Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of gross fair value of derivative instruments, including embedded derivatives [Table Text Block]

The following table presents the notional value and gross fair value of derivative instruments, including embedded derivatives:



	September 30, 2018							December 31, 2017
	Notional		Gross Fair Value					Notional		Gross Fair Value
			Assets⁽¹⁾		Liabilities⁽²⁾⁽³⁾					Assets⁽¹⁾		Liabilities⁽²⁾⁽³⁾
	(in millions)
Derivatives designated as hedging instruments
Interest rate contracts	$	675	$	8	$	—		$	675	$	23	$	—
Foreign exchange contracts	—		—		—			87		—		4
Total qualifying hedges	675		8		—			762		23		4

Derivatives not designated as hedging instruments
Interest rate contracts	59,482		609		603			66,043		1,081		416
Equity contracts	56,352		2,685		3,237			59,292		2,423		2,883
Credit contracts	862		7		—			721		—		2
Foreign exchange contracts	4,307		45		28			4,163		36		23
Other contracts	1,350		—		—			452		—		—
Total non-designated hedges	122,353		3,346		3,868			130,671		3,540		3,324

Embedded derivatives
GMWB and GMAB ⁽⁴⁾	N/A		—		(686		)	N/A		—		(49		)
IUL	N/A		—		684			N/A		—		601
Indexed annuities	N/A		—		15			N/A		—		5
SMC	N/A		—		12			N/A		—		10
Total embedded derivatives	N/A		—		25			N/A		—		567
Total derivatives	$	123,028	$	3,354	$	3,893		$	131,433	$	3,563	$	3,895

N/A Not applicable.

⁽¹⁾The fair value of freestanding derivative assets is included in Other assets on the Consolidated Balance Sheets.

⁽²⁾The fair value of freestanding derivative liabilities is included in Other liabilities on the Consolidated Balance Sheets. The fair value of GMWB and GMAB, IUL, and indexed annuity embedded derivatives is included in Policyholder account balances, future policy benefits and claims on the Consolidated Balance Sheets. The fair value of the SMC embedded derivative liability is included in Customer deposits on the Consolidated Balance Sheets.

⁽³⁾The fair value of the Company’s derivative liabilities after considering the effects of master netting arrangements, cash collateral held by the same counterparty and the fair value of net embedded derivatives was $870 million and $1.3 billion as of September 30, 2018 and December 31, 2017, respectively. See Note 12 for additional information related to master netting arrangements and cash collateral. See Note 4 for information about derivatives held by consolidated VIEs.

⁽⁴⁾The fair value of the GMWB and GMAB embedded derivatives as of September 30, 2018 included $178 million of individual contracts in a liability position and $864 million of individual contracts in an asset position. The fair value of the GMWB and GMAB embedded derivatives as of December 31, 2017 included $443 million of individual contracts in a liability position and $492 million of individual contracts in an asset position.

Schedule of gain (loss) on derivative instruments, including embedded derivatives [Table Text Block]

The following tables present a summary of the impact of derivatives not designated as hedging instruments, including embedded derivatives, on the Consolidated Statements of Operations:



	Net Investment Income			Banking and Deposit Interest Expense			Distribution Expenses		Interest Credited to Fixed Accounts			Benefits, Claims, Losses and Settlement Expenses			General and Administrative Expense
	(in millions)
Three Months Ended September 30, 2018
Interest rate contracts	$	6		$	—		$	—	$	—		$	(205	)	$	—
Equity contracts	(1		)	1			17		34			(229		)	3
Credit contracts	—			—			—		—			4			—
Foreign exchange contracts	1			—			—		—			—			(5		)
Other contracts	—			—			—		—			(2		)	—
GMWB and GMAB embedded derivatives	—			—			—		—			261			—
IUL embedded derivatives	—			—			—		(40		)	—			—
SMC embedded derivatives	—			(2		)	—		—			—			—
Total gain (loss)	$	6		$	(1	)	$	17	$	(6	)	$	(171	)	$	(2	)

Nine Months Ended September 30, 2018
Interest rate contracts	$	28		$	—		$	—	$	—		$	(738	)	$	—
Equity contracts	(1		)	2			22		37			(341		)	5
Credit contracts	—			—			—		—			22			—
Foreign exchange contracts	1			—			—		—			(1		)	(13		)
Other contracts	—			—			—		—			(4		)	—
GMWB and GMAB embedded derivatives	—			—			—		—			637			—
IUL embedded derivatives	—			—			—		(18		)	—			—
SMC embedded derivatives	—			(2		)	—		—			—			—
Total gain (loss)	$	28		$	—		$	22	$	19		$	(425	)	$	(8	)



	Net Investment Income			Banking and Deposit Interest Expense			Distribution Expenses		Interest Credited to Fixed Accounts			Benefits, Claims, Losses and Settlement Expenses			General and Administrative Expense
	(in millions)
Three Months Ended September 30, 2017
Interest rate contracts	$	(1	)	$	—		$	—	$	—		$	14		$	—
Equity contracts	(10		)	1			13		18			(261		)	2
Credit contracts	—			—			—		—			(3		)	—
Foreign exchange contracts	—			—			1		—			1			1
Other contracts	—			—			—		—			(2		)	—
GMWB and GMAB embedded derivatives	—			—			—		—			227			—
IUL embedded derivatives	—			—			—		(24		)	—			—
SMC embedded derivatives	—			(1		)	—		—			—			—
Total gain (loss)	$	(11	)	$	—		$	14	$	(6	)	$	(24	)	$	3

Nine Months Ended September 30, 2017
Interest rate contracts	$	(8	)	$	—		$	—	$	—		$	61		$	—
Equity contracts	(7		)	3			36		50			(920		)	7
Credit contracts	—			—			—		—			(22		)	—
Foreign exchange contracts	—			—			3		—			(27		)	5
Other contracts	—			—			—		—			(2		)	—
GMWB and GMAB embedded derivatives	—			—			—		—			569			—
IUL embedded derivatives	—			—			—		(43		)	—			—
SMC embedded derivatives	—			(3		)	—		—			—			—
Total gain (loss)	$	(15	)	$	—		$	39	$	7		$	(341	)	$	12

Schedule of payments to make and receive for options [Table Text Block]

The following is a summary of the payments the Company is scheduled to make and receive for these options and swaptions as of September 30, 2018:



	Premiums Payable		Premiums Receivable
	(in millions)
2018⁽¹⁾	$	54	$	31
2019	294		171
2020	216		132
2021	187		119
2022	225		200
2023 - 2027	545		59
Total	$	1,521	$	712

⁽¹⁾2018 amounts represent the amounts payable and receivable for the period from October 1, 2018 to December 31, 2018.

Fair value hedges [Member]

Derivative Instruments, Gain (Loss)

Schedule of gain (loss) on derivative instruments, including embedded derivatives [Table Text Block]

The following table presents the amounts recognized in income related to fair value hedges:



Derivatives designated as hedging instruments	Location of Gain Recorded into Income	Amount of Gain Recognized in Income on Derivatives
		Three Months Ended September 30,				Nine Months Ended September 30,
		2018		2017		2018		2017
		(in millions)
Interest rate contracts	Interest and debt expense	$	3	$	4	$	9	$	12