FAIR VALUE DISCLOSURES (Tables)

12 Months Ended

Dec. 31, 2017

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below. At December 31, 2017 and 2016, no assets were required to be measured at fair value on a non-recurring basis. Fair value measurements are required on a non-recurring basis for certain assets, including goodwill and mortgage loans on real estate, only when an OTTI or other event occurs. When such fair value measurements are recorded, they are classified and disclosed within the fair value hierarchy. The Company recognizes transfers between valuation levels at the beginning of the reporting period.

Fair Value Measurements at December 31, 2017



	Level 1			Level 2		Level 3		Total
	(in millions)
Assets
Investments:
Fixed maturities, available-for-sale:
Public Corporate	$	—		$	14,298	$	47	$	14,345
Private Corporate	—			6,045		1,092		7,137
U.S. Treasury, government and agency	—			13,135		—		13,135
States and political subdivisions	—			441		40		481
Foreign governments	—			409		—		409
Commercial mortgage-backed	—			—		—		—
Residential mortgage-backed⁽¹⁾	—			251		—		251
Asset-backed⁽²⁾	—			88		8		96
Redeemable preferred stock	180			324		—		504
Subtotal	180			34,991		1,187		36,358
Other equity investments	13			—		1		14
Trading securities	467			12,161		—		12,628
Other invested assets:
Short-term investments	—			768		—		768
Assets of consolidated VIEs/VOEs	1,060			215		27		1,302
Swaps	—			15		—		15
Credit Default Swaps	—			33		—		33
Futures	(2		)	—		—		(2		)
Options	—			1,907		—		1,907
Floors	—			—		—		—
Subtotal	1,058			2,938		27		4,023
Cash equivalents	2,360			—		—		2,360
Segregated securities	—			825		—		825
GMIB reinsurance contracts asset	—			—		10,488		10,488
Separate Accounts’ assets	118,983			2,983		349		122,315
Total Assets	$	123,061		$	53,898	$	12,052	$	189,011
Liabilities
GMxB derivative features’ liability	$	—		$	—	$	4,164	$	4,164
SCS, SIO, MSO and IUL indexed features’ liability	—			1,698		—		1,698
Liabilities of consolidated VIEs/VOEs	670			22		—		692
Contingent payment arrangements	—			—		11		11
Total Liabilities	$	670		$	1,720	$	4,175	$	6,565


(1)	Includes publicly traded agency pass-through securities and collateralized obligations.


(2)	Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

Fair Value Measurements at December 31, 2016



	Level 1		Level 2			Level 3		Total
	(in millions)
Assets
Investments:
Fixed maturities, available-for-sale:
Public Corporate	$	—	$	12,984		$	28	$	13,012
Private Corporate	—		6,223			817		7,040
U.S. Treasury, government and agency	—		10,336			—		10,336
States and political subdivisions	—		451			42		493
Foreign governments	—		390			—		390
Commercial mortgage-backed	—		22			349		371
Residential mortgage-backed⁽¹⁾	—		314			—		314
Asset-backed⁽²⁾	—		36			24		60
Redeemable preferred stock	218		335			1		554
Subtotal	218		31,091			1,261		32,570
Other equity investments	3		—			5		8
Trading securities	478		8,656			—		9,134
Other invested assets:
Short-term investments	—		574			—		574
Assets of consolidated VIEs/VOEs	342		205			46		593
Swaps	—		(925		)	—		(925		)
Credit Default Swaps	—		5			—		5
Futures	—		—			—		—
Options	—		960			—		960
Floors	—		11			—		11
Subtotal	342		830			46		1,218
Cash equivalents	1,529		—			—		1,529
Segregated securities	—		946			—		946
GMIB reinsurance contracts asset	—		—			10,314		10,314
Separate Accounts’ assets	108,085		2,818			313		111,216
Total Assets	$	110,655	$	44,341		$	11,939	$	166,935
Liabilities
GMxB derivative features’ liability	$	—	$	—		$	5,319	$	5,319
SCS, SIO, MSO and IUL indexed features’ liability	—		887			—		887
Liabilities of consolidated VIEs/VOEs	248		2			—		250
Contingent payment arrangements	—		—			18		18
Total Liabilities	$	248	$	889		$	5,337	$	6,474


(1)	Includes publicly traded agency pass-through securities and collateralized obligations.


(2)	Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.

