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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2015

Financial assets and liabilities carried at fair value

December 31, 2015
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	251	$	528	$	-	$	779
State and local government		-		1,641		-		1,641
Foreign government		-		2,010		4		2,014
Corporate		-		14,122		326		14,448
Mortgage-backed		-		48		1		49
Other asset-backed		-		198		326		524
Total fixed maturities⁽¹⁾		251		18,547		657		19,455
Equity securities		32		89		69		190
Subtotal		283		18,636		726		19,645
Short-term investments		-		381		-		381
GMIB assets⁽²⁾		-		-		907		907
Other derivative assets⁽³⁾		-		16		-		16
Total financial assets at fair value, excluding separate accounts	$	283	$	19,033	$	1,633	$	20,949
GMIB liabilities	$	-	$	-	$	885	$	885
Total financial liabilities at fair value	$	-	$	-	$	885	$	885

(1) Fixed maturities included $483 million of net cumulative appreciation required to adjust future policy benefits for the run-off settlement annuity business including $30 million of appreciation for securities classified in Level 3. See Note 11 for additional information.
(2) The GMIB assets represented retrocessional contracts in place from three external reinsurers that cover the exposures on these contracts.
(3) Other derivative assets included $15 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $1 million of interest rate swaps qualifying as fair value hedges. See Note 12 for additional information.

December 31, 2014
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Financial assets at fair value:
Fixed maturities:
Federal government and agency	$	290	$	664	$	-	$	954
State and local government		-		1,856		-		1,856
Foreign government		-		1,936		4		1,940
Corporate		-		13,105		393		13,498
Mortgage-backed		-		84		1		85
Other asset-backed		-		234		416		650
Total fixed maturities⁽¹⁾		290		17,879		814		18,983
Equity securities		61		85		43		189
Subtotal		351		17,964		857		19,172
Short-term investments		-		163		-		163
GMIB assets⁽²⁾		-		-		953		953
Other derivative assets⁽³⁾		-		6		-		6
Total financial assets at fair value, excluding separate accounts	$	351	$	18,133	$	1,810	$	20,294
GMIB liabilities	$	-	$	-	$	929	$	929
Other derivative liabilities		-		1		-		1
Total financial liabilities at fair value	$	-	$	1	$	929	$	930

(1) Fixed maturities included $756 million of net cumulative appreciation required to adjust future policy benefits for the run-off settlement annuity business including $65 million of appreciation for securities classified in Level 3. See Note 11 for additional information.
(2) The GMIB assets represented retrocessional contracts in place from three external reinsurers that cover the exposures on these contracts.
(3) Other derivative assets included $5 million of interest rate and foreign currency swaps qualifying as cash flow hedges and $1 million of interest rate swaps qualifying as fair value hedges. See Note 12 for additional information.

Level 3 fixed maturities and equity securities priced using significant unobservable inputs


As of December 31, 2015			Unobservable Input	Unobservable Adjustment Range (Weighted Average)
(Fair value in millions )		Fair Value	Unobservable Input	Unobservable Adjustment Range (Weighted Average)
Fixed maturities:
Other asset and mortgage-backed securities	$	327	Liquidity	60 - 440 (200)
			Weighting of credit spreads	170 - 630 (220)
Corporate and government fixed maturities		285	Liquidity	70 - 930 (280)
Total fixed maturities		612
Equity securities		69	Price-to-earnings multiples	4.2 - 11.6 (8.3)
Subtotal		681
Securities not priced by the Company⁽¹⁾		45
Total Level 3 securities	$	726
(1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.


As of December 31, 2014			Unobservable Input	Unobservable Adjustment Range (Weighted Average)
(Fair value in millions)		Fair Value	Unobservable Input	Unobservable Adjustment Range (Weighted Average)
Fixed maturities:
Other asset and mortgage-backed securities	$	417	Liquidity	60 - 370 (140) bps
			Weighting of credit spreads	160 - 2,560 (290) bps
Corporate and government fixed maturities		344	Liquidity	80 - 930 (262) bps
Total fixed maturities		761
Equity securities		43	Price-to-earnings multiples	4.2 - 9.8 (8.1)
Subtotal		804
Securities not priced by the Company⁽¹⁾		53
Total Level 3 securities	$	857
(1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.

