$	688

Liabilities:
Short term debt		1,038		$	1,050		2		1,052
Long term debt		9,530			8,538		595		9,133

December 31, 2014


Assets:
Other invested assets, primarily mortgage loans	$	588				$	608	$	608

Liabilities:
Short term debt		334		$	255		84		339
Long term debt		10,320			10,299		420		10,719