Reconciliation of Assets and Liabilities at Level 3

The table below presents a reconciliation for all Level 3 assets and liabilities at December 31, 2017, 2016 and 2015 respectively:

Level 3 Instruments

Fair Value Measurements



	Corporate			State and Political Sub-divisions			Foreign Govts			Commercial Mortgage- backed			Residential Mortgage- backed		Asset- backed
	(in millions)
Balance, January 1, 2017	$	845		$	42		$	—		$	349		$	—	$	24
Total gains (losses), realized and unrealized, included in:
Income (loss) as:
Net investment income (loss)	5			—			—			(2		)	—		—
Investment gains (losses), net	2			—			—			(63		)	—		15
Subtotal	7			—			—			(65		)	—		15
Other comprehensive income (loss)	4			(1		)	—			45			—		(9		)
Purchases	612			—			—			—			—		—
Sales	(331		)	(1		)	—			(329		)	—		(21		)
Transfers into Level 3⁽¹⁾	7			—			—			—			—		—
Transfers out of Level 3⁽¹⁾	(5		)	—			—			—			—		(1		)
Balance, December 31, 2017	$	1,139		$	40		$	—		$	—		$	—	$	8
Balance, January 1, 2016	$	420		$	45		$	1		$	503		$	—	$	40
Total gains (losses), realized and unrealized, included in:
Income (loss) as:
Net investment income (loss)	—			—			—			—			—		—
Investment gains (losses), net	1			—			—			(67		)	—		—
Subtotal	1			—			—			(67		)	—		—
Other comprehensive income (loss)	7			(2		)	—			14			—		1
Purchases	572			—			—			—			—		—
Sales	(142		)	(1		)	—			(87		)	—		(8		)
Transfers into Level 3⁽¹⁾	25			—			—			—			—		—
Transfers out of Level 3⁽¹⁾	(38		)	—			(1		)	(14		)	—		(9		)
Balance, December 31, 2016	$	845		$	42		$	—		$	349		$	—	$	24

Level 3 Instruments

Fair Value Measurements



	Corporate			State and Political Sub-divisions			Foreign Govts		Commercial Mortgage- backed			Residential Mortgage- backed			Asset- backed
	(In millions)
Balance, January 1, 2015	$	380		$	47		$	—	$	715		$	2		$	53
Total gains (losses), realized and unrealized, included in:
Income (loss) as:
Net investment income (loss)	3			—			—		1			—			—
Investment gains (losses), net	2			—			—		(38		)	—			—
Subtotal	5			—			—		(37		)	—			—
Other comprehensive income (loss)	(25		)	(1		)	—		64			—			(4		)
Purchases	60			—			1		—			—			—
Sales	(38		)	(1		)	—		(175		)	(2		)	(9		)
Transfers into Level 3⁽¹⁾	99			—			—		—			—			—
Transfers out of Level 3⁽¹⁾	(61		)	—			—		(64		)	—			—
Balance, December 31, 2015	$	420		$	45		$	1	$	503		$	—		$	40



	Redeem able Preferred Stock			Other Equity Investments⁽²⁾			GMIB Reinsurance Asset			Separate Accounts Assets			GMxB derivative features' liability			Contingent Payment Arrangement
	(in millions)
Balance, January 1, 2017	$	1		$	51		$	10,314		$	313		$	(5,319	)	18
Total gains (losses), realized and unrealized, included in:
Income (loss) as:
Net investment income (loss)	—			—			—			—			—			—
Investment gains (losses), net	—			—			—			29			—			—
Net derivative gains (losses)	—			—			69			—			1,494			—
Subtotal	—			—			69			29			1,494			—
Other comprehensive income (loss)	(1		)	(4		)	—			—			—			—
Purchases ⁽²⁾	—			6			221			13			(344		)	—
Sales ⁽³⁾	—			(3		)	(116		)	(2		)	5			—
Settlements ⁽⁴⁾	—			—			—			(4		)	—			(7		)
Activities related to VIEs/VOEs	—			(22		)	—			—			—			—
Transfers into Level 3⁽¹⁾	—			—			—			—			—			—
Transfers out of Level 3⁽¹⁾	—			—			—			—			—			—
Balance, December 31, 2017	$	—		$	28		$	10,488		$	349		$	(4,164	)	$	11
Balance, January 1, 2016	$	—		$	49		$	10,582		$	313		$	(5,146	)	31
Total gains (losses), realized and unrealized, included in:
Income (loss) as:
Net investment income (loss)	—			—			—			—			—			—
Investment gains (losses), net	—			—			—			19			—			—
Net derivative gains (losses)	—			—			(261		)	—			140			—
Subtotal	—			—			(261		)	19			140			—
Other comprehensive income(loss)	—			(2		)	—			—			—
Purchases ⁽²⁾	1			—			223			10			(317		)	11
Sales ⁽³⁾	—			—			(230		)	—			4			—
Settlements ⁽⁴⁾	—			—			—			(7		)	—			(24		)
Activities related to VIEs/VOEs	—			60			—			—			—			—
Transfers into Level 3⁽¹⁾	—			—			—			1			—			—
Transfers out of Level 3⁽¹⁾	—			(56		)	—			(23		)	—			—
Balance, December 31, 2016	$	1		$	51		$	10,314		$	313		$	(5,319	)	$	18