Changes in level 3 financial assets and liabilities carried at fair value

	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at January 1, 2015	$	857	$	953	$	(929)	$	24
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		(5)		2		(3)
Other		24		1		-		1
Total gains (losses) included in shareholders' net income		24		(4)		2		(2)
Losses included in other comprehensive income		(11)		-		-		-
Losses required to adjust future policy benefits for settlement annuities⁽¹⁾		(1)		-		-		-
Purchases, sales, settlements:
Purchases		153		-		-		-
Sales		(230)		-		-		-
Settlements		(21)		(42)		42		-
Total purchases, sales and settlements		(98)		(42)		42		-
Transfers into/(out of) Level 3:
Transfers into Level 3		49		-		-		-
Transfers out of Level 3		(94)		-		-		-
Total transfers into/(out of) Level 3		(45)		-		-		-
Balance at December 31, 2015	$	726	$	907	$	(885)	$	22
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	(6)	$	(4)	$	2	$	(2)

(1) Amounts do not accrue to shareholders.

	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
(In millions)	Fixed Maturities & Equity Securities		GMIB Assets		GMIB Liabilities		GMIB Net
Balance at January 1, 2014	$	1,190	$	751	$	(741)	$	10
Gains (losses) included in shareholders' net income:
GMIB fair value gain/(loss)		-		251		(251)		-
Other		15		(1)		15		14
Total gains (losses) included in shareholders' net income		15		250		(236)		14
Gains included in other comprehensive income		14		-		-		-
Gains required to adjust future policy benefits for settlement annuities⁽¹⁾		55		-		-		-
Purchases, sales, settlements:
Purchases		101		-		-		-
Sales		(202)		-		-		-
Settlements		(156)		(48)		48		-
Total purchases, sales and settlements		(257)		(48)		48		-
Transfers into/(out of) Level 3:
Transfers into Level 3		165		-		-		-
Transfers out of Level 3		(325)		-		-		-
Total transfers into/(out of) Level 3		(160)		-		-		-
Balance at December 31, 2014	$	857	$	953	$	(929)	$	24
Total gains (losses) included in shareholders' net income attributable
to instruments held at the reporting date	$	2	$	250	$	(236)	$	14

(1) Amounts do not accrue to shareholders.

Separate account assets schedule

2015
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Guaranteed separate accounts (See Note 23)	$	235	$	274	$	-	$	509
Non-guaranteed separate accounts ⁽¹⁾		1,401		4,698		1,225		7,324
Total separate account assets	$	1,636	$	4,972	$	1,225	$	7,833

⁽¹⁾ As of December 31, 2015, non-guaranteed separate accounts included $3.6 billion in assets supporting the Company's pension plans, including $1.2 billion classified in Level 3.

2014
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Guaranteed separate accounts (See Note 23)	$	242	$	288	$	-	$	530
Non-guaranteed separate accounts ⁽¹⁾		1,609		5,031		1,158		7,798
Total separate account assets	$	1,851	$	5,319	$	1,158	$	8,328

⁽¹⁾ As of December 31, 2014, non-guaranteed separate accounts included $3.8 billion in assets supporting the Company's pension plans, including $1.1 billion classified in Level 3.

Changes in level 3 separate account assets

(In millions)		2015		2014
Balance at January 1	$	1,158	$	1,035
Policyholder gains ⁽¹⁾		95		85
Purchases, issuances, settlements:
Purchases		198		266
Sales		-		(2)
Settlements		(230)		(226)
Total purchases, sales and settlements		(32)		38
Transfers into/(out of) Level 3:
Transfers into Level 3		16		20
Transfers out of Level 3		(12)		(20)
Total transfers into/(out of) Level 3:		4		-
Balance at December 31	$	1,225	$	1,158

⁽¹⁾ Included in this amount were gains of $95 million attributable to instruments still held at December 31, 2015 and gains of $85 million attributable to instruments still held at December 31, 2014.

Financial instruments not carried at fair value

(In millions)			December 31, 2015				December 31, 2014
	Classification in Fair Value Hierarchy		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,911	$	1,864	$	2,168	$	2,081
Contractholder deposit funds, excluding universal life products	Level 3	$	1,151	$	1,148	$	1,136	$	1,124
Long-term debt, including current maturities, excluding capital leases	Level 2	$	5,515	$	5,020	$	5,740	$	4,967