	Redeem able Preferred Stock		Other Equity Investments⁽²⁾			GMIB Reinsurance Asset			Separate Accounts Assets			GMxB derivative features' liability			Contingent Payment Arrangement
	(in millions)
Balance, January 1, 2015	$	—	$	61		$	10,723		$	260		$	(4,130	)	$	42
Total gains (losses), realized and unrealized, included in:
Income (loss) as:
Net investment income (loss)	—		—			—			—			—			—
Investment gains (losses), net	—		5			—			36			—			—
Net derivative gains (losses)	—		—			(316		)	—			(743		)	—
Subtotal	—		5			(316		)	36			(743		)	—
Other comprehensive income (loss)	—		2			—			—			—			—
Purchases ⁽²⁾	—		1			228			26			(274		)	—
Sales ⁽³⁾	—		(20		)	(53		)	(2		)	1			(11		)
Settlements ⁽⁴⁾	—		—			—			(5		)	—			—
Transfers into Level 3 ⁽¹⁾	—		—			—			—			—			—
Transfers out of Level 3 ⁽¹⁾	—		—			—			(2		)	—			—
Balance, December 31, 2015	$	—	$	49		$	10,582		$	313		$	(5,146	)	$	31


(1)	Transfers into/out of Level 3 classification are reflected at beginning-of-period fair values.


(2)	For the GMIB reinsurance contract asset, and GMxB derivative features’ liability, represents attributed fee.


(3)	For the GMIB reinsurance contract asset, represents recoveries from reinsurers and for GMxB derivative features liability represents benefits paid.


(4)	For contingent payment arrangements, it represents payments under the arrangement.

The table below details changes in unrealized gains (losses) for 2017 and 2016 by category for Level 3 assets and liabilities still held at December 31, 2017 and 2016, respectively:



	Income (Loss)
	Investment Gains (Losses), Net		Net Derivative Gains (losses)			OCI
	(in millions)
Level 3 Instruments
Full Year 2017
Still Held at December 31, 2017
Change in unrealized gains (losses):
Fixed maturities, available-for-sale:
Corporate	$	—	$	—		$	4
State and political subdivisions	—		—			—
Commercial mortgage-backed	—		—			45
Asset-backed	—		—			(9		)
Subtotal	$	—	$	—		$	40
GMIB reinsurance contracts	—		69			—
Separate Accounts’ assets⁽¹⁾	29		—			—
GMxB derivative features' liability	—		1,494			—
Total	$	29	$	1,563		$	40
Level 3 Instruments
Full Year 2016
Still Held at December 31, 2016
Change in unrealized gains (losses):
Fixed maturities, available-for-sale:
Corporate	$	—	$	—		$	11
State and political subdivisions	—		—			(1		)
Commercial mortgage-backed	—		—			9
Asset-backed	—		—			1
Subtotal	$	—	$	—		$	20
GMIB reinsurance contracts	—		(262		)	—
Separate Accounts’ assets⁽¹⁾	20		—			—
GMxB derivative features' liability	—		140			—
Total	$	20	$	(122	)	$	20

(1) There is an investment expense that offsets this investment gain (loss).

Quantitative Information About Level 3 Fair Value Measurement

The following table discloses quantitative information about Level 3 fair value measurements by category for assets and liabilities as of December 31, 2017 and 2016, respectively.

Quantitative Information about Level 3 Fair Value Measurements

December 31, 2017



	Fair Value			Valuation Technique	Significant Unobservable Input	Range	Weighted Average
Assets:	(in millions)
Investments:
Fixed maturities, available-for-sale:
Corporate	$	53		Matrix pricing model	Spread over the industry-specific benchmark yield curve	0 - 565 bps	125 bps
	789			Market comparable companies	EBITDA multiples Discount rate Cash flow Multiples	5.3x - 27.9x 7.2% - 17.0% 9.0x - 17.7x	12.9x 11.1% 13.1x
Separate Accounts’ assets	326			Third party appraisal	Capitalization rate Exit capitalization rate Discount rate	4.6% 5.6% 6.6%
	1			Discounted cash flow	Spread over U.S. Treasury curve Discount factor	243 bps 4.4%
GMIB reinsurance contract asset	10,488			Discounted cash flow	Lapse Rates Withdrawal rates GMIB Utilization Rates Non-performance risk Volatility rates—Equity	1.0% - 6.3% 0.0% - 8.0% 0.0% - 16.0% 5bps - 10bps 9.9% - 30.9%
Liabilities:
GMIBNLG	4,056			Discounted cash flow	Non-performance risk Lapse Rates Withdrawal Rates Utilization Rates NLG Forfeiture Rates Long-term equity Volatility	1.0% 0.8% - 26.2% 0.0% - 12.4% 0.0% - 16.0% 0.55% - 2.1% 20.0%
GWBL/GMWB	130			Discounted cash flow	Lapse Rates Withdrawal Rates Utilization Rates Volatility rates - Equity	0.9% - 5.7% 0.0% - 7.0% 100% after delay 9.9% - 30.9%
GIB	(27		)	Discounted cash flow	Lapse Rates Withdrawal Rates Utilization Rates Volatility rates - Equity	0.9% - 5.7% 0.0% - 7.0% 0.0% - 16.0% 9.9% - 30.9%
GMAB	5			Discounted cash flow	Lapse Rates Volatility rates - Equity	0.5% - 11.0% 9.9% - 30.9%

Quantitative Information about Level 3 Fair Value Measurements

December 31, 2016



	Fair Value		Valuation Technique	Significant Unobservable Input	Range	Weighted Average
Assets:	(in millions)
Investments:
Fixed maturities, available-for-sale:
Corporate	$	55	Matrix pricing model	Spread over the industry-specific benchmark yield curve	0 bps - 565 bps	151 bps
	636		Market comparable companies	EBITDA multiples Discount rate Cash flow Multiples	4.3x - 25.6x 7.0% - 17.8% 14.0x - 16.5x	11.7x 11.4% 15.6x
Asset-backed	2		Matrix pricing model	Spread over U.S. Treasury curve	25 bps - 687 bps	38 bps
Separate Accounts’ assets	295		Third party appraisal	Capitalization rate Exit capitalization rate Discount rate	4.8% 5.7% 6.6%
	3		Discounted cash flow	Spread over U.S. Treasury curve Gross domestic product rate Discount factor	273 bps-512 bps 1.1% - 7.0%	283 bps 4.3%
GMIB reinsurance contract asset	10,314		Discounted cash flow	Lapse Rates Withdrawal rates GMIB Utilization Rates Non-performance risk Volatility rates - Equity	1.5% - 5.7% 0.0% - 8.0% 0.0% - 16.0% 5 bps - 17 bps 11.0% - 38.0%
Liabilities:
GMIBNLG	5,155		Discounted cash flow	Non-performance risk Lapse Rates Withdrawal Rates Utilization Rates NLG Forfeiture Rates Long-term equity Volatility	1.1% 1.2% - 26.2% 0.0% - 11.5% 0.0% - 16.0% 0.55% - 2.1% 20.0%
GWBL/GMWB	114		Discounted cash flow	Lapse Rates Withdrawal Rates Utilization Rates Volatility rates - Equity	1.0% - 5.7% 0.0% - 7.0% 100% after delay 9.0% - 35.0%
GIB	30		Discounted cash flow	Withdrawal Rates Utilization Rates Volatility rates - Equity	1.0% - 5.7% 0.0% - 8.0% 100% after delay 9.0% - 35.0%
GMAB	20		Discounted cash flow	Lapse Rates Volatility rates - Equity	1.0% - 11.0% 9.0% - 35.0%

Fair Value Disclosure Financial Instruments Not Carried At Fair Value

The carrying values and fair values at December 31, 2017 and 2016 for financial instruments not otherwise disclosed in Notes 3 and 12 are presented in the table below. Certain financial instruments are exempt from the requirements for fair value disclosure, such as insurance liabilities other than financial guarantees and investment contracts, limited partnerships accounted for under the equity method and pension and other postretirement obligations.



	Carrying Value		Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Total
	(in millions)
December 31, 2017:
Mortgage loans on real estate	$	10,935	$	—	$	—	$	10,895	$	10,895
Loans to affiliates	703		$	—	700		—		700
Policyholders liabilities: Investment contracts	2,068		—		—		2,170		2,170
Funding Agreements	3,014		—		3,020		—		3,020
Policy loans	3,315				—		4,210		4,210
Short-term and Long-term debt	769		—		768		—		768
Separate Account Liabilities	7,537		—		—		7,537		7,537
December 31, 2016:
Mortgage loans on real estate	$	9,757	$	—	$	—	$	9,608	$	9,608
Loans to affiliates	703		—		775		—		775
Policyholders liabilities: Investment contracts	2,226		—		—		2,337		2,337
Funding Agreements	2,255		—		2,202		—		2,202
Policy loans	3,361		—		—		4,257		4,257
Short-term and Long-term debt	513		—		513		—		513
Separate Account Liabilities	6,194		—		—		6,194		6,194